Powin's Mike Wietecki Discusses Trends in the Battery Energy Storage Sector

The battery energy storage sector was already in a strong position before the Inflation Reduction Act. Now, the industry is charging up for a boom.

Mike Wietecki, Senior Vice President of Strategy and Regulatory Affairs at Powin, joins the show to share his insights on the technology and trends that are driving energy storage growth. Mike does a deep dive on how the Inflation Reduction Act is providing additional momentum for the sector, including how investment tax credits related to labor, location and domestic content are having a big impact on manufacturing.

Mike also delves into the jobs-related politics of renewables and the IRA; and how Powin is working with companies like IKEA to create a blueprint for the expansion of the battery energy storage market. 

Highlights from Mike Wietecki

Basics about battery energy storage - (2:41)
Powin's current customer base - (7:15)
Common questions from customers about energy storage - (8:34)
How Powin keeps the lights on in Sydney, Australia - (11:10)
How the Inflation Reduction Act has supercharged the battery sector - (13:20)
The importance of IRA guidance related to domestic content - (15:41)
Powin's current manufacturing footprint - (19:43)
The crucial role the Department of Energy's Loan Programs Office - (21:05)
Untangling supply chain issues - (22:14)
Political headwinds - (25:00)
Why speed is key for IRA projects - (27:22)
Creating a battery blueprint with coporate partners like IKEA - (29:25)
Batteries boosting grid resiliency in places like Texas and Califronia - (32:20)
Mike's bold predicitons - (33:54)
Biden administration's risky IRA politics - (34:30)
Will we see a government pricing scheme for carbon? - (36:35)

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Transcript

(Note: This transcript was created using artificial intelligence. It has not been edited verbatim.)

Sean McMahon  00:08

What's up everyone and welcome to the Renewable Energy SmartPod. I'm your host Sean McMahon, and today, we're going to spend a good chunk of time talking about trends in the energy storage sector. 

In a minute, I'll be joined by Mike Wietecki. Mike is the Senior Vice President of Strategy and Regulatory Affairs at Powin. Powin is a vertically integrated energy storage systems supplier, so Mike has an insider's view on how that market is continuing to evolve. He'll explain the technology and trends that are driving growth in that sector and the way the inflation Reduction Act has provided a huge boost. And speaking of the IRA, Mike will delve into how the impact of key details of that legislation, specifically investment tax credits dedicated to labor, location and domestic content are still being sorted out. And he'll share his insights on how those incentives stand to present opportunities and challenges for market participants up and down energy storage supply chains. 

Looking ahead at the schedule for this show, I just want to give you a heads up that we're going to be taking a break for a few weeks. Obviously, the Thanksgiving holiday is coming up here in the US. But ahead of that I'm taking my wife and kids on vacation to Brazil. That's right. We're going to Rio. One thing you might not know about my family is that we are so dedicated to all things renewable energy, that we're going to be doing a complete and thorough analysis of the solar resources that can be found in places like Copacabana and Ipanema. It's tough work, but somebody's gotta do it. 

So if any of you listeners out there have any local tips about Rio that can help us get the most out of our strenuous research trip. send them my way. Otherwise, I promise to report the findings of our field research at the end of this month, which is also when this show will return so we can shift our focus to all the news surrounding COP28. So gobble gobble. I hope our listeners in the US enjoy your Thanksgiving break. But before you do, dive on into this conversation with Mike Wietecki from Powin. 

Hello, everyone, and thank you for joining me today. My guest is Mike Wietecki, the Senior VP of Strategy and Regulatory Affairs at Powin. Mike, how are you doing today? 

Mike Wietecki  02:32

Doing great, Sean, thanks for having me on. Excited to be here. It's fun to be on your podcast, longtime listener first time caller.

Sean McMahon  02:38

Yeah. Well, welcome to the show. Let's just start things off with a real quick explainer for our audience what you and the team at Powin do. 

Mike Wietecki  02:46

Sure, yeah, happy to could you mind if I start with a little background on the industry, and then we get into how Powin fits into that background? 

Sean McMahon
Certainly go for it. 

