Renewing Energy Investments with Mark McCall of Lime Rock







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Mark McCall joins us in this episode to talk about the rise of renewable energy. Mark is a Managing Director of Lime Rock New Energy, a private capital firm that is trying to capitalize on the major energy transition currently underway. During the Obama administration, Mark was appointed to serve as the Executive Director of the loans program office of the Department of Energy. In that role, he was responsible for loans covering $30 billion of clean energy technology.

In our conversation today, you will hear about the megatrend toward renewables, what technology investments are required along the way, how the government will be involved, and the role traditional energy will play. 


Mark McCall

Managing Director, Lime Rock New Energy

Mark McCall is a Managing Director of the Lime Rock New Energy team with responsibility for deal sourcing, execution, and overall fund management. Mark was appointed by President Obama to serve as the Executive Director of the Loan Programs Office at the U.S. Department of Energy from 2015 to 2017. In that capacity, he reported directly to the Secretary of Energy and was responsible for a $30 billion portfolio of existing clean energy technology investments, as well as originating new loans for four loan programs designed to support the commercialization of innovative technologies that reduce greenhouse gas emissions in the automotive, renewables, nuclear, and hydrocarbons industries. Mark joined Lime Rock Partners at its inception in 1998 and served as the firm’s first Chief Financial Officer (17 years) and General Counsel (12 years). He also served as a member of the Lime Rock Partners Investment Committee for 13 years. Prior to joining Lime Rock, Mark worked at Delus Corporation, Lehman Brothers, and E-II Holdings in positions in finance and international business. Mark and his wife Marianna, through their family foundation, launched Trust for Learning, a high-impact non-profit focused on equitably expanding access to high quality early learning opportunities in underserved communities. Based in Westport, Connecticut, Mark previously served on the board of directors of SmartSynch, Inc., Nexcom Telecommunications, and Noble Rochford Drilling. He is a graduate of Georgetown University (B.A.) and Yale Law School (J.D.).


Greg Dowling

Chief Investment Officer, Head of Research, FEG

Greg Dowling is Chief Investment Officer and Head of Research at FEG. Greg joined FEG in 2004 and focuses on managing the day-to-day activities of the Research department. Greg chairs the Firm’s Investment Policy Committee, which approves all manager recommendations and provides oversight on strategic asset allocations and capital market assumptions. He also is a member of the firm’s Leadership Team and Risk Committee.


Greg Dowling (00:06):

Welcome to the FEG Insight Bridge. This is Greg Dowling, head of research and CIO at FEG. This show spans global markets and institutional investments through conversations with some of the world's leading investment, economic, and philanthropic minds to provide insight on how institutional investors can survive and even thrive in the world of markets and finance.

Greg Dowling (00:30):

We are pleased to welcome Mark McCall, managing director of Lime Rock New Energy, to the FEG Insight Bridge. Lime Rock New Energy is a private capital firm that is trying to capitalize on the major energy transition that is currently underway. Prior to Lime Rock, Mark was appointed by President Obama to serve as the executive director of the loans program office of the Department of Energy. In that role, he was responsible for loans covering $30 billion of clean energy technology. In our conversation today, you will hear about the megatrend towards renewables, what technology investments are required along the way, how the government will be involved, and how traditional energy fits into that equation. Mark, welcome to the FEG Insight Bridge,

Mark McCall (01:17):

Greg, thanks. It's great to be here.

Greg Dowling (01:19):

Would you mind briefly introducing yourself and Lime Rock?

Mark McCall (01:23):

Sure. I'm Mark McCall. I helped start Lime Rock back in 1998. Lime Rock is a private equity firm. We started with 5 people and a $100 million dollar first fund; today, I think we have about 250 people and we've raised 13 funds for $9 billion. And all of that has been in energy. The principal fund group, Lime Rock Partners has been a growth equity investor in energy throughout that period.

Greg Dowling (01:48):

Now you took a detour, right? You were at Lime Rock for a while, and then you went from the private to the public sector. Tell us about that.

