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Maud Texier

Head of Clean Energy and Carbon Development


February 16, 2023
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Ep 77: Maud Texier - Head of Clean Energy and Carbon Development, Google
00:00 / 01:04

Bret Kugelmass [00:00:58] So we are here today with Maud Texier, who is the Director of Clean Energy and Carbon Development at Google. Great to have you here.

Maud Texier [00:01:05] Thank you, Bret, for hosting me.

Bret Kugelmass [00:01:07] Yeah, it's a real pleasure to talk to you. Obviously, I'd love to understand how you think about the clean energy space and how leaders in technology like Google might influence the future of clean energy. But before we get there, I'd love to just learn about you as a person. So tell us, where did you grow up?

Maud Texier [00:01:25] Yeah, absolutely. Well, as you can tell from my accent by now, I clearly did not grow up in San Francisco. So I'm actually born and raised from France, Paris or around Paris, I would say. And I made the move to the Bay Area 12 years ago and am happy to tell you more about my journey. But it was for clean energy that I made the move, so it started early on.

Bret Kugelmass [00:01:47] Well, tell us, like even earlier. Yeah, I want to hear early in life. What are some of the formative experiences that you'd have, or not, but that led you on your journey here?

Maud Texier [00:01:55] Yeah, absolutely. So, I'm an engineer by training and I think really what brought me to energy is I would say the scientific curiosity and looking at all the nitty gritty details and the technical things. So that's really what brought me early on into energy. And the funny thing is, as I was doing my master's degree, I wanted to start my first experience in the energy space. It was in 2009, so the job market was pretty specific. And luckily the oil and gas industry was hiring. And so my first experience was actually where I was working on offshore oil rigs, decommissioning and things like that.

Bret Kugelmass [00:02:42] So what kind of engineer were you?

Maud Texier [00:02:45] So back then I was looking more at power systems engineering. And so the oil and gas industry was kind of something that I was not necessarily expecting as a first experience, but I would say I was pretty interested personally from, I would say, the technology achievements that they have made in that industry, when you look back at the scales of the projects and the scale of all the platforms and everything. For an engineer, I think for me, it was kind of like a land of discovery. So it was super fascinating to do that as a first experience.

Bret Kugelmass [00:03:21] And not just the engineering advancements that they've made, but like, I think we have to give credit where credit's due. The oil and gas industry is responsible for human prosperity as we know it. We can malign them on certain aspects of how the environment is being impacted, but I think it would be to everyone's detriment if we just cover up the fact of how important energy is to human flourishing in general.

Maud Texier [00:03:47] Yeah, yeah. I totally agree. And I think there's a lot of debate around that today. And it's a healthy debate, right? We need to accelerate the transition, but I agree with you, that's an industry that was a pillar for us for the advancement of not just energy consumptions, but in our daily life, in plastics and chemicals and things like that. So it's still very, very important pillar for us. But as I went through that experience, then I went back to school to finish my master's degree. And I really wanted to focus actually on this more like energy transition piece. And so back then, I'd look more closely at power systems transformation. So I finished my master's degree around renewable energy, and back then smart grids were kind of like the keyword for us. And that's really what began my specialty.

Bret Kugelmass [00:04:34] And this master's degree, was this more on the policy side or was this still a technical degree?

Maud Texier [00:04:39] No, technical. An engineering degree, engineering school in Paris. We did a little bit of like policy and markets, but it was more to make sure we were equipped for the context, but it was much more on the technical side in the first place.

Bret Kugelmass [00:04:51] Great, great. Okay, so now you've got some experience under your belt, a master's degree. What happened next?

Maud Texier [00:04:57] Well, then I started looking for a job in the power industry and there was this large French utility that you might know called EDF that was hiring. And I started working for them initially. The first project was actually super interesting; it was on a power trading desk. And back then we were looking at doing demand response for the first time. So, how do you monetize the services? That was kind of like the flavor of the day. And it was fascinating to see how power trading was actually not automated in real time. And people sent a fax to power plants to kick it off and so on. So I really loved it.

Bret Kugelmass [00:05:38] Oh, I've heard some stories about some generating assets being so disconnected that people have to literally like get on a bicycle and like bike over to it to turn a knob in order to have the response.

