 Good afternoon. Howard Wade, Code Green, Think Tech, Hawaii. It gives me huge pleasure this afternoon, too. Welcome to the table. Nick Dizon, president, CEO, and everything else of NIDON Clean Energy. Nick and I go back longer than we either of us would care to confess. Suffice to say that when it comes to clean technology, Nick is not just on the cutting edge. He is the proverbial tip of the spear. Today we're going to look at two of his new technologies, Simplify Energy and... Let's see the other one. Sun track. Sun track. It's not just solar cooling. You're going to have your socks blown off by this. So welcome to the program, Nick. Thanks, Howard. Yeah. So let's talk first about the Simplify batteries. Why are they called Simplify? And they are unlike any other battery on the market, I believe? Pretty much. The only comparison that comes close to them previously was the Aquion batteries. The Aquion filed for chapter 11 about three weeks ago. The difference being is there's a criteria that we look for in batteries. Number one is that there's not a penalty for 100% discharge. And we want a minimum of 3,000 plus cycles. Because the only way for energy storage to have value is to pay for itself. And the only way it pays for itself is if you discharge the battery heavily every day. We're one of the few groups maybe in the world that's actually doing energy storage for both commercial and residential with a return on investment of five to seven years or less. Yeah. And let me clarify that a little bit. Batteries don't come cheap. So you've got to reap. You've got to get your money back. And in this case, it would be day after day after day. Say you're renting a hotel room. The way you get your money back on a hotel room is by hopefully renting that room every day. The more days in the year that you rent, the better your return. In this case, the more days that you can cycle all the way down, meaning you start off with at 100% energy and you get pretty darn close to zero, then that's one day, then you recharge, you get down to zero. That's the way you get your return on investment. Correct. The beauty of these batteries is that depending on the customer situation, every design is different. You can't look at five houses or five businesses and have the same design. Simplified batteries, the simplify means they're easy to use. And the way that they're easy to use is they have a high amperage draw capability per individual battery. They're wired in parallel without getting overly technical. Design-wise, these batteries are easy to work with and they're difficult to hurt. Let acid batteries, you can kill them pretty quickly. Most lithium-ion batteries, you can kill them within a year and a half. Simplify is a lithium-ion battery, but it's a lithium-ion iron phosphate battery that has a proprietary design that prevents it from thermal runaway, the formation of dendrites, and other things that reduce the life of a lithium-ion battery. Now, by thermal runaway, can you put that into more plain English? Well, thermal runaway is a condition where the lithium-ion battery due to wear and tear of high-amp charge discharge cycles suffers an internal breakdown which can result in a short or a conductivity within the lithium-ion battery resulting in a potential fire, which is thermal runaway, which you've seen with some of these smart phones, batteries that were carried in airplanes, things like that. That's a serious situation and we don't recommend lithium-ion batteries lightly. So in our selection of the Simplify battery, the thermal runaway fire safety issue was paramount, right there with depth of discharge. It's great if we can cycle all the time, but if it's a fire hazard, we don't want that liability on ourselves or we certainly don't want to do that to our customers. And it doesn't help the industry, one ensy-weensy little bit, when there was that infamous Kahuku fire. I don't know how many years that set back the whole storage battery industry, because that made national news. Well, there was a chemistry problem and it was a known chemistry problem. All batteries other than pump storage rely on chemical reactions. And when you're imposing high-amperage, repetitive cycles on chemistry, you have to make sure that chemistry is designed to meet that overload situation. And frankly, there hadn't been enough research done from what I could see that they had taken that into account. We test relentlessly before we sell. And as a result, the systems we put in, be it lead acid or Sony lithium-ion, cobalt manganese, which we have done, or iron phosphate or salt water, we've customized the design to the discharge-discharge capability of the chemistry to the discharge-charge loading profile of the load and the recharging source. That tells you that phrase, a four-letter word describes that phrase, math. Lots of math with a lot of variables that are unique to a particular situation. And if you don't do that, you invite a lot of problems. Absolutely, yeah. And maybe a good analogy of test, test, test is when a new plane comes off the out of the factory, those guys don't say, oh, here it is out of the factory. Let's load up our passengers and take off here. I just can't imagine how much testing there is of a plane. And while testing batteries isn't the same life-death situation, it is potentially a very serious situation. And these customers have put a lot of money into this thing. They don't want to have it conk out three months down the road. Right, and simplified batteries, a 3.4 kilowatt hour battery is going to cost you around $3,000 plus dollars for one battery. Therefore, to recapture that value, you must use that battery regularly. Whether you're using the Tesla wall or the Blue Ion, Sony battery