How Do You Get 20 MW When the Utility Offers 7? #368

0:00The Clean Power Hour is brought to you by CPS America, maker of North America's number one three-phase string inverter, with over 10 gigawatts shipped in the US. The CPS product lineup includes string inverters ranging from 25kW to 350kW. Their flagship inverter, the CPS 350kW, is designed to work with solar plants ranging from two megawatts to two gigawatts. CPS is the world's most bankable inverter brand and is America's number one choice for solar plants. Now offering solutions for commercial, utility, ESS, and balance of system requirements. Go to chintpowersystems.com or call 855-584-7168 to find out more. They have approximately 5 to 7 megawatts of utility power that's available. What the customers need at those sites is actually more along the lines of 20 megawatts.

1:05The interesting thing is because the customer is willing to operate on shifts. They're not consuming for manufacturing all that power all the time. So what that allows you to do is put battery energy storage, use a microgrid controller, a critical loopy called SIGNESS, that basically can take in import and export limits from the utility. The clean energy industry is moving fast. The deals are getting bigger. The technology is evolving and the stakes have never been higher. Welcome to the Clean Power Hour, the podcast for solar, storage, and microgrid professionals who want to stay ahead of it all. Each week, your host Tim Monague, industry advisor and president of Clean Power Consulting Group, brings you unfiltered conversations with the leaders actually building the energy transition. Now, here's your host, Tim Monague. Today on the Clean Power Hour, speed to power.

2:07How to bring megawatts of new renewable generation online fast for industrial facilities and data centers. My guest is Balorama Murphy, founder and CEO of Critical Loop, a modular microgrid company based in California. Before this, Balus spent 12 years at SpaceX, including as chief engineer on the first human spaceflight mission. Now he's applying that same systems thinking to the grid. Welcome to the show, Balor. Tim, thanks for having me on. So, Balor, you have a background at SpaceX. That's quite interesting. What is your background academically and then what did you do at SpaceX and then why did you start Critical Loop? Great question, Tim. Yeah, my background academically, I have some background physics and math, but then shifted into engineering. I was mechanical engineer by training. I ended up, I've throughout my career, I've actually worked at different factories.

3:08I interned at a train factory in India, interned at Larsen in Tubro, and then I ended up NASA Ames Research Center and then found myself down at SpaceX in early, early 2011. I was there for 12 years. At SpaceX, I had a variety of roles. I think it could be best described as sort of a systems engineer. I pulled together complex systems to make important missions work. I served as sort of the program technical and operations lead for Falcon 9 from the perspective of launching human beings to space. So, I was the chief engineer for the first human space like mission there. So, that's probably the thing and most proud of having accomplished there. The Clean Power Hour is brought to you by SDE, Sinclair Designs and Engineering, Fixed Tilt and Carport Racking, Design, Engineering, Permitting and Manufacturing all under one roof in Michigan.

4:09No outside vendors, no waiting in someone else's queue, just fast turn around and steal that ships when you need it. Ask Ag Energy Co in Illinois or Sunrise Solar in the Mid-Atlantic. They'll tell you what it's like to work with the Sinclair team. SDE, everything in house, visit Sinclair-HyphenDesigns.com. So, you're a real rocket scientist but got interested in distributed generations somehow. How did that happen? So, I've always been fascinated with energy in all of its forms, right? Like the control of energy in different forms, rockets are one form of that. I've always been fascinated with how power is generated and distributed and you know, sort of the background at SpaceX working on high reliability systems. Like how do you take a complex set of parts and make them really reliable and really constrained circumstances, right? Because you have mass limits and so on when you're building a rocket. And I was thinking of the analogous problem for the electricity grid, right? Where you have some aging infrastructure, you have modern technologies, you have this non-imogenous, like sort of system.

5:23And how do you make that work better? How do you make, you know, how do you absorb more solar power into the grid? Kind of all of that thinking led to thinking about energy storage and how that might be more tactically deployed. And that's kind of how I ended up where we did as a company with Krickle Loop. But yeah, I wanted to found a company, met my co-founders, we did a deep dive into the energy industry because that seemed to be the most interesting impactful area we could work on. And then industrial customers kind of came up as like, you know, this historically thorny set of customers who like, you know, have very important high reliability needs, but are difficult to acquire. And then it turned out like we aligned with the time and there was actually super high demand for power from both like sort of the manufacturing sector. And then recently it's been, you know, data centers and other folks too, but generally there is a trend to consume more power in areas where historically there have been a lot.

