Commercial Building Energy Storage: Combat Energy Costs, Intermittent Renewables and Emissions ft. Yoram Ashery (Nostromo Energy)

My very favorite thing about hosting The Resilience Report is chatting with our guests. But  a close second, however, is doing the research on the topic beforehand. This next episode was no exception. In fact, the more I researched the company, the more I was just dying to speak to their CEO. Why? Because my research found me going deep into two topics that I care a ton about: buildings and renewables. 

Nostromo Energy offers true sustainability through energy storage. More specifically, the company accelerates the renewable energy revolution by reducing our reliance on fossil-based energy while contributing to a more stable electric grid.

All of that to say, once having completed my research, I could not wait to speak to their CEO: Yoram Ashery.

With over 20 years of leadership in healthcare, Yoram has overseen startups to commercialization, leading three IPOs and acquisitions. He has extensive experience in corporate strategy, international markets, and raising over $200 million in equity. Yoram is dedicated to advancing clean energy to combat global warming, driven by a commitment to impactful technologies.

On this episode we dive into the staggering and growing energy demands of buildings, the pivotal role energy storage will play in meeting these demands, the groundbreaking battery-alternative that Nostromo offers, how it addresses the challenge of renewable energy's intermittency, the role of governmental incentives and regulations, and an incredible use case in the heart of Beverly Hills.

The way Yoram distills complex topics is a rare and incredibly valuable skill in the sustainability space as we all try to get others on board. The next 45 minutes with Yoram will equip you with such clear and concise information that we will all be that much better equipped to talk electrification AND buildings going forward. 

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[Host: Lauren Scott] For our longtime listeners, you'll know that I've spent, outside of the podcast, the past decade or so working in the cleantech space, and more specifically in buildings and in renewables. So, when I was researching this next guest and this next company, I got really excited because this company actually combines these two topics so beautifully. And today, to share a little bit more about Nostromo Energy is their CEO, Yoram Ashery. So, welcome to the show, Yoram.

Thank you very much, Lauren. Pleasure to be here. 

Because we have listeners of all different backgrounds, I'm going to start us off really high level. I want to go into the details right away, but we'll start high level. I think most people can understand that buildings use energy, but I don't think many people understand how much demand that buildings actually place on the grid and energy demand. So, can you help us understand that a little bit more, and then maybe directionally do you feel like this demand is just going to get more and more challenging?

Yes, well, absolutely. So, according to the Department of Energy in the US, there's plenty of data about the energy market. It's actually 74% of electricity. Okay, it's not just energy. If you look at energy, there are other forms of energy, but we're just looking purely at electricity. It's 74%. And why is it important to focus on electricity? Because we're in the electrification era. Electrify everything, right? Heating, transportation, etc. And most of the charging, if you talk about EVs, is done in a building. It could be a parking garage, could be your home, could be your office, somewhere. There's some in the public space, but it's mostly going to be in buildings. Heating will become electric as well, right? So, that's the goal. The idea is to electrify everything and then make sure that the electricity is generated from clean sources. So, today we're at 74%. We're probably going to get much higher than that as this trend continues on electrification, and we have some new loads coming on. Think about data centers and AI and what that's going to bring on. People are talking about building nuclear plants just to supply the electricity requirements, and these are also some forms of buildings. So, essentially, the built environment will account for the vast majority of energy consumption. Obviously, kind of leading to the next stage is, what do we do about that? What tools are there for buildings to manage that energy usage in the most efficient and environmental way?

Absolutely. A lot of the research sounds like storage, energy storage is really one of the solutions. How can the idea of or the concept of storage, and certainly the technology, help with this increasing demand?

Yeah, so, you know, the need for storage has really become a focus and now really a necessity as more and more renewables are available and the effort to integrate them into the power grid. These resources are variable; they're not steady. So, the way to stabilize that energy supply is through storage. You store when it's available, and then you provide the energy from storage when those resources are not available. I mean, take solar as an example. You have an abundance during the day; you have zero at night. Store as much as you can during the day and use the stored energy at night. If we take California, for instance, there are plenty of days in the year today that 100% of the consumption is met from solar, even at a surplus. On the other hand, when you come to the peak hours, which is between 4:00 and 9:00 p.m., the sun is going down, demand is going up, you have that daily ramp-up phenomenon. Then you start to use all the peaker plants, all these inefficient gas turbines that just work a few hours a day and therefore are least efficient and most polluting. Those account for a very significant portion of the carbon emissions related to electricity production. Storage can help you avoid that. If you can use the energy during those hours instead of using those peaker plants, then you'll be saving a lot of carbon and other pollutants released into the atmosphere. That's where storage really comes into the equation. 

