Digging Deep Into Geothermal with Mike Richter from Brightcore Energy

Sponsored by: EDF power solutions

When hockey legend Mike Richter retired from the NHL, he pivoted to a career in energy efficiency. Mike is now the president of Brightcore Energy, a company that offers turn-key solutions -- including geothermal systems, solar, energy storage, or smart building technologies -- that simplify the clean energy journey for large commercial and industrial clients. 

During our conversation, Mike and I focus on advancements in geothermal that enable companies like Brightcore to not only complete projects in wide open spaces like business parks and college campuses, but also in extremely tight spaces ... like Manhattan. 

Selected highlights

• How geothermal helps buildings 'beat the heat ... and the cold' - (4:33)
• The challenges of using georthermal in urban settings - (10:05)
• Geothermal and earthquakes - (18:48)
• PPAs and other financial factors for geothermal - (25:17)
• The impact of the Big Beautiful Act on geothermal - (32:06)
• Mike's bold predictions for the future of geothermal - (39:33)
• Geothermal and AI data centers - (43:13)

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Transcript

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

Sean McMahon  0:00  

This episode of the Renewable Energy SmartPod is brought to you by EDF power solutions. 

More than renewables, EDF power solutions integrates wind and solar with innovative technologies like green hydrogen and battery and pumped storage. Join EDF power solutions in creating energy designed for the future. To learn more, visit EDF-RE.com or just click on the link in today's show notes.

Sean McMahon  0:41  

What's up everyone? And welcome to the Renewable Energy SmartPod. I'm your host, Sean McMahon, and I've got to say we've got an exciting episode in store for you today. In a few minutes, I'm going to be joined by Mike Richter, the president of Brightcore Energy. Now I understand that Mike's name might ring a bell for you, especially if you're a hockey fan. That's because this Mike Richter is the same Mike Richter that was a legendary goalie for the NHL New York Rangers. During his stellar career. Mike was a fixture between the pipes at Madison Square Garden. He also played for Team USA in the Olympics and was selected to multiple NHL all star games, even bringing home MVP honors for one of those appearances. Oh, and who could forget … Mike also helped the Rangers lift the Stanley Cup in 1994 

After Mike hung up his skates, he quickly pivoted to a career in clean energy, and now he and the rest of the team at Brightcore have their hands on some fascinating projects. They offer all kinds of energy efficiency and renewable energy services, but Mike and I are going to spend a good chunk of our time talking about geothermal energy. You'll hear all about how the technology in that sector has advanced so far that firms like Brightcore can not only complete projects in the wide open spaces associated with business parks and college campuses, but also in extremely tight spaces like Manhattan. 

But before Mike and I drop the puck, so to speak. Just a few quick housekeeping items. If you follow this podcast, you know that in recent weeks, we've launched the daily dose of renewables. This quick roundup of headlines, which usually lasts just four or five minutes, keeps you informed about developments shaping this industry. But just a quick heads up, I'm traveling tomorrow, so we'll be skipping that episode for a day. 

And as always, if you want a newsletter that's packed with news and information about renewables delivered directly to your inbox each day, head on over to smartbrief.com and sign up for the renewable energy SmartBrief or you can just click on the link in today's show notes. 

Right now, it's time to welcome to the show. Mike Richter, the president of Brightcore Energy. Mike, how you doing today?

Mike Richter  3:11  

Great Sean, really, really excited to be here. Thanks for having me on.

Sean McMahon  3:15  

I'm excited to chat with you. Obviously, you know you and the team at Brightcore have been doing your thing for a number of years now. But just in case, we have a few listeners who aren't familiar with your company. Tell me a little bit more about what you do. 

Mike Richter  3:26  

Well, great question. Lots of people in the office have been wondering that now for a decade. But at Brightcore, we're effectively an energy efficiency company in the commercial industrial space, okay? And the whole idea that our reason for existing is to make buildings run better, smoother and save operational costs, the motivation is to decarbonize, for sure. But really the equation is the value that we bring through three basic pillars, lighting controls and VFDs and whatnot, solar and ground source heat pumps to your thermal the whole idea is we have to do the upfront analysis to make sure that there is a financial reward for putting more effective, efficient technologies in the building. So we do work with new builds as well as retrofits, and increasingly, with some of the technology we're bringing, which I'm sure we'll cover in the geothermal space. We're able to do this in a pretty aggressive manner in the retrofit market. So we're super excited by it.

Sean McMahon  4:28  

And now you mentioned, you know, the financial piece of this puzzle, right? But we're here. We are talking in July. It's the it's the dog days of summer. And there's been a few pretty, pretty tough heat waves that have hit, you know, urban areas, and I think there's a heat dome sitting over the Northeast pretty soon here or today. What are you hearing from clients about the importance of optimizing their HVAC systems just for a better work environment?

