Low carbon heating with Johan du Plessis (Founder & CEO @ Tepeo)

Do we how do we actually tackle and manage the good physics? The answer is, as we all know, is flexibility primarily. Eighty percent of all the energy we use in our homes, is for eating. So why don't we see if we can find a way of making eighty percent of all domestic energy consumption entirely flexible?

Start with how are you thinking about the the huge wall of inertia that you're fighting against here. Well, we have to we have to chip away. We have to take it a step at a time. We have to keep demonstrating that there is a better way of doing things that enables them to take their own steps along the decarbonization journey.

My assumption is surely the best thing to do is to install a battery, so a lithium ion battery, put electric heating in And then you store the energy as as chemical energy rather than heat energy. There there are a few key challenges with with with doing something like that today. Hello everybody. Welcome back for another episode of Modo, the podcast.

In today's episode, Quentin is talking to Johan Duplessy.

CEO and founder of Tepio. If you're enjoying the podcast, please hit like and subscribe, and all the good buttons. It really means the world to us. And if you want to see more content, head over to LinkedIn or our platform where we've got loads more going on. And with that, let's jump in.

So Tepio, t e p e o. Where did that come from?

Good question. It it is, actually Latin. It means I am warm. So, yeah, I guess when I was when I was thinking about starting a heating business, obviously, the most important thing to do first is to start with a name.

So now that's, that's where I went. Nice. And so I assume nobody else has got this name. Apart from the Romans two thousand years ago.

The yeah. The Romans had it, but no one since that we're aware of. There's there's a lot of similar names. There's I think we someone's getting confused with Co, which we're certainly not.

But, but, yeah, it's, it's, it's that's kind of part of finding a good name. I guess, finding something that's unique and and not really use much but has to I suppose some meaning, although, let's say, less one percent of the people who come across us have any idea what it means, but that doesn't matter. And so you described, Tepio as a heating company, and heating is kind of sexy again now. Right?

Because forever, I normally cared about it, and now energy infrastructure is in important. And we've got heat pumps and storage heaters and all these other things that people are getting installed. And it's like a moral It's more imperative to do so. So what do you guys do in the world of heating?

I can't believe you said it's sexy because that's awesome. I think I think there is the most That is my opinion. Right? I find some weirds.

Like, yeah. I mean, I'm into I'm into trees, dude. Well, okay. Yeah. That that is true.

That is true. But I think, but it's a good point because actually part of what I've set out to do is to try and make eating sexy again, because, again, all for the first time, because I think, it is such a root such an enormous challenge to get our heads around and to solve. I think the first step of that is probably to get some of the battery crowds, more excited about heating because that's kind of, for me, that is the next evolution. You know, we've, we've started down the road of you know, transitioning towards, you know, batteries and EVs and and that kind of thing.

The the really big thing to tackle is is heating. So, yeah, we we are making it, trying to make it sexy or at least elevate the conversation. For most people, a boiler is a white box that sits in a cupboard, that they never look at or never see until one morning, they wake up and the heating doesn't work. And then they get quite angry.

So, you know, it is real challenge to how how you build a brand in this space. And really elevate the conversation because it's it's kinda what we need. So to get this straight, so what what does Tepio do? We've talked about boilers briefly there, but What what's so special about what you guys do?

So what we do is we have a technology that enables you to get away from heating your home with fossil fuels. The zed or zero emission boiler, which we've developed is a direct plug and play replacement for a fossil fuel boiler. The key really is we are able to give you the same heat output that you have from a from a from a gas, an oil boiler, an LPG boiler, But we're switching the the fuel source to electricity.

But, critically, this is not a direct electric flow boiler because that would be terrible for the grid. So what we do is we have a very ultra high density thermal storage medium inside the device, and we use that to store forty kilowatt hours of of of high density thermal energy. So we take electricity from the grid, turn it into heat, store it, and then we can ship that out into your heating system into your into your central heating and your your your radiators, your underfloor heating, as needed. So so that's really what at the heart of it, what what we're doing with the product.