Tying that to buildings, you can put storage in two places. You can put this on the front of the grid, or the meter, or let's say on the grid side, on the supply side. You have a generation source, doesn't matter what source it is. It could be renewable, it could be any type. That's charging the batteries, and then when you want to use the stored energy, you just run the electrons through the grid, through the wires. On the other hand, you can have storage on the demand side, and then you have it actually where you need it. You're not dependent on the grid anymore, you're not dependent on infrastructure, you have the energy on the side of the demand, and that can save you all the infrastructure in the middle. It's much more reliable and resilient because you already have it on the side of the demand, not on the side of the supply. That's where buildings come into play because that's when 74% of electricity is consumed. That's where you really want to have that storage in place. That's why we believe that buildings have a key role in the whole energy transition and modernizing the power grid. Storage in buildings is a major component of that.

I think two pieces in that, for me, are a big eye-opening moment because, again, I have experience in the renewable side and certainly we're talking about storage. I think we were mostly talking about storage on the supply side. So, I'm less familiar with learning about actually having storage where you need it and having that locally. I think that's brilliant. From a storage side, I've always associated it with your classic battery, or at least that's how I picture it from a storage standpoint. But the technology at Nostromo Energy is really different, and I would love for you to share how that is because I didn't even know necessarily that this existed. So, I think our listeners would love to learn more.

Sure, I’d love to. Storage is almost synonymous with batteries, with lithium batteries. Just Google energy storage, and this is what you're going to find mostly. Because, yeah, when the grid started to install, to procure more storage, lithium was the technology available, still is. But because of the safety issues, we know what happens when a little scooter goes off in an apartment, or the dangers of lithium when it catches fire. Most of that went on the supply side. It's easier to put a battery farm outside in the field, where damage can be contained as opposed to a building or an apartment. So, it's easier to scale and build big storage facilities in those outer areas. That's why all storage right now, not all, but 90 plus percent of storage goes on the front of the meter, or the grid side. 

Buildings don't really want to have those big, if you were thinking of an office building, or a hospital, or a hotel, or any of those, they would need batteries on the scale of several megawatt-hours. This is several containers of lithium batteries. They don't want to put those things inside a building for obvious reasons. That's why they really didn't think that storage was relevant, because storage is batteries. Batteries? No, we don't want that. So, they're not in the game. Only 1% of storage really goes into commercial buildings, which are the biggest users. If we talk about 74% of the electricity in buildings, 50 to 60% goes into the commercial and industrial sectors, and the rest goes to residential. The safety, the regulatory barriers, regulatory in the sense of fire codes and those kinds of things, make the installation much more complicated and expensive, keeping them out of this game. You have to think about, okay, what are the benefits? Why would a building even have a motivation to install storage? Why would you play in this? This is the grid's problem, right? I'm a consumer; I just want to flip on a switch and get my power. I don't want to, that's your problem, not mine. True, the grid is responsible, but here comes the decarbonization factor. Buildings want to be green. It's good for business, it's good for the climate. Buildings are being rated for their carbon footprint. Real estate investors raise their capital. It reduces their cost of capital if they're showing the buildings have a better carbon profile. Storage is probably the most impactful way to reduce the carbon footprint of a building.