Maud Texier [00:05:50] Oh, yeah. I would not be surprised. It was literally, we are like, "Oh, this power plant has been selected for this service. Well, we should send them a fax to tell them."

Bret Kugelmass [00:06:01] But how did it work in France? Maybe you can explain the French system to me, because I thought that France's electricity grid was like somewhat socialist. Because I even heard stories about how they have to provide electricity to the islands in the Caribbean. How does the market work in France?

Maud Texier [00:06:19] Yeah, it's a good question. So actually, the French market is what we call a deregulated market. So, the European Commission back in 2000, I forgot now, around then I would say, in any case, they decided to open the market to competition. But you mentioned it right, like EDF is what we call the historical monopoly, the French utility company. They built the grid over there and so on. And so this decade, actually, was a big transition for them. They still are pulling the poles and wires, for instance. But no, they are deregulated on the supply side and the retail side. And so, you still have, I would say, a more traditional energy market in between. So you have real time energy trading and ancillary services. Very similar, I would say, to the U.S., a little bit different. But your point on the French islands is because those are still a very islanded grid and separated grid. And so in those specific islands, you still have kind of like the monopoly of the utility trying to regulate that grid. And in exchange of that, most of the mainland France, basically, is helping subsidize those islands, because the price of electricity is is very high over there for them. Very similar to how you would look at Hawaii, for instance. That would be a very similar use case for us.

Bret Kugelmass [00:07:42] Yeah. But I don't think we subsidize Hawaii. Maybe we do in some way, I guess. It just seems so bizarre, but I guess that's more of like a historical, political, social context as well. But given that France has this incredible nuclear fleet as well, which I've always heard about, especially being so involved in the nuclear sector, how does it work in terms of like trade? Because you were in the trading side, how does it work like trading across the continent? When prices are high due to oil increases or other possible energy increases but low due to nuclear, is there an arbitrage moment to selling power across countries?

Maud Texier [00:08:26] I won't go into too much detail because I haven't been working on this part for many, many years now, but I would say, in general, the way it works is very similar to U.S. energy markets. You put your energy dates in and those are more at the regional or country level, generally. There are a little bit of exceptions with different bidding zones. But generally you stop there. And then, each country has kind of like this fixing hour and so each country is publishing their own price curve and supply and demand curve. And then you have the physical constraints in terms of what are the transmission lines between the countries to make sure that the power flows can solve for each other. And that gives you a broader Western European fixing, if you want. So it's a two step process. First, you do it more at the local country side and then you expand it at the broader side. But you do have a lot of cross-country flows, I would say, and arbitrage opportunities, like you said. And it's very well known, for instance, that typically during the night in France, the nuclear generators are still running, but you have a lower demand in France. And so for instance, the hydro pumping storage in Switzerland is generally going to benefit from this nuclear power to be able to pump during lower cost and lower demand hours. So you have this kind of like famous, I would say, trade cross countries like that.

Bret Kugelmass [00:09:58] Wow. And then you went on to Tesla?

Maud Texier [00:10:01] Yeah. So I did a couple of jobs. Through EDF, I've been able to move to the Bay Area, actually. By then it was more about sourcing new technologies for the company. It was 2011, 2012, so Cleantech 1.0, as they called it. So we did a lot of energy storage, a lot of renewable energy with new technologies on solar panels and so on. And at the end of this experience, there was so much innovation in the Silicon Valley, especially around clean tech, that I felt it was a great opportunity maybe to go on the other side and see what it takes to actually develop those products that I was looking at and trained to buy and looking at this fast-paced environment of the Silicon Valley and all the thrill. And that's what brought me over time to Tesla in 2014. I joined Tesla for what is now Tesla Energy as a business unit, so still really deeply focused on energy and grid decarbonizations and working on going to market and and developing the products around the batteries and many around large scale batteries. So we did power packs, and just before I left you it was mega pack, the bigger battery.

Bret Kugelmass [00:11:18] And what new skills did you pick up as an individual throughout that process?

