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Episode 81: Climate Change is Water Change with Gia Schneider

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Transcript

Jon Powers:

Gia, thanks so much for joining me at Experts Only.

Gia Schneider:

Yeah. Well, thank you. It’s a pleasure to be here.

Jon Powers:

Absolutely. Really look forward to talking about the work you’re doing today, but I want to step back and as we were talking offline, you grew up in Texas and now you’re out in California. Growing up in Texas, were there any moments that got you interested in climate and the environment, and what drove you down this path?

Gia Schneider:

Yeah. I would say, actually, pretty early on. So I grew up out on a little farm and we were always really close, I guess, to our environment. So we spent a lot of time outside and so early on, actually, we started to see things. Like I remember in my early childhood, every winter we would have snow and our pond would freeze over. And by the time I was in, certainly in middle school, that never happened anymore, you know?

Jon Powers:

Right.

Gia Schneider:

So there’s some visual things that were pretty obvious, actually, in a relatively short time period. It’s all anecdotal, so not but those things matter. And then we also spent a lot of time… Every summer we went out to Colorado because my brother’s an avid fly fisherman, and we would go camping out in this place in Southern Colorado and go fishing for a couple of weeks every summer. And that was pretty fascinating because we basically got to see, side-by-side, this little natural experiment, two forks of the same river. One fork was wilderness area, one fork was managed for grazing.

Jon Powers:

Oh, interesting.

Gia Schneider:

And one fork had a lot of beaver dams and very rich, diverse habitat. The fishing was excellent, and the fork that was managed for grazing, for whatever reason, historically all the beaver had been removed and fishing was terrible.

Jon Powers:

Right.

Gia Schneider:

So, again, we had some of these anecdotal things thinking about not just climate change, but also how climate is related to water, and at the end of the day, that all then sparked this interest that still goes today in terms of how do we solve this problem of getting energy in a more sustainable way so that we can enjoy all the things that we like that’s enabled by energy, right? But do so without.

Jon Powers:

So let’s come back to that. I’m going to come back to your brother too, for folks that don’t know, he co-founded the company you’re at today.

Gia Schneider:

Yes.

Jon Powers:

Any other siblings, by the way?

Gia Schneider:

Oh, we have an older brother as well.

Jon Powers:

Yeah?

Gia Schneider:

And but-

Jon Powers:

Is he on the board, or is there no relationship? I’m just kidding.

Gia Schneider:

No, no. He’s off doing his own thing.

Jon Powers:

You end up going to MIT?

Gia Schneider:

Mm-hmm (affirmative).

Jon Powers:

Right? and you focused on chemical engineering and economics there. What led you in that trajectory?

Gia Schneider:

A lot of it is because chemical engineering is basically a process engineering discipline, and again, a lot of my interests has tended to be towards those systems and processes, and how do you optimize system level processes? So chemical engineering’s a pretty natural fit for that.

Jon Powers:

Yeah.

Gia Schneider:

And I mean, it wasn’t like I had perfect insight and was totally organized and, you know? It was just like…

Jon Powers:

Right.

Gia Schneider:

I don’t want to claim that for myself at 18 or whatever.

Jon Powers:

Right.

Gia Schneider:

But yeah, it’s because of that. In general, I like thinking about how do you create solutions for systems where a lot of that stuff is driven by optimizing processes? Some of which could be engineering, but a lot of which are actually financial, economic, political, policy. Right.

Jon Powers:

No, that’s true. I mean, there’s so many folks that come out of the engineering perspective or are developing concepts and often don’t think through about the business plan, the regulatory implications of what they’re doing. Especially in an industry that we work in, it’s so important to think about all those different pieces of the ecosystem so your company can actually move forward.

Gia Schneider:

Yeah. Yeah.

Jon Powers:

So you went from there to… Did you go to Constellation next?

Gia Schneider:

I went to Accenture, actually, out of school, to work as part of their energy practice. And that was a bit of… I was trying to figure out some way to get more exposure to energy, the energy industry more broadly. So this is like-

Jon Powers:

Which is not what you focused at MIT, right? It was more of the chemical engineering, economics, and then energy came next?

