 There is a product placement about to happen, thanks to David Letterman and Netflix David Letterman has a great show called My Next Guest Needs No Introduction. However, this guest who's very special to me is going to introduce himself because he has a little ground to cut. And welcome, Rick Tolman. Thanks, Ricky. Nice to be here. I'll let you introduce yourself. Oh, fair enough. Well, my name is Rick Tolman. I am a sustainability professional. I've been spent most of my adult life working in sustainable industries. Everything from cleaning up big superfund sites to starting new water utilities. A lot, done a lot of renewable energy projects and brought a lot of new sustainable technologies to the market. And I think for the Hawaii audience, a lot of folks are familiar with company AES Clean Energy who's done a lot of the renewable work across the islands. That's a company that started as Main Street Power Company. I started at the end of 2008. We sold our company to AES in 2015 and they've taken it to the stratosphere from them. I couldn't be happier with the quality of work or the direction of companies going. So my wife and I leave full time on Kauai right now and I'm working to help investors and operating companies get more dollars and more effort towards our clean energy transition. One of the things that I liked about Rick is early on he is a good teacher and we went back and forth about clean energy. We started very small from houses, jumped electronic vehicles. The last show that I did was heavy in EVs. He listened to it. Thanks to Luke. I changed my mind and then when I recapped that with Rick, he tried to change my mind even further. So I'm fully prepared to give him the floor about EVs, but also how everything fits together, all for a good cause of making me wrong. So I turned it to you. Well, I never want to be in that position, Ricky, because from my experience, you don't stay wrong for very long. So glad to be part of the discussion today. I appreciate it. Well, I really think it's worth talking about more generally when we get into the conversation of EVs and whether it's time to start putting infrastructure in for those kind of things. Where our conversation went and what I thought would be interesting to share today is just some discussion about the infrastructure in the state of Hawaii and specifically are here on Kauai where we live, and how the role of that infrastructure is going to be challenged and is going to grow in the next, say, 20 years. 20 years seems like a long time, but in the infrastructure business, it's a blink of an eye. And as everyone knows, especially here on Kauai, there's a reputation of dramatically shifting to renewable energy, which I think has been seen as a great thing. Not only is the island about, I think 70% renewable now moving to close to 90% once we get a couple more projects done. But it not only has it made the power and energy on the island cleaner, it's also made it now the least expensive power to buy in the state. And that's a direct impact from going renewable. So that progress continues to be made and the state has set a goal, as we all know, of being 100% renewable on the grid by 2045. The thing that I'm not sure everyone has completely grasped there is that by 2045, everything in our life will be running off the electric grid. EV car sales are skyrocketing. Last month for the first time, the Tesla Model Y was the best-selling car model in the world. And that, as we like to say, the train has left the station and it's an electric train. There are a lot of good reasons we can talk about what's driving the energy transition. From my perspective, it's not people trying to save the world. It's actually working families trying to save a lot of money, which you can do if we take fuel out of our lives and replace it with electricity. We get into that in a minute. But what's happening that is going to really challenge our electric grid on each island over the next 20 years is really kind of a perfect storm. As we're ramping up and learning how to run the grid, operate it and keep it balanced, which is not a simple feat. With renewable energy and battery storage, we're also going to see this flood of use. We're going to have to dramatically increase the capacity of our grid because all of our truck cars and our trucks and our farm equipment, our water heaters, everything from your diesel dump truck to your iPhone is going to be run by electricity. So we're not just trying to get to 100% clean electricity by 2045. We're going to be getting everything in our lives renewable by 2045, whether we like it or not. And I think that's really important because the current state of the grid, this is designed to drastically increase the capacity, and we're going to have to. It also isn't designed to withstand severe weather events. And with climate change, we all are starting to experience those severe weather events are going to happen more and more often, or at least become more severe. And so those two challenges of getting through the energy transition and getting a more robust, resilient energy source is all playing out on top of us going renewable. And so it's going to be very complex. And there are a lot of things that we could be doing right now that would make that a lot less expensive and a lot easier than waiting until we have to react. So