Maud Texier [00:11:23] Oh, yeah. Well, it was a wild ride, I would say, like I'm sure a lot of people would say about the startup experience. When I joined Tesla, I was already quite a big company, but I think Tesla is still running like a startup and the energy business was really, really nascent. We were just a very, very small team, very scrappy, kind of almost still a pet projects to see if there was a "there" there and then we'll see how that goes type of thing. And so we're just, we're learning to wear many hats. Also, having this sense of urgency that I appreciated, which is we need to move fast, we need to go to market, we need to also be super lean because we just have only so many resources. And so, how do you keep your team focused on the same goals? So I would say it was a lot of different skill sets. And then, we entered a very large phase of expansion at some point, especially when Tesla acquired Solar City. That kind of like created a multiplier on our activities, on our teams and all that. And having this opportunity to learn how do you manage this transformation from a company activity perspective but also a culture, what's the DNA of your team and what's the vision, I think has been very, very transformative. And yeah, there were some low lows, but very high highs. And so I definitely do not regret the experience.

Bret Kugelmass [00:12:46] I bet you picked up a ton of personal skills there. And now I'll ask the question from a different angle. What about your perspective on the energy industry? Having been at a utility, then at a product company, maybe tell me about this evolution of how you think about how energy is going to be delivered, not just in the U.S. but around the world.

Maud Texier [00:13:11] I think you covered it pretty well. That's why I went from utility to the product side. Electricity is like massive infrastructure, you know, big transmission lines and big power plants. And even if I think there's a very strong trend toward distributed energy and we should do more of that, I just feel like there are economies of scale that are never going to disappear. So, it's kind of like how do you balance this need for this massive, heavy infrastructure, very CapEx intensive, so very utility business, with the fact that we just have to move much faster in terms of transitioning towards a clean energy distribution system. And I think that's really what was the driver for me to go to the other side and do product development. But that's also what I observed when I was working at Tesla and trying to market all those batteries and monetize them. It's like, those batteries were bringing so much value across so many angles that the market itself was not fit to recognize that. And so you had this very weird disconnect between what a battery could bring to the grid today as an asset versus actually to find that it could not go to market because the rules were not changing fast enough. And so, I guess that's where I am today. There are a lot of technologies and innovations that are happening right now, both on hardware and software, a lot of capabilities. And for me, the real conundrum is how do you accelerate the transformation from a market mechanism perspective of standards and policies? And we see today, the biggest barriers, actually both in the U.S. and in Europe for renewable energy, are generally more around permitting and interconnection and process. It's less about getting the technologies. It's really about how do we change those mechanisms to just go faster, and to some extent, get rid of a bit of what used to be bureaucracy and know what can be automated and can go faster.

Bret Kugelmass [00:15:06] Can it go faster or are there institutional barriers that are beyond the processes and the technology of bureaucracy that fundamentally slow down industries like this?

Maud Texier [00:15:20] So, great question. I'm not sure I'm fully equipped to give you the full answer, but I would say my take is like a little bit of both, right? Just as we talked about the French market going from those historical monopolies to deregulated, there are still a lot of issues raised at deregulation processes, how do you make sure you have fair competition, those type of things. So I think you're right; those institutions still need dramatic change, I would say, and different perspective on how we go about the energy markets. I think today there are a lot of things that could be automated. We have lots of technologies; we do a lot more calculations on power flows and things like that for those interconnections, for instance. So I think we can make progress there in the short term once thinking about the bigger picture of the market and the institutions.

Bret Kugelmass [00:16:15] Yeah, that's a very optimistic look. I'm just concerned by like California, specifically. So like, California is like a herald for things to come, always tries to be the first. And no one wants clean energy more than California. They're always passing subsidies and regulations. They're one of the first ones to say all cars have to go electric. So, clearly there's the political will for clean energy in California, and yet it still sometimes takes like... What was it? Do you ever watch Bill Maher? He has this TV show and he's a big clean energy advocate. He had to wait 1,000 days, over 1,000 days, to get the permit for the solar panels that he installed in his backyard that were already built. They were just sitting there for 1,000 days. And I'm like, "Oh my God, this is crazy." It's like, why is California, that's willing to spend billions of dollars on clean energy subsidies, unwilling to fix their permitting problems?

