Grain Ecosystem Advances Waste to Value Energy Innovation

Hi and good morning.

I'm Jeff Guterman, and this is the Impact on FinTech TV down on the floor of the New York Stock Exchange.

I'm joined this morning by Jason Dodier, who builds and scales ways to value infrastructure platforms at the intersection of energy, data centers, industrial assets, focused on converting power constraints and underutilized materials into durable, contracted real asset cash flow businesses.

He's the co-founder.

And Chief commercial Officer of Green Ecosystems, a Schneider Electric Ventures, backed company enabling asset owners, developers, and institutional investors to deploy repeatable biochar, energy, and waste to value infrastructure, bringing a global operating perspective shaped by living and working across the Middle East, Africa, Europe, and North America.

Jason, welcome to the show.

Delighted to be here, Jeff.

So, we always like to start the show here by really finding out a little bit of people's background journey, and you didn't really come to this through the typical investment route or anything, so, give our audience a little indication of why you're focused on impact, why you're focused on doing good, where did that impulse come from, or the turning point in your life.

I think about it as if every action you take in life is kind of a vote for the person you want to become.

So at a very early age, and this goes back even to when I was in college, I had roommates that were from all over the world, uh, particularly from Middle East, Africa, uh, India, and my Experiences early were how do we find efficiencies?

I saw there were a lot of gaps.

I realized the role that emotional intelligence could play in bringing groups together and finding systems related solutions.

And ultimately, there was an incredible company called American Power Conversion.

They were one of the first to really do critical power and cooling.

They had the idea back in the 80s to basically use solar for batteries in UPSs.

I was very fortunate with an internship there.

They were succinctly acquired, acquired by Schneider Electric in 2007.

And that really brought me to the next level of my career, roles internationally and exposed me to access to energy and a lot of the intangibles that have driven the work that we're doing today.

But it really started in my home state of Little Rhode Island, small state in the US.

So you wind up working in biochar, and we've talked about biochar once or twice on the show, but every time we talk about it, I'm not convinced that our audience leaves really understanding biochar.

So can you give us a little bit of background on biochar before we really dig into the subject?

Absolutely, Jeff, and.

The fascinating thing is biochar has been around for such a long time, and I remember seeing it in my travels, filing it away, but being really impressed by how it was being leveraged in those communities, and then living in France during the Paris Agreement, when you start to see the discrepancies between avoidance and carbon removal, biochar emerged as something that we believed was going to be at the forefront. char is really straightforward.

When you take cellulosic organic waste, think agroforestry, uh, you know, woody biomass, pistachio shells, and you're heating these things up in systems like pyrolyzers and gasifiers in limited to no oxygen.

What this does, it creates a rich gas, a syngas that could be leveraged for electricity.

And then the biochar, you've got a very stable permanent carbon source that could be used in things such as soil, water filtration, you know, PAST remediation, uh, and it could be used to inject into things like green steel, which is red hot right now, and other elements, asphalt, concrete, etc.

So it's really this process of taking that waste and you have so much of it in the US and then reusing it and the utility value of biochar is fantastic.

So we talk a lot, especially on the show lately about commodity super cycles and the difference between resource availability, supply demand versus constraints and security issues and global security issues that are now driving commodity prices as well.

You started thinking about energy more as a capacity and constraint issue a while back.

Is that what led you to start grain?

It was one of the big drivers when we looked at and we were really fortunate that we had the lens of Schneider Electric and then subsequently I helped to uh really lead up a group between the Carlisle Group and Schneider Electric to do energy as a service.

So I got to see what big infrastructure projects look like and what the constraints are there, particularly when we worked on Terminal One here uh at, at JFK.

And when you see those constraints and you realize there's so many other variables that go into that, whether that's transmission distribution, it's, it's regulation.

It's permitting carbon becomes an inherent constraint.

You can't clear these solutions with just offsets alone, which is one of the cores of grain is we'll go to the hyper scales, we'll help them to hit their net zero ambitions, which they're still very, very much looking to achieve by 2040.

