Gareth Evans is committed to a mission of empowering businesses and communities to make the global transition towards a more affordable, secure, and renewable energy future.
Gareth has been a leader his entire life. From working in charity and community organizations, and leading sports teams to military operations, Gareth has parlayed these experiences into building teams and businesses that challenge the planet’s greatest challenges and opportunities – he is now focusing on enabling companies to successfully navigate the energy transition.
His time in Iraq following the Gulf War set his mission in motion; it opened his eyes to a world without access to reliable energy and other essentials needed to survive. He saw the impact that can have on the stability of a region and the health and success of businesses and communities. Driven by this experience, he committed himself to finding solutions that create profitable and sustainable energy outcomes such that we can all thrive.
Last year, businesses lost $150B due to grid outages. How are they expected to make the transition to sustainable energy without sacrificing their bottom line? Gareth Evans, CEO & Founder of VECKTA, has the solution.
He and his team utilize their platform to track performance, emission reductions, and savings to hold suppliers accountable and be ready to act on new opportunities quickly.
Gareth’s background working on some of the biggest energy reserves in the world and his commitment to sustainability drive his team’s mission of enabling businesses and communities towards a renewable future.
What you will learn
- Gareth shares his experience in Iraq and the crucial importance of reliable, accessible energy for all communities
- Why it’s important to seize opportunities and embrace unexpected career paths
- The challenges faced by Gareth in establishing VECKTA and the learning curve associated with pitching to investors in the clean tech space
- The evolution of VECKTA’s business model, focusing on subscription-based SaaS and a marketplace facilitating energy projects for customers and suppliers
- Unpacking the aging infrastructure in both Australia and the USA
- The complexities of transitioning to sustainable energy sources while maintaining reliability
- Energy infrastructure as a sovereign issue
- Discover the challenges and opportunities present in the evolving energy market
- Plus loads more!
Transcript
Jeff Bullas
00:00:05 – 00:01:51
Hi, everyone and welcome to The Jeff Bullas Show. Today, I have with me, Gareth Evans. Now, Gareth is coming in from San Diego but he talks with an English accent, Canadian accent, an Australian accent and I’ll, you might want to have a go and try to pick all of them but I speak with an Australian accent and no one understands me. So we’re gonna have a good go here at having a chat. Gareth is committed to the mission of empowering businesses and communities to make the global transition towards a more affordable, secure and renewable energy future. And who doesn’t like the sound of that? Gareth has been a leader his entire life and works in charity and community leading sports teams to military operations. Gareth has parlayed these experiences into building teams and businesses who challenge the planet’s greatest challenges and opportunities. He is also now focusing on enabling companies to successfully navigate the energy transition. He spent some time in Iraq following the gulf war that set his mission in motion, opened his eyes to the world without access to reliable energy and other basic essentials needed to survive. He saw the impact that can have on the stability of the region and the health and success of businesses and communities. Driven by this experience, he committed himself to find solutions that create profitable and sustainable energy outcomes such that we can all thrive. Last year, businesses lost $150 billion due to grid outages. How are they expecting to make a transition to stable energy without sacrificing by the line? Gareth has the answers. Thanks Gareth for coming on the show. It’s an absolute pleasure to have you here and look forward to finding out about what you did in Iraq and all the places around the world and what led you to start VECKTA and what VECKTA does. So welcome to the show.
Gareth Evans
00:01:52 – 00:02:00
Pleasure to be here, Jeff and yeah, global citizen and a mongrel on many levels. So thanks for the intro.
Jeff Bullas
00:02:01 – 00:02:30
So Gareth, let’s go back, no, we’re not going back to your childhood. But what did you do that led you to Iraq? In other words, where did you go to university and say I wanna be, go to Iraq and rescue them or help the military? I don’t know. Where does this interest in VECKTA and renewable energy come from? Takes a little bit back in time to when this sort of curiosity rose.
Gareth Evans
00:02:31 – 00:06:03
Yeah, it’s been a wild ride, honestly, Jeff and I think what it’s a case study in is you definitely cannot map out your career directory or where you’ll end up. And I think, for anyone listening, who’s wondering what the next step in their life or work journey looks like. I think what I’ve always enjoyed doing is just not planning and just saying yes, when opportunities arise and I actually always wanted to be a fast jet pilot with the Air Force and I designed my whole schooling around that. And so I went to university to study environmental science, but I didn’t really know I wanted to go to a university originally. So I took a gap year which is very common in England and Australia, but less common here in the US. I traveled around South America, did a bunch of charity work, kinda matured, learnt about the world. And my passion was always geography and the outdoor lifestyle. My mom and dad were both police officers. So I never had any kind of entrepreneurial upbringing. It was all about just enjoying moments and experiences versus materialistic things. And so they were all kind of the base trends sets for my kinda starting in life, the Air Force paid for me to go to university. So I flew at the weekends, studied during the week and then at the end of university, they’d bought a bunch of planes that were all delayed and trained a bunch of pilots. And so they had a surplus of pilots and not enough aircraft to fly. And so they didn’t need me. So we agreed to part ways and it probably was one of the best things that could have happened. I continued on my travels around the world, traveling with a few friends to Northeast China. We’ve spent two months training with the shaolin monks, and traveled through Asia, Australia, New Zealand. And then I decided I didn’t wanna live in the UK. So I moved to Canada and I turned my environmental science degree into my first job, which was a consultant, supporting the oil and gas industry to clean up old oil and gas well sites throughout the rocky mountains. There’s lots of wild twists and turns that go along with that. But ultimately, the consulting firm I was working for was bought by one of the biggest engineering firms in the world, Worley, who are very common names are probably most of your Australian listeners. The biggest energy engineering firm in the market today. And I had a wonderful 15 year career with them. But one of the biggest opportunities I had was to go to Iraq. And that was right after the second gulf war, the oil and gas industry wanted to move into the region and they were looking for volunteers to be the first people on the ground. And so I put my hand up, my wife and I recently married, packed a duffel bag, each moved to Dubai and then I did fly and fly out of work out of Iraq. And, yeah, lived on the US army base in Basra and got to be surrounded by personal protection teams and we were mortar attacked most evenings. We’re always worried about roadside bombs and ambushes, but we were there to essentially assess the liability for the oil and gas companies moving into the region. So environmental, social quality community is a super exciting project, super exciting journey. And to your intro, it was like a real insight for me into the risk of relying on a centralized system and the impact of not having access to clean affordable power like the consequences are devastating energy is truly the lifeblood of everything.
