 My name is Yi Chui. I am the director of Preco Institute for Energy and also the director of Sustainability Accelerator. It's my great honor to introduce Mike Morgan. Particularly, Mike has been serving as the co-chair of Preco Institute for Energy Advisory Council for a number of years. Thank you for all your contribution to Stanford Energy. Your advice has been amazing to help us to build up this whole ecosystem. Mike is currently DCI, that's the Distinguished Career Institute Fellow. Oh, a big fan here. Make it harder now. Mike has been doing clean energy, the energy transition investment for quite a long time. From the title right here, you will be able to tell, right? He will have quite a lot to share with you. He's a co-founder, partner and chairman of Triangle Peak Partners. He has been also serving in three public companies board. Oh, you have so many job titles right here. But I'll just mention one more. He's the former president and currently director and the king of Morgan. With this introduction, Mike, tell us about the 30 years experience. My clicker is not working, so I'm going to be a little bit tied to the computer here. But again, thank you. Appreciate you being here. Quick disclaimer before we get started. This is very much about my lived experience as opposed to the excellent peer-reviewed research that you're used to receiving at these kind of things. I'm not here on behalf of any company. I'm going to tell stories about three different companies that I've had a long involvement with, but I'm not speaking on their behalf in any way. Everything's public and all opinions are my own. Just quickly because we're all products of our own experience. And so on this page, briefly is mine, but I come at this from a lot of different perspectives. Started my career at an electric utility, small electric utility in Indiana. Went on to do energy consulting at McKinsey. Helped, found a company called Kinder Morgan that is one of the three companies I'll spend some time talking about. Have spent the last 15 years with my partner in the fourth row here, Dane DeGroff, doing Triangle Peak Partners, which is energy and tech venture capital. And then have been a board member and early stage investor in Sinova, which is residential solar. They've been public for about four years. And also STEM, which is larger scale storage and solar. They've been public for about two years. So that's a little bit of my background. I bring a lot of baggage to the party. And so that's what you'll need to know. Before we get going, I am mainly going to be talking about rich countries and rich country energy problems because that is where my background is. That is not, it is a pressing problem, but there's a much bigger pressing problem in the world. And that is there's about a billion people in the world without electricity. There's about two billion with inadequate or unreliable electricity and about three billion that still need clean cooking solutions because they're using firewood, dung and charcoal. And I think it's really important to keep that in mind. As we go through this today, as I like saying, we must learn to feed ourselves before we cook ourselves. So anyway, but with that imperative out of the way, let me talk about what I'm going to do today. So I'm going to quickly hit on four big themes for investing in the energy transition. So what are we looking at when we're thinking about companies or strategies that can be effective in the energy transition? I'm going to tell three very personal stories about these companies. And because I got on the 432 framework, I'm going to keep going with it to suggestions on for regulators, reformers and activists, a brief overview of the energy venture market right now, clean tech venture market. I do want to leave a lot of time for Q&A. So I work much better at Q&A than I do on prepare remarks. So please feel free to do that. Okay, four big themes, trying to make this as straightforward as possible. The four big themes, time, freedom, storage and the sun. And let me hit the first of those. So time. Time is not our friend, right? We have to decarbonize quickly. I think everybody who's spent any time studying energy and the environment at Stanford probably agrees and appreciates that. The thing about energy transitions, they take a very long time. The time scale is decades, not years. One important mistake that often happens is people think more new energy means less old energy, that's not always the case. And importantly, and the thing that's really, really hard to estimate and has been terribly difficult over the last 30 years, is the relentless pace of technological improvement and its effects both on old energy and new energy. And I'll talk about that a little bit in the context of the shale gas revolution. Time. So if you take a look at this chart, you know, it really takes a long time for energy, new forms of energy to get hold, took coal 60 years to achieve 50% share, oil 60 years to get to 40%, natural gas 60 years to get to 20% and nuclear energy about 80 years from discovery to any kind of reasonable deployment. Beyond that, if you look forward, that was looking back. If you look forward, this chart, if you look at the left, sorry, the bars here together are the year 21, 2030, 2040 and 2050. So each segment is that time scale. But population, this is now U.S. Population in the U.S. expected to grow about 13%. GDP about 89%. Renewables, big growth, about 101% in the light green there. And then natural gas and oil products really growing in line with population. So still growing. This is the EIA forecast. Okay, that was time. So the other big thing to think about as we go through these stories is freedom. And this is kind of a different one. And the thing that I've been struck with is how important freedom has been to consumers. They want to make their own decisions about how to deal with affordability, reliability, security and