Maud Texier [00:17:14] Yeah, I mean, I agree with you. It's kind of dramatic to see the same issues both at the residential level and the large scale system. Like you say, I'm optimistic, but I think that's what I have to be to be in the field. And pragmatic optimist, I guess, is the right way to frame it. But you're right. How do we shake up that system? How do we balance going too fast and making mistakes with going too slow and putting up barriers? I would recognize that today, I think there's really this sense of urgency. And actually, I think we're now moving faster. I'm an optimist, so when I see things like the IRA and so on, I'm like, whoa, things are really happening now and it's going to be a pretty exciting decade.

Bret Kugelmass [00:18:00] Okay, that's interesting that's what you see from the IRA. I see the IRA as just like an opportunity for graft. Like, yes, it's the right thing, but like, who's going to steal that money? Like, when we issued $6 trillion for COVID, maybe half a trillion went to the right place and $5.5 trillion went to... nobody knows. So it's like, I'm terrified that the IRA is going to just go... Like, yes, infrastructure will be built, but will it be the right infrastructure? Will most of the money go to general contractors' pockets or will it actually go towards the technical solution? I don't know, but I'm scared of the IRA.

Maud Texier [00:18:37] Well, I don't think you should be scared of the IRA. I think the execution is going to be key to it. But I think we had to start somewhere, which is actually getting those mechanisms for funding. Otherwise, I don't think we would be able to get the infrastructure that we need by by 2030 and to push for the new markets. But you're right, everywhere where there are funding mechanisms, people are going to look for the loopholes and the shortcuts. And as soon as you have rules, you're going to look at how can I walk around those rules. But I do think it's all about mechanisms and executions and what are the guidelines and those type of things. Like right now, there's a lot of discussion around how does the IRS define things, green hydrogen and microwaves and those type of things. I think this is a very important moment, actually, were specialists should be engaged to make sure that the right rules and standards are put in place, because if we do that too quickly, then I totally agree with you, there's a lot of opportunity for interpretation, right?

Bret Kugelmass [00:19:38] Yeah, totally. We've got to get the experts laying out the rules first and make it less ambiguous. Yeah, exactly. I totally feel the same way. Okay, take us into your current role.

Maud Texier [00:19:48] Okay, my current role is clean energy at Google, trying to do two things, I would say. The first one is we've got ambitious goals for 2030. So, what's the plan? How do we make sure that we get there by the time that we have to get there? So, primarily 24/7 carbon free energy, which has been our flagship program. But also now we are expanding with our net zero goal and so really trying to expand beyond all direct, I would say, center of control and emissions and looking across the value chain and what can we do more to achieve net zero by 2030. And the second side of that is, we're doing so much internally. How do we make sure that we can amplify that or make it a catalyst for others to be able to replicate the same things. I think we're very fortunate to be in a company like Google where we have resources and we have bold ambitions. And so our goal is also to be able to create that into a more systemic change. So the second part of my job, I would say, is how do I leverage what we do internally to make sure that others can replicate this same things through products or market changes or policy discussions.

Bret Kugelmass [00:21:00] Okay. Wow. All right, you just went through a lot there. So let's pull apart a couple of those because I mean, any one of those levers that you just described could be potentially very powerful. So, maybe you pick the one that you think is going to... Let's see it this way, the one that you think will have the most surprise impact. The one that you think your average person on the street wouldn't expect it, but it actually is going to be incredibly powerful.

Maud Texier [00:21:29] It's a good question. Can I pick two?

Bret Kugelmass [00:21:32] Yeah, yeah. Go for it.

Maud Texier [00:21:36] So, the first one that I think had more impact than we thought it would have is when we started thinking about this 24/7 carbon free energy approach. It was more about, "Okay, how do we make sure we get local, hourly clean energy for data centers where we consume it?"

Bret Kugelmass [00:21:53] Okay. Can I just pause you there to explain to people? Because I also thought that this program was groundbreaking and necessary and I was actually so pleasantly surprised that you did it. But the two elements that you said for 24/7 was that it's local and hourly. So that means you can't just buy a carbon credit from some other place in the world and say that you're clean. Like, if you're claiming that your energy is clean, that clean electron has to be produced at the time and the place that you're claiming credit for. Is that right?

Maud Texier [00:22:22] Yeah, absolutely. Absolutely.

Bret Kugelmass [00:22:24] I thought that was an awesome program.

Maud Texier [00:22:27] Yeah, it's an awesome program. It's a hard to achieve goal, but we did it less to be about the percentage or the metric, but more because we realized that really to drive those grid decarbonizations in the places where we have the data centers, you have to align the incentives and you have to align the metrics.