Jeff Bullas
00:06:03 – 00:06:38
So that was the first time you noticed the impact of not having reliable energy. And obviously that started your thinking about what you’re doing today. So you had that observation, you saw that, I suppose the suffering that comes from not having power and energy and impact on the community. So, what was your story? What was your journey like after that to when did you start VECKTA? What happened in between starting VECKTA and the Iraq war, for example? And what year was the Iraq war?
Gareth Evans
00:06:39 – 00:09:45
Yeah. So I was in Iraq, 2009 to 2011, like, one quick story that I think will hit home for people is like we get briefings by the US military every morning. So we’d find out what the state of the security situation would be on the ground. And one morning they showed us a video and what happens is when someone releases a mortar, they have sensors that detect the origin of the mortar attack. And so then they’d send out patrols to try and see if they could catch anyone. And on this day they didn’t catch anyone, but they found a video recorder on a tripod and the people who fire the mortars would have to record themselves in order to get paid. And essentially what the video was translated to was as it was essentially people like you and I, Jeff, two guys out in the rain and wind and it was essentially like, I really don’t wanna be here tonight. It’s pouring, it’s wet, it’s cold. I wish I was at home with the family, dropping the mortar, hustle and running away. And I think the reality of what was described to us is these were people who were just desperate to survive and they were being paid a couple of 100 bucks to cause harm. But it wasn’t because they were there wanting to inflict that harm. It was because they needed to pay for food, pay for diesel. And that is the risk in these situations if people don’t have access to the most critical resources. They’ll turn to doing crazy things in order to survive. And so that was truly the most eye opening moment, I think following that, I ended up moving to Perth, Australia and I ended up leading an environmental consulting business within Worley, 150 people. We specialize in supporting the mining oil and gas sectors to develop their assets in a really kind of efficient and effective way. So we’d do environmental impacts assessment, we’d monitor and measure their performance and ensure that they were deploying their projects per the environmental regulations. And then I was really lucky to have a mentor and sponsor within the corporation who said, I know you have big aspirations to lead a business. You need to kind of throw some zigs and zags into your career. So I moved away from the consulting and I took a role, leading their commercial strategy and pursuit. So I got a real exposure to how big businesses work, how you pursue and when work, how you tell a story, how you sell it, how you convince someone to buy it. And that ultimately led to me taking a sales role then back in the US selling energy solutions to some of the major businesses in the US. And my final role was leading their global power consulting business for what we call distributed energy or on site energy. And that’s where I really saw the need and opportunity for VECKTA’s concept. I was lucky enough to have some incredible team members who were specialists in this space and could help frame the technical challenge ‘cause I’m not an energy expert by training more of a business builder.
Jeff Bullas
00:09:45 – 00:09:59
Right. So you worked at Worley and then got big commercial experience by, you know, how big companies worked. What was the next step in the story after that to get to VECKTA? Where did we like?
Gareth Evans
00:09:59 – 00:12:15
We were doing the work that ultimately now we’ve automated through VECKTA, we were doing that manually as consultants and engineers. And so what we did is we manually tested the hypothesis of there is an opportunity in the market to deploy what we call on-site energy systems, whether that be solar batteries, gas, diesel electric vehicles, fuel cells, businesses can generate and store energy right at their facility at a price point cheaper than what they pay their utility today. And it’s more reliable and it’s more sustainable. The pain point for them was they’d, because they’d never had to think about energy ever. Up until that point, it had been provided to them by the utility in an affordable clean way. They didn’t know what was possible, who to turn to where to begin. And so we manually tested the concept of can we automate more and more of the assessment design configuration of these systems, which is a very technical challenge. And we did that and so we incubated that idea for, actually, over two years and we applied for innovation, funding. We held some internal workshops, we brought in stakeholders from all the different groups, construction operations, maintenance, consulting engineering. Yeah, within Worley. And then we found a great software partner who specialized in automating some of this workflow. And finally, we got to a point where we saw that we could do a lot of the automation work, but there was still a bigger problem in the market that once you, even if you knew what system you wanted to buy, the supply side of the market is very convoluted, you know, the person selling you a solar system in Sydney where you are is gonna be completely different and so on deploying a gas turbine in Florida. And so how could we ensure that businesses that wanted these systems could get firm competitive quotes from the best suppliers in the market and ensure that they could get apples to apples comparisons to ensure that they were making the most informed correct long term decisions. And so we realized we could build that solution within a big corporation. We had to create a business that was independent, stand alone and that was the inception of VECKTA.
Jeff Bullas
00:12:16 – 00:12:19
So when did you make that big step?