So that was one of the drivers here is we could take something like a waste to value, waste to energy, and it could be in front of the meter or behind the meter, and then you can layer in all these other elements because with a biochar project, you essentially have investment tax credits.

You've got.

Electricity, you have the physical product, but it helps to bring this element of resilience, which is the nature of a lot of the discussions we have.

It's a waste of value and resilience play tied into that and creating these commodities.

So talk to us a little bit with all the pressure, especially in the United States, on anything climate related right now, does this still work without carbon pricing ultimately?

Does it still work without support from the administration?

One of the Reasons that we really enjoy this space is it's very bipartisan so I do a lot of work today on the Hill.

I spent many years in DC working in the data center space.

Earlier I worked, you know, did some work with the Green Grid on power usage effectiveness, and you look at the kind of the intangibles that go into these projects, Jeff, and the, and the, the answer to your question is essentially most people that reach out to us for projects have a waste problem, so they either have regulatory issues, they're burning a lot of cash, they've got opex constraints, so they're.

To figure out how do I deal with this waste issue and the carbon credits in a lot of cases, if you, if you clear additionality hurdles, they can be a great additive.

And as I alluded to earlier, the way that I see things going today from my lens working so long in data center and energy, I see a world where just the hyper scalers alone are doing roughly $3 trillion in revenue by 2030, and that means, you know, around $0.5 trillion in capex.

So when I go back to being carbon being constrained.

Teams have to be ready to address that, and that's kind of an element where we come in.

So regardless of carbon markets, where carbon markets go today, just for the audience to understand, the voluntary carbon market, 93% of deliveries are tied to biochar, which means that these are projects that are actually producing, they're delivering, and they're sequestering carbon.

So it puts us on a really positive track.

And again, it's one of the few things I've seen policymakers on both sides of the aisle agree that this is a great input output where again from a utility perspective.

A dollar in creates great economic return out and it's great for these communities that are depleted both from a water and soil perspective and and other uh key resources.

So talk a little bit about grain ecosystem.

Why the name?

Why the title?

Um, give us a little bit more breath on the company.

The first thing really is we didn't want to have carbon in the name.

There were so many, if you remember that period of time where companies were getting stood up, there was a lot of companies that had the name carbon.

We thought that would be a bit for our audience a little bit disingenuous because.

The way we saw was, you know, grain is this individual thing, but when you put it into an ecosystem, it's like a grain of sand, it becomes a lot larger.

You pull in other resources, you build feedback loops, and we didn't also want to be seen as an organization that was just focused on a project by project basis.

We really wanted to be seen as builders and aggregators to pull different groups together and really build infrastructure platforms.

I think that was the myth early on in this space was.

So it was maybe a project that was looking to $5 to $10 million in capex.

We're really focused now on building these platforms that are having projects that can scale out and are looking for $50 to $75 million and grow from there.

So it's this little grain of sand expanding and growing, and we've seen what's happened in the last 4 years, particularly in the, in the biochar market.

It's been, it's been more than we had anticipated originally.

So you got one side of it is the waste issue.

The other side of it is these data centers that are being.

Literally populated all over the planet as fast as we can build them, but what's the constraint on it?

The constraint is the energy, the water that we need to actually drive the data center usage as biochar come in as a play there, especially as the administration is pulling back on permitting for renewables.

So there's a couple of things I would point out, and I would go back to one of my favorite paradoxes, which is Jevin's paradox.

And essentially, and even if you listen recently to Jensen Wong's talking about efficiencies with cooling, he recently talked about we would potentially be able to get rid of chillers and bring in warmer water to cool, and that would drive down 6% just on data set.

So PUE power usage efficiency from 1.5 to 1.2.

So as I look at the space and I think about the efficiencies of bringing in the waste component and going behind the meter, that's really the element I see us embedding carbon into these solutions.

They become more of a balance sheet risk.

Initially it was OK, we all these companies have goals that they have to hit and had zero goals.