Gia Schneider:

Yeah. Well, the MIT Energy Club, I think it started my last year at MIT. Now there’s a huge effort at MIT organized around energy, but when I was there, it was only in that last year that actually the first interdisciplinary classes started to be offered around energy and engineering and I took those, but, yeah, it was all… And so I knew I wanted to be focused in this space it’s just like it’s hard to… It was the late ’90s and I remember-

Jon Powers:

Yeah. I was an elementary education major, so I totally… You were steps above me when you… You were already there so.

Gia Schneider:

I remember researching, “Okay, how would you write a business plan, actually, around a new energy tech?” And going to Sloan to look up wholesale energy price. Finding information was hard.

Jon Powers:

Yeah. Totally, totally. So talk me through a little bit about your career at Constellation, because that led to some really interesting stuff that you’re doing in carbon, and led you to Credit Suisse, which I think is a really interesting next step.

Gia Schneider:

Yeah. Yeah. So I got to Constellation, actually, through Accenture. Constellation was my last client at Accenture. So I got an offer to go and work on the desk…

Jon Powers:

In Baltimore?

Gia Schneider:

In Baltimore, yeah.

Jon Powers:

Yep.

Gia Schneider:

And so I was part of the strategy group at Constellation, which worked on basically finding ways to manage various types of risks around assets, around physical assets. And so coming out of that work, a couple of us had a couple interesting ideas with respect to weather derivatives and the ability to create effective hedges, particularly with natural gas, to hedge electricity. At the end of the day, weather drives variable load risk for power, which is where you get the big excursions one way or another in power pricing. And, but yet NYMEX natural gas is a much more deeply traded future from a trading perspective.

Jon Powers:

Right.

Gia Schneider:

So yeah. So the question we thought we had some interesting ideas on that, a couple of us left, we had a brief stint where we thought we were going to start our own hedge fund, but ended up connecting with the folks at Credit Suisse and went in-house to Credit Suisse to help Credit Suisse as they were starting up their commodity trading desk. And that was in ’04. I’d been paying attention to the EU Emissions Trading Scheme as it was coming together. Basically when that launched, we were like, “This looks like an interesting market for us to get into.” And the bank was willing to try it out.

Jon Powers:

So it seems like a big leap to going from commodities trading side of the desk to being the CEO of a hydro company, right?

Gia Schneider:

Yeah.

Jon Powers:

So what first peaked your interest in hydro? Obviously, growing up on rivers sounded like part of it, right? And then realizing that there was an opportunity here to develop not just new tech, but a new company, to go after the market.

Gia Schneider:

Yeah. So basically my brother and I actually started thinking about this, effectively, when we were both in school. We both happened to go to MIT, and so we overlapped there for a couple of years and so we did some early brain-

Jon Powers:

Who’s older? Who’s older?

Gia Schneider:

I’m older.

Jon Powers:

Yeah.

Gia Schneider:

By a couple years, yeah. And so we had done some early brainstorming in the late ’90s and to a certain extent, that somewhat informed what I did because it was very clear from that, I’m like, “I don’t know enough about energy or how all this works to really figure out how you launch a business.”

Jon Powers:

Yeah.

Gia Schneider:

And so Credit Suisse really was, in some ways, an important element. It gave me a lot of exposure to not just the trading side, but also how projects get financed, what happens in decisions around project finance, et cetera. And so anyhow, so when… And I had a genuine interest as well, obviously, in climate overall and carbon, and so there was kind of like that allowed me to also explore that and gain some experience in that, again, first big carbon market that was established.

Gia Schneider:

So my brother and I had picked those conversations up again in the late 2000s. The bank, obviously, with Lehman happening in 2007 that all the banks basically started to exit various parts of business. So we shut down-

Jon Powers:

Everything, basically.

Gia Schneider:

Yeah. Yeah. We shut down this.

Jon Powers:

Right.

