Episode 11: Customer Voices on Building Sustainable Energy Futures

Constellation Energy: Welcome to Plugged In, exploring energy, a podcast from Constellation, where we explore the evolving landscape of energy solutions. In each episode, we are joined with industry leaders and experts for conversations on the ideas, innovations, challenges, and strategies shaping the future of energy and sustainability. Welcome back to Plugged In. I'm Chuck Hanna, Vice President of National Accounts and Solutions at Constellation. Today, we're talking distributed energy, resiliency and what's next for onsite generation. We're very pleased and appreciative for our guests joining us today. Wissam Balshi, who's the Senior Director of Channel Partnerships at mainspring energy. If you're following energy innovation, you've probably heard a lot about mainspring's linear generator, which is a fuel flexible, low emissions alternative to traditional gensets and turbines. Before mainspring, Wissam spent over 16 years at Cummings helping customers design microgrids, and distributed power systems around the world. Today he's building MainStream's channel strategy and partnerships with companies like Schneider Electric and leading integrators. Wasan, thank you again for joining us and we look forward to our discussion today. Let's start with your personal story. had a long successful career at Cummings in microgrids and distributed generation. What convinced you to transition over into a newer technology with the MainStream energy company? Thank you, Chuck. First of all, I want to thank constellation for hosting me on Plugdyn. So the reason I left Cummins after a long career at Cummins, which was a great career, Cummins for those who do not know the company is one of the biggest diesel engine manufacturers and backup power systems providers in the world. But what we started noticing is you have a lot of digitization going on, which AI is booming, electrification. So we needed more efficient and cleaner dispatchable prime power solutions in the market. And that trend was very, very clear. So I was looking at different technologies in the market and I came across MainSpring. MainSpring's linear generator technology is a great new technology. It combines the dispatchability of gen sets. It's very efficient. It has near zero NOx emissions, very similar to fuel cells when it comes to emissions and efficiency. with the ability to switch between gaseous fuels on the fly without changing hardware or software. So when I saw that, I was really excited and I decided to join MainSpring. Very interesting. Thanks for sharing the evolution in terms of how you arrived to MainSpring. Can you share some of the lessons learned from your Cummings days in terms of what you're applying in this role as you described it, please? Yes, I learned from my 16 years plus at Cummings that you need to do what you're best at and focus on that. So knowing where you have the right to win in the market is very important. This technology will solve many problems, but it's not the solution for every problem. So you need to really know where it makes sense, how to pitch it, how to use it, how to apply it. And then to scale a new technology, the best way to do it is through creating a sales and a service channel and through partnerships. No one company can do this alone. So we need a lot of strategic partnerships. And that is what I... try to apply to my role at MainScreen. Can you start with the basics in terms of providing more insight on how the technology works and the difference between a linear generator from a traditional rotational technology, if you would please? Yes. So again, linear generators are not in the market, haven't been in the market for a long time. We just started selling linear generators a few years ago. So it's a very new technology. The main difference between linear generators and traditional synchronous generators is that the mainspring linear generator generates electricity from a linear motion, hence the name, versus a synchronous alternator or generator. So we use inverter-based outputs and we use similar UL1741 listed power electronics and inverters, the same ones that you use in solar and PV, wind power, and battery energy storage systems. This makes it easier to interconnect to the electric grid and to integrate with other inverter-based distributed energy resources in a microgrid application and a use case. So the mainspring linear generators prime mover is based on a similar concept to compression ignition, which is what you see in diesel engines, but it happens at a lower temperature. So it's a low temperature reaction and it's flameless. And that is the IP and the competitive advantage that mainspring has compared to traditional combustion engines. So we stop the compression right before it gets to the point of generating nitrogen oxides. So nitrogen oxides are generated with flames. So if you have flameless combustions, that basically means that you will have near zero NOx. That is the main thing to remember about mainspring cleaner generators versus the traditional combustion engines and turbines. This makes it a much cleaner power source and it's therefore much easier to air permit in any district in the United States. We do not have the smoke and knocks and PM and socks and CO emissions issues that combustion engines and turbines have. The other thing I want to highlight is that We have very similar transient performance to shunt sets. When I mean transient, for those that are not familiar with that term or not electrical engineers, it's basically what you need to start a motor to energize the transformer. So it's very short duration, usually milliseconds or few seconds at most. And that is a very important feature in generators. We actually have with