Episode 9, Game Changers and Transition Makers: Repurposing data centre heat for social good

Elena Lambros:

Hello and welcome to ESG Matters at Ashurst. I'm Elena Lambros, the Ashurst Risk Advisory Climate Change and Sustainability partner. Welcome to the latest episode of Game Changers and Transition Makers. In this episode, I'm joined by Mark Bjornsgaard, the founder and CEO of Deep Green Technologies, a data centre company that recaptures the heat computers generate and repurposes it for social good.

Hi, Mark. Welcome to the podcast, and we're delighted to have you join us today.

Mark Bjornsgaard:

Thank you. Thank you for having me.

Elena Lambros:

I always like to start by letting our listeners understand a little bit about yourself and a little bit about your business. So could you just outline where you came from, what your background is, and who Deep Green Technologies are?

Mark Bjornsgaard:

I think when you reach a certain age, the CV can take as long as the podcast, so I'll give you the...

Elena Lambros:

And no need to tell me your age either, so that's fine.

Mark Bjornsgaard:

The first business that's relevant to this story is actually a startup in the music industry 25 years ago called Artists First, and it had a social good component in it. We were very visible at the time. It was a time of Napster and all the crazy stuff going on in the music business.

And then fast-forward through 20 years, and there's a whole bunch of businesses that I've invested in, and like any entrepreneur, you take as many losses as there are successes. That is the game and the joy of entrepreneurship. But then, fast-forward to eight years ago, and I'm running a venture capital company, a small one that we've built ourselves. We've just accrued capital into the business and we were working with British Gas and we launched the first version of Deep Green, which was called Heater. It's still going.

Chris Jordan, who happens to live about 500 meters that way, he and I have collaborated on a number of different businesses and we were trying to impress the chief exec of British Gas and we were in the pub and said, "What could we do to impress him?", and Chris said, somebody at Microsoft has written this white paper and they said they can capture heat from computers. So we built the shonky prototype, and so the sergeant walked into the office, it had a perfect desired effect. He said, "What's that tub of massage oil in a home-brew bucket?" And we said, "It's free heat." And he funded the first version of our business. Eight years ago, no one was talking about, really, as you will know as well as we, no one was really taking climate tech seriously. This business wasn't viable. We can geek out on what data centres are and how they work, but certainly nobody in the data centre industry would... I mean he literally belly laughed when we announced what we were doing.

So we kind of parked it and then we worked on other businesses for five years. About three years ago, I figured the time might be right, so I actually bought ourselves out of that business, launched Deep Green, we spent a couple of million quid, and we built the first, and this again relates to I think the things we want to talk about, which is you can say you can put a computer in massage oil and capture the heat from it all you like. You can say tell that story in slides and in the most beautiful way. But unless you actually march someone down to X at a swimming pool and say it's there and that's the pool that's warm, it turns out people are super bad at understanding left-field ideas, I guess.

So that's what we did. We announced, we built a supercomputer in a swimming pool in the west of the UK, and then Octopus called us at 11 o'clock that day, and the rest is history, really. We had a number of other investors who wanted to invest in it, but Octopus were very keen. They had a brilliant brand. They had all of the energy ecosystem in terms of solar and batteries that are important for what we're doing. And then we closed the funding round at the end of last year. So we are now at the stage where we've got one of the largest energy companies in Europe prepared to put hundreds of millions into heating swimming pools for free with computers. So what's not to like?

Elena Lambros:

First of all, it is amazing. Secondly, congratulations. It's pretty exciting. And maybe just to understand exactly what impact that has and what that is all about, maybe you could just walk people through, particularly if you think about data centres, what's the issue there? What issue are you trying to solve for? And second of all, how does that work?

Mark Bjornsgaard:

Whenever I do a talk on this, well, for about a year I was doing a talk and everyone, it was very muted response. And then I realised that if I asked everyone in the room if they knew what a data centre was, nobody put their hands up. The first thing to explain is you say data centres. So data centres: Data centres and the cloud, people, sometimes, quite a lot of people have heard of the cloud, this idea that their data and computers are doing stuff that eventually end up on their phone. People have that sense that that's happening. But the cloud is a bit like a climate change. The cloud is a brilliant euphemism for massive barns in the middle of nowhere full of millions of pounds worth millions of computers, all making a horrendous racket, extremely noisy and creating incredible amount of heat.