Gia Schneider:

Well, all down and basically by 2009, we were in a situation where we were like, “Okay, it might not be the best time to start a company, but actually it’s this natural transition point. So let’s pick up these ideas that we’ve had for a while and dig in.” So that’s what we did. We were fortunate to win a grant in the EERE program, the stimulus, the recovery act and from the DOE, and that really helped kick us off. And so we just decided to get going in late 2009 and won that grant, and that got us off on the early development work.

Jon Powers:

Yeah. Let’s get into that for a second, but just to set the stage for the audience, because the focus here at the podcast is often on the intersection of energy, innovation, and finance. We talk a lot about your classic renewables, and I think hydro is not often talked about enough in the renewable landscape, but just so folks know, I mean, the hydro markets seven… And I may get some of this wrong, but it’s seven percent of the total electricity use in the country, but it’s almost 40% of the total renewable use, right?

Gia Schneider:

Yes.

Jon Powers:

And as solar and wind and others are coming on board, obviously that dynamic’s changing, but hydro has historically been a very powerful part of the renewable story. So that EERE money comes in, you guys were able to use it to really start to sketch out and put together the tech behind the firm?

Gia Schneider:

Yeah, exactly. And just in context, what kind of tech did we want to… What was the idea? And it was really if you look at hydro, yes, hydro globally is about 1.3 terawatts of installed capacity globally. It’s actually two-thirds of the global renewable energy supply, and there’s a lot of resource, over 11 terawatts of… There’s more than that technically, but in terms of more realistically developable potential. But the conundrum is, “Okay, will we develop hydro the way we’ve done it for 100 years?” We looked at that and said, “The approach going forward is likely going to be more distributed, not necessarily building huge dams, and in addition, we have to deal with the fact that over half of the fleet was installed before 1990.” So we have this conundrum of an old fleet, but yet the new model looking more distributed, and so our focus was, first and foremost, on a turbine that would… Because in hydropower, your choice of turbine defines the rest of your powerhouse and civil work.

Jon Powers:

Of course, yeah. Yep.

Gia Schneider:

And so if you want to move-

Jon Powers:

I’ll tell you, by the way, I live 20 minutes from the Niagara Power. So I think people’s traditional view of hydro is either the Niagara Falls or…

Gia Schneider:

Grand Coulee or Hoover Dam.

Jon Powers:

Yeah, Hoover Dam, right? It’s like, that’s how people picture hydro. You’re going to build a huge dam, you’re going to create a reservoir behind it and start pouring it out. And I mean, could you talk for a second and more about the distributed model? What that really means.

Gia Schneider:

Yeah. So basically in the conventional approach, you build a big dam and if you think of a river running down a slope, I build a big dam at some point down slope and I integrate all of the vertical drop across that slope in one step.

Jon Powers:

Yep.

Gia Schneider:

And what a distributed approach… So that’s kind of like if I wanted to get to the ground floor from the top of a building, I’m going to jump off the roof or parachute off the roof, right?

Jon Powers:

Right.

Gia Schneider:

And in our case, what we do is we walk down the stairs. We take out that energy, but in steps as we’re going down the slope of the river. And by doing so, you still technically build things that are technically from a civil engineering perspective would be considered dams, but they are very different. They are designed to enable and support river connectivity, leveraging a lot of things that are already understood for civil engineering around, for example, river restoration projects, et cetera, but they are much lower. They don’t look like Hoover Dam. They don’t look like beaver dams per se, but they are much more akin in some ways, for example, to a beaver dam than they are to Hoover Dam.

Jon Powers:

And what does that model do for, I guess, supporting the ecosystem, right? Versus completely, in many cases, wiping out that ecosystem, right? Yeah.

Gia Schneider:

Yeah. You actually have a lot of positive benefits that come from that because you end up slowing water down as it runs across the landscape. That creates an ability for groundwater recharge because it’s not rocket science, I’m just slowing that water down. It spends more time on the land. It can get into the ground that helps our groundwater and the water table. That’s good for flood mitigation, because again, if I have an intense precipitation events, if I can create a landscape that has more spongy capacity in it effectively through this distributed approach, it’s able to mitigate a flood peak. In a drought, having better… Groundwater is what rides is the gives us ride through in a drought. Groundwater storage is many times what we can ever get in terms of surface reservoir storage. So robust groundwater is critical for both flood and drought.

