Energytech Startups

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Unknown
Energy tech doesn't move forward alone, and neither should you. Energy tech cipher brings together the founders, investors, operators and corporates shaping what's next. From innovation trends to data driven insights. This is where the ecosystem connects, collaborates and moves. Find your place in the ecosystem at energy Tech cipher.com. That's cipher as in Sci, pH. E.R. where we bring the community together online and in-person.

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Unknown
Everything is bigger in Texas, including climate change. But luckily, Houston is leading the energy transition here in H-Town, the fourth largest city in the United States. Entrepreneurs from across Texas and around the world gather to work with titans of industry to build a technology that will reduce emissions and power a low carbon future. We sit down with those changemakers and wildcatters who are solving the toughest energy challenges, with trillions of dollars on the line.

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Unknown
We dig into how Houston will bring technology to market on a massive scale. Join us as we talk with leaders from the energy capital, the world as they show us how the energy transition gets done. I am Nada Ahmed and this is the Energy Technology Podcast and I'm Jason Attia. Let's jump in. Welcome back to the show. I'm Jason Ta here at Energy Tech Startups, and I'm very excited to be here today with Janice Tran at Keenan Energy.

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Unknown
We had Janice on, I think 2 or 3 years ago. But to get us started, why don't you reintroduce yourself, to our audience? Yeah. Yeah. Well, first, thanks for thanks for having me. And I know that we've talked about doing this for a while, so I'm glad that we're finally doing it. Yeah. So I'm.

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Unknown
I'm Janice, and this year, one of the co-founders worked for Cannon Energy. And what we do, we're based out of Houston and in Calgary, Alberta, Canada. And what we do is we are a developer of power projects. So we take waste heat from industrial processes. So think about, you know, cement, steel, a lot of like, oil and gas processes, like refining or natural gas, pipelines or natural gas processing.

00;02;00;06 - 00;02;27;11
Unknown
And we take that waste heat, which is a byproduct of those processes. And, we turn that into clean electricity. And what makes us unique is as a developer, we're not out there trying to create the new technology. There's actually really great technology already out there that's commercially available. In the waste to power space. So what we're doing is really, taking those technologies and creating projects with them and, you know, kind of developing that ecosystem.

00;02;27;13 - 00;02;50;05
Unknown
And then tell me about the size we're talking about, 100kW megawatts is a baseload. What kind of power we talking about? Yeah. So, I mean, the the topic to shore right now is baseload clean. So it is baseload clean. So it's kind of like our moment to shine. We've been around for, you know, six years now and it's it's really cool to kind of see how the market and, the power markets especially have evolved.

00;02;50;05 - 00;03;16;20
Unknown
So, yeah, it's, it's firm power. It's clean power because there's no incremental emissions being created. This is already waste heat being, you know, put into the atmosphere and capturing it. And, yeah, it's, it's, it's our world. Yeah. The question was, what's the size? And and actually, I have a following because you guys are starting to talk about, how it's clean, like, are there you get recs, do you get carbon credits?

00;03;16;20 - 00;03;42;20
Unknown
All the above. Yeah, yeah. Okay, so so what is the size of, So, you know, we see the power project can be anywhere from 250kW to, you know, there's some, you know, large ones that are 50MW in an above. Right. So, it can be quite kind of wired. But the typical project, I'd say, like the way to power projects that we're doing around, like kind of ten ish megawatts.

00;03;42;22 - 00;04;07;04
Unknown
Yeah. And all over, like, anywhere really does have the industry. We can see that. You can see that possibility being harnessed. Yeah. And then the idea behind can is always to, like, land and expand into other, technologies as well. So we really like waste heat because, you know, the main technology uses organic Rankine cycle turbine, but there's other really great, you know, waste heat power technology.

00;04;07;04 - 00;04;26;28
Unknown
So we look at two, but we saw, you know, initially this, this technology, the auk, which is actually really common with geothermal companies. You know, that wasn't getting a lot of exposure and we didn't see a lot of them deployed. And we kind of asked ourselves, why not? And the answer to that was, we see the power project is actually quite complex.

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Unknown
You've got, you know, it has a tie in to the, the host site. We're using a technology while totally commercially available and actually quite simple. Is, you know, it's it's still it's still new ish because there hasn't been that many, like, deployed around the world. And so we had to, like, kind of teach people more about the technology.

00;04;46;27 - 00;05;07;24
Unknown
And then there's a whole like, you know, putting the project together. So you have to understand investment tax credits because we, we qualify for some of that. You have to understand, you know, the, the power offtake. And if you're selling it to the grid, you have to understand, like utilities and interconnection. You have to also hire contractors.