6:31So that is resulting in rethinking how the distribution grid works. And then in doing so I'm kind of like, you know, how do you do that in a more reliable fashion. People have talked about, I mean, you're a veteran in this industry, so you know that, you know, DRs, VPPs, all these things have been around for a while and different incarnations. And so it's a really interesting time now to bring to it modern computing, modern mission control practices, modern hardware development practices and seeing. You know, how those might apply it. So there's actually some good transfer ability of some of the lessons I learned doing space craft and rockets to what the energy industry is doing right now. How long have you been working in energy now? Well, three years. Okay. So, yeah. So, so welcome is appropriate. Welcome to to the energy space. I think that's fantastic. We need a smarter grid. And of course, if you're building a new facility, whether that's a factory or a data center, you need power and getting an interconnection from the utility sometimes take several years.

7:34And so you could build the factory and power it with a micro grid in the short term and get it running right before you have a solid grid interconnection. Is that part of your playbook? Yeah, exactly. Like, well, what is the bridge solution and what's like a bridge solution that works from a financial perspective, etc. Relating back to that point, you made about like the top three expenses typically of manufacturing facility or facility industrial facility of any kind. One important element of that too is like, well, power is an expense, but in addition to it, in order to enable hiring the right people, say, and you know, other logistical expenses, you want to be able to cite your facilities in locations that often have power constraints, right? Like, we look at the greater Los Angeles area or the Bay Area or, you know, some parts of Texas, like, you have all these areas where there's like a lot of busy.

8:35You want to put your factory there because there are people and talent available, but you have this utility constraint. And then how do you solve that? Like, can you use a micro grid to solve that? Then it comes down to like, can you also build an economical micro grid and that, you know, what critical loop has taken as an approach is to make it really great interactive. So like pull out, I mean, your most economical way of getting powers is going to be pulling power from the grid, right? So, have as much grid power as possible, but then use battery energy storage and supplemental generation to fulfill the gap. And then we do it through this really simple energy service agreement model where people are effectively leasing capacity for like the bridge period, right? For the first three years or, you know, two to three years, but the utility can't deliver the power there. And then over time, the expectation is that you get more permanent power there. But the nice thing about things like batteries is that you could probably use them in perpetuity at the site, right? Because there are other needs that they can fulfill, like, you know, supplementing, you know, to, you know, for resilience, for cost, production, et cetera.

9:47So it is a really compelling concept of site batteries. So a couple of things come to mind. But let's first tackle a case study if we could just to illustrate the value proposition of critical loop, if you would. We'll be back after a quick break. Hey, guys, are you a residential solar installer doing light commercial, but wanting to scale into large CNI solar? I'm Tim Monigue. I've developed over 150 megawatts of commercial solar. And I've solved the problem that you're having. You don't know what tools and technologies you need in order to successfully close 100 KW to megawatt scale projects. I've developed a commercial solar accelerator to help installers exactly like you. Just go to CleanPowerHour.com, click on strategy and book a call today. It's totally free with no obligation. Thanks for being a listener. I really appreciate you listening to the pod. And I'm Tim Monigue. Let's grow solar and storage. Go to Clean Power Hour and click strategy today. Thanks so much.

10:59Yeah, for sure. A few come to mind. There are two industrial facilities in California. I can't tell you exactly where they are. But let's say they have approximately five to seven megawatts of utility power that's available. Right? That's kind of what the utility can commit to for the first two to three years of operation. What the customers need at those sites is actually more along the lines of 20 megawatts. Right? So you got like seven megawatts from the utility one 20 megawatts. Now the interesting thing is because the customer is willing to operate on shifts. They're not consuming for manufacturing all that power all the time. Right? So what that allows you to do is put battery energy storage, use a microgrid controller. That's what we call it. Sickness. It's a grid interactive controller that basically can take in import and export limits from the utility, like basically saying, like, here's the hours during the year where you can't pull power from the grid and enforcing that at the switch here for the customers, meaning like if the customer attempts to pull too much power.

