Energy Transition Now - Episode 13 with Marek Kubik

In this week’s podcast Marek Kubik, a founding member and MD of energy storage company Fluence – which recently floated on the NASDAQ – shares his insights into ‘electron time machines’, or batteries, within the broader context of energy storage.

David and Marek discuss the role of batteries in the evolving power system, including the broad set of use cases, commercialisation routes and the pairing of batteries with other technologies. Marek explains why lithium-ion batteries have become the dominant energy storage type, driven by their versatility and ability to solve current market needs, as well as the growth of EVs that have helped scale the technology. We also touch on the subject of the sustainability of the industry, including the mining of the necessary raw materials and the role of recycling.

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About Marek

Marek Kubik Headshot

Marek is a founding member and managing director of energy storage technology company Fluence.  He leads Fluence’s UK, Ireland & Israel team where he is responsible for overseeing the origination, development and commercial negotiation of energy storage technology, software and services sales.  Marek has over a decade of experience in cleantech, including an instrumental role in delivering Europe’s first grid scale commercial battery storage project in 2015.  A prominent energy industry influencer and thought leader, he was also named in 2017 a Forbes 30 Under 30 honouree; a list that recognises “the world’s most inspiring young innovators, bright rising stars and the leaders of tomorrow”.

David Linen: Hello everyone. I’m your host, David Linden, the Head of Energy Transition for the Westwood Global Energy Group, and you’re listening to Energy Transition Now where we discuss what the transition really means for the oil and gas and the broader energy industry. Capturing and storing energy to manage dislocations between supply and demand, it not a new thing. But it’s an essential part of how our energy system works, whether it’s for emergencies or how to manage short term changes in the energy balance. And a transition of our energy system will also require us to build new forms of storage to work alongside the new paradigm that we’re looking to build. And to talk to us about that, I have the real pleasure of having Marek Kubik here with me today. Marek is a founding member of the, and Managing Director of energy storage company Fluence, and he leads Fluence’s UK, Ireland and Israel team, where he is responsible for overseeing the origination, development and commercial negotiation for energy storage technology, software and services sales. He has over a decade of experience in cleantech, including an instrumental role in delivering Europe’s first grid scale commercial battery storage project in 2015. He’s a prominent energy industry influencer and thought leader, is also named in 2017, a Forbes 30 under 30 honoree. A list that recognizes the world’s most inspiring young innovators, bright rising stars and leaders of tomorrow. I think the one thing he hasn’t done yet, though, is be on the Westwood Energy Transition Now podcast, so here’s your chance, Marek, welcome.

Marek Kubik: Thank you. And I’m glad to right that tremendous wrong, David, and thank you for having me on board.

David Linen: Absolute pleasure and thanks for taking the time I know. And know you’re a busy man. So thank you. Look, I mean, what I normally try and do in these podcasts because, you know, the audience can either be extremely well versed in this subject or know nothing about it. And so it’s good to go back to basics in one way. So, you know, as I just touched on my intro. Energy storage is an important part of our energy system as it stands now, but it’ll need to change as we go forward. But could you maybe just talk a little bit of around, what is the role of storage play in our energy system at the moment and going forward as well?