let me stop there. Any thoughts on that Ricky. Oh no, I sent some wrong I'm going to stick with being wrong about the EVs. Now I can quote you instead of the economist. It's hard to this that to the audience why came to appreciate you is about six, eight months ago. We had the chance to go to the one you have power plant, which is the oldest hydro project. West of the Rockies. And the Genesis for for that was a and B was putting on the market. But our particular relationship started when you mentioned that you had a background in hydroelectric power, helping small towns on the Eastern slope of the Rockies upgrade their hydro facilities. And starting from that point. When we went up and walk through a very beautiful place with a very expert engineer. That was the first time I really appreciated the importance of me not talking. Let's go with that. Let me let me dig in a little bit here. First of all, it's worth it's worth thinking about how we got where we are. Why does our electric grid look the way it is why does it function the way it does. You know, when, when, when this all started. This is using, you know, 1800s 19th century technology as you said the plants up on the North Shore here is the hydro plant was built I think in 1902 or something if you use this 19th century technology. And that is still what we are using to light our lights here. If that doesn't concern people just in its own right. There are some real design issues that that haven't been to date, but they're going to be more in the future and you know, basically the whole idea of centralized power generation is starting to fall apart. Where you have one big central electric plant or maybe a few big central electric plants, and then you have big wires that take those electrons after people's light bulbs and they use them. And there are a couple of issues with that, though. First of all, there's so many single points of failure. You know, if a line goes down, power goes out. If one generation system goes down, power goes out something happens to boil a transmitter, or any kind of switching equipment in the neighborhood, the power goes out for the neighborhood. It is very difficult and very expensive to expand the capacity of an old system, because you have to make your central plant bigger, and you have to make all the wires bigger along the way. So it's very difficult and it's also obviously exposed to weather. And so, a different approach, which is being taken now in a lot of places around the world, that really transforms things and opens the door to a more sustainable future, really, is to go to it with a distributed generation model. The reason we have central plants is because they used to be run with coal or water, if it was a hydro plant. And so you can't move coal to everybody's home and burn it for electricity, although that was Thomas Edison's original idea. Oh my God, we didn't do that. But as a result of that, we built great big giant coal plants that are next to coal mines, for the most part. And now that we've gotten solar, it's sort of a muscle memory to build these big giant solar farms and then distribute the electrons. But the fuel is everywhere. So why not just put the electric generator where you need it on your home, where you park your car, where energy is used. And it turns out that if you do that, the grid, our current grids, which only deliver about maybe on the top side, 25% of the power they generate, the rest up to 90% is lost. Not to the line loss to all of the energy losses that happen between a fuel and a light bulb in somebody's house. That can actually become 90% efficient instead of 10% efficient. You can increase the efficiency of the system drastically. Now why is that so important? Well, it's important because if everybody's running their houses the way they are now, but they also own a couple electric cars, they're going to have two or three times the energy demand on the grid than they do today. And so instead of just building more solar, big solar on the south side and more big transmission lines, if you work with micro grids and you have generation and storage at people's homes in the neighborhoods in the communities, you can build a tiered system that ends up being about 40% more efficient than the old way of doing things. But that is actually enough to cover all of the additional load that's going to come from EVs. So again, what that means is we don't have to increase the size of our current system. If we switch to a more flexible, bi-directional system, we can gain the efficiencies to add in all of our electric vehicles and not have to increase the size of the system. So that's a huge deal, right? Because whether you like it or not, we're all going to be driving electric cars now. Those are the only cars that are going to be manufactured certainly well before 2045 when Hawaii plans to be 100% renewable. So number one, we gain massive capacity and we can avoid the cost of having to dramatically expand our central plants and our transmission grid. The second thing is weather. And we learned this here certainly in Hawaii more than once. And if you look at what's happening in Puerto Rico right now, it's a result of Hurricane Maria hitting a system that looked a lot like Hawaii's system before it got hit. And so I can't help but think that if we don't modernize our grid into a smart