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Episode 83: Andy Klump

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Transcript

Jon Powers:

Andy, thanks so much for joining us at Experts Only.

Andy Klump:

Jon, thanks for having me. It’s great to be here.

Jon Powers:

We were talking offline. You grew up in St. Louis, now you’re living overseas and have been there for almost 20 years. Let’s sort of walk through the story. First of all, when you were in St. Louis, was it then that you got interested in things like energy and the environment, or was it sort of as you progressed in your career?

Andy Klump:

I will definitely give my mom the credit for getting me interested in the environment. I was never much of an energy wonk until later on in my life, but I was always very passionate about the outdoors, and I would say it was really my dad who… He was a cab driver for 44 years, so we never went anywhere for a vacation, but my once a year trip was to go to the Boy Scout camp and go to the woods, but I just remember always just looking-

Jon Powers:

You go to Philmont at all when you were Scouts?

Andy Klump:

I did do Philmont, yes. That was my first big trip outside of bi-state area of Missouri-Illinois. That was when I was 15 I went to Philmont, but I was-

Jon Powers:

Did you get your Eagle Scout?

Andy Klump:

Oh, absolutely. Absolutely.

Jon Powers:

Same here. Same here.

Andy Klump:

Yeah, I was dead set on selling pizzas every year so I could go to summer camp. That was my one week of vacation every year.

Jon Powers:

That’s amazing.

Andy Klump:

But my mom was always the one who kind of got me into recycling. We always picked up cans when we went to the park, and I still remember the first $2.37 I had was when I took a trash bag full of crunched aluminum cans to the recycling center. That was kind of a big deal when I was five or six, to make money like that, so I was always conservation and enjoying the outdoors.

Jon Powers:

Then you end up going to Northwestern and you studied Economics. At what point along that path, were you like, “Oh, economics makes sense for me. I should dive into that space.” Was there a trigger point, or was it just sort of a natural next step when you were heading off to college?

Andy Klump:

To be honest, I applied to seven schools. I got in everywhere, but I really had no clue because my parents didn’t go to a traditional school. My mom eventually got her degree at the age of 34, but they never went to… My dad was just a high school graduate, and then just went to work. I didn’t really have much guidance. The one thing I always asked my dad is he had a list of seven schools I got accepted to, he talked to every single customer, every single one kept saying great things about Northwestern, and so I said, “Well, maybe that makes a difference,” and if I want to do business one day, maybe that reputation matters. That was really the extent of my choice, and the second factor was that they gave me the most financial aid. Even though it’s the most expensive school, ended up being a lower cost than everything else because of all the grants, so I said, “Okay, it’s a done deal.” At that point, I just chose Economics because it was the only undergrad business program at the school.

Jon Powers:

Oh, interesting. When you finished, did you go immediately for your MBA, or did you work in between?

Andy Klump:

No, I did something. I was graduating right into the massive tech boom, but Northwestern being a little more Midwestern sleepy school, not a lot of folks were into tech, so I thought I was doing something dramatically different when I moved to Austin, Texas, and I worked for a software company, but I was just excited to be in a high-growth environment. I did tech for a few years, and then I was just getting to the point where I said, “Look, it’d be good to maybe go to the sidelines and get my MBA right when the first kind of economic downturn was happening in 2001 and the tech bubble burst.” I just applied to-

Jon Powers:

Timed that one real great.

Andy Klump:

Yeah, I just said, “Either go big or go home.” I just said I’ll apply to one school, see where it goes. I got in, and then the rest is history.

Jon Powers:

Yeah, how did your folks in St. Louis think about it when you got into Harvard?

Andy Klump:

It was just super exciting… of my family to go to Harvard, and I was kind of always the underdog kid. I still remember telling my mom when I got in, she literally did not say anything on the other end of the phone, and I just said, “Are you there, mom?” I hung up, I started calling every other friend, and later she said she just had to sit down. She just was so shocked. It was definitely a lot for them, so they were very, very proud.

Jon Powers:

Yeah, I always think about my folks. My dad was an insurance agent, and my mom was a teacher, and when I talk about finance or energy, it just… My dad has for a long time listened to podcast, so he can understand what I’m doing, but it was like when I finally worked at the White House, they’re like, “Oh, that makes sense. Okay, now we understand. We still don’t understand what you’re doing, but…”

Andy Klump:

Yeah, there’s a lot of very basic education I try to have, but look, I love my parents. They taught me everything. They taught me all the key things, but really pretty much nothing with respect to my career, professional endeavors. I’ve had to learn a lot of that on my own.

