Season 1 Episode 10: Bex Stone on Forecasting the Future of Energy

Today, we speak with Bex Stone and Adam Dawson from Exawatt – a strategic consulting firm for the solar PV, power electronics, EV and high-purity quartz and lithium-ion battery markets.

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S1E10 Bex Stone

In this episode, we covered:

  • The challenges in long-term forecasting in the semiconductor industry due to the qualitative nature and ambiguity in data.
  • The future of the silicon carbide market, including potential overcapacity due to current investment trends.
  • Examination of China's investment in wafer capacity and its potential impact on the global market
  • The difficulties in integrating new tech into industries like electric vehicles as a result of conservative technology adoption practices.

The weekly Hypercube podcast sits down with leaders in the energy and utilities sectors to explore how data analytics can help businesses make smarter decisions and accelerate business growth.

CHAPTER MARKERS

[0:49] Dario makes a quick introduction and gives an overview of his role at Next Energy Capital.

[1:44] Dario explains the role of energy storage in the energy transition and as an enabler for greater renewable energy penetration.

[4:19] Dario discusses where the UK sits on energy storage innovation in comparison to other regions.

[5:19] Dario shares his insight into how NEC approaches investments in the energy storage space.

[8:14] Dario highlights some of the considerations informing investor strategies in the energy sector.

[12:27] Dario explains how investment in the electric vehicle space is expediting battery development for energy storage.

[16:09] Dario emphasizes the challenge of connecting energy storage solutions to the grid.

[18:55] Dario discusses the role of data in managing supply and demand imbalance in the national grid.

[22:08] Dario gives an overview of some of the success stories he has seen at NEC.

[24:38] Adam asks Dario to share his take on the big innovative technologies of the next 5-10 years.

TRANSCRIPT

Hypercube Podcast Transcript

Title: Bex Stone on Forecasting the Future of Energy

Host: Adam Sroka
Guest: Adam Dawson and Bex Stone

Intro: Welcome to the Hypercube podcast, where we explore how companies in the energy and utility sector leverage data analytics to make smarter decisions and accelerate business growth. I’m Adam Sroka, founder of Hypercube, a strategic consultancy that supports asset owner-operators, traders, route-to-market providers, and energy services companies to unlock the power of data.

If you’re interested in hearing real-world examples of how data and AI are advancing the energy sector, this is the show for you. 

Adam Sroka:  I’m joined today by the team from ExaWatt. Adam and Bex, if you’d like to introduce yourselves to the audience.  

 

Adam Dawson: Uh, hi, I’m Adam Dawson. I am head of power electronics at ExaWatt. So we do market analysis, cost forecasting, supply chain analysis for the power electronics industry, uh, looking at the various technologies, um, and how they’re going to develop ExaWatt as a whole, kind of decarbonisation, electrification I’ve been leading the Power Electronics team at the company for almost five years, working with Bex to do the Power Electronics analysis.

 

Bex Stone: Hi, I’m Bex. I started at Exelwatt about two years ago, nearly, coming up. I primarily work on silicon carbide supply chain. Um, understanding kind of the major players, the type of capacity going into the industry. So I do a lot of, of tracking, um, of news, press announcements, financials, things like that. 

 

Adam Sroka:  You must be busy, right? Like the, the, the trends are on, on the right direction for that kind of interest and how you finding it? 

 

Bex Stone:Yeah. So I, I don’t have a background in power electronics. I actually studied history at university. So I came into this job kind of by chance. It sort of suits my, my skills, I think, um, and the way I think. I really like digging into kind of the bigger questions about things like this and the silicon carbide and power electronics industry is so changing, especially with, with the new types of technologies that we’re tracking at the moment, which is primarily silicon carbide. gallium nitride and how it relates to, you know, electrification of transport and, and things like that.