Mike Richter  4:53  

It's a heck of a question. And Sean, honestly, I think I'm remiss. I'm in sales. Primarily. I'm. President of Brightcore, and we sometimes forget there's people in these buildings, and the environment in which you live and work and try to just flourish affects your day to day, whether it's a student in a grade school in the Bronx or higher ed at Harvard University or an office building housing workers at Goldman Sachs. The better that environment is, the better you're going to perform, and the happier going to be. And I think we tend to talk about greenhouse gas emissions, suppressed ROI and ease of use and optimizing avoid maintenance. These are important things. Obviously, they're crucial, but lost in this. And we've had clients tell us, as you guys didn't tell me, that it was actually going to be quieter, it's going to be more modulated temperatures, right? As an example, again, we do commercial, industrial space, CNI, we don't do residential, but I put geothermal my house a year ago. I live in Connecticut, and I have 100 year old, pretty leaky house, so I had to oversize the system a bit, but I didn't anticipate the day to day. Of course, I've been in buildings with geothermal plenty and just the quietness my entire family, as much as they complained about the drilling and the mess that was on my driveway, and there certainly was the quietness and the smoothness of operation. Is something else. I used to have these hot spots and then cold spots, or in the wintertime, I had a very powerful oil furnace. When it came on, it would really come on. And there was areas that, you know, the bathroom in my first floor would be almost too hot. The kitchen was too cold. This is consistent throughout the house. You can really dial it in. It integrates with your phone, as a lot of these things now do, but I think just the day to day operation this, I think we're remiss and not talking about the word better I often use. We talk about green sustainability. Nobody quite knows how to define that. We do understand efficiency, but this is flat a better system. It's a better work environment, better living environment.

Sean McMahon  7:07  

And, you know, I bring that up in a context of, you know, coming out of the pandemic, there was all this work from home stuff, and a lot of high profile executives, you know, are out there, and companies are out there demanding their workers come back to the office. But then if they come back to the office and it's too hot in July or August, and they got to send them home again. Are there executives you've talked to who are kind of relieved that they don't pull all these people back and then say, You know what? It's too hot, go back home again.

Mike Richter  7:33  

I'm one of them. I'm speaking to you from Armonk, New York, about 25 miles north in New York City, and it's a lovely area and a great place to work, but not a particularly efficient building. So on cold days, I'm feeling it. On hot days, we can be feeling it. And I think one of the problems with building electrification, while you're getting away from the greenhouse gas emissions in a significant manner, it's difficult sometimes to right size these things and have them work consistently. And we can get into this in more depth, but air source heat pumps are phenomenal. They work really well. But in the extremes, they can struggle either to keep up or just the amount of energy they need to heat a building or to cool a building on the hottest days. Becomes pretty significant, and you lose a lot of efficiency. And you think about the thermal mass of the Earth, it's big, it's consistent, and that's exactly what geothermal does. It shaves off a lot of those peak demands that you have truly and we've been able to have some pretty sophisticated software where we can understand with 15 minute interval data, for example, in the wintertime when the coldest nor'easter is coming in or some polar vortex and say, All right, Friday afternoon, 24 hours from now, we're going to have the temperature go from 42 and rainy to 12 degrees Fahrenheit. What do you do? You preload individual selected boreholes. If you can imagine this with extra heat so that you can then store them out. It is truly it's called B test. It's thermal storage, and we can be accurate enough with our software to use the hardware in a really effective manner. And we're actually doing this right now downtown New York City in a retrofit that we did in 100 year old Co Op. And we really had a lot of support from Con Ed. They understand that the peak is going to move from the summertime and the hottest day to the wintertime on the coldest day, as we electrify these buildings, particularly old ones with poor shells like my house, and they were able to get time of use pricing, and actually get paid to shave those peaks in the winter and summer. So as much as this appears to be a blunt object, you know, this geothermal you use in the ground, and it doesn't seem very nim. Cool. It's very, very effective when you combine it with the right software.

Sean McMahon  10:05  

Alright. Now, you mentioned that project, you know, in downtown New York, I want to ask you so I talked to a lot of you know, folks who have solutions, and if they're working on a project out in a rural area or the suburbs, and they've got tons of space to work with, right? Not quite the case in Manhattan. So what are some of the challenges? You know, when a property owner comes to you and they definitely want to leverage some of your solutions, but they're like, hey, my footprint, I don't have much to work with. You know what I'm saying? 