And in the case of a lot of those data centres, also using enormous amounts of water.

Do one query on ChatGPT is about pint of water is used to evaporate in the terms of cooling the data centre down. So data centres are these huge barns in the middle of nowhere that generate an enormous amount of heat. Already, data centres are about 2% of the world's electricity supply, and with everything that we know that the robot is going to do for us in the next 10 to 20 in the future, we are going to need 10 times the amount of data centre capacity we've currently got. And if you think about we've only had data centres for 20 years, we've done all the easy stuff. We've got all of the cheap easy electrons from the grid. Now we need 10 times the amount of data centres, that's the existential problem for the data centre industry.

Elena Lambros:

Yep. No, that absolutely makes sense, and you can see that it's a problem. So it's a problem for the amount that it emits now, but it's a massive problem considering what expectations we are planning on data centres and the amount that it's going to meet in future.

Mark Bjornsgaard:

Huge problem. So, the next thing to understand is computers are brilliant electric heaters. 97% of the energy that goes into a heater to power the computer comes out as heat. We should think of computers as like wind turbines or solar panels. They are an amazing environmental asset that we've got as a species. They're just in the wrong place, and we're not doing the right things with them. And the other thing about data centre industry is that for every pound they spend powering the computer, they spend 50p, another 50p trying to keep the computer cold, trying to keep it cool. If that all makes sense, then what we are doing is exactly the opposite. I'm a history and politics student. I'm a troublemaker by trade, and obviously, if you've got this massive existential problem of 2% of the world's electricity pipe literally heating the environment more, what could you do?

So instead of building big barns in the middle of nowhere, what we said is let's take smaller amounts of compute and take the computers to where the heat is required. And if you do that, then all sorts of amazing good stuff happens. So that's what we are doing. That's what Deep Green is doing. We are building hundreds and then thousands of much smaller clusters of computers. No one really cares about that, but what we care about is the fact they generate enormous amount of heat, and so what we are doing is we're taking that heat and we are giving it away for free to people who need that heat.

Elena Lambros:

Okay. That is an absolutely great description of that. It actually reminds me of the behind-the-meter power. Like you might think solar panels, direct to homes rather than through the grid, that sort of concept.

Mark Bjornsgaard:

It's got a huge link, which is why we went with Octopus as funders. It's got a massive behind-the-meter component, because the grid as we know is so constrained, and there is absolutely zero chance of us improving the grid in the time frames that we need to escape the climate emergency that you have to... Not only does the data centre industry is an environmental disaster, not only do you need 10 times the amount of the data centre industry, but also, guess what, you haven't got a grid. So the data centre industry is never going to grow to 20 times. There aren't enough electrons to go around. It's never going to be able to grow to this size. And you'd expect me to say it because I've been working on the problem for eight years, but the reality is there aren't enough electrons to go around.

Elena Lambros:

Everything is electrifying, right? It's one of the core principles of getting to net zero.

Mark Bjornsgaard:

The next thing that is absolutely amazing about this way of work is not only do we create free... So for every pool that we land in, we save them 80,000 pounds a year. So we give them 80,000 pounds of free heat energy. We save them 140 tons of carbon as well. But pools are just the fun easy bit. They're just the visible bit. We kind of dress up in lifeguards and we get kind of the BBC interviewers about swimming pools.

But the much more important thing about what we're doing is that heat pumps, and certainly in the UK, no one gets any brownie points for installing a heat pump. It's not a rational thing to do, right? Gas is 4p a kilowatt hour. I don't care about anyone. I've invested in Heatio, I invested in a number of different heat pump startups, but I love the technology. And nobody gets any brownie points for investing in a heat pump at the moment, but you do if you slave it to a Deep Green unit. Because if we slave a data furnace, a Deep Green unit to a heat pump, for every 10 degrees high heat we put into a heat pump, it's doubly as efficient.