I think that goes to the question of when do you consume energy? Because if you consume the energy while most of it is clean, you can consume as much as you want. It's like good cholesterol and bad cholesterol. So, you got good kilowatts and bad kilowatts. If you consume all good kilowatts, nobody's going to care how much. When you consume the bad ones, that's when it's a problem because those are emitting a lot of carbon. If you can draw electricity during the day when it's clean, first of all, your carbon footprint is pretty low, could be even zero. If you can draw more and store that, then during the evening, using that during the evening, that allows you to avoid using the more carbon-intensive electricity of the evening and instead use it from your storage. By that, you can reduce your carbon emissions from the building. Now the building has an incentive to do that. The other incentive is that electricity costs are starting to climb rapidly. Part of that is because of the energy transition. There's more infrastructure to be placed, sources are less reliable. Again, that's the nature of renewables, and that brings more costs to the power market. We see that reflected in the consumer prices. So, how can you save energy costs with storage? Same thing. If you have a time-of-use tariff, which is in most states, you have peak prices and off-peak prices. You can store your energy during off-peak prices and avoid using it during peak prices. You're playing this arbitrage, and you're able to reduce your energy costs. Buildings now are getting a big benefit from installing energy storage, and it's getting more interesting. Then comes the question of the technology. Lithium is, like we said, a problem from a safety perspective. So, looking at safe technologies, and this is the category that we're in, thermal energy storage, specifically for cold energy, is a completely safe category. We're not the only ones doing it, but we have engineered it in a way that almost every building can install it.

First, let's talk about what thermal energy means, and then we can get to the practical side of that. About 50% of the energy in a building goes for thermal conditions, heating and cooling. We are taking care right now of the cooling side because this is what's using electricity. Heating is still mostly gas. Cooling uses, in big buildings, machines called chillers. Chillers are huge machines, big compressors that cool water down to like 45 degrees F. That water circulates throughout the building, talking about hundreds of tons of water that circulates in the pipes of the building, goes to every space in the building. There, you have some fan coils that blow air over the water coils, and that's how you get your air conditioning. Then, it goes back to the chiller room to be recooled again. That takes about half the electricity that the building is using. That's the biggest use of electricity in the building. If you can store that energy and provide that instead of using chillers, have a device that stores cold energy and cools that water instead of using a chiller, you can drop the consumption of the building by half when you supply that cold energy from this storage device. That storage device is what Nostromo is doing. We call it the IceBrick. It's called ice brick because we store it in water. Water, when it freezes, changes phase from liquid to solid. It stores a tremendous amount of energy, 80 times more energy than the energy you use when you just change the temperature. It's just the rearrangement of the molecules from a liquid form to a solid form. You store 80 kilocalories per gram of water, whereas if you just change the temperature, it's one kilocalorie. So, 80 more. We use electricity to freeze that water during off-peak hours or during surplus renewables, so it's cheap and clean. Then, when you want to use the energy, let's say you're on peak prices or your high carbon footprint electricity, instead of using the chiller, you just use the ice and cold energy in the ice and use that to cool the water of the building instead of using electricity. It sounds very simple, but the engineering is a little more complicated. You want to do this very efficiently, you want to do this in a compact way. How do you install this in the building? There are a lot of practical challenges in doing this, and that's where our technology has been pretty successful in engineering this concept in a way that every building can have it.

Well, I appreciate you distilling it. No, but I appreciate you distilling it to that level. You're saying it sounds overly simple, but I think that's what's needed, is that level of description for everybody to understand. I work with a whole department of engineers, and I know it's never that simple, so I appreciate you distilling it to that level. This might be a dumb question, but is the water that you have in your technology something that you're constantly sourcing, like there's a faucet on and this water is coming in, or do you single source it when you install it? Is it the one time that it's there? I'm really asking the question, I'm thinking of a facility that I was talking to recently. They have a more classic storage, but they're in a very water-strapped area. So, I'm wondering what that looks like from a water sourcing standpoint.

Right, no, it's a closed system. You fill it once, and those cells are good for 25 to 30 years. Once you replace them, you can water your plants. Nothing goes away, nothing is spent, there's no water waste at all.

Very interesting. The next time I see my ice cubes melting, I'm going to think about all the energy that's being produced there.