linear generators, similar transient performance to shunt sets. and we can run lightly loaded much more efficiently than an engine. So we're dispatchable, we can be used for backup power, we can be used for peak shaving or prime power, which is the most common use case. This makes us the best true prime power generator in the market where we can run thousands of hours per year without worrying about the NOx emissions, SOx, carbon monoxide and all these criteria emissions that other technologies emit. And finally, we do get a 30 % tax credit incentive that traditional generators do not get, which makes our levelized cost of energy much lower than traditional generators and can supplement utility power where the utility grid is not there or too expensive. So these are the main differences between us and traditional junkstats. Very interesting. Thanks for sharing your insights there and how you're differentiated from what we're used to in terms of traditional generation technologies. Other companies offering this type of technology? There's a follow up question to what you just shared with us. And then the other question is, how long has your product been commercially available? Yeah, that's a great question. So as I said earlier, linear generators are new technologies entering the market. We are the only company that commercially sells linear generators now. There are other companies trying to commercialize their solutions, but they haven't yet. MainSpring has ⁓ an advantage there. The company started 15 years ago. We actually have many projects in the field running thousands of hours per year, and none of them have any major issues. We also contracted more than 100 megawatts of projects that will be deployed over the next six to 12 months. So we are the most commercially available ready technology in the market that can do linear generation at the moment. So you touched on a number of applications. Can we go back to the one that you mentioned around on-site power in terms of that as a big growth opportunity, particularly around data center AIs as we're reading a lot and a lot of the headlines. And can you tell us about your commercial strategy in terms of how your technology has evolved and the segments or verticals beyond data centers AI you may be going after and kind of what's the structure of these deals in terms of. the size of the linear generators that you provide and any other information in terms of how this actually works. So the linear generator that MainSpring offers is a 250 kilowatt generator. It's one product. We don't have multiple kilowatt nodes yet. We want to first make sure that our 250 kilowatt is mature and stable before we start introducing new kilowatt nodes, most likely bigger nodes in the future. And the 250 kilowatt generator is pre-configured. So it comes in a box, it's ready to go. All you need is three connections. You have a gas connection. Usually if you're running on pipeline gas or whatever gaseous fuel you're running the generator on, you have an electrical connection and you have a communication connection. So it's really easy to deploy in the field. You can install two megawatts per day in projects, so eight units. We've been in the market for a few years. A lot of our success has been in behind the meter commercial and industrial applications. So we sell a lot to hospitals, supermarkets, commercial buildings, cold storage facilities, and so on. We also have a couple of data center projects and we have a few front of the meter utility scale projects. So the biggest project we have contracted so far is a 36 megawatt project. And we can't say too much about it yet because we don't have the approval from the customer to share the case study at the moment, but it's being deployed. It will be installed next year. So we go from 250 kilowatts, one unit projects like supermarkets, all the way to 30 to 40 megawatts, peaking power plants or data centers. Our main go-to-market strategy has been selling direct. but we're starting a channel, a sales and service channel. So we can now sell through dealers and developers, and we are training them on how to install, commission, and service our equipment. And from a geography perspective, we're mostly in the United States now. We are going after projects in the Caribbean and Mexico. In the United States, our biggest installed base is in California and the Northeast. We do have a few projects in Colorado, Indiana, Texas. So we're starting to spread, mostly we go after areas where the utility price is really high. That's the main target market for us. We've developed multiple strategic partnerships. That's another tactic and go-to-market strategy. So for example, Constellation is One of our strategic partners, it's a win-win. We can solve customer problems together. Constellation has, as a service provider for electricity and gas, can help bring our technology to the market. We also have similar strategic partnerships with big system integration companies like Schneider Electric. So these partnerships are needed and will help us put together ten key solutions that we cannot offer on our own to our customers. Thank you for the ⁓ insights there and the reference to our evolving partnership. We're excited about that and we look forward to the opportunity to work with you. We always think of our role as you described as an integrator of various types of applications that roll into solutions that work for customers across all fronts, whether it's reliability, various sustainability options, and of course, cost is always forefront of our customer minds. And I think this is an exciting new technology that will fit well. in of what our customers are looking for. So just continue down that path in terms of how customers think about these types of opportunities with your