Marek Kubik: Sure. So if we take a step back when we’re talking about energy storage, predominantly, we’re using that as shorthand for electricity storage. There are obviously other kinds of storage that you can look at, gas storage, I guess, and so on. But predominately we’re talking about electricity storage. So that is charging something up with electrons one way or another, holding that energy in one form or another. And that could be directly electrical like electrochemical batteries, which is where largely the growth is in the industry. It could be through pumping water up a hill right by running a turbine, right? So that’s what most of the energy storage that’s installed in the world is today on electricity grid, it’s through pumped-hydro. So already that plays an important role there’s about one hundred and eighty seven gigawatts of hydroelectric electric pumped hydro storage around the world. And that is dominantly been used, as you would expect to help balance supply and demand on generally within day basis, right? So a lot of the stories of, for instance, in the UK Dinorwig Electric Mountain, as it’s called, was essentially built in a few decades ago, largely to help with nuclear and integrating nuclear to the grid because nuclear is not very flexible, and so you needed other technologies to provide that flexibility. So, electricity storage in general has a critical role to play on the system, but that becomes all the more relevant as we move to a more variable and distributed decentralized form of electricity supply, where not only then do you have challenges of the variability of those resources as they increasingly become renewable and intermittent, but also vocationally because you’ve got fewer large central locations where the electricity is generated, it’s more distributed and the demand is more distributed. You also have locational issues that storage can help solve by moving electrons almost through time, so to speak. So maybe a nice way of putting it is that it’s an electron time machine, which is very, very useful and something we’ve not had a great deal of on on the grid in the past.

David Linen: Excellent, yes very interesting ‘electron time machine’. I think that’s a new one. I like that. I mean, I guess if you think about then, the history of all our electricity grids and our electricity system, they’ve come very much from let’s ramp up or ramp down centralized production to now, what you’re saying is a system where everything’s much more distributed. And actually, what you’re trying to do is a) increase efficiency and therefore flexibility also in the system, right? Because you could just wrap things up and down, but that would be highly inefficient way of doing things. So it is about efficiency and flexibility. Am I reading that right?

Marek Kubik: Absolutely. I mean, so it goes back, Fluence through, you know, through its predecessor’s, been doing energy storage. Battery based energy storage for over a decade now and even a decade ago, when battery prices were much, much higher, the first high value applications that were found for this sort of form of flexibility that the batteries can provide was essentially doing the heavy lifting of this ramp up ramp down flexibility, particularly very, very short, very rapid ones from thermal power stations. So a thermal power station runs most efficiently at sort of baseload, which is full power output consistently 24/7, right? You get a lower price of electricity per unit generated and lower emissions, interestingly enough, right. So its a little paradoxical to think about that, but running a thermal plant more has lower emissions per unit that it generates. And so batteries are very good at being able to do that sort of heavy, you know, heavy lifting of fast changes up and down, they’re digital assets. So that’s something that very effective up, but it becomes increasingly important as you look to the future, right? Because we’ve always had the thermal power plants to provide that ramping and stability, particularly over longer periods, but ultimately to get to net-zero, which we we need to first, you actually have to get to net-zero in real time to get to even 50 percent or an 80 percent average electricity renewable target over over the year. That inherently implies because it’s not always windy, it’s not always sunny. There will be periods where you have zero or very low and there’ll be periods where you need to have basically 100 percent. So this becomes very, very important because if you basically can’t have a thermal plant on your system because you need it to be zero emissions, then it’s these sort of technologies, it’s storage and it’s so flex-tech that needs to provide the the services that you that those thermal plants were delivering in the past.

David Linen: OK, quite interesting that actually batteries were supporting thermal plants, if you see it back in the day and now we’re switching out, I guess those thermal plants with renewable plants, which are in theory, more intermittent or are more intermittent. And therefore that’s the support that the storage, the battery in this case can provide. But I guess, you know, maybe there’s a bias because people are talking about batteries a lot at the moment, but there are a range of options, I guess, out there as to how you can create that efficiency and that flexibility that we need in the system. Could you maybe talk us through a little bit around what are those options that we do have, right? It is not just about a battery, I mean, a different version of the battery, I guess, but there are other things out there as well. Can you maybe just talk us through it? What are they? What problems are they trying to solve?