It is. If you take it out of the freezer, it doesn't freeze right away, right? It can sit there for 10 minutes maybe, and it slowly, slowly freezes. That's when it's really absorbing the energy from the outside and cools the environment. Obviously, it's a small ice cube, and it's a bit difficult to understand that. In the way that it works in a building is that we store, I mean, we have these devices called IceBrick, and inside each one of them, there's hundreds of small capsules that contain water. It's regular tap water, but we add some ingredients to the water to accelerate the freezing, so it freezes very efficiently, just using less energy. There's this concept of round-trip efficiency in energy storage. What are your losses? You don't make energy when you store it, right? You lose. So, if you have like a 90% round-trip efficiency, your losses are 10%, and that's kind of the high end of the range. That's where we are. We're 90%, sometimes even a little more than that our round-trip efficiency. Those capsules with the water, there's a coolant that flows between those capsules, and the coolant kind of extracts the cold energy from the capsules as the ice melts. There's a heat exchanger, which is like a big radiator, where you have the water from the building coming in, our coolant coming from the other side. They exchange that temperature, and the water is cooled and goes into the building back without having to operate the chillers. You can look at our website, there's a nice video explaining exactly how that goes.

Well, actually, to help explain technology, I find it's always great to understand a use case. I know Nostromo Energy had a really interesting success story in Beverly Hills, of all places. Can you talk a little bit about that project? It's sometimes just easier to understand the concept when you can see it in action or hear it in action.

Certainly, yeah. That's really a great test case. We decided to focus in California as the first US market, given the conditions for the technology. Both the market for energy storage is pretty good there economically, there are some incentives, there's a mechanism to participate in the energy market. Basically, you can also sell this capacity, the ability to drop demand, what's called demand response services to the grid to help with that stabilization and get paid for that. The economics are more favorable. There's a climate, obviously, especially in Southern California, and there's a big demand for decarbonization. So, it's a good market for launching and expanding. We looked for a building that would be well known, well recognized, well respected, and we met with the owners of the hotel. They have a strong passion for these kinds of things. Despite the building being 70 years old, it has a lot of innovation in it in regards to using greywater, insulation, and those kinds of things. They're really trying to look at new technology. on the energy side, they were a bit limited because of the age and the original design of the building. When they heard of our concept, they got really excited about this. How do you put a system in a 70-year-old building? In our case, that's not so much of a problem because the IceBrick cells, which are the bulk of the system, have a very small profile. It's a long, elongated case, like a Kit-Kat shape, just a little longer. It's about 14 ft long, 20 inches wide, and 10 inches high. You can actually get this in through almost any door. We installed the system through a 3 ft corridor. The whole installation for a pretty big-sized hotel took us, net onsite, about three months of work, maybe a little less. The building was equipped with 1.4 megawatt hours of storage. 

When we use electricity units to describe the storage size of a thermal energy system, it's by how much power we can avoid the use of. So, when we drop down their chillers, we're saving every day about 1.4 megawatt hours of electricity, obviously doing this during peak hours. That system was installed in October, so it was winter, but now we're starting to get into the summer, and the temperatures are going up. We see how very nicely their demand curves are going down every hour by hundreds of kilowatts as they don't need to use their chillers, but they're getting their cold energy from the IceBrick, the Nostromo IceBrick system. If you were in the hotel, you'd never know that your air conditioning is not coming from those big chillers with those fans on the roof, but you're actually getting it from ice that is melting, and as it melts, it provides you with that cold energy. You get it the same in your room just as you had when it was working from the chillers.

So cool, for lack of a better word, pun intended. Semi-intended! I'm sure that the demand for air conditioning, I mean, I live up in Montreal, Canada, and in my childhood, we never used air conditioning, and now our summers are getting hotter and hotter. So, I can only imagine that this technology is going to be more and more needed as all of our different geographic locations require the cooling. That makes a ton of sense. This particular use case was in the hospitality vertical. Is that primarily where you focus, or is it different verticals? What does that go-to-market look like for Nostromo Energy?

No, we're pretty agnostic from a vertical perspective. It's really a more technical fit for the building. If the building is using chillers for cooling, then we could fit the technology. The benefits would be the same, generally speaking, as long as they have some operating hours during the peak hours. So, after 4 p.m., even if an office building closes at 6 or 7, they still have two to three hours during peak hours where they're getting very expensive electricity, and also very carbon-polluting. We can avoid all of that. That would be a big benefit. Obviously, buildings that have longer demands like hotels, airports, data centers, those kinds of facilities, would have a high cooling demand also throughout the entire peak hour. Peak hour in California is from 4 to 9 p.m. generally. If your loads are all the way through 9 p.m., you're paying a lot of money, and you're accounting for a lot of emissions during those hours that we can prevent. So, it's not really about the type of building; it really affects the duration of their loads. Even if you get 6 to 7 p.m., you've got some high costs and high emissions over those hours that you benefit from them being avoided.