It shifted from kind of the ESG play.

So today it's data center, energy, and then.

Sustainability, it's for us we view it as a balance sheet element.

So our ambition is how do we play on the balance sheet, how do we drive down the cost, and how do we embed carbon into the operations and how do we be ready.

So I think the last time we had 12 consecutive years of Republican, you know, Republican leadership in the White House was probably Reagan and Bush.

So things will change.

You never want to make decisions based.

On the stroke of a pen, and that's something we look at as well.

So we know projects are happening right now.

They need resilience and one of the things I'll just add with Biochar that's really nice is when you have these systems you can have either an ORC organic rank and cycle unit where you're capturing, you're taking more thermal spinning generators, driving more electricity, to create power purchase agreements and wrecks, so that.

Appetite is there, and we just want to make sure that we're continuing to do good work so that we can grab a hold of it and people aren't standing there looking for solutions when things do shift and they're gonna need to have high quality, high integrity, transparent carbon removal solutions.

And then layer that with the fact that you have AI centrists that need 24/7 on energy demand.

Where do you see this falling in the energy stack?

Well, I, I think it's, it's going to be a critical element in the energy stack.

I always talk about redundancy.

That was the big driver in the early days of my data center work was N+1, N +2, tier 2, tier 3 data centers, you know, the 57, 9s.

So this is just another way to drive that resilience into the value chain.

And when we look at a lot of the work we do, it is.

In the middle part of the country, so places that do have access to a lot of waste, you don't have to distribute and and drive those waste streams from a pre-processing, processing, post-processing different places, and it's very tangential with other solutions whether that's combined cycle gas turbines, combined heat and power, or you're looking at other elements like SMRs, you know, small modular reactors.

And new solutions that are gonna be driven from from wind and solar.

Solar's been the clear, better, faster, cheaper solution today when you look at efficiency drivers.

So we've just positioned ourselves to be playing in that stack very, very efficiently, and we enable the solution providers to make reversible decisions quickly as they're evaluating their balance sheet needs going forward.

So take us into the future.

AI reshapes the whole order system.

What, what do you see in 5 years for the industry that you're working in?

It's so industrial automation is gonna play a big role.

It doesn't get enough, we don't talk about it enough, but as I, I visited probably over 90 different sites around the country.

These are large sugar mills, large dairy farms, all of them are in somebody's value chain.

I see a lot of them going to, obviously, uh, monetization and automation of programmable logic systems, skater systems.

So a lot of that's becoming open source.

So I think that's gonna be something to watch all the companies that come in to help enable as you map in all the different resources and all the different platforms and systems these organizations are run on today.

I'll be looking for large organizations to play a role when it comes to automation and industrial control systems.

This is one of the industries I think that a lot of these folks in the value chain have felt left behind by industrial automation and control systems, and then more broadly, as I said, those are just my statistics earlier when it comes to the, the big hyper scalers when you look at where those companies are going.

I see 10 to 12% of GDP in terms of in the US data center demand, and I see, you know, you look at what just happened with Venezuela, but natural gas could potentially be doubling from a petawatt perspective.

I think we're going to be at 45 to 50% natural gas.

Usage in 5 years.

So, at Green, we have to figure out how do we buttress that and how do we play, play a role with all of those things to come.

But I think that uh we got to be watching the space quickly, look at efficiency, look at Jevin's paradox, and ultimately, it's a balance sheet play for the work that we're doing um at Grain Ecosystem.

So talk a little bit about raising capital.

Um, you've got everybody throwing money at every AI solution out there, even if it's AI for your underwear.

People are willing to throw capital at it today, but, you know, lots of people talking, especially going into this year about AI maybe being in a bit of a bubble.

But the background for that, the AI centers, the buildout of all that, the grid infrastructure.

The the picks and shovels, do you still see that it might become an easier world to raise capital on that side of the market going into the next year as investors maybe get a little bit tired of the AI play alone?

I see two angles.

So coming at it first from now the lens of an entrepreneur.