12:14That time we would shut off the power from the grid. And likewise, make sure that we don't export power unnecessarily so we can maintain the sort of behind the meter nature. And so the that controller orchestrates these, you know, let's call it like 60 megawatt hours of battery energy storage rate at a given site. And it allows you to bank the power and the batteries. And then during those times of peak need where the extra supplemental power to cover that gap between seven megawatts and 20 megawatts needs to be achieved. These batteries can dispatch power to effectively cover that gap. And so that's kind of a case study, right? You have the batteries at the industrial facility basically. And then yeah, you're charging them and when power is available and discharging them. Now if there's like local source of generation like solar, we can preferentially charge from that as well. And your business model is explicitly about temporary solutions or is it a both end you'll provide facilities on wheels, so to speak, but also permanent.

13:23Yeah, great question. The answer is like, yeah, we provide that we have both models, right? We have, I have to say the majority of our customers pursue the temporary bridge model where you know, they have a lease for a few years for these assets. And then we've designed everything to be relocated. We can move those assets off to the next job effectively, which is cool because you know, modern technology allows that like batteries are designed to be moved out, right? And so the, yeah, so that's like a majority of our customers. However, we have customers where effectively they end up owning the assets and we have a long term service agreement, which might you know be range from five years to 15 years. And we're basically providing sort of doing all the controls for effectively controlling the battery in the same way, but doing all the O and M and all the other aspects related to keeping them functional and operational for long haul. Those tend those customers tend to be like utilities or like critical infrastructure facilities up, you know, people who have more permanent need for these assets.

14:30But effectively the same controls stack is able to address both problems. And you know, sometimes industrial customers might seek to buy these assets too because they may have a bridge need, but they may want to transfer that into like sort of EPS capability or something. I've had resilience capability in the long term, so you allow for both. Sure. Now, you know, when I think about this, the build out that's happening. This is industrial facilities, AI infrastructure, like data centers. It's also, you know, charging stations both for consumer vehicles and commercial vehicles. So there's a, there's this explosion and load growth happening. What is it that gives critical loop access to the batteries and the generators that are needed for these facilities because the facility owner themselves is looking at the landscape and going to the word silas and the Tesla's of the world and saying, hey, we need batteries or we need generators.

15:38We want to buy them. Aren't you competing in some way for that for those for those goods as well. That's a great question. The reality is like, okay, if I'm a real estate owner, right, let's say I'm a real estate landlord, right, and I want to my job, it would be to, you know, I borrowed some money from a big bank and I have this facility and I need to start paying me rent. And not to take on liquidated damages or anything that tenants might have for the non-delivery of power, right. And so we, so as the landlord, my goal would be like, hey, I need power. I could take two approaches. I could have like an internal dry utilities consultant, like go try to seek out and inner purchase and acquired like manage and install these assets. Or because I mean, I would contend that because it requires a fair amount of specific technical knowledge to install and maintain and operate these assets seamlessly and also certifications that are related to how the interaction of the utility goes and so on.

16:45It's not, it is easier to actually just hire a critical loop to come help do that. So you also, yeah, go. Yeah. So you are effectively critical power infrastructure as a service. Is that, yeah, is that a proper way of framing it? Yeah, it's kind of in the name. Yeah. The other aspect to it is like you're appointed by the supply chain as a super relevant one, right. If I'm trying to say procure like 60 megawatt hours of batteries and the corresponding inverters to help solve this problem for a specific site, that volume is actually a small volume. And I'm like a big battery manufacturer or you know inverter manufacturer. And having multiple projects, I think the ability for critical loop to aggregate multiple projects and then create that demand that is comparable to some of the bigger developers that they would encounter allows us to source that supply chain. So that's the origin story. Now let's talk numbers. How fast critical loop is actually growing. Yeah, we closed a series a.

17:53Earlier this year, 26 million dollars series a week. We've been deploying. I mean, what's kind of unique about critical loop is we've sort of managed to be able to deploy to customers almost from the outset. And we've been pretty resourceful in sourcing that supply chain, especially the US made equipment. And yeah, we we early adopters kind of included our first deployment was this ADU manufacturer call cover and they had effectively nearly a year of need where basically we used 4.5 megawatt hours of batteries and 170 kilowatt generator. To serve all their power because they had no access to power from the utility. The clean power hour is brought to you by CPS America maker of North America's number one three phase string inverter with over 10 gigawatts shipped in the US. The CPS product lineup includes string inverters ranging from 25 KW to 350 KW. Their flagship inverter the CPS 350 KW is designed to work with solar plants ranging from two megawatts to two gigawatts.