Part of those verticals is, I guess, commercial real estate. I know it's been a challenging time for, I'd say, since 2020 for a lot of those working in commercial real estate, which means financing can be a challenge on some of these projects, especially when you're trying to evaluate if you just do the bare bones or if you try and make it more sustainable. Nostromo Energy, you offer a couple of different options for those who want to bring in the technology, whether it's a buy or lease. Can you explain what that looks like and why you offer it? Is it to make it more accessible? What has that process looked like?

Sure, yeah. Some people in that space, in the real estate world, there are different types. There are pure real estate owners, and then there are operating companies like hotels and so on, where they operate the whole business; it's not just real estate per se. Some of them have what's called a preference for CapEx, meaning they would provide the capital because they have access to low-cost capital. So, if you propose an improvement and it has a good ROI, then they will just buy it and put it in place. Others have a preference for OpEx, so they would like to get this as a service or in a way that they don't have to pay for it; they just get the benefit. Obviously, it would be less than if they owned it because somebody has to pay for the cost of this upgrade or improvement, but they don't have to invest anything. Given that we're in an era of high interest rates, and a lot of those businesses are still recovering from COVID and occupancy is not as great, there's much more preference for the OpEx offering or model as opposed to the CapEx. They would reserve their capital for upgrades that they cannot have as a service. If a hotel needs room upgrades and stuff like that, it's hard to get as a service, for example. Now, what we're proposing, the benefits we're proposing are not just reducing their net operating income of a building but also reducing the carbon footprint, which is also good for business. It has marketing advantages, of course. 

Realizing that, we developed this service offering, we call it ESaaS, like energy storage as a service. The deal is where we basically install at our cost, and the building just enjoys energy cost savings and all the operational savings like carbon savings and so on. They don't have to pay anything; they just pay a service fee, which is a percentage of their savings. No savings, no payments, and they could reduce their cooling costs by 20-30% compared to their utility costs, sometimes even more. That's the proposal or the deal that we're offering now. The funding is actually coming from, partly, the Department of Energy. There's this program called the Loan Programs Office, where they provide financing for new technologies, new clean energy technologies, to help accelerate their market penetration, and also some private investors. We're working on something between 120 to 200 installations in California. Currently, this is limited to California because this is where we started. There's a meaning to the geography in terms of focusing the logistics, the manufacturing, the installation, the after-sales support. There's an operation that goes with that. It's not just we don't send you this by mail. So, we got to be in the area, but we definitely think about expanding into other areas and offering the same service, energy storage as a service, to commercial buildings. 

Since we're focusing on the larger buildings, buildings that have chillers tend to be like 100 thousand square feet of floor space and up. There are other solutions for smaller buildings. I can talk about that a little bit also. These are smaller units called rooftop units, for instance. So, there are other markets, other companies on the market that offer that, like there's a company called Ice Energy, for example, that does something similar to ours but for the smaller buildings. We're taking care of the larger buildings, such as hotels, big office buildings, hospitals, airports, that kind of stuff, which is obviously scalable. So, those buildings are about 25% of the total square footage of commercial real estate in the country, and there's plenty of work to do to get them all fitted with storage.

Well, I'm just saying, you know, we started talking about electrification, and right now we're talking just the cold side of the energy, but there's also the heating side. As heating becomes electrified, we're going to be seeing the same phenomena as we see with air conditioning now. Air conditioning today, because it's like only on in the summer, right? If you look at the load curve of any state, any market, it doesn't have to be like California, but anywhere, you see this rising in the summer, and then it goes back low because in the winter, the heating is not from electricity. Once we electrify heating, we're going to see that same peak occurring also during the winter. This peak behavior causes the grid to be utilized by only 40% of its capacity. So, the grid is only sending out or distributing 40% of the electrons it could if it was working fully efficiently. This is because of that volatility. If storage can levelize the demand, okay, because during the peak hours, buildings will consume from their storage, we could do with half the grid we have now. Just think about billions and billions, hundreds of billions of dollars, trillions that are going into building grid infrastructure and the nuisance of building this inside the cities. Like, you know, you got to close a street and you start digging under to put these high-voltage lines. I mean, it's becoming more and more expensive, especially on the last mile, literally. If buildings could provide their energy usage during peak hours from storage, you could do without half of the grid.