Mark McCall (01:55):

Yeah, that's an interesting story. So in 2015 I'd been at Lime Rock for about 17 years and I got a call from the U.S. Department of Energy. Secretary Moniz was looking for somebody to come run the Clean Energy Technology Investment Program at the department, that's a $70 billion program. They had a $30 billion existing portfolio of investments to manage and $40 billion that President Obama and the Secretary wanted to see put to work towards the end of the Obama administration. So I talked to my partners at Lime Rock and they said, "That's a tremendous opportunity. You've got to go do that." So I headed down to Washington for the last couple of years of the Obama administration and ran that program. And I can tell you, it was just a tremendous time and place to be.

Mark McCall (02:34):

For me it was really immersion education in the state of clean energy technology in the U.S. at that time. We really literally had a chance to see everything that was going on. And I should add one of my partners at Lime Rock actually joined me for that. So Alex Mishkin actually came and helped me do that, the two of us ran the program together. And actually, I was a presidential appointee, so when I got the boot in January of 2017, a new administration came in, he was actually able to stay and ran the program himself for a while.

Greg Dowling (03:00):

How different is it from private to public?

Mark McCall (03:03):

Oh yeah, it's an interesting transition. In the private sector, a small group of people can make decisions and act fairly quickly. In the government there's a lot more bureaucracy, a lot more that you have to go through. What's interesting about it is decisions get made--and I was fortunate because I came in towards the end of that administration, so it was really running, I would say, pretty well. Like well-oiled machine by the time I got there. You can see the power of the federal government--when it decides to take action it's a pretty powerful body.

Greg Dowling (03:33):

I imagine that many of the people you worked with under the Obama administration are kind of "getting the band back together" for the Biden administration. Are a lot of those same people in similar roles or have taken higher leadership roles?

Mark McCall (03:47):

Yeah, absolutely. That's happening right now. They've filled most of the cabinet positions and they're starting to go down the line and fill the rest of the positions, that's a fairly long process. But yeah, I've already seen... Quite a number of my former colleagues have already gone back into the government in various different roles.

Greg Dowling (04:02):

So I imagine that no matter who was elected to the White House, we would've seen a large infrastructure bill, but under the Biden administration, there's a bigger focus on clean tech. What do you think this current administration's impact is going to be on renewables and cleantech?

Mark McCall (04:17):

I'd start by saying that it's pretty clear that President Biden has a very personal keen interest in climate. And you can see that from the actions that he's taken from day one. On the first day he was in office, he put the U.S. back into the Paris Climate Accords, he directed all of the cabinet secretaries to report out to him in relatively quick fashion what actions each department of the government can take to help with climate change, and the appointed a domestic climate policies czar, which I think is Gina McCarthy, and also John Kerry to be the international... He's very focused on it. And the infrastructure bill is coming out, and you're going to see a lot of clean energy initiatives in there that go from 500,000 charging stations, talking about electrifying school buses, incentives for electric vehicles, and on and on. I think it's real. And I think it's going to have a pretty dramatic impact.

Greg Dowling (05:17):

All right. So this new energy revolution--why now? It feels like I've heard this story before. What's changed from a technology perspective that's going to enable this to be a real revolution.

Mark McCall (05:27):

Yeah. I think quite a number of things. First of all, the "why now" is really a story of cost declines. The costs have really come down. I mean, the reason Lime Rock has started Lime Rock New Energy is we see that the economic fundamentals are driving this transition. What do I mean by that? I mean the cost of wind and solar have declined so dramatically now that they're cost competitive with the incumbent generating sources. Because of that, it's just economics 101, you're going to see more and more deployment. You're already seeing that. Literally hundreds of billions of dollars are going into wind and solar, but also energy efficiency, and electrification of transportation. So I think when you say, "What's happened? Why is this happening now?" For me it's really a cost story. But in terms of what's changed on the technology front, just think about it--the internet, it's software, we have a lot of tools that we didn't have say 10 or 12 years ago that make it easier and faster and cheaper to iterate and innovate.

Greg Dowling (06:25):

So when you say "cheaper," these standalone, there's no need for government subsidies to make it competitive with gas or oil or coal or anything, right?