Marek Kubik: Yeah. So and it’s a great question, and it’s a complicated one to unpack. But the way that I think about it, there’s there’s often talk of short duration and long duration storage technologies, which I think is a bit of a false paradigm and I want to try and restructure a little bit, to thinking about essentially daily storage or within day storage. And then you get into sort of know multi-day weeks of storage and then seasonal, right, so you’ve got sort of, if you put it that way, that would be short, medium and long. But the reason I sort of, I don’t like using the word short duration is it doesn’t have a defined common understanding in the industry is an eight hour battery, for instance, wouldn’t probably be regarded as short duration. But if you talk about daily storage as being, you know, the time horizon you’re looking at, it’s a little bit clearer, I think. So essentially, there are different technologies that play in each of those, each of those time horizons and buckets. So batteries can respond very, very rapidly, very, very quickly in hundreds of milliseconds so they can deal with sort of some of the inertia and frequency balancing challenges on the grid. But also they’re already today competitive, even for a longer duration. So actually four hours to six hours very commonly providing systems around the world today. And even in some fringe cases, I mentioned there are some eight hour lithium ion batteries in the world. So that’s sort of where the horizon is up-to today. As battery costs continue to fall, the horizon is going to move a little bit further. But it’s always, at least in my view, when you look at where the cost curve is going to get to, likely to stay within daily storage, you might be able to get to 10 hours or 12 hours economically, but not more than that. So, there are other technologies that also sort of play in this multi-hour space. You’ve got, you know, redox flow batteries, you’ve got liquid air storage, compressed air storage and sodium sulfur batteries. There are a lot of different ones, each with relative pros, cons, merits, probably don’t have a lot of time to get into all of the details of all of them. But generally speaking, within this sort of daily space, the reason batteries are the ones that are growing by far the fastest is partly a bankability issue, right? A lot of Lithium-Ion has been around for a long time. It’s well proven and versatile and so on, and so the financial bankability side of things is a large part of it. The second is that the cost curve is coming down because of that sort of perpetual motion and scale of the technologies. The more that you build, the more production areas, the more the costs come down. And that’s being driven from outside of the stationary storage industry by predominantly electric vehicles and other such technologies. And the final is probably around  efficiency. If you compare more or less any other storage technology, it’s very difficult to find some things, in a battery DC DC is about 95 percent roundtrip efficient. Whereas if you look at, you know, something like pumped hydro is maybe 60 or 70 percent. So it’s a big difference when you look at time shifting. So having said that, batteries can’t solve the whole energy transition alone, right? If you want to get to 100 percent sustainable energy, you need more than daily storage. And that’s where potentially pumped hydro, compressed liquid out. All these technologies are scalable to longer and longer durations and could do potentially these, you know, 12+ hour sort of applications and shifts. And there are also these, you know, we see other technologies vying for that space, the sort of gravity batteries, there’s rust batteries is probably not the sexy way of describing them, but Form Energy what they’re looking at, which is essentially oxidation, which is rusting basically of metals as a form of storage. Those can deal with the sort of medium term. And then the medium term is your sort of multi-days, but you still potentially need seasonal storage, right? There are still general big trends between winter and summer. And that’s, you know, today, certainly because of technical solutions, the hydrogen and the commercial side of things is, is the challenge right doing that? Whichever technology is going to win up seasonal has as a commercial hurdle to overcome. But that’s sort of how I think about it. Those three horizons and, within those, there is competition between different technologies. My view is batteries very strongly will play a role in that daily storage, but there are certainly a mix needed to get to sort of a fully decarbonized system for these longer time horizons.

David Linen: Just listening to you there, it does sound like, batteries are ahead in one way because of the fact that EVs are driving some of that. Well, if I listen to you on other areas, you know, well, it depends on you talk about scale, which one of those can can achieve a similar sort of scaling in a short period of time because they need something else, I guess, to help scale as well, because stationary storage is. If I recall of the outlook’s for sort of batteries as a whole, EVs make up almost 90 per cent of the forecast cost of that. So the scaling angles are being really helped by the EV industry. Other technologies are going to have to do it by themselves. If that’s fair?

