Craig Evans – ESS

David Hunt 0:31
Hello, I’m David Hunt, CEO and founder of Hyperion executive search and your host for the reason clean tech podcast. Thank you to everyone who provided feedback on the last episode with Gretchen Bakker. It was something a little different but seemed to go down very well. Please do keep your feedback coming. It’s really useful and that it seems it’s all pretty positive. If you can rate us or write a review on Apple podcasts or your platform of choice. That would be much appreciated. This week who returned to the US and to an innovative flow battery company I’ve been watching for a while as I speak with Craig Evans. Craig is the President and CEO and founder of SS Inc. Having started efss from his garage back in 2011. He led the company to the commercialization of the ion flow battery system in 2016. Craig has authored over 15 patents and patent applications he holds a BS in aerospace engineering and an MS in mechanical engineering from Clarkson University, and an MS in finance from Rensselaer Polytechnic Institute and an MBA from Carnegie Mellon University. I hope you enjoyed the episode. Hello, and welcome to the leaders includes that podcast. Craig, it’s great to have you join me How are things in Portland right now?

Craig Evans 1:41
Oh, they’re good. It’s not raining. So the spring is trying to get here. So we’re losing the rainy weather, which is always good.

David Hunt 1:47
Yeah, yeah, I think everybody more than ever this year is looking forward to some some spring sunshine.

Craig Evans 1:52
Yeah, absolutely. Absolutely.

David Hunt 1:55
Cool. So I’m really glad that you were able to join us and given your experiences in aviation fuel cells, flow batteries, and a broad range of technologies and really keen to get your some of your thoughts on the energy transition broadly, as well as the the ESF product. And that’s it’s quite timely. Of course, after the recent episode, we’re focused on some of the fundamental flaws and issues with the US electricity grid that were particularly exposed in Texas recently, and California last year. So to see how emss are playing your part and improving that, but it’s customary for the podcast that we start off with a little bit of your backstory if you would, so can you perhaps share a little bit of your journey and more specifically, how you came to found SS back in 2011?

Craig Evans 2:38
Yeah, that’s a great question. So, you know, my career started off in aviation, I worked at Pratt Whitney, we’re gonna guess turbans back in the early days when I got out of school. But I always was really interested in renewable energy back in the college, was running the solar car days. So working in PV and doing some transportation with solar cars. And so I was always interested in that. So I got into Pratt Whitney, but my real my real drive was to try to get into UTC fuel cells, which was, which was part of the United technology conglomerate there. So Pratt Whitney, UTC power on site carrier, so on and so forth. So I was really trying to get into UTC fuel cells. And my in my end that was through Pratt Whitney, because I have an aerospace engineering degree. And, you know, I worked for Pratt Whitney for about a year and a half. And then I finally was able to find a way to get into UTC fuel cells. And that was great. I mean, I learned a tonne by electric chemistry with the team, UTC fuel cells, started off in the test group, with a grunt, doing a lot of testing work for the small scale fuel cells, and then ultimately, the automotive stuff. They still have their NASA unit down in Windsor, Connecticut, so we got to see the stuff that was being used for NASA and was using the Apollo days. So that was really fascinating. And then, from there, I worked at a worked out probably DC, power fuel cells, whatever was that they changed the name a couple times. But eventually, I think 10 years in I got recruited to a startup called clearedge power, which is out here in Hillsboro, Oregon. And it was a small startup. There’s probably I think, 10 people at the company at the time. One of the the CTO at UTC is sorry, the CTO at Claridge power was a an old friend from my UTC so he recruited me in and I led the, the the engineering and product development group there. And so there we were developing residential scale, combined heat and power fuel cells basically take natural gas in, you reform it make high quality hydrogen gas that goes into the fuel cell and whenever it’s not used, typically the remainder of 20% or so would get pushed back into the steam reformer. So keep that loop going. That was the goal there was to have 90% total efficiency, but 40%, electrical 90% total, that was a very challenging project. I mean, it was the size of refrigerator. And the goal was to put in California to minimise baseload use. So that was a learned a lot there, you really used every little bit of your engineering expertise to get that project off the ground.