Gia Schneider:

So you get those interesting co-benefits that are actually going to be increasingly critical for us because climate change is changing water patterns. Climate is water change, I often say. Then from a species perspective, you design these projects so that you have bypass channels, side channels, side channel connectivity. You have things that look like… Where you’re creating actually much more like wetlands and ponds, as opposed to reservoirs that don’t necessarily have a lot of diverse habitat.

Jon Powers:

People are taking their party boats out on, yeah. Sorry.

Gia Schneider:

Right. And then on the recreation side, it’s interesting, some of the folks we’re working with now are civil engineers that design man-made whitewater features where you incorporate a… You incorporate recreation, again, it might not be your party boat because you don’t have a big reservoir, but it’s a different type of of river recreation. Anyhow.

Jon Powers:

So-

Gia Schneider:

So that’s the big picture vision of you get a lot of these co-benefits and you get reliable, renewable energy.

Jon Powers:

In this DG model, right? What scale are you producing power at along these different steps? And then how do you actually transmit that power, right? From now you have multiple interconnects or how does that work?

Gia Schneider:

Yeah, absolutely. So you have multiple interconnections points. One of the things that we’re working on is can you… So there are a couple interesting things. Maybe I’ll start first from a big picture power systems’ perspective. So we did some work with NREL about a year and a half, two years ago, where we looked at a distributed virtual power plant. So a cascade of 25 megawatts total. I think it was 23 individual plants. So a little over a megawatt each, not huge, fairly small.

Jon Powers:

Yep.

Gia Schneider:

But each of those plants had between 10 minutes and maybe half an hour of physical storage at each node in the cascade. So with, obviously, distributed energy resource management software, I can now operate that distributed cascade as a 25 megawatt BPP and by doing so I can now start to optimize the use of those little bits of stored energy because 10 minutes at the top turns into 230 minutes through the whole cascade. And we’re able to show, you could get up to 200 megawatt hours a day of dispatchable storage just over using smart systems software that we have today to operate that, and if you start to pair that then with-

Jon Powers:

And just quick interruption, so the has not just the turbines. Have you guys developed the software too or are you partnering with a software provider that provides that?

Gia Schneider:

We have some of the elements, like for example, a software component that we have developed is a more accurate water forecast and that’s critical because forecasting my flow is my fuel, which helps understand that dispatch problem. But for the control side, we’re working with partners who have already have… There’s a lot of really great work that has been done on.

Jon Powers:

For sure. For sure, yeah.

Gia Schneider:

And then-

Jon Powers:

Is that where Schneider comes in in terms of their investment? Have you guys partnered with Schneider on that?

Gia Schneider:

That was definitely a motivation for them, yes.

Jon Powers:

Yeah, of course, yeah.

Gia Schneider:

Absolutely. And then the next step is to integrate, for example, with batteries and there’s, I think now where things start to even get more interesting, which is when you look at the charge/discharge cycle of what makes the most efficient use of battery spend? Charge/discharge cycle really drives life, and so maximizing useful battery life versus my investment’s critical and distributed hydro paired with batteries gives you a really great charge/discharge cycle profile. And none of it’s, again, not all of this stuff, we’re going to need everything we can get to the grid. So it’s just trying to find where do you put all these pieces together in a way that creates the most grid value at the lowest cost so that we can actually take the 730 gigawatts of thermal fossil generation off the grid in 15 years, right? That’s an aggressive-

Jon Powers:

Super aggressive, yep.

Gia Schneider:

… challenge while maintaining reliability.

Jon Powers:

Yeah. But I think… So I’m going to step back for a second. I think the folks view what you guys have brought to the table as pretty, pretty tremendous. The fact that you’ve brought… We’ve talked about breakthrough ventures before on this show and the fact that Breakthrough came through and invested means that they really see this as an opportunity to really, as their title says, breakthrough here, right? And try to solve this. As you guys were developing, I want to step back to just quickly before we get… Because investment happened in the spring?

