This week Johan and William are joined by David Schlosberg. David has a big passion on environmental energy, and has gone from PV systems to EV systems, he is vice president of Energy and Utilities in TeraWatt Infrastructure. In this field, David focuses on large infrastructures and on big transportation vehicles, and this is what is discussed in this weeks episode.
Broadcasting from the commodity capital of the world, Zurich, Switzerland, this is insider's guide to energy.
Addition to insiders guide to energy is brought to you by FedEx.
Go to www.fedex.
Dot com For more information.
All right, welcome to another episode of Inside Guide to Energy.
And with me today is not Chris as as usual, but will Stephenson all things well.
Yeah, things are good.
Things are good.
Having a good summer and it's really nice to be back in the fold on on the main show joining you.
It's it's great to have you on and especially for a topic like that we will have today.
But you you mentioned the main show, which is interesting as well because obviously the insiders guide to energy is more than the main.
And in I was about in your daily life or in your on your on your day job, but probably not on your additional extra job.
You're running our.
Other podcasts our sister podcast and I I would assume most of our listeners have listened into it, but for the the ones that haven't, what is it?
Yeah, so the sister podcast is inside this guide to energy stories.
And if you go on to, you know, wherever you get your podcasts, from there the the episodes in.
I mean, and they focus on a more personal side of the energy sector, meeting particular people and trying to get their story working through the energy industry.
And and some of the stories we've had, especially some of the recent ones have been really, really inspiring.
So I would, I would recommend it, if I may say so myself.
Of course you can shamelessly plug it.
It's no problem at all.
I think that's great, but it's it's it's also part of it.
So I think.
That's great, but today we're on the main show.
We are looking into something that I find really, really interested.
I dip my toe in.
To this in my previous role when it comes to to the whole infrastructure in charging, it's a complex part.
It has many stakeholders and especially once we start talking about large.
Uhm, scale charging?
I think that's going to be.
A topic that I have quite a few things that I would like to explore with our guests and especially then around the ecosystems and and how this will be from the.
New and the.
Old a little bit, but also maybe from an OEM point of view, so really looking forward to.
To this end, any thoughts from you?
Well before we welcome the guest, what do you expect from the call on the show today?
Yeah. Likewise, I I'm really looking forward to it. I, I think that the political context is something that I'm, I'm quite excited to get into. You know, in the US the Inflation Reduction Act is just.
Just come through and so I'm I'm keen to hear David's thoughts from the inside I guess on that what he thinks.
That'll do for for electric.
Vehicles, but it also feels a bit to me like.
Uhm, you know, and I'm sure we'll hear some arguments to one side, like there's a a bit of a, uh, kind of pivot point for heavy duty transport which we go for.
Or do we go for electric vehicles?
Which I think is quite an interesting point.
Yeah, I'd I'd really like to get David thoughts or on.
On where he sees.
Us going and what what the right decision is if there.
And I'm pretty sure we get we'll have some really good insight to this one.
But hey, we speculated enough.
I think we've already thrown out some some heavy duty questions that will take us sometimes to to to master and and.
So let's get our.
Guest on the show welcome, David.
Schlosberg vice president.
Energy utilities at terawatt infrastructure.
Welcome to inside this guy to enter.
Well, thanks for having me.
Looking forward to the conversation today.
And well, you up on there?
Now more than welcome.
And I think as you can see both me and will has a great interest and and maybe not well, at least from my point, less knowledge, but more interest.
So it's going to be really interesting to to pick your brain on, on some of these things.
And when I did.
My research around the show and also when we spoke before, there's a lot of things coming into the infrastructure and and and all the rest.
But I I really would like to get you maybe the first question out of the way and I'm actually going rogue down it before and I'm going to steal a little bit what will said in the beginning as well this.
This kind of.
Shift where we are in terms of heavy duty, specifically on battery versus the hydrogen and kind of the input from from the OEM's as well. I think there's a little bit of a mix here.
With your with your expertise building the infrastructure for around this, how do you see this and where are we going?
Well, I, I guess I would say, you know, terrawatt itself, we're we're focused on all vehicle classes.
So depending on the day, you know sometimes people only want to talk about the light duty, what's happening in in major metropolitan areas because that's where a lot of the electrification is happening today.
It's sort of a foregone conclusion that these types of.
Uses of transportation will be electric and it's happening very fast.
And as you said, certain certain.
Certain things happening at a government level in the US will really facilitate that to happen faster. On the other end of the spectrum, people are also interested on those heavy duty vehicles and how they will be electrified.
And because they they they provide a lot of benefits when you do electrify them, whether it's, whether it's air quality.
If you can get the mileage on them, they really get those total costs of operations down to the levels where it's quite attractive to to go electric.