So this whole thinking is actually, the pools are the fun easy bit. What really gets exciting about this is that this technology can be the catalyst for the electrification of heat. That's the really important bit of what we are doing, once we're already landing in district heating systems where big heat pumps are, and that's the big story, really.

Elena Lambros:

That's really great. So I want to come back to eventually around the fact that you're giving off this heat for free, and how that works. But first of all, could you just explain when you think about everything that you've said so far around the problem that you're trying to solve and the way that it all works, what does success actually look like to you for the Deep Green Technologies?

Mark Bjornsgaard:

Well, we're trying to save the world. That's what makes it so fun, right? I mean, we've all got egos. But the point is, when we are doing this, you don't... No entrepreneur goes into this, nobody plays this game to get rich. You get into this game because your ego is big enough that you feel like you want to make a dent, but this one, you can make a real dent. Success is in 20 years' time, the fundamental mechanics of capitalism having a spanner in the works, because you've taken a commoditised product that has a price, heat energy, and you've made it free, and then you've taken a commodity, carbon, which is now effectively free, and you've put a price on it. The headline success for us is taking this explosion in data centre demand and actually doing something amazing with it.

In the data centre industry, in the IT industry, everyone's running around fretting like, "We are never going to do this. How are we going to find this power?" We're the opposite. We're just, knock yourself out. Like make the worst chips you possibly can. Everyone's going, "Oh, no, Nvidia, just come up with this super chip, a super chip that's even hotter than the last super chip." We're sitting there going, "Brilliant. That's amazing. That's great."

Elena Lambros:

Let's use that heat.

Mark Bjornsgaard:

Yeah, if you can use the laws of thermodynamics correctly, then the electricity just passes through Deep Green and goes on to do something much more important, heating homes. And then what really blows your mind is that you can then recapture that heat. The laws of thermal dynamics don't stop once you've passed it through once. You can actually then mechanically recapture the heat, generate more electricity, and then power the data centre again.

Success is fundamental to societal change. The environmental movement will never unlock unless we are brutally honest about where we are, and we all know we're lying to ourselves. On almost every level, we're lying to ourselves. Kate Raworth, talking about doughnut economics, we cannot grow like we're growing and not have a climate emergency. Renewables have to pay an intermittent subsidy because they're not on all the time, so they should pay an intermittent subsidy. We feel like in Deep Green we're trying to posit and show an amazing positive, for instance, where we could go as a society, and it could be we could all get a lollipop. But on the other hand, if we do that, then we've all got to get brutally honest about where we really are.

Elena Lambros:

Yeah. No, thank you. And that probably leads really well into my next question, which is around what do you think is key, then, to reimagining the current system and changing the game around hitting net zero and mitigating climate risks?

Mark Bjornsgaard:

Whether it's your personal life, whether it's business, the thing that makes 99.9% of people's lives not go the way they want them to go and businesses not go the way they want to go is because people can't, ultimately, a brutally honest diagnosis. There's a brilliant book called Good Strategy Bad Strategy, and in that, good strategy starts with a brutally honest diagnosis of where you are. And it's very difficult because all our heads are down anyway, right? We know we're in the last quarter of the last... We know the window of opportunity is already very, very narrow now.

So there's a great podcast, The Rest is Politics, Dieter Helm was interviewed. He's of the same mindset that it's just, unless we get to a brutally honest assessment of where we are. But if we do that, if we can confront and grasp some of these nettles, then we can make a proper plan. Carbon isn't $20 a ton. Carbon is $250 a ton, probably more. All of the stuff that we know we're lying to ourselves about, if we can start to be a bit more honest with ourselves, then we'll build better solutions faster.

Elena Lambros:

Yeah, no, I think that is actually really key, actually having that honest assessment around where everything is and what you need to do about it and what you can actually do about it, either in your work or in your personal life, whatever it is that you need to actually think about it. Because it has been spoken about for quite some time, I would say it's not a conversation that's really actually that new. Just changing tracks slightly. What is your own personal commitment then to net zero in the next 12 months?