Gia Schneider:

Yes.

Jon Powers:

By the way, congratulations on closing a investment during the kickoff of COVID. That’s amazing.

Gia Schneider:

No, so to be clear, I mean, it happened before kickoff. We didn’t announce it,

Jon Powers:

Oh, it did?

Gia Schneider:

Yeah.

Jon Powers:

I saw the article for March, I’m like, “That’s amazing. They did that.”

Gia Schneider:

No, no, no, no. We didn’t. There has been a little bit of a delay there, but yeah.

Jon Powers:

Yeah, no. So you get EERE money, you spent the next what? Basically five or six years developing the technology? What led to the significant investment that both Schneider and Breakthrough came in? Was that as, “Technology’s here, we’ve proven the case and now we are going to grow and accelerate” What brought, not just the need for that investment, but what was the trigger point for you to say, “Okay, this is the right investment to take at this time to launch the company.”

Gia Schneider:

Right. So basically solving the problem of how to make a turbine that works for this distributed hydro vision is hard, but it’s not necessarily a trivial one.

Jon Powers:

Yeah, of course.

Gia Schneider:

So when you look at the criteria, you’re like, “Okay, this distributed vision, what do you need? You need to be cheap, you need to be compact, you need to be modular. All those things relate at the end of the day to driving down costs. You need to be high-performance. So the turbine needs to be very efficient, because again, you’re not going to… That helps generate more megawatt hours and drives towards costs. And critically, you need to be fish safe in places where…” Not every place around the world has regulations for fish, but in general we wanted… Where you do have regulations for fish being fish safe from a practical perspective helps reduce costs, because then you don’t have to screen.

Jon Powers:

Right. Oh, interesting.

Gia Schneider:

So that’s the standard approach is like, “If you aren’t fish safe, you put a big screen in front of your intake and-”

Jon Powers:

And when you say fish safe, literally a fish could swim through this and not be affected?

Gia Schneider:

Correct, correct. And size dependent, of course, right?

Jon Powers:

Yeah, of course.

Gia Schneider:

So I always make that clear. So those were our design criteria, and we started down a design path that went to a completely novel powertrain. It was a linear machine and so basically for a couple different reasons, we thought that would be a good path to go down. And to then make that tech work we had to design fish safe efficient blades, and we had to make a reliable linear powertrain.

Gia Schneider:

We solved the fish safe, efficient blades challenge relatively quickly. The linear powertrain was a much heavier lift to be blunt. So we went through three generations, we got some early prototypes installed, and some early pilot neo style projects. And we were solving problems on the power train, but basically got to a point where it became clear to the team that really we needed to go back to the drawing board and say, “Is there a different way for us to achieve the end objective, which is not actually to make a linear power train, but it’s to make the turbine that meets those initial criteria?”

Gia Schneider:

And we realized we could actually adapt the… Now that we understood enough about how to make high performance fish safe blade shapes that we could put that on a conventional rotating powertrain.

Jon Powers:

Oh, interesting. Yeah.

Gia Schneider:

And that was really what pivoted things. So we went through this big pivot in 2018, late 2018, and that led to then the investments in 2019.

Jon Powers:

And you raised that capital because it was time to scale? The…

Gia Schneider:

Yeah, we were able to go and literally we went from the point where we’re like, “Yep, we’re going to take these blade shapes, put them on a conventional rotating machine.” And from that decision to having a first unit built and tested with proven fish passage results and proven power curve performance over 90% was less than six months. And-

Jon Powers:

Is that testing done at NREL? Where’s the testing done?

Gia Schneider:

It was done at a mixture of… The fish testing was done at a lab in Massachusetts called Alden Research Lab, which is one of the nation’s leading fish test labs, and then we did the power curve testing… We actually have a test facility at our own facility in Alameda.

Jon Powers:

Oh, amazing. Yeah.

Gia Schneider:

So we did that there and independent engineers come in and they run the tests, but it’s built on our own facility.

Jon Powers:

So-

Gia Schneider:

So that it… Yeah, go ahead. Sorry.