I mean I think it's a, you know, there are specific use cases where heavy duty vehicles are, you're already seeing them be electrified here in California and new airports generally, you know, the term is drayage.
So vehicles that are doing round tripping a lot each day between.
Ports and warehouses and multiple trips per day. These are already seemed to be, you know, very viable use cases for for electrification, even if the battery sizes that exist today. So the ranges are still only 150 to 250 miles long.
Say however, on the horizon you already see commercial vehicles being announced that have longer range of batteries, up to even 500 or so miles on a single charge, and when you start to see that, it starts to open up other routes that can be used for electrification.
Uh, you know, truthfully, the industry is still, you know, fleets are still thinking.
How do we explore hydrogen as an option for 0 emission freight as well as electric?
And you know both sides have their, have their challenges and have their opportunities.
We feel a terawatt that electrification will be the dominant source of transportation and one of the reasons is just pace from my past experience if you think about what the world experienced with photovoltaics.
Versus solar thermal.
So I had the pleasure of working in solar thermal energy, which for some time was thought to be the more cost effective, more efficient, more large scale solution for solar energy.
And what we saw was the technologies that were able to be built in manufacturing facilities at very high volumes, we're able to experience these very dramatic reductions in cost and if you think about batteries.
From your cell phone to light duty vehicles to battery energy storage utility scale.
Now you see all this volume that's going into making batteries cheaper, more efficient, lighter and that scale that learning economies efficiency that batteries will have, we think will accrue to the benefit of heavy duty electrification.
Which gave a great summary of of this, but it also gave a little bit of an insight to you David and and your experience.
You mentioned back before Terrawatt and also what you worked on before, so maybe for our audience.
We should do an introduction.
So we, we mentioned you as your title, as your person, but maybe a little bit also on your background because that leads us into to what we're going to discuss today because it ties a little bit into the ecosystem that we try to do here on on the show where when we talk about new digital technologies, we talk about that.
That energy transformation and and also then with the focus.
On on the charging infrastructure here and it seems like you have throughout your career touched or more than dip your toe in all of these areas.
So, so maybe a little bit of introduction to David and also then to tell what infrastructure?
So actually the the spark for me that made me want to work in clean energy was actually I worked prior to coming to energy.
I worked in the insurance sector, the property and casualty insurance sector, and I started a job in investor relations for one of the largest insurance companies in the United States, and my first week on the job was Hurricane Katrina.
And you know, really seeing first hand what was happening to our changing climate and and and the attention the insurance industry was getting around the world is changing what is happening in our economies, what's happening in risk taking to respond to it.
And I and I, it was there that Colonel that said there's going to be.
This investment to help help our planet address the climate crisis.
And so I decided I wanted to, you know, make my career focused around energy.
And so I my first job out of Graduate School was in was in solar energy development, large scale solar energy development.
But as I mentioned, it was in solar thermal, which was another technology that was a, you know, competing against solar photovoltaics at the time.
And what we saw was just dramatic cost declines in.
In an industry that was able to produce volume and get their costs down and then get those soft costs down by by really developing over and over again and at scale.
But following my time at, you know, working in solar thermal, I was able to transition to the customer side, the digital energy side, working a little bit at Google on some energy projects and then slowly made my way to the EV charging sector, which is really that combination of infrastructure and large infrastructure.
Where I am today, as well as the digital energy economy.
Thank you very much for the for the the sort of look back at your career.
I'm I'm quite interested personally in in the idea of potential cost reductions coming in and you talk about about batteries as.
Potentially the more widespread, you know, energy vector.
Uhm for transport and I wondered what you.
So think of current extremely high battery prices and and what you see come coming in the future.
How much room is there to run for, for these cost reductions as adoption increases?
Yeah, I mean batteries are one of the overall components of total costs of operations, so you know from our side on the infrastructure side.
By, you know, building large projects at scale, we still have an opportunity to be more efficient and get our.
Costs down first of all.
And secondly, the the Chargers themselves, they are also experiencing inflationary pressures, supply train constraints.
So the costs of those devices are going up and and the technology is advancing as well.
So there will be a step up in cost before we begin to come back down that, that wall of.
Of cost pressures, I think when there is.
You know, in an attention to demand and an increase in cost, you see an investment in capacity and supply.
And I think on the other end of this, we might see the the opposite happen, which is cost pressures to bring costs down again.
But we are at a point right now where it's a good thing, there's a lot of interest.
And attention in building this infrastructure and bringing these technologies to commercialization, but it's it's causing everyone to run through the door at the same time, which is causing supply, supply train constraints and some inflationary pressures on the battery side.
Same things are happening, but I think yesterday I saw that Honda and LG announced that they're going to build a $4.4 billion battery facility in the United States, right?