sustainability. They are very resistant to central planning, government mandates. And I think particularly in our current era of anti-institutionalism, it's a really tough era in terms of that. So you have to keep consumer freedom of choice in mind. The other thing, and I'll spend some time on this at the end, free financial markets have a really interesting way of innovating. They've done it over the last 30 years. They've taken financial products that were designed for one use, applied them in the clean energy context, sometimes with good effects, sometimes with really bad effect. Storage. I've got the guru of storage sitting here in the front row who introduced me. But storage is just absolutely critical. So it is the critical thing to solve the intermittency problem of wind and solar. Affordable long duration storage. There was a day on this last week during energy solutions week is really the holy grail in terms of bringing a lot of this together. But the problem is NIMBY, not in my backyard, banana, built absolutely nothing near anything anywhere. I didn't quite get that right, but that's close. Jane Woodward will chastise me for screwing that up. And bad policies have really made storage critical to dealing with increasing disruptions from weather, from accidents and from malicious actors. And so as we go through just through this one chart in to talk about really this shows two things on the pink line is battery storage costs coming down over about the last decade or so, and then PV and offshore wind. So that's just something to keep in mind as we go through. Okay, finally the sun. My view is solar is going to dominate renewable deployment over the next decade or two, certainly. We are seeing rapid progress in all areas of solar. So residential, community solar, commercial and industrial, and utility scale. The impacts of the 10x reduction in PV costs over the last decade and the impacts of the IRA are just beginning. We're very, very early days. So when we look at things in the venture market, we look at what big companies are doing, it is just getting started. Solar has a big watt per square meter advantage, certainly relative to wind, and that's why it's going to win. And on the Resi side, we talk about solar, really helps turn NIMBY not in my backyard into Pomroy, which is please on my roof or yard, right? These are people getting excited about getting this. Okay, you know what, I realize I just missed something. Here, sorry, I skipped past this. One thing on freedom. Sinova is one of the companies I'm going to talk about. Sinova helps people put solar panels on their roof and storage, usually in their garage, to go with it. And if you go to the Sinova website, this is one of the first marketing things you're going to see. And the thing I'd point out to you on this is there's not one mention of clean, there's not one mention of green, sustainable. It's all about independence, control, and resiliency. And the reason Sinova does that is because that is what the customers want. They just finished a massive survey of their over 300,000 customers, and those kinds of words all scored much higher than anything related to being green or sustainable. So just food for thought. Okay, so that's kind of an overview of some big themes on the way I'm thinking about the energy transition, what we're looking at. Let me talk now a little bit about the first of the three companies. And really, if I'm saying something that's upsetting you or weird, note it down, let's do it in Q&A because we'll have a lot of time for that. Okay, Kinder Morgan. So Kinder Morgan is really where I spent a lot of my career. Kinder Morgan today, and I'm going to go back and talk about what Kinder Morgan was when we got started. Kinder Morgan today is really the largest infrastructure company for energy infrastructure in North America. It's the largest natural gas transmission network with about 70,000 miles of interstate gas pipeline, largest independent transporter of refined products that is gasoline, diesel, and jet fuel. That's one of the largest independent terminal operators, both liquids and aggregate materials. Handles a lot of CO2 for enhanced oil recovery and has a growing energy transition portfolio, but it's about two-thirds natural gas. So it's mainly a natural gas pipeline company. The red pipes, mainly in the middle over here, really are the natural gas lines that Kinder Morgan has. So it's got about 10,000 employees, about 80 billion of enterprise value, but it wasn't always that way. So when we started the company in 97, basically Kinder Morgan started as a very, very small master limited partnership. Now master limited partnership is a tax-advantaged structure, and it's really back in 92. This is where old assets in the industry went to die. If you had boring assets that had a lot of cash flow and not much growth potential, companies would take them public via an MLP. They'd try to get as much cash as they could out of it. They'd put the B team on it, and they'd basically say, please pay your distribution and don't bother us. And that's what most of the industry was. It was kind of a goofy asset class. In 97, we decided to try to take a page out of the real estate investment trust handbook, which had turned REITs, which were also boring sleeping entities, into growth vehicles. So we did that. We acquired a small general partner in early 97. It had 175 employees and about 150 million of equity value in energy that is extremely small. The cash distribution they paid was 17 million, but it was called by a trade publication at the time a real dog's breakfast of assets. And the other part of the quote was why anybody would pay real money for these assets is beyond me. So that was taped to my wall for a long time for motivation. So we had the strange basket of four, not much to write home about assets, and we had a very simple strategy. These four points of the strategy were in every