Gareth Evans
00:12:19 – 00:12:51
Yeah, by the end of 2019, we came out with amazing aspirations to change the world overnight and then literally the world did change overnight. COVID kicked in just a couple of months after we formed. And you can imagine the idea of being a startup and small team surrounding a white board, ideating, innovating, creating a huge amount of internal energy, all that evaporated overnight because none of us could hang out together. So yeah, it’s been a pretty wild ride.
Jeff Bullas
00:12:52 – 00:13:09
So, ‘cause now you’re in San Diego and you were in Perth with Worley. So we were having a chat before. You said that part of the reason you moved to San Diego was to be at the hub of technology and startups, which is the USA. Is that correct?
Gareth Evans
00:13:10 – 00:14:13
Certainly. The US is very unique from that perspective and I’ve thought a lot about this, you know, I think people talk about Berlin being the next Silicon Valley and there’s all, you know, lots of different places pitching themselves as being the next tech centers. But the reality is the innovation, the I get stripes on my shoulder for trying and failing versus being beaten down and called out like that’s quite unique here. And, actually then just the venture capital market that supports the corporate business willingness to try new things. It’s very unique here. And I would say from an innovation, incubation, piloting it’s an amazing place to be and combine that with the US has one of the oldest grids in the world. California is very forward thinking in terms of clean tech and there being a lot of good talent here, it’s great ingredients to build a clean tech software enabled business.
Jeff Bullas
00:14:14 – 00:14:34
So you’ve got the intersection of what you think are the basic building blocks to make VECKTA a success. In other words, renewable energy focuses on a large grid, large market, funding, innovation. So it’s really the intersection of everything you need to give yourself the best chance of success.
Gareth Evans
00:14:35 – 00:15:04
That’s right. And even just, Jeff, from a perspective of branding that, you know, I think when businesses see a California based software company, it’s a very different story than if I was to say I’m a software company based in Liverpool, England and we specialize in clean tech. It’s just, there’s something about that that just people connect with. So there’s lots of good reasons but there’s also those softer marketing opportunities that we can leverage as well.
Jeff Bullas
00:15:05 – 00:15:14
So you go to San Diego but you need to pay for a startup, tell us about that.
Gareth Evans
00:15:14 – 00:16:51
Yeah. So the original investment, we convinced the corporation that I was working for Worley to give us our initial funding, which was great. It kind of derisks the initial launch of the business. And I think that also provided some validity in the market because here was the biggest consulting and engineering business in the world investing in a company that they knew was automating a lot of the work that they actually do manually. So this was a bit of a risk hedge for Worley. They hadn’t really done a lot of that in the past, so it was a very brave move by the business and definitely wanted to reward them in the future with a large return on that investment. But then straight after COVID, we closed our first venture seed round. So we’ve done two seed venture rounds since. Then, we’ve raised a little over 6.5 mil with some of the best climate and venture software tech investors in the world. All based out of the US. That was a brutal process, honestly, that was a, I had never raised money before. I knew nothing about that market. I didn’t even know what angel and seed and series A meant, I didn’t know how to value a company like it. That was a very steep learning curve. And I ended up pitching to over 100 and 20 different businesses before I found the right initial investor. And yeah, that was a very stressful time. We actually ended up having to borrow money. We ran out of money at one stage before we closed the investment round, so, yeah.
Jeff Bullas
00:16:52 – 00:17:41
That’s not an unusual story. I remember when I initially caught up with Melanie Perkins, one of the co-founders of Canva in Australia. And she actually did a presentation at one of my workshops for me when they were just starting out. And she said that one of the biggest challenges she had was basically doing different variations of the slide deck or the pitch deck. I think she said she did 40 or 50 variations and I think she did 40 or 50 pitches. You did over 100. So I think you win. But she did mention how important it was just to just keep trying and persisting. And so well, who are you pitching to? I suppose, specialist VC firms in the renewables energy space?
Gareth Evans
00:17:41 – 00:18:53
I think that’s what I really learned. Candidly is I was originally pitching to a lot of the general generalist funds and because this is one, a new market to a new business model for a new market, kind of the odds were stacked against us in terms of fitting into the kind of perfect risk box that a lot of the venture capital firms have, they all have their own decision making criteria. I ended up moving more and more towards the pure clean tech focused funds where I started getting more traction because they actually at minimum understood the opportunity. I think for both customers and investors today. You have to educate them about one, the state of the current market to the new market opportunity, three of business models to disrupt the status quo and then four or why VECKTA. So there’s, like, an iterative process of finding people where you can scratch out at least one or two of those sales features and make life a bit easier. So originally I pitched to people in the wrong stages, the wrong risk profiles, the wrong knowledge base and slowly refined that at the time.
Jeff Bullas
00:18:54 – 00:19:09
So initially because pandemic hit, you would have been, the team would have had to go and work from their own little nooks in different homes. Do you have an office today or is it still, you’re basically just gone totally virtual like a lot of companies have?
Gareth Evans
00:19:10 – 00:20:03
Yeah, we remote first for sure. We have a finance partner where we borrow their office once every two weeks. We have a core team here in San Diego where we come together and just hang out in a boardroom once every two weeks. But we’ve now got employees in Canada, Brazil, Mexico, Australia, US. So it’s impossible for us to work together regularly. But then what we do is every four to six months, we come together, we rent a big Airbnb and we all live together, cook together, workshop together to kind of reflect on what’s worked well. What’s not the next strategy is and then use that as kind of our bonding and kind of culture, reset time to really ensure that when we all do go remote again, that we’ve got that kind of bond and connection and values alignment to kind of keep us moving for at least another few months.