That's probably due to the recent Inflation Reduction Act that needs batteries to be manufactured in the United States to maximize those credits, but I think.
We'll see more capacity additions globally, but also in the United States and that will just accrue to the benefit of all batteries everywhere needed, whether it's light duty vehicles, heavy duty vehicles, commercial industrial stationary storage and utility scale storage, so.
There's going to be a need, a lot of investment, but hopefully that investment is matched with economies of scale, economies of learning.
So this was one of the points I wanted to pick up on as as we introduced the show, I was quite keen to talk about the Inflation Reduction Act and what that what impact that might have on your business.
What are the key points within that do you think that are going?
To affect your operations day-to-day, and.
And how you know successful you can be in, in building out this infrastructure?
Yeah, I mean first I I give a brief introduction to terawatt infrastructure.
So terawatt infrastructure was purpose built to be the place the location for commercial vehicle fleets to to do their charging.
So we are a real estate owner first and foremost and we develop that real estate to be.
Charging infrastructure, electric vehicle charging infrastructure, targeting commercial vehicle fleets. Uh, we got our start back in 2018. The the founders of the company actually saw this.
They saw the Inflation Reduction Act.
They saw the infrastructure bill in the future, even though they didn't know exactly what shape it would take.
And they saw the vehicles likely to come to market.
And they said there's, there's just gonna be an absolute lack of.
Charging infrastructure and places to put that charging infrastructure.
And So what can we do now to position for that, you know, massive transition.
So they started acquiring property in key logistics areas around distribution centers, warehouses and on on Hwy corridors so to get ready for the day when it tipped.
Right. And we're we're there, right. The vehicles are here in mass on the light duty side and the vehicles for the medium and heavy duty side are starting to come to market, so in 2020.
One, they realize this is the strategy is it's it's great, but we need a team, we need a real strategy around this land portfolio to bring it to life.
And so they hired Neha Palmer, who is at Google developing data centers and renewable energy for data Centers for the better part of 10 years and so understanding.
What it takes to bring large scale electric infrastructure to market and also understands that there's this trajectory of change that sometimes it's hard to imagine.
You know, when data centers were started, they were, they were smaller, more manageable energy assets.
And computer facilities, and now they are, you know, hundreds of megawatts if not a GW of demand in one single place.
We're not expecting EV charging facilities to be that large, but we do expect them to go through a scaling that is not really understood or expected necessarily today.
Uhm, now we expected that to happen without the infrastructure bill, without the Inflation Reduction Act.
What this does is actually just bring it.
Nail likes to say bye down timelines.
Well, essentially the government has brought down those timelines to make these things happen sooner by bringing down some of those costs, but they were inevitable.
And now they're going to happen sooner because it'll be easier to get those cost reductions easier for fleets to make that operational change that, that, that.
You know, that decision that they want to do this.
So, you know, as we think about it, there are a couple of key accelerants coming out of the Inflation Reduction Act.
One is that actually the commercial vehicle tax credit.
So we're not a direct beneficiary of that.
But as I like to say anything that helps, you know, adoption generally in the market is helpful for those that are.
Providing infrastructure to that market because there's just more.
Demand and more of a there are more constraints, right?
I can't just put a couple of Level 2 chargers on the back of my building.
I really need a place to charge lots of vehicles, move them in and out, and maybe that place is not.
Where I Live Today.
And so the inflation Reduction Act, it doesn't necessarily target the heaviest of vehicles because the the credit caps out at $40,000 per vehicle.
And so if you think about the costs of a Class 8 vehicle, that $40,000 is helpful, but it's not a full 30%.
Tax credit? Uhm.
Because it maxes out at 40,000, so that but that is still very helpful for commercialization of fleets. The second piece that's more directly relevant to our side of the business is the the alternative fuel Infrastructure tax credit. So some of your listeners and they know the tax credit is called the 30 seat.
Don't know how they come up with these, but it used to be.
It used to be for your home charger.
Two campuses or whoever was installing charging infrastructure. However, it was limited to $30,000 per project, SO1 charger or 50 chargers.
Still $30,000 though limited tax credits, so it wasn't really moving the needle on cost. The now the.
Tax credit is moved from $30,000 to $100,000, but it's actually per.
FC per charging station rather than per project.
So now it scales with very large projects with multiple chargers.
Now it really makes sense for a fleet facility if you will.
Now the one of the interesting nuanced nuances if you look at the Inflation Reduction Act.
There's a lot of, you know, imperatives from the Biden administration around environmental justice, social justice, investment in disadvantaged communities.
But each, each component kind of.
Pushes on different aspects of that.
None of them include all of those requirements.