David Hunt 5:22
Yeah. And then,

Craig Evans 5:23
you know, when I think 2010, is, when I started to see renewables really start to take off, you started to see wind and solar prices really coming down. We were getting very frustrated with the cost of fuel cells, and the challenges would bring those costs down. Right? At the time, the the VP research development, Dr. Julia song, at clearedge, you know, we started talking and I kind of convinced her that, you know, potentially batteries were the next best thing and 2011, I left clearedge power to start USS, I started in my garage. Julian, I’ve been working on it in the evening times, had a vanadium flow battery up and running in the garage and was getting chemical sent to my address. Until one day, the DEA basically put a stop to that because apparently you can’t get lots of chemical sent to a residential address. We tried a bunch of different ways to overcome that we got a UPS virtual mailbox that eventually got shut down by the by D wr who’s the shipping menu or the shipping manufacturer of the chemicals, right? And then, you know, eventually that forced us to have to go into an office. And so really, in 2011, is when we moved down to our first office. And that’s when Julia joined the company full time. And so for those who don’t know, Julia is also my wife. And so we got married. Who is now Julia is also the CTO VSS here. Okay. So that always adds an interesting wrinkle to everything. extremely smart dielectric chemists. She’s probably one of the reasons why we’re successful today. is we are

David Hunt 7:02
Yeah, yeah. No, that’s, that’s an extra dynamic to, to the process always loved the founder stories, and they’re so wide and varied. And I guess it’s kind of nice to have the the archetype will start in the garbage thing, but you don’t think about those simple processes of just getting stuff sent to you, potentially a problem.

Craig Evans 7:19
That’s great. That’s really

David Hunt 7:21
cool. So I’ve been watching DSS for some years. And I think I mentioned I met some of the team down in San Diego to energy storage North America in 2019, when we could still travel around. And that must have been, I think, just after your seed round of fundraising, this understanding. And one of the things, as the audience will know, at Hyperion, we work with a lot of clients and lithium ion space and across the battery piece. And that’s all pretty cool. But personally, I really loved the long duration storage piece, because I see it as a really important part for us to get through the transition or get to the sort of energy transition that we have. So I’d love to see companies like yours evolve. Can you tell me a little bit, though, specifically about the ESF technology and why you chose to use iron ore rather than vanadium? Which we touched on our other electrolytes or other solutions? Can you share a little about your particular technology and its advantages?

Craig Evans 8:09
Yeah, that’s a great question. So, you know, we, Julie and I initially started off with vanadium is the chemistry that we thought we were going to go with. And the reason is, is because, you know, it was the chemistry is relatively well known. And I would do and I really had our experience in was building the battery modules or the flow modules, we had a lot of experience in building fuel cells, both at UTC as well as at clear edge. And so we thought we could bring something unique to the flow battery space. And we, you know, our goal was really to increase the ability for the battery to output 10x more power than, than any other competitors. And we were gonna drive down cost. By doing so by just driving down the cost of the actual hardware, the challenges with vanadium, the cost of the electrolyte alone was was more than the ultimate targets for energy storage. And so we I think we probably within a year, we quickly abandoned that chemistry, and went to the iron base chemistry, you know, now we didn’t invent the base chemistry, though I give full credit to Dr. Sam annelle, at Case Western for doing that in the early 80s. They did some of the early work on this. But they ran into some challenges early on where they weren’t able to cycle the battery and maintain the performance for more than maybe a handful of cycles. But what would you and I were able to do is we were able to overcome those issues that took us about six months or so we use the same exact battery module we were using that we were using for the vanadium minus the negative side, the positive side, the electrode stayed relatively similar, but we changed the negative side because on our chemistry counter to vanadium and the vanadium. You have both redox reactions on both the positive and the negative. And our chemistry we really have the epi two plus, that’d be three plus that there’s the ferric reaction on the positive, but on the negative side we have Have a plating reaction. So we’re taking ferrous, and we’re actually electroplating that on a carbon surface. And so that was different and the challenges overcoming the challenges you have to overcome with electroplating. Iron was one of the main things. And the main challenge with our chemistry, you know, is no batteries perfect, right. So even lithium ion has efficiency issues, and cycle over cycle batteries get out of balance. And that’s a lot of cases where you run into your capacity fate or your performance problems. And our battery is no different, right. So for our case, the biggest challenge is Ph. imbalance from the positive side to the negative side. Other batteries have state of charge and balance, we have that as well. But we can we have some interesting ways to take care of that. But the main challenges are batteries. If you look at the poor Bay diagram for iron ferric, which is the the epi three plus state, which is our charge state on the positive side does that like high pH it’ll precipitate out into into basically rust, right. And on the negative side, the battery wants to be at as low pH as possible to prevent as many side reactions, I’m sorry to be as high pH as possible prevent his side reactions. And our side reaction, because we’re in a water solution, and it’s going to be hydrogen on the negative side. And so we’re trying to minimise that, because that’s going to impact efficiency. And you have a relatively pure reaction on the positive side. So you, you know, every electron that is transferred on the positive side is going to be put to use for work. But that electron on the negative side, a part of it is going to go to hydrogen generation. And the other part is going to go to electroplating iron. And so you’re going to have the state of charge imbalance. And you’re also going to have this pH imbalance that’s occurring. And so what happens as you’re charging, the protons are streaming over the negative side, they’re driving down pH, which is going to cause you to have all hydrogen on the negative side, it’s also going to charge you to get out of imbalance on the positive side. And so what we do is we essentially, we have a proton pump, you can be Julia likes to explain it as it’s kind of like the the kidney for the battery. And that keeps the proton pump keeps our electrolyte clean, and that it takes a hydrogen that is evolved. It basically converts it back to a proton and puts it on the positive side. And we put that proton back at the positive side, we actually convert the ferric back the ferrous. So we’re actually putting the state of charge back in the balance. And we’re also putting that proton back on the positive side, which keeps the pH low on the positive side and keeps the pH high on the negative side. Yeah,

