 from our studios in the heart of Silicon Valley, Palo Alto, California, this is a CUBE Conversation. Hello, and welcome to the CUBE studios for another CUBE Conversation. Here where we go in depth with thought leaders driving innovation across the tech industry. I'm Donald Klein. Today I'm here with Tom Steppian, CEO of Primus Power. We're going to talk about the state of clean tech. Tom, welcome to the show. Great to be here. Thank you very much, Tom. Okay, great. Well look, we're going to kind of get into the state of kind of climate change and what's happening and why the kind of solutions that you provide are kind of important. But first, just why don't you just give a quick overview of Primus Power and what you guys do? Sure. So Primus Power is a stationary energy storage company. Our flow batteries work on both sides of the meter, the utility side, the guys who are supplying electricity and the behind the meter side, the folks who use electricity like this studio. And what we do is offer a solution that allows you to optimize your electricity use. You charge the batteries typically when the price of electricity is low and the usage is low and then you pull from those batteries instead of the grid when the grid prices are high and the cost is high. Okay. And that allows our customers to save money on both sides. Excellent. And so just quickly, who's the you? Who's the customers here? Who are the primary folks that you're selling to? Sure, sure. So the utilities are PG&E. The utility that's putting electrons in this studio to smaller utilities. There's several thousand utilities in the U.S. and then worldwide of course, folks who are supplying electricity. Also think about renewable plants, right? Solar plus storage. Wind farms have curtailment problems because wind is gusty, tends to show up at the wrong time sometimes. You can save wind when it's extra and then dispatch it when time is low. So renewables are projects are customers. And then homeowners are customers. I lost power on the way here this morning. If I had a battery in my garage or by the side of my house, I would have been able to keep the lights on and the garage door open. Okay, excellent. Okay, all right. Well, so let's talk about kind of clean tech, right? So everybody's interested in what's happening with climate change. It's kind of front and center in the new cycle these days. California has actually been a real leader in implementing legislation to accelerate the adoption of grid tied storage solutions to make better use of renewable energy, correct? They sure have, absolutely. The California Energy Commission has been a leader in this space, the CPUC that governs the three investor owned utilities in California. Initially, eight, 10 years ago, put out a very important law that Nancy Skinner led relative to using storage and mandating storage in chunks for the three IOUs over the next 10 years. We have exceeded those goals. I think it has helped drive down the cost of storage. It's helped companies like Primus blossom because it's created a market. Other states have jumped on that bandwagon. New York has done that. Oregon has storage goals in many other states also. And it's helped improve the technology for sure. Interesting. So California's really been leading the charge since 2010 in this area? Yes, yes. I've been to China and Europe and Kazakhstan and all places. Everyone asks me what's happening in California. If you look at Bloomberg numbers about energy storage, California is broken out and often the leader, South Korea did a lot last year, but within the US, California leads for sure and will continue to do so. Interesting. And then they doubled up on those numbers again back in 2016, is that right? They are, they're continuing to up the goals, right? As a state, we now have a carbon-free goal, Wisconsin, just this morning I read, is also moving two carbon-free goals under EnergyMEX. So California has led for sure, but other cities, Chicago has a goal, other states are following, but it all has started here for sure. And just talk about this connection between kind of a carbon-free energy solution and grid-tied battery solutions. What is the connection? How do the batteries help with making states carbon-free? Yeah, for sure. So solar is the least expensive way of generating electricity, full stop, right? What Germany did years ago with feed and tariff and has driven down the cost is actually somewhat similar to what California did and helped drive down the cost and improve the technology. It is now at a point where it is the cheapest form. It is less expensive to put in a new solar plant than to run some of these gas plants. California has no coal, got rid of that years ago, but has a lot of gas. Point in fact, in earlier this year in the Southern California Edison District, the California Public Utility Commission, the guys who rule the utility, said no, no, no, let's not put a couple hundred million dollars to update and refurbish some of these gas plants, stop, instead let's move that toward energy storage. So here's how it's going to look in the future. You have solar, right? And we all know the low, low cost of that, right? Next-era energy using some of their numbers because of the largest, one of the largest developers in the