Jon Powers:

You graduate Harvard, and then you end up working at Trina. Did that happen immediately, or did you move into another space post-Harvard?

Andy Klump:

No, my path was really… I had this itch to go to Asia, and it happened because I had a friend who was traveling around the world while I was working in consulting for a little while, and he sent me these amazing stories from Asia, and I said, “Look, I’m never going to have a chance to go to Asia unless had a big chunk of time.” I had a few months off right before business school, and so I went to Southeast Asia, and I was just… My eyes were open to a wholly different world.

Jon Powers:

This is pre-Harvard. So, you went from Austin to Asia. Got you.

Andy Klump:

Exactly. I actually prior to starting at Harvard actually went to Southeast Asia. I traveled for a few months, knowing I was going to start in the fall of 2001, and that was obviously a very traumatic period with 9/11, but at that point, I said, “Look, I want to go to Asia. I want to at least spend a summer living in one city.” I really only lived in a handful of cities in the US, let alone never even traveling to Asia. During my first year, I made a quick trip. Loved every minute of it. I said, “Come hell or high water, I’m going to be in China.” I started studying Mandarin on the side, and just kind of jumped into an internship with Intel in 2002. And once I talked my way into that role, and I actually was there on the ground, and I started studying the language quite intensely, then I went back to business school and I enrolled to Harvard undergrad, and so I was actually taking the bike 15 minutes every day to Harvard undergrad to study Chinese, not for the grades, but just to learn the language.

Andy Klump:

I became super, super focused on just how can I learn the language and make enough connections to get a job there, and then I end up landing a job with Dell. So, I talked to a lot of CEOs who came and gave presentations, I asked them two questions. I said, “Where do you wish you spend from a geographic perspective, and what was the skill set you wish you had had?” And they all said, “China,” and they all said, “The sales.” So I said, “That’s it. My goal is to work in sales in China.” I just knew I had to stay with the same functional area, or the same industry, that’s why I went kind of from software and consulting to hardware, and I took the job with Dell. And there was no ad saying, “Hey, we’re looking for a 6’5″ non-Chinese speaker to sell computers to Chinese,” but I kind of talked my way into it, and I was the only foreigner in a 900 person sales force.

Andy Klump:

But I said, “Look, I first want to get there working in multinational and then transition to work for a Chinese company and really help a Chinese company go global,” and it was just right place, right time. I got to know one of the investors in Trina Solar back when Trina was a Tier 3 manufacturer that no one knew. 500 folks, and I was the first non-Chinese member of their executive leadership team, and so we just helped the company ramp up about 10x in those two years. I was part of the IPO deal team. I translated for the CEO when we were on the roadshow and getting to investors, but my job was-

Jon Powers:

What timeframe was this because you started CEA in 2008?

Andy Klump:

Yes. Correct. I started CEA the fall of 2008. I started Trina in the fall of 2006. I started Trina knowing that the investors put capital in, they wanted to have an IPO by the end of the year, and so I was part of the team that was working IPO, but functionally, my title was Vice President, Business Development, and I helped really solve a lot of supply chain issues because that was the big challenge that Trina had. And over the course of two years, I traveled around with the CEO, translated for him, but we did a lot of different international deals that secured Trina’s supply, allowed Trina to kind of scale and become a Tier 2 and then eventually Tier 1 manufacturer, and then at that point in time, I just got married to my wife, who’s was actually from Dallas, Texas, and she was the one-

Jon Powers:

Did you meet her in Asia, or did you meet her back here?

Andy Klump:

No, we actually met in Beijing. She moved to Shanghai together with me, and I fortunately had the good vision just at least proposed to her before we made that trip. She had a ring on her finger, knew I wasn’t a runaway, but I did not see her for the better part of two years, for about a year after we were married, and so finally said, “I want to stay married to her and not to Trina.” Said goodbye to the company and said, “I’m just going to forge my own path with CEA.”

Jon Powers:

Yeah, let’s talk about that for a second, because first of all, you come into clean energy sort of through the hardware side of things, which is really interesting, and you saw a niche and the opportunity around CEA. Of course, you decided to start it right in the beginning of the financial crisis, which is fascinating timing, but also, we’ve talked a lot about this show about the steroid injection that came with the American Recovery Act, and I think you were in a great place once you had that setup, but what was the opportunity you saw that drove you to launch CEA?