00;05;07;24 - 00;05;24;21
Unknown
And these are not kind of like two year or less payback period type of efficiency projects. And you got a firm with a financial partner. Yeah. And and then you know, you know, we can. And actually what makes us unique is like the capital piece. We bring the capital as well if they need it. Sometimes the industrial hosts, they don't need us and that's fine.

00;05;24;21 - 00;05;47;19
Unknown
Like we can do a fee for service. But what we're seeing is like the capital solution really unlocks there. So, you know, for us to go to industrial partner, like, especially right now or power prices are really high and say, hey, your the power prices are really volatile. They're increasing 20, sometimes 50% year on year. You know, we have a solution that can cut that power cost down.

00;05;47;21 - 00;06;03;04
Unknown
And it's it's baseload, it's clean. We're going to do everything. We're going to operate it. We're going to do all the construction, we're going to do all the development, engineering, design, and we're going to pay for it to you just have to pay us this like kind of flat fee, and lock it in that savings. And yeah.

00;06;03;04 - 00;06;22;24
Unknown
So it's been, you know, now is kind of our time to shine. And it's been yeah, it's been really exciting. I've been really busy. I was thinking, in some ways, energy companies, they tend to ebb and flow where they want to consolidate, and they're or they want to manage everything. And then at some point, they realize they should just be good at doing what they're doing, which is, you know, drilling oil or producing chemicals.

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Unknown
And I think their value of saying, look, we will handle everything really fits, you know, in that paradigm, when they realize that the slimmed down and I think, yeah, it's the time to shine, both with power markets being up. But I think we're also seeing a lot of slimming in in the energy industry. And I don't know how much of that is isolated to upstream, but it's it's funny how much these kind of macro forces can really open up opportunity and have the right place in time.

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Unknown
Yeah, yeah, yeah, I know it's like, you know, as a as an entrepreneur, you're always kind of asking yourself like what is like the immediate problem that you're solving. And so I'd say there was a big, kind of focus, over the last three years on, you know, sustainability and making sure that, you know, people were focusing on energy transition and, and whatnot.

00;07;05;19 - 00;07;25;02
Unknown
And now it's I'd say it's less about energy transition. At least that what we're seeing and it's more. But I think that that's actually still a very important topic. But you know, what we're really seeing, like the near-term problem is like the, the power. And it is always really come down to economics. It's just now the economics are much better.

00;07;25;03 - 00;07;45;23
Unknown
Yeah, yeah, yeah. But yeah. To the, to the point about you know, focus on what you're good at and, you know, I always get this question. So who is your biggest competitor? Our biggest competitor is actually the company other, you know, seeing like this is just not a priority. Which is totally fine, you know, time and place.

00;07;45;23 - 00;08;03;07
Unknown
Got it. But our biggest competitor them actually wanting to do it themselves and I think like so when you work with like the, the very large like the mega kind of mega oil and gas companies, they're so sophisticated that they can't do it if they had the time. Yeah. And they're just like, well, we, we deal with like turbine.

00;08;03;07 - 00;08;25;12
Unknown
Yeah we know exhaust. We know thermodynamics. Of course we can do this. And then it always comes down to like, yeah, but should you be doing it right. And that's where like the sophisticated, kind of like, you know, innovative, companies that we work with, they're like, we could do this, but we strategically don't want to do this.

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Unknown
Yeah. We also strategically, we could use our balance sheet capital to do this, but we strategically don't because this is not the best use of their money. Their best use of their money is to, you know, you know, create more cement or chemicals or, you know, whatever kind of oil and gas processing that they're doing. So, you know, go do that, do that and invest in those, those types of things.

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Unknown
And let somebody else worry about it, worry about this kind of waste power thing. So and we always, like, tell our, our, partners to you can be as hands on as you want and so sometimes people just like it's a control thing, like they, they, they can't give up control. And like, honestly, we, we always have an interface with our, our partners.

00;09;06;04 - 00;09;31;06
Unknown
And so we've got a few projects now that, you know, are publicly available and that we can share. So we just announced our partnership with Phillips 66 a few months ago. So we're building a seven megawatt plant in, in Colorado or one of their gas processing sites. And so this one is where, you know, they are looking for a clean baseload, energy alternative.

00;09;31;08 - 00;09;48;12
Unknown
They're not hooked up to the grid. And so they're looking to kind of grow. And, this allows them to, to grow in a greener way. So kind of hits all the, the things that as a kind of goal of our company, we want to we want to help perpetuate which is sustainable clean growth. Good. And yeah.

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Unknown
And in that case, you know, we're providing the financing. And so it was very much like you do what you're good at. And then so success is going to do what they're good at. They're trying to control cost. We lower their cost. It's great. It's it's a win win for everyone. And they've been like fantastic partners. And then we've got another project or suite of projects that were, working on with, Tallgrass Energy and that they're a pipeline company and they have other infrastructure to work in as well.