U.S. has the 20-year power purchase agreement price of solar by itself is $25 to $35 a megawatt hour, right, really low. So two and a half cents a kilowatt hour, right? I pay 10, 12, 18 cents per kilowatt hour for electricity at my home, depending on the usage. So wow, right, it's an order of magnitude less than that. And then we all know what solar looks like, right? It's great during the day, but there's two dynamics that are important with solar. One are clouds, right? If you lose power because clouds go over it, that intermittency is a problem. Quick acting batteries can take that out. The second one that everyone knows is the solar parabola tends to fall down when the sun sets. Well, what do you do for the other either 12 or 18 hours of the day? And that's where batteries of a different type come in that gets charged in the middle of the day with that extra electricity from the peak and dissipate it at night. That is the grid of the future, for sure. And you can do this both at a residential level, right? But also at a distribution center replacing an older kind of peak generation plan. Absolutely, right? And if you look at the refurbishments that are happening up and down the coast here in California, that's exactly what they're moving towards. And here in California, we have a utility that got into a bit of trouble because of some of the wildfires and not maintaining some of the lines as we all have read about. Now they are publishing and turning off parts of the grid if there are wildfire concerns. That is going to drive the use of storage at home. And the tariffs are also going to encourage that, right? Where you are encouraged economically to save extra electricity if you have panels on your roof and then use that at night. So it's helping drive that market and it's the right way to go. Interesting. So both in terms of houses that are in sort of forested areas, right? They're going to need this type of local energy storage solution. You've also got replacing the kind of peaker plants with using grid tied storage to be able to push out energy over the grid, right? So these are going to be increasing use cases. So we're going to see battery installations both at plants and also in homes. But all of these battery solutions are all tied to the cloud, correct? They're all tied to the internet. They're effectively functioning as IoT devices at the edge. Maybe talk a little bit about how that works and how what the benefits are from leveraging those types of technologies. So yes, you're absolutely right. They are at all points of the grid and different types of batteries for different functions. And it's fascinating there is a whole class of companies that of course are merging on the battery scene, right? Lithium ion batteries, flow batteries like Primus, et cetera, and other types, really long thermal batteries are going to be coming. But then there's a class of the software companies that are helping manage these assets because you need to smartly charge and discharge, sometimes driven by weather signals. Okay, it's going to be really windy tonight. So I want to enter tonight with an empty battery if I'm on wind farm down in Palm Springs so I can take that extra wind and put it into the battery. Sometimes you're driven by economic signals, right? Because it's a really hot day and the prices of producing electricity are going to be high. So therefore I can take a different type of action. And they will control and those assets, batteries on either side of the grid and make intelligent choices driven by economics to provide the best outcome for again, either the utility or the homeowner, maybe even the neighbors, right? At some point we're going to be able to share electricity. Why can't I use my neighbor's panels if they're out of town for two weeks and they can do the same when I'm out of town. So that will all come here over time. And that's all being enabled by a new class of software companies that are really treating these energy solutions as kind of IoT devices. Absolutely, and it's a great model because it's just another IP address, right? And there are some attributes that it has and you understand the batteries and you can make economic decisions. So think of it like a trading platform, if you will. So those are emerging. There's some really fascinating companies that are young and starting but off to a great start on those tasks. Excellent, okay. So why don't we just talk a little bit about Primus Power itself for a second. So you're in a particular type of energy solution. Why don't you talk about that and how you differ from some of the other providers that are out there? Sure, so there's lots of different types of batteries, right? And one thing to mention is there's no perfect battery. There's always trade-offs on batteries, right? You always of course get less out than you put in because you can't create energy. So there's efficiency differences. We're probably all familiar. The audience here is with lithium-ion batteries with the power wall and sun in and some famous companies, Solar Edge has done a great job putting batteries with solar or just having batteries by themselves. Those batteries today, most of the market is lithium-ion. Lithium-ion is 20, 30 years old, first showed up on the Sony