Jon Powers:

No, no. So this is super interesting. So you guys brought the capital in to now scale up. Can you talk to me for a second about the economics of one of these projects? As you go to put these in, how are you guys… Are you financing those based on the capital you raised on the corporate side? Or are you doing project level financing now going into these opportunities?

Gia Schneider:

Yeah. So our first two projects… So we have two projects installed at this point. We installed our first customer project in 2019 at the end of the year. So in December of 2019, and it’s a small net metered project in Maine. It powers a little school and a restaurant in an old mill building and that deal was-

Jon Powers:

And do they have a PPA off the power? Is that how it works or is it…

Gia Schneider:

Well, it’s under Maine net metering-

Jon Powers:

Just because it’s net-metering. Got you.

Gia Schneider:

It’s net metering.

Jon Powers:

Okay.

Gia Schneider:

Yeah.

Jon Powers:

Yep.

Gia Schneider:

Yeah, yeah. So yes, it’s a net metering contract. And customer finance, we took some risks in getting the project delivered. Ultimately, that’s a customer project so it’s owned by the customer. Now that it’s in operation and working, it’s owned by the customer. That was the first project.

Gia Schneider:

Second project was one where we did… It was one that we’d started development on early and we did bear most of the costs, some of it was grant grant-funded in getting that installed, and that installation just happened, or happened earlier this year in August/September and that is a project in Oregon called the Monroe Hydro Project. That a project’s now… It’s our first installation of our one megawatt class turbine.

Jon Powers:

Oh, that’s great.

Gia Schneider:

And then our next projects that we have contracted are our first contracts, which I think of as being truly more like the a bankable situation where they are being financed by the customer and that there’s a debt piece as well on the construction.

Jon Powers:

Is there a tax credit for hydro? I don’t even know.

Gia Schneider:

Yeah. Tax gets, sorry. Hydro gets both the PTC… You can choose PTC or ITC. In almost all cases, the ITC is the right choice for hydro.

Jon Powers:

Yeah.

Gia Schneider:

Yeah.

Jon Powers:

Is that currently ramping down like solar? Will that be hopefully effected in the new… Do you see… Let me change that around. There’s, obviously, going to be major infrastructure push here, right? With the new administration and is hydro sort of at the table with the other technologies in terms of trying to get some of these solutions forward and the Biden plan?

Gia Schneider:

Absolutely. Yeah. With the National Hydropower Association, we are actively engaged in those discussions because yeah, it’ll be critical in helping to drive forward additional deployment for sure.

Jon Powers:

So let’s use that to look forward. So you guys have done some really amazing stuff over the last decade and now proof of concept is there, second project out, you got some bankable projects coming. What does the hydro situation look like in 2030 and how do we get there?

Gia Schneider:

Yeah. So over the next three to five years… I would say over the next couple of years, a lot of our… When we look at the market for hydro and how hydro can play our focus is in the very, very near term. We have old, small hydro plants, thousands of them that produce reliable, renewable energy into the grid today but have old turbines. In some cases, you have plants that have two out of four, two out of six turbines are already offline.

Jon Powers:

Sure. Retrofit those.

Gia Schneider:

Yeah. So basically, there’s a modernization re-powering opportunity. And by doing so you now take these old plants and they have modern turbines, modern controls, and they’re fish safe. Then we have-

Jon Powers:

And what scale of opportunity is that in terms of either megawatts or dollars?

Gia Schneider:

Yeah. And ,again, it’s like thousands of plants, you’re probably looking at… It’s on the order of maybe a gig or so. It’s a an initial opportunity. There’s a bigger opportunity in Europe.

Jon Powers:

Yeah.

Jon Powers:

But having that retrofit opportunity just for folks in, I mean, it’s much quicker, right?

Gia Schneider:

Yeah.

Jon Powers:

You’re not having to do permitting. You’re not having to…

Gia Schneider:

Interconnection’s there. Off-take is there actually in many cases. Yeah, it’s a much more…

Jon Powers:

Yeah, that’s great.