Mike Wietecki 
Great. So the industry that we participate in, is battery energy storage. And in the most basic terms, energy storage allows, allows us to take electrons when they're cheap, and store them to be released when they're expensive. Electrons can become cheap, if one of two things happen, there's too much supply, or there's too much demand. As they said, This is the most basic explanation I can make of energy storage market. So let's talk about how there's too much supply. Because that's really interesting in light of what's going on in this sort of shift to renewables. As we build more wind as we build more solar, that generation is what's called intermittent generation. I'm sure I'm not telling your listeners anything new. But that intermittent generation means that we don't have consistent supply to meet demand. And there's a couple of ways to manage that issue. The first is to just limit the amount of renewables on the grid, we keep burning stuff to make electricity. And we say, you know, renewables are capped at 10%, or whatever the percent is that the grid can handle. Well, frankly, that that idea doesn't work because we're not gonna be able to transition to a carbon neutral economy by continuing to burn stuff. The second option is we build a ton of renewables and transmission. So there's always enough generation somewhere to meet the available demand. And basically, we just over build massively, we invest massively to move all those electrons around to where they're needed at that point in time. And that's a really interesting potential solution. It's not practical, but there is some thinking around there. That overbilled coupled with the third option, which is store those those excess cheap electrons until they're expensive and needed. And we do that right now with battery energy storage, and that's called shifting. That's the most basic attribute that a battery brings to the grid. And it's a critical tool to increase the amount of renewable capacity on the grid. So battery storage and we are have the lithium ion and battery energy storage provides multiple other resources to the grid. But let's just stick to sort of the basics, which is that shifting. And there's there's, there's several ways to store energy, historically, the largest was pumped hydro. And there's gravity coming online, there's thermal storage, there's pneumatic storage. But battery energy storage is really interesting, because geographically agnostic, you can really put a battery anywhere and store that excess energy until it's needed anywhere on the grid. And we've seen a transition to a specific type of battery chemistry called lithium iron phosphate. That's what Powin uses. And that's due to the unique characteristics and inherent safety of of that chemistry. So, Palen, what do we do? Well, we participate in this energy storage market by being a vertically integrated energy storage system supplier. Our vision is to lead the frontier of energy by accelerating the transition to clean, reliable and affordable power. And we build fairly large scale projects. Our average size is larger than 100 megawatt hours, they're typically in front of the meter in the industry has grown rapidly. With a hockey stick growth rate of the energy storage industry generically, we have about three and a half gigawatt hours of operating assets, about 13 gigawatt hours in construction, and Powin systems over the last nearly decade have discharged about a half a terawatt hour into the grid. What do we sell, we sell a vertically integrated, full turnkey energy storage system. Powin owns the technology from above the cells all the way to the energy management system that controls these power plants. We sell the hardware, the software that controls analytics, we have a service team and a monitoring team. And we're actively expanding our service offering to support our customers efficiently optimizing the value of their their assets. Is that enough? To give you a little background on PowerPoint? Yeah,

Sean McMahon  07:12

I think I know where you all sit now. Great. Talk to me a little bit about your customer base right now. It sounds like it's utilities, maybe some large corporates, you know, what's the blend right now?

Mike Wietecki  07:22

Yeah, so our customer base, we started by self consuming our own supply. Back in 2016, we self developed a couple projects, and use them as proof of concept. From that stage, we've expanded the customer base to people that actually pay us. And those are really developers IPPS, utilities, corporates, and that mix of customers is really the mix that's driving this whole industry, the customer base is ever evolving, and their off takers are ever evolving. And as we expand really the applicability of energy storage across the grid, by lowering the cost of storage, we do expect that the customer base will continue to expand also, and you know, this fast, it's a fast moving technology. And so creativity in our customers is moving the business models, successful business models to deploy our technology in ways that we're not always expecting. It's a really exciting industry to be in and a time to be in it. 

Sean McMahon  08:28

Okay, and as that market evolves, obviously, you're gonna have some new participants perhaps entering the market. Right? So what kind of questions does your team field from via utilities or corporates who are asking questions about energy storage and how it all works, and what they need to satisfy their demands?