00;10;16;07 - 00;10;38;29
Unknown
But we've got four projects with them. And one is now operating. So that's right, operating a few months ago and, yeah. And you know, that one, we are just a developer. And, there's more to it than that. But, you know, very much like, actively, you know, we we brought the idea to them actively, like, making that idea happen and, working on the optics and stuff like that.

00;10;38;29 - 00;10;56;25
Unknown
So, that's one where, you know, they they made that decision. You do what you're good at, which is developing ways to power projects and being a power developer. We're going to be our, you know, natural gas pipeline company. But they wanted to also invest, which is totally fine. And so we created a good structure there, too.

00;10;56;27 - 00;11;16;06
Unknown
So, you know, we're very flexible to have what our partners want. And then we can just tailor a solution that works. Interesting. Okay. And I'm hearing, the pipeline is really strong. And that helped catalyzed, a recent financing that you announced today. Right. You want to talk about that? Yeah, yeah. Today is actually quite a big day.

00;11;16;08 - 00;11;37;10
Unknown
Got, like, you know, some kind of beast on my phone already. So, yeah, just a few hours ago, we announced, we put out the press release that, we raised, $100 million or up $200 million from, to and categoria fund. So, SG led the round and counter growth Fund was a participant in a very large participant in it.

00;11;37;13 - 00;12;02;08
Unknown
And yeah, it's $6 million initial kind of commitment with 40 million. According to at our option if we want to, expand it, but essentially $100 million of equity, that we can have access to, to build projects. So we see power projects, other kinds of industrial efficiency and kind of behind the meter industrial energy projects to service our customers.

00;12;02;10 - 00;12;28;10
Unknown
Super excited about it. Very excited about working with Sug and Canada Growth Fund. You know, it was really, really important for us to, when we, you know, as a competitive rally, we got several term sheets and it was really important for us to find the investor that was, you know, aligned with what we wanted to do and the long term, you know, kind of growth plan of the company.

00;12;28;17 - 00;12;49;02
Unknown
And so when you think about a growth stage startup, there's a lot of hires, but there's going to be lows. And so you need a a fund that like understands energy, understands the macro market, understands development, the challenges of development, and all the things that go wrong. And but like also the ways to like kind of make it rain and and whatnot.

00;12;49;02 - 00;13;16;07
Unknown
So that, we don't, you know, get someone who's, kind of, you know, is spooked when things are not spooky. Right. So, this is, you know, we're we're so thrilled to have a SG who are energy infrastructure, investors, who are, you know, native from the energy industry, very kind of collaborative as kind of the core of their, of their kind of thesis and, yeah.

00;13;16;07 - 00;13;33;20
Unknown
And then the county growth Fund as well. Like, you know, we, have always wanted to have a Canadian investor base for Canadian roots. So this is the first time we've been able to do that, which is which is really fun and kind of get, yeah, get some of that maple leaf energy into our cap table. So, yeah.

00;13;33;21 - 00;13;52;25
Unknown
No, we're we're super excited. It definitely helps us unlock our, our pipeline. And so, yeah. And so talk to me about is that creating working capital does allow you to bring in, like, more, I guess development, staff, like, what is the use of funds typically for sort of this growth phase? Yeah. Yeah. So all of it.

00;13;52;28 - 00;14;09;24
Unknown
Yeah. So it is kind of invest it at the, at the top call. So you know cannon Energy top. And then so part of the proceeds are going to be used to fund the country and aid fund, you know, salaries to fund, my trips to come and talk to you. And I'm of course, very important stuff.

00;14;09;26 - 00;14;34;20
Unknown
But, yeah, it's, it's, it's, you know, funny, but most of it, the heavy, heavy, heavy majority of it is to fund, the projects themselves. And, each project, you know, they call it like our average approach size, somewhere around 25 to $75 million, you know, typically, and you're going to see and the mix between project debt and project equity.

00;14;34;23 - 00;15;01;25
Unknown
Okay. Yeah. So, and what's that typical ratio in a project when you're at maturity? How much is project equity versus debt. Yeah. So at our like the types of projects that we do and it's probably worth noting, like I came from an investment background and it came from a project finance background. So it's always been like shaping this company and doing our projects in a way that was project finance for has been like the core thesis of our of our business from day one.

00;15;02;01 - 00;15;22;15
Unknown
And so we designed it to be debt friendly and financing and bankable. So in that case, like we're trying to optimize debt as much as possible and kind of like, increase kind of the, the levered returns of these projects. So you're seeing something like I'd say call it 70 to 80% leverage is our goal on these projects.