 

Adam Sroka: Very interesting. And Adam, how do you find like the mix of customer industry draw-on stuff versus a lot of social political pressures? Cause I think that must be a really, you’re probably in a really interesting position whereby like technical experts in a really hot topic that’s growing at a rate, like how’s that feel?

 

Adam Dawson: Um, yeah, it’s interesting. And I mean, there’s a lot of very kind of. Complex interactions to understand between all those factors, you know, I think some of what we do is on the more technical side and the more, you know, looking at the kind of, you know, the out and out kind of costs and manufacturing of these kind of things, the different kind of technological benefits and how technology is evolving, that can be very quantitative in some ways and, you know, and clear cut in kind of how we, how we analyze that, but then you have to kind of, yeah, throw in the more kind of social, political, particularly geopolitics in a lot of these industries, you know, into that, you know, there’s, there’s a lot going on in the semiconductor industry right now in terms of  investment and support from various countries and regions, kind of the geopolitics of how,  how the industries are protected and developing in different parts of the world.

 

And that has a big influence on these industries. No decisions aren’t always made for the kind of  pure technological or, or kind of manufacturing reasons. So yeah, you know, being right in the middle of that, and then yeah, you bring in the kind of. decarbonisation, the push towards developing new technologies that kind of all come into it.

 

So it’s a really interesting time to be in this industry. And, and yeah, to kind of be be analysing all these different factors. 

 

Adam Sroka:  So let’s rewind a little bit. If I’m, an organisation that’s just starting to get into this space, when’s the right time to engage with Exowatt? 

 

Adam Dawson:  Yeah, I mean, to a certain extent, we’d kind of say, A lot of what we’re trying to do is understand which technologies are going to have the biggest impact and when and, you know, and then, you know, in which areas or which specific applications or kind of, you know, all down that route and understanding the supply chain that needs to support that.

 

We’ve done quite, you know, we’ve done a lot of our projects have been with  Kind of companies looking into kind of market entry. So, you know, they’ve either got the technology they’ve been developing or they’re in kind of other related supply chains or the related industries that are looking to move into the kind of more specific, you know, whether it’s, you know, the silicon carbide industry or, or power electronics more broadly, you know, and it is working with them to understand what the situation in the industry today. 

 

In terms of where technology, where supply chain that they’d be entering into, but also what the, what’s the situation going to be in 5 or 10 years time, you know, a lot of these investments to kind of increase capacity or develop these technologies aren’t really going to kind of be complete or kind of have a major impact for, for a number of years.

 

So you’ve got to know that your technology or your,  your manufacturing, whatever it might be.  is going to be competitive to where, where we think the industry is going, where this technology is going. 

 

Adam Sroka:  Yeah, no, we were talking to some people that were saying that actually they’re like long horizon, 15 year timeline for one of these massive investment projects  was actually just banking on the technological advances and stuff in the industry to like, to catch up to a certain threshold that they believe would happen. Otherwise, the whole thing wouldn’t be profitable. Is that quite a, Like, is that quite an out there statement or is that more and more common at the moment? 

 

Adam Dawson: I don’t think that’s exactly the kind of conversations we’re having, you know, it’s looking at there were a certain kind of customer’s technology, for example, what does that, what is that going to look like in five, 10, 15 years time?

  

I mean, I think most of our work tends to be on the more kind of five to 10 year kind of outlook maybe, but you know, the same questions could apply however far forward you’re looking. You can work both ways. It can be, you know, no for that customer’s product and technology to be successful, what does the industry need to achieve or what benchmark, or it can be, you know,  In that time period, your technology isn’t going to be competitive because the industry is going to have out, out developed you.

 

We’ve done it, we’ve recently done a big project. You’re looking at where capacity is going to go that, you know, we’re looking at people entering the industry kind of saying, potentially, there’s going to be already more than enough capacity in the industry. Is your technology worth that investment from where you are today?

 

It’s giving that benchmark to, to understand where they fit in essentially. 