Bret Kugelmass [00:22:47] Can we actually talk about... Were you there at Google when the 24/7 project was started, or did you come after?

Maud Texier [00:22:53] Yeah, yeah.

Bret Kugelmass [00:22:55] Okay. Can you just tell us about some of the internal debate? Because I can imagine that there were probably different parties internally that had different thoughts because that is a very hard goal to hit. And some people would probably be like, "No, no, let's not make it that hard."

Maud Texier [00:23:10] Yeah, that's a great question. So yeah, when I joined in 2019, the team had been working on renewable energy for a decade already. And actually, Google early on started a renewable energy program. They were one of the first corporates to sign a power purchase agreement, a PPA, that was a four week forum in the U.S. And so, the team really quickly set up this ambition to achieve what we call 100% renewable energy, which is the most recognized traditional corporate standard for clean energy procurement today, which is you look at your annual consumption of electricity and you try to match it with clean energy that you procure globally, generally, or more locally, but I would say generally, at least at a continent level. So, pretty broad definition. And so when I joined the team in 2019, Google had achieved its 100% renewable energy target since 2017. So it was kind of like the third year that they were meeting that goal. And so, the team was starting to look at what is the impact of that goal as they continued to maintain it, and is it enough, or, what is the next phase, basically, of the journey for decarbonizing our electricity emissions.

Maud Texier [00:24:22] And so, that's kind of like what I focused on when I joined. Taking survey a little bit of what had been done to date and what was the impact of the portfolio and also kind of like trying to align that with what was the mission of the company, which is really looking at how, at least from an electricity perspective, how do we drive deep decarbonization of the electricity systems? And when we looked at this portfolio that we had, we realized that there was a mismatch, generally, between the places where we consumed electricity and the places where we bought clean energy, because you had liquid markets with a lot of PPAs in one place and you had data centers in more restrictive markets or just utility territory where you had less clean energy in that place, and we just had no access to clean energy.

Maud Texier [00:25:08] So this whole system realization really pushed us to understand how we could reset a little bit about for us to start and move us towards a realignment of that portfolio. And so that's really what triggered the 24/7 carbon free energy discussion. And to your point on debate, yes, we had hours of debates, good debate, because that's a very complicated goal and you have to translate that into a methodology and metrics and so on. I would say a couple of things that really tipped the balance towards the decisions of going that way is, one, just the deep belief that that was going to be the way that things had to go anyway. So whether it was no, it was going to be a little bit later, people were going to ask for local clean energy.

Bret Kugelmass [00:25:58] I see. So you might as well get ahead of it and be thought leaders in this space. I see.

Maud Texier [00:26:01] And as you look at grid decarbonizations, even from like a data center side, we're very involved in the community space as well, so now you're on those grids that are running on coal power plants and so on. So you have a lot of ancillary effects anyway around decarbonization of those look at local grids and added benefits to the community that were kind of really aligned with...

Bret Kugelmass [00:26:21] Oh, that's awesome. I hadn't thought of that perspective. That's another great way to look at it as well. Let me ask, what percentage of Google's energy consumption is data centers versus everything else?

Maud Texier [00:26:34] Yeah, so I won't give you the exact percentage.

Bret Kugelmass [00:26:37] Close. Round it to the nearest 10%.

Maud Texier [00:26:39] A very large share. As you can imagine, it takes quite a bit of electricity to run the Internet. So the electricity consumption of Google is pretty much the data centers and then the buildings, the offices where we work. So, yeah, the vast majority of our electricity consumption is definitely data centers.

Bret Kugelmass [00:26:57] Interesting, interesting. And so then are you also tackling that from the other approach instead of just generating clean electricity, figuring out a way, or are data centers constantly being redesigned to use less power to heat or cool in different methodologies? And does that fall on your portfolio as well?

Maud Texier [00:27:13] Yeah, I mean, we have engineering teams in the infrastructure teams who are really driving those designs. But you're right, it's really core of the DNA, I would say, of the Google Data Center to first of all to drive energy efficiency. Actually, the Google-owned and designed data centers, I would say have the lowest PUE, so power usage effectiveness, which is the metric for energy efficiency in the data centers. We're on 1.08, which means that for every one kilowatt of compute, you only need .08 more energy to really maintain your summer management system and the lights into the buildings and so on. So it's really reflecting the efficiency of those data centers. So we've been working on that for several decades now. For about two decades, this PUE metric has been declining. And of course, the absolute perfect score is one, so we're trying to get it as close as we can.