Mike Richter  10:30  

Sean, this is a question, and it's a legitimate one. We get asked all the time, and I think if we've done nothing else, we've helped move some of the cutting edge technology from Europe. We have an office in Stockholm, Sweden, where we have two PhDs under contract with us, their employees, and they're helping write the software, but they also understand a lot of the technology. They're probably two decades ahead of where we are in North America. So we didn't reinvent the wheel. We just brought it across the Atlantic and are plopping it here. This Beresford project that we did is really kind of a celebrated thing in Manhattan, but if you go to Stockholm, you can hit a nine iron in every direction, and you're probably going to be hitting one of these retrofits. And think about that. Retrofit market is related to urban settings in a way. They're all space constrained because you already have utilities, you already have buildings, you have limitations. And to be honest, it's quite rare for us to walk into a building say, Listen, we have a building we'd like to build or retrofit, and we have 300 acres go use this big thermal mass of a football field over here, which it'll often take depending on what the load of the building is. So really it's a direct correlation. The tonnage that you need to heat and cool the building translates to number of boreholes. You know, at whatever depth you're going, 500 800,000 feet. We usually don't go past that. So it matters. But what, what the cutting edge technology allows you to do is perforate the surface in in a smaller area and reach a thermal mass that's larger. So if you can imagine, instead of having parallel chopsticks stuck into a birthday cake. And truly, we're about 20 foot at center normally, so that these wells don't communicate with each other. Well number one starts to throw out heat and well number two starts picking it up. If they're too close, you got a problem. So you have to start to spray these things around. When you're talking about 234, 100 boreholes to a major building. You're looking at an enormous amount of square footage. So this technology allows us to go actually five and a half feet of center on the surface. And we designed a system for a major university on the east coast on a bike path, if you can imagine this. So we can get a mini rig down to a bike path, five feet at center, but spreading out on specific angles, about 7.5 degrees, and it looks almost like chopsticks on an angle, but the thermal mass that you're accessing 600 feet underground is truly the size of a rugby field, and there's No communication, so you have to do the math and all the analysis, but it's a solution that a lot of engineering firms in the United States still don't know exist. And so they may look at a project like that, that we designed for and then geothermal out. They're on a hill. They really don't have any stable ground to put one of these large trucks. And these drilling rigs are normally the conventional rigs, and we have plenty of them, or, you know, the ones on wheels and even tracks their size of a mid size fire engine, but we have enough, I guess. What would you say? A Swiss Army knife of options, and so we can go into a building, even in the sub basement of buildings, as we did in Manhattan, and if we have nine and a half feet of clearance, we can drill down to five 600 feet. So

Sean McMahon  14:07  

Wait a second. Wait a second. I got to jump in there. So you're telling me, you can go into a basement existing 100 year old building, and with nine and a half feet of clearance, you can drill 500 feet down. 500

Mike Richter  14:19  

feet down. It's a lot of manual labor, and a lot of these things that are mechanized, but you are literally putting on five foot sections of drilling pipe, drill down, add pipe, drill down, add pipe, and they screw into each other. But yeah, we actually have done that, and you have to have the ability to be very accurate when you're drilling in densely populated urban settings, as you can imagine, the thermal mass of, say, Manhattan schist, the bedrock under Manhattan, is ideal. It's got great thermal properties. But getting there through 300 years of infrastructure is a real dance. And where we were drilling in Manhattan at. Um, it was right across the Museum of Natural History, 81st and Central Park West. And if you can imagine the there's a subway stop there, there's water tunnels nearby, all kinds of fiber optic cable and pilings and everything else, from buildings that are currently standing and those that aren't. So you better know what you're doing with ground penetrating radar and all the rest. But we're quite capable of doing that. The industry has come a long, long way, and as I said, you know, Northern Europe has led the charge, and we're just riding their coattails a little bit, but we continue to innovate, and that's what really opens up the addressable market. So where, in the past, you can say, hey, one out of 20 buildings may be eligible for this, honestly, depending what the infrastructure is inside the building and the size of it, we consider everything that comes our way, because there's very few buildings that were precluded from attempting to do geothermal. Whether the return on investment is there or not, is a different calculation. But we can pretty much put geothermal boreholes anywhere.

Sean McMahon  16:08  

Wow. So tell me more about how these systems work. I mean, we talked about, you know, where you can put them, and how far down you got to drill. But walk me through just the, you know, the the operations itself of how they contribute to more efficient buildings.