00;15;22;18 - 00;15;44;21
Unknown
Yeah. So you know that equity. Well, yeah. Yeah, I think I learned because I took a program like I guess my two years ago. Yeah. And learned a lot. And I was just amazed how like, that stack is just very sophisticated. And I'm curious, like, I learned, I was, like, the whole underwriting that you had to do with, like, I'm sure it's like, is that a do you have a partner you work with that you like there, or is that.

00;15;44;24 - 00;16;06;24
Unknown
Not really. And maybe you want to explain how these waterfalls work for people who want to get a little nerdy on? Yeah, let's let's get nerdy about project. Yeah, yeah, that's fun stuff. Yeah. So when you think about a typical, like, energy infrastructure project like ours, capital cycle will be equity. And so this is where we pull from that ACG kind of growth fund investment.

00;16;06;27 - 00;16;26;25
Unknown
And then on top of that, there's like if there's investment tax credits you need to finance. And so, you know, our, are we seeing our projects get somewhere between 40 to 50% of the investment tax tax credit. Okay, 30 based, 3% based credit. You get 10% domestic content, which, our projects do is most. Is that a Canadian saying, there you are.

00;16;26;25 - 00;16;46;16
Unknown
You are saying, oh, what is your thing? Okay, okay. Interesting. Yeah. And hopefully in Canada where we're trying to talk to the government right now about getting our technology into, the Canadian tax credit as well. So fingers crossed we can be successful there because it would unlock a lot of opportunities there. But in the US right now is all we have.

00;16;46;16 - 00;17;04;28
Unknown
And in the US, it's, it's about, you know, somewhere between 40 and 50. So the domestic content, you get a 10% bonus. And on top of that, yeah, a 10% bonus if you're in an energy community. So historically, if it's like an oil or gas or coal community, you get kind of that credit for, building, like kind of great jobs in those areas.

00;17;05;00 - 00;17;20;28
Unknown
So, so you get, you know, kind of the part of your capital stack is going to be, investment tax credits, which you have to go and get financed, from tax credit buyers in the market. And then on top of that, then you have, you know, if you have any grants or whatnot, and then on top of that then you have debt.

00;17;21;00 - 00;17;38;11
Unknown
So on the debt, that's where you're, you know, hoping to get something around 70 to 80% coverage of, against that equity. So but there's actually a lot of other criteria for getting in the system. Yeah. And so take that like takes kind of the grants and the tax credits, like take that off of the CapEx.

00;17;38;11 - 00;17;54;15
Unknown
And then you're seeing like whatever is the remaining kind of like, 70% loan from that are dead on that. And, just because you talked about it, I'm year. So if you have these kind of tax credits, do you have a relationship with a typical buyer or do you have to like go to every project and say, here's the coupon, who wants it?

00;17;54;17 - 00;18;18;27
Unknown
Yeah, yeah, you can do both. There's lots of kind of great, great, brokers out there. There's some that are sort the mature market is one here very like a very, very mature market. Yeah. And so when you kind of hear about, the investment tax credit, not being extended to solar and wind, but I think it expired, July of this and this year, you know, it's a big deal.

00;18;18;28 - 00;18;39;27
Unknown
I think, you know, a lot of people have preserved the credit, to protect their pipeline. But it's, you know, it's a big deal. So that's kind of maybe gives you a sense of, like, the sophistication of that market and how developed it is. Yeah, yeah. So take a step back. So you talked a lot about finding the right partner, who really understands like the power business.

00;18;40;00 - 00;19;00;19
Unknown
And I think I'm going to do a little we'll see if I can do a spot analysis here. But, you know, when I understand like a project developer and you're not really a merchant generator because you have a locked in baseload contract, right? It's just like it's a fixed contract. But I imagine that, like, the value of the business for like a venture investor is like, how quickly can you grow the pipeline and turn that into, projects?

00;19;00;19 - 00;19;26;25
Unknown
What what kind of drives that valuation increase, that you hope to deliver, you know, everyone's got to make money and there's, there's obviously like, venture risk still even at a growth stage. So like, what's the what's the key drivers that you see kind of really make this business grow in value. Yeah. Yeah. Thanks for listening. If you're fundraising now or know someone who is, I want to tell you about saffron, our investor relationship management product for energy tech founders.

00;19;26;28 - 00;19;57;06
Unknown
Think of it as a CRM built for energy fundraising. Use our recommendation engine to find the right investors faster and then track every conversation and stay connected through your raise. There's a free tier so you can start today at no cost. That's c y r o n.com now. Thanks. And back to the show. I think this is a very, important distinction between, say, our company and maybe some of the other companies that have come onto your podcast before we are not a venture, business.

00;19;57;06 - 00;20;16;27
Unknown
We are an infrastructure. So that okay, that being said, we do have some venture investors. Yeah. And you know, they take they took some kind of early bets on us. But you know, this idea that we are going to ten, 20 acts, you know, pay out the fund that's like you're not going to invest in us for that.