David Hunt 12:29
yeah. Yeah. Yeah, really interesting work. And I think that’s, again, I think one of the challenges, I started working with people like red tea and other flow battery companies again, many years ago. And I figured or felt that it was a technology that should have its place relatively quickly. And I think a combination of some of those technical issues you’ve talked about, and also just the amount of money and interest that lithium ion battery spaces sucked up? And of course, not phenomenally well. But let’s not forget it, as you know, as an amazing cost reduction and density improvements. But how have you I guess code because you talk about commercialising in 2016 in that backdrop of both the technical challenges, you’ve kind of touched on there. But also the fact that the market has changed so quickly in some of those competitive technologies have changed so quickly.

Craig Evans 13:18
Yeah, so I mean, when we started the company back in 2011, long duration storage was an hour, right. And so people were telling us that we were crazy that we’re building an eight hour battery or a 12 hour battery. So it was it was tough to get traction in the early days. But in the grand scheme of things, the technology development is relatively easy. I think we had, you know, I don’t know, lab scale, we had everything working pretty good. Probably within the first year, when we transition to the iron base chemistry, we had the proton pump working pretty good, the battery was cycling, 10s of 1000s of cycles without any issues in the lab, the challenge really comes around scale up. And so I was always fascinated when the press takes hold of a new technology out of the lab, and they say it’s gonna be the next big thing, because we’ve spent the fair majority of our evolution as an organisation scaling up correctly, and it’s just not scaling up internally. But it’s also scaling your your customers and it’s scaling your vendors, right. So it’s a lot of thought leadership, getting people to understand how the technology works, how they can gain additional revenue, with the technology, it’s getting your vendors up to speed that you know, you are a small company, but you you are going to have a scale long term, you need a quality product, please don’t ship the parts that are contaminated because it’s only going to slow me down. And then, you know, how do you actually grow the organisation internally? You know, people tend to be problematic sometimes. And so how do you build a cohesive team that’s going to work together and scale the organisation?

David Hunt 14:44
Yeah, yeah. Yeah. Just on an interesting point there. I was going to I was gonna ask about that because obviously founding the business in 2011, which in clean tech, he is a bit like bogies, I guess. They seem to be an awful lot longer than most. So it’s a long time ago in this sector. You’ve touched on a few of them. But I was keen to see what the challenges were in those early years particularly, and how they’ve evolved and what the biggest challenges that you face now are, I guess, more so on a personal level as much as on a company level.