presentation we did probably for the first five years of the company's history. Very simple, focused on stable fee-based assets that are core to the energy infrastructure of growing markets. That pushed us towards natural gas pipelines. It's an increased utilization and control costs, leverage the platform and make M&A, and do things that maximize the value of this tax-advantaged MLP structure. There's no rocket science there. It is a blocking and tackling execution-based strategy, and it worked out pretty well. So we were very fortunate and very, very lucky on timing. So in 1997, everybody wanted to be Enron. They wanted to be asset light. They wanted to be in marketing and trading. The boring toll roads of the industry, the things that actually move products all around, were completely out of favor and available for six to eight times cash flow at the time. So we were able to do about five billion of acquisitions in the first four years. That was my day job when we got started. We were able to grow the cash of the company by about a 74% compound annual growth rate over the seven years. So from 17 million over here to about 800 million in 2003, today that's a little less than five billion of distributable cash flow. But the weird thing is this is in an industry where the organic growth rate was one or two percent a year. So I'm pretty proud of that track record. The blue bars, by the way, one of the big advantages of the MLP structure is there's a general partner promote. And so the blue bars are the amount of that cash that then got to flow to the general partner. We took the general partner public in 2001 as a separate company. Now years on, this has all been collapsed. The Kinder Morgan of today is just one big corporate stock. It's all been consolidated together. But that's the that's the early story. So one important thing, Kinder Morgan is actually a Stanford story. You know, Stanford has all these great startup stories and tech and people founding things in garage, garages and things like that. This is a really bad photograph from an old article 20 years ago. But my three colleagues here who were very early, I joined the company that's founding at age 28. I hired my good friend Joe Listengart at age 29 to be our general counsel, another good friend, Park Shaper at 30 to be our CFO. All fellow classmates from Stanford class of 90. So you never know who you might end up working with in your career. Okay, couple, couple thoughts on just energy transition and the things we thought about over that period of time. So if you go back to 2003, we did not own all these assets. The main asset we had ended up buying is this big natural gas pipeline here called natural gas pipeline company of America. And it would take gas from West Texas up to Chicago and from South Texas and Louisiana up to Chicago. So big flow from south to north of gas to really serve Chicago when, you know, weather got terrible in Chicago. But what was happening at the time is production in the US was completely flat. Canada production was booming. And every high paid analyst in the country was telling us we were dead. And gas was going to come flooding down in these new pipelines from the north. And we were going to have to reverse our lines or at a minimum we no one would ever pay us to move gas from the south to north. And we fretted and fretted and thought about that and what are we going to do with this wave of gas coming at us. And then a few years later, the shale revolution hit. And none of that mattered. Okay, so one of the lessons in this for those of you who may not maybe don't know. Shale gas was really the convergence of three different technologies that progressed over 40 years to produce an overnight revolution, right? So you had seismic imaging, which allowed us to see targets underground better, directional drilling, which allowed us to get to the target, and then better hydraulic fracturing techniques, which allowed us to exploit those. And so those those things steadily developed over decades and resulted in this massive revolution, which created all the gas today. Now today, this yellow wedge, which is from the Permian base in West Texas, Ken and Morgan over the last five or six years has been building capacity out of the Permian. It's been some of their biggest growth area just to deal with the flood of gas coming out of the Permian. Okay, so another moment in this personal story. 2007, as we looked at the world and what was going on, we thought we could be heroes. Natural gas is going to help the environment enormously by displacing coal as the primary source of electric power generation. Coal is dirty. We would reduce CO2. We'd reduce SO2 and NOx. We're the good guys. And in fact, that turned out to be very, very true. This is the U.S. electric generation capacity. In 2007, about 49% came from coal, 22% from gas, and 7% from renewables. Flash forward to 2021. Coal is all the way down to 22%. Gas has boomed and renewables have boomed. And importantly, there's almost a gigaton of CO2 emissions that have been reduced all while the economy has grown 45%. So you've got the economy growing over this period. You've got CO2 emissions declining dramatically. We're the good guys, right? Not so fast, right? So it was kind of surprising to us how quickly that turned into we're the villains. Natural gas is viewed as part of a monolithic oil and gas industry. We thought we might get associated with the renewables guys, but no, we're part of the oil. And instead of gas being characterized as the best fossil fuel option, many of you will want to debate that. Happy to talk about that. We were lumped in. Now, methane is a huge issue. Methane is a massive issue. And the leaks of methane as a contributor to the GHD problem is serious. There are new penalties that have just come in. We need better prices on that. But that's a problem that's now being tackled by the industry. And I think the industry is going to do very well on this. Now, one thing is, as you think about this, and again, with all deference to the storage guru in the front row here, one thing that I think is very underappreciated right now for Kinder Morgan is the critical role of natural gas deliverability. And just, I'm going to do two slides on this, so just give me a second. Very complicated slide, but let me explain it briefly. So this is a decade on the time scale. And this is basically natural gas draws on capacity week over week. And all you need to know is there are three dramatic events. 