And that's key because we need to move people away from fossil fuels. Obviously, electrification of heat is the way to go. And the reason I started the business was really coming in at this initially from the angle of, you know, how we're gonna manage a highly renewable grid when we move towards distributed, renewable generation that we lose control of, how do we how do we actually tackle and manage the good physics? The answer is as as we all know is flexibility primarily.

Eighty percent of all the energy we use in our homes is for heating on average.

In the UK. So why don't we see if we can find a way of making eighty percent of all domestic energy consumption entirely flexible? Seeing as we have to move away from fossil fuels anyway. So I really came in it from from that angle, and I was working for, for v charge, which we were bought by Clooza.

So by by Avo, you know, rebounded as Clooza. So so with that sort of VPP hat on, but then actually, looking at heating and thinking, well, I I really think there's a lack of innovation in this space. No one is trying to make this see. No one is trying to do what Tesla managed to do with EVs.

So we need to try and disrupt this sector. It's a it's it's a very, entrenched sector. It's it's stuck in its ways and it needs someone to come and shake it up a little bit. So, you know, we all know about heat pumps and heat pumps are a critical part of the of the electrification of heat solution.

But there are lots of reasons why the the rollout of heat pumps has been woefully, woefully inadequate, to be frank today. It's picking up a little now. One of them. Well, yeah.

Well, the daily mail and, and and others But really what's behind that is is an industry that doesn't want to change. And, you know, the Hello hydrogen Blobby Group, which is you know, unashamedly funded by e u e u a and and, you know, I I understand it. What's e u a? Sorry.

Joy energy utilities alliance. But but and, you know, and there are others. And obviously, the gas network is here to, you know, fight for its existence. So there are there is gonna be significant resistance to change.

But unless new people come into this industry and into this space with new technology to disrupt it, my fear is that it won't happen. So I wanna I wanna ask a few questions about some points you made there. But before we do, where does you you think about heating and boilers a lot. Right?

So where do where does the UK sit compared to the rest of the world? Say the rest of Europe or the US? How do they do heating in those countries and how do we do it in the UK? And how is that the same or is it different?

There there are some quite significant differences. In different regions. So you're over in the US now. Mostly in the US, they have air to air systems.

So they don't that though there are wet central heating systems, but it's much more common to have ducted heating systems. And that actually has the added benefit that you can put in an air to air heat pump and get air conditioning, because I think no one in the US can live without air conditioning, which is not not necessarily a great either, but Well, it's a it's a hundred degrees here right now. So four forty Celsius.

It is bonkers.

Fair enough, fair enough. I I think that is, that is reasonable. It doesn't, I guess, it doesn't always need to be twenty one degrees in the room, but, that that's maybe different. But, yeah, I think and I think more of us are gonna need air conditioning, obviously, heat, even in the UK.

But in most of Europe, we have hydronic systems. So web based central heating systems, a radiator is under full heating. The UK is plumb last, with heat pump rollout. So mostly most countries are taking the approach of trying to encourage heat pump adoption.

And in some countries, it's it's going better than others.

So, yeah, Germany's doing alright.

France has a very high penetration of electric heating anyway, partly due to the history with nuclear. Ireland has a ton of oil. They don't really have gas networks. So different different countries deal with it differently, and most of it's historical.

You know, we, central heating systems in the UK only really came about in the fifties and sixties coincided with, you know, the discovery of North Sea oil and gas. So, yeah, it's not a coincidence that we ended up building a gas network to dis to distribute gas through most of the country and use it for heating. But there's there's a there's a lot of interesting history around, like, yeah, why we've ended up as where we are. The UK is, as I said, probably plumb last.

Part of the reason for that is as a country, we seem to be unable to invest in our housing stock. And I don't know whether I mean, I I what it's like we get What does that mean? Sorry.

Blum last. That's a new phrase for me. Well, just the bottom of the pack. I mean, we we out of the UK, we are we are the slowest country, really, to be carbonite using our our housing stock for a pair of heating systems in our housing stock.

So so, you know, most of us, ninety five ninety plus percent of us that's still burning gas to heat our homes. I think it's about three or four percent oil. And and that change is just not really happening very quickly. We don't invest in our out houses.

You know, we have incredibly leaky homes, and I think that doesn't help. Because as soon as you're trying to move move towards something like a heat pump, you need you'd really need to make sure that your home is insulated as as you can or appropriately insulate it. I'll put it that way. Okay.