So for infrastructure tax credits, it's only available in low income areas and rural areas.
So it's really driving investment in this fleet electrification and charging infrastructure into to areas that are more depressed, more haven't received.
An overall economic investment as much as other areas, and so that actually works very well, to be honest, for charging infrastructure for free.
These are actually places where fleets have resided before.
If you think about lower income areas, places that have pretty poor air quality and if we can retrofit existing sites or move to other sites in the area of with electrified transport, that will have a major impact on air quality and also new jobs for construction.
And new energy jobs for operating that that new technology and when you think about corridors being able to go long distances, a lot of those sites are could be in rural areas.
So it it's it's quite meaningful in the in the areas of fleet.
Electrification, I would say.
But isn't it also then I think one of the challenges with with this is that if you look at low income areas in terms of building infrastructure, apart from having it into warehouses and kind of centralized areas of distribution, there's also a.
Expectancy between the cost of a car and electric car and infrastructure, so, so, so it sounds very good that we move in in also to low income area to building the infrastructure, but if the car is too expensive, it's not going to move the needle for specifically.
The people there, which I think is one thing.
If, if, I if.
I move a little bit away from from the government, the fundings, et cetera.
I think we're seeing the same kind of thing also in Europe in one way or the other in terms of and especially now with the current situation that it helps speed.
Or at least maintain momentum rather than a recession that all sustainable investment would have gone down.
I think that's a good.
Good part that I think if I heard you right and I I I tend to agree we are also something that would have happened anyway we were on this on this road with or without incentives, same thing as production or renewable energy I think but but going back a little bit more to terawatt and in the infrastructure you you said.
Previously, earlier regarding that your real estate company that you invest a lot and the real estate but.
Combining that obviously then with large scale electric vehicle infrastructure, so maybe not your home charger, but really we're talking, we're talking on a large scale here.
So tell me a little bit more about in this.
Part from from from from the properties in the real estate to to the infrastructure.
What what is the terrorists role in this new, in this new kind of infrastructure?
Do you play?
Because no one will will do everything so.
What do you do?
Sure, happy to say and I'd.
I'd love to go back to.
Later on, if we can about UM.
The ability for these cars to be adopted by the folks that need to adopt them, right?
You know, I think I I categorize our role is kind of four major functions.
So we we look at real estate acquisition, we have team that does that, we look at project development and and you know how do we bring these sites to life working with.
Utility working with the local municipalities, working with construction partners.
And then business development, we have to actually place fleets that want to use these sites at our sites, right?
And so there's a lot of conversations with fleets of varying sizes and different use cases to understand their needs and build facilities that work for them and work for multiple fleets at the same time and then finally.
Operations reliability is not necessarily the hallmark of the EV charging industry and EV charging infrastructure to date.
And we believe that for fleets to actually really electrify, they're going to need that level of reliability that they expect out of their current operations in in electric.
So you know, we we see ourselves as an owner operator and a landlord, if you will, for, for those fleets and to maintain those facilities.
So one thing we're not, we are we are buying charging stations from you know the highest quality manufacturers to place at our sites.
So you know that's not a role that.
But we're helping to advise our customers on, you know what, what is the technology that should be used at these sites in order to meet their their needs, right, what is the technological needs, digital needs that they have?
And we make sure that they're delivered to the site and that they can interact with them.
And then also what's going to be reliable.
For them over the long term and taking that burden of maintaining those chargers off their hands and they, you know, contract with us for that same level of reliability.
How does that mean in terms of your business model?
Where do you where do you make the money?
Yeah, because there's a number in any ecosystem that that is built and especially in the transforming ecosystem that there's an opportunity in a number of different swimlanes or in a number of different area.
Is to to make that either you or the platform provider you're the customer interface in terms of having a relationship with the customer.
In this case, in many cases you could also be the producer of the energy and the energy provider.
So where is it?
Across everything or.
No, no, I mean.
Primarily we are an infrastructure provider, so just in the same way that you know you would, you would look at a solar, you know energy developer.
Or an owner, as I'm finding a site I'm developing, that site I'm building the infrastructure and I have an offtake agreement with a utility.
And I need to get a price for that energy that produces, you know, the returns that my investors are looking for, right.
So we are also building that infrastructure and recovering the costs of that cap ex.
Through a lease agreement or a charging energy as a service agreement with those customers to recoup the costs of our Capital plus plus an adequate rate of return.
So it it can be pretty tricky to provide.
I guess these the the volumes of electricity that are required, especially if you know a few vehicles from a fleet come in at once is part of your responsibility to ensure that the electricity will always get delivered perhaps by.
Backup generation kind of storage assets on site.
Yeah, I mean first and foremost, we we do assume these to be grid connected systems.