grid that can work in multiple directions, we're kind of one hurricane away from Puerto Rico. And what's happening there is exactly what I'm describing. People are generating their own electricity and they're working with their neighbors to share in microgrids and building the system from the ground up. Not because people are telling them to do it, but because it works and it's very efficient and you don't have to pay anybody for the power if you produce it yourself. So the economic, I think, of doing this for the average home is monumental. My wife and I have been over the last 10 years, we've had three electric vehicles, we've been driving them for over 10 years, 12 years now. We have not spent one penny on maintenance, not on one single car, three different mages. We generate all of our own energy so we never have to pay for it. And having solar and batteries at our house with two electric cars saves about $1,500 a month in costs. So to the average American family, that's about a 50% pay raise off of the $58,000 median income that the average American household makes. So that's what's driving the energy transition and what you're not going to be able to stop is it takes a lot less money to run an electric car and an electric home than if you're burning fuel. And then the last thing to talk about maybe is just the impact of severe weather. If you have a centralized system and a line gets knocked out, power's gone and until that line comes back up, nobody has power. And what's happening now is people are realizing that if you have micro grids and you have many, many, many sources of distributed power being generated, it can keep the grid running when the big plants shut down. Recently, just in last year in California, there was an interesting experience where SoCal Edison announced that because of the forest fires in California, they were going to have to shut down two generation plants. And when they did that, the grid power was going to go off and people were given a heads up that they were going to have a blackout. They shut the generation plants off and the grid didn't turn off. And the reason is because so many Californians now have power generated at their homes, solar and batteries, that they kept the whole grid running without the central plants. And that's happening, there are stories like that happening in Florida where the terrible storms that hit Florida last year wiped out most of central Florida. But there was one town called Babcock Ranch, which people should look into, where they built the infrastructure where it's all solar, it's net zero, so they're not importing power, they can generate their own power for their plants community. The houses, the foundations, the drainage was all designed to withstand hurricanes. And when the storm passed in the next morning, not only were all of their houses still standing essentially undamaged, but the lights never went off and their cars continued to charge. So there are models out there of communities that have really embraced sustainable energy and sustainable water systems, and they've proven to be much, much more efficient. They allow for much greater growth. They save an enormous amount of money to the homeowners and the consumers, and they can withstand storms that a conventional system just can't withstand. So for all of those reasons, Hawaii is going to be building smart grids that are resilient and flexible in nature. Whether we want to or not, it's going to be a requirement. And if we do, if we start those plans today, it's going to be a lot less expensive than a lot easier than trying to reinvent our delivery system, make it a smart grid while we're dealing with climate change, while we're dealing with EV acceptance. And it's going to make it not only less expensive, but more reliable for the customers. So I'll stop there, Ricky. That's my pitch for why we should be paying attention to boring things like infrastructure. Thank you. I'm going to take off on what you just said, which is systemic and macro and bring it back down to the individual, the household, the homeowner, who will have to pay for this. And one of the light bulbs, I don't have many. One of the light bulbs just went off listening to you was the appreciation of cheap energy at the source of the household. It's not just the savings. It's having a plentiful source to do something with. And you and I talked about computer aided or printing manufacturing. And that's that is the future. It's got to be energy intensive. But you have a printer at home and you're making something for everybody else. You make some money. And again, what do you make? It's not just the printer. I mean, I'm not just what's one of the most expensive things in the world that that's important to have is aluminum. And of course, that's heavily energy intensive. So if you cheapen the in the resource use most intensively, you get a big boom. And if I'm dad, and my kids want to do something like in COVID, my son decided to make masks, and his wife was in Samoa and she's a great seamstress and I'm going off on a tangent. But their creative, their creativity got them ahead of the curve. But if the same thing happens in one household, and then you have a cul-de-sac and you have six other people, maybe everybody's making the widget a BCD, and you end up with something going down the road. Or maybe you