We in, in the entrepreneurial space, which is part of the picks and shovels, the technology, the software, and the physical infrastructure, we're, there's a big mix right now between venture capital and then growth equity, growth stage capital.

So that middle ground, uh, we're seeing some organizations actually, uh, private equity and others looking at that space more carefully.

Without that, that's a big issue, and a lot of companies that are, that are world class at building, particularly European companies that are in our space, they pulled back on commitments to manufacture in the US because of some uncertainty.

So you talk about picks and sho shovels in terms of actually being able to take, process the waste, and create the outputs that we need to be successful, that does get me a little concerned and I'm not seeing investment move as fast in that space in our world.

To flip it on the, on the AS side, I mean, again, going back to the scale element of the whole part of the story.

If you look at LLMs in training, because costs are going down, more data centers need to be built.

I would, I would say that I'm seeing a lot of investment going into edge data centers.

So these are facilities that are not potentially centrally located in the cloud.

They're on premise, and then the role of the prosumer is one that I'm watching extremely closely.

These are individuals.

You know, they might have a powerwall at their home to do electrification for their, let's say their their Tesla or their EV vehicle, and they're able to produce and potentially sell back to the grid or share in those communities.

I think of the early, you know, Sonova or Sun Edison kind of financial vehicles that drove that marketplace going forward.

So I think.

And then obviously overall of this is the role of national security, and that's why this is a lot different than the dot com, you know, times where money will have to continue to be spent.

I just think some of the predictions I've seen on certain technologies are a little bit farfetched in terms of, you know, being able to actually execute and get live where the work we're doing, it's proven we could do it at a scale.

We just need to find that those middle dollars, and, and that's one of the reasons to go back to what you said a couple of questions ago.

The carbon credit part of the story is so critical because if you have a big player like a Microsoft underwriting your project, that can drive in some of the traditional debt, equity structured credit that you're gonna need to be able to finance and underwrite these projects at scale.

And you see a lot of these companies like Microsoft jump all the way to the far end into the nuclear place and put investment there.

When you're talking about, you know, minimum 78, 10 year cycles to even get that energy available, do you think eventually those people start dealing with the fact that we need short-term solutions, and do you think they, some of these big companies stay with their net zero commitments?

So, The two-part question.

The first part is my observation doing micro grids.

Absolutely.

The reason, one of the reasons micro grids is so paramount is because of the fluctuation in values of pricing, pricing for energy.

We saw it with the polar vortex in Texas.

That was one that really hits home and obviously, I was so proud to work on Terminal one for a lot of reasons.

One of them was Hurricane Sandy.

You had security risk, but you also had this inconsistency in pricing structures.

Spot, etc.

So there's a huge demand and push, not just for resiliency but for price certainty to build behind the mirror.

So I think that will continue to scale and that of course there's a lot of money and the US government even investing in companies like Intel and other institutions that control the supply chain of critical, critical minerals.

So that for me is really the big driver when you look at the whole thing.

I think this continues to move.

There's lots of capital and I see the same trend in the space that we're working on because I look at the early innings of solar, wind, storage, and geothermal.

All these companies emerged where you had a technology specialist like a Schneider Electric, and then you had a capital provider like a Carlisle.

So you saw companies like Alpha Structure and Calibrand, so these organizations coming together because you can't expect as a publicly traded company, you can't expect your investors to take balance sheet risk.

So you have to do what you're good at and find ways to deploy that.

Capital and bring in the capital providers.

So my gut tells me in looking at pattern recognition and market cycles, Jeff, that's probably where we're going.

You're gonna see more of these joint venture structures, more development companies and operating structures to drive capital, and I'm hoping we're gonna see a lot more of that in the space that I am in, which is the, you know, waste to value, waste to energy infrastructure, and, and broader biochar play.

Awesome, Jason, thanks for being on the show today.

I look forward to the next one.

Thank you.

That's it for the impact on FinTech TV.

I'm your host Jeff Guterman.

Until next time.