Handycam, very bankable, very proven, but like all batteries have trade-offs. We know the fade that we've experienced with our laptops and our cell phones with those lithium-ion. That's okay, because you can buy a new iPhone every three years, but if you have that on the grid, not so good. You don't want to go out to the substation every three years with a new set of batteries. Well, there's also fire concerns. There were 30, 40 fires in South Korea last year, lithium-ion based, and there was a big one early this year in Surprise, Arizona, bit of a surprise down there. It sends some fire fires to the hospital. So that's some of the strengths and weaknesses of lithium-ion. A flow battery like ours gets its name because we flow a liquid electrolyte. And the typical flow battery has two tanks and you're moving liquid from one tank to the other tank through a reaction chamber that's a stack of electrodes and you plate a metal, we plate zinc, other people plate iron, or you're playing tennis with electrons. This is high school chemistry coming back to haunt all of us. You're changing valence states of vanadium, for example. Primus, if I talk about that difference, is unique in that it only has a single tank because we exploit the density differences in our electrolyte, kind of got a oil and vinegar separation going on. And we don't have a membrane in our stack of electrodes. So it's about half the cost, half of the price compared to other batteries. It's earlier, right? That's our biggest detriment is that we're not quite at bankable scale yet. We'll get there, right? As a young company, you have to earn your stripes and get the UL certification and get enough things out there to do that. But there will be a number of winners in this space. Lithium-ion is really good for certain applications. Flow generally is good for daily discharges. Think solar plus storage, deep discharge, multiple hour, four, five, six, eight hour storage. And then there's going to be week long batteries that might be thermal based. There's a company that's moving, got a nice round of funding last week that's moving blocks of concrete around because you can just like the pumped hydro, you can move water up and down depending on the price of electricity and the use. You can move concrete blocks up and down, spend energy moving it up and then use gravity as your friend when you need electricity from the concrete battery. So in terms of future battery economy, maybe multiple types of solutions for different sort of use cases, right? Whether sort of transportation or handheld, right to residential, to grid tide, et cetera. Absolutely, sure. And it'll be driven by economics and then you can't have a concrete battery in downtown San Francisco, but you could in the middle of Mojave. So it'll be- Understood, understood. Okay, so in order to kind of let you go here, why don't you just talk a little bit about Primus? How you, where you guys are at in terms of your own evolution, how much deploy battery pods do you have out there in the world today? Sure, so Primus is at a stage now where we are growing. We're trying to grow at the right rate because you don't want to get too far ahead of yourselves. We have systems up and down California at some projects that have been put at wastewater treatment centers, right? Where we can help optimize the economics of the wastewater treatment centers. They have components that are spending electricity, they have solar, okay, batteries can help improve those economics. We have them at utilities that are testing them to see, okay, how well do these work? Many of these new battery companies are where we are, where our customers are a tribe before you buy or a test before you invest type of a situation. We have a battery in China at one of China's largest wind turbine provider. Wind curtailment is acute in certain provinces in China. In fact, in one of the provinces, Chenhai in Northwest China, they passed a law a couple of years ago that said every new wind turbine has to have a battery with it. So that's created a market there. There's also, we will be coming out with a residential version for some of the same reasons we mentioned about the wildfire concerns. Excellent, and so just give a sense, how big, you talked about your pipeline and how many kind of quoted sales you've got out there. Just give us the audience a rough idea of what kind of pipeline you're looking at. Sure, so as a company we're moving from single digit million type of revenue that we did last year to double digit million that we want to do next year, that translates into roughly 200, 300 of our systems. Our systems, by the way, are, think of a large washing machine, two meters by two meters by two meters. We have in our pipeline of projects that we've quoted more than a billion dollars worth of projects, a lot of solar plus storage, couple of years from now, we won't get them all for sure, but it shows the really strong interest in solutions like ours. Excellent, well exciting stuff, Tom. Thank you for coming into theCUBE and having a conversation with us. Appreciate you taking the time. Tom, thank you very much, it was wonderful. Really appreciate it. Great. Donald Klein, thank you for joining us for another CUBE Conversation. We'll see you next time.