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⚡Subsurface Energy Storage

My Climate Journey

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Table of Contents

Host: Jason Jacobs
Guest: Joe Zhou | CEO | Quidnet Energy
Category: ⚡Renewable Energy

Podcast’s Essential Bites:

[5:05] “Quidnet Energy is an energy source company that’s mobilizing the oil and gas supply chain to pump hydro storage underground. And doing that, so that electricity is not only renewable, but also reliable. The way that this system works is if you look at how 95% of the world's source energy is actually not batteries, it's pumping water up these big mountains. […] These are mega projects [that] are heavily concentrated, [and] take decades to get ready for construction. And so you have this phenomenal capability for storing electricity that's been proven over 100 years, but just not available to vast parts of the population. And so what Quidnet does is instead of pumping water up the hill, we pump water down into the ground. And store energy as pressurized water in the subsurface. And when you do that, you bring that same capability to a lot more of the population and a lot more of the power grids that are undergoing transition.”

[12:37] “When you take the energy storage landscape, you can essentially take each of those technologies and distill it down to a set of metrics. […] What I found to be most important, number one, overwhelmingly is CapEx. Number two is asset life. […] And I think there's been another vector, which is, what does it take to get things to scale? And that vector is, things comprised of what is the underlying scientific risk in that journey? What is the total supply chain investment that you need to do to get to scale? And what are the things that you need to do to scale up? What is the scale of risk as well as you go down that direction?”

[17:23] “I think the state of the market [in 2017] was still unsure about when and how much long duration storage is needed. The dialogue, I think, is very different today. […] To put things in perspective, if you look at the total gas storage in the US, it's […] a few 100 terawatt hours. And last year was a record year for lithium deployments and that was a few gigawatt hours. So we are 1/10 of 1% of 1% of the storage capacity, just in gas, that the entire energy system has been relying on to remain reliable. And so I think there's a long way to go. And then I think that relates to also that I don't think this is definitely not a time to pick a winner yet in long duration storage and storage in general. I think we need everybody to push incredibly hard to really build just the size of the needs of the grid […] for it to remain reliable as we do this transition.”

[24:39] “Over the next 12 months […] our focus is threefold. One is where we've already made a home for ourselves, we want to expand. We want to do bigger wells. We want to take larger lease positions and really prepare for these large grid scale deployments. We want to extend ourselves into markets where we're getting some really interesting polls. An obvious place that we're not in today's California. And there's some other ones where we're seeing kind of local customers pulling us […]. And then the other piece is to […] prioritize the partnership opportunities that we have in the funnel, and really crystallize on one or two regional partnerships to help us accelerate.”

[25:40] “In some cases, we will be working with a local utility. And we will just be providing almost like a storage warehouse contract. It's almost like a commercial real estate contract. You just rent the space and this space happens to be instead of storing boxes, you can store electrons in there. […] There's other instances where it's almost providing […] a differentiated capability to an existing wind or solar farm. […] And then the third is you can imagine it's kind of a variant of the second, which is interesting enough, there are folks who have a lot of land, who may be already doing something so that land such as oil and gas companies, for whom it's a very natural fit to leverage that footprint to also kind of incubate and develop a storage asset.

[27:44] “Our value proposition is that we are a long duration source company. We are built on a very mature supply chain. So a lot of the underlying components […] [are] already established and well known with operating a track record. And when we piece it all together, we have a cost position that's very differentiated relative to the competitive set, certainly relative to lithium ion relative to pumped hydro. But we also believe that we have the lowest cost structure relative to say, the emerging asset classes as well. And a lot of that is owed to the supply chain already being there and that scale, and just the fundamental physics that's involved in our system.”

[49:13] “On the demand side, I would love to see market reform accelerated. And for there to be just a very clear and very straightforward way to articulate how storage is going to transact. And it's going to get valued on top of that, then a lot of these transaction structures can be formed. And that can happen sooner. […] I think that then there is on the supply side, […] the cohort of technologies […] needs to get to the commercial scale yesterday, because there's just so much ahead of us. […] It takes a lot of time to introduce a hard asset product into the electricity market.”

Rating: ⚡⚡⚡

🎙️ Full Episode: Apple | Spotify (Original Title: "Startup Series: Quidnet Energy")
🕰️ 53 min | 🗓️ 09/23/2021
✅ Time saved: 51 min

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