technology. How does this compare to the diesel, gensets, turbines, or fuel cells when customers are evaluating different alternatives? And what are some of the competitive advantages you feel like you have versus some of the other technologies? I know you mentioned earlier in our discussion, you your low emissions, which makes the permitting easier. in terms of developing these projects, but can you share other insights in terms of some of the other differentiators that your customers may see around this technology? Happy to do so. So I've sold a lot of diesel gensets and gas gensets and even worked in fuel cells and batteries. So I have a very good understanding of these different technologies. Every technology has a role in the market. For linear generators, the best fit is prime power solutions. meaning you need a power plant that runs thousands of hours per year. There are multiple use cases that require that. For example, you may not have a utility connection. You may have to, you you're building a new campus, a new data center. It's gonna take a few years to get the distribution line from the utility and you don't wanna wait this long. Or for example, you bought a lot of electric trucks and you wanna charge the fleet. You can't wait for the utility to upgrade the distribution line. you're gonna need your own power plant and that's where a linear generator comes in. So we're better than all these other technologies mentioned because we have a much higher net electric output efficiency. So 46 % is what we put in our spec sheets and we have production and efficiency guarantees to our customers. That's much higher than diesel gensets that are typically in 20s, maybe upper 20s percent wise. gas gensets, rich burn gas gensets are very similar to diesels. Lean burn gas gensets are typically in the upper 30s. Some publicly say they can do low 40s, but we actually provide production and efficiency guarantees to our customers at 45%, 46%. So we have a much higher efficiency than a lot of these combustion technologies. Turbines, same things. Microturbines are very inefficient. Fuel cells are efficient, but they are not dispatchable and they are very expensive and their O ⁓ operation and maintenance cost is really high. So we do not have expensive fuel stacks to replace every few years like fuel cells do. We do not have engine cylinders to overhaul like engines do. So that's one of our biggest differentiators. We also have now a lower CAPEX. than a lot of other technologies because of our investment tax credit. We get 30 % ITC for US projects that start construction in 2026. That combined with our lower O ⁓ higher efficiency makes our levelized cost of energy really, really competitive. And because we don't have the NOx emissions issue that combustion engines and turbines have, we don't have a problem running prime power continuous and very strict. air districts and non-attainment zones, such as those in Southern California, for example, or in the Northeast. So these are some of the big differences between us and some of these other traditional technologies. So another question I had around the operation of the technology with mainspring is you touched on the ability for the technology to run off various types of fuels, whether it's natural gas, biogas propane, and even hydrogen. So as we talked about, it seems like customers focus on currently speed to market, but cost is always a big issue. So what's realistic in terms of how these units may operate across different fuels from an optimization standpoint and how may a customer do that? Can you give us more insights in terms of what's really reasonable from fuel switching standpoint and operational standpoint? That's a great question. So we typically generate electricity with let's say pipeline natural gas, is most of the projects that we run on now. And the cost of energy is typically in the mid teens. So we target areas where the cost of electricity is above 15, 16 cents per kilowatt hour. And most of the states on the West coast and East coast, right? A lot of the Northeast states, California have utility rates much higher than that. we can actually supplement the utility and save the customers a lot of money. So the customer would basically run on our generator most of the day and switch back to the utility during off-peak hours. And in some cases, we may be cheaper to run on all day long, right? And the utility becomes the backup power. That's when it comes to like energy pricing and cost. When it comes to the switching between different fuels. We're the only technology commercially available now in the market that can actually truly switch between any gaseous fuel without change in hardware or software. We have machine learning algorithms, early stage AI, if you want to call it that, that basically can change the compression ratio depending on the gas composition. We don't need to reprogram anything. It will detect the change in gas composition. and change the compression ratio accordingly. None of the other technologies can do that. So you can literally run on natural gas in the morning, propane in the afternoon, hydrogen at night. You know, can run on biogas, can even run on ammonia, right? So we have a lot of flexibility when it comes to running on different gaseous fuels. Some other technologies claim to be gaseous gnostic, but the reality is you still have to change some hardware or reprogram the software or use different controls to be able to switch between gaseous fuels. So you've touched on different applications in terms of markets where the mainspring technology would be more of a baseload type unit and you indicated if the energy costs are 15 to 16 cents or higher, those are kind of prime focus areas for you. What do you look for and how did the units operate