Jeff Bullas
00:20:04 – 00:20:44
It’s really the pandemic, really has reinvented how we do business and I don’t think that’s ever gonna go back to, you know, the nine to five turn up to the corporate at tower. Of course, it’s still going to happen. But, so, but that’s certainly broken that model. Now, tell us a bit about, did you create, so, with the product, you’re in a sense where I suppose you had to create a total product. Was there a minimal viable product you put together to test? I know you said you were working at Worley for two years to test in the field within Worley. So, did you get to a point where you created what you thought was a minimal viable product or do you have to go with the big bang theory?
Gareth Evans
00:20:44 – 00:22:33
Yeah, we, because we had essentially a year and a half, two years of not being able to speak to the market at all through COVID, you know, no one was in buying mode. No customers like we couldn’t go and meet anyone. It actually forced us to create in isolation a bit too much. So we did end up building a MVP and we designed it such that people would come in and upload all this data and run their own analysis and come up with some insights and take next steps. And when we actually then came to market at the end of COVID, it was a very steep learning curve in that because people didn’t know a lot about energy, they didn’t feel confident self driving. At least today, I think we’ll get to that in the future. So we’ve now subsequently had to adapt that product and make it do a lot more of the thinking for the buyer and provide the insights and the intelligence without them having to really do any data input. So that’s forced us to do a lot of heavy lifting around that front end analytics data aggregation and actually putting the customer’s hat on and doing all the analysis based on the questions they’ll be asking and giving them just the basic insights that they can then take internally to approve the business case. So we’ve definitely had, I’d say, a few MVPs and now we’re at a point where we’ve got a more mature base foundation of a product that’s endorsed by the market. And we’ve got some great big base load customers that are iteratively working with us to constantly refine what we do and how we do it and how we add the most value. But yeah, I think COVID screwed us up a bit at the start just because we didn’t have that opportunity to do the real market testing around what the product should look like.
Jeff Bullas
00:22:33 – 00:23:01
So what does your ideal customer look like? You would have, I suppose initially thought it was the world and then you decide that it’s maybe not the entire world, but obviously the market size must be quite large. So two questions initially, what do you think is the market opportunity for your firm in terms of global revenue, total market?
Gareth Evans
00:23:02 – 00:24:13
Yeah, by 2030 the onset energy market is estimated to be worth in excess of $300 billion per year in investment in these solutions. The opportunity for us is today, it’s estimated that over 40% of any project costs are soft costs. So this is consulting engineering procurement contracts, procurement. We believe that our platform replaces the need for a lot of that. So how much of that 40 or so percent can we take as VECKTA’s revenue? There’s a less than 1% deployment of on-site energy systems across commercial industrial businesses today. So the market growth potential is huge. So yeah, like we’re really only just beginning and the upside potential is huge and even with many competitors or similar types of products, the list of opportunities and customers is almost endless. Every single business building you look at is a potential customer. So we’ve definitely had to refine who we target and who the priorities are.
Jeff Bullas
00:24:13 – 00:24:16
Right. So what is your ideal customer?
Gareth Evans
00:24:17 – 00:25:43
Today corporations with multiple sites within their portfolio, ideally in the manufacturing, food and bare healthcare or logistics sectors. As you know, we’ve done work in mining oil and gas, all these sectors, but in terms of immediate opportunity where they either have a large energy load, a real reliance for energy from a reliability perspective, or they’ve really committed to the sustainability targets, we like our customers to have one or more of those pain points for opportunities. And with a commitment to actually acting, do you know, I think a lot of people like to talk today, they’re not necessarily in the mood for acting. But what we’re seeing is the businesses that are embracing this are really achieving very profitable outcomes. So what we specialize in has been able to take ten, hundred, thousand of sites and help a business very quickly understand where they get the greatest return on investment, what value that would be worth to the business and then what systems at what locations will help them achieve that. So the more sites, the better from a strategic value perspective. But we’ve done everything from microbreweries to 100 megawatt mine sites and everything in between. So the platform is sector agnostic, but from a sales and marketing perspective. We’ve got our target sectors for sure.
Jeff Bullas
00:25:43 – 00:25:58
So what’s the business model for you? Is there a subscription as a service type built into it as well as I suppose there must be consulting. What’s the business model for you guys that you found to work?
Gareth Evans
00:25:58 – 00:27:14
Yep. So it’s platform access SaaS revenue from the energy consumer. So let’s take a manufacturing company with 100 sites. They pay for platform access that gives them the centralized platform, the data intelligence, the insights, the business case, the analysis, all of that dynamic real time. So now multiple stakeholders within the business all get one central source of truth. They see what the possibilities are and then they get to see where the projects are at, how they’re progressing and what the opportunities are. And then when they have a project that they want to build, we help them get firm quotes from our marketplace. And so suppliers, it’s free for them to be in our marketplace. But when they win work in the marketplace, they pay a success fee. So we only charge when value is created. The suppliers love it ‘cause now they’re getting access to bankable, viable vetted projects and they have no cost of sale. The customers like it ‘cause they’re in control and they’re not being sold to by suppliers. And they get to tell a market exactly what they want and why they want it through our analytics versus kind of guessing at what is right for them. So we’re trying to create value on both sides and kind of raise all boats as it were.
Jeff Bullas
00:27:15 – 00:27:21
So, do you also get involved as a consultant on a per project basis?