And so I I I kinda like the fight against gas heating as a concept. There's a real, like, David and Goliath vibe to it. You've got these massive infrastructure well, you got All these pipes and infrastructure that moves gas around the place. And the the folks who own that that infrastructure, there is a world where none of those gas pipes are used in the future It's all stranded assets.

They are essentially useless in a world of complete electrification.

And then so that's an interesting thing in a lobby group. And then you've got all you've got probably the some of the craziest parts of the hydrogen nonsense lobby in the hydrogen heating and homes. And then you've got the traditional, the, you know, boiler companies combi boilers who are very good at making gas boilers. And we'll do it appears anything to keep hold of of that market. And this is all very exciting for a new new entrance come along with a new system and say, you don't need any of that, and we can do it differently with with electricity.

So how are you thinking about that? Start with how are you thinking about the the huge wall of inertia that you're fighting against here.

I try not to think about it too much because it is a big wall. Well, we have to we have to chip away. We have to take it a step at a time. We have to keep demonstrating that there is a better way of doing things.

And I think you know, we have to we have to prove to consumers that, you know, our product does a great job and actually is really simple to use and actually low cost and enables them to take their own steps along the decarbonization journey. We talk a lot to to the government, to policy makers, to to, you know, to to help them understand that there's a better way of doing things. But, yeah, I mean, the the incumbents are gonna be resistant to change. And it is a massive wall of inertia.

I guess, you know, if you look at what's happened in in the in in the transport space, with with EVs's. You know, they it's a similar there are parallels there. You know, the there was, what, ten years ago, very few EVs around and the infrastructure really wasn't there. So you can equally say, you know, there was a hell of a lot of inertia there that they were up against because there was no charging network.

And the way they the way they did it, and I I suppose, you know, like it more low than, I mean, what Musk has done with Tesla, is create a product, which consumers just love. And he created this consumer pull, which is then, you know, cascaded through the market, and and now you have every and every every carmaker doing the same thing. So if we can prove that there is consumer pool and the consumers really, really want see carbonize their heating and that they love our product and this type of technology, then I wouldn't be surprised if in five years time all the gas boiler companies are doing something similar.

I say I wouldn't be surprised. That's that's my that was my optimistic response. May may maybe I maybe I would be surprised in five years. I'd be very pleased, but but it, you know, that that is what we're trying to do.

But also, it's not the first time this has happened. Right? So I still remember when I was a kid, we used to get coal delivered to a coal bunker back in the nineties. And that's not that long ago.

And so, of course, no one does that anymore, and that's that's that's crazy. But we did move off coal to gas, and we've we've made this kind of of transitions before. And let's see. Let's see. I hope we can do it very quickly. So let's talk about Tappio's technology for a moment.

What is it that you guys build? And how does it work? Yeah. So the the Zev, zero emission boiler that that we that we produce, we design in house.

We manufacture it. We sell it. We own it. We we don't own it. We operate it.

The customer owns it. We operate it.

The product is the size of a washing machine. It is effectively an ultra high density thermal battery.

Heat store. It stores forty kilowatt hours of thermal energy.

It's connected to your to your fuse box, to your consumer unit, And basically what the product's doing is it's charging off the mains and and storing energy as heat. And we then have, a bunch of patterns around the way we can control that heat and extract the heat from a solid storage medium, and put it into a water based system. All inside the unit. And then that goes out to the home.

So the in terms of delivering heat, it's delivering hot water. At up to eighty degrees, whatever you whatever you set in your on on your app to control the unit, and it's heating your home in the same way as a as a gas or oil boiler. On the charging side, every Zeb is Internet connected. So we built our own cloud based infrastructure.

So we then do some machine machine learning in the cloud. To forecast your heat demand for your home. So we get a ton of data from from Joseb, how it's, how it's how it's being asked for heat, how much heat is delivering into the home when you're using heat. All of that's going into our cloud infrastructure and used to to basically create this heat demand forecast.

That then goes into an optimization engine, and we plug in bunch of pricing signals. So, you know, your your particular tariff that you're on, so some sort of flexible tariff to just go or agile or any seven tariff or, whatever. We have some type of used tariffs as well that we can talk about. We plug in carbon intensities local carbon intensity of your grid, and you can then choose as a user.

I want, actually, I want my zeb to, optimize charging based on the carbon intensity of my local network so that I'm only using the the greenest electricity or I can say I'm a bit of I'm a I'm sort of mostly cost conscious also a bit carbon conscious so it can have a bit of both. And so where they're not optimizing that charging and decoupling the consumption of heat from the, from the demand for electricity from the grid. And I think that is absolutely crucial because one, it means that you can electrify heating with a product that doesn't have the COP that you have with a heat pump. It's a

hundred percent efficient, but it doesn't have that kind of two point five times multiplier that you can get with a heat pump or three What is the COP? What is what's the COP, Johan? Yeah. Sorry.

COP is coefficient of performance.

So, in simple and simple times with a heat pump, what you're doing is you're taking one unit of electricity and you're using that to effectively, extract heat from the outdoors, and put it into your home, a bit like a reverse refrigerator fridge.

So in doing so with with a heat pump, you can use one that you need electricity and create three two to three three units of heat, call it The the challenge is that with a heat pump, you need to you you then ideally need to be heating continuously throughout the day. It's not designed really to support peaks and troughs.

It can to an extent. There is some flexibility in the way you use it. But the way that consumers live people live in their homes, particularly in the UK. They're used to central heating systems where they just go, boom, I want it hot now, and they expect the house to be hot in an hour.

You can't do that with a heat pump in the same way. But so if you imagine with a heat pump, you're consuming electricity throughout the day. With a Zeb, we have a one to one relationship between electricity and heat into your home, but we have huge amounts of flexibility about when we consume that electricity. So so that would that would be really key because it allows you to to choose the very cheapest times a day.

So the off peak rate on some tariffs is a quarter of the peak rate. So you can use all of that off peak electricity and store it till you need it for your home. But also, it's a big enabler of of flexibility.

It used to be that I think octopus used to get, like, fifty pence kilowatt hour and seven and a half p overnight. So the the the saving was pretty big. And so is the art is is the way that it works most of the time you'll just to use a word charge here. Put a charge like a battery? Yeah.

You can say charge. You'll take your zap and, charge it up with heat over overnight when it's cheap and then use it when you do it later. And how How good is a zeb at, which is my favorite new term, at holding heat? So when it when it when it stores that charge in battery parlance.

You know, how much does it lose across the day? Are you charge it, you know, overnight? Two to four o'clock in the morning, and you want it for that seven PM peak, which is, you know, sixteen to seventeen hours away. Doesn't it not self discharge across the day?

So it it does, to an extent, there are some heat losses. So if you fully charged a zed and just left it, sitting, it would have usable heat after about ten days. So it's gonna take about ten days for all of that heat to, well, most of the heat to dissipate. But there's a there's a decay curve. So it, you know, you have more he lost in the first day. So if it was fully charged, you'd lose about twenty percent of the heat in the first day.

However, that is not the way that it actually works in practice because you wouldn't have the heat in there that long. This is not like a storage heater, which, you know, storage heaters get a really bad sort of have a really bad reputation because, well, There's actually conceptually nothing wrong with them, but they were never designed with consumers in mind. So they they kind of really would design in the seventies to get rid of nuclear energy at nighttime. But but actually what they can do for you is is is store energy.

And but with storage heaters, they're kind of because they're reheating the room, they're also designed to release heat into the room. Our product is very much designed to keep it in the box, and only extract it into the water system when there's a call for heat. So useful. The use the sort of the efficiency into the water system over a year is about eighty five percent.

It does depend on your usage.

However, when it's installed inside the heating envelope, it's actually basically a hundred percent efficient because the heat losses are going into the home, like, as if it was a radiator.

So, so that that's basically how it works. I should say that the the whole concept of nighttime, you know, nighttime off peak is, is changing. And, you know, we see peaks and troughs throughout the day now. So for example, we have we currently have a trial with Ovo where they've given us effectively a type of use tariff. And so the concept there is we have this flexible price signal throughout the day from Ovo, that automatically goes into our to our cloud infrastructure. So we're optimizing for those consumers based on a flexible price signal throughout the day. But the customer pays a flat rate whenever the Zeb charges.

And so what that means is that we now have flexibility to charge throughout the day. It's not about charging you know, midnights or four AM, and then using that heat for the rest of the day, it's actually charging some in the some in the early morning, some around lunchtime when there's solar, you know, some before the evening peak because, you know, there's a dip or whatever. So, it's it's much much more flexible than that. And that's kind of the world that we're moving to. And if you look at the broader kind of the the electricity market, changes and, things like Rema and than half hourly settlement and and all these sort of things that are gonna happen over the next number of years. This is all about trying to encourage more flexibility. So, you know, we need more price signals to to really get the most out of this flexibility.

But most people today use it on a really basic level just just on a, you know, an off peak overnight tariff. And you you guys build this in the UK. You manufacture here in the what? I'm not in the UK right now, but they're in the UK.

Yep. Yeah. Yeah. We do it all ourselves. We, kind of, had a necessity because we were sort of developing the product and then wanting to build and get it out.

The the core itself is, is quite a complex bit of engineering and, quite complex to produce. So we we do it ourselves for now. I don't think that will always be the case. So, you know, we do we are we are scaling our own manufacturing capacity quite quickly now, but probably gonna come a time in the next couple of years when we need to to to outsource that.

It's it's almost it's almost exotic to to manage in the UK these days or start a manufacturing business in the UK. How many how many zebs do you guys manufacture in a year, say? So we, right now, we have capacity for about, about nine hundred a year.

We are taking on another facility, well, but it'll be up and running by the end of this year to more than triple that. So that's that's kind of the that's sort of the scale we're at at the moment. So we're still relatively small scale, but we're we're growing quite quickly. There's obviously a massive market out there.

So, yeah, plenty of room to grow. That's a lot. So you got you'd roughly three a day right now, and you're gonna get, near enough ten a day. That's a couple of boilers being manufactured in the UK.

Where about see you guys based? It is. I should say we're not we're not at that rate. Today, we have the capacity to get to that rate.

So we are we're working out towards that rate over the next to the next number of months. We're so we're basing outside ready in the m four corridor. Not a classic part of the world to be manufacturing.

Certainly not the cheapest part of the world to be doing it either. So, you know, That doesn't matter for now. You know, this part this part of the UK gives us great access to to engineers and talent and and and people to build the business. I think it will always be our HQ down here, partly because I live around here as well, instead of not not entirely a coincidence.

But, yeah, there there there will be you know, in the in the longer term, I suspect we'll be moving to to other parts of the UK to manufacture. But, you know, I think I think there's no reason why can't manufacture in the UK. I think we should be doing it. I think they were used to do it so well.

There are lots of reasons why we do much less of it nowadays, but there's a real appetite to support it. And I think if we can if we can be become the leaders in this next generation of of heating technology, why not do it here? And there's also a there's a sort of a practical element to it as well, which is that, you know, the product is quite heavy, you know, with the it's a high density thermal store. It's a it's effectively, you can think of it a bit as a bit like a high density concrete inside.

So, yeah, transportation costs, so it's become a bit of a challenge if you're if you're transporting the whole product from, say, China will be, you know, far, far away. And and how big is the problem How many boilers do we have to turn into zabs?

Well, the the there are twenty seven million homes in the UK. Today, we just in the UK, the we install about one point eight million boilers every year. Gas boilers, one point six to one point eight million. So typical boiler lasts about fourteen years. So that's kind of how your math gets out to to around around twenty five odd million homes.

The, you know, I get very frustrated when people talk about you know, we can't we can't decarbonize heating fast enough because actually all the boilers that are installed today are gonna have to be replaced anyway within the next fourteen years because typically they only last that long anyway So we can do it. But what we have the way to break it, the way to do that is we have to come up with a product and a technology that can fit into the replacement cycle.

So you asked how many zeds have to be installed. I definitely don't think that all of them are gonna be zeds. They're not. I think I think heat pumps gonna be the majority solution they need to be.

And I think, they need to be because we have to tackle the overarching problem with the the volume of energy that we are gonna need to heat homes with electrically.

And so the coefficient of performance with heat pumps allows you to basically get that volume reduction. But what zed's are gonna do is they're gonna compliment that by Zeb's another smart thermal storage technology is gonna is gonna complement that heat pump rollout with enormous amounts of flexibility so that as we as we're electrifying heating, we're also embedding a huge amount of flexibility into our into sort of the the extent of the electricity network to support it. So Yeah. I mean, there there are it's a it's a huge market. So even if we're, you know, even if we're at, in the tens of thousands, we're kind of at one percent of the of the gas boiler market So last year, there were about fifty thousand heat pumps installed.

So, yeah. Woeful, really. We need to kind of ten x that. Well, I wanna just have a discussion about playing out what happened in this market.

It seems obvious that But I've got a bias here. Right? So my my bias is that I think that electrification of heat is a key part of getting to net zero in countries like the UK. And electrification is basically the the best use of capital and resources to get it to do that as fast as possible.

That's my belief. As much as possible. There's obviously some areas that will continue to use fossil fuels. That's for the there are there are niche cases.

But in general, the average home, I think, should be using electricity to heat. That's my opinion. And if you assume that that is actually what's gonna play out, and there's lots of reasons to suggest that just purely on a economic basis on a kind of pence per pence per thermal kilowatt hour basis. If you assume that's what's gonna happen, then then what's the game theory here with all of the the, you know, the gas networks and the boiler companies and the the lobby.

What happens next? You guys would have put a lot of thought into this, I'm sure. I mean, yes. I mean, when when when I first started really looking at this industry and that the challenge about sort of seven years ago, what what you see is, yeah, you see a very entrenched industry, as I was saying earlier, that are desperately lobbying to to to keep their infrastructure.

And my my take on it is, you know, there are only two options that we know of today to heat your home, that potentially heat your home. One is electric elect electricity. And the other is with a gas like hydrogen in in a low carb lower carbon world. The the gas lobby has latched on to hydrogen because if they can sell hydrogen as a concept. Obviously, they can continue to pump that down the existing infrastructure.

If you wanna be more cynical, it also allows them to continue to to to, to extract fossil fuels for longer, and claim that so that we can get there with, you know, brown hydrogen or or blue hydrogen and, and use CCUS carbon capture and storage. So that that is the but but I think that's I think that is the truth of it. Is that they believe that if you if they push hydrogen hard enough and, Explain to policy makers, explain to consumers that electrification is gonna be too difficult for them and too expensive.

And the hydrogen is just gonna be simple because you'll just have to replace your boiler with a hydrogen compatible boiler, and that will be, you know, everything done, and, you know, you can carry on your life.

The truth is though that even if technically it was feasible, the end consumer's gonna be paying an absolute fortune for their heating because, you know, you the your efficiency loss with creating hydrogen, you just wouldn't bother doing a really, really bad use of hydrogen. There are lots of good uses of hydrogen, potentially, you know, the domestic heating is right at the bottom.

But the I think the game here for them is, you know, if we can convince policy makers that the electrification is too difficult and that hydrogen is an is an easy win, Once we've set off down that path, it'll be very difficult to turn back. Once we've invested in all that infrastructure, once we've said that, you know, you're not gonna be able to fire up the heating in your home, you're gonna have to use hydrogen. Then that decision's made, we would look back on that decision in, in, you know, decades time and say, well, those consumers using hydrogen are paying a fortune for their eating, and it would be a mistake. But I don't think that was a concern.

To to the people, to the to the the the companies involved. So I mean, that's I think that's the honest truth of it. But but, you know, I my approach has been, this sounds a little bit like I'm, apologizing here, but I I I definitely don't I don't want to you know, I'm not a hydrogen lobby bash. I don't I'm not I don't I don't think that was is particularly helpful.

To to have a big argument about it. I think they're gonna carry on this.

I'll happily do, do that for you. Don't worry.

Maybe I will then. No. No. I think you'll do a better job of it. But I I, you know, I think the answers the the answer's gonna become clear itself.