 

Bex Stone: I think a big part of our job is, is trying to anticipate.  what we foresee the future kind of bottlenecks in the industry or what we anticipate happening with, with things like capacity and technology development. We’ve sort of noticed there’s a tendency to, to think about what’s happening now and panic over it a little bit and throw all of your investment into, at the moment, you know, in the silicon carbide industry, there’s a supply demand gap.

 

So people are throwing a lot of money at  growing that capacity.  But we’re kind of looking at it thinking, well,  if everyone’s throwing money at the capacity now, what’s happening in a couple of years, and is that even going to be an issue? by the time that capacity comes online. 

 

Adam Sroka:  Yeah, because it’s big bets, right?

 

And it’s like, it’s almost unknowable. You’re talking macroeconomics, long-term forecasting, like social-cultural stuff. I, yeah, it’s,  we were talking to the director for analytics at ICAS and they were saying that, they do some of this for commodities prices and stuff. And it’s a bit kind of crunchier and more easily defined.

 

I guess you’re looking at a price function, but again, the, just the level of complexity and that you, you’ve got to really consider like what’s going on on the other side of the world and how is research going to play into this as it develops and so on and so forth. 

 

Bex Stone: I think especially in, in the kind of our industry in power electronics industry, um, when we compare the type of data that we get to some of our colleagues in the, in the studying the PV and energy storage market, you know, they, they oftentimes will look at what China’s doing with, you know, they’re a lot more open about their financials and exactly how much things cost to manufacture, manufacture.

 

In parallel electronics, because silicon carbide, they’re new and it’s a maturing technology, we don’t have a lot of that data. So it becomes even more complex because you’re almost trying to pull meaning out of out of very ambiguous and vague statements sometimes, you know, a lot of my job is, is looking into earnings calls and trying to pick out very small, brief mentions of how much capacity they’re aiming to get to in 2027, or how much silicon carbide revenue they’ve generated.

 

And then added to that is a lot of these geopolitical questions as well. And seeing it, it sort of becomes very complicated. And a lot of it is. estimations based on our insight into the industry, um, because we can’t rely on very concrete and solid data. It’s interesting that I think it, I think it makes it a lot, a lot more. 

 

Adam Sroka:  Yeah, because yeah, emerging technology, right? The data just, it just doesn’t exist. It’s not there. It’s like, who knows? You’re taking guesswork on, on stuff that’s in flight at the moment. So I was going to ask then that you’ve kind of hinted at, yeah, like going through articles, like walking through  earnings calls and things like that.

 

So a day in the life of, let’s think about like, what, what does that look like? Where are you getting data from? Like, what’s the kind of process? 

 

Bex Stone: Yeah. So a lot of our data. In terms of looking at trying to forecast, um, supply in particular comes from the things that I’ve mentioned, you know, earnings calls, press releases, financials, investor presentations, things like that.

 

We,  tend to get our data for the actual product from distributors like Mouser, and things like that. You know, we look at data sheets. 

 

Adam Dawson: Yeah. I mean, that covers most of the kind of hard Data we get. I mean, a lot of, a lot of where we’re missing data comes from kind of conversations we have directly with, with kind of industry sources, you know, people we work with, whether that’s clients or no other kind of contact, we attend conferences,  et cetera, to kind of get this stuff and we have partners as well that we work with on kind of some of the maybe more technical aspects.

 

For example, we have a very good partnership with Professor Peter Gammon at the University of Warwick as our kind of technical expert. Beyond where, where we can kind of get into that depth. We kind of have all these different sources of information and it’s bringing that together into something meaningful, hopefully, to kind of triangulate what that means, where the industry is going, where the technology is going, what people are actually up to.

 

Cause you know, often part of the problem is that you’ve got these big manufacturers developing these, these products that they don’t necessarily want to be super open with exactly what, how good or, or bad that technology is or their, their production processes are. So, you know, trying to get what we can from public sources and that we can, we can share and use.