That's so fascinating because so much of the conversation, at least if you're reading the news in this area, is really just around this idea of our grid can't handle the electrification of where we're going. So, this sounds so complementary to that transition of making sure it's more balanced and steady throughout. You did mention some maybe more governmental incentives. Do you see, maybe from a regulatory standpoint, that we're going to start seeing changes that are going to impact the way buildings are managing electricity or energy, depending on what the mix is? And what kind of role does storage play in that future, in those changing regulations, whether it's specifically in California, across the US, or globally?

Sure, yeah. It's happening in different places. I mean, not yet in a uniform way, but you see different states or cities that adopt, or markets, or utility public utilities commissions that start to develop regulation or market mechanisms in order to either require or incentivize, I'll just call it shifting consumption. Okay, energy storage is just a great tool to shift your consumption without changing your operation or behavior. All right, so if I tell you to charge your EV at a certain hour versus another hour, and you're at home, that's fine. But I cannot tell you to turn your air conditioning on in another hour, not the other hour, because you turn it on when you need it, right? You don't have that flexibility. Businesses even have less flexibility. So, regulations around time-of-use power prices, peak and off-peak prices, those kinds of things are starting to become much, much more common. There is a great example recently in New York City. It's called Local Law 97.

I'm familiar with it, but if you want to speak to it, it's probably not everybody who nerds out about local laws like that, so feel free.

Yeah, it actually came into force this year, January of 2024. It was enacted five years ago, and basically, it puts a cap on carbon emissions of buildings, I think about 25,000 square feet. That cap is based on their historical assumed emissions, and they have to come down every year. I can't exactly remember the steps, but if you are above your step, you have to pay a fine of, I think it's like something $270 per ton per year of excess emissions. The way that they would calculate emissions is based on your energy use, of course. Okay, I mean, there's obviously, if you use energy outside, then the other form of energy is the electricity that you consume, and they account for the emissions of the building, and then see if you're above your cap, and you get fined for that. Those fines can be pretty massive. I mean, some buildings might have millions of dollars of fines that they will have to pay if they can't fall under their cap. There are various ways to reduce your carbon footprint in the building, but like I said before, storage is probably the most effective one. Because if you can charge your storage device during hours where electricity has a low carbon footprint, that's probably your best way. Think about just efficiency. Okay, so efficiency meaning do the same work just using less electricity. You can save 10, 20%, maybe 30% by putting in very much more efficient lighting, heating, other types of appliances, or even air conditioning. You can invest in the most expensive air conditioning systems, and you can get 10, 20% more efficient machines. When you're using storage, and you're charging it with clean energy, you can win even 100%. Okay, if you're able to source that energy from a clean source on-site or on the grid, or through a PPA, like a power purchase agreement from a solar facility somewhere, you can basically run them on 100% clean energy. That's the best way to reduce your carbon footprint. That's a great example, and people believe that other cities will adopt similar regulations going forward. The way they are treating storage or any type of shifting technologies is by time of day and carbon calculation. So, same as you have time of day for electricity, there will also be a carbon price, if you will, for electricity during every hour of the day. This is how they're going to calculate your consumption. So, based on the time you used it, electricity, they're going to calculate your carbon emissions. If you can move out your consumption during the hours where the carbon price is low, that's a great way to avoid those fines. That's one example.