Marek Kubik: It is fair. And that is exactly the challenge. You’ve sort of really hit the nail on the head on what the issue is because batteries are really, well stationary energy storage based on batteries is riding the coattails of a much, much bigger industry, which is creating the economies of scale. If you look at any of these other technologies, that’s the challenge you have to sort of do it on your own. The reason flow batteries are not coming down and cost as dramatically is there’s no third party industry that’s 10 times bigger, bringing down the cost of electrolyte by a factor of, you know, 90 per cent in 10 years, which is what’s happened on the battery side. So I don’t have a magic answer to that. That is the challenge, and it’s very well put. Which technologies will succeed in that? It’s still difficult to say. I mean, hydrogen is certainly the one that’s talked about a lot. Sometimes with I’m going to borrow the phrase, ‘hopium’ here that it’s it can be used for absolutely everything when in fact it’s going to be very much use case by use case. Which things is hydrogen competitive for. Certainly the potential for hydrogen to do everything is there. But this again comes back to this point of, OK, technically there’s lots of different ways you can solve a challenge, but technically it doesn’t matter. It’s commercially what what’s going to deliver the service? The biggest issue, to be honest, I think at the moment is that there isn’t really a clear market driver or incentive towards long term storage. The reason we’re not building long duration storage is that there isn’t a strong enough price signal to do that yet. Most of the applications for storage today require only one, two, three or four hours of capacity, which is where batteries play very, very strongly. And that’s why you see there’s very significant growth there. Whereas pumped hydro, whilst it’s a huge installed base, as I said, 187 gigawatts in the world is growing very, very slowly. It’s not really increasing anywhere near the same trajectory. And that’s because there’s less drivers for this sort of much longer duration form of storage at the moment from a market base.

David Linen: That’s fascinating to hear and would explain a lot of why the focus is on batteries and a lot of chatter on all the others, but maybe not quite the same, the same scaling. But there are, I guess, different ways of trying to, there are a number of different companies investing in these different technologies, all the same. And I guess they are having to make investment decisions on whatever basis they’ve got in front of them. So I guess the question for you would be, OK, so how easy – if that’s the right phrase – is it to put together a a business case for an energy storage project here? So is it pretty straightforward actually for batteries now because there are enough markets out there that you can go and find something you know you don’t need subsidy and support to do it. You know, there is sufficient kind of, you know, merchant risk that you can take on in that and you can structure it in a way that is actually perfectly viable while something like hydrogen or some of these other sort of flow batteries or those sorts of things. It’s really a case by case basis, and it’s a company taking on the risk either itself or looking for some support from a government. I mean, is that how you got to build a business case here?