Andy Klump:

Well, one of the mysteries of why I chose this path, it was actually rooted in the fact I had this sales job with Dell because they had a mandatory requirement: I’d have 20 sales meetings every single week. I had to lock in my schedule and was constantly traveling, constantly meeting with clients, and so I just always had a natural curiosity to ask questions, and I would go to every meeting and I would say, “By the way, is it possible for me to just look at your factory out back and just give me a quick tour?” I went and I saw dozens and dozens of industries on many different manufacturing types. I was never an engineer. I always found it so interesting. When I studied the different manufacturing supply chains and operating environments, and then I went to solar, I thought, “Well, this is really, really bizarre. You have this really small industry with a bunch of lot of batch processes. No one really thinks about quality, and you’ve got to have the products working for 25 years, when these companies just got started two or three years ago?” I said, “Something just doesn’t seem right.”

Andy Klump:

And then I saw the processes. Naturally when I worked for a manufacturer, I was always in the factory. I would always take clients or investors, but I would always just make friends with the guys on the different shop floors. I’d ask about what they were doing and, “Why are you getting everything ready and cleaned up?” They’re like, “Oh. Well, some investors coming tomorrow from a bank,” and so I was like, “Okay. Well, what’s going on here?” And they said, “Yeah, we have to make the place look good.”

Andy Klump:

They rolled out the red carpet. They treated the guy really well. He was jet-lagged, tired. Had a late lunch, and they’re like, “All right. Let’s ship him back off to Spain, make him happy, and then we bring out the rest of the stuff,” and I was like, “What other stuff?” He’s like, “Oh, we have to get rid of the old work-in-progress and inventory just to clear out the workshop. At this point, it doesn’t really matter. He’s just here for today.” I was like, “Well, that’s kind of odd. You’re still selling that product. Why don’t we just work on the quality systems a little bit?”

Andy Klump:

I met with and I understood the quality side, understood the testing side, and I saw how the sausage was being made from the inside, and so after two years of Trina I said, “I’m curious to see some other factories,” because I was in a high-visible role in the industry, I had Sean Chu from Canadian, Dr. Shi from Suntech, Mr. Miao from Yingly, and all the top CEOs would call me and say, “Hey, we want you to do exactly what you did for Trina, but do it for us,” and so I knew full well I had a non-compete with Trina and I wanted to maintain the strong bond I had with the board members and the executives, but I was interested to take every one of those calls.

Andy Klump:

In a very short period of time, I visited dozens of factories, saw a lot of different operating environments, and I said, “There is just a world of hurt that’s going to come in this industry if you have so many different quality levels at so many different plants,” and so many customers are really clueless about what was happening. I said, “I just have to play this role of helping folks understand,” so my first few engagements of doing supply chain work and quality actually I did it for free just for friends I knew, and then I realized, “They keep calling me, I should just start charging for this,” and that was the core of my business, and I thought it would be doing other things.

Andy Klump:

I was really misguided and a clueless entrepreneur when I started, but I kind of learned the ropes, and truth be told, it wasn’t really until 2012 I’d say where four years of my business where we really muddled along a lot of different things, but then we really started kind of nailing processes, organically build our team. We made a lot of mistakes along the way, but at that point, our business quintupled from 2012 to 2016, and just going through that massive growth was pretty unique experience.

Jon Powers:

Yeah, for the audience, Clean Energy Associates. I may get some of these numbers wrong, so correct me, but you’ve got over 135 folks now with… I love that you guys over 1,000 years worth of experience, that’s amazing, but 85 of them are engineers, and you are all sort of working both in solar and storage. I do want to come back to the storage piece of this in a little bit. Your focus is very much on risk in the supply chain, working with teams. Give a little bit of color to that. Give me a little case study of something you guys have done recently that you can talk about.

Andy Klump:

Yeah, once again, our work as you mentioned does encompass a lot within solar, but we also do a lot in energy storage. We’ve worked with a lot of major IPPs and developers, once again, the combined market cap of the companies we work with is actually 2.8 trillion based on today’s statistics. We work with some pretty big players in the sector. I can’t disclose all those folks due to NDAs, but I’ll say some of the RE100 are our clients, some of the large IPPs and utilities we work for, but look, I mean, we’re helping anything from helping to identify the right suppliers to negotiating contracts, doing contract reviews, the whole supply chain bit kind of dawn to dusk is something we do, not just on modules, but also inverters, racking, other BUS components, and then we basically take our teams, our 85 engineers and inspectors, and we just throw them into the different factories.