00;20;16;29 - 00;20;37;00
Unknown
What you're gonna invest in us for instead is kind of the, the downside protection. And so when we have and, and the reason why we enter into these long term contracts is because you're getting 15 to 20 year dividend streams, that as long as this thing keeps operating and like, there's no reason why you shouldn't, you're going to get money.

00;20;37;00 - 00;20;58;06
Unknown
So it's not like, say, a SaaS business where you might have a ton of traction and then you're just like, out of vogue or you're like, or, you know, even worse, your technology just, like, doesn't work or you just don't get the market traction, whatever. And it goes through and it goes from 150 million valuation to literally zero, right.

00;20;58;06 - 00;21;28;05
Unknown
That just like won't happen to us because we literally have like cash flow streams coming in. That being said, the upside is capped, right? Like because there's kind of walked in streams. And so the value driver for a development business like ours is going to be like the growth of our pipeline, you know, and obviously the macro environment that kind of supports that, along with the locked in, cash, you know, cash flow streams and and then, you know, kind of to bundle that all together.

00;21;28;05 - 00;21;47;02
Unknown
It's like, how big can you go? And so we're not targeting it. We're not targeting venture Eggs. You know, like our kind of exits are going to be like, you know, IPO or it's going to be but the IPO investors are going to be looking for different things. So those are different public. And then that'll be the kind of public.

00;21;47;02 - 00;22;19;03
Unknown
Yeah. I mean, the the types of people who invest in utilities or like invest in Kinder Morgan or something like that. Yeah, it's going to be closer to that than it's going to be to anthropic. You know, it's just a completely different investment style. And there's, you know, an investor that want all of it. Right, like the different kinds, or it's going to be, you know, a large or private equity or infrastructure, funds or it's going to be like a strategic that wants, operating portfolio of operating assets as well as like a strong development team to do it.

00;22;19;03 - 00;22;39;24
Unknown
And I kind of think like some people are like, oh, Janet's like, are you just like waiting to cash out? Like, no, like this is like, this is my platform. Yeah, I, I speak to to that across, you know, my, my co-founder and all of, you know, the people that work like, we're building something really special and like, we, you know, we're we're not doing it just to, like, make a quick buck.

00;22;39;27 - 00;22;57;25
Unknown
So I kind of think about, you know, there's a long journey ahead. Even after SG, there's going to be lots of different kind of financings. And our hope here is like, we can kind of continue to grow and evolve with the with the company and like its, different needs from. Yeah. Yeah. Interesting. I was I think at a certain point, you know, right.

00;22;57;25 - 00;23;17;29
Unknown
Right now SG has like it's an infrastructure or a special purpose vehicle I think. Yeah, yeah. So it's, it's the special opportunities for special opportunities, like. And I assume at some point you get to a size where you start to actually, work with people directly, you know, so people could be. Yeah. Right. And that would and I assume it I mean, it's pensions, people who want that kind of continuous cash stream.

00;23;18;02 - 00;23;37;28
Unknown
And so it is, it's amazing to me how sophisticated energy is in terms of like, there are all these different pools of capital. And one of the things we talked about our pilot often yesterday was that one of the challenges with Energy Venture is like, you got the venture investors, you have a small bit, but like the company itself has to morph to address the different needs of capital providers.

00;23;38;06 - 00;23;57;25
Unknown
And it just changes as you grow and as you mature. And the, the founder kind of has to be a chameleon, so to speak. So like move to and transition like the value proposition to that. And the value proposition investor is, you know, when it's VC, it's it's that kind of raise and equity value. But to a pension fund it's no very reasonable reliable dividend.

00;23;57;27 - 00;24;24;06
Unknown
That's proven. Exactly. Yeah, exactly. And I think that that's, that's what in some ways makes energy like different. It's like a different skill set. And then like what you talked about with software. So it's you're doing it in action. So yeah. Yeah. No. And and I think it's also, sophistication of the climate investment community to recognize that, like, are you investing in a software company or are you actually investing in an infrastructure company?

00;24;24;10 - 00;24;56;05
Unknown
The long term capitalization path is very different for those two. And, yeah. So it's just kind of being a more, I think there's, there's some climate investors that are like truly grappling with like, okay, you need to go debt. You can't, you can't, can't continue to raise $500 million round from venture capital. Like, not only are you, like totally diluting the founders and all the people, but like, it's just not a very capital efficient way to use that money, right?

00;24;56;05 - 00;25;23;07
Unknown
Like that. The type of like markup is just not even possible on points. So yeah, it's being like getting the company ready to be positioned to get, you know, traditional bank financing, project financing is important. So, so obviously you came from a background because you were I if I remember generally. Yeah. That's you know, how that how do you how would a how as normal people learn to navigate this if we had to like do the same thing because, because people aren't, you know, do you have to understand this?