Gareth Evans
00:27:21 – 00:27:50
We can. And we can sort of do that on a like an assessed single assessment fee or a consulting fee. But because we’ve built a software platform, we certainly like to kind of stay away from the consulting theme because it has people who have their own connotations associated with that. But certainly, yes, it’s today for where the markets are at, it’s software enabled outcomes versus software only outcomes.
Jeff Bullas
00:27:50 – 00:28:31
Right, okay, cool. So you’re entering an industry which is full of monopolies or oligopolies. In other words, they are very well protected both through market share as well as government regulation. So that begs the question is how, what are some of the challenges you have of breaking into those monopolies and getting past the government regulation side of things? What are some of the big challenges for you in this? What is essentially a market that’s been around for a century plus? What are some of the biggest challenges for you that you found to break into the market and grow?
Gareth Evans
00:28:32 – 00:31:31
Yeah. Now you’re spot on it is 100 year old market and particularly the utility model has become complete monopoly like here in California where I’m based, you have no option but to buy from your local utility as a consumer, which is very different to the UK and Australia and places like that where you can competitively source your energy. But here we’ve actually now got some of the highest rates in the world, which is shocking for being in theory the most progressive state when it comes to thinking about this. So I’d say there’s a few primary challenges. One is because the status quo mentality has always been, the utility provides my energy and that’s where I get it. Just changing business leaders mindsets that they have other options. That’s challenge number one. Challenge number two would be educating them on site. Energy is an opportunity to really help them drive profitable and sustainable outcomes and then that VECKTA is the right business to help them do that. So that would be the first challenge I think with the utilities themselves. There’s definitely more progressive utilities than others. Some are certainly in defense mode and they are in that kind of death spiral of their grid is aging, it’s becoming less reliable, there’s more outages. So they have to spend more money keeping it up to date, that money gets passed on to the ratepayers. Ratepayers don’t like paying more. So now they’re looking for other options as more people defect, the rates go higher because the cost base has been spread across fewer people. So that’s the real risk to utilities. If they don’t adapt and figure out a way to support those that want other options, they are going to be massively disrupted. I think what’s very unique here is the federal regulations are almost counter to the local utility positioning. So the Inflation Reduction Act incentivizes businesses 30 to 50 cents on the dollar of any capital spent. You’ll get a tax credit back on that through the Inflation Reduction Act. And then at the utility level, they put every barrier in the way possible to prevent those systems from being deployed. So these are some of the balances that we’re kinda trying to work around. We certainly prioritize the states where rates are at the highest, where there’s the biggest pain point where regulations are more attractive and less obstructive. And we want to work with the utilities to ensure that they also gain value from the deployment of these distributed systems because those that figure out how to integrate and manage a more flexible, agile, adaptable load base will be more successful in the future than relying on one central source of power. And so, it just requires a bit of a change of mindset, but when you’ve been running a business the same way for 100 years, that can be a bit of a slow transition for the utilities for sure.
Jeff Bullas
00:31:31 – 00:32:41
Yeah. We and the other challenge that we talked about before we hit, you know, record on this podcast was we use the analogy of this is like the PC industry disrupting the mainframe industry in the 1800s. Essentially, there was a stranglehold on computing power by IBM with its mainframes and a few others like Deck and so on. Whereas the PC industry blew that up and today IBM basically doesn’t sell hardware that I’m aware of, it sells services. So we’re moving and the biggest challenge is that we’re moving away from a centralized system to a decentralized system which has been enabled by technologies such as, you know, you used to have solar panels and you had dumb switchboards. Now we’ve got smart meters that can measure energy in and out. And also we have the ability to actually generate power base load energy now with batteries. Batteries must have been quite a game changer for you in terms of what you’re offering. Would that be correct?
Gareth Evans
00:32:41 – 00:35:12
Yeah, we certainly see them in most systems. So because we’re solution agnostic, we look at a business from a perspective of how do you generate energy or how do you use energy today? What’s your energy consumption profile? How much do you pay for it through your utility? And then how much real estate do you have access to deploy a system? What are your business priorities? So we take all these different variables: fuel prices, solar radiance, wind speed, gas prices, all this sort of stuff. And we look at what is the optimal system particularly here, but in most cases, it’s normally solar plus storage because storage provides so much more flexibility to control when you do consume from the grid to ensure that you’re consuming power when it’s at its cheapest from the grid. If there is an outage that you can ride through it by being self reliant, as well as them being able to control your peak demand loads, which really impact what your total utility bill will be. So it provides a huge amount of flexibility. But there’s also been amazing advancements in fuel cells, in gas turbines, in electric vehicle charging infrastructure. And what we want businesses to do is understand that a combination of these technologies can meet your needs. There’s a few big misconceptions in the market today. One is let’s throw some solar panels on the roof and they’ll fix all our problems. And people don’t realize that solar is awesome, but on its own, you’re now generating energy when it’s at its cleanest and cheapest on the grid, you know, during the sunny hours. And if the power goes off from the grid, your solar also has to go off ‘cause you can’t be pushing energy generated by the solar back into the grid. So you have to have a way to store it. So your operations only become resilient with the likes of a storage solution. But batteries have come down in price over 80% in the last 10 years. And they’re really commercially viable, which is another big misconception people think they’re too expensive. And actually when you look at the use case, we just saw a project for a customer in the northeast of the US, a big manufacturing facility. They’ll save $1.2 million per year with solar and storage alone. And that’s assuming a three percent escalation in utility rate year on year. Whereas in fact, we’re seeing 5-10-20-30%. So you imagine that’s the minimum. The upside potential is huge.