Bret Kugelmass [00:28:11] But then you still have the processing. So I guess, just so I understand that ratio a little bit better, does that include the cooling?

Maud Texier [00:28:19] Yes.

Bret Kugelmass [00:28:20] Okay. So you're already able to reduce the cooling significantly.

Maud Texier [00:28:25] Yeah, it's all the auxiliary loads, basically, that you're including to that. So it's really cooling; it's mainly cooling and lighting.

Bret Kugelmass [00:28:33] What's been the biggest breakthrough there? This immersion stuff where they soak the servers in liquid? Is that panning out? How's that working?

Maud Texier [00:28:43] I think it's really just an addition of small things. Like, you don't really have a silver bullet. I would say the advantage is it's been really more like what you call a vertically integrated design. So really coming from like, how do you build the racks together, right? And then within those racks, how do you optimize? And then from there, how do you optimize the room, right? And the summer management systems. And then we've been adding innovations as we evolved over time beyond just the materials and just some old designs. An example is, within a few years ago, actually, we started using DeepMind machine learning algorithms to optimize the cooling cycles, for instance. So that's an example on how you can keep driving down energy consumption over time. And I think for us, as we're reaching kind of like the asymptote of what you can do from an efficiency perspective, how do you become more flexible in your profile? And I think the interesting piece is data centers have been known to be those inflexible, critical resources. And we're kind of like the consumer asking for electricity and we need that electricity. And in the context especially of 24/7 and all those grid resiliency considerations, we are really looking at load flexibility and how can data centers better integrate into their own grid and be better citizens of the grid as we call them, so that we can adapt our own consumption when the grid needs it, or when the clean resources are maybe a little bit limited.

Maud Texier [00:30:16] So we had several programs. We started working on that in 2019. We now show our first load flexibility program to optimize for the carbon intensity of the grids, for instance. And I'm hoping we can do more because I do think demand side management is still a big piece of the equation for decarbonizing the grid. And if we can push the envelope for data centers that are critical, flat load infrastructures, I'm hoping that can drive the market signals and also the market demands right on helping us to do more.

Bret Kugelmass [00:30:48] Yeah, it's a great strategy and definitely worth going after. But with data centers growing, what, like 6% a year or something, I feel like we have to tackle the generation. It's not just going to be the demand side. As a matter of fact, at some point we might realize all these demand side savings aren't going to count for much unless we really figure out the clean energy generation side. Do you have the same perspective or a different one?

Maud Texier [00:31:10] I agree. I mean, I think really the biggest problem right now is we're going to need to find a way to get many more electrons on the grid, right? It's not just about the data centers, it's electrification. We need to decarbonize transportation; it's likely going to be through electrification, so that's another load. Now we're talking about green hydrogen. It's a lot of gigawatts of electrolyzers. So I agree with you. Right now we have this big problem that I think we need to really pay attention to, which is we just need more electrons very quickly, more generation capacity very quickly. But then as we go through that, I do think we need to pay attention to energy efficiency because that's going to be a massive lever, right? Whatever we can reduce from a growth perspective, that's really going to help us move faster on these decarbonization cross curves, because if this growth is really unlimited or unbounded, we're just going to delay the transition because people are going to need to build quickly. And what you can build quickly is natural gas power plants and things like that. So that's that's really timely.

Bret Kugelmass [00:32:12] Okay. So what role do you guys play in terms of the picture of getting more clean electrons on the grid?

Maud Texier [00:32:18] Well, as a corporate buyer, hopefully we've been sending a lot of signals that we're going to pay. I would say corporate buyers have created, just last year, maybe 30 gigawatts of PPA. I would need to go check on those numbers.

Bret Kugelmass [00:32:33] And how does the pricing work? Are you guys willing to pay more for clean electricity than other people? Like, how does that work?