I can give another example, just maybe more on a federal and national level. There's this regulation by FERC, the Federal Energy Regulatory Commission, that says distributed energy resources, like buildings or anything that's in the building, okay, it's a distributed energy resource, can participate in the wholesale market like any other energy resource on the grid. So, what does it mean? That means you can sell the energy into the grid and earn money. And how do you do this? One of the ways is by dropping demand. Dropping demand is the same as supply, okay? Adding supply, dropping demand, at the end of the day, we just want to stabilize that. There's different ways of measuring how much demand you're dropping, but if you have storage, it's pretty easy. You just meter how much energy you're releasing from that storage device. If you do this based on the market signals, that is through the system operator, you can provide a bid, and you get a schedule, and you operate it based on that schedule, and you get paid. And that's part of your economics of the system. It's a little complicated to do, that's something that we provide our customers as a service, but that enhances the economics, makes it much more profitable to install this kind of technology. So, that's a great example of how market mechanisms can provide the incentives without putting any more dollars. It's just redistributing the dollars. So now, they can call it democratizing the market because now a building owner can participate in the energy market, and not just a big power plant. We're both part of the same market. They're selling electrons, and I'm selling avoidance of electrons. At the end of the day, it's about when supply meets demand. So, that's another example of a very important regulation. It's adopted in a few states right now, but it's mandatory, so ultimately, it's going to be across all the US.

You've been so helpful at distilling some of these concepts that are a little bit more complicated, one that I think unless you're in the space to understand. You mentioned the power purchase agreement, and then there's also the virtual power plant. I think when we think of a power plant, we think of one kind of infrastructure within our neighborhood that then feeds it that last mile like you're talking about. What is a virtual power plant, and maybe even the power purchase agreement? How do those two concepts come together, and then how do they overlap with Nostromo?

Right, so that's exactly what we just talked about, really. The virtual power plant is really an aggregation of distributed resources. So, typically, a single resource to participate in the energy market, it's a little complicated and sophisticated. So, you know, normal consumers are not going to have the capabilities or the time to do this. Once you put a large number of them together, and there is another player that manages all that, then you have the scale to do this much more efficiently, and that's actually the virtual power plant. So, a virtual power plant operator basically has the means to control a large number of distributed resources. It could be storage, it could be thermostats, okay, it could be anything that can change the load on the grid. Either provide load or reduce load, all right? And you can do this, and you can control that large enough number, then you can take that whole aggregation and use that as a resource, one resource on the grid. That's why it's called a virtual power plant because it's made of many, many smaller resources. Like those examples I gave, it could be EVs, it could be thermostats, it could be any other devices that shut down power use or feed power use. Feeding power use for distributed solar and so on has become less popular just because during solar time, there's an abundance of energy on the grid. So, it's more about storing it rather than feeding it to the grid. So, net metering has changed, and now the backfeed of power is much less profitable, the rates are much lower. But storage is becoming the most common form for a VPP. So, the idea is that the VPP operator can control the time that these storage devices are dispatching their energy, and the signals are coming from the grid through the marketplace. And then, everybody who's part of that VPP is basically enjoying a pool of the revenues that's coming in from that. So, it's really a form or a model of enabling distributed resources to participate on a large scale because individually, it's very, very challenging because there are some regulatory and technical interfaces and stuff like that. Nobody wants too much of a headache. 

DOE is really investing a lot in this direction because, from their perspective, the way the grid evolves, historically, it was always like demand grows, so let's grow supply, and then demand grows more, and then let's grow supply. And then, in the middle, you need to keep building more and more infrastructure to deliver. They said, no, let's start to lower the demand instead of building more supply and more infrastructure. VPPs are just a great way to do this. They released a report last September which says basically that going forward, VPPs will grow pretty much at the same pace as supply-side resources. So, demand and supply are going to kind of grow hand in hand as opposed to one going up and then the other has to catch up with it. So, that's a really strategically different way of thinking about things. I think that's going to save trillions of dollars by using less infrastructure and needing fewer big plants, especially as, you know, retiring nuclear plants and coal plants and all that stuff. And, you know, solar and wind, the biggest challenge in the renewable space is all the interconnections that slow down deployment. So, figuring out ways how to control demand and actually lower demand is the best way to accommodate that. VPPs are really the tool to do this on a larger scale.

It might be hard for you to choose this next one, but are you working on any projects in particular right now that you're super excited about and that you can share? I'm sure there's a lot that's under NDA, but anything that you could share with our listeners?

Well, from a technology perspective, we're looking at advancing our technology into other areas, like, for instance, district cooling. That's an even larger scale than a commercial building. These are multiple buildings that are getting their energy from a central facility. Those are much bigger scale, so serving them requires some redesign and some new technologies. That's something that we're currently working on with some partners in this area. 