That was always my view. Like, electrification is so obvious. Technically, as an engineer, it is just the much more logical solution And it's sad to me that we're gonna waste billions of billions of pounds and lobbyists are gonna waste millions of pounds, trying to to push hydrogen for domestic heating, but I think it will I think it'll be self defeating in the end. So I think we'll end up electrifying it.

The only downside is that, you know, we would have lost, we would have lost time. Progress would have been slower. Which is obviously, not ideal, but I think I think we'll only we'll get we'll we'll get to the same place in the end. And how about the divide between When should a house use a zero emissions boiler?

And when should a house use a heat pump? We so we our our Zeb is sized for homes up to the median by kind of by heat demand. So that is a that is a home that today would be burning around twelve thousand kilowatt hours of gas a year, which you can see on your utility bill. And typically, that looks like a a sort of a two, three bed semi detached terraced house, that kind of size, and below.

And the the simple reason for that is that because because there's a one to one relationship between electricity usage and heat while we're very flexible, If you if your house needs too much heating in peak winter, you just simply cannot get enough electricity into the home on the single phase supply. So for larger homes, absolutely, heat pump needs to be the answer or a or a, potentially a combination. So you can we are looking at hybrid solutions where you could potentially combine a heat pump with something like Azerve, but to give you a high temperature boost at certain times of day. So

that that is that is an option, but but typically those larger homes who really are not gonna be able to get away without some sort of heat pump. For smaller homes, the the typical typical customers that we that we serve, have tried to get a heat pump properly first because they're interested in decarbonizing the heating. And so they have explored that avenue, and they end up coming to us because, for a variety of reasons, so it could be that, you know, the the quote was outrageously expensive. The pumps can be incredibly expensive to install, not in all cases, but, you know, you're talking, it's definitely over ten thousand pounds.

So it's quite significant, but also sometimes they don't have the space. The space limitations, there's too much disruption required to their homes. I think the thing that people, in this industry overlook time and time again is that, you know, people's homes are sort of sacred to them. You know, it's, it's kind of part of your, you know, your your family lives there.

It's it's your space.

And the idea of of having huge amounts of disruption to it to rip out radiators or to do various other infrastructure works is is unpalatable for many people. People don't like, even though it may seem not a massive sacrifice, people don't like their level of disruption and change. So we basically can avoid that by installing a zerp. So that's basically the type of the types of homes that we install in.

So smaller homes where they don't have the space outside for a heat pump, they might need to to, you know, replace lots of radiators and do lots of other infrastructure work in their home and ends up being too expensive. And why wouldn't, you must have done the math on this? The the first thing that comes to mind is surely the my assumption is surely the best thing to do. Is to install a battery, so lithium ion battery or equivalent as in a in a home, put electric heating in.

And then if the round trip efficiency of the battery is like I don't know, ninety percent plus, then the battery does the charging and discharging depending on carbon or price. And then you store the energy as as chemical energy rather than heat energy, because I would have thought that that would be more efficient. But I assume that's just the there's more to it. Right?

Because there's CapEx, so cost is these home bachelors are pretty expensive.

And some other things. So how are you guys thinking about that problem? It's it's I see it as it's sort of parallel market, but, you know, we do keep an eye on it because the battery technology is is improving all the time and coming down in cost. I think that there are a few key challenges with with with doing something like that today.

One is the energy density. So the energy density of our product is significantly higher than than you're gonna get with a chemical battery. So I, like, a big Tesla Powell is I think there's they're about ten kilowatts at the moment or nine or ten kilowatts, kilowatt hours. Sorry.

Our product's stored in forty kilowatt hours. And that's important because back on that kind of median home that I was talking about, sort of the top end of the the size that we would be looking at. On the coldest day of the year, your heat demand for a home like that is gonna be around seventy kilowatt hours. So if you have a chemical battery, you really have to have at least about forty kilowatt hours of storage to be to to be flexible enough to get enough of enough cheap off peak electricity to heat your home.

Which probably costs you about thirty, forty grand pounds in CapEx. And so that's the so that's the first problem CapEx. So so our product is today is five thousand pounds. So it's a, you know, it's whatever, fifty, forty thousand pounds is an eighth of of what you would pay in lithium, lithium ion batteries.

So so that's the first thing. The second thing is is power. So in your, the zeb is outputting fifteen kilowatts of thermal output. So if you need, you need that kind of amount to really be heating a home in in that on that winter day.