Mike Wietecki  08:43

Yeah, so you know, Powin is a pretty well known player in the industry. We've got three and a half gigawatt hours operating 13 gigawatt hours and construction, we have about a half a terawatt hour of total discharged energy through lb systems. So we have gotten to a point where we don't really have to explain the company anymore. It's really how do you make a system fit? And these are massive investments. You know, we talked about sort of the small size project now is 100 megawatt hours. These are expensive investments that take a lot of resources across organizations to move forward. And so the questions are really how do you optimize the investment that these folks are making to get a plant and a project that's going to more than penciled is really going to be profitable in the long run. And we do have that power and a bit of a unique perspective on how to make that happen. And that comes from our structure, Powin provides a fully vertically integrated system. So we own the entire energy storage value chain, with the exception of cells, and we treat cells as a commodity that that that's a raw material and we're able to incorporate cells from various different suppliers across the market. And so when we're working with customers, there's a focus on what is this cell going to be able to do over the next 510 20 years. And now we're seeing announcements looking out, where cells are being guaranteed for 25 years, two and a half decades of cell performance being guaranteed as a pretty exceptional thing. When looking back just five, seven years ago, suppliers weren't really willing to guarantee anything past 10. And so the question is evolved with this market, and with the investment that's going on, and sort of the base level technology, which is the lithium ion cell. And because lb doesn't own that manufacturing that piece of the vertical, we're able to utilize best cost best fit technology. And customers are laser focused on that, as well as safety. There's been lots of news recently about folks trying to slow down some energy storage deployments because of concerns about safety. And customers just really need to understand exactly how these systems work operate, and how they're going to be good members of the community for long term.

Sean McMahon  11:10

And what about kind of the mix of projects? Is it mostly co-located stuff with, you know, wind or solar? Or is it a lot of standalone or what's the blend there,

Mike Wietecki  11:18

The mix of projects is changing. And we can get into, you know, some of the factors driving that IRA being one of them. But our projects are typically standalone storage. These are large scale, we're doing a project in Australia, right now, it's nearly two gigawatt hours of storage, almost a gigawatt of power. And those projects are really baseload replacement. And so they're being sited at locations that have good transmission, either legacy fossil fuel plants, the one in Australia that I mentioned, is adjacent to a coal plant that's being decommissioned. And that battery is going to power Sydney, if that battery goes down. The City of Sydney will go dark. So these these sites are Yeah, yeah, I mean, it's it's these are more than science projects, you know, you think about the rate of growth that we talked about it sort of when we kicked off, where projects back in the 2015 range were a big project was 10 megawatt hours. And it was big, because the cost of cells at the time was just so expensive, you had to have a really niche fit for that project to make sense. And today, we're talking about gigawatt hour scale projects. And that's because the cost of these systems has gotten to a point where the applications have just increased geometrically, to the point where we're using batteries, plus, you know, renewable generation source to displace legacy fossil generation, it's a really exciting time to be in this industry, and just a confluence of all these things happening with technological advancements in the lithium sphere that's bringing costs down, plus a market that is now providing incentives to transition away from legacy to renewables. And so it's, you know, there's no real stopping how these applications are going to expand and where they're going in the foreseeable future.

Sean McMahon  13:20

You can't really work in renewables these days without talking about the inflation Reduction Act, right. So how is the IRA shifted the landscape for energy storage,

Mike Wietecki  13:30

You cannot talk about renewables without mentioning the IRA, for sure. It is certainly added additional velocity to this transition. What we have seen, because energy storage when the IRA was announced, had already really reached an escape velocity. I don't want to say cruising altitude because it continues to accelerate and growth. But it had become a technology that could be deployed without subsidy, economically, it could compete without subsidy. So what happens when you add a subsidy to something like that, it adds massive velocity. We saw the market overnight for energy storage increased something on the range of 30 to 40%. From before IRA to post IRA, it made marginal projects suddenly pencil, which is, you know, a pretty exciting industry to be in when your your order book just increases by 30 to 40%. overnight. It also brought substantial additional attention into what was happening beyond just you know, the solar panels on people's roofs. People understood the industrialization and institutionalization of renewables generally, but storage specifically as an asset class with the ITCs. And with all the investment that's coming in, there's just no way for institutional capital to sit on the sidelines anymore when it comes to utilities. Scale energy storage. And we're also seeing, you know, manufacturing, springing up in a diverse set of locations and substantial investment being directed to disadvantaged locations, whether it be low income, or whether it be locations that are suffering from the transition, you know, X coal mining communities, or plants or communities that had legacy fossil generation are being targets for additional investment and incentive, which is a really exciting thing about the IRA. It's spreading the wealth that the renewables transition is bringing to the US to communities that wouldn't otherwise have great access to it.

Sean McMahon  15:41

And what other aspects of the IRA, are you keeping your eye on? I mean, you mentioned some of the incentives in terms of location and things like that. I know, there's also stuff out there regarding domestic content, labor. So what do you keep the closest eye on? 

Mike Wietecki  15:56

Absolutely. Our eyes are focused on the rulemaking that is expected to come out on domestic content before the end of the year. Right now, there's guidance that a lot of people are using to direct investment. But that guidance has a couple of holes in it, and left a couple of questions on answered. And we do expect the rulemaking by the end of the year to answer some of those, hopefully, all of those questions around what it's going to take to achieve the applicable percentage thresholds that are laid out in the IRA. And the applicable percentage threshold is, at most basic term, how much of the content of a product needs to be manufactured or undergo a manufacturing process in the United States in order for that product to be considered of domestic content. And what we're expecting to see is some clarification around the labor, the cost of labor that goes into the manufacturing of those products, and how that cost is integrated into the calculation to determine what is the value of us contribution to the value of the product. And our customers care a lot about that, because when they are building a facility, that facility can achieve an additional 10% Ira peitc bonus, if that facility achieves those applicable percentages. So it's not just pounds product that goes into that calculation, it's the overall cost of the project that goes into the calculation, and pounds product is a very substantial add or, or detract or as the case may be, to the applicable percentage of domestic content for those projects. So we do expect that companies are customers, let's think about what incentivizes a customer to buy a product, it's cost, you know, there's the benefits of the product, but then there's like the bottom line cost. And so when we're talking about domestic content, it has a absolute material impact to the value proposition of a project to a customer's pro forma, that 10% ITC adder needs to be taken into context, because in order to achieve that 10%, we need to produce the products that go into the project in the US. I don't think anybody's going to say right now that from a pure cost perspective, the US manufacturing of energy storage can directly compete with overseas sources that time hopefully comes soon where we can directly compete because of technological advancement. But what it boils down to is the customer will be forced to make a decision. Assuming that we can't get to parity between domestic content plus the EITC. With the cost of overseas sourced goods, the customer will have to make a decision on whether or not they're willing to pay more in certain cases to source domestically. Or if they can find product cheaper, that is sourced globally, go that route. What we do expect is that in the pretty near future, with that ITC, we will be at parity based on the applicable percentage thresholds. We don't have to achieve 100% domestic content in the US we need to achieve right now. 40% And then it steps up to 45% 50% 55% in successive years, and we do expect that we're going to be able to achieve that at parity or extremely near parity with globally sourced goods.

Sean McMahon  19:44

And what does Powin’s current manufacturing footprint look like?

Mike Wietecki  19:47

Yeah, we have a global manufacturing footprint and its ever growing to meet the increasing demand. We talked through that sort of hockey stick growth rate. And that's probably one of our Our biggest challenges is continuing to keep up with supply chain evolutions. Right now we are manufacturing in Mexico, in Vietnam, in China, we are spinning up manufacturing in the US, that is being accelerated by Ira opportunities. And we are looking at expanding manufacturing elsewhere in response to large projects where it makes sense to have a manufacturing footprint that is geographically proximal to the project when these projects are of such a massive scale. We do have partnerships with quite a few suppliers. And I'd love to talk about supply chain and just this ever evolving supply chain at some point, but our suppliers, cell suppliers are spinning up manufacturing in the US pretty aggressively in response to the IRA, we've seen a lot of announcements with a lot of gigawatt hours in the press. And we do have offtake agreements in the 10s of gigawatt hours with manufacturers that are accelerating development in the US. 

Sean McMahon  21:06

So that's some of the headlines we're seeing in terms of manufacturing, throughout the south, places like that. And I think the LPO is pretty involved in that right?

Mike Wietecki  21:13

Yeah, there's a there's a bit of a battery boom happening in the US. It's It's exciting to see just the scale of investment. We are seeing the DoD LPO program, as yeah, as you mentioned, get very aggressively involved in providing loans and financing to some of these large scale projects. And you know, those large scale projects wouldn't happen if you didn't have an off taker for the cells like Colin Powell is signing up on on one side of the ledger saying, Hey, we're going to buy 10s of gigawatt hours of cells. And that justifies the investment for the sell plants that are happening in states like Tennessee, South Carolina, Ohio. And it's justifying the investment and that investment is coming both from public and private sources. The DoD LPO program has put billions of dollars into play in financing this advanced manufacturing revival in the US. And it's really exciting to see and be a big part of.

Sean McMahon  22:14

And you mentioned there's some other areas of the supply chain that you're watching. What are those? 

Mike Wietecki  22:20

Yeah, certainly. So, you know, really in response to COVID. Boy, none of us could get any of the things we needed. It wasn't just energy storage that was bitten by supply chain disruption, it was everything, we are aggressively diversifying our supply chain. And the amount of investment that's happening in all the different stages of the energy storage value chain are being driven by multiple markets, we see benefit from EV investment, the EV investment is really driving the evolution of the cell technology, as well as some interesting thinking around modules. And so we're following the technological evolution and the technological evolution of our raw materials, which we consider to be cells is driving diversification of the supply chain, there are new entrants coming in, that have a new technology that just makes sense to investigate to research. And we have our own lab. So we're pulling cells from all over the world, and doing cell testing on the next greatest thing that's coming out to make sure we understand it, and we're on top of it. And it's not just the same companies that are pumping out the next evolution of technology. It's new companies, new entrants into the market that were considered a tier two or tier three supplier, that with a technological leap forward, and some diligent research into whether or not their technology is meeting the performance metrics that are being put into the market. That supplier can then become a tier one, and we can incorporate that into our systems and then put it out into the market. 

Sean McMahon  23:59

In addition to untangling or resuscitating the supply chain, are there any other headwinds that the energy storage sector is facing right now?

Mike Wietecki  24:06

Well, that's a great question. It feels like there's a lot of tail winds. It feels like you know, the the industry reached escape velocity about four years ago. And with the IRA, we've just received more tailwinds with, you know, additional renewables being put on on the grid constantly. There's more need for energy storage. I think the biggest headwinds that we're seeing are, you know, supply chain, just the difficulty of the supply chain keeping up with that truly insane rate of growth, doubling over, you know, several years and now we're at a compounded annual growth rate, really steady state for the next decade of 25% compound annual growth rate. It's an incredibly difficult supply chain to continue growing. So we do expect that there's going to be some unexpected disruptions in the Future. So we talked about diversification of supply chain that is not a immediate headwind. But that's a foreseeable headwind. And then I think another unforeseeable would be political change. You know, we're seeing some rumors about I don't think any are founded yet. If there is a change in Washington, peel back of the IRA, we're seeing some local governments, Texas specifically, put in place regulations that are slowing down aggressively trying to slow down renewable integration into the grid. And I think that there's this renewable transformation, and just this really, market transformation is such a massive opportunity. And the smartest people are getting involved in this transition. We think that Sure, there's going to be intermittent upsets, Texas will slow down integration of renewables with these bills that are being passed. But those are those are intermittent, they we will push past them. There's just too much backing, there's too much investment going into manufacturing, to really slow down the industry. And, you know, willful denial of science by factor injectors, just it's it can't slow down progress. Progress is happening in energy storage is an integral part of that sort of transitional period that we're excitingly moving through.

Sean McMahon  26:23

Yeah. And it seems like maybe changing some minds on this might be part of the strategy or the administration to baseline where they're kind of putting some of these manufacturing facilities. I mean, they're dropping them into red districts like, you know, left and right. So it seems like the we're hoping that the power of the economy or the the lure of jobs will change the minds there. 

Mike Wietecki  26:39

Yeah. Isn't that interesting? It's I mean, this is such an interesting thing to see where all this investment is going. And it's great. And there's reasons for that, right? The IRA was really smart about putting incentives in place to put jobs where the transition could potentially upset local economies and giving incentives for projects to be located in low income areas or areas that are considered missed out on a lot of that technological transformation, or, you know, old coal mines save states are getting incentives. It's great. It's brilliant. I really do applaud the foresight and just the all inclusive nature of the IRA to bring people along. It's really a masterstroke.

Sean McMahon  27:22

Yeah, definitely, it seems like about every other day, there's a big headline of a big plant being built somewhere. But do you have any concern that mean, it's one thing, you know, to break ground, and, you know, throw a shovel in there and have a ribbon, cutting ceremony, whatever, but they still take time for these big facilities to be built. And what I'm hearing you talk about is just this massive demand for more products. So is there any concern that those facilities just can't get built fast enough, is what I'm trying to say.

Mike Wietecki  27:50

They can't, yeah, they certainly can't get built fast enough. What we do see is an interesting sort of supply demand curve in the cell world, which is driving, you know, the cells drive a really substantial cost of these projects. It's not exact numbers. But let's say 50% of the cost of an energy storage system is tied up in the cost of cells themselves. And if you think about the cost of cells, there's all the transportation involved, there's tariffs in under certain circumstances involved. And so the manufacturing that is happening is just bringing more in the US is bringing more capacity into the market, at what is currently a higher marginal cost than we can get sells for overseas. But what we do expect will happen is as that capacity comes online, as with all things technology, the overall cost is going to trend downward. The investment is so substantial, that just the market dynamics are going to require that sell costs come down driving the overall system cost down, and thus expanding the applicability of energy storage across the market. So yes, you're absolutely right. Absolutely right. It can't come fast enough. Some would argue there's a glut of capacity in the market. But we're not subscribers to that what we're subscribers do is the best sells the best manufacturing processes are going to drive costs down. And those will be the cells in the technology that are consumed. And the systems like ours and by customers like ours.

Sean McMahon  29:25

I want to shift for a second here and talk about specific projects. You already mentioned the crucial project you have in Sydney, keeping the lights on down under what other projects do you have of note?

Mike Wietecki  29:34

Yeah, we've got a lot I think a couple that have been announced recently, we are doing a project with a really cool developer called apex. And that project is interesting because it's a it's a partnership between apex in IKEA, one of IKEA's investors that IKEA is funding the construction of the actual facility through apex and as well as buying the offtake. And so, you know, these are these are sort of outside of the typical structure that we think of where electricity is being provided by a utility or an IPP. It's corporates going in, and self building self funding and self consuming their their own investment. So that we think is a really exciting evolution. You know, that's happening at a continuing larger scale. There's been for the last decade, corporates going in and developing solar plants in the meadows of the world. And we see that happening and storage now also, also directly contracting with utilities, utilities, people think of utilities is slow moving, moving monoliths, it's just not the case, these guys are moving so fast. And the energy industry is evolving. So incredibly quickly. And utilities are driving a lot of that. So we have a project with Idaho Power right now. It's a huge project 400 Plus megawatt hours. And these utilities see energy storage as being a not just a critical part of, you know, a mixed grid future. They're a integral part of decommissioning legacy fossil generation, as well as offsetting or delaying the cost of transmission upgrades. So we talked about, you know, the diversity of batteries on the grid and all the different applications, that's one that utilities are looking at very closely is, how can I defer investment in my distribution grid and my transmission grid by putting a battery in a constrained node, and we do expect, and I don't think this is going out on a limb or anything, but we do expect that any node where there's a constraint, or any transmission project, where it can be transmission, investment that can be delayed by installing a battery, rather than going through the massive permitting process to build a new transmission line, there's going to be a battery there. So you know, those projects and the diversity of projects is just going to increase. And that's, that's probably the most exciting thing about being in this industry right now is the big scale, the huge scale, that the war tile project in Australia is amazing. And then there's going to be a diversity of projects that are going to start filling in the gaps, as people understand the applicability of batteries across the entire grid.

Sean McMahon  32:20

And so you mentioned Texas has kind of put some things in the way of the embrace, we'll say of renewables. But they're also under the spotlight, you know, for keeping the lights on after the the freeze they had a couple of years ago. And it seems like, depending on the storm, or the whatever freeze comes through, sometimes the grid stays up. Sometimes it doesn't seem kind of the same headlines out of California, right, whether it's fires or heat and things like that. So I think we all know, storage is playing a role in that. But how big of a role and you mentioned maybe even replacing the need to build new transmission lines. So So where does that all take us in the next few years? Are we going to be hearing about regions like that keeping the lights on? Because of energy storage? Or what? 