Craig Evans 15:10
Yeah. So when I would say in the early so we deployed our first product, to stone edge farms up in Northern California, which was a vineyard, we did that we are our first real money into the organisation was a grant from ARPA E. And it was like a $2.1 million grant, which really is what catalysed the organisation. Without that grant, I don’t think we would have been here today. All right. So we’re extremely grateful for the RP folks. And so the culmination of that project, or B was to build a 10 kilowatt battery to scale it up. And so we we did that at our little incubator facility in downtown Portland, and shipped that to storage farms. And I think the majority of the challenges we had, I would say, the first one is going to be with shipping and handling. While the battery probably worked just fine in our facility, shipping and handling always great weird effects. You know, we did a lot of vibrational studies on site at our facility, but then once you actually ACTUALLY SHIP IT, you don’t realise what the actual shippers put that product through the site. So we had cracked pipes, and so on so forth that we needed to replace. So I would say that that was our big challenge for the the first system there as we evolved, and we moved in through the energy warehouse, which is our early our standardised product today, we shipped the first one to UC San Diego, which was one of our first customers for the Ew, we still had shipping problems with that one. But I think the the problem with that one is we had a lot of contamination from our vendors. As we deploy that system, it’s always great to get material from alpha aser, running 99.99% material quality, but as you try to drive down cost, and get material that’s more commoditized, as opposed to lab read material, you know, you never know what you’re really going to get people may say you’re going to get this high quality material, but then it actually comes in and there’s a ham sandwich in it as well, which you weren’t anticipating. Yeah, or you know, you’re trying to scale. So instead of using us vendors, you try to go to China and use Chinese vendors. And while you’re using the same resonance to do your compression mouldings in the States as you wouldn’t China, you may not use the exact same resin that you think when you go to China, or they’re not following the exact same recipes. And so unless you have on site quality, in your international vendors, it’s always hard to understand what you’re going to get. And so we had a lot of leaching into the chemistry anytime you’re running running aqueous based chemistry, you know, you can get leaching, which is going to cause problems long term for a battery. Any other technical device.

David Hunt 17:41
Yeah, yeah, I think that’s an interesting point. Because that’s one of the real challenges, I think, in any of these technologies or companies. And there’s the techniques, we’ve touched on the sort of technical challenges of a creating the product. And also then as you touched on there, scaling the product, and how do you get it bigger, and reduce the cost? And all these kind of things you’ve just touched on? And then of course, it’s scaling the business where you from a couple of people to however many people you are now that those kind of challenges? Have they evolved? Because clearly now you’ve got it sounds like most of those travel and sort of early scale problems out of the way, but what are the things that are challenging you now as the business is evolving?

Craig Evans 18:22
So in terms of headcount, I would say we’ve have to we’ve had to evolve over the years. And so in the early days, you know, we didn’t have a lot of money. So we were always looking to get folks out of school. And so, you know, Joe and I were being the technical leads, as well as the business leads. And we were hiring a lot of new grads right out of the university here, either in Oregon or California and Washington tried to keep it local because we didn’t have money to pay for read the recruiters or the pay to get people moved up. So, you know, we get a lot of folks right out of school in the early days. But as we progressed, and you need to start doing sales and need to have some grey hairs in the field, you know, we’ve had to take some risks julen It took probably about five years or so with no salary as we’ve grown DSS. And so we’d sacrifice our salary to bring in some folks that had some experience to help with sales start catalysing things. I think we’re we’re at probably from 2018 2017 on is really trying to move away from getting the folks right out of school to getting the more experienced people to bring more credibility to the organisation. It’s just not doing it anymore. We’re bringing folks from from GE from Mitsubishi ipace, Hitachi power, flare, you know, bring it folks in from the utilities. So Amir, who’s our CFO comes out of sdg&e. So, you know, building I would say building the management team and building the folks on his management team is starting to get more and more important. And I would say also, as you built the board, Board of Directors, that’s also I think that a extremely important aspect of the of the development of the organisation in the early days. We had a lot of board member came on from just the investors. But as we built up the organisation through bringing in more and more independence, you know, how can you strengthen the board and the expertise on the board by bringing folks with utility experience? Yeah. How can you bring folks in from industry that have done something similar? So, you know, we have two board members from First Solar, we kind of equate ourselves to the First Solar journey where they were a disruptive technology that wasn’t necessarily the same as silicon, but they had a lot of extra benefits. So how do they scale that organisation? So you know, we have rich and, and rocky from surfer seller who’s come on to the board and have been instrumental in shaping the organisation with their experience for solar. But I think where we’re at now, you know, we’re really trying to bring additional executive staff on to help strengthen the management team did put more focus on customer service, as we deploy more and more product around the world, were thought leadership. Lithium ion is certainly the incumbent out there. But you know, when you get the longer duration storage, you got to, you’re looking and you’re gonna put mass amounts of duration, you want to get a product out of the field that’s going to be clean, it’s going to have a low impact, cradle to grave on the on the evolution of the product in the field, and it’s gonna be safe, right. One of our, you know, California has issued wildfires on the west coast. And there’s mandates in California now where you can’t cite lithium ion and some places where you can’t cite diesel gensets. Currently, we’re the only technology that can be cited in a those wildfire resiliency zones. So we’ll have product actually going out later this year, to demonstrate our ability to operate a fire resiliency zone and keep those communities and those first responders having the lights on.