Andy Klump:

I’ve always had this belief, once again, because I spent time in the factories, I said, “Look, having some independent third party that is doing the work on behalf of the downstream clients, there’s a lot of value in that that you don’t see with other industries.” Once again, this cell phone, you’re going to throw away in a year or two, but when you put panels on a roof, they better work and they better not cause a fire for at least 25 years. That’s where a lot of our team and our core value proposition is around the quality assurance side, but then once again, those same customers are asking us, “Hey, can you help out with owners engineering on the ground?” And that’s when we set up our operations in 2013 in the US, and we started growing and scaling a team.

Andy Klump:

Actually, our team outside of China is bigger than our Chinese organization now, and that’s where a lot of our growth has happened in the US, so we’ve nearly doubled our team in the last 18, 24 months, but a lot of the work we’re doing is site-level inspection, both on rooftops as well as large utility ground mount installations, but we’re the technical adviser who’s basically helping the long-term owners of these assets gain comfort and reduce their risk as they see these projects being deployed.

Jon Powers:

Is most of that work being done at the utility scale projects? Are you doing anything in the DG side?

Andy Klump:

It’s definitely more weighted towards the utility scale, but we still do a lot of work on the DG side as well. Once again, we have teams in over a dozen states, a number of PEEs, a couple PhDs, and so our teams are looking at various aspects of the system and trying to help design kind of cost-optimized solutions. Look. I mean, some folks come to us who have a DG portfolio, and once again, we have to look to say, “All right. What’s your budget? We’ll customize a plan around that.” I think we’re very different. We certainly run across Black & Veatch and DNV GL and Leidos quite a bit, but I think a lot of folks come to us because one, we have a lot of domain expertise. We’re very strong in what we do, particularly on the supply chain, but also because we’re a lot more nimble and flexible based on what the market needs are.

Jon Powers:

Let’s talk about the supply chain for a second. I want to sort of flashback to where you were in 2008, to sort of where we are today. How has the supply chain become sort of more efficient, or what major changes have you seen sort of throughout that decade? The following which I want to ask about is the storage piece. Are you seeing that begin to happen on the storage side?

Andy Klump:

I mean, absolutely. It’s just night and day compared to where I started in the industry. I mean, I still remember the industry was just changing the form factor from 125 millimeters wafers to 156, and if I just hone in on wafers as one key thing, which maybe not a lot of people go that far upstream the supply chain, but wafer technology was very, very standard.

Jon Powers:

Explain what a wafer is, just for folks that aren’t…

Andy Klump:

Yeah, exactly. Once again, elemental silicon is the second most common element in the Earth’s crust with roughly 24% of the Earth’s crust. You’re basically picking up rocks out of the ground then you purify that into metallurgical grade silicon, which is roughly 98.5 to 99% of pure silicon. It goes through a process which is kind of this, quote unquote, the start of the crystalline supply chain, and that is creating polysilicon in a huge giant petrochemical-like facility. That creates purity levels of anywhere from 99.4 nines to 99.9 nines in a pure state, then all those gray rocks, if you will when you see them, they get melted into either solid crystal called Monocrystalline, or it’s created into a multicrystalline block, which is called multicrystalline, and then they’re effectively sliced into wafers, which look gray, they’re then treated with a silicon nitride deposition layer, which turns it into a blue or sometimes a black color, and then those get metallized on the top, and those get mounted into a module. The module is what a lot of folks just know as a solar panel. That’s the supply chain in that two minutes or less.

Jon Powers:

No, that’s fantastic, and I think for a lot of listeners who are in solar aren’t even aware of that, right? How much of that early stage silicon development is still happening in China today versus how much of it now is moving to other countries?

Andy Klump:

Yeah, so it’s a couple of interesting trends that happened since I started, and once again, I source polysilicon, I visit dozens of facilities around the world, and at that time in 2006, less than 5% of the world’s supply was actually made in China. It was dominated by large American players like Hemlock, Wacker Chemie in Germany, Tokuyama in Japan, and a few others were just starting in Korea. Now the market shifted, and over 70% of the world’s polysilicon is made in China, and the technology’s change quite a bit. It’s literally gone through over 97% a price dropped from the peak in 2008. It is going through a massive industry transformation, where effectively you had an oligopoly of five players that controlled 90% of supply, then it went to several dozen folks, or it went to hundreds of folks at one point in time who tried to get into it, then it narrowed down to a few dozen, and now there’s really once again a smaller number of big players, but the industry won’t go short like it’s been in the past.