or LG or Samsung, in most cases, those are being designed as backup where the battery is hardly ever used. And the chemistry in those batteries lend itself well to backup, not daily heavy discharge. If you subject those technologies to heavy daily discharges, they won't last that long. You'll be lucky to be at 80% capacity in a year and a half. It'll probably be much lower than that. Simplify, on the other hand, can do 100% that the discharge. It comes with a rating spec from the factory at 10,000 cycles. So a single cycle a day is over 27 years. That's crazy good for a lithium-ion iron phosphate battery. The other thing about Simplify is their customer base has burn tests proved them in, and that's primarily DoD. The Marines have been heavy users of Simplify batteries in the worst of conditions. Did they put them out in the battlefront? Oh yeah, these are in rough, rugged, isolated conditions. If you go to their website, they sell a lot of mobility stuff for field construction sites and things like that. Of course, military units using it for whatever mission. It's a portable source of power that is hard to beat. So Simplify has a revenue base that's better than a lot of their competitors because they meet mill spec. They're out there on DoD jobs. Yeah, and think of them on the front lines of Afghanistan, Syria, whatever. And that brings up another point where in the early days of the Afghan war, they were still using oil as a power source. I won't describe how they had to get it up there, but the oil by the time, a barrel of oil by the time it got to the remote hills of Afghanistan I think was over $1,000 a barrel. Well, when you're under fire too, your convoys are under fire. You've got to pay all these guys big bucks to drive those trucks. Yeah, I could see that without even processing it, just transporting it was a problem. But Simplify has come up with a superior design. Their marketing strategy of getting it mill spec and into the DoD means that they now have a strong revenue base that sustains them with which to begin moving into the residential commercial private market. So you can scale all the way from residential, a single family home, all the way up to what's an example of a large customer? Well, you can do that with almost anybody's battery, but again, the math that's involved to design and make sure that what you're doing is going to work. And when you go from residential, now we're not dealing with small motor interest currents that are single phase. When we get up to commercial, we're dealing with 208 or 483 phase. Now those batteries by themselves may not be the best solution. So we're a little different in that we design power electronics interfaces and controls where we may combine two or more storage technologies in the same power electronics. So it's like you're protecting the batteries from high motor inrush current. You're having that absorbed by capacitors or a flywheel or a motor generator. And once that surge is passed, it hands it off to the lithium ion batteries, the Simplify batteries. So it's an elegant, cost-effective solution where your power quality, the variations in your load are all accommodated. Again, like analogies here, a good analogy might be a really good front bumper system on a car where if you hit something at, say, five miles an hour, if there weren't a good bumper there, boom, you're going to have some pretty serious damage. But the bumper is designed such as to be a cushion and absorb that energy. And the same with the technologies you're talking about here. They absorb that inrush of current. And then once it's smoothed out, then the battery can take over. That's exactly what it is. It's a shock absorber because when a three-phase motor starts up, even if it's under variable speed or variable frequency control, if you have enough of them cycling at the same time or you could get this inrush current, which also makes your demand charge rate higher with utilities, so you pay thousands of dollars more for those. So the shock absorber takes care of that spike so the utility never sees it. It never damages your equipment or your storage. It's all handled by the design of the power electronic to the batteries and the software. And we need to take a break very shortly, but when we come back, I want to get your perspective on the future of storage batteries in Hawaii because we have become a test bed in many ways. And the mainland looks to us. So let's talk about that when we get back and then we'll get into Sun Trek. Take a break. This is Howard Wig Cold Green with the Honorable Nick Dizon. We will be back in a moment. Aloha and Happy New Year. It's 2017. Please keep up with me on Power Up Hawaii, where Hawaii comes together to talk about a clean and just energy future. Please join me on Tuesdays at one o'clock. Mahalo. Hey, Stan the Energy Man here. Join me every Friday here at Think Tech Hawaii, where I bring up to speed on all things new and exciting in the world of energy in Hawaii, especially hydrogen, my favorite thing hydrogen. I can always talk about hydrogen. You probably wonder what Stan the Energy Man does when his batteries are low and he's out of energy. That cabin you see in the background is where I go and run away to. That's on the Big Island up in Hamakua. And I'm building a cabin up there so I can go up and just kind of commune with nature. And that's where I was this past weekend, listening to cows and pigs and pheasants and birds and turkeys and just collecting my energy. So if you want to look at some of your own energy, join me on Fridays with Stan the Energy Man here at Think Tech Hawaii on my lunch hour and we'll fill your batteries up too. Aloha. Good afternoon again. Howard Wiig, Code Green, the Honorable Nick