David Hunt 21:37
Yeah, yeah, that was incredibly potent, of course. So it’s really interesting. Again, you pick on the point that you’re getting, it’s it is tough when you’re bootstrapping and when you’re growing a business, to bring an experience you need. And I think you had an interesting what you referred to as a great years of having them both as employees, but I think a lot of people underestimate the importance or at least the benefit of having the right sort of advisors in and working sort of with you in your organisation. And, again, not always the obvious place to pick them. But people who’ve been through similar journeys, even if it’s not the same tech, I think sometimes people reach out too much for people who’ve just got the same sort of too much similar to yourself, but I think those grey hairs, you’ve had journeys, the similar but but but not necessarily always the same challenges can be really beneficial.

Craig Evans 22:22
Yeah, absolutely. I mean, First Solar, I think, went through a very similar trial tribulations that we did, and just the challenges with scale up, they can bring a tremendous amount of knowledge to the organisation, and how they got the market, how they’re going to how they scale the organisation how they got their manufacturing up online. Now, that’s

David Hunt 22:39
been great. hugely beneficial. Cool. So listen, when when you started the business 10 years ago, the energy world looked very, very different than it does now. I started in clean tech 2007. And, you know, it’s brilliant to look back. But back then we didn’t see how things would be now of course, so there’s so much more renewable energy penetration than there was, although, to some extent, we all saw that coming. But of course, some of those extreme climate and weather events, you touched on the wildfires in California, and of course, the issues in Texas more recently. The course huge challenges, of course, but also huge opportunities. So how do you see the SS and perhaps the broader long durations energy storage sector, meeting some of these challenges and the opportunities in the next four or five years?

Craig Evans 23:25
Yes. You know, when we started the company back in the early days, I mean, I think we saw renewables being put on the grid. We saw the decarbonisation efforts, we saw things becoming more decentralised as you brought more renewables online. And you could certainly see challenges lithium ion and the potential safety issues they may have with large amounts of lithium ion in a centralised location. With the Mayans great, you know, we will never try to disparage lithium ion whatsoever they have their place, hyper replications, but for long duration, as you see more decarbonisation more renewables putting on the grid, you start to see issues where baseload generation is getting stressed because those renewables during the day are really pushing the base loads down. So they have to either throttle down or shut off entirely, which they can’t do. So you see curtailment on a low cost renewables, you see the high ramp rates in the morning and evenings. Try not to say Ducker. But, you know, that’s one of the issues we see in California, what’s really driving a lot of this stuff and really that some of the early adopter type stuff a long duration where you you really need to start storing that that energy that you’re getting during the day which would be six or eight hours in some locations and being able to use that in the evening times and use in the morning times to offset some of those ramps that you see and you know, you can’t do that necessarily with lithium ion you can’t store that large amounts of energy and you can’t displace it over a long period of time at cost. Which we can so you know if you if you look at our technology, you know our cost is at par with lithium ion. But on the levelized cost of storage basis. We are 50% cheaper than that of lithium ion just Because our technology has no capacity fade, we can cycle our technology 20 25,000 cycles, and you still have a brand new battery. You don’t, if you had a 40 kilowatt hour battery, or one megawatt hour battery on day one, you’ll still have a one megawatt hour battery in your 20, which means your revenue opportunity you’ll have in the field as an operator with the same ID one of these isn’t isn’t your 20. And so they really allow us some some flexibility to the customers, how they’re gonna use this battery to keep their grids up and operational and in a safe manner. Yeah,