Jon Powers:

Yeah. I’ll come back to storage in a second, but just quickly, I mean, one of the fears earlier this year when COVID really started to take off, especially in China, were supply chain concerns, where are we going to get what we needed to put in the ground. There’s still obviously other concerns about, “Can you actually get your engineers deployed in some states to go do the work,” but supply chain was over and over again in May, in June and July, it was a repetitive thing that was being talked about at the CO level and the solar energy industry level, and we were really freaked out about it, what was going to happen. Can you talk a little bit about what we saw in terms of supply chain blips this year? Do we expect that to smooth out? Did that ever, the wave of concern that people had, have ever really crystallized into actual supply chain problems?

Andy Klump:

Oh. I mean, absolutely. It was a very traumatic period, and when I say, “Traumatic,” it started on my side with my family and I having traveled… We actually left China in mid-January. We heard about this virus and just kind of ignored the news, but we actually were keenly aware in mid-January when Chinese New Year happened, and all of a sudden, these cases started proliferate, and we were forced to shut down our office, and no one could even go in, and these very restrictive measures were in place. We said, “Wow. This is very serious,” and we watched it very closely, but we extended our stay in Indonesia, first by a week, and then later we just enrolled a couple of our kids in school in Bali, and just stayed there for two months because we said, “We’re just waiting for this to kind of blow over,” but look, we were tracking very closely because all of our engineers had to go into quarantine if they were in…

Andy Klump:

We actually had two folks in the Wuhan area. They were about an hour outside the city, but the whole province was locked down. And then all the factories shut down. For a period of anywhere from two to six weeks, some of the factories still maintained 30 to 50% utilization because not all the workers went home, but for the most part, no one could really move around. Some factories were stuck for a period of a few weeks, maybe a month or more at this… Some were at no utilization, some were at 50% utilization. There absolutely was this concern that the supply chain won’t react and the world’s going to be starved of modules, but that didn’t account for two things. One, it didn’t immediately impact the US because a lot of the suppliers are actually based in Southeast Asia or Korea, and the bigger players actually had supply chains which were already domestically located at those specific countries, so they were Okay.

Andy Klump:

A few that were weaker, were relying on the China’s supply chain, and they were impacted. We saw utilizations go down in those regions, but once again, as China got its handle around the pandemic, these factories started to open up. I remember being asked that I had to sign a document that say I have to release all and any kind of uncertainty related to the pandemic if my team went in, and we caused any kind of problem. I was like, “I’m not going to sign that document. It’ll bankrupt my company overnight,” but once again, slowly they opened up I would say in end of February and into March, and by the end of March and early April, I mean, all the factories in China were back up and running again, but conversely, we all know the story.

Andy Klump:

It started to spread in the West. I was actually in the US and traveling between Indonesia and the US twice during this period, and then I kind of scrambled back to Indonesia to be with my family. Then we spent the better part of 6+ months in the US, and that’s where my story goes further down the rabbit hole because we sent our passports-

Jon Powers:

It’s a different conversation I want to have at some point.

Andy Klump:

Yeah, exactly. We went down to the Houston council it two days before Trump closed it. There was a lot of comedy that went about, but we ended up coming back to China, and that’s where I’m calling you from is Shanghai today.

Jon Powers:

If you’d any message for the industry of what 2021 looks like in terms of a supply chain, are people should be less concerned and just continue to execute or what is 2021 look like?

Andy Klump:

What’s interesting is I would say it’s business as normal, but normal is not normal in the solar industry. What we’re actually encountering right now is there’s actually a shortage of glass and some of the other sub-components like EVA, and that’s actually having an impact of a penny plus a wad just on glass alone, so we’ve seen a supply chain shortage in this point in time because once again, China pretty much shut down all manufacturing facilities and installations in Q1. In Q2, Q3, they still are doing about 18 gigawatts worth in those two core quarters, but then they chose to, once again, unleash the beast, and in Q4 of this year, we’ve really seen about another 18, if not 20 gigawatts, worth of modules that went into the China market. That shortage of raw material components compounded with the fact that the government’s been trying to reduce some of these energy-intensive manufacturing facilities around glass, that’s actually caused the squeeze on solar glass that’s had a meaningful increase in costs, so all glass-

Jon Powers:

Is that glass shortage across other industries as well, not just with us?