19:07CPS is the world's most bankable inverter brand and is America's number one choice for solar plants now offering solutions for commercial utility, ESS and balance of system requirements go to chintpower systems.com or call 855 584 7168 to find out more. I've been flying consistently to San Diego a couple of times a year and the thing that I notice is that that airport is continuously under construction. So why why do they mean critical infrastructure critical loop though like if I'm the San Diego airport like I have major influence and authority and the ability to if anybody can get a quick interconnection agreement or whatever with with SDG any it's it's the airport. So why do they need critical loop well I think the simple answer in the case of the airport you might think of the airport case that we're doing is almost like okay what happens after the interconnection happens and you still have the storage and what are the continued benefits of having that asset on the site as well as as well as the solar and because while you have the interconnection you get charged a lot of money you their demand charges right.

20:28You know multiples of like the you know bulk power cost rate so what we effectively orchestrate is that ability to peak shape I mean it's a tried and true concept of peak shaping to optimize the use of the battery and the solar to minimize the utility expenses and we get paid proportion like to that. So that's that's that's kind of why they need us I mean and then I think the other why is like conceptually it's all well and good and I know Tim you know this quite well right like it's like okay it's great yeah we can make this drawing single line drawing put all these assets at the site wire it up but then it's like to actually maintain and I think this is something that everybody in the industry maybe is like not enough people are talking about which is not really good. The operations and maintenance required to give whatever performance you need like be that that extra power or the cost savings or the voltage stability or what have you with these batteries assets requires that you have a system that is really optimized for maintenance and operations without blowing out the cost right that means what critical loop and that's heavily in is like our ability to do a lot of automation and you know minimize the cost.

21:55It's not like we have a dedicated person sitting and watching the same day airport all times right like we have a pretty sophisticated alerting system and you know a lot of autonomous controls that are in place and I think that sort of capability is going to be needed especially I mean even for something as small as like 11 megawatts site which is roughly what the same day airport is great and scaling up for sure. Before we get into vendors and supply chain I wanted baller to walk me through the San Diego airport project in more detail because it's a great real world case study of what critical loop actually does on site. Okay the San Diego airport was an interesting case study this is probably the first project we wanted an open bid competing with industry leaders right and what was interesting was like this was a project where. The solar and batteries had been developed by somebody else in the past and had effectively been.

22:58That company when it had seized their US operations and therefore there was basically idle batteries and solar sitting around site i think. I think it was a really cool exercise in the versatility of the platformer built because you know we built it on other battery vendors and you know solar providers but it's you know as long as it can talk mod best or canvas or any standard protocols we can talk and control systems and so we were able to go in install or controller and take control of like there's like four megawatts of solar and. For megawatt hours of batteries and to megawatts about inverter output that spread across 17 batteries the solar is distributed across the campus it's actually pretty interesting problem from the perspective of the campus as well because it's. The assets are somewhat distributed across the campus this means that. They all have to be coordinated in in you know so that all the signals and the power consumption different meters is practically so.

24:04So yeah the and by the way like if we screw up with we can take out power into the airport which we do not want to do right so. If we accidentally try to export or something right yeah so so going back so it was a devolved by somebody else in that case we didn't they already had the batteries and solar. That's not the model for most of our projects going forward we're actually doing the we're deploying the batteries and often working with partners on the solar or. Generation or hydro what what what have you for the site but in this particular case we basically install our control system may we sort of re integrated all these assets together. Make sure they work and yet they're working as we speak right so you're the you're the hardware and software brains for this project exactly exactly and can you speak to how much money that project is saving San Diego. Or the air I give you the ballpark because I don't think I'm allowed to give you the exact figure but it's millions of dollars or it's mill it's literally millions of dollars over the term of the contract which is like five years.

25:15I'm just playing devil's advocate on this on this this piece about access to equipment. Who are your preferred vendors when it comes to batteries and inverters and other necessary hardware. Work with a range of providers and you find it important to actually maintain a pretty diverse supply chain and you know test that we can deploy assets that are suitable to the customer site. One of my thoughts is who are your customers like are you working with developers and EPCs and hosts like that full spectrum or yeah who tell us a little bit about who ultimately you want to knock on your door. Yeah yeah so I'd say like the people knocking maybe it's best evidence by the people who are knocking on our door today and we want more to talk to more of those folks real estate developers are certainly one of them we get a lot of inbound references from the major brokers real estate brokers are trying to establish tenants and facilities and and so so we get a lot of inbound from that as well.