 

It’s sometimes a challenge, but it’s all interesting stuff and we hope to get there at the end with the, with the right answer. 

 

Adam Sroka: Yeah. And even like the, the actual device data, like down the, down the line, like when these things are built and deployed, is that they’re, they’re actually really high barriers and, and like obstacles to getting access to or sharing or getting any kind of insights from That data I’ve heard firsthand from people that even own the devices. Like they say, or their supplier doesn’t like them playing with it. And you think, well, I do own it. Okay. So we talked a bit about the data. It sounds like quite a manual-intensive sort of analytical process. Are you seeing like a, a big impact of where things like data science and these trends in AI and stuff are having an effect on like the work you do or the industry that you’re in? 

Adam Dawson: Certainly, it gets talked about it kind of comes up and I think we, We do see, I’ve seen some of it,  particularly at a conference recently, you know, it does get brought up in terms of the, certainly in the kind of technology development side, there’s kind of people talking about where things like AI could potentially come into that kind of stuff. In terms of our day-to-day work, it’s something we’ve probably not fully really explored in part just because our data sets and what we can get into the data is a bit, I don’t want to say all over the place. That sounds like it’s not a positive thing. We know it’s a bit kind of different types of data, different kind of, a lot of it’s quite qualitative.

You know, we’ve not fully kind of got to a point that we’ve, we’ve been able to explore where we might be able to use this stuff, but I think it’s certainly something that could and probably should be explored in terms of where there’s any way we can help with that. I mean, as a company, Exowot was acquired by the IE group back about six months ago.

 

Um, so they do a lot of commodities data analysis. They’re in some ways similar to what we do, but with a more kind of commodities materials focus.  Uh, well, we kind of focus more on the technology side that you already kind of touched on it. They that kind of commodity side of things maybe does handle with a lot more handle a lot more kind of the data aspect versus what we do.

 

So we have been doing work as we kind of integrate over the last few months to try and work out how we can improve our data processes a lot. So using kind of what they know and their skills, there’s definitely work to be done there. And, but yeah, it’s very different kinds of industries and how we actually apply that is something still to be explored more.

 

Adam Sroka: Do they, do you think there’s an ambition or a strategy to, tie in some of the long-term forecasts on that front with the more kind of near-term commodity stuff? 

Bex Stone: Yeah, I think, I think that’s something that we’re exploring now. It’s actually part of what I’m working on in the next couple of months. I think where we’ve focused a lot on the technology. Crew kind of brings a really good understanding of, of the materials that go into making those technologies. And I, and I think there’s a lot to be explored there in terms of, you know, when we maybe look outside of a lot of what we do is, is at the device level. So it is quite, it can be quite technical.

We’ve typically focused on silicon carbide and gallium nitride, but when we look at those, the kind of wider systems that those technologies go into,  there’s a lot that crew can contribute and help us with. When we look at, you know, REV specialist Elijah, he’s working on looking at copper.  and how that is used in EVs, um, and demand for that. So I think we could probably bring in similar kind of analysis to systems like inverters, onboard charges, and things like that. 

 

Adam Sroka: Yeah. And it feels like there’s, there’s a lot of opportunity to almost shape a strategic direction and that longer time horizon scanning, like skills development and knowledge development within the organization. That’s really cool. 

Bex Stone: Yeah, definitely.

Adam Sroka: Any big sort of predictions, any juicy sort of insights that to share that like, what hot topics or hot takes if we got that, that maybe aren’t common knowledge that you’re, you’re allowed to sort of let loose on the Hypercube podcast. 

Bex Stone: I mentioned, um, earlier that, that, You know, the industry is experiencing a supply constraint at the moment, and that, that is the big talking point, you know, when, when are we going to kind of meet that demand as it grows. And, and the bottleneck is primarily at the wafer level because, you know, the capacity just hasn’t, hasn’t been built to manufacture devices, silicon carbide devices on. It’s a lot more time and energy-intensive than traditional silicon wafers. And so there’s, there’s a bottleneck, uh, there,  and our perspective on it is that there’s so much investment going into that, growing that capacity, both in the West and, and China.