Marek Kubik: Yeah. For long duration, that is partly the challenge. At the moment, unsubsidized, it’s very difficult to to get those sorts of projects built. On the other hand, where the subsidy does exist, it’s then quite straightforward. I mean, look at the growth of solar through the early days. It’s now obviously subsidy free, but it was driven by subsidy and you now have a different world where with if the batteries are all the commercial projects happening around the world are unsubsidized, there’s not many markets where batteries are being paid a subsidy and if they are, it’s usually sort of residential scale or something like that to incentivize a particular distributed sort of system. The utility scales do not. It’s very market specific. And, you know, business cases don’t exist in the ether on their own right. That, paired with investors and different investors, have different comfort level. So if you want to really scale and in this industry, you probably want to be able to leverage debt finance, you want to be able to access infrastructure sort of funding and those sort of investors typically, want all the risks buttoned down, and they want certainty and long term contracted revenues. There are some markets around the world for battery storage where that exists, and it’s quite straightforward, therefore, to put together a business case. So for Israel, for instance, one of the markets I oversee, it’s very straightforward. The government has a 30 percent renewable target by 2030, starting from a pretty low base today and obviously has a great solar resource. And they’ve just mandated that every megawatt of solar interconnection comes with four hours of storage, and they’ve awarded PPAs 23 year long PPAs with a guaranteed price per kilowatt hour for every unit electricity exported from those sites. So that’s very good for that sort of debt type of investor because it’s it’s backed by the State of Israel as a as a counterparty and it’s a long, long term contract. But there’s not so many of those sort of opportunities around the world. And a lot of if you look at the UK, it’s completely the opposite end of the spectrum. It’s not a single use business case about time shifting of renewables day to night. It’s a much more complicated plethora. Batteries are, you know, all sorts of different ways they’ve been described, but they’re Swiss Army knife states, so many different services that they can deliver, and that actually makes the investment case, at least at first appearance, a lot more confusing, right, because it’s not based on one service and one long term contracted revenue, it’s more inherently recognizing there is value in flexibility. And having an asset that is agile and can move between these markets has a lot  of value. And we are actually starting to see, so although that sort of merchants, the word that’s used, borrowed from thermal power plants of the past, but what we mean by merchant is just essentially not contracted. There’s no long term contract to do what the battery’s going to do. It gets paid whatever it can, in fairly close to real time these days. You know, there’s not many long term contracts with that sort of revenue structure. It’s inherently more risky. But what we’re starting to see now batteries are over a gigawatt installed in the U.K., and there’s somewhat of a track record now showing that actually the worst cases is not zero right, which is what an investor worries about “OK, so I could potentially make nothing or lose money”. Well, volatility is increasing on the grid. There’s an increasing need for this type of flexibility and storage. So, in fact, actually, you’re very likely, you know, it’s just a probabilistic distribution. You’re most likely to make this much less and less likely to make significantly less or significantly more. So it requires time before sort of the debt and infrastructure, investors get comfortable with that, but we’re starting to see it. There are banks lending into these projects without any price for it, without any guarantee of the return they’re getting. And so that’s going to continue and propagate. I’ll pause because I’ve spoken quite a bit there and it’s quite a complicated answer. But does that sort of answer what you were, you were asking me to address?

David Linen: Absolutely. I think that maybe the conclusion I draw from that is in some markets, it’s almost like a no brainer. But you’ve been helped up by the government, maybe essentially to say “Here it is, we need it. Let’s make it happen”. You know, certainly in the US, there are some cases like that as well, right? You’ve got a pair storage, you know, you bid in to say, you know, you’ve got to provide firm power of X, but it’s going to be renewables like, “Oh, how do I do that?” Will I pair it with some renewables, with batteries and other things? But it’s much clearer in that sense that that’s the demand was in other parts of the world. It’s like it’s up to you guys. You work out the business case yourself. Go and find it. It’s harder work, if I put it in those words. But ultimately, you know, potentially there is a there’s either a higher or lower reward, depending on the kind of risk you take on and how you manage that risk yourself. But the opportunity set is there. But I guess if there is less certainty, it might also hamper growth in some markets versus others. And and that is the question of the appetite of risk that the investors want to take on.

Marek Kubik: I think that’s, you know, it’s a good summary of it there. So there’s the whole spectrum of in between. One is sort of low risk, but will be low return and the other is high risk, potentially high return. And that’s why I say typically in the high risk, high return, it tends to be more private equity money and so on at the moment, albeit the debt lenders, I think, are starting to get more comfortable as well that it’s it’s not as dire as it looks like with the sort of crash case. But yeah, that, I think that’s a good summary.

David Linen: I think that was sort of starting to fall into this bit as well. But we, because there is potentially a real openness as to how to think about battery storage and storage more broadly and all these other technologies coming together and the problem we are trying to solve is flexibility and efficiency. And people have started to try and talk about, well, how do I provide firm renewables and those sorts of things? It starts to come this sort of pairing of technologies, right. So solar plus storage and other areas. So how do you see that trend and how important do you think it is of that pairing of technology? So it’s not just here’s a battery and I do batteries, but it’s actually I do batteries plus other things like services or renewables and those sorts of things. How important do you see that going forward?