where you're operating more from a peaking standpoint or peak shaving standpoint, whereas we've seen a lot of the increased of costs around transmission and distribution charges and customers are looking to reduce their costs around coincident peak in terms of how they may be built through the ISOs and utilities. How does the unit operate in those type opportunities versus more of a baseload? That's a great question. I've actually had some experience with peak shaving based on coincidence peaks based on some experience I had when I was at Cummins. That is a very difficult thing to do. A lot of DERM solutions and softwares claim to be able to predict coincidence peaks with very high accuracy. ⁓ I would say like, you know, pressure test that, ⁓ you know, some of the claims we've heard ⁓ when we actually deployed some gas generators or diesel generators with after treatment with the main goal of turning on during these coincidence peaks. It was based on the accuracy of these software ⁓ predictions and it was not always accurate. What we do is actually permanently shave the peak. We're actually running base load so we can load follow or give you a fixed output and act like a continuous base load. Which is also another thing that we can do. Our efficiency does not change based on the load profile. So we can load follow or we can give you a fixed output. Engines actually have different ratings and efficiencies based on how you apply the generator. So engines would have a higher standby rating or a prime power rating, but they would have to de-rate when you go from standby to prime. And they have to de-rate it even further if you're going into continuous operation. We do not need to do that with a linear generator. It's the same output, same efficiency. So instead of trying to predict when that coincidence peak is going to happen, it's better to actually just take off permanently that load of the grid, and then you don't have to worry about chasing coincidence peaks. Now, if you do want to use linear generators for just peak shaving, you can still do that. But then you have to do some modeling to see if it makes sense to use a linear generator just for peak shaving versus doing so with a battery or tier four diesel or a lean burn gas engine. Typically we'd like to see thousands of hours of runtime on our linear generators to justify the investment. So we typically chase true prime power applications. And that's where we go. We typically will sell the generator to run 24 seven if possible, or at least thousands of hours per year until maybe the utility connection is established. Once the utility connection is established, then we can turn the generator into a peak shaving or a standby generator. By then you've already got the return on investment. You've already got a lot of power out of the generator, but you don't have to throw it away once the utility connection is established. The linear generator is designed to run for 15, 20 years. So you can keep it on site and just turn it into a backup generator or a peak shaving generator. What's the reliability from an operational standpoint on the mainspring generators versus other technologies? As you pointed out, a lot of the customer applications you have operating, a very critical industry. You've talked a bit about data centers as another area that have very high reliability requirements slash needs. how do these operate in terms of reliability? from an availability standpoint versus other technologies in the marketplace? Could you give us some comparisons there? Yes. So obviously a lot of data centers require 99.99, 9 % uptime and reliability is very important. So they need solutions that are very reliable and proven. And our technology has been in the field now for at least five years. We have create reliability data to back up our claims. We provide production and availability guarantees to our customers. The pre-configured nature of our generator and sending our units into the field in 250 kilowatt pre-configured boxes that you can parallel to create megawatt scale solutions is actually another advantage. If you lose power, let's say you have a problem with one generator. you only lose 250 kilowatts. You're not losing megawatts worth of power. So we have built-in redundancy with our systems because we run multiple 250 kilowatts in series and parallel to give you your solution. So even if you lose one or two boxes, right, or two generators, it's not going to really impact the reliability substantially. Even if you have a problem with one core within the generator. We have two cores in the generator. Let's say you're servicing one core or there's a problem with one of the cores. So we have two 125 kilowatt cores in the generator. You can service one core while the other core is still running. So you're not even losing the full output of the generator. So we have a lot of built-in redundancy. We're pretty reliable. We have a lot of data to prove it. And that's one of the main reasons that data centers and utilities are buying our generator. There's also fuel redundancy. Let's say you have a gas pipeline issue. You can switch immediately to propane and you can have on-site propane as a backup fuel, right? So that's another advantage that we have that other technologies cannot provide. So you gave us some indications of types of projects you're working on earlier in our discussion today. You said you have a project that's evolving that could be as large as 36 megawatts. Can you share other examples that are public around both commercial slash industrial applications that you may have developed and or other examples with utilities. Like for example, we understand that you've done some pilot programs with the AEP utilities. And then as we mentioned in our opening, you've also had various