Mike Wietecki  33:00

Absolutely, yeah, we already are, California did not have blackouts this summer because of battery energy storage on their grid. That is absolutely a great topic for a future call, because I am gonna get way over my skis way too quick on that one. But yeah, absolutely. You know that energy storage is already a critical component of grid stability, from California to Texas, to island countries to, you know, wherever it's being deployed, it is taking peaking generation offline. And the batteries are going in to replace that peaking generation and provide a suite of other ancillary benefits to the grid. So I think, you know, your your point is great. And let's go about a future call on that one with with some people that can speak much more intelligently than I.

Sean McMahon  33:52

 All right. Sounds like a plan. You mentioned at the top that you listen to the podcast. And if you do you know that I like to, then you know, I like to kind of wrap up my conversations with guests by asking them for some bold predictions. So now's your chance, Mike, great. What's your bold prediction about how the energy storage sector will evolve in, say, the next five or 10 years?

Mike Wietecki  34:11

Fantastic. Can I can I give you a three but I'll give you three if you're willing to argue with me on at least one of them.

Sean McMahon  34:17

Bring it on? Let's do it.

Mike Wietecki  34:18

Okay, great. So I think the we discussed a bunch of headwinds. Well, not a bunch, we've discussed a couple headwinds that are pushing back against the tailwinds of energy storage. I do think that in the next 24 months, the science projectors in Washington, are going to be quieted quite substantially. We do see, and this gets to your point of where this investment is happening. We just see so much acceptance of the renewable energy transition and really low carbon future transition happening at a accelerated rate that we're seeing. I think we're seeing In the last desperate gasps of the climate exploitive lobby, starting to go silent, which is exciting. So that's my first one. The next one is by 2030. 

Sean McMahon  35:11

Oh, hold on, I'm gonna, I'm gonna go ahead and jump in on that one real quick, I have concerns about the strategy the administration is deploying in terms of dropping some of these manufacturing facilities in red districts. I see the strategy, I know what they're trying to do. But my concern is that they might not be watching their flank. I think there's some purple states purple districts, that when we look back 10 years from now might go red, and they probably might have wished they brought some of those dollars in those districts. So that's just me, you know, I feel like it's an aggressive play right now. But I'm in a part of the country where you know, I'm, I'm in Portland, Oregon, right. And so the city, very blue, I don't have to drive that far to get really red. But I know some of those areas that are red around here. wouldn't mind having some of those jobs, but Oregon's a quote unquote, blue state, and so not as much money is coming here. So what's your next bold prediction?

Mike Wietecki  36:02

That's a great point. It's a great point, Sean. And it's, hopefully we're seeing projects that are going into many more states than the ones that you know, we talked at the top of the show it's in but I, when I say projects, actual sites, facilities that are being deployed, where people are seeing, you know, what a battery can do, specifically in the ground. 

So my next one is by 2030, renewables are going to hit 50 plus percent of all US domestic generation, and within the next 10 years, and here's my optimistic prediction, I thought you're going to disagree with me on this one, I sort of left it at the end, was that we're gonna see a governmental pricing scheme in the next 10 years for carbon.

Sean McMahon  36:46

I don't think that will happen.

Mike Wietecki  36:51

That's my dream prediction for you. 

Sean McMahon  36:53

Yeah, I think well, you start you talked about the uncertainty that politics can present. And I think that a lot of things would have to stay very consistent for the next 10 years for us to get close to that. And I'm just not sure they will. So make sure what Yeah, yeah, am I you know, I'm rooting for that, but I'm not sure it's gonna get there. So the reality is, the rally is a little more sobering, I think. 

Well, hey, listen, Mike, this has been wonderful talking to you. I appreciate your insights. And thanks for making the time.

Mike Wietecki  37:20

Thanks a lot, Sean. Glad to do it. Hope to talk again soon.

Sean McMahon  37:30

All right, everyone. Well, that's our show for today. Thank you all for listening. And if you haven't already, please subscribe or follow this show on Apple, Spotify, Google, or wherever you listen to your podcasts. And as always, please be sure to share it with your friends and colleagues. Have a great day.