Mark McCall (06:32):

Yeah. I think that's where a lot of people maybe are stuck in a 2015 kind of mindset, because the government subsidies have been there and they've actually done the job that they intended to do, which is to drive the economics. Whereas before you could tell a story that, "Well, these things are only working because of the subsidies," that's no longer true. They're actually undercutting--without subsidies--fossil fuels. And you can see that in the deployment numbers. Two-thirds of all the new generating capacity that's been deployed in the U.S. over the last four or five years has been from renewables. And I think in 2020, they're projecting it's going to be about 80% from renewables.

Greg Dowling (07:10):

What is the role that carbon is going to play? So what is the role fossil fuels such as natural gas or oil are going to play in this energy transition? It feels like we're not there quite yet.

Mark McCall (07:20):

Right. I would use the analogy of the aircraft carrier. Think about that as the global economy. It's built up a lot of momentum in one direction and it's capable of turning around and going a different direction--and that is happening and it's going to happen, but it's not going to happen very quickly. You've started to see those changes, but just look at the install base of... People talk a lot about electric vehicles, but the reality is the fleet of existing vehicles that's out there that's going to be there for the next 12, 15 years--it's a billion internal combustion vehicles on the road today. So that's just one example.

Greg Dowling (07:52):

Natural gas, especially, I feel like that's the one I hear the most about. Like that's definitely going to have a role, but some of the other, maybe dirtier fossil fuels like coal are almost already being phased out. Is that true?

Mark McCall (08:03):

Yeah, absolutely. Particularly in the U.S., coal is definitely on a rapid decline and natural gas has, for the most part, been taking share from coal. But now what you're seeing is renewables are sort of taking share from both--or at least they are the replacement. What you have in the U.S. is a replacement cycle, a lot of the generating capacity is reaching end-of-life. And so as that goes offline and you have to replace it, typically it's being replaced with whatever's cheapest, and that's why you're seeing so much of it's being replaced by renewables. Globally it's a little bit of a different story. Each country is using whatever's cheapest in its own country, so the countries that have a lot of coal are still using it and still building coal plants. But we see the same dynamic happening globally, which is renewables are getting cheaper and cheaper, and they're starting to eat into that share on a global basis, and that's just going to continue.

Greg Dowling (08:51):

You have a situation where you have a region and maybe there's a of solar and, maybe you have a little bit of natural gas. It seems like we really need to re-engineer the grid to make all of this happen and that maybe batteries are also the missing link. So can you talk a little bit about grid and having all these different energy sources going through it, and then also storage?

Mark McCall (09:15):

Sure. Grid modernization is near and dear to our hearts at Lime Rock New Energy, that's one of--our very first investment that we've made is in that sphere. And the reason is, when you think about the electric grid, it was basically designed for a past era. It was designed for a different paradigm, which was where you had power that was flowing only in one direction from very large generating stations, say a coal plant or a nuclear plant, going in one direction to the city. And today that's just no longer the case. Now you have solar and wind distributed on the grid. You've got rooftop solar. And in all of those cases, now the power has to be able to flow in two directions, and the grid is really just not designed for that. So the first company that we invested in is a company called Smart Wires. Their solution is a smart valve, which basically goes on the system and allows the grid operator to respond to that distributed generation and move power on the grid in real time. And that's a problem that is new and is only going to increase as you have more renewables come on the grid. Because renewables, as we know, are intermittent--the sun doesn't shine all the time, the wind doesn't blow all the time, so those power sources are constantly going up and down throughout the day, but this product gives the grid operator the ability to respond to that in real time and move the power around on the grid.

Greg Dowling (10:34):

So grids have to be completely rebuilt across the U.S. How big of an opportunity is this? It seems like this is going to be a massive, multi-year type of project.