David Hunt 25:33
yeah, I think, again, one thing that often comes up when we’re speaking to organisations in the longer duration spaces that we all know that as we get to hopefully get towards a point of 100%, renewables that so much long duration leaving into seasonal storage is going to be required. But right now, it’s not necessarily easy to get the commercial to get the revenue tax efficient, in terms of what’s the need for six to eight to 12 to 16, sort of hours, those some challenges you’re facing in any particular state and or in new markets where the product is robust than the solution works, but it’s just trying to get the revenues, right.

Craig Evans 26:10
So I would say in 2017, I would think of a lot of those issues going away, I think 2017 was really the tipping point for us and the inflection, when a lot of this a lot of the thought leadership we did in the early days. And just the market itself really started to take a turn with low cost renewables. And so, you know, since then, you know, we’re starting to see more and more RFPs in the market. For longer durations, six 810 hours, those are becoming more and more standard. You starting to see the RFPs for the utilities, looking 1020 years out, getting ready for the mass amounts of renewables are getting put on the grid, you know, California is looking at 60%, renewable penetration by 2030. Newark 70% renewable penetration by 2030. And so, you know, it’s going to it’s not a matter of if but when right. And so the problem I think we’re seeing today in California, they’ve already got, you know, 25 or some odd percent close to 30%, renewable penetration, they have problems with the grid during the daytime. And so, you know, long duration storage is required today. And, you know, it’s it’s, it’s only a matter of time, and I think one of the ways we’ve been able to resolve you know, are we are we ready type questions, is we may have to bring on a partner called Munich Re, which is basically an insurance organisation they did a lot of work with, with solar in the early days to make those organisations bankable, we brought me agree on a 20 2018, I believe it did around 18 months of due diligence for them. And in the end, they basically vetted our technology and said, we’re gonna give you two warranty products, the first one is gonna be an investment grade warranty on your technology. Basically, anything that’s in the field, they’ll back for 10 years, the other ones be a project based warranty, which essentially says, you know, we’re going to warranty any product that your customer has in the field. And if something happens, DSS while that warranty is in place, will basically come in and step in, and make sure that projects holds. That’s business continuity insurance, essentially. So with that, with that insurance policy in partnership with Munich, Reid has been able to really make VSS a bankable organisation and really drive these products in the field. Yeah,

David Hunt 28:15
yeah, no critical important to have that support for for your customer to give them the reassurance to proceed, as you say, both financially and also with from a technology point of view. One thing I always go back to my earlier point of, you know, entrepreneurs and founders come in all shapes and sizes, all kinds of backgrounds, clearly, you’ve got a phenomenally strong technical background, how have you dealt with it’s an issue that a lot of CEOs, you know, spend an awful lot of time on. And that’s the challenge of raising capital to expand clearly you you bootstrap to an extent but you’ve you’ve taken investment over the the years, and it can be a hugely time consuming process. And right now, I guess there’s an awful lot of noise around the sort of clean tech investments from VC from P and of course, the kind of spec numbers recently I’ve been fairly fairly crazy. How are you managing and how have you managed growth? And how have you adapted that sort of, I guess, financial string to your bow, having no come from and perhaps a more engineering and academic background.