 

There’s been a question mark around China, but a lot of what we’ve done recently is assess that market and understand when and how they will come into that market. And they are putting a lot of investment into growing with a capacity. You know, we’ve tried upwards of. probably 30 companies, and we’re aware that there’s probably more compared to under 10 Western manufacturers that, you know, in the US and Europe.

 

I think there’s an interesting question there as to whether, when, or if that undercapacity becomes an overcapacity. It’s something that we’re assessing. I don’t know how much I should say definitively,  but I think potentially it might be,  we think people are overlooking that there might not be a need for that much capacity in the market but everyone’s sort of driven by this fear that there’s not enough currently instead of looking sort of more mid to long term.

 

Adam Sroka: So yeah, like the pendulum will swing the other way. 

Bex Stone: Yeah, especially when it comes to kind of, yeah, we were discussing geopolitical considerations before. There’s a question as to whether, yeah, how quickly China can ramp this, you know, worth the capacity.  And there’s some doubt as to whether they have the quality and worth as comparable to, you know, the manufacturers in Europe and the US. You know, we’ve seen time and time again that China are able to, to catch up and put a lot of investment into these technologies. You know, our PV analysts, they track the market in China day in, day out, and they see still investment being thrown in China. And, and. They’ll be building, you know, factories that are operating at 50 percent or less utilization.

 

And I’m not sure if people are considering those, those sorts of things yet. maybe, maybe potentially underestimating what they can do. I don’t know. 

 

Adam Dawson: Yeah, I completely agree. I think that when I speak to people in the industry, how, how things are going to develop in China is probably the biggest question at the moment that people are interested in.

 

When we look, particularly from an export perspective, because the company was originally founded looking at the PV industry, we’ve got a lot of history there. We’ve seen the PV industry completely shift from the early days when there was a lot of manufacturing in, in Europe and the US. To almost completely to be in China.

 

It’s starting to look like, you know, as, as Bex has talked about, that potentially starting to happen, or at least, you know, the, the technology and the capacity is growing in, in China to to catch up. There are still a lot of people who doubt that China can do the same again as they did in pv, in silicon car buys.

 

And  personally I think that’s probably a bit naive that it’s not gonna happen. I think there are some differences this time around, particularly with the kind of geopolitics of it.  People, particularly the US, the EU, European countries, et cetera, are a bit more wary of letting the industry move fully to China, if possible.

 

But that’s all kind of still to play out. How exactly that’s going to unfold, kind of, it’s a bit too early to say. But we can see it coming in China, from what we’ve heard of people who have seen it first hand or are working with these Chinese companies, they are very quickly, if not already,  getting their kind of quality and technology up to the current kind of leading standard, even where it’s not, they have the capacity and the investment and the backing to, you know, to catch up sooner rather than later.

 

And I think that’s going to be a big factor in the dynamics of the industry over the next, you know, kind of short to medium term, if not longer. 

 

Bex Stone: It’s a controversial topic. I don’t think everybody agrees on it. 

Adam Dawson: Yeah. I think the thing that certainly some people who were kind of,  even not looking at the data or the, the kind of the evidence that it’s catching up or Publicly, you don’t want to admit it.

Adam Sroka: Heard it here first 50-50 splits on industry view out to the numbers as though just on what you’re talking about rings a bell with way back in the midst of time. I was a  laser electronics engineer and we were tracking like semiconductor manufacturing for the semiconductor wafers and things like that. And it was a similar story. But the numbers like were unbelievable. It was like building a new computer.  plant that had the same capacity as like the whole US like every year for eight years and things like that and we were like you remember reading it back in the day thinking that can’t be right that’s surely not.