And so we're first going to the utility and asking for.
To to use the power that the site may already have or to upgrade the site for additional power and having the Chargers you know, show up at the same time so that we can begin our charging.
I think the use of behind the meter resources, specifically batteries, but also potentially solar PV too.
Lower the cost of that electricity.
Or to provide resiliency in the case of a grid outage is our components of our sites and we look at what the customer requires and wants in terms of resiliency and will they pay for it as well as just the techno economic cost effectiveness of those resources by themselves.
Quite frankly, it's it's an opportunity for us to generate.
Margin, if we're able to provide a lower cost blended cost of electricity to those fleets than just passing through the cost of electricity and we do so by adding renewable energy so they get a greener and cheaper solution and potentially a more resilient.
Solution that's that's sort of the the trifecta if I'm a fleet that I'm getting all of those things and I'm not.
Having to invest.
Millions of dollars of upfront cap ex, but I can pay as.
I go essentially.
And you mentioned earlier that you're the company works sort of across the sizes of vehicles.
So it's not just the heavy transport kind of things, but but also smaller vehicles.
What are some of the challenges with with?
So urban settings versus rural longer sort of highways?
How do those two differ in terms of what need?
What kind of problems need to be solved?
Yeah, I mean it's.
Then they both have their pluses and minuses and based on where the market is today, right in, in the metropolitan areas, you know, finding real estate in the places where electrification is happening.
It's not like you have your pick of the litter.
You can't just walk down the street, find a site that has lots of power, you know?
And there's landlords who are willing to sell or to rent because there's high vacancy.
There's not, I mean, you think of a place like the port of Long Beach in California and so you're, you know, listeners in the United States know there was a lot of attention.
During you know middle stages of the pandemic about just how much activity was happening in the port and you know these supply chain constraints.
There's so much activity that the real estate market is, you know, there's no recession in the real estate market in that area.
So if you want to be able to provide charging infrastructure, there's not, there's not an unlimited supply of sites that you can go to.
And so when you're when you see those options you want to find something that's cost effective that site you have to.
Somewhat custom build a site that makes sense for what you have, right?
Whereas on the flip side you think of a a corridor where land is more plentiful.
You can kind of have a cookie cutter approach to this is the way terawatt builds a truck stop on the side of the highway and you can you can get those economies of of scale and efficiencies of doing it over and over again.
On the flip side, where the electrification is happening today is in those major metropolitan areas, whether it's rideshare or autonomous vehicles where there's flea.
These are all those vehicles are electric or they're making, you know, significant investments in making their new vehicles electric or by the port with drayage in California with certain regulations, whereas the vehicles are just coming online on some of the more heavy duty, longer, longer distance traveling.
Well, I I guess from a from a real estate point of view and especially as a real estate owner.
To to come to rent the property or or or at least the property out to someone, then it's.
It's a basic calculation on ROI.
You know, it's it's better for us to build an infrastructure AVS, or is it better to do something else?
It's more of a property gain there, I guess, rather than than anything like that.
Come across that.
Yeah we're we're you know we were built for to build charging infrastructure.
So you know if if the if the economics of building charging infrastructure are less than the economics of building a multi family building or or an office park or or warehouse in theory some other owner some other want to.
Want to be owner or developer should come along and offer a higher price. Similarly if you know the site's not.
You know, one of the benefits of being a real estate owner is we're not burning capital, you know, and throwing it away with a lease if the site just doesn't work.
We're trying to make sure we're buying properties that will be turned into charging facilities, but if for some reason it it, it can't work out where we have this asset that has value to to our investors.
And potential value to other buyers of that real estate.
On the flip side, though, sometimes there's real estate.
Let's say it's within a couple miles of an airport.
There's height restrictions, so there's actually only a certain number of uses that you can have at that site.
It might mean that it's the value of that land is less than a site that could be more intensely used with density, and so it.
Works really well for EV charging, and it also has that use of there's going to be more and more electrification of rides coming to and from airports, and so there's that happy marriage there.
But do you see?
This as a challenge, especially in in in rural and then you look at some of the European countries where, where?
Ride share and sharing of cars might be more more common at least the growth of of some of these areas and where that will have a challenge then because real estate becomes too Scott scarce and it's difficult then to find the opportunities to to build this infrastructure especially in in some of the key.
Rural areas or is it still a viable business case long term to do this?
Yeah, I mean we, we don't have I guess, a lot of airports in rural areas in the state. So sometimes they're built kind of far-flung, but there are also large power projects for those airports themselves.
So it could just be a long long haul, you know, to get, no pun intended.
Again with the utility, the power that you need, you know?
You know, we're we're working in one metropolitan area in the US where the utility is said. We have just undergone so much development.