2014 polar vortex, the 2018 polar vortex, and winter storm URI in 2021. Each of those cause the gas system over a very short period of time. You have to send out 40 to 50 billion cubic feet a day. Now, that's a big deal if you're in the gas business. No one knows what 40 or 50 BCF a day means, right, practically. So what we tried to do was make that more understandable. This billion and a half, sorry, this is the estimate of all the installed battery capacity in 2050 if current targets are met, 2050. And this is, if you made that 50 BCF a day of gas send out into a daily power equivalent, it's about 4x that amount. So that's just trying to say, we have a massive long duration battery equivalent storage system that already exists and is incredibly important in this. I will say URI right here, which nearly collapsed the Texas grid and there are a lot of root causes that did that. Kinder Morgan ended up making a billion dollars in five days by turning off power, shutting in their operations, selling the power back to the grid, but also loading up gas and storage ahead of the storm and turning it around. So it was a dramatic, dramatic event, but it shows you the value of storage in that. Here's another example, which is much more recent. Again, really busy slide. The point is, this was December of last year. This is July of last year. So this is a cold weather event. This is a hot weather event. Temperature is the black line. Natural gas is the pink. And you can see natural gas swinging in to fill up the demand in both these cases when wind fell apart. So in the winter, wind went from 25% of generation down to 12. Natural gas stepped in to make up the difference. And in the summer, I think it's similar 23 to 11. Can't quite see it. So again, a pitch for how important natural gas is in terms of deliverability. Now, Kinder Morgan is not only investing in the old business. They've made a big commitment and they've now just about finished investing 1.1 billion dollars over the last three years in capturing renewable natural gas from landfills. They bought two or three different companies. We've been building out projects. And basically, this is capturing gas and CO2 from landfills, processing it, putting it into the pipeline system will be up to about 7.4 BCF of RNG production in 24. What Kinder Morgan's decided to do to face the transition is they are doing very small incremental step-outs. So renewable natural gas, things that can be put into the existing pipeline system. Renewable diesel, which can be put into the fuel system. Things like that. They're keeping their eye on carbon capturing sequestration. In fact, last month, we announced a big project with the Southern Newt Indian Tribe in Colorado. They own a lot of gathering and processing facilities. We're going to capture CO2 stored underground as part of that. Okay, so that's Kinder Morgan. I hope we're doing on time. Okay, now many of you have seen this chart before. This is the energy flow diagram from Lawrence Livermore Lab. It's basically the entire U.S. energy system arranged by source. You've got petroleum and green, coal, natural gas, wind, solar, nuclear up here flowing all the way through the system. I only want to show this to make one point, which is natural gas's future is very, very well positioned. Petroleum is primarily a transportation fuel with a little bit of industrial. Coal is entirely electric generation. These up here are mainly electricity. So natural gas is the only fuel that is really split relatively evenly between electricity generation, serving residences, serving commercial customers and industrial customers, small bit of transportation, not much. So it's in a good position. But the other two companies I'm going to talk about today are really in solar and storage. And this is just showing 2011 to 21. You can see solar dramatic increase from 0.2 to 1.5 quads. By the way, the reason this chart is so helpful is the total is 97 quads in both years, 11 and 21. And so it's almost like percentages, close enough to be a percentage. Wind also a big increase, natural gas a huge increase over this period, while coal was the main decline. Second company, Sinova. This is what Sinova does. So Sinova helps people put solar panels on their roof, batteries in their garage, that's here. They have a big partnership with Generac to do electric generation and some load control within the home. What Sinova did is they started as a PV finance company. So if you wanted to put solar panels on your roof, they had a pretty basic product. They would do a lease, they do a power purchase agreement, they do a loan. But that was pretty much it. Their deployment strategy was John Berger, who started this in 2012, very good entrepreneurial CEO. It was not a high tech play. It was what works now and how do we deploy it as fast as possible. So it was deploy first, learn and then go back and develop new products and a lot of tech to go around it. So now Sinova has developers all over the place trying to make need apps on phones that can help manage all of this complexity with what started as a pretty simple product. They're in all the states now. The dark orange is where they offer solar plus storage. The light orange is actually where solar is coming soon. They've got very important markets in the island markets, Puerto Rico, Hawaii. They've grown tremendously. They've