YouSaid · the spoken record

Shaun Connell

lines on the record: 81
first: 2022-05-25
most recent: 2022-05-25
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“That with right, and so the answer's been that you can replace it with renewables, hydrogen is part of the solution. But in this example, is that you're going to essentially negative 1x your fossil fuels, and you need to 15x your wind and solar capacity from current levels, right?”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But if you think about what we've been fortunate about in Bitcoin and mining, how it relates to energy is that for the past several years, countries have been pledging to say net zero emissions by 2050 is one of the main timelines, right? It's a real noble thing to do and it's the right thing to do, but there's a ton of implications on that. And so what it means is that to go to economy where your net zero emissions means that you need to electrify everything, right? And that means that cars from combustion engine, you're going to go to EVs, right? Buildings are going to be electric. And so that means you're going to have a lot more electricity demand because you're going to electrify everything. And it works out to be about a 3x, an electricity demand over a 30-year period. Electrifying everything at the same time is that to decarbonize means that you're going to retire fossil fuel generation, which is your natural gas and fossil fuel plants and coal, whatnot. And so what are you going to replace?”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And how much would you really turn down if a price signal went to a certain point? Maybe limited. And they're improving on this and having loads that are responsive to price. So I guess kind of like, and I mentioned this on Peter's podcast, but just to zoom out and to say that I think that when you frame Bitcoin mining as is it just or not, right? Like everybody's going to come away with a different opinion. You're not going to. Everybody on board, right? That's a really hard thing to do”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And you're guessing what the real time five minute price is in your area. If it was really, really high, you wouldn't know and you couldn't turn down because there's no, you don't have the required equipment or telemetry in your house to respond to prices”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Start with is that power generation provides two services, two main services. They provide energy to the grid for real-time supply demand balance, and they provide backup power, which is called ancillary services in case something unexpected happens and you can come online to make up for that, right? And so up until now, like demand has been perfectly inelastic, right? What's the price of energy right now for you where you're at, Preston?”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“It, right? And so for the first time in history now, you can actually bring a load to this deposit of sunshine and wind that couldn't get tapped into before because you couldn't pull it out of there. That's a neat concept. It's that Bitcoin's really unlocking.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so that means the energy is being curtailed, right? And so that's not going anywhere. You can't ship that anywhere else. And without some type of load that's collaking right next to it, you really are going to be spilling wind, right? You're just going to say, no, we can't do it. So it's just kind of an important point that, and most of what I understand is that you can have energy abundance in certain areas and not in others. And I think about kind of the idea that I'm from Alberta and back in the 80s that people would go buy land for the mineral rights that were underneath them and all you had to think was is oil going to be valuable in the future because if it is i just i got long oil just from buying some land and you know i i think about this in kind of you know in the renewable space right now is that you know there's been these massive deposits of wind and solar in certain areas given the certain kind of the geography the weather and whatnot that you couldn't tap into before because there was no power lines there you couldn't monetize”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Without having the ability to move a load to that area, the only option is building out transmission lines. And so there are cases like in West Texas where 10% of the hours last year were negative, which means that the grid operator sending a price signal that's so low that you should turn down.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The investment that was made in kind of customers having a rate base that you're paying for these wires. And it's really kind of back to kind of like energy is very complex. It's like there can be real pockets of excess electricity.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Is that there's a belief in the world that energy is scarce everywhere and all energy is create equally. Like converted energy type of energy. So, like, you think about moving energy around is the easiest way to move something would be like coal, right? Put it on a truck, put it on a train, move it around next is oil, put it in a pipeline. Next would be kind of natural gas and pipelines as well. So the hardest one is electricity, right? Because the network of electricity, it's not like you can have an excess amount of wind and some electricity in one area and say, hey, Europe, you need some electricity, we're just going to ship it. It's in an area that's constrained by the wires in that area.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And you say on hours when the price is too low, I now have an option of saying I can sell to the grid or I can sell to my sell to Bitcoin mining because of the flexibility of my CapEx was so low, like I don't have to try and, I'm not chasing to try and recover that capex spending. So one time spend for infrastructure, right? And then it's almost like free for those miners. And so I would say that economics are significantly higher too on these intermittent resources that can get paired with like an older miner with a lower CapEx cost.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But you're still multiples above. And so now Lair on the second part is saying you don't always have to buy a new gen miners. So now think about like you're ignore kind of like the baseload natural gas plant or whatnot and let's go to a wind farm, right? And so you can look at this wind farm and you can say in 2020 when Bitcoin price was, I think it was like $6,000 or $7,000 and hash rate was high, right? The revenue per megawatt hour for an S9 miner was $30. people were giving these away for free. They say like, if you pick it up, you can take it, right? Or they're $20 a piece. And so what that works out to is you could have bought one megawatt of S9 miners for about $15,000, right? So compare that to the New Jam miner of $3 million for megawatt. Like this is peanuts, right? So you could then take these S9 miners and you're on some type of wind farm or solar asset.