00;25;23;09 - 00;25;43;03
Unknown
And, and obviously you don't want to stumble into it while you're trying to build. Don't someone. Yeah. How did the head of the West rest of us get this kind of wisdom, I guess. Well, how did you learn about venture capital raising? Right. You just you will learn it. It's not you. You know, you were, you know, all the founders out there that are raising venture capital rounds.

00;25;43;03 - 00;26;03;07
Unknown
We're not also venture capital investors in the exact same thing here. Energy infrastructure. So when you think about or just infrastructure in general, right, like when you think about, how oil and gas facilities are built, how buildings and real estate is built, how a bridge is built like the world is built using project finance. Yeah. It's amazing.

00;26;03;08 - 00;26;24;08
Unknown
Right? Yeah. And all the people that have done these, develop these hazard projects probably didn't come from banking backgrounds either. Right. So so those are traditionally not venture people because I think they look at their risk go, well I don't understand that. Yeah I mean they're definitely not going to like definitely like I remember raising our, you know, coming from generate capital, which is more a project finance like equity fund.

00;26;24;11 - 00;26;45;04
Unknown
Like it's a lot more robust when you're doing diligence, when you're looking at the market, it's very quant heavy. You a lot of financial models. I was shocked when like we were raising a venture round in some of the venture investors, you know, they would say like, oh, we have such a robust data room and like, wow, your model is so sophisticated.

00;26;45;05 - 00;27;04;17
Unknown
I'm like, well, what do you mean? And this is and this is like the norm. Someone even look at a model, actually many venture investors and we're talking like, you know, we raised our first round at the end of 2022. Like, what's project finance? I was like, whoa, okay. Which is funny because like, so much of I think she had already had that in existence.

00;27;04;22 - 00;27;27;26
Unknown
When you think about like, wind and solar. Yeah, it was critical. Oh, yeah. But it's, it's funny how much, I'm starting to appreciate that. Like, founder market fit matters at the early stages. Oh, yeah. And like, you like, for the business you're building in your market, like you're the example of, like a founder market fit situation because you came from the background and you knew how you were going to design the business.

00;27;27;28 - 00;27;44;16
Unknown
And so I, you know, I think you touched on a little bit, but when you think back to, Young Genesis, I don't know if we're like, old or anything, but, you know, when you were doing Clean Energy Accelerator with. Right? It's like. Yeah, like how much, how much help you like how much you think the feel. The plan has deviated kind of to where you are today.

00;27;44;16 - 00;28;05;20
Unknown
I'm curious how that feels. I moved to Houston in like 2021 year after you like. Yeah, you pitched us in the depths of Covid in 2020 or like, hey, you should. Yeah, she moved to Houston. So, and I have you to think. Thank for that. Oh, God. How are you doing, Houston? Yeah. No. So, how much is a deviated well?

00;28;05;23 - 00;28;25;06
Unknown
So I think I started canon and maybe, like, just to step back here, like, I did not come up with the idea. My co-founders actually came up with the idea, so they were working in a geothermal company, and they saw that, and especially at that time, like, geothermal is really hard to get off the ground because you have to drill into the ground.

00;28;25;06 - 00;28;49;21
Unknown
You're it's very risky to do that. And then the output is you're getting like, you know, power commodity price returns, which is pretty low now with like, you know, the geothermal gasification especially kind of data centers and the need for baseload, clean power, geothermal power purchase agreements. And that pricing is like getting that premium and, you know, folks like for of of been able to move the needle on that.

00;28;49;24 - 00;29;18;22
Unknown
But I think like for them at the time the, the, the, the economics and risk reward just didn't make sense. And so they said, okay, well, what if we take the same technology like organic rate, can turbines not drill in the ground but like above ground and industrial heat and and and you know, do that instead. And so co-founder kind of pitched me about it and we're like, yeah, that's, you know, because my background to generate capital I was on the the organic waste team.

00;29;18;22 - 00;29;36;29
Unknown
And so we were looking at all things kind of called it waste to value. So all things like a lot of anaerobic digestion, like renewable natural gas, biomass kind of stuff. And when we are starting, like when I was at generate and creating kind of that, that portfolio, it was very early at that time. So it was very scrappy.

00;29;37;02 - 00;29;59;13
Unknown
You know, not a lot of developers, policy was still pretty shaky. And, you know, did a lot of stuff in terms of like making the policy more robust for investment. But that was a whole that was a whole thesis of generate capital at that time was like lean in in these kind of nascent sectors that were inherently bankable but didn't have investors that could see kind of like the potential of it.