So now you're talking about a pretty high power output for a for chemical battery as well. So I again, I believe, like, the powerwalls typically size or most most domestic batteries are size that are around two or three kilowatts. So I'm not an expert on this, so I know you get bigger ones, but But so you would need to have at least four separate batteries running in parallel discharging all full power at the same time to give you enough thermal power up. So that's a challenge.

You also then need to be able to you also then need to be able to charge them bloody quickly as well. I'd say more more copper on your connection as well. So the distribution network operators might have a few things to say about that as well.

Yeah. Yeah. And then then the last thing to say as well is that you took the in terms of the round trip efficiency, it's yeah. Maybe maybe if you said it's a ninety percent with the lithium ion, the with with a zed, maybe it's eighty five over across the year.

But the heat losses are going to the house anyway. And the storage medium is not degrading. So the with a zeb, the there's no degradation storage material over time. So you're not losing capacity.

So, you know, it will last twenty years without changing.

And so that's really key as well. So because you're having to if you were gonna use lithium ion, you're gonna have to cycle your batteries a lot.

Which they're not gonna love over a period of time. So they're unlikely to last the same the same time. And, certainly, we'll have some degradation over that period. And then I suppose lastly, I just think that we have so many better uses for for for for chemical batteries.

You know, we should be putting them into really high value use cases like EVs, and and other things. So I just don't think that there's a, you know, the environmental impact of of lithium ion and and that sort of thing. I think is is probably a little bit wasted in in a domestic setting. And so our view is, you know, if you can do it with with, you know, a non toxic, very readily available low cost material that doesn't degrade or lose storage capacity.

Why wouldn't you do that? For, you know, dealing with eighty percent of your heat of your energy demand in your home as heating. And you can maybe have a a smaller lithium ion battery for for the remaining twenty percent of this electrical demand, or you can use your EV, for for that flexibility.

Cool. So the first thing I wanna say is congrats on, raising your series a that must does that that's pretty huge. And you've got some great investors on board to help you get to the next phase.

This is your chance to plug anything. Have you got any announcements or anything that you want in the world to hear? Well, we've look, I think, We're growing really quickly. I what would I plug? I mean, I would I would encourage people to think hard about their heating system, like, think like, it's it's the unloved part of decarbonization.

Yeah. You know, go home tonight when you've when you've, or when you've listened to this and have a think about how you're heating your home and how would you decarbonize the way Yeah. You you heat your home, look into heat pumps, look into thermal storage. It, it needs a serious look.

We, we, we're not raising at the moment. You know, we're well funded. We're growing quickly. We're trying to we currently don't cover the whole of the UK.

So we've got we've got enough demand in the parts of the UK that we do cover, but we wanna we wanna get national coverage. So, you know, go and have a look at our product to customer stories on the website and, and look out for us because we're coming. And now my favorite question, which is what is your contrarian view? So what do you believe about the world of net zero or heating in your special case that is a little bit unusual?

I have a few. I I think my maybe what I would say is that within heat the heating space, there has been too much of a relentless focus on energy efficiency and actually that we should be more interested in carbon efficiency.

And, and there's been too much, emphasis on on relying only on the COP of heat pumps and assuming that they can be a silver bullet when actually homes or every single home in this country is different in some way.

There are a lot of nuances in this space and to to solve that problem, we need more than one technology. And that actually flexibility can be as important to support future energy grid. As as the coefficient of performance and efficiency that heat pumps can can give. So so that's that's that would be more of a training view.

I think flexibility is Cam could be as important, in in a future world on the electricity grid as as energy efficiency. Right. Well, Johan, wanna say I must thank you for taking time out your day to speak to us. If you're listening to this, check out Tepio.

If you are somewhere between one and fourteen years of your boiler, You absolutely need to consider getting one of these things installed in your house. So go to tepio dot com. We'll put a link in the show notes. And of course, if you're listening to this and you haven't yet hit subscribe and like, and all of those buttons, please hit them right now.

It gives us all motivation to carry on with this thing. Alright. Take care, and thanks to your hunt for joining us on the pod. Thanks, Putin.