Mark McCall (10:44):

Yeah, absolutely. And the issue is it's difficult to do new transmission clearly. That's one of the other things that we like about this company, is that it allows the grid operators-- instead of building new transmission... When they've got an overloaded line or they've got congestion, instead of building new transmission, they can simply reroute the power. And I'd add something else to that, which is, one of the issues that you see is when you have line congestion, the first thing that usually gets curtailed or turned off is the renewable generation, because it's the cheapest to turn down, even though that's not what you want from a climate perspective. So one of the things that we like on the climate side from this technology is simply the fact that it allows the renewables to continue to generate, and they just solve the problem by rerouting the power.

Greg Dowling (11:27):

You mentioned that the sun doesn't always shine. That is a very true statement. This stuff is intermittent. So what do you do in terms of storage? It seems like that's really the missing link here.

Mark McCall (11:38):

Yeah, I think you're exactly right, Greg. There's been a lot of focus on storage, and right now kind of state of the art is battery technology, and the focus has been on relatively short duration, so the four-hour market. And that's really a function of people coming at the end of the day and turning on their lights and turning on their air conditioners. And how can you extend... ? You've been generating renewables, let's say, throughout the day, particularly solar in California, how can you extend that through the evening hours, those peak hours? And so that's a four-hour window, and they've actually gotten to where they can do that pretty effectively with battery technology. But the real issue going forward is you have periods of weeks where it's just cloudy or the wind dies down.

Mark McCall (12:23):

And so we're talking about trying to increase the share of renewables all the way up to--people are talking about, "We want 100% renewables," but you can't get to that point without a long duration storage solution, and we just don't have that right now. So that's one of the things we look at. We're constantly talking to companies that are working to solve that problem. There are quite a number of interesting solutions that are in the works, but we don't have it yet. But when you say that's the missing link, I agree. I think that there are a number of issues that have to be solved. This energy transition is creating new problems and new issues that have to be solved, and bottlenecks. And that's really what Lime Rock New Energy is focused on, is what are the companies that are solving these problems today? And we see a lot of opportunities there.

Greg Dowling (13:11):

All right, share with us some of those new technologies on the battery side. I think listeners would find it interesting to hear what kind of novel approaches people are taking.

Mark McCall (13:19):

Yeah, so it's actually, it's less on the batteries. There are battery technologies that can operate for much longer than four hours. So we're talking about flow batteries. But I was actually talking about longer-duration solutions. People know about pump storage, where you pump the water up the hill into a reservoir, and then when you want to release the power, you let it come back down. There's compressed air, which is a similar idea of where you're compressing the air into, say, a large cavern and then releasing it when you need it to turn the turbines. But in all of these cases, the issue is: what's the efficiency? What's the round-trip efficiency of that technology? We're seeing people that are just essentially working to get those efficiencies up using novel and innovative ways, but still it's a pretty big challenge.

Greg Dowling (14:02):

Also seems another challenge we have--so it's not just the technology, it's also materials. If we're going to build a ton of new electric vehicles, putting up more solar panels--that all requires, at least now, a lot of materials like copper and lithium. Do we have the resources? Everybody's going to drive an electric vehicle.

Mark McCall (14:21):

Yeah. So when you look at--if you kind of take a static picture today and you forecast forward, you definitely see those types of bottlenecks developing. But I'm not overly concerned about that, because I think the market really steps in to solve those types of problems. One general comment that I would make about this is that the opportunity here is so large. We're talking about a global scale issue where people just want to see less carbon emissions. They want to have a cleaner footprint. And so you're seeing that individuals want that, companies want that, and governments want that. It's creating this massive opportunity, and because of that, there are a lot of teams that are out there trying to solve each of these problems. For instance, with the batteries. Today's battery chemistry is not going to be the battery chemistry that you see even two years from now, it's evolving that rapidly. And so wherever there's a situation where we're using too much of one thing, they're either going to produce more of it, or they're going to change the chemistry to use less of it. And we see that.

Greg Dowling (15:15):

Can you do that? People always talk about the monopoly China has on the rare earths that are kind of key components. Have we figured out how to use less of those, or recycle ,or get new supply? What are we going to do about those key ingredients?

Mark McCall (15:28):

Yeah. All of those things. There are teams that are out there working to source rare earth from places other than China. There are people that are working on using less of those rare earths. There's definitely recycling teams that are in place that are getting a lot of attention. So all of those things collectively are going to address those issues.