got a little over 300,000 customers now. They managed two gigawatts roughly. I think the amazing thing, the battery penetration rate, 15% of their customers now have batteries. Four or five years ago that was zero. And when they came in and said, we're going to start offering this to the customers, my reaction was, oh, this is for the doomsday preppers and the nuts. Because how can it possibly pencil? But it goes back to one, battery costs have come way down. Two, freedom, resiliency, controlling your own destiny is a massive, massive thing for these customers. And so they've been quick to adopt this. And they've grown significantly to about half a billion. Just a quick timeline. This is their customers. We invested in Dan and I, who's in the fourth row here, invested in Series B round back in, well, it's late 2013, early 2014, when they had very few customers. And we thought it was going to break even about here. That didn't really happen until about here. So one of the lessons is that often these things take a much longer period of time. But they went public in 2019. They've done great since the IPO. They've been booming. Growth has actually accelerated since the IPO. If you look at their financial metrics, everything's up to the right. I won't make you go through this. But the market doesn't care. Everything in clean energy, I'll start with the index. You go back here. This is about the time Sinova went public. The whole index, this is the index, peaked up at around 34 and has come back to about half of where it was. Sinova went public at $12 in July of 2019, raced all the way up to 54 and it's back to 15 or 16 today. If you had told me they would deliver on all their promises for four years and that's where the stock would be, I would be floored. This is a big issue right now. When I get to the venture slides, the venture market is in a little bit of disarray. The public markets have completely turned around on a lot of these companies and it's making things more difficult. Okay, last company. This is STEM. What I'm showing here, STEM is also in the solar and storage, but they come out from a very different way. They have big batteries, big batteries that support the grid and then they also have software that manages big solar installations. And just to think about what STEM does, they have really focused on the software, which they call Athena. And so unlike Sinova, so Sinova was just deploy panels, just get them out there, we'll figure out the tech later. What STEM did is they spent years refining their technology and they did that with limited deployments so they could get a lot of data to feed into the ML and AI machine and try to develop software that was really good and more recently they've gone for the big deployment. But they're sitting in the middle, they're basically sitting on top of the battery with Athena and looking at the grid, looking at distributed generation, EV charging and trying to save their customers money, optimize against the grid and basically do a lot of energy arbitrage. They have a lot of great customers. These are there behind the meter customers. You know, people like Home Depot, Walmart, Apple think this is on the customer side of the meter, so they have a big battery there and they're managing loads and creating value for customers on that side. Then they have a really big front of the meter business, 80 to 90 percent of which is working with independent power producers and developers who are trying to develop big solar utility scale solar projects. The reason is they need the batteries to be able to have a more dispatchable type of load to go into the grid. I'm going to just try to pick it up so I get to Q&A here. This is for the wonkier in the group here. This is the Rocky Mountain Institute wheel of service that storage can provide. The big thing that STEM has been able to do is they offer all of these different services. I won't go through them. Some are more for behind the meter, some are more for front of the meter. They are some very, very esoteric things. Most people focus on energy arbitrage, which is, oh, I can store it when it's cheap and sell it back when it's expensive. There's a lot of other things that the grid values other than just that. STEM, so they only had about 7 million of revenue back in 2018. We actually took them public via a SPAC at the early days of the SPAC craze when they had about 36 million. They've really boomed the last few years. They went to 127, 360, and they should be around 650 to 650 million of revenue this year. They, unlike many SPACs, have hit their targets. They just reported last week, terrific results. Wood McKinsey just made them the largest virtual power plant in North America. Again, everything's kind of up and to the right, and it's the exact same story on the stock price. When public here at $10, literally the same month as the index and Sinova hit the big peak of 51, now back below $5. So same dynamic getting all these companies and making it a little harder. I will get your questions ready because I'm just about done. So quick comment on the financial markets. So one commonality across these stories is that you have these really weird financial products that have stepped in and filled in the gap at different times. So master limited partnerships back in 92 were just tax-advantaged assets where old assets went to die. We repurposed them into an acquisition growth vehicle. About 40 MLPs plus followed us with that strategy. That meant a surge of lower quality companies came in, and then it went bust, and there are not as many MLPs left today. Asset back securities started as a safe way to finance mortgages. Then you had the rise of CDO squared and the big short and the global financial crisis. A lot of it was out of this. Now they are the primary way that we are financing solar deployments and Rezzy solar. So every month Sinova is doing a huge offering of asset back securities