That first of all of the real estate in the downtown area is very, very elevated in cost and all of their feeders are pretty much full up and so they have an obligation to serve. But it will be 24 months before you know any electric, you know utility power could come to a site and so.
You know the good thing is this is happening.
It's happening fast, but it's it is still a ramp, right and so if you have a a longer more patient approach to.
Looking at metropolitan areas and seeing where the where the activity is going to happen, you can start making those investments today to bring on that infrastructure and talk to those fleets about where do you want to be.
And it might be that being outside of that major metropolitan area could be the most efficient thing to do from a cost of charging at cost of real estate, but it also, you know.
Meets their needs.
And so you know it's it's constantly that conversation, where do you need to be as a fleet and how much is that going to cost and coming with that happy marriage for us and them.
Is there a role perhaps give given the way that you interact with sort of both sides of this equation, people you know built building out this, this grid and you're doing your planning based on those expectations for network enhancements and and the consumers?
Looking to, you know, finding out where, where they want their fleets to be going.
Through is there a potential role?
As a sort of middle person.
Uh to to kind of marry those two together to ensure.
That the the.
Optimal solution for everyone gets gets arrived at?
Or is it simply a cost calculation?
I'm, I I'm not sure exactly what you're getting at, but I I actually do think that as there are more facilities and there are more fleets and there's more liquidity in this infrastructure.
That there there will be roles, there will be brokers, right?
Just like there are real estate brokers today it will look more like leasing in an office park Aurora building than it does look today.
Which which honestly right now it's I'm a sophisticated fleet that's decided I want to go electric and and I've made a lot of decisions.
About what my ideal world looks like.
And so it's a very bilateral conversation, but it ultimately needs to get to a place where.
You know, you have a half a dozen stalls that I could have, you know, dedicated or I could share with, with, uh, one or two other fleets and there'll be some orchestration of that charging to make sure that we don't all show up at the same time.
I just need that charging and I need it to be somehow relevant to my operations, you know?
Maybe those will be bilateral conversations, but there there could be the role of intermediaries that says I have relationships with terrawatt and two other organizations that have facilities and.
Yeah, I know they have vacancy coming up in six months that they can slot in.
I do see that world happening.
It's not the world we live in.
Today because you have leading edge customers with specific, you know, requirements and a scarcity of that.
Infrastructure right now.
So, so when you said about partnerships, which is I'm always interested in in terms of ecosystem and I think in a transforming industry in a transforming part that we're.
Then this is going to change constantly.
So they use frenemies is something I kind of adapt to because I think this is where we're heading a little bit in energy industry.
I guess it's always been a little bit like this.
If we look at.
Large scale infrastructure we look at.
Heavy duty vehicles.
Uh, today there is a current infrastructure based on.
The way they act today, and especially on incumbent.
Uh, engines like, like diesel and gas.
So you have the big gas stations, you have they rolled his truck or pilot flying or BP and shell in Europe and NL and all what they're called.
They had their infrastructure, they've been catering to the the heavy duty trucks for quite some time, quite a few years I would assume.
This transformation that they're also working on trying to get their hands on this transformation and making sure that.
When when the diesel and the gas engines are moving out and electricity is coming in that they're ready to do this.
So how do you work with these guys?
Or do you?
Or are you?
Are you competing against them directly?
I think it's a little bit of both, but I.
I will say.
If you look at any incumbent industry that makes the lion share of their money from one thing, it's very hard to cannibalize themselves to do another thing.
Now one unique aspect of large scale fueling is a lot of the revenue and profit doesn't come from the fueling, it comes from concessions and.
You know, selling other things at at the pump if you will.
And so I think over time there could be some fruitful partnerships because quite honestly that's not an expertise that we have.
It's not a business that we're looking to be in in, but you know, there I will say that the we're not replicating the gas station model.
For light Duty fleet electrification, I think it's more likely that the places where charging is occurring for.
The longest you know, most heavy duty fleets will be similar. We're not going to just reinvent the Interstate system in the United States and put charging at very far-flung locations.
I think the government will have an interest in not allowing that to happen, but you know, sometimes having property in having existing operations is an asset.
And sometimes it's a liability and so, you know if.
You have a.
Whole facility that's oriented around one thing, you can add things on the margin.
That look different, but totally overhauling it is can be quite challenging and sometimes starting from scratch allows you to do things and plan for scale that you know having the legacy doesn't.
And so I do think it will be there's not going to be one provider of charging infrastructure for all fleets everywhere, I mean, in order to do this.
For us to be successful as a.
As humanity, we are going to need, you know, 10s of terabytes.
It's figuratively and literally to to to meet this moment.
And so I think, I think that those entities will get involved.
I think that we have certain advantages and they also have certain.