 

Bex Stone: We’re seeing similar things to be honest like we’ve tracked or tried to track how much capacity we think these manufacturers will build or are attempting to build by 2027.  It’s, it’s more than, you know, the demand for wafers in the region that they’re selling into.  Yeah, that, that’s what kind of drove us to, to look into this in the first place, because we were, we were seeing all this, you know, these announcements that people were investing and we were thinking,  hang on a minute, something’s not, Not adding up with that, you know, how is this going to balance out with the demand? And, and yeah, so we’ve kind of explored that. 

Adam Sroka: And I think it leads to like other constraints and bottlenecks in, in the kind of end to end deployment and process, because  certainly from like our experience in the GB market is the back to like data, right? The actually the technology and the tools from like a software and a data architecture point of view just absolutely aren’t there yet. And there’s only a few players in the market and it’s growing and emerging and understanding the Yeah, you might have all this kit that’s great, but you’ll end up being constrained on  the software part to make best use of it and most effectively do it. Otherwise, you’ll get the situation that we’ve currently got, which is just lots of kind of ad hoc processes and things that haven’t haven’t quite been done, built the right way round leading to chaos essentially and lots of like missed value and lost opportunities with data quality and things like that. It’s uh, it’s yeah it’s an interesting thing to watch then and see how that plays out and if it’ll keep pace. 

 

Adam Dawson: Yeah and I think yeah there’s a big kind of caveat to a lot of this development we’re seeing whether it’s in China or kind of in the west is yeah will there be those other bottlenecks that will that will maybe hold it back from what people plan and want.

 

I mean we’ve seen bottlenecks the last few years on you know even just getting hold of the components to make the The equipment to manufacture things and, you know, can you develop the, the process side of things, you know, to actually, you know, these, these processes, they’re not kind of plug and play.

 

It’s kind of, you develop these processes, you know, and then, you know, and then it comes right through to the kind of energy industries. Do they have the ability to, you know, to integrate these new technologies, you know, the EV industry, for example, almost all manufacturers are looking at silicon carbide, but have they got the right, you know,  Development teams in place to start using this and start implementing it in their vehicles, which are often on multi year design cycles, you know, there’s potential bottlenecks at kind of all stages.

 

And a lot of work we’ve been doing is looking at kind of applications beyond EVs as well, but there’s still a lot of those industries that are conservative in their technology development, or, you know, have high reliability standards that You know, there might be the capacity further down the supply chain, but are they ready to to adopt those technologies?

 

And, and they’re, these are all still kind of questions that are ongoing that we’re, we’re trying to come to, come to some answer for. 

 

Adam Sroka: Well, we’ll have to get you back on when you’ve got answers to share. That’s definitely interesting.  Well, look, it’s been great speaking to you. One thing I always like to do is if there’s anything you’d like to promote or plug for the audience, or if people want to find out more, where’s the best place to send them?

 

Adam Dawson: Generally, we’re quite active on, on LinkedIn. Um, you can find our kind of website and stuff where we try to post kind of insights and stuff of what we’re doing, doing more generally. Right now, we’re still a lot of what we’re doing is actually trying to, trying to really understand what the industry needs from us and needed in that data.

 

So we’re, we’re always happy to kind of. talk to anybody out there in the industry who might have a need for anything to, you know, how we can help and how we can adapt our product to whatever any individual needs are in the industry. 

 

Adam Sroka: Very cool. Okay. Well, look, it’s been great speaking to you both. Thank you very much for today. We’ll see if anyone in the audience wants to reach out and get in touch and talk all things power electronics. 

 

Outro: And that’s it for this episode of the Hypercube podcast. Thanks for tuning in today.

If you have any questions about the topics we covered, you can reach out to us on LinkedIn or check out our website at  wearehypercube.com. You can also join Beyond Energy, our Slack community of data leaders from the sector. There’s a link to sign up in the episode description. We’re just getting this show off the ground, so if you like today’s episode, please leave us a rating, review, or subscribe wherever you get your podcasts.

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