Mike Richter  16:21  

Well, I mean, fundamentally, it's like I tried to tell my family, we're putting it in I've got three young boys. It's taking a warm hand and putting on a cold beer. It's just a thermal communication. And so in the wintertime, that mass of earth under your feet, the ambient temperature where we're sitting today is about 55 degrees four feet down. It doesn't change below the frost line. So in the winter, it's 55 in the summer, it's 55 and you talk about the mechanical lift. So if I'm taking 55 degree air or water and trying to get to that to a comfortable 68 or 70 your mechanical lift is only 15 degrees. In the summertime, you're pulling up 55 degree air or water, and that's pretty good for cooling a building. And the majority of the big buildings in Manhattan will often need both. There'll be areas that are heated and areas that are cool, but you're kind of cooling all year round in the big buildings. So you really have to understand how to balance the load. But the fundamental principles is exactly that, if you space these boreholes appropriately, and we literally have closed loop systems, it's a straw the U bend so it goes down, say 500 feet, goes back up, goes laterally to the next hole, and keeps doing this. So you have a series of bore holes called a bore field. That could be 1020 for a house. It could be one to four for a major lab, as we're doing at a university here in the east. It could be 300 and that's a lot of drilling, that's a lot of infrastructure going the ground, that's a lot of design work that better be really accurate. But in the end, the fundamental principle is just physics. It's a cool Earth and that warm liquid. What's beautiful about this is we either put direct water or water and glycol, and the glycol is simply a coolant, almost an antifreeze agent, but it's food grade. So if there's a leak, I wouldn't suggest eating it, but it is non toxic, so this is very different than saying there's an oil leak or anything else, because it's a closed loop system as well. This thing is robust. It's very, very resilient, and maybe it's disingenuous, but it's fireproof. It's flood proof. It's below your feet. Once you cap that thing and put it in the cement, it's over. And these things, even seismically, they're very robust. They can handle that shear that is often there. 

Sean McMahon  18:48  

Well, let me ask you a question, quick there. So we're talking about the Northeast. You're in northeast a lot. I'm born and raised in Southern California. Lots of earth moving around out in California. So how strong are these? Are they able to withstand earthquakes up to a certain, you know, point of the Richter scale, or?

Mike Richter  19:03  

What they are. And you know, if you're on a fault line, I suppose there's nothing standing in the way of the earth moving and taking out any infrastructure. But they're surprisingly robust. One of our engineers, he's from Santa Clara, California, and he has a hard time conveying how strong these things are on the ground. People like, well, you know, what if we have a truck run over, these things are underneath buildings. They're building skyscrapers on them. They're quite robust, and they're real. Set it and forget it. The life expectancy of the radiator that we have put in the ground through that boar field is between 75 and 100 years. So what we're putting in in Connecticut, at that university right now will be there long after we're all gone. And why is that important? Well, when you're talking about a municipality or a university, they have long horizons in terms of what their payback can be and what their infrastructure needs to be, and that's a beautiful thing we can amortize. That capex, the front end costs over many, many years. It's not a commercial property. Often that will be need to be flipped in three years. But we can get into some of the incentives right now, but now there's even ways of third party ownership, potentially. And this is a game changer. It's equivalent to a PPA is solar, so it travels with the owner, so it encumbers the actual client often. But back to the physics of this thing that water goes through, the ground comes up, and it's simply the same as any heat pump refrigerator, exactly when you think about the cold that's being put into your refrigeration box. And if you have bare feet in the morning, you have hot air blowing out at your feet. We just take that hot air and put it into the ground through the water system. And it's a, it's a heat exchanger that's very, very efficient. It's no different than an air source heat pump, but it's, it's more efficient than an air source heat pump because water is denser than air, and so if you can imagine how hard that thing has to work on a zero degree Fahrenheit day to get it up to 70 or hot, humid, 98 degree day that we had a couple weeks ago, and pulling that thing down to 68 or 70, it's a beast to try to get that thing turned around. We think Heat pumps are amazing, and they keep getting better. We've actually hybridized a lot of systems so that you use an air source when it makes sense. That means there's less boreholes in the ground. That means there's less front end expense, and in the extremes, you're using the geothermal more, but geothermal has the capacity to hit those extremes in a way that air source doesn't, so it really is a insurance policy. 

Sean McMahon  21:42  

Alright. Well, I appreciate you explaining a little bit more about how these systems operate. And like I said, the California kid in me is glad to hear that they're strong and durable, and I am, however, kicking myself for missing the perfect opportunity to make a terrible pun about the Richter scale. 

Mike Richter  21:55  

There's a lot of bad puns out there, not just for the Richter scales, for all the drilling and the boreholes, and believe me, I'm ultimately a vendor, and there's plenty of people who think I am both a bore and a hole on the other end of that phone.

Sean McMahon  22:09  

I imagine you've heard quite a few jokes about, you know, previously working in a cold environment, but everyone like it when you're on a hot streak. Exactly. All right, so back to these geothermal systems. So I kind of want to ask you how long it takes to install one of these, but I'm guessing that the parameters are different based on the building and the project. And you said, how many holes? Or is there any kind of general rule of thumb, or is it really just project specific?