Dizon, and I are getting totally absorbed in batteries such that we didn't show the battery photos. So what in the world is this here? Yeah, this is a parallel array of eight simplified batteries. I believe these are the 2.4 kilowatt hour batteries going to a sunny aisle battery inverter. So this is like a typical residential installation. And the nice thing about it is these batteries are capable of up to 80 amps per battery. So that's four times 80 amps of immediately available DC power. That's more than you need in a typical residence. Oh yeah. Same thing with this one here. It's a similar setup. As you can see, it's set up in an all-weather NEMA3 and it's outdoor. And then we got one more. Yeah, this is more of a commercial setup where you have looks like three outback 8000 watt inverters in parallel. So this is more of a commercial. This may be a 208 or 483 phase solution. Those are the 3.4 kilowatt hour batteries back there. Again, you can see it's very compact, size-wise. Yeah. So the energy density, the amount of space you have to take up, this is a very friendly design. So in my, just to look at the larger picture for a moment, I read all kinds of energy-related materials, as you can imagine. And the word storage, storage, storage, smart grid, small grid. And in my mind, these grids that are largely offline or completely offline, they absolutely, positively, must be accompanied by batteries or an integral component of these smart grids. So how does that work in a real tight nutshell? Well, you're exactly correct. You have to have energy storage. But what's limiting widespread adoption of energy storage in both residential, commercial, not only in Hawaii but worldwide, is the ability to do the math to design. That training, that education which spans chemistry, physics, electrical energy, there are multiple disciplines involved to design this. And there is no school that you can go to that teaches that. We have our own training program, so we're teaching that. But it's not easy to learn. And that's why batteries have not taken off because we think of batteries as being as easy to use as in a flashlight. Well, in a home or a business, it's much more complex than that. And if you're interconnected with the utility, it's even more complex. So that level of understanding is not widely out there yet. I introduced you as being not just cutting edge, but the tip of the spear. And I think this is a perfect, perfect example of that. But we can expect batteries, batteries, batteries in the near term and in the longer term. And I think we can also expect a lot of mishaps. This type of battery does work, this one doesn't work, and some people are going to fold. Yeah, and it happened to Aquion, but I think it was more of a marketing problem. We explained to them over a year ago that if they didn't set up a training program, we called it the University of Aquion to teach people how to use their batteries, that that would be a problem. But that's true for Simplify, Samsung, LG. Right now, Tesla is taking the bull by the horns by selling this complete system. Which works, especially if it's only battery backup and you minimize the amount of discharge that it does. It will work, but it won't be cost effective yet. The only way to be cost effective is an ROI that's less than five to seven years. Yep, yep. And on that cheery note, let's get to your next technology, SunTrack. And here are some guys on the roof. What in the world are these guys doing here? Well, several years ago, this solar air conditioning, solar cooling theory came about. And it actually does work. What you're doing is you're taking the refrigerant that's coming out of the compressor and you're heating it up. Yeah, it's hot to begin with, isn't it? Right. So what you're doing is the refrigerant coming from the compressor goes into a solar panel effectively. And the goal of that is to have the intelligence of the system realize at the condenser side that the heat and pressure coming in is such that it tells the compressor to slow down or drop it stages of operation. Because the Sun is doing a lot of that work. Correct. So in the morning, you don't have the Sun yet. The compressor starts to work. It does it. As the Sun comes up, these panels start heating up the refrigerant line. And now the condenser intelligence passes around to the rest of the inverter-based system that, hey, I don't need, you know, the temperature is good. We can back off the operation of the compressor. That's the easiest way to explain it. And so what's going on with our slide here now? Well, this here is a SunTrack solar panel. Now this uses concentrated solar. There are troughs in there, long six-foot troughs that track the Sun. There's a stereo photo eye there that tracks the Sun. And then there's refrigerant lines that are running down the middle of these troughs. So the original idea that came out was vacuum tubes. But vacuum tubes leak over time. That mismatch material, diurnal heating, it's just troublesome. This, on the other hand, is very, very simple. So are these individual, we see what, six panels here, do each individual panel track the Sun? Correct. Within the, yeah. So we, these are angled towards the south. And they are designed to track the Sun. So usually by around, if we turn the AC on at 8 o'clock, by 9.30, this thing's having an impact. So we're seeing up to a 40% decrease of amperage going to the compressor. 40%? That's substantial because in many buildings and even in many centrally air-conditioned homes, the air conditioner is the prime energy user. The number one energy user in the state of Hawaii is air conditioning, followed by refrigeration. The thing about it is a 32 square foot panel, which is what this is, is the equivalent of almost 250 square feet of PV. So of course it's also more efficient to do thermal to thermal versus electrical to thermal. So there's a huge space savings on the roof. There's an efficiency gain, right? And then the other thing about this is it's interesting is, SunTrack, you know, if you go to a fairly new Mitsubishi or Fujitsu split that's been in for two or three years, this doesn't ruin the warranty. In fact, the warranty from SunTrack covers the entire air conditioner for another five years. Because you're using the air conditioner less and you're not forcing it to go up to max. Correct. So the wear and tear on the compressor is cut down, but you are cutting into the refrigerant circuit of, let's say, an existing or brand new air conditioner. And SunTrack went far in their warranty work to make sure that they could warranty an entire system. So we're looking at doing systems that are beyond their warranty. They're like six, seven years old. They are running R410A. They are inverter based. They do have intelligence. And we piggyback these systems in and an air conditioner that didn't have warranty now has five years. Yeah, it's what reminds me of, say, you have a car and the car's first owner is a teenage male. And if you remember your teenage male driving, as I remember my teenage male driving, you're giving that car a priority gosh darn good work out. And if you don't crash, thank goodness, I don't know if you crashed, I didn't know why. But you're really driving that car hard. Now the boy goes off to college. The car gets sold to a little old lady in tennis shoes who just basically goes to the supermarket and to her grandkids and to church. And she drives it very, very gently. So the before and the air conditioner might be it's going up and down, going to its max. Now it's more like being driven by that little old lady in tennis shoes. Correct. And it has an actual warranty backing it up. In addition to that, it qualifies for the federal solar tax credit. So the return on investment on this thing is less than two and a half years. How about the state tax credit? We actually are hiring an attorney to see if the state tax credit will apply. I don't know why it wouldn't apply. Because it's using the same, the language, the PV solar credit applies to it so we would hope that the state would apply to it too. Many, many years ago when the solar fans first came out, PV with the fan in the middle and it exhausts the attic air, I worked with the tax department and got a credit for it. Right. It took benefit because I put one on and I got that tax credit. Yeah, so many people did. Oh yeah. Let's do one last slide and then go into more generic. Now what are you, it looks like you're trying to market this thing and what's this Mitsubishi business here? Right. Now we actually were looking to do air conditioning, the DC side like what a lot of other companies have been doing and at the schools. So we took a look at those but the variations in the design and the models and the parts were too wide. Meanwhile, we've been taking houses off grid since 2014 that were running Mitsubishi splits and frankly you just can't be more energy efficient than a Mitsubishi split. So we actually partnered up with Craig's Air and it was Craig's Air conditioning that actually had me check out these SunTrack Solar. When he first called me up about it I was like nah, I don't want to do that but I went and saw it was concentrated solar with those troughs so there's nothing to leak, very little to break. Electrically we're running on 24 volts DC and other than chopping into the refrigeration circuit and adding five pounds of charge, we're not that invasive. It's very low hanging fruit, simple stuff and it can scale up to chiller plants. So we can do splits, we can do package units and we can scale up to chiller plants. Imagine a 200 ton chiller plant where we're cutting the energy by 40%. That is a major, major cut and what comes to mind immediately is schools we're cooling the schools but I don't think that it worked because schools have so few operating hours a year. Most of the time the system would just be sitting there doing nothing. You wouldn't need to cool it. During the summer months that's true. I would submit to you that if we have more PV and these kind of systems at schools maybe now multi-state uses could create more value out of these schools for the DOE or for the state. That gets into a more creative area above my pay grade but the thing about it is it gives you the opportunity to more heavily utilize your facility without costing you a lot. Now in a business if you're cutting your costs down on air conditioning and your business is open from 6 a.m. to 5 p.m. 365 days a year. That's right, now your energy savings will really start kicking in and of course you get accelerated depreciation as well. And we're just about to leave but final phrase track record this technology has a track record? Yes it's been around for about three years it's mostly been on the mainland only in the past several months has it been brought here so Craig and I are actually driving this locally. And I might point out that air conditioning is a bigger and bigger slice of the energy pie because as LEDs come online they're getting better and better, the controls are great so lighting used to be a big slice of the energy pie it's getting smaller smaller smaller so this is the opportunity to get that AC slice of the pie. That's the big one, that's the big one, yeah. So on that cheery note we're just getting warmed up so to speak but we must say bid fond du again Think Tech Hawaii code Green Howard Wig with my esteemed guest, Nick Dizon President of NIDON Energy Clean Energy back next time thank you very much Nick. Thanks a lot.