Maud Texier [00:32:42] So I think it's that we're giving a value, I would say, to the clean aspect of electricity. And I feel like more and more people are doing that. That could be a carbon price, that can be something else. But kind of like what is the external and internal value of that? The hourly component is very interesting for us because by introducing this hourly value, we can differentiate, I would say, the value of different production profiles. So for instance, we have certain grids where we prefer to go after solar than wind because we are very heavy on wind and we really care about those few hours where we're short in the middle of the day. So this differentiation is going to help us have a different price sensitivity. But the interesting aspect of that also that we didn't realize at the beginning but it is actually a very big argument for us is as we are readjusting the portfolio on an hourly and regional basis with consumption, there is this hedging effect from a financial perspective. And so now we have a better hedge mechanism between all clean energy PPAs on one side, and the cost of running our data center is on the other side because they are more related to the same market. So those are actually the financial benefits for us. It's not just a green premium at the end of the day.

Bret Kugelmass [00:33:57] Yeah, that makes sense. Okay, so what are your options in terms of clean PPAs? You got wind, solar, what else?

Maud Texier [00:34:04] We've got wind, we've got solar, some storage to help us bridge in between. An example of this type of portfolio is for the data center in Virginia. We have a partnership with AES, actually, where they have a what we call the CFE manager contract for us, a Carbon Free Energy Manager Contract where they build a portfolio of resources for us for a certain percentage score that we're trying to achieve. So starting, generally, with 90% and then going higher. And so in this portfolio, for instance, they're bringing us solar and wind, lithium ion battery and a little bit of hydro.

Bret Kugelmass [00:34:42] Is this like a sleeve? Is that the term for this type of mechanism?

Maud Texier [00:34:45] This one is a little bit more advanced than a sleeve, but this is an all in contract, basically. And it simplifies a lot because as a buyer, it starts being a lot of PPAs to manage. And so it's pretty heavy. And so it actually was very beneficial to find partners like AES and others that we've done in other countries since then to simplify that, because that really lowered the barriers to do those types of complex portfolios.

Bret Kugelmass [00:35:10] And do you do similar things internationally as well?

Maud Texier [00:35:16] Yeah, so we started our first Carbon Free Energy Manager Contract with AES in Virginia. And last year we replicated a very similar model with ENGIE for operations in Germany as well. So a very similar approach.

Bret Kugelmass [00:35:31] But you guys are all over the world, right? You guys are data centers everywhere?

Maud Texier [00:35:35] Yeah, we have data centers in the U.S., South America, Europe and Asia-Pacific as well.

Bret Kugelmass [00:35:43] And do you think about these regions differently in terms of strategies to procure clean energy? How does that all play out?

Maud Texier [00:35:50] Yeah, each region had its specific road map in terms of executions and, I would say, access to clean energy and mechanisms. Is it a PPA, is it a utility tariff, is it something else because we have we have no tools available. And also in terms of mix of resources, right? In the U.S., generally, you have a lot of renewable energy. That's also a region that is rich in geothermal, for instance, in certain aspects. So that's why we have, actually, our first advanced geothermal contract in Nevada with a company called Fervo. And then you have other regions that are much more limited in terms of resources. We have a data center in Singapore, for instance. It's kind of an islanded grid with very little physical space to put wind turbines or solar panels. And so there it's going to really take a very defined perspective and most likely is going to be more what we call like a technology leapfrog around hydrogen or around new generations, new technologies for generation.

Bret Kugelmass [00:36:53] Couldn't you just run a cable to Indonesia and Malaysia or something?

Maud Texier [00:36:56] Exactly, or cross-border transmissions. And those are very challenging, not just from a technology perspective but more from like, you're trying to get governments, basically, to agree and things like that. Those are very complex. But I do think those are powerful. Like, transmission and interconnection is just a powerful tool overall that I think across all those regions comes back as something that is underutilized, I would say.

Bret Kugelmass [00:37:23] Now, I didn't hear you say nuclear. I heard you say a lot of things, but I didn't hear you say nuclear.

Maud Texier [00:37:29] So, nuclear is part of our carbon free energy definition as a technology. We are looking at things like advanced nuclear, for instance. We think there's a lot of interesting...

Bret Kugelmass [00:37:39] Why just advanced? Why not current operating plants?

Maud Texier [00:37:43] Current operating plants are part of our carbon free energy, I would say, score and calculations. We don't have a PPA with nuclear power plants.