Jeff Bullas
00:35:13 – 00:36:33
Yeah. And so yeah, battery technology is just being, it’s going ahead in leaps and bounds. And now the challenge is trying to produce batteries that have enough power and are light enough to power airplanes. And that I think of some of the holy grail is if you can generate a really light battery that’s got a lot of power, then you start to change the air industry as well, potentially, which is not where you’re playing. But the place you’re playing interests me quite often. A solution happens when you get an intersection of technologies. In other words, a change in the marketplace, a huge paradigm shift. And I’m just reflecting on what the place you’re playing with renewable energy is. That number one, solar panels have become very, very efficient and really cheap. That’s just an example. Number two, you now can store that base load cheaply in batteries. Number three, we’ve got smart meters that can measure energy going in and out. And number four is the ability to actually manage that through software. So is that correct? Is there anything I’m missing in terms of, is that intersection goes for? Is there another, well, are more technologies that have intersected to provide a paradigm shift in your industry, power and energy.
Gareth Evans
00:36:33 – 00:37:42
You’re spot on and I think what we recognize is the big gap now is enabling technology to connect all of those things and that’s why we wanted to create factories, software. Yeah, customers want the confidence to act on all the supply capabilities that exist in the market. We’ve got amazing constructors. We’ve got capital providers who want to finance these systems. We’ve got great equipment that will continue to evolve and improve all the time, but they exist today and they just want access to really good projects. Customers want the confidence to build the right projects. But yes, the intersection is everything you described. Plus the fact that the incumbent solution is fading in terms of its reliability and affordability and that governments and regulators are massively incentivizing people to do something about it. And so between Europe, US, Australia, they’ve all got their own incentive plans that are very significant and businesses should truly capitalize on the opportunity to get cash out of the system and differentiate their businesses at the same time.
Jeff Bullas
00:37:42 – 00:38:03
Yeah, I certainly noticed there’s been a lot of Australian businesses such as Twiggy Forrest, for example, moving into hydrogen, that he’s moved into the states to build like hydrogen plants because of the huge contribution by the government. So that’s the Inflation Act or is it the, is there an Infrastructure Act as well? Are they, is that both of them?
Gareth Evans
00:38:03 – 00:38:30
Yeah, like the Inflation Reduction Act is driving it. But certainly the Department of Energy, the DOA is also financing these energy hubs as well which is exciting for the hydrogen folk. I think hydrogen, it’s exciting, it’s still not commercially viable at scale it seems and I think there’s still a long way to go but it’s great to see the investment going into proving it out.
Jeff Bullas
00:38:31 – 00:38:56
Yeah, that’s interesting hydrogen because hydrogen seems to be battling with I suppose battery technology in a way for storage. And the jury’s still out on who’s gonna win that or maybe both will win. I have heard some stories about the fact that hydrogen might be good for commercial interests and batteries could be better for more retail consumer interest. What’s your thoughts on that?
Gareth Evans
00:38:57 – 00:40:40
Yeah, I think hydrogen is really interesting for me specifically for our interest on an on site energy level. I am actually one of our suppliers, fuel cell energy, they have a really nice fuel cell unit. And what I like about that technology is if a business wants to transition from a base load of fossil to an energy substrate of the future, let’s say hydrogen, the fuel cell facilitates that. So you install a fuel cell at one capital cost, you run it on gas today. It generates energy with time. It can be blended with gas and hydrogen and then ultimately potentially run on 100% hydrogen, but it’s the same unit. And so for businesses wanting to go on that journey, especially more industrial businesses, that’s a very exciting opportunity. I like that concept, especially when you combine it with solar and batteries and you can kind of integrate all these different technologies, I think utility scale hydrogen. I’m definitely not an expert. My kind of perception at a holistic view is you need to have good by-product, you know, whether it be fertilizer or whether it be, you know, there has to be other reasons for it, other by-product for it to work or you have to have endless amounts of renewable energy to ensure that the energy drawer isn’t so significant that it’s a like it has to be penciled, you have to have enough good clean energy for us to generate the hydrogen in a way that makes it sustainable and then we need to figure out the whole transportation side of it.
Jeff Bullas
00:40:41 – 00:41:13
And that’s the challenge, isn’t it? You’ve got a century of distribution being built. Even though it’s aging, whether it’s a petrol station or whether it’s an electric grid, and I suppose that’s the challenge, isn’t it getting to a point where the network effect takes over because you’ve got proper distribution? And we’re seeing that in Australia. In fact, it’s interesting looking at Australia in that quite often, electrical companies have been broken up into two types, the producers and the grid. How’s that in the USA?
Gareth Evans
00:41:14 – 00:43:05
It’s actually starting to head that way as well, you know, I think there’s a lot more of a rise in what’s called community choice aggregators. So the utilities are realizing that it’s not their play to be generating, they need to be managing the transmission distribution and then the aggregators essentially wholesale, buy energy from whoever’s willing to sell it to them and then they use the utilities infrastructure to get it to their, to the customers. So I think we’ll see more and more of that. I think those that will truly differentiate themselves as those that figure out how to transact the power between every prosumer. That’s the kind of ultimate intent. So we’re not reliant on individual big central sources of energy. And yeah, I think, you know, we just saw, I think Virgin Airlines fly from London to New York with sustainable aviation fuel, which is made through waste products from corn, as well as waste foods. And I think in terms of that distribution challenge that you described that’s kind of critical today is what, where can we use the same infrastructure just with a slightly different input. So instead of the aviation fuel today, use SAF, sustainable aviation fuel, instead of having to retrofit entire planes with batteries or hydrogen infrastructure, all like it’s a very simple switch in, switch out. I think the challenge will be, do we actually want to be using our food crops to generate power. If it’s a waste product? Great, but we can’t afford to be wasting our agricultural potential on fuel, I don’t think. So yeah, lots of complexities, lots of opportunities. I think the electrical infrastructure exists especially at the distribution level. How can we maximize that to provide more reliable, affordable, flexible power for everyone.