Advantages and so.
So that leads me to one question.
I was during the summer I was, I was driving around Europe on my holiday and and.
Obviously you're hitting all the major roads like the autobahn and and you see all the traffic and then you come up to one of these, a few of these massive trucks.
Props, and I know there's one in I think in Kent in the UK right on the ferry or the OR the tunnel which increased the capacity of 600 parking spaces for trucks so the old infrastructure they can manage 'cause, that was more of a parking issue and you can fill up your gas adding curiosity and.
Especially on large scale infrastructure in your background, if we don't change the behavior in terms of the roads and the way the truck today and we try to replicate this for electricity, how would we be able to solve something where 600 trucks will be parked overnight and a majority of them will?
Probably try to.
Charge their battery at.
The same time.
How would this work?
Yeah, I mean I I think the the the parking overnight is.
Uh, it actually allows for some efficiencies on the charging, right?
You don't, you know, if you think of corridor charging and car trucks are going a long distance, you're going to want to be doing MW scale charging and higher in the near future.
It doesn't exist today in a commercial deployment, but that's where it's going and those will have impacts on the grid.
And and they won't be parking for very long.
They'll be going on their way.
At the end of of those lines though, there's a legitimate question of if these vehicles are not on the road switching drivers or or just continuous on the road with same drivers.
They will have longer dwell times and can there be more efficient charging from the grid perspective?
Maybe you know in the evenings when it's slower?
And or in at lower power.
Uhm, but the, I think the core question is around parking.
So don't know how the issues are in Europe, but given the rise of e-commerce and that just increase of these vehicles generally truck parking, putting aside electricity is actually a major issue in the United States and most of the time when we're developing sites the local municipalities.
Asking can we actually add some parking?
Uhm, with the charging to to reduce those needs.
And so it's admittedly not my area of expertise, but the issue of truck parking is is an issue and potentially also an opportunity for some new facilities.
But there is, you know, there are other events that are happening.
Like autonomous trucking, too.
That might reduce some of those constraints, but there's a lot of trucks in the system that are if they're not running, they're parking somewhere, right?
And I mean not running continuously because we might be moving to different trucks, electric trucks or otherwise.
So it's still going to be an issue.
Uh, it's uh thinking about some of this uh this longer haul corridor kind of travel is some of the lower hanging fruit for in in terms of real estate to to snap up currently existing petrol stations and things like that who have.
Grid connections and potentially some parking as well and some existing agreements with supermarkets and things like that.
Who might be currently operating on the site, are those sites that you're looking at?
Uhm, mostly because they're, you know, when those are for sale they they tend to be part of portfolios, right?
And their, their specialty private equity type firms that sometimes buy you know, 25 independent, you know, truck stops. I mean they're in the US there are very large truck stop.
Chains, you know organizations, but it's still, if you look at the pie, it's still majority independence.
And so and then the other piece which you know if you're any involvement in energy development.
Environmental concerns at sites.
Sometimes there are things that you just prefer to avoid rather than to tackle them head on.
And so buying a petrol station, typically there are tanks and remediation and so maybe it's not the first place that you go.
If you have your choice.
I think we're.
Coming back a little bit to to your business model and opportunities, you know we love to talk about opportunities from the show and that's what we bring on.
Companies start changing and and and and they're actually finding new ways of capitalizing and monetizing on this change.
One thing that has.
Been discussed quite a bit now.
Now maybe for Reeves in most of it, but surely for for heavy duty truck and fleet especially and connected to the infrastructure is the vehicle to grid part of this one and how to utilize them, monetize and capitalize maybe on this?
How, how do you tell what look at vehicle to grid and how does that fit into your into your kind of approach and your business?
Yeah, I mean vehicle to grid, we should define it, you know, real quickly here, right.
So you know in my history, you know, I know very involved with vehicle grid integration, which can sometimes be just modulating charging to, to respond to a grid event or to manage your energy costs, but if you think of all the way.
Taking electrons from a vehicle and just putting them back onto the.
Uh, you know that is very use case dependent, right? So there are certain use cases, especially in the US, that are well understood as being great for vehicle to grid.
I mean the one is school buses in the United States.
These are vehicles that especially over the summer, are sitting around in the middle of the day when it's.
Quite hot and the grid could be constrained, so it's a great time to be able to discharge the battery, even during during when schools in session they're sitting around in the middle of the day before they go back out.
And so, you know, there's some capacity to be able to.
Do that when you think of the fleet use case.
You know you want to these sites, especially the sites that we did up, we want them to be highly utilized.
And so, you know, having, you know, vehicles that are standing by to be able to discharge is sort of the exception and not the rule.
And so when we think about our facilities as being participants on the grid.