Andy Klump:

Yes, and once again, there’s also still a construction boom right now. China, like a lot of other places, is stimulating the economy, so there’s still a lot of construction happening. There’s a limited number of glass factories that can make the specifications for solar glass and then you also have an increase in glass needs due to the massive shift towards bifacial. As a result, you see this squeeze on glass during this period of time, but with the lack of new permits to operate some of these facilities, we think the shortage may last another couple of quarters. These squeezes in the supply chain have happened, we’ve helped our clients navigate around them, and some advanced procurements and various partnership strategies can offset some of the risks associated with some of these one-off pinches, but once again, a lot of these causes are actually not directly due to the pandemic, but it’s a second order of effect, and this is part of the work that we do to help our clients understand and navigate these waters.

Jon Powers:

To transition out of solar for a second, because I’m going to look at storage before we end here, and the storage industry is been at the precipice of a boom for a while now, and I think with a new Biden administration coming in, there’s going to be some alignment of tax incentives and policy that has never been there before for the industry. You’ve got states here in the US, like Massachusetts and California, of course in New York, really starting to align the local policies, so the acceleration of storage is bound to happen here over the next couple years, and it’s still though a relatively new technology, right? Would you say it’s solar in terms of 2008, 2009 timeline, or where you sort of put it in that… And I ask that from an efficiency standpoint, as the industry tries to bring efficiency.

Andy Klump:

No, no. Of course. Once again, I think we both know the supply chain enough to say there’s massive differences between the energy storage supply chain and solar, but once again, there are some similarities. I think the biggest difference obviously is what’s at risk, and you’ve seen these cases of fires, even among some of the Korean manufacturers that, quote, unquote, the safest of the blue chips still have seen issues in terms of product quality that’s resulted in thermal events, but that aside, there still are similarities. You have this immature supply chain. At that point in time, just… I was describing polysilicon, the same way on the module side. Less than 5% of industry was making modules back in the day I joined the sector, so very immature supply chain in China, but what’s very unique is we’ve now seen as industries grown in scale the last several years really is the energy storage is the gnat on the back of an elephant of the electric vehicle trend. That’s what’s really driven these massive cost synergies and cost reductions, and that’s very similar to solar.

Andy Klump:

Once again, the efficiencies that are gained through technology advancements, also the scale of the industry, and reducing the cost, those themes are absolutely very similar, and I might say it’s like solar 2004 or 2005. I still think it’s very early, and there’s still a long way to go, but look, the energy storage industry is just going to continue to grow massively, and I think we’re really just starting to see that ramp. We’ve been involved in this sector really as early as 2011, was my first visit to an energy storage facility. It was 2014, that a couple of our leading clients said, “Hey, we want to start seeing facilities in China and Korea,” and then I just kind of doubled down and said, “2015, we’re getting into the sector,” and so the last five years, we built up a great team.

Andy Klump:

The head of our quality team in China’s got 19 years of battery cell manufacturing experience, so we go into a lot of depth, not just at the module, but also at the battery cell technology PCS and the other sub-components. A lot of folks are really coming to us and saying, “Look, we’ve worked with integrators, or we’ve seen this that the economics just don’t pencil. Help us to create a better solution,” and so we’ve really helped with customized supply chain solutions allow the industry to grow, but the sector is getting there. It’s super exciting.

Jon Powers:

Two final questions, and I’m going to sort of flash forward now to 2030. At this point, you’ll have been running Clean Energy Associates for 22 years. For me, the last decade has been about alignment, alignment of policy, alignment of efficiency not just in the supply chain, but of finance and all these other pieces, and the next 10 years is going to be about deployment and execution, especially if we’re going to solve our climate challenges which continue to offer grand, grand challenges. Looking back from 2030, what does this decade represent to the industry and what’s it going to look like in 2030?

Andy Klump:

Look, we’re absolutely going to see I’d say exponential-type growth over the next… And I would really kind of characterize more 2022 is I think we’re going to really start to see the steep curve, but equally we’re going to see a 5 to 10x in the industry size. We’re going to see substantial drops in costs and improvements in technology. I think pretty much ever renewable energy deployment, by the time you get to 2023, 2024, it will absolutely have a storage component. One, that’s going to be really operating the grid in a totally different realm. I think by 2030, unfortunately the risk of climate change… We’re now getting the attention of politicians, so I have a feeling that there’s going to be a lot of pretty extreme measures as you get to the later part of the decade, but I would expect coal in the US to be well below single digits, I think it’ll be just complete, all coal plants will be shut down. I think there’s there’s absolutely going to be a very-

Jon Powers:

Even where you are? Even in China, where they’re putting quarter?