because they are deploying about $4.5 billion of capital this year. The Department of Energy last week announced that they are getting a $3.3 billion loan guarantee which will allow them to put even more solar panels out. And then SPACs. Probably a lot of you have seen sort of the SPAC thing that happened in the last few years, but SPACs have been around a long time. They were kind of desperation financed for small companies. Then they became a legitimate and mainstream source of growth capital and a legitimate alternative to an IPO. And then a bunch of lower quality companies came in and blew it all up sort of like the MLP story. Quick ideas for regulators, reformers and activists, carrot and stick approach here. I think the carrot is simply we need big incentives for investment and innovation in renewable storage and carbon capture. I don't think we can get there without carbon capture. And the stick, I go back to George Schultz who was on pre-court for many, many years and the carbon dividend. You have to find a way to put a price on carbon. The system is so complicated you just can't make enough progress without that. And my advice for activists is focus all of your effort on getting the price for carbon into the system. That is the highest leverage point you have. It's much better than focusing on a lot of things that are well-intentioned, but ultimately have a smaller impact, my view. Quick thing on Triangle Peak as I do the venture stuff here. We found it in 2008, we've done four funds, 86 portfolio companies founded the entire business on that Venn diagram at the bottom, which is really dramatic, just energy and tech. And just to hit where the venture capital market is today. If you look at this chart, these are exits in venture from 2013 to 2023. You can see the huge bust after 2021. This is in clean energy, VCDO activity. So the top is activity, which is trended down a little bit. And again, exits are also down. And then one just interesting take here is these are the top clean tech investors venture firms. And I would just point out Shell Ventures, Chevron Ventures, Total. One of the things the new school has been talking about is how do you include people? Who should you exclude? It's a very contentious issue. I appreciate that. There are thousands and thousands of people who are very knowledgeable about energy, who care about these issues, and who, you know, many of them are getting demonized. Many of that is unfair. And I think if we can talk to as many people as possible and get as many resources focused on this problem as possible, that's going to be the best possible outcome, left 20 minutes or 15 minutes for questions. So anyway, that's it. Thank you. My thank you so much. I like your concluding message right here. Put a price on carbon. That's so important. Questions from audience? Thank you, Mike. That was excellent. Yeah, price on carbon. I know that that was a discussion at the end of the conference last week. And, you know, so I would just ask, I mean, there's a couple of different ways to look at this. So from a policy point of view, that seems to be a non-starter politically. So when you, I guess I mean, you say activism, it does perplex me because I think we'd all like to get there. And I don't think anybody knows how to get there. But then on the other side of that, you know, we also want to get prices on carbon credits, right, to get the sequestration going and get that market going. So I guess I'd like to get your perspective on both those things. Yeah, I think it's a really tough question. So going back to the carbon dividend idea, which was originally the revenue-neutral carbon tax, which nobody liked that title, so it became the carbon dividend. But the idea there is, you put a tax on carbon and then instead of letting the government spend it, you pay it back to society as a dividend, an individual dividend each person. So you get the benefit of curbing the use of things that produce carbon, but it's not a new revenue stream for the government to go spend. So that was politically, the idea was that was more palatable. My point is I just don't think you can give up on it. I think it's the most effective policy solution. It's very, very tough. What I have seen in industry, and I'm talking old oil and gas industry, is the opportunity for the grand bargain I think is coming. And the grand bargain is going to be something like, we'll accept, we being like old, you know, stereotypically, old, we'll accept a price on carbon and support it if you'll get rid of some of these hams drinking other regulations. And I think that's going to be a fair trade for everybody if we could pull something like that off, only because the, you know, trying to have sort of a command and control economy top down, picking who's going to win and lose and what can happen and not happen, we'll get some of it right, we'll get a lot of it wrong. It's going to be a lot better to have that pricing signal come through. So, you know, mansion, a senator mansion would say, you can't do this until you get Europe and China. And his view was if you can get Europe and China both on board, you could figure this out with kind of border adjustment tariffs as a way to, if people are cheating. So it's, nothing's easy politically right now. So I realize that it's maybe a pipe dream. Yeah. I was just going to ask, because when you put up the chart, you said that coal was decreasing with like, all of which energies are rising and decreasing, but oil did stay the same. And all of your companies are talking about like success within North America. But globally oil still supports many economies. And also, like countries that aren't necessarily first world countries are going to have a lot of trouble getting to the level that these technologies have reached in North America. So, like, what is your response? Like even when talking about pricing carbon, it gets messy for like other countries. So