Greg Dowling (15:44):

So it feels like--if you think about the tech boom or railroads--you tend to make more money on the picks and shovels approach than investing in the railroad themselves. So what are some of the less obvious industries and service providers that you're looking at that you think are going to be great investment opportunities but may not be as sexy as the front page solar panel or wind turbine?

Mark McCall (16:04):

That's a great point that you're making, and that's sort of the point of view that we're taking. We're looking for companies that are solving the problems today. A great example is the second investment we made, is a company called Qmerit. This is a direct play on increasing sale of electric vehicles. The play is essentially, you're going to need a lot of electric vehicle chargers installed in people's homes, two-thirds to three-quarters of the people that buy an electric vehicle want to have a home-charging option, so they want to have a charger installed in their garage. So you have this issue where people walk into the showroom, they're at the dealer looking at the electric vehicle and they ask the salesperson, "How do I get a charger?" Obviously the automakers don't really provide that service, that's not their core competency, and yet it's an obstacle to the sale for them, and they're sort of placing their franchise value in the hands of whoever comes to do that installation.

Mark McCall (16:53):

Qmerit is a first national platform that's been created to solve that problem. They have a national footprint. They're able to offer that automaker the ability to do those installs on a very high-quality, consistent basis. They've locked up quite a number of the major automakers. So if you go to GM, for instance, and go on their webpage and type in "charging," you're going to see "powered by Qmerit." GM recently announced that they're going to go all-electric by 2035. They also announced that Qmerit is their partner for installation and maintenance services. That's kind of a less obvious... Everybody knows that electric vehicle sales are going to go up over time, but we think that's one of the less obvious ways to play it. The other thing I would just add is it's sort of technology neutral. One of the things--we're trying not to take a lot of technology risk in our portfolio, we're looking for the later stage companies that have already gotten over the technology hump. But in the case of Qmerit, they're not part of the technology war of the charger manufacturers, they're just going to install what the customer wants.

Greg Dowling (17:48):

Related question: I have always wondered what are we going to do with gas stations? I know they are increasing the range of most electric vehicles, but if everybody has electric vehicles and we're driving them for our vacations to the beach, and I think of all the truck fleets that are out there--it takes a long time to recharge. It's a lot longer than it takes to fill up your tank at a gas station. We have infrastructure--gas stations, they're everywhere. What are we going to do with electric chargers when everybody is driving and they're driving past their range?

Mark McCall (18:21):

That's a great point. I've actually thought about that myself. You were talking about, "We're all going to be driving our cars." I think that over time, you're going to see much more autonomous driving. The Uber, or the car is going to come and pick you up. But the question is: where do those cars go to recharge and where do they go when they're not in use? Maybe gas stations get repurposed as little mass-charging areas for your autonomous cars.

Greg Dowling (18:45):

It'll charge and you can go get your Slurpee and roller dog.

Mark McCall (18:49):

What I'm saying is they go there, they're going to come pick you up at your house, take you wherever you want to go. They go there to rest when they're not busy.

Greg Dowling (18:57):

Well what if I want a roller dog and a 36-ounce, big Slurpee? I guess I could go there anyway.

Mark McCall (19:02):

Have it delivered.

Greg Dowling (19:04):

That [laughs] it's right, we'll have it delivered. It seems like everybody is green these days, and I think that's a really good thing. There's just general awareness of the need to be a little bit more conscious of how we consume energy. But then when it gets down to like, where are you going to put a wind turbine or even natural gas, which is a lot cleaner than coal--like if you think of like the northeast, it's really hard to get anything done up there. How do we actually do this? Where people love this stuff, but just, not in my backyard.

Mark McCall (19:36):

Yeah, I would say two answers to that. One, for the northeast I think you're going to start to see pretty quickly here and pretty dramatically offshore wind as a solution for how to get clean power into the northeast, because there's a huge wind resource not far off the coast on the northeast and there are already projects that are being permitted and approved to do that. It's an economic engine, all the states along the coast here are looking for that as a job creation function. And it makes a lot of sense, because to your point, you're not going to be able to build new generation in these highly populated areas. You're not going to get permission to get new natural gas lines in there. They've already made that fairly clear. But it's not that difficult to run new generating capacity into those existing grids. You're going to see that, and I would also say, distributed generation. You're going to see much more rooftop solar. It's going to become fairly common for people to have their own--instead of having a generator, you're likely to have a battery in your garage that ties into your rooftop solar. Technology is going to advance, and the economics--again, the costs are going to come down to the point where it's an economically rational thing for you to do.

Greg Dowling (20:44):

We've talked a lot about wind and solar. I keep hearing about smart nuclear as being an option for people. Is that not at all plausible just because of the connotation that nuclear has?

Mark McCall (20:53):

The technology is advancing. They're working on small modular reactors and that technology is certainly advancing. It sort of makes it cheaper, safer, easier to deploy. But at the same time, you have this backlash. After Fukushima, people are nervous about nuclear. There's still the nuclear waste issue. What do we do with the waste? And so there are definitely headwinds on the nuclear side. It just takes a long time. The program that I was running, we had a nuclear program and we were backing the first new nuclear facility in the U.S. In 30 years, the Plant Vogel in Georgia. That program was designed to do things that hadn't been done before to help get them started, to start getting the costs down so that the market could take over and do more of it. But on the nuclear side, it's a huge challenge just in terms of the scale of the projects and the costs that are involved.

Greg Dowling (21:43):

It feels like we've seen several cycles before. It seems like a lot of people have lost money, especially in kind of green tech 1. Now there's all these cleantech ETFs. A lot of money is going there. It also feels a little bit to me like shale in 2012. Why should returns be any better with all the flow and hype that are going into this marketplace?

Mark McCall (22:04):

Well, a couple of thoughts on that. One of the things that I think is creating the opportunity that we see, particularly in the private market, is what happened during the cleantech 1.0, where there was a lot of capital that was destroyed. And you really haven't seen funds formed over the intervening 10, 12 years to target these markets. So that creates an opportunity where there's been relatively less private capital going into these areas. Now, I think what you're talking about is, clearly we're seeing this SPAC phenomenon and the public markets are throwing a lot of capital at these opportunities. The other place that you see a lot of capital going, is after big wind and big solar, that's become a tried and true way of making money. The equity returns have been compressed, but they're still positive and it's viewed as relatively safe.

Mark McCall (22:52):

So you see a lot of capital going into those two areas. We essentially have designed a strategy to stay away from both of those things. We're playing smaller companies that are still private, that don't need the size of capital that, say, you see coming in from the stacks. I wouldn't argue with you that there is--the market has discovered this. And again, this kind of goes back to what I was saying, is that the market views this as a really large opportunity for the companies that can crack that nut. I think they're right about that.

Greg Dowling (23:19):

But you're saying that it's more a public phenomenon than a private. I guess I don't see as much private activity, dedicated venture funds, throwing money at the space. It seems more retail-oriented. Is that another big difference from the last boom and bust?

Mark McCall (23:33):

Yeah, absolutely. I would say that's fair. And I would also mentioned my other partner, Mark Lewis. He had been the head of global business development for GE Energy and left that job to go work at MissionPoint Capital, which was part of that era. And they had quite a number of good investments. But he lived through that period and has all of the experience and the scars to prove it. But again, we had talked earlier about the different dynamics that we see now. Things have moved on. You have the benefit now, I would say, again, of the internet, of software, of lower costs. One of the things that we see is companies that we deal with today are very cost-conscious. They've become much more cost-conscious. A lot of capital I think just got burned up on big plans, kind of capital-intensive business plans that were also dependent on getting large amounts of financing down the road, and so I think entrepreneurs have sort of taken those lessons and they're working to do more with less and trying not to be dependent on very capital-intensive business plans.

Greg Dowling (24:30):

Go back 10, 15, 20 years. Was the industry, even that mature to have a growth equity strategy? It seems like it was all venture back then. And there's still venture now, but I didn't see many growth equity approaches. Is that just because the industry is more mature, so there's more proven technology?