26:31But yeah real estate developers are really big one we also work with some major EPCs some you probably know many of them but but yeah we partnered with all all those sort of entities i'd say the biggest customer set is probably the real estate landlords who. So if they're them it's like you know they financed and they want to start renting out this property and and the important thing is to make it attractive by having sufficient power to get you know like a high value industry to locate there and now it's beginning to be the case that you know like people you want to site like data centers on the distribution site like for inference right like smaller data centers. So yeah I'd say like those are some interesting parties we're talking to and and yeah beginning to talk to some data center developers as well in my mind I don't make the distinction there like to me it's a continuum of industries it's just how many megawatts they're using so.

27:31Yeah and in a perfect world how many megawatts will you deploy and control in a good year like your current clip and then in the near future tell us a little bit about the scale of what you've got moving well by the beginning next year i'm hoping to have finished deploying 100 megawatt hours of going by megawatt hour scales because that might be a simpler one to grapple at the moment. And yeah so and then you know i'd like by the end of next year to have contracted like 500 megawatt hours and then the year after a gigawatt hour right so that that that's that's sort of like kind of our scale and ambition that we're shooting for at the moment and yeah. Okay. I have to say you have a very sunny disposition and i mean i love your optimism but are there are there things that are keeping you up at night i mean i have to i have to also say the energy industry in the US is kind of freaking out right now like the the amount of load growth is is really mind boggling there's at least two and a half times as much load growth.

28:44As is going to get built and so that's a that's a very big pain point that is of course an opportunity for companies like critical loop I think but what is it that keeps you up at night. I mean you talked a bit a few things like supply chain finding enough electricians to work on our team like yeah i'd say like there's a lot of opportunity. The supply chain piece we have solutions for I think the talent pieces is really important one to like you know you're finding the people of the right set of transferable expertise to manage some of the cool thing about introducing new technology is that well you can but then it's like well we got to get people trained to operate manage and install these assets and I'd say like that's kind of the thing that i'm spending a lot of time in the last month or two is like you know making a lot of money. I'm sure we have the right staff to go to go to execute on some of these real cool projects the clean power hour is brought to you by S.D.E.

29:46thin Claire designs and engineering fixed tilt and carport racking design engineering permitting and manufacturing all under one roof in Michigan. No outside vendors no waiting in someone else's queue just fast turn around and steal that ships when you need it ask I get energy co in Illinois or sunrise. I'm a solar in the mid Atlantic they'll tell you what it's like to work with the Sinclair team sd e everything in house visit Sinclair hyphen designs dot com this is fantastic i'm thrilled to know about critical loop and I certainly will be doing my darn to get the word out about your company and your solution but what else should our listeners know. No thanks for this opportunity and I'd love I could nerd out a little bit of it on some of these aspects but I'm so like yeah if you have a mega once a kilo power need very interested to talk to you we might have a solution we're deploying projects in California and beginning to work on other states like New York and Wyoming and so on but.

30:57The yeah we are right bring us to toughest energy problem our toughest power problems and we are excited to take on a challenge so. And of course if you want to come work for us do let me know we're always looking for great electrical engineers electricians and so on so i then that. Great well i want to thank balla romma murthy with critical loop for coming on the show check out all of our content at clean power hour dot com tell a friend about the show that's the single best thing you can do to help others find this content we're all in this together we're growing the energy transition one podcast at a time and we need more people to realize that this is a golden opportunity for the next. 20 30 years with that balla how can our listeners find you. Well you can you can find us on our website or you can find me on LinkedIn and or Twitter at rocket underscore balla. Rocket ball i love it okay i'm to monitor you let's grow solar and storage take care everybody cheers.

32:01The clean power hour is brought to you by cps america maker of North america's number one three phase string and burger with over 10 gigawatts shipped in the US. The cps product lineup includes string and burgers ranging from 25 k w to 350 k w their flagship inverter the cps 350 k w is designed to work with solar plants ranging from two megawatts to two gigawatts. Cps is the world's most bankable inverter brand and is america's number one choice for solar plants now offering solutions for commercial utility. Yes s and balance of system requirements go to chint power systems dot com or call 855 584 7168 to find out more.