Andy Klump:

Look, China’s energy demands is just so massive, and if you look out once again, China’s made a commitment to 2060 to be carbon neutral, but I know that that data is going to be pulled in, if they’re going to do this over time, but look, they will-

Jon Powers:

Are they under political pressure there like they are in the States?

Andy Klump:

No, I think it’s a different type of pressure. I think it’s really driven by a forward thinking, a government approach to say, “Look, they want to embrace the renewable energy trends, and really try to invest and be ahead of the curve.” I don’t think they’re necessarily taking political pressure the same way that US politicians feel it, and if you look to the political systems, obviously, dramatically different, but one of the things about China that’s so fascinating is that every single politician, they have a science or engineering degree. They know how to build things. The amount of infrastructures they’ve built in my 18 years here, it’s off the charts, and I have no doubt they’re going to go through a similar boom. I actually think 2021, my prediction’s we’re going to see the largest deployment of solar in Chinese history. The last one, as you know, was 2017. It had a peak of 53 gigawatts. I think it’s going to be more than 60 gigawatts, and we’re going to see true in some of the western parts of China.

Andy Klump:

There absolutely is going to be a 60 plus gigawatt deployment for the next five years in China just on solar, but if you combat that with wind, and once again, astounding numbers, but they’re not going to be independent of coal. They’re not going to be shut down all the coal plants by 2030. I think it’s probably going to take another decade, but they are rationalizing the coal facilities, running them more efficiently, and once again, you still have to look through… China just looked through so many people, they looked at a million and plus workers in the coal industry, they’re not going to just lay them off and redeploy them on solar.

Andy Klump:

Solar just crossed over two million of employment within China, but a lot of those are actually the downstream deployment teams. It’s not just those in manufacturing the core products. That’s where I think, similarly in the US, the path to economic recovery has renewables all over it, but it’s really going to be more of a technology innovation angle, and really true deployment of mass amounts of blue collar workers who are making sure these systems are deployed properly and see who’s going to be there to make sure that they’re deployed safely.

Jon Powers:

I love it, Andy. I want to come back and have an entire China episode at some point, by the way, so I’m going to follow-up with Lauren to set that up, but my last question, you go back to St. Louis for a second. Your dad’s driving around, having conversations with folks about where you should go in terms of Northwestern. If you could sit down and have a coffee, or maybe a beer with yourself at that point and give you a piece of advice, what would you say?

Andy Klump:

I would say, “Be more confident in asking questions and challenging the status quo,” and it took me a while before I finally had the gumption to go off and set up my own business at the age of 32, and I don’t regret it one bit. I wish I would have taken a bolder path up front, but I was always somewhat reticent looking around to someone else, but I would say, “Hey, just be confident. Ask questions. Challenge the status quo,” because it’s really the change of thinking that’s really what’s defined my career, but ultimately that of CEA.

Andy Klump:

If I had a dime for every time someone said, “Don’t be an independent third-party. That doesn’t exist. It can’t happen,” but sure enough, we took a path of creating a new model and creating QA as a standalone service for the downstream, and I did that partially because I had this non-compete with Trina. I chose to honor that, but I also saw that there’s an opportunity to really impact the industry, to create a platform where a whole set of buyers, and once again, we work with clients or client projects in over 57 countries. These folks have additional confidence knowing that we’re in the factories, adding value to their overall project because we’re mitigating risk, taking out bad product, and making sure that they’re getting the deliveries they can. That would have been the story I told myself.

Jon Powers:

Andy, that’s great. Well, thank you so much for joining us today. I really appreciate it.

Andy Klump:

Absolutely, Jon. It’s been a lot of fun and I definitely look forward to the next conversation.

Jon Powers:

Absolutely. Special thanks to Lauren Glickman from RenewComm for helping to set this up, and for our producers, Carly Battin and Colleen Young for helping to put this together. You can learn more about Clean Energy Associates and the work they’re doing. We’ll link to it from the podcast page. You can always find more episodes at cleancapital.com, and as always, I look forward to continuing the conversation. Thanks.

Andy Klump:

Thanks so much, Jon.