Mark McCall (24:47):

Yeah, I think that's exactly right. I think back in the day it was all early-stage stuff. There was a lot of binary technology risk that was taken. And when those things work out, it's great, but you know that the odds are a lot of them are not going to work. One of the benefits of the strategy that we've put together of looking for more mature businesses is that they've already gone through that Valley of Death, they've got the technology proven, they've got a product or service that customers are buying. We know it's commercial, so it's not pilot, they're not giving it away for free. They can actually make money doing what they're doing. Now the issue is: how do we scale this up and get bigger, faster? That's what Lime Rock has been doing for years and years. There haven't been a lot of those companies until now. So one of the things that we do is work with the VCs and look for the companies in their portfolios that have made it to the point where they're ready for a bigger equity check to scale up

Greg Dowling (25:38):

Give us another area that maybe you haven't invested in yet, but you're super excited about and you're spending a lot of time researching it. You think this could be just a hugely scalable opportunity.

Mark McCall (25:49):

Yeah. So one of the areas that we're looking at is data centers. Data centers use a lot of energy, that's one of the major costs on their income statement. So if you can come up with a technology or a solution that allows them to dramatically lower their energy use, that's going to be a very compelling sales proposition. That's a hugely rapidly growing industry, so you're selling something that's needed into a growth industry of its own. So it's a double-win. Another place that we're looking at is just energy as a service. You hear that a lot. There are a few companies that are beginning to crack that nut as well. We haven't made an investment there, but that's an area that we're following quite closely.

Mark McCall (26:28):

That's where a company comes in and basically takes over all of your equipment, all of your energy. They take over the billing. And essentially, using AI and knowledge of energy, they can essentially replace your equipment with much more energy efficient equipment and manage it. The sales proposition to the customer is, "You've got a budget for energy costs. I'm going to lock it in at a lower price. So you can budget going forward. I can finance this equipment. It turns your CAPEX into OPEX, and you've got lower operating costs going forward." Most companies, their core competency is not their energy use and their energy equipment, that's not what they're good at. So if they can outsource that to somebody who is good at it, I think that works for everybody. So that's the one that we're continuing to look for.

Greg Dowling (27:12):

I like it. So you have SaaS--software as a service--so we could have EaaS, or something. I don't know.

Mark McCall (27:17):

Yes. It doesn't roll off the tongue quite as well, but, uh [laughs].

Greg Dowling (27:21):

No. I think that's a good idea. That's that's great. Give me a couple of bold predictions here. We're at the end, give us the big close. What are the things that people are just... We wake up every day and we turn on the TV or we observe our surroundings, and then all of a sudden, sometimes change happens and you're like, "Whoa, when did this happen?" So give us--what's going to happen in the next 5 to 10 years? Give us a few bold predictions in terms of cleantech and renewables.

Mark McCall (27:47):

We've been working in energy for a long time and you would reference the shale revolution. And so that's something that I think about quite a bit. The shale revolution took everybody by surprise, but everybody's very familiar with that story now. It was just incremental technological improvements that made producing fossil fuel in the U.S. much more economic than it had been. And all of a sudden, the U.S. shot up the charts in terms of production and became the global leader in terms of production. That was a technology and innovation story. But I think what people have not focused on is that technological innovation is not limited to one sector. At the same time, that type and pace of change was happening in all the sectors that I've been talking about, but people really weren't noticing it. So people still have this idea that solar and wind are more expensive than natural gas and coal, and it's just not true. Again, my bold prediction is that you are going to see literally hundreds of billions of dollars deployed in the areas that we're focused on. That's renewable energy efficiency, electrification of transportation. I think it's going to go faster and larger than common wisdom today.

Greg Dowling (28:52):

Wow. Hundreds of billions of dollars. And it's going to happen faster than you think. You heard it here first. Mark, thank you very much. Thanks for your time today.

Mark McCall (29:01):

Greg, thanks so much for having me. This has been fun.

Greg Dowling (29:04):

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