Craig Evans 29:12
So, you know, my my background is I have an aerospace engineering degree, have mechanical engineering degree, and I also have an MBA from from Carnegie Mellon. So you know, I get some business background from that MBA and the work I did with Carnegie Mellon, but you know, I would say that the the fundraising aspect has never been the most fun part of this thing. I’m not a technical person by art and I love to do technical things, but I realised you can’t build a business without money. And so you just got to you got to suck it up. And you know, you put your backpack on and you go fly around the world, you do your 10 minute pitches, and in the early days, that’s what I would do. Julia would stay back at the back of the lab and continue to keep the technical stuff going and I get my backpack on and go do 10 minute pitches around around the North America or even in Europe, in some cases, so, you know, did a lot of 10 minute pitches where you’re trying to win $50,000 or 20 $50,000. And in those days, back in 2010, through 2013, that was a tremendous amount of money for us. Right. And even with the grant that we got from RP, you know, that was still limited that we can use those funds for. So we were still raising money. And so you know, you had, it quickly became apparent that the only way you’re really going to be able to get money is by showing stuff in the field. deployments in the field, we got customer traction. But that is raising money is a huge time sink. And we were extremely purposeful, on what money we raised. We weren’t doing extravagant things in the office, we try to get some 1960s furniture, not because we wanted that, but that’s what was the cheapest, the money is supposed to put towards the technology, not towards decorating the office. If we have to forego salaries for Julie and I, we would do that in order to, you know, make sure that technology is taken care of and our employees were taken care of, we never missed payroll. We always made sure our employees were taken care of. And, you know, we seemed like we were always raising money. As soon as we close one round, we were getting ready to close the next round, make sure that we get our valuation points, keep the valuation going up, make sure we didn’t have a down round. And moving on moving on board. And so I think the the challenge we have now is how do you scale the organisation when we you know, when we’re in the field, most of the feedback we get from our from the customers we’re talking to is when can we get product? And how can we get it faster? And so, you know, we have we just closed our series C in 2019. We have part of that series D coming in again this year to help scale the organisation further. But yeah, there’s, there’s a lot of opportunities out there, we’ll be looking to do another fundraising around here that our future, that’d be relatively substantial. And the majority of that is going to be towards scaling the organisation to getting multi gigawatt hours out of the factory facility rent today, we moved in in 2019, it’s around 150,000 square feet, we can do around two gigawatt hours per year, this facility once we’re up and running 100% think we can do around 200 megawatt hours per year today. But one of the one of the benefits with our technology is that it’s extremely capital efficient to build it’s around 97% more capital efficient than that of lithium ion on the factory side, right. So we can, we can scale the organisation with very little money. And the benefit of that is, you know, we can build a facility in North America take care of North American operations, we can build a facility in Australia for very little money take care of Australia for same in Europe, or same in Asia. And that’s that’s extremely challenging to focus on that the mind right you’re you’re stuck with a lot of the the Asian manufacturing that you have today, because they spent 30 years perfecting that technology when those high speed coating lines. And so it’s hard for someone who’s not an incumbent to come into lithium ion space. But we took a different approach and we’re extremely capital efficient, which means we can be a disruptor. And that’s what our attention is. Yeah,

David Hunt 33:03
yeah. Cool. And it’s good to see you’re already looking at internationalisation beyond the the US market, which in itself clearly is has massive opportunities. Given the breadth of your experience, Craig, I don’t mind if you just share a few thoughts because on the podcast recently, we’ve spoken to sort of founders and CEOs, not just from renewables and mobility and energy storage, but in sort of more diverse areas we’ve had fun with the cough, CEO of zero vs. a fuel cell, hydrogen aviation, we’ve had fuel cells for buildings and heavy industry with that sort of hydrogen and electrolyzers. Recently, I’m kind of, towards the electrification of everything. But but but but still remain technology agnostic, you’ve got experience across those different pieces. Perhaps you can share a little bit of where you see the future of energy and mobility transitions, and where perhaps some of those alternative technologies have a place or do you not see them having a place.

Craig Evans 33:59
So I would say, fuel cells always are a close to my heart, because that’s really where I started my part of my career and spent now electrochemistry is where I’ve always been, besides early days of Pratt Whitney. I love fuel cells. I hope one day, we can make them work in mass, there’s a lot of challenges, at least when I was in fuel cells 10 years ago, maybe they solved a lot some of those. But from what I see a lot of those challenges remain the same, right? They’re using the same membrane that we were using a decade ago. The flow fields are the same that we’re using a decade ago. It’s the same bipolar plate material they’re being used a decade ago. So there’s not been a lot of material advancement. in that space. There’s still you’re still using platinum, right? And you’re the cost that is that heavily driven by platinum, but it’s gonna be driven by the coding and so until you get a lot of volume on those coding lines for the fuel cells, it’s gonna be hard to drive down those costs. And it’s always around the durability. How do you you know, maintain the durability of fuel As anyone who hasn’t the fuel cell days, we’d always say so if batteries just came out, when you’re working on fuel cells, would you do a battery? Or would you do a fuel cell and everybody would always say a new battery, because at least you didn’t have to worry about pumping hydrogen and pumping air and always at the same time, it was already contained. So once you’ve got a chart, it would work. And there was always challenges with fuel cells back in the days, but they’re getting better. I think they’re there be great radiation, if we can figure out a way to get everything compressed and get the weight down on that stuff. But I think batteries are, are the next thing for for a bunch of patient on the grid. So you get renewables such as wind roller hydro, integrated with things such as batteries, electric chemical batteries, flow batteries, and that’s what’s going to stabilise the grid. I think lithium ion stuff and fuel cells are fantastic for traction. But long term flow batteries, I think are the appropriate technology for the grid itself.