Mark Bjornsgaard:

The flipping heat pump. That's my personal commitment.

Elena Lambros:

So I live in quite a hot country, so I don't have a heat pump yet, but I'm not sure I need one, but yet I've got solar.

Mark Bjornsgaard:

It's one thing to see the bill for what it's cost, and then the bill for how much it takes to install. I think we all have to go through that. We all have to go through the phases of sort of grief about what we can and cannot do in our lives, don't we? Because I'm 50 and we've got very used to all of the good stuff that we know is that our carbon economy is in which it's based. And we talk about this a lot. I think all of the good stuff that we must do that we all know, whether it's meat or transport or flying and all of that, but also, on the other hand, again, back to the same model, we actually need to imagine a world that is better with some sort of abstinence from consumption, if that's not too abstract, right?

We've probably got to hang out with our mates more. We've probably got to make better social connections. I think it's incumbent on government and us for whatever we are leaders in this movement, is to say, actually, human happiness is really what we're at gunning for, right? There's a really good book called The Better Angels of Our Nature. I don't know whether you've read it. It's all about civilisation kind of mechanic that's gone on within societies over the last couple of thousand years, and we're not born to be consumptive, right? Like 500 years ago, interest was frowned upon. Anyone making more than a profit was deemed... So we're not a naturally consumptive species. I think we've learned this behaviour, and there have been some big positives. We murder each other a lot less because of capitalism, which is a good thing, but the net effect of the last 300 years has brought us to this calamity. We've all some proper work to do, haven't we?

Elena Lambros:

You know, it is. It's a really interesting point, right? Because there's that question around "Do I need this?" in pretty much every aspect of your life. So it's actually really a good thing to think through, because I start doing that now. I have lots of beautiful things, and I could probably not buy anything for a very long time and be very comfortable with, but what you're doing is that human connection and thinking through the impact that you're having in the world, right? Yeah, invest in that more so.

Mark Bjornsgaard:

Yeah, invest in that. My partner and I, we make a point of seeing our mates at least once a week, try to do more. Date night isn't one night a week, it's three nights a week. Actually, I think you've got to really invest in the good bit. It sounds very existential. I don't have a proper plan, don't get me wrong. I'm just sort of over the ramp.

Elena Lambros:

Well, you know, you start thinking about it and then you make some judgements around that, I think is always the way to go. Final question. If you could provide our listeners with just one action to take away, what would that be?

Mark Bjornsgaard:

Perhaps it is that personal honesty. Perhaps it is. But I wrote a book seven years ago. It was terrible, but it's about the way that we build a business, and the way that we build a business is not about ideas. It's about hypotheses and about testing hypotheses. There isn't one book in the Amazon bookstore with hypothesis in the title because it's so dull. It's such a dull idea of defining a value hypothesis right. But if you define value of hypothesis, you get to a truth quicker, and maybe that is it. And I'm not for one moment, well, I might sound like I'm pontificating, but I'm not. I'm not saying for one moment I figured it out, but I have nearly finished this book. It's called How to Define a Value Hypothesis, and it's the way we work. We discovered this like eight years ago. When you're starting a business or you are starting any project, you start with a driver rather than the fun idea that you're trying to get to. So there's a whole kind of way of unpacking ideas and a whole way of getting to personal honesty, and we all have our different ways of doing that, but maybe that's it. Maybe that's it.

Elena Lambros:

Mark, thank you so much. I've really enjoyed this conversation. Obviously, your passion and intellect for this area is really inspiring, so thank you for joining.

Mark Bjornsgaard:

Pleasure. Thank you. Thank you for having me.

Elena Lambros:

Thank you for listening. I hope you found this episode both worthwhile and insightful. To learn more about our podcasts, visit ashurst.com/podcasts.

This Game Changers and Transition Makers miniseries follows on from our 30 for Net Zero 30 series, and I would encourage you to click on the link in the show notes to find out more. To ensure you don't miss any future episodes, subscribe now via Apple Podcasts, Spotify, or wherever you listen to your podcasts. And while you're there, please feel free to leave a rating or a review. In the meantime, thanks again for listening, and goodbye for now.