I mentioned heat storage. It's a little further out, mostly because the demand is not there yet, but it will definitely come in. Obviously, what I mentioned earlier is this project of the service agreement. This is something that we're just putting the final pieces together, and we expect to get that officially launched later this year. That's also a big, it's more on the commercial side, not much on the technology side, but it's a big, you know, it's hundreds of millions of dollars in terms of the financing for hundreds of systems. So, that's a pretty big project on a commercial scale.

Absolutely, and our listeners are probably going to be shocked to know this, but you have not spent your entire career in the energy space, which is incredible. I would love to know, was there a specific moment where you decided you wanted to make the transition over to the sustainability space? And maybe you can just quickly fill people in as to where your background is, and was there a catalyst moment, or was it more of a general progress, I guess?

Yeah, that's a good question. I ask myself several times. Yeah, I've been in the energy space for a little more than three years, actually, so that's not very long. I've been about 20 years before that in medical technologies, new technologies that are used for medical procedures. One of the challenges in that industry is that it's very regulated, like energy. Okay, it's not so different in that sense. Both are highly regulated, and anybody who's working in the industry is frustrated by the time it takes you to bring a new product to the market or even make a change in the product. It's just like years and years. Then also, to have a product sold, you need reimbursement or medical coverage, the insurance coverage, and so on. So, that even takes more time. I like innovation, generally speaking, and this is one of those mountains you need to climb every time you have a new idea and you want to bring it to the market. When COVID happened, we saw something amazing. We saw, in less than a year, regulators approve three vaccines. It would take them 10 years to approve a vaccine if it wasn't a crisis. So, when there's a crisis, regulators move much faster, you know, 10 times faster. In the energy world, we're in a crisis, and that's why things are moving so fast. I'm generally not a very patient person. I like things to move a little faster. So, I said, wait a second, I want to be in a market that moves fast and solves problems. I was in the medical field because it has an impact; it improves the place we live. That's kind of what gives me a lot of meaning to what I do, but working so long to get something done was difficult. I see here in the energy market, things can move so much faster. Now, there's budget, there's awareness, there is openness. I mean, we're able to meet people both on the customer side, regulators, and policymakers. I don't want to, yeah, I mean, that could be another podcast if you want, but how we were able to change the law in the Senate to enable the technology to fast-track it to the market. I just think that there are many people, not everybody, but enough, who are aware that things need to move fast. We don't have much time here, and I thought, you know, that's the place to be right now if you want to get things done fast.

Well, there's so much more to dive into, and if our listeners want to learn more about you or Nostromo Energy, where would you recommend that they go check out?

Well, easy. It's just at nostromo.energy. That's our website. Our team has done a good job in putting a lot of resources, and there's blogs, and there's news, and there's a bunch of things. There's some nice videos and so on, and that's, I guess, the place to start. From there, if they want to know more, just reach out, drop a note or email on the contact list. We'll be happy to respond and provide you with anything else.

It's been such a pleasure talking to you, and even just researching, I was having so much fun learning about your technology. We do like to end every episode with the same question, which is, what do you think it will take for businesses and leaders to be resilient going forward?

Yeah, great question. I think it's leadership and strong individuals to show the way and others to follow. Leaders can be everywhere around us. I'm the CEO of a company; it doesn't have to be the leader. It can be anybody in the organization that is a leader. If you show excellence in your role and always want to improve and always do better, that's the core of leadership. If you focus on being strong for yourself, strong for your community, strong for your co-workers, we're in a very, I would say, unstable time, right? In a lot of ways, politically, climate-wise. We got to be resilient, right? We need to be able to overcome things and keep our North Star and keep moving strong. I think that's why resilience is very tied up with leadership, because leaders can pull others with them. So, I really encourage people to focus on and think about leadership, and I think everybody can find a leader within themselves if they just set their mind to that. So, that's kind of when you see that come together.

Thank you so much. This has been an amazing chat. I think, to your point, we could probably have multiple podcasts on adjacent topics. So, thank you for joining us today. I really appreciate it.

Thank you, Lauren. I appreciate being here. It was fun talking to you, and I hope your listeners enjoyed that. Yeah, let's talk about some other stuff in the next opportunity.