Bret Kugelmass [00:37:53] And why not? Especially with some of the ones that have run into economic troubles because of the way that markets are set up in the U.S. I feel like this would be a perfect match to solve their market issues and also prevent them from shutting down, keep a gigawatt of clean energy on the grid by helping stabilize the market with these long term PPAs.

Maud Texier [00:38:14] Yeah, this could be a great opportunity. I think keeping alive or extending the lifetime of clean energy assets is as important as deploying new assets. For us, I think as early adopted, we can bring a lot of value into the new technologies because we have a little bit more appetite, I would say, for those newer technologies. And I do believe that they're going to help us with especially when you look at like SMRs, for instance. They can help us solve problems that those massive power plants are not necessarily going to solve. We are definitely supporting them extending their lifetime as long as they're made safe and in the right environmental conditions. But I do think for us, the bigger play is really looking at the next generation of capacity.

Bret Kugelmass [00:39:01] And so how would that work? If a next generation clean energy company wanted to come to you guys to sign a PPA, how does that work? Do you guys have like a target list of areas around the world where the energies are more expensive or higher carbon content? Do you have like a priority list that you're like, "Yeah, if you could deliver this widget to me here, I would pay X dollars for it?"

Maud Texier [00:39:26] So, we're trying to be as transparent as we can. And for instance, we're publishing every year discourse of all our data centers and grids. And so if you look at our 2021 map, well, first of all, you'll see that we're only at 66%. So there's a lot of room for more clean electrons across the board. And then if you look at the regions, I would say, we have... We're lucky we have five data centers above 90% carbon free energy already. So those are generally the regions where either we have a lot of PPAs historically or the grid's actually cleaner. And so that's also a way to recognize that. And then you'll see kind of the data centers that are more lagging. And so those are particularly coming from Asia-Pacific. So Taiwan and Singapore are the hardest to decarbonize in terms of getting clean capacity right now. And then the other spot you're going to see is in the U.S. Southeast, which are data centers that are more traditionally part of a vertically integrated utility territory. And so that's where we have to work more closely with the utility to go and deploy clean energy. And you don't have this liquid access to different energy, different options. It's not just about signing up PPAs; you have to partner with the local utilities to do that, so it's a slower process overall for us.

Bret Kugelmass [00:40:42] Got it, got it. Great. Okay, so as we're coming to an end here, what do you think is just important for the future? What do you want people to think about and what are you going to continue to work on over the next five, ten years to make this a reality?

Maud Texier [00:40:56] Yeah, good question. I would say I think there are three things that are exciting about and we're actively working on. The first one, we talked about it, emerging technologies. I do think we need to make some major strides in accelerating the deployment of those new technologies. So it's like, how can we generate new clean electrons? And then the next question is going to be how can we do long duration energy storage? Or how can we store those electrons, really, to maximize renewable energy and where we can? So how can we accelerate hardware, I would say, is one thing that we're pretty excited about and working on.

Maud Texier [00:41:34] The second one is around data. As I mentioned from my power trading desk days, I think there's still a lot of room to really modernize our energy systems around data, real time optimization and so on. We started doing some work there with AI on how can you better forecast renewable energy and things like that, but I do think there's more to come around can we exchange clean energy in real time, for instance, you and I, if we want to do 24/7, right? How do we do that? So there are a lot of interesting tools there.

Maud Texier [00:42:06] And then the last piece is when we talked about policy and standards. For me, the biggest question right now is how do we make sure that we all are rowing in the same direction. And for that, I think you need clearer guidelines and standards and things like that. There are a lot of appetites and there is a lot of energy towards net zero and decarbonization and clean energy, but we need to make sure that we all speak the same language and solve for the same metrics. And that's going to really help, I would say, magnify the individual contributions into the system level changes.

Bret Kugelmass [00:42:41] Amazing, amazing. Well, thank you so much for all the work that you've done so far. Obviously, you've just had an incredibly interesting career that's taken you to this place. And the way you articulate both the problems and also the ways that you're going to solve them is just amazing. So I just want to thank you again for taking the time to share your perspective with us today.

Maud Texier [00:42:58] Well, thank you for hosting me, Bret, and having this fun and nerdy discussion. Always appreciate it.

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