cooperate in other ways. So to me, how do you get people to spend that money willingly. It would be self interest. Yeah, absolutely. And I think this is something that people miss when you when you when you're reading, you know, about how we're transitioning from one energy source to the other. And people think, well, whether it's a gas car or an electric car, whether I've got a propane water heater, or an electric heat pump water heater, you know, it's, you know, I'm buying energy from somebody and using it. But the difference what's happened that I think is really just dawning on the general population is you're not just going from one energy source to another. You're going from an energy source that I have to buy at a gas station, or I have to buy from the propane company to an energy source that I can make myself in my backyard. And you, you know, I don't have a, you know, an oil refinery in my backyard so it can't make gasoline, but I have 32 solar panels so I can make enough electricity to run everything here. And that's the difference is it's the self control that you're, you're right, you're not saying well, I'm going to pay a little bit less for electricity if it's generated from something else. What it means is right now people are doing business with the electric company, the propane company and the gasoline company. And what will what what's what's happening in the world is a convergence of those into all electric just essentially getting rid of fuels, because they're really, really inefficient and it turns out they're very expensive compared to non fuel options. Oh, and they're bad for the environment too. But I don't believe people are going to just sign up to do solar and batteries and electric cars to save the world. I think they'll do it to save money. So if you can generate your own energy. And the same type of energy is used for everything in your life, whether it's a phone, a car, a tractor, a piece of yellow iron, you know, your stove, it's all run by exactly the same energy. Then you can imagine this new smart grid that is looks a lot more like the internet today and less like the electric grid. It's a marketplace where people can put power onto the grid or they can buy power from the grid as needed. And that means that if myself as you pointed out, let's say I'm covering most but not all of my power needs here at the house and down my street all of my neighbors are doing the same thing. We can share excess energy. Let's say, you know, two of my neighbors didn't use their car today. Two others went to LaHouian back. You can share energy to recharge those cars in a timely fashion. If it's raining here but it's not raining in, you know, Kapa, then we can share power from Kapa to Kilauea. And then if need be, you can use, you know, sort of a higher level of powerful grid sources like the big solar farms down with staff. But the grid and the big solar farms become backup to everybody instead of the primary sources of electricity. And so if I am able to, you know, pay for the solar panels and pay for the batteries to go on with the tax credits that are available in Hawaii, it's, we saved an enormous amount, almost half of the cost of the system was covered by incentive programs. And the rest of it paid for itself in just a few years. So think about it. The cost of my electric, you know, electric bill goes from, you know, 250 bucks or something like that. My propane bill goes from 200, 250 bucks a month to zero. My gasoline bill goes to zero. All of my car maintenance with an EV goes to zero because I don't have a fuel system. I don't have a cooling system. I don't have an ignition system. I don't have a transmission. All those things that can go wrong, I don't even have. So I save about 250 bucks on gas every month, and I save another couple hundred bucks on maintenance and insurance because these cars are safer. And so again, what's going to drive us to happen is that the average American family is going to save with two electric cars. You know, a system might cost, you know, 20 grand to put in, but it'll save them almost that much money each year. And as there are more incentive programs and more financial aid available for lower income communities and lower income households. I think, I think that again, people are going to need this in order to make their family budget work as we move forward. And you're not going to stop them. Okay, at this point, I do get to interrupt you with 30 seconds left and probably less because one of the things that I'd like to get in, we talked about affordable housing is a big issue today. And I think what this brings up is sustainable living. And that is why land and politics is kind of dovetails to the whole thing. As well as how you make production of housing cheaper how you make our transportation rail, all of those things have a have a relationship and and to see a better future, the wider the vision the better. Well put. Yeah. Okay, so thank you very much for showing up. I know it was a long drive from Kilauea to kappa. And I'll tell you what, I'll meet you halfway at Oasis and we'll have a drink. How's that? Sounds good, Ricky. Always pleasure to talk to you. Thanks a lot. Cheers. Thank you so much for watching think tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram and LinkedIn and donate to us at think tech Hawaii.com. Mahalo.