Gia Schneider:

The lead time is short. So that’s initial sell into that space and we have a pretty active book of work that we’re focused on getting closed in that space. And then the second chunk is in non-powered dams. So the headline stats are over 90,000 existing dams in the United States, less than 2,400 of those are hydropower facilities. So the vast majority are non-powered.

Gia Schneider:

Of those, so total gigawatts is about 13 gigs from a DOE study in 2013. Of those, when you subset down to the things that we think are developable, which is a combination of can you get interconnection? Are they going in a good power market? Are they relatively clean structures to deal with? Stuff like that. And we think that’s probably more like a four or five gig opportunity.

Jon Powers:

Yeah.

Gia Schneider:

And for those, then that’s where we’re working with a couple of different development partners. We’re doing some development ourselves as well, but we’re mostly working with development partners where we go and say, “Okay, here’s the most cost-effective way to take advantage of our technology advantages to build compact power plants that, again, are modern, fish safe, make power from these plants.” And those plants are generally going to be between a couple megawatts and 20 megawatts at the large end. Like individual plant. And in many cases, you will end up with cascades of those because these are locks and dams that were built in cascades to help manage navigation in prior times. So that’s the next chunk.

Gia Schneider:

Then the blue sky, as we look out 2025 to 2030, where we think things start to get really interesting beyond this initial get stuff moving is actually to take first of those 90,000 dams, again, only a subset of those we think are going to make sense to put power on as they are. But there’s a big chunk there, which is I think presents… We think presents a really interesting opportunity to combine modernization of the water infrastructure with river restoration and new energy, and that’s what we call restoration hydro. We were part of a group over the last two years that brought together the river community and the hydropower industry that released a joint statement about a month and a half ago about this opportunity, or partly about this opportunity. It covers a couple different things.

Jon Powers:

Did you work with the river keepers and some of the other folks in that…

Gia Schneider:

American Rivers? Yeah. So yeah, American Rivers Union,

scientists, NHA, a couple of other folks in the hydro industry. There were a number of-

Jon Powers:

Yeah?

Gia Schneider:

Yeah, it was a very good group of environmental NGOs and industry folks.

Jon Powers:

Yeah.

Gia Schneider:

And coming out of that, we were like, “Okay, you can take an… Some of these old dams are old and unsafe.” Right? Like we had the two dams that failed in Michigan earlier this year.

Jon Powers:

Right.

Gia Schneider:

Right? And so not to… At the end of the day, the point is to say, “Okay, old dams that have outlived their purpose. How can we take those dams out or reconfigure them in ways that deliver benefit?” And we’re actually funded right now by the Department of Energy on a grant project, working with Natural Systems Design, which is one of the… A leading engineering firm that has done work on dam removal and river restoration.

Gia Schneider:

And it’s just really cool stuff. It’s like taking things that have already been deployed and proven in river restoration projects, but adapting that civil engineering to build new hydro that is now sustainable and so that’s… Again, restoration hydro, we it as this big… That’s where the really big growth potential is. That’s how you unlock the 65 gigawatts of resource potential that the DOE noted in, again, that 2013 report. We have a lot of resource. It’s just, we have to develop that in a sustainable way.

Jon Powers:

Sort of last question, just from a timing perspective, but thinking about from a developer perspective, when you look at things like solar and storage, it is a state-by-state game right now?

Gia Schneider:

Yep.

Jon Powers:

Right. You have to have a almost a 50 state strategy. Really probably a 10 or 12, or 15 state strategy.

Gia Schneider:

Yes.

Jon Powers:

Is hydro the same sort of… Like I think about the climate solutions they’re pushing here in New York or, of course, California, where you are, or Massachusetts, or Maine. What are some of the key target states for you in terms of developing opportunity?

Gia Schneider:

Yeah, I would actually say New York, New England, PJM. Those are… There’s a lot of opportunity in New York and New England in particular. There’s a lot of opportunity in PJM. I do think that New York is… When we look at the country New York and California in terms of policy and regulatory drivers, and thought leadership around distributed energy resources. How do we get more of that? How do we integrate that in the grid? How do we help those resources add to grid reliability as we transition to a zero carbon grid? Those two states definitely stand out so we’re definitely focused there. Because there’s also good resource as well.