Marek Kubik: It sort of comes back to what the job to be done is in each case. So the pairing piece is, as you sort of said, it ties well into these sort of structured procurements where firm power is required from a site which essentially whether it was solar or wind, you won’t be able to achieve without a form of co-located storage. The co-location benefits themselves are not huge, right? There are some synergies, right, in terms of perhaps EPC. So the construction installation costs do the civils for both at the same time, maybe some in terms of the grid connection. But it depends a lot of actually solar plus storage projects in the UK or in Ireland at the moment aren’t really a hybrid combined system. It’s sort of more of a co-located using the same site, but having two separate grid connections and do two separate things. In the US, in Israel, it’s a little bit more closely coupled where you have one grid connection, and it’s making most efficient use of that. So, if the use case is around essentially time shifting and predominantly charging up, easiest to think with solar charging up during the day and particularly in the middle of the day, in the peak and then discharging more into the evening where the Sun is set. But actually power prices tend to be higher. Then there’s a lot of value of that pairing, and in terms of resource adequacy and and capacity, it’s very high. But on the other hand, batteries are not just about time shifting of renewable. I also talked about that sort of locational piece right. Well I talked about electron time machine, maybe electron teleportation is the other one to talk about, right? So it’s putting storage where it is going to have the most impact and value on the network, and that is always going to be case by case and country by country. For instance, you can put in batteries, at transmission or distribution nodes. So, hubs or connection points where I guess multiple power lines come in and manage the transmission and distribution network more effectively from those locations than you could by putting in the battery, say where the generation is like the wind or the solar or or anywhere else. So it’s one of those pretty unfortunate ‘it depends’ questions that there’s no real right answer. There were some with the right business case, the hybridization has a lot of value, but it really depends on which challenges you’re trying to solve. And it comes back to that challenge that the batteries are very versatile and can solve a lot of different problems. So it’s always going to be case by case, what makes the most sense.

David Linen: Interesting, OK. And actually, that makes the market arguably more complex. You kind of need to know what you’re doing, to be able to deploy those effectively. Okay. I mean, I was going to ask you about, you know, because I think you answered it before, you know, have you got all the technologies we need? And I guess part of your answer to that would be, well, yes, but no. As I said earlier, we haven’t quite developed some of those, you know, seasonal, let’s say, storage like this, partly because we don’t need them right now, but they might come along and we need them later on. So there’s still a need. Tell me if I’m wrong, but I guess the question, though, would maybe turn around to that, though, is what is the real risk and the challenge to developing this market then? I mean, is it commercial in the sense there isn’t really a, you know, a clear business case in every market in the world and say you’re not going to deploy this or is it like a lot of naysayers would say,”Oh, but you know, you’re going to have to go and find all these raw materials that you need to find in the world and develop those from different parts of the world, which maybe aren’t as ethical as they might want to be, et cetera, et cetera.” So if I sort of just flip it around, we’ve had quite a positive conversation around batteries and their opportunity, and there’s a lot to be done. But what what could sort of put the brakes on some of this development in your mind?