how do you take like all of this energy stuff on a global scale for like an environmental crisis that like affects everyone? No, that's right. And it is where I tried to start, right, with the billion without electricity, 2 billion with less electricity than they should have and 3 billion that don't have clean cooking. You know, all the projections right now are still showing globally oil is going to grow for the next couple of decades. And that's a really hard message to hear. I mean, we should be trying to electrify as many of those developing countries as we can and then decarbonize as we electrify, you know, if at all possible. But it has been incredibly difficult to get off of coal and oil globally. It just is. People don't change behavior. And it takes a lot to convince somebody to take a higher cost solution if something cheaper is readily available. And that's just, you know, that's the battle we're fighting. It's not a great answer. Good question. Not a great answer. Thank you for coming. Hello. You have work? All right. Good. I've been a student at the GSP, but before GSP, I actually used to work at my so so we're closely with Indian Utilities and Kinder Morgan. Okay, great. Kind of follow up question to my work at my so what's your view on transmission and whether or not it's actually needed specifically for the deployment of all these large storage systems or if you think there needs to be one proceeding the other. Yeah, I NIMBY, not my backyard of the banana issues on the transmission are really, really hard. And in fact, one of the things STEM is doing is, you know, if you can drop a storage, you know, think of a footprint about the size of a tennis court. If you can drop some of those into critically constrained areas within a constrained grid, you can make big progress and avoid having to do those. Now, you know, doing big utility grade, I mean, utility scale solar developments way out in the hinterlands and then trying to bring that in via high transmission lines, loaded with issues. I think part of this is if you can get to a pricing mechanism, you can make some of these decisions a little bit more rationally. It's very hard to get them all right with pure command and control. And that's a real high level idea. It's not a very helpful answer, frankly, but it's the best I've got. I think, you know, you look at the way ERCOT nearly collapsed two years ago. I mean, it was unbelievable how close it was to just a horrific situation. It was bad enough as it was. So getting more interconnections, getting more resiliency in the grid, all of that is incredibly important and it has real, real impacts on people when it fails. Thank you. Thank you. Great overview. We've been watching solar photovoltaic for like 50 years. And finally, it's now the most cost effective solution for energy generation. We've been watching wireless for 40 years, most cost effective comms. But then you pointed out the key issue for electric power is storage. How do you think personally about looking at the candidates and trying to figure out what may become economical and scalable in the next, you know, two, three decades? I mean, we have compressed gas, we have chemistry based batteries, we have gravities our friend, we have many different solutions that people are prototyping. How do you think about that? Yeah, we need so much of it to deploy wind and solar that I think you have to take the shotgun approach and do as many different kinds as you can and hope that you're going to get a fundamental materials breakthrough or chemistry breakthrough that can really change this. One of the strategies at STEM is focusing on making the software as good as possible and realizing the battery is a complete commodity. So it's lithium ion now or it's LFP, you know, down the road it's going to be something else and build a system that is resilient enough that you just plug in whatever the most efficient version of that is. And that's on the battery side, obviously. So other than that, I mean, the land use of pump storage is incredibly difficult. I mean, it's like redamming the West, you know, that's going to be tough to do. We do. That's true. That's true. So I don't, and I should say that the companies we've been involved with have been much more about deploying technology that's able to work today than the massive R&D and the next big breakthrough, right? And so I'm more a deployment guy than a fundamental what's, you know, you can tell us what the next winning chemistry is going to be. So I actually have two market questions for you. One, you cited the fact that the stock markets are valuing these companies at a level that seems, I mean, if you just look at earnings flow and revenue and cash flow and all that stuff, they should have a higher stock price. So I'd like you to explain to me why they don't. And then second is that if you think about using the electricity markets to, I mean, there's every kind of pricing for the value of storage that you can think of, and some you probably can't think of across the country, surely out of all of that experimentation, we should know something more about how to structure those markets in a way that helps us make this transition that we need to make in electrifying vehicles and being able to deal with the intermittency of some of the incredibly important renewable resources, is that a key part of this whole managing this giant portfolio? I'll do the second one first. That is one of the most interesting things about what STEM is doing, right? So STEM is putting these batteries with the software that's trying to optimize them in all these different markets. And some have a market for, you know, spinning reserves or black starter frequency and others don't. And they really are very different. So one of the strengths of the American system is that it's all balkanized and split up into these different areas where you can have these experiments. There's