Jon Powers:

Right.

Gia Schneider:

So strongly aligned both with resource and with the state policies, and then opportunity set wise, again, there’s a lot in New England, there’s a lot in PJM in particular right now. I think there’s a-

Jon Powers:

Are you targeting local developers to educate them to go out or do you have an army that’s hitting these in the street trying to find these opportunities?

Gia Schneider:

We do a bit of both. So we have a couple partnerships, folks that we’re working with who are developers and then we are also… I mean, we’ve spent a lot of time building our internal tools to understand and look at sites. So we also have a bit of our own internal development work as well.

Jon Powers:

Excellent. And then finally, if you could go back to yourself, this is the final question I always ask my guests, but if you can go back to yourself either graduating MIT or leaving Texas to go to MIT and you could sit down and give yourself any advice, what would it be?

Gia Schneider:

I don’t know. It’s so hard to look back. I have another thing that I often thinking about, which is one wants to always learn from one’s past experience, but not regrets because it just like… I don’t know what regret really. Not that that was the point of the question, but I think in terms of learnings, the… Man, I wish I had more hours in a day. That’s not really a good thing, but it’s just like okay, because it’s a multi-

Jon Powers:

The classic entrepreneur problem.

Gia Schneider:

Yeah, it’s a multifunctional problem. We are part… It’s energy. So we have to deal with a regulatory framework so you just have to fight… It’s like chess on many levels, right?

Jon Powers:

Yeah.

Gia Schneider:

You need to get the tech right. You need to turn that tech into a product that fits the customer need correctly. You need to keep moving the regulatory framework and the political landscape in the right direction. All of those things have to… Then you got to scale production, you got to execute projects. Like this project that we’re… The work we’re just announcing today where we got Monroe installed, got it commissioned, and then completed this really great fish testing, had this really fish testing results in the field with PNNL. That happened in COVID. Like, for example, right?

Jon Powers:

Right.

Gia Schneider:

When COVID hit, we were already like… We needed to get that project in the ground this year and it was an incredible March just to make sure that we have suppliers in Wisconsin, we have suppliers all over and we’re trying to… Because we’re outsourcing the production of all this and so if they shut down, then we’re like, “Oh.”

Jon Powers:

Right.

Gia Schneider:

Anyhow. So the bottom line is I think that the only way you do that is by having a good team and you it’s not possible to do that as an individual. And I think that the advice I would give myself is just that it takes a really great team and then a broader community to make it possible to do what we are all trying to do.

Jon Powers:

Yeah.

Gia Schneider:

And that’s-

Jon Powers:

Does that include your brother? Is it nice working with your brother? I didn’t ask about that.

Gia Schneider:

Great working with my brother.

Jon Powers:

Yeah.

Gia Schneider:

Yeah. No, it’s awesome. So I think we have a great team. I always wished sooner than we had… It’s one of those things. The quicker you can aggregate a good team the better, because it creates the capacity to actually execute this.

Jon Powers:

Excuse me. Going back to your chess analogy, I call it nine dimensional chess. You got to build to play nine dimensional chess to move these things forward.

Gia Schneider:

Absolutely.

Jon Powers:

So, Gia thank you so much for being on. I really appreciate it and I’m going to follow you all closely and would love to find ways to work with you. You have really interesting work and so critical to solving the climate crisis.

Gia Schneider:

Well, thank you. I really appreciate the opportunity to chat a little bit more about this and share a bit about what we’re doing.

Jon Powers:

You can always find out more at Natel Energy, natelenergy.com and of course we’ll link to that one. I want to thank Jenny Bourne and the team at Bam for helping to put this together and our producer, Colleen Young and Carly Battin for helping to put the conversation together today. You can find more episodes at cleancapital.com and in the future, look forward to continuing the conversation. Thanks so much, Gia.x

Gia Schneider:

Thank you. Have a wonderful day.

Jon Powers:

You too.