Mike Richter  22:34  

Yeah, depending on an average site. So you're not encumbered by a lot of infrastructure and whatnot, where it can get pretty tough, and it does get tougher on a retrofit and an urban setting, but you would expect 123, holes per day, at a rate of about 600 feet per hole. Then when you need to accelerate, you just bring more rigs. We've had space constrained places where you can only get one mini rig there. We've had others where you can bring as many as four rigs operating simultaneously, so you're getting four to eight holes in a day, and you start to breeze through this a little bit quickly. The difficult part about that is has to be sequenced properly. One of our early projects we took on was difficult in its sequencing. There was already pilings in the ground, so now you have to maneuver around them, and ideally you'd come to kind of a virgin territory, plop your boar field in there, cap them and get out. Now the building can be constructed around you, or even put in a subfloor and drill through that, cap them, get out. You can do it while the building is going up. You just, hey, it makes it more difficult when the building is already up and you have these limitations on turning radiuses and whatnot, but it's pretty malleable what you can do. But the earlier we get involved in the process, and we've brought design in house, just to have that communication with the people that are actually the boots on the ground drilling, and it is paramount, just for risk avoidance, cutting the time down really makes a difference. Sequentization is really important. So sometimes, you know the building's design, and they're like, Oh, what about geothermal? Oh, man, like you can't back that up. You're six months behind. And you know, horses out of the barn. So because it's not been used as much as it has in Europe, I think it's not on the field of vision for a lot of the engineering firms and starting to become so, which is great.

Sean McMahon  24:32  

We'll be right back. 

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Sean McMahon

And now back to my conversation with Mike Richter from Brightcore Energy. Okay, now I want to shift a little bit to the financial piece of this, you talked about how some incentives are starting to evolve, shared ownership, similar to PPAs, which this audience knows power purchase agreements are a game changer when it comes to the energy sector. So how are some of those things applying specifically to some of the solutions that you and the team at Brightcore have to offer?

Mike Richter  25:39  

Well, what's fantastic is, first of all, it's a more effective, it's the most effective way to heat and cool building. Why we get into geothermal is simply that reason. I can change every light bulb in the country, and we're still not going to be hitting our decarbon goals. We're not going to save you much. We may save you 50% on the energy that was going to that light. But lighting accounts for 10 to 20% of a normal commercial building. So the elephant in the room has always really been HVAC. And how do we get this more efficient, more effective? Whether your goal is to decarbonize or just save money and avoid maintenance, this is the best solution we have, and frankly, we try to be a little bit agnostic to our solutions. You can't be, because we have to have the training and the infrastructure over decades to do it right. But if there's something better out there, we'd be pursuing it. And right now, the question is, can you execute it? And we found a very disaggregated marketplace, right? So you have an advisor over here, you have a designer there, an engineering firm takes a design, then procures someone else may be financing it, you know, ultimately or finding finance for it, and who's doing the O M, the operations and maintenance of this thing can be different than what they're accustomed to. We really wrap this all in one kind of bundle. We felt it was necessary to de risk the projects and actually have the execution go as seamlessly as possible. But what we found is it actually cuts a lot of the margins out. So you're not paying margin to Joe Larry and Frank. It's all in house, and that communication means that you can execute quicker. And Bard College is an example that we were able to take on a retrofit of their main library. And Bard is really knowledgeable. They've done a lot of work, I guess what, two hours north of the city, an hour and a half north of the city, beautiful campus, but they were saying, we need to do this and get this thing in the ground before commencement. And I think one of the ways that we took it and effectively cm this thing, we subbed out the mechanical engineer. We're not mechanical engineers. We have them on staff, but that's not what we do. We inverted the equation a little bit, where the mechanical engineer usually says, hey, put in a radiator in the ground, geo guy and get out of the way. We said, we're designing this around geothermal. And we had tremendous buy in from the school and from the engineering firm Ola, who did just a supreme job. But it worked very smoothly because you designed around that solution. I think our first rig penetrated the ground mid January, and we were out by May for somewhere around 50 boreholes for their library. And we had to get that field sod it, and put the commencement ceremonies on top of it, so there's little time pressure. And we got extra rigs in there, but we compressed the time, which is saving labor and saving costs. We hit their time, which is their obvious goal, but we really kind of, sort of chopping the margins. The return on investment is all over the map. But if you look at life cycle costs, the capex to put this thing in the maintenance, of it the avoidant maintenance, because they're really a set it and forget it, as I said, and ultimately, the longevity you're bringing the mechanicals inside, you don't have a lot of the Legionella issues on the roof, throwing all kinds of heat out. The exhaust systems don't exist or inside. So particularly, you know, I live in Connecticut. I'm on the coast, and with the salt air, it starts to make a difference, chewing up your anything on the outside of the building. It allows you have the roofs pretty much free, either for solar or if it's in the case of a building where you want to access the roof for usable space, it's there. But ultimately, the savings are derived from operational efficiency, and you're just using less energy over time, so that's where we really make the savings. And look, we can't have this conversation at all without the federal incentives. Thankfully, they're stackable, like solar, but the federal incentives after this reconciliation bill remained in place. We had a lot of uncertainty. There a lot of rumors, and we lobbied. We did have. Anything we could. But generally, geothermal husband spared the cuts and the sun setting that solar subject to and we came out a little bit ahead because there was a flaws in there that precluded third party ownership, and they removed it. So we've been going through this thing and getting opinions and have in house counsel. But it looks like third party financing in a PPA model is now Unleashed for geothermal. And this is really significant, because if it's a bit more most people don't touch it. If you can third party finance, you can, and what's happening is, if you don't have the upfront money, well, you're gonna be paying over time in a big way, with a less efficient solve for your heating and cooling. So I think the words getting out that this is often at parity with, you know, a gas fired system, for example, or an air source system. But don't forget, there's two components. You have, the underground component and the mechanicals. So you're saying, Well, why would I pay for both these things? Like you just have the mechanicals if I was getting an air source, for example. What's beautiful about this is both of them are subject to the to the tax treatment. And really it's 30% plus a 10% adder for domestic content, which is fairly easily hit. So it's 40 to 50% 50% if you're an economic demand. Economic Development Zone off the front end cost of this thing. So it starts to become with parity. And what's intriguing is that utilities now have been incredibly supportive. They understand a group like Con Ed in New York. They don't want brownouts. They don't want that peak happening in the wintertime. And so we're, in a sense, providing them with extra capacity because we're using less on the extremes. So they've worked hand in glove with a lot of the vendors. They've been incredibly helpful to us. It's a very different story than it's been with solar, where you see some acrimony there, the support from the utilities has been really pretty profound. 