Jeff Bullas
00:43:05 – 00:43:57
Yeah, it’s very interesting that Australia in that, I think the government’s funding a $20 billion infrastructure project to try and move the grid from centralized to being able to handle distributed power in and out. Because the grid was designed for mainframes, as we say, rather than the PCs, in other words, distributed computing, distributed power. So because we can’t, you know, the thing we talked about before is we can’t rely purely on the capitalist market to work for the common good. So sometimes the government needs to provide a guiding hand as we say. And everyone’s got a different philosophy on that around the world. So, do you see, so the federal government and the US are trying to drag the utilities kicking and screaming in that model?
Gareth Evans
00:43:58 – 00:45:48
Yeah, it’s interesting, isn’t it? They’re certainly incentivizing businesses to try and act themselves because I think the reality is if we wait for the utility model, we’re gonna be waiting a long time because the incentives are not aligned. But we do need to have the ability to support the people who genuinely need this the most and can’t afford it. So that equitable transition is super important. And how do we ensure that that happens and that there’s a sustainable way of achieving that? I think the utility scale renewable model is frowned on for those same reasons is, you know, you bring in more and more, let’s say, inconsistent, unreliable power into a grid which is heavily impacting the grid reliability. And you’re taking over huge amounts of landscape and destroying ecosystems. And meanwhile, we’ve got a built environment that’s already been impacted. How do we leverage that first? So there’s no silver bullet to all of this. How do we combine all these things? But yeah, what’s the last? How do we ensure everyone benefits? And that’s why there’s a big push back about turning off oil and gas tomorrow because the whole world is expecting a certain quality of life and we’re certainly not ready to stop using fossil fuels today without impacting lots of people. So we need to adapt with purpose over the decades to come, to make sure that we transition in a way that is reliable. We can’t afford the power to go off because when the power goes off, terrible things happen.
Jeff Bullas
00:45:48 – 00:46:01
Yeah. And you’ve seen that in Iraq, when communities basically were without power, I’m sure. We’re seeing it in Gaza where they’re building door frames just to actually heat food and cook food.
Gareth Evans
00:46:02 – 00:46:57
And you make a very good point like this is actually a sovereign issue countries now need to face is, you know, we saw even in the Ukraine conflict, one of the first things the Russians did was target energy infrastructure. And so if you were reliant on single points of failure, infrastructure assets, that is a major risk and whether it be cyber attacks, whether it be physical attacks. And so this is the beauty of where the industry is heading. You mentioned that all these sweet spots are coming together to facilitate a transition to more distributed energy generation here. It’s gonna massively grow and it actually creates a more sovereign, independent, secure future for businesses, countries, and communities. And that’s kind of got to be part of the equation as well.
Jeff Bullas
00:46:58 – 00:47:38
Yeah, it’s just interesting to watch. Looking at the market here in Australia but, and chatting to you about, you know, how it works in the US versus how it works in Australia. And it’s a messy evolution, isn’t it? In terms of getting from A to B. And no one can predict the future. All they can do is look back and maybe use history to guide them but not to be the prescription. So just a quick question, a lot of people wanna know, how do you like, obviously, you’ve got to find customers. What’s your promotion and marketing look like in terms of getting new customers?
Gareth Evans
00:47:39 – 00:49:17
Yeah, this is an ongoing exciting challenge for us that we’re navigating. We created our own podcast. I love what you’re doing here because I think a way to educate people in a really digestible, understandable way is to want to be guests on podcasts like this and to have our own, we want to make an energy interesting, enjoyable, exciting. We want business to see that it’s actually the profitable thing to do versus just being just doing it for, you know, there’s a lot of pressure to be sustainable, like let’s ensure sustainability does not come at the expense of profitability. So we’ve generated a huge amount of content around blogs, vlogs, videos, podcasts. We try to use our website, our social media to push that out that’s constantly evolving and growing. We have our direct outreach through our own sales team and then we were constantly building a big referral network where a lot of these business leaders already have trusted relationships, whether it be with consultants, energy efficiency providers. HVAC installers, even the suppliers in our marketplace, have their own sweet spots, they have their own customer bases, they know that they can’t do what we do at scale. And so they refer opportunities to us and get a revenue share on that. So that’s a really exciting and growing opportunity for us. And that’s the way we can ultimately scale beyond, you know, just in house resources. And so we’re heavily focused on that as a priority with our educational outbound awareness. I know we have things like nurture campaigns, newsletters, all that good stuff.
Jeff Bullas
00:49:18 – 00:50:00
And the fact for you is you’re dealing with a big end of town, large capital, big budgets. So you can afford to invest a fair bit in getting that lead, I suppose because the opportunity then is that the upside is, you know, you can spend thousands of dollars on a lead, but then that turns into hundreds of thousands of millions of dollars in revenue to you. So it’s, but you can’t be spending all that money So I’m intrigued by you talking about the referral network. And what I’m curious about is you must have a large base of suppliers to the industry to facilitate a solution. How many in the database at the moment if you’re willing to reveal it, or a number?