In a more transactive grid, we really look at those dirs behind the meter as being able to provide those services while not interrupting the core function of the site.
Which is charging those vehicles so when when you have that that battery being able to you know decrease the burden on the grid from that charging during peak times and and at the extreme being able to discharge if if if requested by the utility those are you know the the most likely you know scenarios where we're.
Being part of that transactive grid, but I think over time.
You know we'll we'll be in the V2G space but it's it's not you know a core component of our initial sites, but it will also be led by fleets, right. If we have a you know a property that we're we're generically developing and then we we come come across a public transit customer.
Who's looking for a place to locate?
For whatever reason, the property that they already inhabit or they live does not work and they, you know, we're introduced to them.
You know, we could design our site in a way that could integrate, you know.
Energy export from the vehicle if it makes.
Sense for that fleet?
I I think it's interesting.
I think there's the whole topic on its own when it comes to visits grid, and as I think you correctly said in the definition of it before anything else.
We're actually coming up a little bit on time we're, but I have one more question that I've held back and I promised to get back to you and that is the and I'll then hand over to to to will for a final remark or a final question but.
But we discussed early on the adoption of EV and for example in low income areas and then.
We promised that we got back to that a little bit.
So the how do you see this?
Yeah, I mean I think on the on the light duty side where where when we talk about adoption, right, afleet their decisions to adopt, if they're locate, if they're you know, uh, a minority owned business and a disadvantaged community, their business, they're just gonna make an economic decision.
Is that vehicle less expensive on a total cost?
Operation basis than the ICE vehicle that they're using today.
And those incentives, especially you know, for a commercial fleet are easier to access quite honestly, than the incentives for an individual trying to get a tax credit on a on a light duty passenger vehicle, if you're talking about the rideshare space where those individuals.
Making those decisions.
They will also likely access those commercial vehicle tax credits because they might be leasing a, you know, an electric vehicle from from an entity that's leasing to those types of users or they might be able to benefit from a used vehicle tax credit that's also coming out of the Inflation Reduction Act.
So I mean if you go to major metropolitan areas.
In the United States, you're seeing a lot more electric vehicles in those rideshare.
It's, you know, if you look at what Uber and Hertz and Tesla are doing, you see a lot of model threes in the Uber fleet because Hertz is leasing those out to people.
And if you talk to any driver over the last three to six months, they will say, I love driving this EV. I just go and I fill up it's 25 bucks to fill up the the battery.
And if I had my old, you know, ice vehicle, it would have been $100 every day to go fill up. And so they're saving a ton.
You know on the on the the larger end of the vehicles, like I said, they're making economic decisions and whether we're driving down the costs of charging from infrastructure, they're getting, driving down the cost of vehicles through vehicle volumes from the OEM's or tax credits those that equation is getting.
You know more in the green every day.
Which of which I think is great and I think the discussion has always been that it's difficult because of the price TV.
But I think you I think you flipped that question into a great answer where where we thought also see the tendencies of behavioral changes that you might not have to own the.
Car so all.
These things are coming together, which we also see.
Uh, a lot across Europe and Asia.
So I I thought that was, I was glad that we went back to that question 'cause it it it kind of helped.
Us quite a bit with any.
Last questions before we wrap this up.
I suppose just just a thought that comes from that last question is it's perhaps 11 positive to take from a bit of a fuel price crisis you might call it, although I think less.
Perhaps less dramatic in the US than it's been here in in Europe, but still significant is that it might well incentivize other forms of transport which are cleaner and and you know, friendlier to the environment. So it's it's a positive note to sort of take away.
It is, but it ironically, it's also the the desire to get an electric vehicle in the United States, whether you're a fleet or an individual, has gone up because the the benefits have become more.
Tangible and so that has actually had inflationary pressures, right, you know, jammed up the supply chain.
So you know, hopefully this will, you know the the good part of capitalism I guess is that people see opportunity, they rush in and bring more supply and hopefully they won't.
They won't be injured by bringing in excess supply, but that it will, you know, come in and create an equilibrium that helps you know fleets do something that's less expensive and also to combat the climate crisis.
And I think with that you also need the infrastructure in order to support this.
And thank you very much, David, for coming onto the show.
Really appreciate the eight-year having you here and I learned a lot from this one. And I'll take away also the transformation of transition to eaves outside of the suburban.
Rich areas that is actually happening, which I thought was a really good.
Take off once again, thank you and also to will for coming on to the main show this.
This week, and to our listeners, you have listened to another episode of Insiders Guide to Energy.
If you like this show, please make sure you comment on our Instagram, on our LinkedIn, and our social media, and don't hesitate to send it to your friends.
And for this, I'll see you next week with.
Thank you very much.