Sean McMahon  32:06  

Yeah, I was gonna ask you about the policy front right? You know, the one big, beautiful Bill act, and how that affected geothermal. And like you said, it seems like geothermal kind of, let's just say, didn't absorb as many hits as some of the other renewables technologies. What about supply chain. So there are parts of of that legislation that focus on supply chain. And, you know, foreign entity of control. And again, solutions like solar got hit because, you know, modules are coming from China. I'll admit I don't know where all the pipe you're working with and the drill bits you're working with are those all, for the most part domestically produced overseas, or?

Mike Richter  32:42  

A fair amount of more, or else they're coming from friendlies. Actually, geothermal is exempt from the foreign entity of concern regulations. I was just reading about this this afternoon, so we are home free there, which is really significant. Don't forget, we're not mining special minerals or metals. This is just upfront construction. You're drilling a hole in the ground, no different in the sense than if you're doing a water well in your backyard or some kind of, I guess, foundation for a large building. So thankfully, we're exempt from that and that, you know, coming out, I said slightly ahead, because we do have the potential for the PPA style third party ownership. I think that'll unlock an awful lot of opportunity. And these keep the conversation going so people can start truly rolling up to see understand the financing, and not just what is the cost upfront, but what is my overall bill going to look like. And, you know, we have had a number of times where we've come a little late to the party. Like I said, if it the design is already there, you're not going to run it back six months. It may save money, but cost overruns, you know, getting the hospital finished or the school's lab completed by you know, the school year is too big of a hurdle, but there's been a couple of cases where, you know, the difference in operational savings was hundreds of 1000s of dollars per year projected over, you know, the next 50 years. So, yeah, these are really significant savings we expect to be saving, you know, over something like oil, where I change in my house, 50 to 60% operationally. And the avoidant maintenance is pretty significant as well. But again, we're a young industry. The market penetration here is about 1% so we can have no hiccups along the way. 

Sean McMahon  34:39  

And so with with some of the third party ownership, or, like you said, the PPA formatting. Perhaps you've always been talking to banks and other investors, but has there been kind of an uptick in taking some calls from groups like that, if they're sticking with their with their green investments, shifting them over to geothermal and away from some of those other technologies?