Marek Kubik: So the market demand based on – I mean, EVs is one thing, but also stationary storage – need is very, very high, based on if you sort of add up all of the the decarbonization goals and so on. And what that means in terms of intermittent renewables on the grid, the need is very clearly there. I would say in the short term, there is a challenge of balancing supply and demand, right, that is extracting quickly and efficiently enough the materials you need to actually make the batteries. And, you know, in a way that matches that demand because this huge uptake of EVs as well, and as we talked about earlier, that’s 90 percent of the market. So, you see that with certain players in the space like Fluence is pure play energy storage, stationary storage. We don’t have any of the business lines, but if you have a high margin, high value, you sort of, you know, EV business versus your stationary battery business, you have probably a little bit more of a difficult choice where if you’ve got limited supply and you’re going to put it in stationary storage or cars, probably into cars, right? That’s that’s sort of the rational outcome. And that slows down then your ability to deliver the infrastructure that’s needed on the stationary side of things to try to transform the grid. So there is a supply demand challenge. It’s not a resource challenge per se because the resource is plentiful. And so I do want to dispel that right, lithium is an abundant mineral, It’s not something that is rare, it’s not a rare earth metal or anything like that, just sometimes misunderstood. And actually, there’s not that much of it in a lithium ion battery by percentage content, it’s relatively low. So again, I think there’s some misnomer or misunderstanding exactly of what goes into into these batteries once they’re built. And the second is you take aside the extraction process because there’s a lot of interesting stuff that’s going on to try and make that more efficient and scale and faster. And I’m a big techno optimist. I think that’s going to be solved and will be solved, at the other end of the spectrum when you get to end of life, we actually don’t at the moment have so many batteries end of life because they last longer than people thought that they would. And so there isn’t really a big pile of batteries that need to be recycled. But when you do get to end of life, the recyclable potential is very, very high. You know, effectively you can get up to 100 percent and some companies really, really focus in on that. We partnered with NorthVolt, as perhaps has been seen in the news. So NorthVolt building a European gigafactory and really focused on the whole embodied lifecycle of those batteries and how they’re made. So making sure that they’re being produced using essentially renewable energy, you know, hydro and wind and solar, and then that they’re taken back to end of life and incorporated into the new batteries. So at some point you will have a large enough mass of sort of materials that are already in the supply chain that you’re going to start reusing and you have to extract less and less of the new virgin materials from the ground. So there is, there are challenges in that scale up and bottlenecks that will come with that, but certainly there’s not a shortage in terms of supply overall. So I think this is something that balances out. The danger is that it just means that we decarbonize slower than we would like or that we would need from a climate crisis perspective.

David Linen: No certainty. And one thing I think people often forget, and it’s the same in many of these sort of clean tech where we’re an early start of a lot of these technologies in terms of scale. The fact that we’re thinking about it now rather than when it’s already all built is also a big, big difference, right? So we’re actually really thinking about the potential problems and trying to manage and deal with those. And you know, I do a lot of work on the offshore wind side of things as well, and the fact that we’re only, you know, at the very, very start of that industry and already talking about recycling the blades, which is one of the big issues. But talking about that already, that’s that’s really quite a step forward versus maybe other industries that have evolved and not thought about end of life as such and how to deal with that.

Marek Kubik: So, yeah, in a way, it’s great having the critics to pick at this because I mean, I see all those arguments and I’ve seen it as well that, yeah, you see these sort of scare articles of like, “Oh, well, it’s not renewable at all and is throwing these all into the landfill”, not realizing the stage that the industry is out. And actually the solutions are being developed to these particular challenges already. So I think actually that sort of, you know, disruption and people having an objection to it almost helps, like it has its challenges. But actually, it’s really helpful to think about these things earlier so that you actually can solve those problems and challenges. And of course, what we don’t talk about so much just to frame maybe the reverse of this is often, it’s easy to point at whatever is new and say, “Well, that uses raw materials”. Well what in the world doesn’t use raw materials, right? So you have the, you know, any traditional industry is using a lot of raw materials to produce whatever it is, that is being produced. So it’s a bit of a straw man argument to point at, you know, any new technology and say, “Well, you know, this uses resources”, because everything does. And it’s a case of using them in the most environmentally and socially sustainable ways that you can.

David Linen: Oh, absolutely, absolutely. So look, I mean, one thing I haven’t done so far and we’ve mentioned the name of Fluence a few times and you’ve indicated what you do, but I guess I would be amiss if we didn’t at least talk a little bit about Fluence itself. How does how does Fluence look at, you know, at the storage world? You know what? How do you see your place within that? What you what’s your vision, your mission in those things? And therefore what does that mean in terms of what you focus on?