00;29;59;13 - 00;30;21;03
Unknown
And so you come and go in and like create that value. And so it's exactly we did an organic waste. And so my co-founders on the geothermal side, like, they knew kind of this kind of potential of waste heat to power capture. But, they kind of tapped me as I went to university with one of my coworkers with Dan, and, and I was like, hey, you know, come help us build this company.

00;30;21;03 - 00;30;40;04
Unknown
It's kind of adjacent to what you're doing in, like, organic ways. And I saw it. I was like, oh, this is this is really interesting. It can follow a similar playbook. Our success at, at generate and so, yeah, I, you know, I came into the company with this idea like, this is my opportunity to build the company.

00;30;40;04 - 00;31;02;02
Unknown
I always wanted to invest in. And so it's very much like project finance focused think ability at the kind of onset a technology that works but is still nascent. And, kind of like an industry group that was still there but could use kind of like more kind of, institution. Institutional knowledge to add to it.

00;31;02;05 - 00;31;21;21
Unknown
Okay. Did you ever have this moment? When you were, like, evaluating this and you said this like, I'm the person for this or I'm the only person to do this? Oh, I'm curious, you know what I mean? Yeah, actually, you know, when I was a generate cap, I was very happy with my job. And, this because it was a gig.

00;31;21;21 - 00;31;44;03
Unknown
Yeah, yeah. Fun to be like. Yeah, yeah, I got to work with jigger. And we were doing really cool things and making a lot of impact. And so my friend kind of pitched this idea. It was like, I was like, oh, I could do this. Like, I can see the path. Like, I uniquely can do this, given kind of the stuff that I did at Treasury and my network.

00;31;44;10 - 00;32;10;07
Unknown
And I think for me personally, I've always been guided by like, what's the thing in my career that can make the most climate impact? So kind of, you know, I made a promise to myself and others and like, when I was like 20, that, I wanted to, you know, when I'm on a deathbed, I want to look back on my life and say, like, look myself in the mirror and be like, I did everything I possibly could to help mitigate climate change.

00;32;10;09 - 00;32;37;25
Unknown
And have I did I live that value my entire life. And so that has guided every single career decision that I've ever made. And most of the time, the career decision was counter to what the maybe the best financial decision was, right? Yeah. So, yeah, I mean, like when I was given this opportunity, it was very much like, oh, this is a sector that could really use, my skill set and like my, my network.

00;32;37;27 - 00;33;02;14
Unknown
And, and I just love the, the sector, like, you know, being in ways you're, it's just super not sexy, right. Like you're, you're and we were dealing with, like, cow manure. Yeah. It's so operationally challenging. Yeah. It's yeah. It's like, you know, it's it's it's operationally challenging for sure. You're in the middle. Yeah. So I love these like places where it's just like not cool.

00;33;02;17 - 00;33;22;17
Unknown
And you know the heavy industrial and coming from like Alberta where, you know, you have oil sands and you have like, you know, a lot of heavy industrial in your backyard like that. Just it just seemed like such a cool fit. And so kind of what was like that Gandhi saying Gandhi is that are probably it's like a you don't you don't or maybe.

00;33;22;20 - 00;33;43;06
Unknown
Yeah. Yeah, maybe it's like probably not similar. But if not you then who. Yeah. So yeah definitely that calling and I think like, you know for my co-founders and I, you know, I probably would go as far as to say a lot of our, our team is like, you know, if it's not you trying to build out this because it's not easy, you know, a lot, of lot of hours.

00;33;43;13 - 00;34;03;12
Unknown
I support a lot of what I am learning. Now, thanks for sharing that. It's it's it's so funny how, sometimes, like, it makes sense why you're here. Based on on being that person in the room. So I want to ask one more question, and I'm looking at the clock. So, a rumor I've been hearing, not about you guys, but just about the market in general.

00;34;03;12 - 00;34;24;10
Unknown
Is that all this growth in and hyperscalers. And I'm not like a. Yeah. I hyperscaler person, is is causing energy companies to look at, providing power on site and providing they're like, existing infrastructure that like co-locate data centers. Is that something you're seeing? And like, what? Is there something driving that? Or am I just hearing rumors?

00;34;24;12 - 00;34;46;18
Unknown
Oh, are you saying, like, using their existing infrastructure? Yeah, because they already have power. They already have permits or have offtake. They already have. You know, whatever. Regulatory right away they need. And, would someone be, like, interested in using your product? Not necessarily to offload their power, but actually to enable, bringing in a data center or a system that they don't have today?

00;34;46;25 - 00;35;14;09
Unknown
Yeah. That's something you're starting to see. Yeah, absolutely. Something that we're actively pitching. Okay, okay. Just tell me, like what? You know what makes canon different. And going back it was you know, we see to power was always the first product. But we always thought like if we can be the ultimate energy developer for these special facilities and be that like ultimate partner for them, that can provide the capital, the expertise, the operating expertise, the market expertise like that.