Mike Richter  34:56  

I don't think we've seen the shift yet, because people are digesting. It, but we're having those conversations in earnest right now. We're setting out the latest and greatest analysis of what the bill means on a practical level. So you will start to see this in a pretty profound way. And I think that idea of having a one stop shop that we have created here at Brightcore is going to resonate with the market. Just you tell me what this thing's going to cost. You execute it. You're responsible for it. We have a 10 year performance guarantee that we've been adding to our projects now. So it starts to get that inertia moving a little bit. People say, I'm not sure about this. I've read it's great. I've experienced some of my peers may have it, but I just don't know enough about it that may get them over the hurdle, certainly having the possibility of third party ownership. But honestly, we've even prior to this, we were saying, Can we can we do a bond and different ways of going about this? My two partners, the founding partners of this company, were structured finance guys, so they really know this inside now, and we really look at it through that lens of the financial before anything else. And what we found is the savings are robust enough where people are going. Why am I taking someone else's expensive capital? I'll put this thing as an investment my own future, it's avoidant maintenance, it's longevity of product, and it's day to day operational savings. So we thought they were going to be looking for third party financing a lot more. It'll be interesting to see. Right I think universities are under a lot of pressure right now with research dollars drying up, and so there could be a change in the equation, but it's keeping the conversation going away that's pretty robust.

Sean McMahon  36:44  

All right. Now, you've mentioned the project at Bard, and you mentioned multiple universities you kind of referenced, but let's talk about some of the projects you've either, you know, in the works right now, or you've completed that are stuff you'd like to tout and kind of point people towards. Hey, this is what we do. This is how we execute it. This is the variety of buildings we can help what are some of the highlights?

Mike Richter  37:05  

I think that the Beresford Downtown New York was a very complicated project, if you can imagine, we had to go into buildings, into this building with that mini rig, and go through the freight elevator, cut through a wall and create a gantry system to lower it into the subfloor. And this is really interesting kind of metaphor. It was a, it was originally the coal room that we accessed, which became the oil furnace room, which was then gutted and became the, it is now the geothermal room. And it says beautiful thing. I mean, when it was going on as loud, smelly and everything else. Then the floors put back in place. There's pipes coming up from the from the laterals, and it's a it's quiet as a mouse and a work of art. We did it while the building was still functioning. And it's a high end Co Op on Central Park West in Manhattan. So, you know, there's, they can't just say we're going to shut this thing down for a little bit. There's people living there. There's doctors offices on the first floor. It was really extraordinary to be able to go through the subfloor into the Manhattan shift and access that. And it's performing better than advertised right now. We do have a monitoring system on it, which is something that we've been developing over time. You know, we can talk about all the incentives, all of the financial engineering, but fundamentally, if you don't have something that functions better, you really don't have much of a conversation. And we keep adding to what we're offering, the performance guarantee, the very the 15 minute interval data that we can have the O and M, where we can course correct as this thing goes, and have literally a digital twin and say, Okay, this is how we thought it was going to behave, but this is the weather that we experienced this fall. Or, hey, is there a different way of sequencing the air source to the ground source that's going to be optimized this thing's performance, and that is gold, because you really you don't have somebody put a solution in your building and then walk away going, Oh, is this thing actually functioning properly? So I think it's pretty exciting where we can actually take this thing up on our computers and look at it, and we're happy to hand it off to the facilities group, or, you know, keep working on ourselves and take ownership of that maintenance and operation. So enormously important. 

Sean McMahon  39:33  

And so now it does sound like there's exciting times for geothermal, lots of runway there for growth. And I say that because one of the things I do on this show is I ask guests for their bold predictions about where their segment of the market is going to be in, say, three to five years. I'm guessing you're pretty bullish, but what are some of the new things we might see? I mean, in addition to just more and more of what's already out there, you mentioned, we're kind. Of shoplifting technology from Europe and bringing it over here because they're ahead of us. What will we see more of in the US that we're not seeing now, if I could ask, I'll ask it that way instead of a bold prediction in terms of growth of the market. But what technologies will evolve here?

Mike Richter  40:16  

It's a really good question, where we get a lot of the cutting edge technology as well is the fracking industry, right? You're digging essentially in the same ground, and we're starting to be able to have our drill bit go down at a certain angle, and then 100 feet further, we'll add a few degrees and miss a large mass, or get around a water tunnel, for example. But the accuracy with which we can move that bit in real time is really a dramatic change, just like it was for horizontal fracking. Right when you start to be able to be accurate with where you're putting, the terminus of that drilling, you can start accessing things you otherwise could this is not just a straight down. Well, also we have to maneuver the rigs in order to change that angle sometimes. And you're precluded in an urban spot, maybe that rig can't swing around 45 degrees to get that proper angle the drill bit started to be able to do this now. And we're really looking at interesting technologies. In the end, you're still going to have a borehole. You're still going to have a fluid going into ground. The physics don't change, but the labor involved, and the quickness with which you can do that, we're compressing that schedule in a pretty significant way, and the accessibility so that, I think you're going to see more of these thermal loops where it's not Sean's building, big or small, it's this town or this university campus, or West Campus of this university, where you have sinks of heat and sources of heat, and they're communicating, and you really start to get economies of scale in terms of the efficiencies, right? That hockey rink is throwing off a lot of heat, or the data center in particular is thrown off a lot of heat. Great. We're going to use that for hot water, or we're going to create steam with that for the lab, instead of just dissipating it and wasting it. And so you're getting cheap hot over here, and you're creating cool over there. You just have to balance the load. And there's many, many ways of doing that, but the more sinks and sources there are, the more efficient, more effective you can be. So that's why we love campuses, because there's many that can start to communicate with each other. But I think you're going to see more private, public, private partnerships, because I can be a private co op in the city of Armonk, but we're both trying to do the same thing, or else town starting to take the rejected heat from a laboratory at the University or data center that's privately owned by you name it, Microsoft, and that synergy is starting to work. Rather than I've got my own Python and you have yours, and we're both being inefficient. I just think the accessing the thermal mass of the difficult part, and more and more technologies, really, from Europe, sure, but also the fracking industry in the United States has blown the doors open on what we're capable of doing.