a lot of weaknesses to it too. So I think that is actually one of the most interesting is you take learnings from, you know, New England or the Midwest and you apply them in California and vice versa. And that STEM is actively trying to do that. So I think as you, you know, maybe we get to the monolithic, here's how you should structure the national market and everybody should standardize in certain ways. We're way away from that right now. It's all very, very different. As to your first question, important fact, none of those companies are profitable. And so what's happened if you look at SAS, right, Software as a Service in the Valley, it is the exact same chart. Okay. If you're a high growth company that is not profitable, you have gotten killed in the last two years. And it hasn't shown up in the major indexes, but talk to your venture friends, look at the indices I showed. It's a real issue. And so I think what's, you know, and then you look at Kenner Morgan, it's paying almost a 7% yield, right? Massive cash flow pays it out to its shareholders. So it's been much better protected and insulated as have the utility companies. So that's the big thing. You know, the pendulum usually swings back the other way. Growth will come back in favor. Maybe once the Fed starts cutting interest rates, but right now it's just a very tough situation. And a lot of people are sitting on their hands, and then it's exacerbated by Silicon Valley Bank, First Republic. I mean, these are going to have big impacts for years on the way venture lending gets done and venture funding gets done. And Dane, do you want to add anything to that or do you give it to that? Okay. You know, it's more about that than I do. So it was interesting to imagine young Mike Morgan, age 28, sees kind of this, you know, oddball thing. Everyone wants to be in Ron. You're like, I'm going to do the same little contrarian deployed worked out well. So Nova comes along. Now you're an investor, as opposed to, you know, the entrepreneur saw something deployed to play work stem, etc. And then you get this big portfolio. You sort of see a lot of stuff. So what would you tell 28 year old Mike Morgan today? Where should you spend your time for the next big hit? Yeah, I it's a great question. I what I would do is just get involved in energy. I mean, I this is, it's still early days, you know, that the fact that things take a long time means this is this debate, this problem, all these new technologies are needed for decades to come. So if you're 28, you can have a lifelong career trying to help on this big problem. And I think it's going to be so disruptive, there will be ways to make a buck along the way. I think the smartest thing we did at Kenner Morgan, and the thing I've always told our companies, if I'm sitting on the board or anything, is strategy is much more about what you're not going to do, right? It's it's clearing out all the stuff you're going to stay away from and then being very, very open in a defined lane to whatever opportunity comes along. So it's this, you know, so for us, we defined ourselves early on as the anti n rock, we are not going to do marketing and trading, we are going to focus on heavy steel, you know, meat and potatoes, transportation businesses. And we're going to look aggressively for every opportunity we can. One of the things we did is we went around and bought assets from all these companies that were trying to be like Enron. And they had starved these businesses for capital and opportunities because it just wasn't the sexy part of the business. And so it was kind of like, you know, we were in the emancipation business, we got these teams that had been kind of abused for years and neglected, and we would come in and buy the assets. And then they'd say, oh, well, here are the 12 projects we've been wanting to do for 10 years and no one would fund them. You know, half the success was from just doing that stuff. So I think energy is a great place to spend a career. And I may be preaching the choir here, but yeah. Oh, that's a tough one. Great presentation, Mike. With higher interest rates and higher household energy bills. How are you seeing those two factors impact the residential solar market uptake? And then how are you seeing the rising interest rates impact the ability of residential financing companies sell their loans forward? Yeah, that that is a great question. I was terrified four years ago of a big rise in interest rates. Because what's Nova is doing is they're growing really fast. They are writing just think of it the simplest part of the financial they are writing solar loans at let's say at the time at 8%. And they're trying to get enough of those aggregated to then be able to turn around and finance them at four or 5% and capture that spread. And what you worry about is they get they're growing so fast that the next slug is so big that if the rates rose, you're you can be underwater and get in trouble. They have been masterful at raising rates and kind of keeping that risk really, really well managed. So now that I think they publish it every quarter last quarter was a little over 10% was the effect of financing rate. And then they were financing at six. And so they were capturing that kind of 400 basis point spread. So it's it is a critical risk management question. And what's happening is it has slowed, you know, there are so many incentives in the resume market and the good part of the IRA is just about to get here. And, and, you know, some of the tax incentives and other things that are happening. So it's been remarkably resilient. I think compared to what I would have worried about five years ago, it's been very, very resilient and that demand for energy independence, energy freedom, resiliency is is an enduring trend right now. I think I'm two minutes over. So yeah, I think with that, let's thank my for share the 30 year experience. A lot of nice discussion. Thank you.