Gareth Evans
00:50:01 – 00:50:47
Yeah, there’s a little over 4000 suppliers in our marketplace today covering capital construction and equipment. We never expose our customers to all of them. They just want to work with the right suppliers who match their specs. And so that’s part of our secret sources. We help the customer design the right request for proposal and then we ensure based on their commercial interests, their technology needs their location, their sort of the level of sophistication of the supplier they wanna work with. That’s who we then make sure receives the opportunity. So they don’t get bombarded with dozens of bids. That’s no good to anyone either. We want to make sure it’s three to six, you know, highly focused firm quotes from the best suppliers to meet their needs.
Jeff Bullas
00:50:48 – 00:51:01
Yeah, it’s and I’m sure that the supply market must be growing as the competitors come into the marketplace. Are you seeing an explosion of people moving into your market as in, you know, the suppliers, for example?
Gareth Evans
00:51:02 – 00:52:09
I think across the board, you know, we’re actually seeing other platforms, you know, talking about doing similar things both in terms of technology in terms of consulting, in terms of everyone’s seeing the real unique opportunity here of a new market that’s got massive upside. There’s new developers, new equipment providers in the market every day. I think what’s great for us is that high quality projects attract suppliers. So we don’t have to go to the market, finding suppliers by originating good quality leads and opportunities that draw them in. But we certainly want to keep on top of what’s new, what’s exciting, who’s coming down the pike while also balancing a big corporation that doesn’t necessarily wanna work with a battery business that they don’t know whether they’ll exist two years from now. So, who has the ability to deliver on their performance guarantees and warranties and so. These are all the risk profiles and insights that we want to provide to our customers to make sure they make the right decisions.
Jeff Bullas
00:52:09 – 00:52:30
The other question I’m curious about is what sort of you, mentioned that you were saving up to a million and a half for one of your customers or. So what’s the average saving you’re getting across the board generally, it’ll vary, I know, but what are some of the some odd levels of savings that you’re producing for your clients?
Gareth Evans
00:52:30 – 00:53:51
Yeah, like at the very minimum, it’s locking in an energy cost today that is equal to the utility rate. But knowing that it won’t go up for the next 10 to 20 years. So at minimum being able to hedge, here’s what I’m at today and I don’t wanna see escalation, but typically we’re seeing 30 to 50% cost savings. On the really positive side, there are businesses who will just come in and guarantee 10% less than your utility regardless. And so the opportunities are very big, like we just looked at a corporate portfolio for a customer with over 1000 sites. They over the next 20 years have the ability to save in excess of two and a half billion dollars. And most people would not have guessed that they would not understand it. And they don’t see it as being a line item in their budget that they think they have any control over. In fact, the escalating nature of that cost item is a massive risk to their business. And so we see ourselves as being, one, a risk hedging mechanism as well as a real profitable solution for businesses who want to do it right. And, I think that’s the biggest light bulb moment for most business leaders when they start seeing those sorts of numbers and they start actually realizing the upside potential.
Jeff Bullas
00:53:52 – 00:54:20
Yeah, you only have to look, think at, look at what happened, for example, you know, Russian gas supplies into the German market that essentially took businesses that were making money into loss making ventures because the cost of gas had gone up two or 300%. So, you’re right. You actually risk, you’re hedging risk for large corporations especially. And, well, for anyone, any corporation in that they have more control over their destiny from an energy cost viewpoint, isn’t it?
Gareth Evans
00:54:21 – 00:54:24
100% yeah. Absolutely.
Jeff Bullas
00:54:24 – 00:54:58
Yeah. So just to wrap it up, it’s been fascinating. I don’t know. Well, I found it fascinating but I usually ask a couple of questions and more on a personal level just to wrap things up. Number one is the first question, like if you had all the money in the world, what would bring you, what would you do every day? And number two, what are some of the challenges that have taught you the biggest lessons? So you can answer either one or another or going well. I really don’t know. That’s alright.
Gareth Evans
00:54:59 – 00:56:09
Yeah. So, number one, I genuinely believe this is my purpose and mission is to ensure that everyone has access to clean, affordable, reliable power. And so with all the money in the world, my mission would stay the same, but I’d certainly travel more with the family and ride my mountain bike a bit more probably. So very passionate about anything on two wheels, mountain biking, motorbiking. Love doing anything adventurous. So I’ve got a great wife and a nine year old boy. And so the more time I get to spend with them the better. In terms of biggest challenges, yeah, I think this is something I’ve kind of just built my career on is anything that comes up that people do not want to volunteer for. I’ve been willing to put it on my hand and get after it. I think the biggest learning has just always been to say, yes, live in the moment, get after it and trust your gut and surround yourself with awesome people who can rein you in and point you in the right direction when you need it.
Jeff Bullas
00:56:09 – 00:57:03
Well, it sounds to me like that. The biggest thing that brings you happiness and also what you learn from is the people and relationships that you surround yourself with. And that’s what the 80 plus year old Harvard study reveals that our happiness comes from our relationships. And the consumer society doesn’t produce happiness even though we’re sold that lie. So, but yeah, I think you’re making a difference in the world, Gareth, which is amazing and you’re doing what you love, you’re on purpose, which is also fantastic. A lot of people aren’t, they’re just showing up but you’re showing up with purpose and love what you do. It’s great to hear and thank you very much for sharing your stories, insights and making a difference to the planet and saving the world. That’s great. Thank you.
Gareth Evans
00:57:03 – 00:57:09
Thank you for helping us to tell the story and excited to work with a bunch of your listeners in the future.
Jeff Bullas
00:57:09 – 00:57:13
Great. Alright. Thank you very much, Gareth. It’s been an absolute joy to actually have you on the ship.
Gareth Evans
00:57:14 – 00:57:15
Thanks.