Sean McMahon  43:13  

Well, we almost got through this conversation without mentioning that magic phrase that everyone in the energy markets is talking about these days, data centers, particularly AI data centers, right? You mentioned it. I gotta ask you, are you getting a lot of conversation from you know, some of the people building these giant facilities, these hyperscalers, most of those have some space around them. So it's not like kind of the basements we're talking about. Is that an area where you and the team at Brightcore are licking your chops ready to help them grow.

Mike Richter  43:42  

We are. We're doing a lot of research there. We have a pilot project going with a small data center right now. The problem is, they need this energy, so the draw is going to be dramatic. Their costs associated are dramatic to run these things. I saw some presentation where, if you do a Google search, who is Sean McMahon, okay, that's going to use X number of kilowatt hours. It's 10 times that to do an AI search. AI search is accessing more computers and uses more power, and in about five years, that search will be so much bigger that I use 100 times the Google search today. So that's just like a small snippet on just a scale of what's happening. I guess two things are happening. First is the demand on the system. The demand on our grid is going up. So my energy costs in Connecticut have gone up, my electrical costs in particular, but I think these it's not too many people feel sorry for utilities, but they have a tall task, right? You're trying to rebuild ancient, if you will, infrastructure where the demands are changing dramatically, with renewables going on, the grid intermittently, batteries are certain coming up. So there's a lot of solves, but mixed into all that is this crazy demand increase, and so they are really scrambling for all the above, and that's where I feel really excited, because, again, we're suppressing demand. And I think there's gonna be a lot more integration of the utilities into some of these, where they may own some of these thermal loops, or, if not build them, buy them and own them. But I also think there is a solve for Co Location. Maybe we don't put the data center in the middle of a cornfield, somewhere else away from people, and have a big solar field. Maybe you bring it in and use that waste heat to generate hot water for an entire community. And so they get paid. They're still using an awful lot of electrons, but they get paid back and dissipate some of that cost, and the town gets it at a reduced rate. So there is, there's kind of, there's a symbiotic relationship waiting to happen there, right? And so I'm super excited by this. We've done a lot of work with the NHL. They're trying to figure out these rinks or energy hogs. What do you do with it? And it's one direction you're constantly creating cool. You're constantly throwing out hot. Is there a way to use that in a meaningful manner. So, yeah, there's a lot of potential there. It's not gonna be easy to solve, but if you even get close to a solution, you are talking a very, very large scale, and it's necessary. Look, I mean, it's easy to dump on fossil fuels. They've created this great world in which we live. It's amazing. It's, you know, if you go back 100 years, it's a lot harder life where our heating and cooling is phenomenal, but can we be more effective and efficient with it? Yeah, and so you start to move to different technologies. And geothermal is as funny as it sounds. It's been all around a long time, but it's really starting to get quite nimble and quite accurate, and maybe more than ever it's needed.

Sean McMahon  47:06  

Well, I can appreciate the excitement that you and the team at Brightcore have for the you know, the landscape in front of you for geothermal is looking pretty good. I could use another pun and say, you know, the ground is shifting for the energy sector, but, but hey, listen, Mike, I truly appreciate you taking the time to walk me through all this. I definitely learned a few new things about how you all do what you do. So appreciate your time today.

Mike Richter  47:28  

It's awesome. I loved being on love your program, and thank you for having me. It was fun.

Sean McMahon  47:32  

Yeah, Mike, that was a lot of fun, wasn't it? Alrighty, well, that's our show for today. But before we get out of here, I want to say one final thank you to the exclusive sponsor of today's episode, EDF power solutions. 

This episode of the Renewable Energy SmartPod was produced by Dillon Kelly. And if you like this show, please share it with your friends and colleagues, and of course, be sure to follow us on Apple, Spotify, YouTube or wherever you get your podcasts. The Renewable Energy SmartPod is a production of SmartBrief, a Future company.