David Hunt 36:02
Yeah, yeah, I think that’s always come back to one of the costs is the ability to scale go back to the point we talked earlier about, you know, scaling just brings so many benefits, not least of which are significantly around cost reduction, which is always important. And it’s difficult to scale some technologies. And I sort of revert back to kind of long time before I was in clean tech, you know, hydrogen was always the next big, big thing. And it still seems to be right on the cusp. But it does seem to be this really interesting. movement in that more recently, fuel cells that don’t require platinum. And I say the the aviation fuel cell aviation was was really fascinating to see.

Craig Evans 36:42
with hydrogen.

David Hunt 36:43
Yeah, yeah, yeah, exactly. The they do have that advantage of the ability to create and store them, or generate and store them relatively easily. But it’s no, it’s interesting to have someone who’s got a broader experience across those that that piece. Craig’s been really useful. I’m really interested to talk to you. Before we sort of disappear. I always like to look at and explore some of the places that you’ve gained inspiration, either in your early days or places you go back to for inspiration, when times are perhaps a little bit tough. Are there any books or thought leaders or places that you would perhaps point people to that have been instrumental in your journey so far?

Craig Evans 37:24
You know, that’s a great question. I have three young kids. So there’s not a lot of book reading that goes on besides Dr. Seuss, and things like that. But I would say, my early days that you read in technology, I think were were instrumental in you know where I am today, there was a lot of really great engineers. At UTC, particularly at the the power division, I learned a lot at Pratt Whitney as well. But UTC power division, back in the day with Mike Perry and Rob darling and Jeremy Meyers, back that cohort that I was in, I learned a tremendous amount from them. And I still talk to those folks today. They’re, they’re scattered around North America now doing different things, but they are, they’re a fantastic group, people learned a lot from them. And, you know, we’d love to do something with them later. But in terms of books, you know, I tend to be a kind of a science nut. And so I love, love astronomy and aviation. So I tend to focus on those kinds of things. I think one of the interesting books that I used to read back in the day when you actually travel on aeroplanes, when I do my business trips was the one book I that we have no idea, a guide to the universe, the unknown universe. So that was that was always an interesting book, basically talking about how we don’t know almost anything. And then there’s another one for aviation, by kind of go back to there’s a book called understanding and maintaining the PA 46, which is an aircraft that I kind of like so, you know, those are the two things that I you know, when I’m frustrated and whatnot, I’ll kind of go focus on those for a little bit. Go breakout. Yeah,

David Hunt 39:05
yeah, no, it’s good to be able to do that. You make an interesting point, actually, in terms of travelling idea, it’s tough sometimes to keep up the reading element when you’re doing 1,000,001 things but one one thing you could always do an under transatlantic flight or on a longer flight was was read but in the last year, that’s of course not been something that’s been possible.

Craig Evans 39:22
Yeah, yeah, I’m ready for this to be over.

David Hunt 39:26
Cool. This really appreciate you sharing some insights with us, Craig and for for your time, we will also continue to keep a lookout for SS and your evolution as a business. In the meantime, in the podcast episode notes, we will obviously point people in the direction of your website and other places where they can find out a little bit more, but thanks very much for sharing with us this morning.

Craig Evans 39:44
Thank you, David. We’ll talk to you soon.

David Hunt 39:51
Thanks for listening. I hope you’ve enjoyed the conversation with Craig and some of the listeners some of the challenges both commercial and technical, but it takes to overcome To have a successful clean tech business, and yet of course the challenges and opportunities just keep coming. Next episode we’re going to be talking more things funding finance, m&a, and what it takes to scale a clean tech startup with Gerard Reed of Alexa capital. I hope you join me then