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So on a new gen miner, right, the cost like say one megawatt, three million dollars, that means you have to recover $100 per hour every hour, every hour of the year for four years, right? Just to recover your CapEx.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And then when energy is scarce and expensive, no problem to turn down. So it's going to be consuming this and it's converting those local megawatts into global megawatts and they're getting that kind of that premium for being a first mover. So if you look back at the past four years, you might have received as a power generator of revenue, top line revenue, $35 per megawatt hour. You would have purchased these miners, you would have had something in the neighborhood of 300. But here's the other catch on this, and this is really important, is that you've got this CapEx depreciation schedule, usually a power generation is like. Depreciate over 25, 50 years, miners are depreciating in four years.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Get into more details because I sometimes get down in the way it's too quick, too fast, but the punchline of later are saying that the people that are getting this early are saying like Bitcoin right now is the buyer of first resort. And that means that it's willing to pay higher than the rest of the customers on the grid for the majority of hours.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“This would require you to be looking back in hindsight Because hindsight would tell you what you would have made for revenue per megawatt given certain machines that you have set up. So you assume that we would say, hey, we're a company, a power generation company, we're going to do a look back over the past four years, and assuming that we bought the latest Gen miners at that time, right? Like what would in the payo difference for having that upgrade? And it's massive.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so, like, that's not linking to an executive or an energy company. You really don't know what that means, right? And so it wasn't kind of an apples to apples comparison. So we're transitioning to that. So I'd say that two, three years ago was a one. People didn't know what it was. They didn't know how to value this, right? And I'd say that today is in conversations I've had with several friends that work for other power generation companies is it's on everybody's radar. And beyond on the radar, I would say that some feel like they've missed the boat and they're frustrated, right? Others are like, well, we're still nervous about this, and we still don't know what we're going to do, but we just, we now feel more confident that it's here to stay, though, right”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So, my observation from a few years ago, so two years ago, was that we were mostly at about a one or two. And that means that we don't understand it. There hasn't been enough mining companies going public that we can look at the appendixes and really understand how do they calculate the value of mining, right? Because that's a black box. Another thing is just in the past, and this is the comparison of how I think about mining is what's the value of an exahash and what is the revenue per megawatt hour for that mining in the mining space. It's more about what is the dollar per day per terahash.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Do we want to just have the same model of having miners co locate with us the same way as these other industrial customers? Or do we think that this is something that we've developed for competencies over the past 20 years for optimizing assets that we could do a better job of saying we're essentially going to think about this as upgrading our facility to refine local megawatts into global megawatts? And we're going to take the value side of the mining, right? Which I think is a natural fit, but that's a struggle that I think some companies will have and just especially back in 2017 of saying, is this thing going to be around in five years? Should we make this CapEx investment in something that may or may not be here?”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“If you think about the traditional model for power generation companies, is that they have, you know, they're going to be connected to the grid and they've got a couple choices to monetize that. They can, you know, one is they can inject that power into the power grid and you're going to get paid whatever the spot price of energy is for that injection point. And then the second part is that you can have customers that are behind the fence. industrial customers where they can take steam, electricity for some big industrial processes, right? And so by being behind the meter with a power plant is that you're avoiding a lot of the costs that would do with kind of the transmission distribution costs and whatnot. And so that's the normal playbook is saying we can have behind the fence so we can do the grid. So now go back to 2017 again is saying how much of the value chain do we want to partake in and is it really our time to extend the value chain of saying we're a power company we produce megawatts and we sell them to customers that use those megawatts right and so”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, that is correct. And I put on one other layer to that, is that so in 2017, what I was hearing around for other power companies was that the lack of understanding what Bitcoin was, is it a Ponzi scam? Is this going to be around for a long time, right? Yeah.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Will the market say What will the market say if I've got renewables in Bitcoin mining? Is that good or bad? And this is now tying into kind of an opinion, is that I think it's going to take a large power generation company to be the first one. And then once they take the brunt of kind of was this deemed to be excellent, a good idea, right? And based on the outcome of that company going forward, I think that you're going to get the companies to follow in behind, right? Because it's remarkable way to monetize generation that previously required wires. And now you can do with Ethernet cable”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Great question Already involved in fossil fuels, like say you're an oil and gas company Probably going to be more receptive to it, right? Because you're already kind of labeled as fossil fuels and bad, right? That, you know, taking on this initial initiative of something like Bitcoin mining, it's great because it's another way to monetize an asset, like at one of your facilities. Power generation is different, right? Because power generation is where I'm grateful for being part of a career in electricity is it's every fuel type, right? Because there's renewables, there's coal, there's natural gas, there's oil peakers before. So like you get to kind of have an exposure to all of these. And over the past 10 years as this kind of narrative was developing around essentially this energy transition, right? Like moving to sustainable energy is a lot of these companies are very cautious about being the first mover.