projects where you've collaborated with Schneider Electric. But any specific customer examples slash stories you can share with us? Yeah, there are a few different use cases I'll share with you. And this information is all public. You can go to our mainspring website, mainspringenergy.com, and you'll find all these case studies. So for example, we have new utility public projects that is Laythrip Irrigation District, for short LID, the municipal electric utility serving River Islands in California, which is one of the fastest growing cities in the country. LID was looking for a power solution that could offer cost savings for residents and businesses that's quickly dispatchable to complement existing rooftop solar. So they have a lot of rooftop solar as you know in California. And that can also meet the strict local air emissions standards. California has the strict air emissions standards in the nation. Specifically LID was tasked to power more than 4,000 homes and 3 million square feet of commercial spaces in central California. So the solution had to fit within that limited footprint and scale within the community's long-term growth strategy. And they needed a fast permitting and they had a very fast deployment timeline that was also critical to keep pace with that development. So we sold obviously our generators to Latrep Irrigation District. The project is about 2.3 megawatts in scale. we used, at that time we sold the units, we had a rating of 230 kilowatts. So we sold 10 230 kilowatts linear generators. The primary use case was powering the community to meet their peak load and to firm rooftop solar. So when we say firm rooftop solar, meaning we know that solar is intermittent. You may have a clouding event or you may lose solar quickly the late afternoon. So to firm solar so that you don't see the swings of output from solar, you can use batteries or linear generators to firm solar. And the customer chose linear generators because we were a more economical solution than using batteries and backup generators. We avoided the need for batteries and backup generators. to firm solar, which is a very common application now. And a lot of solar companies are starting to talk about linear generators now because they see the value to firm solar. And you can replace the need for batteries and diesel backups with one linear generator. The other thing is the fuel source is natural gas with a potential for renewable blend. We do not need to worry about blending different gaseous fuels or renewable content or hydrogen even. We can run on any gaseous fuel. Obviously we have certain requirements for the gas. has to be dry enough. You have to treat it for siloxane and sulfur and oil and gas applications. But we have a very tolerant prime mover compared to a combustion engine or a turbine. And we can run on different mixes of gases without the need to de-rate or without impact on efficiency. So the project is commercially operational and is up and running since February of this year. Another example is for a grid-connected application is Kroger Supermarkets. The Kroger company is a famous supermarket chain. one of the largest traditional grocery companies in the United States. It's looking to build on its investment in energy efficiency and sustainability, and they want to try to manage their electricity costs at the store level. So they needed new ways to control and manage the risks that impact their stores as the utility prices keep going up. The prices are very volatile now. A lot of these stores, they can't really even predict what their energy cost is going to be in few years, the way utility prices are going up. So Kroger wanted an innovative on-site power technology that can help reduce their electricity costs and give them more control over their operation costs. and improve also the sustainability in a way that would most benefit their stores, their customers, and communities that they serve. So the solution was a linear generator. We have single linear generators at the store level. So you'll have a linear generator in the parking lot of the supermarket. All the maintenance will be provided by mainspring. We provide performance guarantees. We got financing by Nixdata Energy for a lot of these projects. So Nixdata Energy is backing our guarantees and we have units operational since 2020 and saving the customers from the first day we started operating. We're looking at more than a million dollars per store and savings over the life cycle of the product. that's incredible. Thank you. So, you we've talked about a lot of the benefits in terms of what the mainspring energy technology provides to customers, whether it's around how you operate it in terms of prime or base load as you describe, how it may help in terms of peak shaving, the ability to be able to switch fuels from an optimization cost standpoint, and how reliable the units are. Let's talk about more the development cycle. You mentioned it earlier on our discussion that you can install, I think you said two megawatts per day, but what's the overall development cycle look like in terms of getting a unit or units up and running from start to finish? Because as we know, it seems like a lot of the customers are interested in speed to market in terms of how quickly these type assets can be deployed. Can you give us your insights in terms of how long it actually takes to get these things up and running? Yeah, I mean, it depends on the size of the project and where the project is, Typically, it's 12 to 18 months. I'll break it down. So typically you have, you know, three to five months of permitting work, air permitting, interconnections, you know, doing feasibility studies, all that stuff. And then you have nine months is currently our lead time from the moment the customer or the reseller places the purchase order. And then finally, depends on how ready the customer is to go live. But if everything is ready, we can, like I said, install units and commission them very, very quick within a couple of weeks. But typically, you know, it's like one to three months from delivery before commercial operations, right? So again, we've seen it as low as one year. I'd say maybe 15 months is kind of the more realistic target and timeline for a lot of these projects. That's quick. Seems like everything takes multiple years in this space these days. So. That seems very fast in terms of speed to market. is. And a lot of larger turbines and bigger engines have a much longer lead time. Like a lot of customers cannot get a turbine for a few years out. So that's actually one of the biggest drivers for our technologies as well as like the availability of the product. We can deliver in nine months, right? From purchase order. Yeah, it's very quick. So we talked about some of the criteria in terms of what customers are looking for in terms of their evaluation and review from a business case standpoint. You mentioned emissions, cost savings, uptime. Any other metrics that customers are focused on in terms of the evaluation and selection of this technology that you can share with our listening audience? I mean, obviously there are other things like size, footprint, how much space do you have? So we can put up to eight megawatts per acre now without stacking. We can lay it out in a way that gives you up to 18 megawatts. Some technologies have a better footprint than linear generators, we, you know, the trade office, have better efficiency and emissions. So the space constraint is a real challenge, especially in big cities where space is limited and you're targeting a C &I customer. So space requirements, something we need to keep in mind. An advantage we have that we didn't talk about is our low noise. Our sound levels are really, really low. It's 65 dB at 10 meters. Basically, you can't hear it unless you're standing right next to it, pretty much, compared to traditional generators, which can be really, really loud. So it's an advantage. for putting linear generators in residential and CNI areas, right? So you don't have to worry about the noise. The other thing I would say, it's ease of installing and the permitting process, the project engineering side of things. We design our product to be modular and it's pre-configurable. So being a pre-configurable solution, we basically just ship the box, it's ready to go. All you need is a concrete pad, assuming you have all the permits in place, right? And then you can just connect it to the gas pipeline, electric grid, and then you have the communication wires. You know, if you have like a SCADA system inside, you need to connect to, which allows us to install multiple generators in the same day, which is not something that you can easily do with other technologies. Other technologies, typically you have to, you know, do a lot of things on site when you receive the generator. It's not typically, it doesn't come in with a box. Our solution comes with the exhaust, with the power electronics, with everything in the box ready to go. That is not the case with a lot of these solutions. A lot of it require a lot of project engineering, application engineering. So installation is much easier with linear generators compared to many of the other more traditional generation technologies out there. So these are some of the... other things that we did not cover that I would consider advantages of a linear generator. Yeah, that's incredible. It sounds like it's a true breakthrough technology. Sounds like you're continuing to receive a lot of interest, strong demand from the marketplace. And as you continue to evolve the offering, it sounds like you're going to continue to grow very rapidly. So it'll be very, very exciting to see. Wasam, I really want to thank you for taking time, sharing your insights, helping us learn and understand. what the technology can do for the customers out in the marketplace. I want to reciprocate. Thank you as well, Chuck and Constellation for hosting me on your podcast. I hope this was useful and productive and that people learn about some of these new technologies in the market. Maybe I'll just cover one or two other questions that I typically get that we didn't cover. One common question is, when is this solution going to be available outside the United States? Obviously, we just started the company. We are in the early stages. We want to focus on making sure that we can service our equipment. So we are focusing mostly on North America for now. We're expanding into Mexico and the Caribbean. But we are in discussions with other developers and potential channel partners in other markets. So I would say it'll probably take a couple of years before we can go to new regions, but it's going to happen. It just takes some time. We also need to add some features and certifications to the product to enter these markets. So that takes some time, but it's really more of a logistical challenge than a product enhancement issue. I think we just need to find the right international partners to help us develop a global sales and service channel so we can sell and service our equipment overseas. From a US perspective, people ask me like, what other partnerships are you looking for? And I'll say that mostly now we're focusing on partnerships with solar and microgrid developers, independent power producers, because we want to help them offer microgrid solutions with a reliable, clean, dispatchable prime power technology, which based on how the utility rates are going, I think you're going to need a lot of linear generators in the market, especially for CNI and data center customers.