00;35;14;09 - 00;35;48;05
Unknown
That's right. And goals in the developer for all energy infrastructure for these, these, these companies. And, you know, the data center build is and computers, you know, infrastructure and opportunity of our lifetime. Yeah. And so definitely like the angle for our heavy industrial customers is if you've got, if you got land that's, kind of, you know, vacant that has access to, you know, we've got this whole, like, checklist of stuff, and we have access and partners on the data, data center side.

00;35;48;07 - 00;36;08;27
Unknown
Like, let us bring that, okay? You know, we bring the capital and all that expertise. Okay? And you would you can bring potentially the data. Yeah, we would bring that. We have a whole list of data center partners, big and small. Yeah, I know I was looking at, I feel some guy, some company that was in new Jersey, and they had a gentleman whose title was like VP of Hyperscaler development, and I was like, you guys build specialty chemicals.

00;36;08;27 - 00;36;27;19
Unknown
What is this happening? And, yeah, I don't know if it's just something that's emerged in the last six months that people are looking at the problem, or is it? I'm curious, like how new is it and how accepting is industry bent at this concept? I guess I'm still far away from that. Yeah. It depends. It depends on like it depends on the company.

00;36;27;22 - 00;36;47;24
Unknown
Some companies are we we tell them about this opportunity. They're like, oh we've already been working on it for multiple years. It's like cool great. Like here we can plug in. How can we help. Like this is how you can help us. Some companies they've never really even thought about, or they've thought about it, but it was really kind of viewed as a just a land sale.

00;36;47;27 - 00;37;19;10
Unknown
And so that that value is just not that one. So, it totally depends on just like the level of sophistication that you're walking into with the company. Yeah. But what I can say is, like, there's a lot of opportunity and it's a very time consuming. So this is where, like a developer that you know, does this for a living and focuses on this can just bring these companies kind of up the learning curve with the partners and execution expertise so that they can take advantage of this opportunity because this operation is not going to last forever.

00;37;19;10 - 00;37;34;19
Unknown
Oh yeah. And that's the big thing there. Yeah. Like a two year win. Yeah. You got, you know, a very short window where like data centers want to build and and it's just hard. Right. And then things are going to change. So like lock it in now then we can do that like very quickly for you. So that's yeah, that's been a really interesting thing.

00;37;34;24 - 00;38;12;02
Unknown
And you know that the side effect, the kind of the spill over on the data center side too, is just like power prices are just rising. So totally, you know, that that's one vertical that we talk about, like the data center value proposition, but really like it's it's it's being kind of smushed in a whole like a larger value proposition is like also your your power price, your bill when you look at it is like 50% transmission distribution costs that you know, those five gigawatt data centers that are going through the utility down the road from you, yeah, is going to impact your T&E charges.

00;38;12;03 - 00;38;37;25
Unknown
You're going to see increases because it gets distributed to get the data that is raping. Yeah. Yeah. And like so yeah I mean I mean there's like regulation that's a whole different podcast. We can give a little different podcast. And you probably find some people who are like way more especially, you know, in your network. But but yeah, so I mean, like they're seeing kind of the impact they're already seeing a little bit of that impact, but they're not seeing like the real impact of that, the that kind of build out that transmission.

00;38;37;29 - 00;38;52;06
Unknown
I guess a lot of it hasn't come online yet. It's still in development. It's still in the still an early, early development. Right. And then give it to two years. Give it three years. You're going to start to see like that actually kind of flows through. And and that's going to be a yeah it's going to be tough.

00;38;52;10 - 00;39;13;06
Unknown
So some of the smart ones, smart industrials are saying like okay like let's let's go to some behind the meter, stuff here to make sure that we're we're hedged against that. So what I'm hearing is the smart industrials are going to give us a call and say give me a call. Your pipeline your capital gains all your answers.

00;39;13;07 - 00;39;33;13
Unknown
Good. No. I, I don't know if there's anything else. So I'll leave us with great last but, Yeah. How how should people get in touch if they want to learn more and more? If they want to, you know, engage your team. Yeah. So upside cannon energy and iron energy.com. And then my email just Janis account and energy.com.

00;39;33;16 - 00;39;51;02
Unknown
Yeah. Where we're ready. Yeah. We're super excited. Let's see what next. You're up at Briggs. Absolutely. So next time when I talk to you, we're going to be okay. Thanks. All right, that's it. Thanks so much. Thank you for listening. I hope you enjoyed today's show. If you like the show, share it with a friend or give us a review on your podcast platform.

00;39;51;05 - 00;39;58;11
Unknown
Lastly, if you have an entrepreneur in Houston that you'd like to hear more about, let us know and we'll try to bring them in. See you next week on Energy Tech Startups.