Marek Kubik: Sure. So Fluence’s mission is pretty straightforward. It’s essentially to transform the way we power our world. And with the subtext of that being obviously to help, you know, accelerate a transition to a sustainable future. So not trans, you know, transformation for transformation sake, but with, you know, an objective that hopefully is well understood to many why we need to do that to move to sustainable forms of energy. And so we do that by offering essentially both energy storage products and then software and services. So there’s a hardware element to this, which is, you know, physically designing, installing, delivering really big battery systems, you know, including some of the very largest in the world, but also to then making better use of those assets and of renewables in general. So a large and growing part of the business is actually the sort of software that the bidding engine, the optimization of wind, of solar, of our batteries and others. And maybe the key thing to understand where we see ourselves assisting in that, you know, value chain. We’re not an OEM. We don’t make batteries ourselves. So despite the fact how much I talked about batteries, we’re an agnostic company. And in the early days of Fluence, we did flow batteries, we have some sodium sulfur, we have some advanced lead acid, there’s a spectrum of different technologies. But it’s just purely by economics that lithium ion has become the dominant one. But we aren’t directly invested in the making a specific cell or chemistry, and that’s quite a deliberate choice. There’s both sort of the vertically integrated players that do, and are building solutions around a battery that they make. And then we deliberately take a more open approach, largely because there’s no one battery chemistry or sub-chemistry within lithium ion that is the best for every use case, that is the best in every market and that is the best today and will always be in the future. We’ve seen every year or every couple of years, you know, breakthroughs and innovations from different OEMs that put them in pole position. And so we’re very able to adapt to that. And talking about the supply chain issues we were mentioning earlier, having a diversity of a building block of technology that can work with different batteries is something that we think is quite special and unique about how we set up because it insulates us a lot from that sort of supply chain risk if there’s any one supplier or any one, you know, chemistry that, for instance, becomes constrained because of one raw material or another. So hopefully that gives a little bit of a feel of where we sit and what we do.

David Linen: It does. It does. It does. If I was to say so, yeah, what’s the opportunity for you? The opportunity is your own flexibility as such an adaptability to where you see the opportunity rather than, “We have a five year plan to be the biggest player in North American battery storage”. It’s actually “Where where do we see the opportunity? Let’s go after it, and we’re sort of flexible in our mind as to how to go after it”.

Marek Kubik: Yeah, yeah. We’re not geographically constrained, so to speak. We have I mean, we’re Fluence is a standalone for the last almost four years now. The prior to that and two of our major shareholders are AES and Siemens. So AES is a Fortune 500, the US utility and Siemens probably is a very well-known name in engineering and in the energy sector, we actually have through those shareholders essentially reach into almost every non-sanctioned market in the world, so the growth potential is large. We were very ambitious when we set up, right, we’re not geographically constrained or only delivering solutions to specific markets. We, you know, this is a global transition and it needs to happen everywhere. So ultimately, we’re scaling very, very fast to be able to address those challenges anywhere that we can in the world.

David Linen: Fantastic. Well, right, Marek, we’ve come to the end of our time, as always, but it sounds like you have a lot of fun ahead of you scaling lots of growth to come. But thanks very much for taking us through, I think, what is sometimes a difficult subject to try and unpick and you’ve done a great job, I think, of trying to sort of summarize things. There’s a lot of things to cover. So we could go on for quite a while longer just un-picking each of the different areas. So thanks for doing that and thanks for taking us through, also, you know, where do we really see the opportunity here? I do think it’s a fascinating space. You know, I myself, I’ve looked at batteries for a while before this, and it was always difficult to explain it to people. So I appreciate you doing it in the language that everyone does understand – hopefully.

Marek Kubik: No problem. Well, thanks for having me on and I’m glad that it hopefully has made some sense. It sounds like it did, so. It’s a complex topic.

David Linen: We’ll ask some other people later and see what they thought. But thanks very much, also for everyone for listening as well. I hope you enjoyed it. And please make sure you subscribe, give us a great rating and share with your friends. Talk to you next time.

 

 

 

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