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Kind of like there were stages of the light bulb, right? Light bulb goes off, and then you find out more, you're like, Oh my goodness, this is a bigger light bulb And then more and more and more. So that was a very long-winded way of saying that I started in energy markets, did that for 20 years, realized the comparison of energy markets of Bitcoin minings, how they're maturing. And the first 10 years of those energy markets were so exciting. I wanted to have a repeat of that and to kind of take the opportunity to say, I'm going to go join this new space with this company that's in this space and have another fun 10 plus years.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Where, when I was first introduced to the company I'm with right now, it was called Lanceium. And what they do is they essentially take these large Bitcoin mining facilities and they turn them into a power plant, but in reverse. And so, what that means is you can dispatch down these facilities the same way as you can with a natural gas plant or a coal plant or whatnot. And you can provide all the ancillary services that are kind of like backup power for a grid. And so for me at that time, it was just, I realized how big of a role this could play. And just like, and I didn't think that.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so there's this mining industry where it's just this hype happening, this excitement, and you see this kind of pulling apart and you say $10,000 of Bitcoin, I can make it for 200. So like, you know, something's got to give, right? And it's going to be, you know, what's the correction? So that was kind of where I really, you know, fell in love with understanding mining for because for me is to invest a meaningful amount of time or money in something, you really got to understand it. And so for me, that kind of started the journey or went down this kind of rabbit hole of kind of understanding the fundamentals of mining and how they kind of, you know, the poles on those. And so over time then, so I was at my company there, Transalta, and then we're considering kind of, you know, should we doing mining, right? And we're looking at, you know, what's the opportunity to do that and realize just how much of a tremendous opportunity this was going to be. And, you know, I think about, you know, you think about just kind of like this new technology.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Was a friend of mine give me a call in 2017, longtime friend respect his opinions, and he was telling me about how I had heard of Bitcoin and I was like, yeah, I've heard about it. And he gave me kind of the digital gold narrative. And I bought into it quite, quite quickly. Then the question was, I said, okay, well, how much does it cost, right? And at the time it was $10,000. And I said, well, how much does it cost to make? Like, how else can you get? He says, well, you can buy it or you can mine it. And I said, okay, what's the price? It's like $10,000 to buy. It was like 200 to make, right? And, you know, so coming from a background in commodities is just, you know, over time, commodity prices always converge. They arbitrage away the”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Place where there's no kind of books on how to do mining and there's no agreed to commodity of saying that the, I believe that there's a megawatt of power, MMB2 of gas. And I think in the future we'll talk about exahashes, which I believe is like a billion billion hashes. And I think that's going to be the commodity. And so there's no kind of playbooks on how do we value the exahashes or Ford market for exahashes and what does that mean? And it really ties into miners because miners have efficiencies, how many exahash per megawatt hour they can produce based on different miners. And so really it's a perfect overlay with power plants, right? Because there's natural gas plants and they have something called a heat rate, right? So a seven heat rate plant uses seven units of gas, produce one megawatt. A gas peaker will do something like a 13 heat rate, but it's really kind of this perfect overlay where you see kind of what happened in power markets and how that evolved over time and really kind of matured. And then you see this kind of thing at the start of Bitcoin, right? And my introduction to Bitcoin.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So I started in 2002 where I found a company here that was energy marketing, got an interview, and they took me for a tour of the trade floor, and I fell in love with it and was super excited and kind of said everything I could to get a job. And then spent the next pretty much 20 years with that company where essentially starting on a kind of narrowly desk and a real-time desk and then kind of growing up and helping kind of build this desk and leading this desk that was responsible for optimizing a fleet of natural gas generation assets in Ontario and some other assets in different markets. And what was really neat about it and kind of has this overlay with Bitcoin is that when markets were just deregulating at this time, so 2002, there was no books on how to trade power. It was kind of like the wild, wild west and you're trying to figure out how to make this work, right? And the people that figured out fastest and earliest were the ones that really did well in the companies that did well. And so it has an overlay with mining right now, right? Because it's kind of like this.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“From the transmission, from the person that sends you the retail bill. So in this process, a lot of these generation companies found themselves in a position where they had a lot of generation that they now need to find a home to. And so that was kind of the genesis of trade floors coming around around the year 2000.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Life, yeah, sure. So, my background is that I came into energy in 2002. And so I was, I'm from the east coast of Canada. I got a one-way plane ticket for graduation gift, and I moved out to Calgary, Alberta. And I was essentially looking for anything and everything could, you know, any job opportunities here. I'd had like a real fascination around trading for a long time and a real interest in it. And so one of the places that I put a resume up to was called Transalta was energy marketing. And so I just finished a business degree and I thought that marketing was kind of traditional marketing. I didn't realize that the energy marketing of kind of marketing power. And so this was right at the time in 2002 that power markets were just deregulating. And so what that meant was that companies that used to have customers that were really just rate payers, right? They didn't have a say in anything. Essentially, markets were deregulated where they separated the generation.”
2022-05-25 · We Study Billionaires · BTC079: The Bitcoin Energy Revolution w/ Shaun Connell (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT