Experts Only Podcast #83: Andy Klump [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=” target=” title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-jwwgyb48′ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwgxszg’ admin_preview_bg=”] Episode 83: Andy Klump [/av_textblock] [av_hr class=’invisible’ height=’10’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwl4lsb2′ admin_preview_bg=”] Welcome Andy Klump, CEO & Founder of Clean Energy Associates, to Experts Only Podcast. With 20+ years of experience in solar and storage, both in the US and China, hear what Andy has to say about the supply chain both today and changes he’s seen over the past two decades. Host Jon Powers digs into how the supply chain has become more efficient, as well as how it’s been challenged due to Covid-19. What does the future of solar and storage look like here in the US and overseas? Tune in! [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’20’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Listen now: [/av_textblock] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ id=” custom_class=” av_uid=’av-k4so2umi’ admin_preview_bg=”] [av_image src=’https://cleancapital.com/wp-content/uploads/2021/02/ExpertsOnly-bar-Klump-1030×258.jpg’ attachment=’7960′ attachment_size=’large’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=’manually,https://soundcloud.com/experts-only/ep83-andy-k-cceop’ target=’_blank’ title_attr=” alt_attr=” lazy_loading=’disabled’ id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-k37p0z0j’ admin_preview_bg=”][/av_image] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-khmlvb58′ admin_preview_bg=”] Transcript [/av_textblock] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-kh7u1yig’ admin_preview_bg=”] 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. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’40’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_social_share title=’Share this entry’ style=” buttons=” share_facebook=” share_twitter=” share_pinterest=” share_gplus=” share_reddit=” share_linkedin=” share_tumblr=” share_vk=” share_mail=” av-desktop-hide=” av-medium-hide=” av-small-hide=” av-mini-hide=” av_uid=’av-354olk’] [av_hr class=’invisible’ height=’40’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_button label=’More Podcasts’ link=’page,5266′ link_target=” size=’small’ position=’center’ label_display=” icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ av_uid=’av-jx1x7jx3′ custom_class=” admin_preview_bg=”] [av_hr class=’invisible’ height=’40’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”]
Experts Only Podcast #82: Adam Browning [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=” target=” title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-jwwgyb48′ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwgxszg’ admin_preview_bg=”] Episode 82: Adam Browning [/av_textblock] [av_hr class=’invisible’ height=’10’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwl4lsb2′ admin_preview_bg=”] Welcome back to Experts Only! This week on Experts Only podcast, host Jon Powers welcomes back Vote Solar CEO Adam Browning for an important discussion including their predictions for the upcoming year with the incoming Biden-Harris Administration and how we can work toward clean energy access for all. Also, hear how you can be more engaged with Vote Solar to help push solar energy policies forward at the state level. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’20’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Listen now: [/av_textblock] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ id=” custom_class=” av_uid=’av-k4so2umi’ admin_preview_bg=”] [av_image src=’https://cleancapital.com/wp-content/uploads/2021/01/ExpertsOnly-bar-Browning-1030×258.jpg’ attachment=’7903′ attachment_size=’large’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=’manually,https://soundcloud.com/experts-only/episode-82-adam-browning-2′ target=’_blank’ title_attr=” alt_attr=” lazy_loading=’disabled’ id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-k37p0z0j’ admin_preview_bg=”][/av_image] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-khmlvb58′ admin_preview_bg=”] Transcript [/av_textblock] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-kh7u1yig’ admin_preview_bg=”] Jon Powers: Adam, thanks for being back on Experts Only. Adam Browning: Oh, I’m happy to be here. Thanks for having me. Jon Powers: Yeah, of course. So Vote Solar is coming on almost your 20th, 20 year anniversary here. You started it back in 2002, it’s a pretty amazing run so far. Adam Browning: It’s hard to believe. Hard to believe, but true. Jon Powers: For the audience, tell folks who aren’t familiar, the mission about solar and some of stuff you guys have been working on in the last few years. Adam Browning: So we’re a nonprofit public advocacy organization. Got our start in March of 2002 officially, after doing a ballot initiative in the city of San Francisco. Our goal initially was just to bring solar energy into the mainstream working state by state. Like how do we set the right rules of the road, the right policies in order to create a vibrant solar market with the goal of bringing down the cost of solar. Now that solar is really cheap, in some cases, the cheapest energy source, our mission and our focus has shifted. Our goal is now 100% clean electricity equitably deployed with a real focus on ensuring that the benefits and the participation in this new energy economy that we’re building are equally shared by all. Adam Browning: We still work principally at the state level and last year we had one of our biggest years ever where we intervened in regulatory and legislative proceedings, I think we had about 78 different regulatory proceedings, 14 different major legislative campaigns, results of which we’re looking at 44 gigawatts of new solar demand as well as really impacting over 30% of the US population. So we go to where many of the most important decisions are made, which is at the state level. Jon Powers: Let’s talk about a state level work for a second. We are going to talk just for the audience a lot about ’21 and beyond, and what to expect out of the new administration. But because for the last four years, the fight has not been at the federal level, it’s been a state by state chess game, and you all have been incredibly effective in that fight. How did you have to shift your strategy, say looking back over the last few years, and execute to be able to play that state by state game? And then for folks that have assets or companies in the States, how can they be more engaged to help push these policies at the state level? Adam Browning: So since our founding, we were really focused on a state-by-state approach. This country does have a commitment to federalism when it comes to many of the major decisions around energy policy. Federally, what we’ve mostly looked at is tax policy, frankly, as a sweetener that helps the States that want to go someplace go faster. So I think the advantage here is A, it’s a venue where most decisions are made in front of public regulatory commissions, public utility commissions, state legislatures. They’re the ones that establish say like clean energy standards, renewable portfolio standards. They do the rate making that really drives distributed generation and the secret there is there is no cookie cutter approach. You need to have bespoke campaigns in every place where you reverse engineer a power map. Who’s making decisions? How are they influenced? Adam Browning: Our focus, our… It’s not a patented game plan, but it’s open source here, but is inside and outside strategy where you first have deep regulatory analysis, you make your case with numbers, you lawyer up and you get involved in the proceedings, but you never win just because you’re right. You wrap around the campaign that really drives the politics and taps into the fact that super majorities of people in this country want to see this transition and you turn that into a campaign that matches your regulatory intervention and analysis. Adam Browning: So we have always partnered with trade associations, like SEIA, principally who really focused on how do you make change through Congress and that really is a whole separate ball game, that of expertise and of policy instruments that just out of a need to stay focused, we’ve deferred to their leadership when it comes to that. Jon Powers: And how do you find the balance at the state level from, I mean, you could put all your eggs into California and spend all your time just working the California rules and regulations because it’s the Superbowl of clean energy, but you guys are focused on advancing stuff in Florida and Michigan and Massachusetts, and in places like Oregon, New Jersey. How are you structured to manage across such a, almost a 50 State strategy? Adam Browning: Yeah, not quite 58. I think we’re about 28 different States at different levels. We’ve organized, we’re now at 35 people and we’ve set up a regional structure where we have senior regional directors for the major regions that then deploy both those regulatory and campaign assets in parallel. You are absolutely right, you could put 35 people on California policy and still have open. So our approach has been this whole clean energy transformation can’t be a California only, this needs to be really national. Everybody needs to feel that they have a role and a benefit in this clean energy transition. Adam Browning: So we mostly focus on places that want us that have a core of policy support and I’d say we probably have 30% where we reserve to the super hard States where you’re swimming upstream, but you got to start somewhere and provide a foothold, a beachhead, and build something, that momentum where it hadn’t been before. I will say, we got our start working in the Southeast and opportunistically, a foundation wanted our partnership and it has been one of the most rewarding things of my career. The Southeast now has some of the largest growth and some of the most biggest opportunities. Jon Powers: Can you talk about that for a second? What do you see has been the misconception? I would argue I probably have those same misconception myself. When you look at the Southeast, people are just like, “Look, you’re going to have to wrestle with the utility monopolies and the demand is yet to be there,” but it sounds like it’s changing. Adam Browning: Oh yeah, and again this might be… In the Southeast, I think you have some of the strongest, the utilities are strongest there where they have the loudest voice and the most power within the legislatures, as well as the regulatory bodies. And they’re also, I cut my teeth first in California, and then in Arizona where solar has never been just a blue state phenomenon. We learned pretty early how to work in a much more conservative environment with different approaches, different policies. Adam Browning: The politics just seemed really daunting in the Southeast until we again went in first in Georgia with a long-term strategy of finding the local voices that were most resonant with the policymakers there, and then providing that type of disciplined regulatory analysis and then campaign support. And the Carolinas, I think there are incredibly promising areas as well and Duke is the largest utility in the country, and we have a lot of direct engagement right now. Adam Browning: They’ve adopted voluntary net zero goals but their IRP is still chock full of gas. They would want to build something like 10 to 14 gigawatts of new gas and I think we have a good strategy for skipping that as we roll off a goal, skipping that gas and going directly to clean. Jon Powers: Looking back at 2020, or even maybe 2019 through today, is there any one or two campaigns that you’re exceptionally proud of getting over the goal line? Adam Browning: I think this energy transition happens on many levels. There’s a rooftop, there’s a community solar element. And then there’s a huge excitement around a hundred percent clean energy. And this past year- Jon Powers: Which we would have laughed at 10 years ago, but now it’s a reality. Adam Browning: I remember when California, trying to get to 10% was like, “Oh my God, that seems so aspirational.” And now it how it doesn’t. Nice. So, I think that’s been another element of our work, is that there is some benefit of incrementalism, as you set a goalpost as far as you can, build power, and then continuously set it farther and farther. And you can get to a point right now where we have nine states with a hundred percent clean energy laws. These aren’t aspirational goals. They have compliance deadlines, as well as penalties if they’re not achieved. And two of these happened in the past year. Virginia was really right before COVID hit, and so it’s such a wonderful win, that immediately changed the entire conversation around- Dominion pulled their IRPs, got rid of the plans to build gas, and now it’s clean going forward. Jon Powers: As a former Virginia resident, I’ll tell you, I was shocked, obviously very pleased to see that, but knowing how hard it is to have to move Dominion in the right direction. But they did, they did, because they got pushed. Adam Browning: That was really a win by many local advocates, that have been working really long and hard. So I do not want to over claim victories here. I think that it’s a real lesson to learn, which is that all politics is local. Jon Powers: I think that the advantage of you all coming in and supporting that is having the data, having the homework, having the track record, having the playbook for folks to execute on, right? Because it’s no more powerful than the folks locally, but they don’t often have the playbook, how you won things in Florida and how you won things in North Carolina and in the southern states. Adam Browning: We were pleased to play a supportive role, but particularly in Virginia. The real hats off go to the local leaders in Virginia. And everywhere. Adam Browning: Arizona is the other place where it’s not a renewable energy win, but a hundred percent carbon free. And the politics of Arizona are complicated and they’re dynamic and they’re changing. And we’ve worked there for a really long time, but we talk about the last four years, where we were bereft of federal action, I think we had some of the best state success over these last four years, for a couple of reasons. Adam Browning: One, the cost, that’s just been changed, where we’re having very different conversations about how much it’ll cost versus how much it will save to go renewable. Adam Browning: Secondly, in the face of a federal government, absolute intransigents, you had state leaders who were like, Oh, cavalry’s not coming to the rescue, right. If we’re going to win on this, like it’s up to us. And I think that is really the mindset that we all need to like keep and maintain as we, as we go forward, leadership happens at every level. You cannot wait for somebody else to solve this problem for you. Take this matter into your own hands and run with it. Jon Powers: Yeah. I think it’s really important. And we talk about this on the show a lot, how actually the fundamentals of the industry are very strong now. And for the last decade, you’ve got a workforce that’s trained, you’ve got capital that is cheaper than ever before, that is trusting in the longterm viability of this as an asset. And you have, because the work, you guys are doing, the right rules and regulations falling into place. Jon Powers: And then the next phase is, which I do want to talk about a little bit later, is how we make it more equitable, and the opportunities are there. But I do want to say, with the strong fundamentals that are in place, the change that is happening at the federal level may really provide an opportunity to continue to accelerate the work that’s been done the last few years. Jon Powers: We talked a little bit offline, and I think you reminded me that Governor Granholm, who’s going to be hopefully the next sector of energy, was a Vote Solar 2012 Advocate Award winner, which was amazing. Adam Browning: A Solar Champion Award, yes. Jon Powers: What do you see with her leadership at DOE, and what to expect over the next few years in terms of some of the changes from especially what we’ve seen the last four years? Adam Browning: Yeah, DOE is a really interesting agency, and who you choose to lead it I think signifies what you think your theory of change really is right now. And so our question right now, if we’re thinking about transforming energy, is it really do we need to invent new energy sources? Is it principally an R&D question? And this isn’t an either/or, this is where your emphasis is. you would choose a Nobel prize winning physicist. If your theory of change is that R&D is necessary and important, and we really need to think about deployment, we need to think about manufacturing supply chains, we really need to think about taking the technology we have and putting it to work, to productive and equitable uses,. Then you pick someone like Governor Granholm, who as a governor held executive office, championed a renewable portfolio standard in her state, has been really focused on growing the supply chains around solar, and also critically around transportation. Like Detroit, she really leaned in hard to clean energy. Adam Browning: I remember once driving to a meeting many years ago to meet with her. And I had a Volkswagen TDI running on veggie oil. And I never heard the end of showing up in a- Jon Powers: A veggie vehicle. Adam Browning: … that wasn’t from Detroit. And she is a huge champion of reinvigorating our manufacturing sector around the technologies of the future. And so this is what that signals, is that this is about when Biden talks about when he looks at climate change, he sees jobs. This is how you put paid to that premise. And I think this will really be about deployment, about jobs, about growing our economy in very productive ways around the technologies of the future. That’s what I see. Jon Powers: Yeah. So for people that aren’t as familiar with the governor, if you sort of step back for a second, I think Adam’s point is right on here. If you look at who Obama appointed, they were all doctorates. They were very focused on the technology or the acceleration of technology. Can you talk a little bit about what the governor has done post her time in Michigan last few years, to help focus on just exactly what you were mentioning, which are really about the next phase of the industry, the acceleration of the industry? Adam Browning: While she was governor in Michigan, she was really focused on renewable energy. She definitely played a role during the Obama administration, in rescuing of the auto sector, keeping those companies alive, and being a strong catalyst for the transformation to the electrification of transportation. She’s on a couple of different boards of clean energy companies, Proterra electric bus company that manufacturers in South Carolina, as well as I believe California, but don’t quote me on that. Jon Powers: Yeah, they do. I’ve had Ryan on the podcast. They’re in California too. Adam Browning: There you go. So I think we are trying to fundamentally remake how we get our electricity. And there’s a huge opportunity to capture a lot of upside and jobs. And so she’s been a lecturer here at UC Berkeley. She lives out here in Oakland now. I presume she’ll be going back to DC. This isn’t something that you can do just by Zoom. Jon Powers: Right, not at all. Adam Browning: I don’t mean to speak for the governor on this, but she has now the real focus on that private sector experience of how do you really build the companies necessary to completely transform our economy around clean energy resources? Jon Powers: No, that’s great. And look, I don’t want to make this whole episode about the Biden/Harris plan, so I’ll put that to the side. But this will be coming out around inauguration day. And I think one of the things that’s very exciting in the drum beat post-election, is that we’re seeing climate leaders being put across multiple agencies. they’re being put at the Department of Transportation. They’re being put at Treasury. They’re really focused in places like Interior, which are so critical to transmission and BLM. Climate is no longer going to be focused in one specific area, but it’s going to really come across the entire bureaucracy as a whole. Plus you have leaders like John Kerry coming in to focus on the international space, and Gina McCarthy, the former EPA administrator, focused on the domestic climate policy. How do you see that transformation helping in the work that we’re doing, the solar industry and you sort of see the return of federal leadership accelerating some of the work you’re doing at the state level, or is it going to be something that people are still afraid is going to disappear in four years? Adam Browning: Yeah. I mean, let’s just start with first Biden won on a climate platform. He campaigns in swing states in the last moments of the campaign around climate. And we’ve seen a lot of polls that show that bipartisan support for this clean energy transition are through the roof. So what I see now, that you’ve articulated, is a desire to actually govern with that mandate. I think there’s going to be a tremendous amount of … this is really also a part of looking at climate as a solution set rather than as a problem set. This is about providing jobs and reducing costs and increasing the quality of life rather than a painful giving up of things that we would otherwise like. Adam Browning: In order to achieve that, yeah, it is multi-agency, it’s multi-sector, it’s multi-dimensional. First and foremost, the government, the federal government is a enormous consumer of energy and has a lot of building stock and a full transformation of that to be centers of climate solutions, I think is going really be a shot in the arm in terms of growth for demand opportunities. There are a ton of things that the federal government can do to help remove obstacles and provide tailwinds rather than headwinds to the fundamentals of the market, as you point out, that are already in place. Adam Browning: And so I look at the transformation of FERC right now and Allison Clements, is a huge champion of really using wholesale markets, that intersection between individual participants and getting value through wholesale markets. She’s been working on sustainable FERC for a long time. She is a wonk’s wonk that really understands that state federal and I think her leadership is going to be transformational and wonderful. So I think what that final agenda looks like will depend a lot on whether or not how the elections go in Georgia and the balance of power in the Senate and whether there will be some legislative options available. But even without, there is a huge amount of executive action and the power of the purse that the federal government can do. Adam Browning: I also see, regardless of how things go in early January in terms of the balance of power at Senate … Europe right now, much of the rest of the globe is talking about a green recovery. How do we catalyze an economic recovery that this pandemic has brought on in a way that also prevents the next disaster? And we’ve just here in the US haven’t had either at a state or federal level, there’s just been no oxygen in the room to have these discussions. Everyone’s been focused on what happens to schools, what happens to restaurants, what happens to state budgets, whether or not we continue to have a constitutional democracy. Adam Browning: And we haven’t been able to really have a focused effort on the recovery. That all changes in January, both at federally, as state, as the vaccine rolls out. So that’s what I anticipate much of the spring to be about, is economic change. Jon Powers: Yeah, I agree. The benefit, I mean one opportunity is that that conversation about the green recovery has happened in the circles where we’re prepared to move forward when the bandwidth opens up, post vaccine getting out, and people are getting a chance to catch their breath. So I feel like there’s some really good solutions being pushed. Jon Powers: To get to some of these climate solutions, solar is going to be such a critical part of the solution set in the work you guys are doing will only continue to accelerate and be more important. So looking into 2021, I want to talk about first some of the regulatory and maybe legislative or campaign goals you guys have, or are putting in place, looking into 2021. How people can play a role in that, but also how we can ensure equal access now to clean energy. You guys are doing such great work and in the climate environmental justice space to ensure access. I definitely want to spend a little bit of time on that. Jon Powers: So looking to 2021, at the state level, what are some of the regulatory initiatives that you’re focused on and hope to succeed over the next year? Adam Browning: Yeah. So, I think it really does make sense to also address equity right now and the way that we have completely changed how we go about our work. So we reorganized and restructured into these regional teams with the express interest and desire to build durable and authentic partnerships with the communities that we wish to serve with environmental justice and frontline communities, and have them set the agenda to describe the problems that they would like to solve and put our partnership to work in turn into supporting those. The premise here is that we cannot get to 100% without really articulating both the goal, as well as a process that serves the interests of everybody. And I will just say that when. Adam Browning: I look at some of these largest wins that we’ve seen most recently. New York passing a seminal 100% clean energy law. That would not have happened, full stop, without the leadership and again the direct leadership of traditionally marginalized communities, of environmental justice advocates. That policy would have not gotten across the finish line if it did not also require an implementation that looks at how do we use clean energy to provide for the energy burden and reduce the energy burden of low-income families? How do we provide for job training that serves the communities where it is needed most? Those were pieces of that legislation that were critical parts of it actually succeeding. So, when I described this change in our process and our focus, we have seen the results already, collectively, of how critical a reorientation of advocacy and environmental advocacy movement of which I’ve been a part of for a long time. So going forward, yeah, go ahead. Jon Powers: I was just going to say, it’s a really … I mean, one of the things we’re looking at on the finance side are, is how do you incentivize. For instance, the tax equity providers to understand that incorporating LMI communities into community solar is not actually a risk to them, but an opportunity. We’ve been discussing different ways to put the right incentives in place, whether it be adjusting the tax credit to a tax grant if you incorporate so much LMI, right? So there’s got to be those levers in place to help, or can the green banks put some type of credit wrap around deals so that the fear of folks who may not pay their bill, right? That’s the concern you hear on the finance side, right? And I think those are very easily achievable, the obstacles that can be overcome pretty easily, as long as we’re thinking of the mindset. It’s not just about setting the goal, but how do you actually overcome some of those obstacles along the way? I think the work you guys are going to do is going to be critical there. Adam Browning: And that’s a key part of what I feel like we bring to the table, is yes, you need to set a goal, but we have a saying Vote Solar, “the passage of major legislation marks the beginning of your effort not the end of your effort.” Adam Browning: The implementation and solving those is absolutely key. So our access and equity team has set up a advisory group that is helping us to really understand the sticking points in terms of implementing these low-income solar solutions and devising policy and other programs in order to bridge those gaps, so that these actually work to serve the interests of real people and real places. Jon Powers: Absolutely. So are there specific state targets that you guys have worked out? Are they going to share, you may not want to be able to share them but, that you really focused on in the coming 12 months? If we have this conversation next December, you’ll be able to highlight the progress you made in some of these emerging markets. Adam Browning: Yeah. I mean, I think we’re going to be working for 100% clean energy or acceleration of those goals in a bunch of different states, Massachusetts, Minnesota, Michigan. Illinois is a place where this is incredibly ripe. It had a governor that campaigned on this back in 2018 and … Adam Browning: … Back in 2018 and was still as yet to get this over the finish line. So we have a bunch of different states where we believe that we can establish state-level requirements that require 100% clean energy, and getting that over the finish line. Adam Browning: On the regulatory level, as soon as the pandemic hit, we made a pivot where we looked at like, “What is most needed right now? How can we work to the highest and best use of our abilities in this space?” And we dug into, there’s a lot of people that have lost their jobs and that aren’t going to be able to pay their utility bills. How can we devise a program that helped the people that is hurting the most? And came up with this idea called Clean Relief for Energy Debt, which in essence is, as we work to ensure that people don’t have their electricity cut off because they’ve lost their job, they’re still mounting a great amount of debt. Utilities are going to look to socialize all this. Adam Browning: In exchange, how do we ensure that we get utilities to really focus on using clean energy, to reduce the energy burden? So it is a regulatory play that we’re implementing in a bunch of different places, that really, again, centers the benefits of clean energy on the people that are hurting the most at this point. I think that it’s important from a moral perspective, and it’s also important to just show what is possible going forward, and to align clean energies’ interests with the interests of, again, the people that are most at risk right now. So we’ve got a couple of states that we’re working on that: Florida, North Carolina, South Carolina, Arizona. Minnesota will be another place where we’ll see that going forward. Adam Browning: There are really large questions right now on, what is the best pathway forward to clean energy? And we helped fund an analysis that came out recently with Vibrant Clean Energy, Dr. Chris Clack, that looked at the different pathways to getting to 95% clean energy. Now, this is really important because we’re trying to articulate as coal rolls off, we’re trying to make sure that we’re not building gas in the interim, that we go directly to clean. Adam Browning: And this analysis looked at five different pathways really, a focus on centralized generation to a couple of different other scenarios, and found that in order to get to that 95% clean energy, the most cost-effective pathway was one that really focused and built around distributed generation. And this is just putting a high-level, deep analysis to prove what should feel rather intuitive, which is that through distributed generation, generating electricity closest to usage, you can reduce the collective infrastructure costs in ways that bring down costs for everybody. And the number on that is 478 billion, half a trillion dollars cheaper pathway than a different one, so- Jon Powers: Is that analysis public? Adam Browning: … It is public. It’s on our website. It is also on the coalition for CCSA. Jon Powers: We’ll link to it, we’ll link to it. Jon Powers: Great. votesolar.org, for folks that are listening to consider. Adam Browning: There you go. There you go. So I do think a big part of the next agenda for the state level is really around clean energy portfolios. How do you find the flexibility in the system and put it to productive use in order to eliminate the need for dispatchable generation? Jon Powers: Sure. Adam Browning: So we’re in a scenario right now where the whole … In order to get a lot more solar, we also need to look at the entire flexibility agenda, the entire clean energy portfolio, which is … Storage is something where we’re seeing incredible cost reductions and a lot of growth. Demand response is something that is also customer-centric and really not tapped anywhere near its ability to provide for great benefits. And we need that. We fundamentally need that. Jon Powers: Does your widening and mission to include more clean energy technologies like that allow you to touch storage, demand response, and some of these other really key pieces to the agenda? Adam Browning: Yeah. Jon Powers: You’re not limited to just focusing on solar-only type of solutions, which I think people may not be aware of. Adam Browning: We’ve been there for a long time. We’re going to keep the Vote Solar name. It’s charismatic. And I don’t think the Vote Beneficial is an appropriate thing. Jon Powers: Vote for 222. Adam Browning: But as we dive into this, again, this comes out of some really painful battles. And so this is the point that has been forged on the campaign field. When you see utilities wanting to build a large amount of new gas, they first say it’s cheaper. And as soon as you shoot that down, then they say, “Well, we needed to keep the lights on.” And that’s a career-ending problem for policy makers. And so really highlighting the path forward for achieving the same level of reliability, through that suite of distributed energy resources that deliver the necessary flexibility, linked with also broadening of balancing areas. I think there’s a macro as well as a micro solution. Our challenge is twofold. One, to convince policy makers that this is a viable pathway going forward. And then two, to lay out the blueprint, the specific policy blueprint, to have this actually show up. Adam Browning: And it’s not academic. We are at the point where we’re not just pointing many years, like this is a problem you kick down the road. This is like, “How do we make this happen right now?” The awesome thing is, is there’s a lot of great new technology platforms that are out there. And this is fundamentally a resource that reduces costs for everybody and drives revenue to customers. There’s a win-win-win here. And we just all need to lean into it. Jon Powers: So one final question for sort of challenge to the audience. If there’s any way folks can get involved in 2021 to really help to move, I think these really critical agendas, forward. Number one, I’ll tell you all to go to votesolar.org and make sure you donate, so that they’ve got the capital to execute. And if your organizations aren’t involved in supporting Vote Solar, make sure they are. But what other actions would you ask the audience to do? Adam Browning: Yeah. We have a pathway to sign up, to be a Vote Solar member on votesolar.org. And if you give us your geographic location, at least your zip code, will allow us to connect you into the local, state campaigns that are most critical to you. And the hope is that, while we do that regulatory analysis, we always marry it with an outside campaign. We need to have the parade there to show policy makers that not only is this the smart thing to do, but it’s the popular thing to do. And so our fundamental premise is that we want to plug the super majorities of people that want to participate in this change, and find the venues, and plug them in to be active participants there as well. So that’s the first thing I would do. Jon Powers: That’s excellent. And as you know, there’s no stronger advocate than the first one who’s going to come from the member zip code. Right? So if you’re flying in from California or from Washington DC, it’s much stronger when you have someone sitting with you who is a local advocate. So be a part of the team, go to votesolar.org and sign up. Adam, thank you so much for the time, and really look forward to working with you all this year to push some of these things forward. Adam Browning: Really appreciate it. And thank for all the great work you do. I always enjoy these conversations. You always show me another facet of what’s going on in the world, that I hadn’t considered before. So thank you for you. Jon Powers: Well, thank you. Thank you. And thanks to Emily from Vote Solar for helping to put this together. And to our producers, Colleen Young and Carly Battin for, as always, making sure these episodes work. You can go to cleancapital.com to get more episodes. And as always, I look forward to continuing the conversation. Thanks. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’40’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_social_share title=’Share this entry’ style=” buttons=” share_facebook=” share_twitter=” share_pinterest=” share_gplus=” share_reddit=” share_linkedin=” share_tumblr=” share_vk=” share_mail=” av-desktop-hide=” av-medium-hide=” av-small-hide=” av-mini-hide=” av_uid=’av-354olk’] [av_hr class=’invisible’ height=’40’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_button label=’More Podcasts’ link=’page,5266′ link_target=” size=’small’ position=’center’ label_display=” icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ av_uid=’av-jx1x7jx3′ custom_class=” admin_preview_bg=”] [av_hr class=’invisible’ height=’40’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”]
Experts Only Podcast #81: Climate Change is Water Change with Gia Schneider [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=” target=” title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-jwwgyb48′ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwgxszg’ admin_preview_bg=”] Episode 81: Climate Change is Water Change with Gia Schneider [/av_textblock] [av_hr class=’invisible’ height=’10’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwl4lsb2′ admin_preview_bg=”] Welcome back to Experts Only! We’re thrilled to kick off a new year of Experts Only podcast episodes with Gia Schneider, CEO & Co-Founder of Natel Energy, as she discusses the connection between water and climate change with host Jon Powers. Hear how her upbringing in Texas led her to a career devoted to protecting the climate, and the market opportunity that hydroelectricty has today. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’20’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Listen now: [/av_textblock] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ id=” custom_class=” av_uid=’av-k4so2umi’ admin_preview_bg=”] [av_image src=’https://cleancapital.com/wp-content/uploads/2021/01/ExpertsOnly-bar-Schneider-1030×258.jpg’ attachment=’7879′ attachment_size=’large’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=’manually,https://link.chtbl.com/Ipznfok5′ target=’_blank’ title_attr=” alt_attr=” lazy_loading=’disabled’ id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-k37p0z0j’ admin_preview_bg=”][/av_image] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-khmlvb58′ admin_preview_bg=”] Transcript [/av_textblock] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-kh7u1yig’ admin_preview_bg=”] 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. 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Experts Only Podcast #79: Michael Eyman [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=” target=” title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-jwwgyb48′ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwgxszg’ admin_preview_bg=”] Episode 79: Michael Eyman [/av_textblock] [av_hr class=’invisible’ height=’10’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwl4lsb2′ admin_preview_bg=”] Welcome back to Experts Only! This week, host Jon Powers welcomes Michael Eyman, Managing Director at Origis Services. Eyman discusses his military background and career in the O&M side of the energy industry. Whether you’re experienced in the operating side of the industry, or want to learn more about augmenting the value of clean energy assets, we hope you find this discussion informative. Thank you for tuning in. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’20’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Listen now: [/av_textblock] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ id=” custom_class=” av_uid=’av-k4so2umi’ admin_preview_bg=”] [av_image src=’https://cleancapital.com/wp-content/uploads/2020/11/ExpertsOnly-bar-Eyman-2.jpg’ attachment=’7845′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=’manually,https://link.chtbl.com/prfR-MRk’ target=’_blank’ title_attr=” alt_attr=” lazy_loading=’disabled’ id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-k37p0z0j’ admin_preview_bg=”][/av_image] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-khmlvb58′ admin_preview_bg=”] Transcript [/av_textblock] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-kh7u1yig’ admin_preview_bg=”] Jon: Mike, thanks so much for joining us at Experts Only. Mike: Happy to be here, Jon. This is great. Jon: Really love your background as an Army guy. I won’t make Navy jokes, but I’m going to talk about your military experience in a second. But you grew up in Texas. What got you interested first in joining the military, and then later on in the energy space? Mike: Yeah. I graduated from Texas A&M Galveston in ’94, and was teaching school through an AmeriCorps program for a high school dropout, 17 to 21 year old inner city kids. It was called Seaborne Conservation Corps, and it was a military style program. And had the gentleman who was running the program was a retired colonel, and he just had a big impact on me. He was a Marine Corps guy. Aviator. Mike: And so as a young man, I just I figured I would see what I could do, and went down to the recruiting district, took some tests, and they said, “Well, what do you think about being a pilot?” And I made the decision with all the forethought that I could muster at 23, and decided to go for it. And so, that was the beginning of that. Mike: I really didn’t have a plan. I would love to say that I would love to drape myself in the flag, but I didn’t have a long term plan. It was a moment in time that lasted 21 years. Jon: Yeah, that’s amazing. I was an ROTC guy. And I think coming out of high school, it wasn’t all about I had a scholarship, it was a good opportunity, I thought it was a chance to travel. It was obviously probably for you, too, pre-9/11, so that was a major shift. Mike: Yeah. It was a different world. It completely changed, right? Jon: Yeah, absolutely. And is there anything? Because I know you were in Afghanistan, right? Mike: Yup, yeah. Jon: Anything in those experiences? I talked to a lot of vets who work in the clean energy space that got you interested in the energy side. What started to drive that transition? Mike: Yeah. It just really had to do with we were deploying, even before 9/11, constantly to the Middle East, right? Following the Gulf War, really the moment in time when I really started thinking about it was I was flying to mission one night over Iraq, and we had two SA3s shot in our direction. And it was a big, slow plane, so we didn’t have any maneuvers to try to dodge or anything. You were just sitting there waiting to hear a loud noise. And these were called sandbushes back then. Mike: And I just remember thinking like, “Why are we here? Why are we doing this?” And I had a real sense of service and purpose, but at the same time, I felt like our national policy had been just chained to a region that often didn’t want us there. Right? And we can have philosophical discussions about different governments and the different policies, but that’s really the meat of it. Mike: And yet we had to be there, right? Because 60% of the oil and gas we used in the United States came from the light sweet crude from the Middle East. And so, we had to sustain those supply chains to sustain our plastics industry, pharmaceuticals, you name it, across the board. Mike: And energy. And so, it really came down to, when I finally got out, wanting to be a part of changing that, right? I had a mission when I was in, and when I got out, I wanted a mission again. And this seemed a place where I could be a help to try to push us away from that necessity, and allow us to make choices at a national level versus being forced. Jon: I had a very similar experience, right? When I transitioned out, I started looking at this issue maybe originally as an energy security issue. And then, I began to understand climate change, and the role that … I wasn’t some climate change activist, environmentalist. I was always an environmentalist, but coming out of the military. Jon: But once I really got into the nuts and bolts of all of the ways that this worked, and went back to school, and focused on it, that’s for me really when I began to get interested more in the climate and clean energy side of it versus just pure … Jon: Because you could talk energy security, you could talk being up in Oklahoma, not too far North from you, and they’re fracking gas wells, right? As a way to have true energy security. What was the trigger that got you into the clean energy side and the climate side? Mike: It was really just wanting to break that connection, right? That connection to national strategy. Again, I’d like to wrap myself in the green energy, but that’s not really where my heart was at the time. Certainly, I’m an environmentalist. My undergraduate degree was in oceanography. The climate science and what’s going on is critical. But for me personally, it was about I felt like we needed to be able to be free to make better decisions as a country. Mike: And so, oil and gas, traditional forms of power, they’re going to be there for a long time. I don’t necessarily have an issue with them per se, but going forward, it just doesn’t make sense. Right? It just doesn’t make sense. We as a country need to be free to make different decisions, and not just fettered with that infrastructure. Mike: And I think people don’t understand how much that drives the decisions we make, and have made in the past. Yeah, as a nation- Jon: As a nation. Oh my God, so much. Yeah exactly. Mike: Enforced them. Realistically, we had to make those decisions the way we did. Again, people can argue about whether you should or shouldn’t do this war or that war. I’m talking about our broad engagement and our policies. And so, that’s – Jon: Spending billions protecting the Strait of Hormuz, right? Mike: Yeah, exactly. You have this narrow strait with where the people on either side just hate each other. And we, particularly in the Navy, are there ensuring it for decade after decade. Why? Jon: Right. Yep, exactly. You stayed in the reserves, but then you ran your career path on, before getting to where you are today, you were at SunPower, you actually had a background a little bit in technology as well. Walk me through your career progression before you got to where you are at Origis. Mike: Yeah. When I got out, I couldn’t find a job. I spent about a year and a half, two years trying to figure out what I was going to do. I worked for a streaming – Jon: I was substitute teaching, Mike, at one point. Mike: Yeah. Yeah, exactly. Right? I worked for a streaming company called [Kulabyte 00:11:38]. I was a COO for a small video game company. We delivered a couple of projects. And it was really just project to project. Because people didn’t understand my resume. They didn’t know what to do with it. Jon: Yeah. So common, too, for people coming out of the military. Mike: Yeah. I didn’t know how to translate it, and I had almost 15, 16 years of experience that according to the real world accounted for nothing. Jon: Yup, yup. Mike: And so, I needed to be able to plant my foot and pivot. So, UT had a great MBA program that’s recognized nationally, and I’ve always been a big believer in education. I already had one master’s degree, but I was like I realized that I needed credibility. So, I went back to school, and I can’t say enough about that program. UT, and what Dr. Burrows and his team have done for so many students is really incredible. Jon: Is there a dynamic though coming as a former A&M guy into UT where you’ve got to change t-shirts and hats? Is there a lot of team commitment? Mike: I tell people sometimes I have to pick which ring to wear. But since A&M went to SEC, there was a little less conflict. Jon: All right. There you go. Mike: Yeah. Jon: That’s good. Mike: I also found that A&M guys were much more focused on UT than UT was on A&M. UT was more focused on OU, so really wasn’t that big of deal as it turns out. But yeah. Jon: Right. That’s hysterical. So, you’re coming out of school. Is that when you went into SunPower? Mike: No. It was about halfway through. I had blanketed the country with resumes. I had zeroed in on energy and renewables, and I had sent resume after resume at SunPower, and they just kept bouncing off like a super ball. And eventually, I basically just networked in, and got to Marty [Neece 00:13:32], who was the only C-level leader at SunPower with a military background. Marty’s still a good friend and mentor of mine. And Marty, he was an army guy, right? Jon: Yup. You got it. Mike: And so, he was willing to give me a chance when no one else would. Jon: That’s great. Mike: Just really comes down to that. Jon: No, I hear you. When I was at Bloom, our chief sales guy was a former Navy guy, and he was dedicated to hiring vets for the reason you laid out earlier is people don’t know how to translate the resume, so they miss the leadership that’s been developed, and from a career perspective for veterans along the way. Jon: So, you go into SunPower, and just looking at your career path, you really start to focus in on the operations side of these things. When having been the CEO of another company, having been obviously in the Navy, having been an officer in charge of different stuff, did you like that idea of diving into the operations side and managing these systems? What stoked your interest there? Mike: I think so. It was partly that I had a ton of background and experience to bring to bear, right? Operations is heavy on the leadership side. Because it’s 70% of the costs, and operations is manpower, right? So, you’re really leading large groups of people when you … And it’s accretive. Over time, as we keep generating more and more assets, they just build up, and get bigger, and bigger, and bigger in these portfolios. For companies like yours that are aggregating these assets over time. Mike: And so, I identified it as an area that was lacking in focus, and in that expertise a little bit. Not to say that there weren’t experts in the area. There were. But solar was transitioning. When I came into solar in 2012, a 100 megawatt project was massive. Unheard of. Mike: And we executed Solar Star, which was the largest project in the world at the time, 579 megawatts. And today, those are happening, they’re still big projects, but they’re happening by the 10s and 20s all over the country every single year. Just in Texas. Mike: And so, that transition where we’re generating these massive projects meant that the operations side actually delivering on all that promise, it required some more focus. And so, I just identified that it was an area that I had a skillset to bring to bear, and it was an opportunity where I could go there and hopefully make a difference. So, I navigated internally within SunPower to that side of the business, and gone on from there. Jon: And when you transitioned then from SunPower to Origis, so what led to that transition? And then, it’s great to see, just looking at your resume, how you went from being in the operation side to running the services company. Talk through the process. And then, obviously I want, just for folks that aren’t aware, talk about Origis, and talk about the work the company does on the services side. Mike: Sure. Yeah. It wasn’t a direct transition. I went from SunPower. MaxGen made an offer and brought me over to run their business development. I was there for about a year and a half, and then they changed directions about that same time. And that gave me exposure to another large top five operations entity. So, I got to see how did SunPower do it? And then, how is MaxGen doing it? Mike: Meantime, I really became a student of the other competitors in the industry, and what was happening. I spend a lot of time reading. I spent a lot of time looking at what’s happening with the market so I can look at where things are headed as much as I can. And then, started [RenewBot 00:17:23] about the same time with Tim [Maddis 00:17:26] about the same time that I got out of MaxGen. Mike: And then, Tim took over as CEO there, and then I started at Origis in September of 2018 when they took on the investment from Global Atlantic, who’s their owner. Which tied them as a developer to those projects long term, and they correctly realized that they needed someone who knew how to run those things long term to help ensure those investments really happened. That they delivered the power and the financial performance that they were designed for. Mike: And so, I came into the company. We did a round looking at M&A, and didn’t really find a matchup. So, we created Origis Services as a wholly owned subsidiary that year in 2018. And had been growing it from the ground up since that time. Jon: In that focus, originally it was focused on the assets themselves. And are you guys now managing for others as well? Mike: We are. We’re starting to. Josh Corbett, who is my director of business development, is out in the market participating in RFPs. We really had to grow the business to the point that we could offer that full scope of services first, and we across that line this year. It takes awhile to build up a full NERC facility, and build up all the capabilities, and the people. And it took us about a year and a half. So, we were operating our own facilities in parallel to putting those in place. But yeah, we – Jon: Talk about that for a second. Because I feel like a lot of folks probably in our audience may not be maybe in the finance side or the deal side, and aren’t thinking about the lifespan of these projects, and how you have to really own and manage them. First of all, what is a NERC? What does it take to put it together, and why the security around it’s such an important aspect? Mike: Yeah, sure. National Energy Reliability Council, I think that’s correct. I may be saying it wrong. Correct me if I’m wrong, Jon, but you put me on the spot with an acronym- Jon: We can Google NERC. Mike: … so then I had to say it, otherwise I’d look like an idiot. Bound to get something wrong. So, if that’s the – I think that’s fine. But all of the energy producing assets in the country have to meet certain requirements to move power around the grid. The grid’s a national asset, right? At the highest of levels. And so, that- Jon: grid scale projects. Not so much the – and the elementary school, right? We’re talking about red tide system. Mike: Right. These are on par with nuclear power plants, combined cycled gas, coal fire, oil fired plants. These are the foundations of our national grid system, which is broken down into the different ISOs in the different regions. ERCOT here in Texas. Mike: And so, this is what happens. This is all the layers and all the people behind what happens every time you turn the light switch on at your house, right? This is all the stuff that no one ever thinks about. And so, it’s really critical that that stuff meets certain requirements. From a physical security, cybersecurity perspective, just from a response time perspective. Mike: And so, there are levels that you have to meet for different sized projects. If you have a solar project that’s over 75 megawatts today, then you have to monitor and run that with a NERC facility. Those NERC compliant facilities have different levels. They have a low, medium, and a high. Low is like up to 700 megawatts that you’re moving on and off any given ISO. One and a half gigawatts takes you into the medium space. And so, when you get to a certain size, the size of the plant, and then the amount of power that you’re moving requires you to have different levels of interaction and accountability. Jon: From a NERC’s perspective, is it geographically constrained? You’re 75 megawatts in Texas, or if you have a system in Oregon, you can still manage that out of Texas? Mike: You can manage it out of Texas. Jon: That’s what I mean. The NERCs don’t have to be geographically focused or based? Mike: No, no. Not at all. We’re here in Texas today. We’re managing stuff from Arizona to Florida right now. And even have some stuff overseas still, in Greece actually. And so yeah, you don’t have to be in the region, but the level of your site, whether it’s a low, medium, or high, is based on the amount of power you move in any particular ISO. So from that perspective, the amount of power you move per region in your ISO, whether you’re ERCOT, or whatever, that does affect the level of compliance that you have to provide. Jon: Great. Step forward to help educate the market here. What are some of the misconceptions that when you’re seeing owners or financier coming in to want to work with you all, and maybe most of the stuff you’re doing is in-house right now, but as a team comes and says, “Hey, we’re modeling this out. How should we be looking at asset management?” Jon: One, how has it changed in the last couple of years? And two, how should people be looking at it over the next decade as it’s becoming more of a, I don’t want to say a commodity business because it’s not, but our industry as a whole has just gotten much better at it over the last 10 years, right? And it has to be pristine here going forward to hit our climate goals for us to be able to own and operate these things. Mike: Yeah. That was a lot. I’ll see if I can get to most of it. Jon: Yeah. Yeah, sorry. Mike: The team here, a lot of these guys- Jon: It was meant to be a softball, by the way. Mike: It was like six softballs all at once. Jon: Yeah, sorry. Mike: But the team here is more than just me, right? Jon: Of course, yeah. Mike: And they all came from MaxGen, they came from SunPower, they came from the industry, they came from connections. Most of the people here have, like myself, have done multiple rounds of gigawatts of solar in some place. And that’s a small group of people. There’s maybe 40 or 50 people in the country that have done that. And at an executive level, there’s maybe 12 to 15. And we all know each other. There’s not that many of us out there. Just because it’s still small, right? Mike: And so, that experience, although we’re still ramping here at Origis, is that experience is there. And so, we’ve seen the way these contracts have done evolve, right? In the early days of Sun Edison, SunPower, and Solar City dominance of the marketplace, and First Solar, you saw particularly utility scale and a lot of DG delivered with performance guarantees. And with Fullscope ONM contracts that were often as much as $16 a kilowatt. Which is if anybody wants to give me one of those today, I’ll take it immediately because that’s crazy money. No one touches that. Mike: And we saw those performance guarantees for a whole bunch of reasons fall away, and really move towards availability guarantees. Which is much easier for the ONM operator to control, right? Because so much about performance is outside of our ability to affect. Mike: And so, that all came with continued pricing pressure. The cost went down, down, down, down, down. And for a time over the last probably three, four, maybe five years, it’s been very common for companies to have preventive, maintenance only contracts. At a super low price. Mike: So, that serves, from the finance perspective, it serves to put this really low price on a spreadsheet, but it unfortunately doesn’t serve to really maintain the plants over time. Because whether you believe it or not, these things are going to break. Jon: Right. And so, they’re 25 year plus life cycles, right? Mike: Yeah. They’re going to break, right? Things go wrong, and they go wrong with alarming regularity. And I don’t mean that alarming from the perspective of, by comparison to other forms of power, the amount of people you need to man these plants is much lower than you need for a comparable thermal, or nuclear, or other, or hydro kind of plan. Because there’s really no moving parts. But lower doesn’t mean zero. Mike: And so, what we’re seeing now, and what we here are really pushing on is moving back towards including more corrective maintenance into the schedule so that the owners, the financiers and everybody have a really accurate and reasonable expectation of what these things are going to cost over time. Mike: And that’s really where we’re pushing as an industry is to say, “Guys, these things don’t fix themselves. You have to have people in the field. And we can provide them, but we’ve got to have rational contracts that protect both sides.” Right? Jon: Yep, yep. Interesting. Mike: I don’t know if I did all those softballs. Jon: No, no, no. It’s good. Mike: – one or two maybe hit the ground. Jon: I think that the key part of that though, I think there is oftentimes on the acquisition and the development side, they’re looking for the lowest dollar, right? As you said, the preventative maintenance. We’re just going to do this. Jon: But at the same point, I think we, at least on the DG side, one of the things we’re starting to look at is actually re-powering and optimization. Do you see that as a developing part? Maybe not so much the utility scale, I’m not sure, but a developing part of the space is how can we increase the efficiencies of these things over time as technology’s gotten better? Or on the utility scale, is it like we built it, it’s out there. This thing’s going to run until it doesn’t run anymore, and we’re going to suck every ounce of energy out of it. Mike: Yeah. And I think you guys probably do the same. Most financial models have some level of repower of major systems that they spread between years 15 and 25. Right? So, they’ll start, from a financial model perspective, they’ll start layering in, oh, in year 15, 5% of a repower cost is going to hit. We’re going to ramp it up on a curve, and ramp it back down again. And somewhere in there, we’ll have basically a new plant executing four year lifetime. Mike: I think that those numbers, so the question of whether or not that’s growing, the answer is obviously yes. But it’s on a delay from the rest of, right? Because you start seeing those things at 10 years. It becomes really clear at 15. It becomes critical at 20. And really, the only markets that are that mature, that have those types of plans in place. You get little ones in New Jersey’s, places like that, but in the large scale is Hawaii, and then California. Mike: And so, as the rest of the market ages and matures re-powering is going to become a bigger and bigger problem. And it’s not a small problem. Because the architecture changes. They went from 600 volts, to 1,000 volts, to 1,500 volt systems. People are talking about 2,000 or higher. When you go to repower, and you go to just drop in new inverters, it’s not like you can just do that. Jon: Pull a string and put a new string in. Yup. Mike: Yeah. You’re having to rework the entire electrical system. You can’t mix panels, from older panels versus new, because it doesn’t work on the site. What you end up doing is, for a period, cobbling together bits and pieces that function, and keeping less and less of the site running while you rebuild the other site. And then at some point in time, financially it makes sense to just rip all the other stuff out, and finish it out. Mike: So, it’s not really, people think of repowering as something that you decide to do one day. Like, “Hey, I’m going to repower the system. Go rip it out and redo it.” It really doesn’t happen like that. It’s really an evolution. You’re keeping it going and stringing it along for a time, then you’re starting to replace pieces of it. And then, you reach a point where financially it makes sense to pull the trigger, and you do the rest. And that is, for the most of the country, is still in the future. Jon: I got one more question. Looking out to … I talk a lot on this show about 2030. Because I think the next 10 years are just critical, not just for our market, but really for solving climate change. What has to change in the ONM industry as a whole, or the way maybe even how people view the ONM industry? For us to really get to the scale we need to be at in 2030 to settle the climate crisis. Mike: Yeah. Jon: Another softball, by the way, but that’s a tough one. Mike: Yeah, yeah. Jon: For sure. Mike: I would say the ONM industry doesn’t act in a vacuum, right? And we, I tell people all the time, we don’t get to choose how these plants are made, where they’re built, or what they’re made out of typically. We operate them as they sit. So, if you want to change the future, you have to take the lessons you’re getting from the field today, and you have to apply them upstream in how you design the sites, how you lay them out, how you look at the cost as a whole, what kind of equipment you buy. And I would say today, that’s generally not done well. You have IES that get involved when you’re later in the process on behalf of the owners, the ultimate owners. And I will say that ONM experience is not resident in those entities today. And they rarely ask. Jon: Yup. Interesting. Mike: And they rarely ask. Jon: Oh, that’s interesting. Yeah. If they did ask … It’s actually great feedback. Because we look at a lot of deals today, and obviously we bring IEs in. And to push them, and how do we take the best practices that we’re learning in the industry today and incorporate them? Where do you even find those? Where- Mike: Well, I would encourage the IEs as when they’re looking at these scopes to reach out to a third party operator, to weigh in from the operations perspective, and to give good information from that side of things. Mike: And generally, I would say if you’re reviewing a company, and you’ve got company A that’s going to be doing the ONM or that’s building it, you want to go to company B or C as a consultant, get an NDA in place, and have them come in and say, “Okay, this is good. This is bad. This is something you need to think about.” Right? Jon: Yeah. For us, we want to have a handful of providers. Right? We don’t want to have dozens of them. And having them weigh in on our deals is actually interesting. I haven’t really thought about that. Mike: It’s really critical. And even at the point that the IEs are involved, frankly the IES don’t have the ability to move the needle that much. Because the site design, the equipment, and all that stuff is already done. Procurements completed. EPC contracts typically are in place and underway. Normally, you’re at or past NTP. And so, it really, not just at that point, but also in the design phase, people need to be asking questions. How do I design this plan to operate most effectively in this region, with this weather, with this environment for extended period of time, right? And I see mistakes made there over, and over, and over again that are impossible to correct after the fact. Jon: Yeah. It’s in the ground, right? Mike: Yeah. Jon: Whole other conversation in the future of how to actually look at the climate impacts coming, and incorporate that as well. Because some of that ground is literally going to be changing over time here. Jon: Well Michael, first of all, thank you so much for joining. I always ask one final wrap up question. If you go back to yourself coming out of Arlington High I think you went to, or even Texas A&M, and could sit down and have a beer, what piece of advice would you give yourself? Mike: I think the same advice I give myself that I’d give to anybody, put energy, time into your networks and to people. Most people only reach out to those networks when they need a job. Suddenly, they’re really active on LinkedIn because they’re in between a job, or they want to make a change. And the way to have that stuff be valuable to you, and to help you move in the direction you want to move to have the impact you want on the world, is first to be of service and be of impact to others. Right? Mike: So, reach out to your network. When other people need help with a job, take the time to make those references. When other people need help with something, take the time to talk to them. It may not be obvious what the connection is, but that will come back and will enable you as an individual to have the impact that you want. It’s so rare that I see people really do that. We have to be of service to each other, right? That plays out over time. Jon: Do you think that comes a little bit from your military experience, leading and working with troops? Mike: I think so. Surely there’s a bit of a personal bias there that led me into that path to begin with. to some degree it’s who I am. But I think everybody can approach it that way, and I think we would all be better if we did. Jon: Yeah. Well Michael, thank you so much for joining. I want to thank Matthew Hirsch and Tara Kern for setting this up. And of course our producers at Clean Capital. At Experts Only, Colin Young and Carly Baton. Really enjoyed the conversation. Mike: Thanks, Jon. I really appreciate your time. Jon: You can always get more episodes at cleancapital.com. I look forward to advice on folks we should be talking to. And as always, look forward to tuning in next time. Thank you so much. Thank you, Michael. Mike: Thanks, Jon. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’40’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_social_share title=’Share this entry’ style=” buttons=” share_facebook=” share_twitter=” share_pinterest=” share_gplus=” share_reddit=” share_linkedin=” share_tumblr=” share_vk=” share_mail=” av-desktop-hide=” av-medium-hide=” av-small-hide=” av-mini-hide=” av_uid=’av-354olk’] [av_hr class=’invisible’ height=’40’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_button label=’More Podcasts’ link=’page,5266′ link_target=” size=’small’ position=’center’ label_display=” icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ color=’theme-color’ custom_bg=’#444444′ custom_font=’#ffffff’ av_uid=’av-jx1x7jx3′ custom_class=” admin_preview_bg=”] [av_hr class=’invisible’ height=’40’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”]
Experts Only Podcast #78: Understanding FERC Order 2222 with Nat Kreamer & Jeff Dennis [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=” target=” title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-jwwgyb48′ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwgxszg’ admin_preview_bg=”] Episode 78: Understanding FERC Order 2222 with Nat Kreamer and Jeff Dennis [/av_textblock] [av_hr class=’invisible’ height=’10’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwl4lsb2′ admin_preview_bg=”] Welcome back to our listeners! We’re thrilled to share a special Experts Only episode with you. Host Jon Powers had the pleasure of speaking with Nat Kreamer, CEO of Advanced Energy Economy (AEE) and Jeff Dennis, Managing Director and General Counsel of AEE, to discuss Federal Energy Regulatory Commission (FERC) Order No. 2222. Do you want to know more about what FERC does as an organization? Do you want a better understanding of what Order No. 2222, which came out in September, will do for the industry and what the market opportunity will be? Do you want to know how you can get involved with FERC and take action? Then, tune in! For more information on FERC Order No. 2222, please visit www.aee.net. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’20’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Listen now: [/av_textblock] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ id=” custom_class=” av_uid=’av-k4so2umi’ admin_preview_bg=”] [av_image src=’https://cleancapital.com/wp-content/uploads/2020/11/ExpertsOnly-bar-AEE.jpg’ attachment=’7827′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=’manually,https://link.chtbl.com/j4Q7EvFL’ target=’_blank’ title_attr=” alt_attr=” lazy_loading=’disabled’ id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-k37p0z0j’ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’40’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock textblock_styling_align=” textblock_styling=” textblock_styling_gap=” textblock_styling_mobile=” size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” template_class=” av_uid=’av-l6cc3ws4′ sc_version=’1.0′ admin_preview_bg=”] Transcript: [/av_textblock] [av_textblock textblock_styling_align=” textblock_styling=” textblock_styling_gap=” textblock_styling_mobile=” size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” template_class=” av_uid=’av-l6cc554i’ sc_version=’1.0′ admin_preview_bg=”] Jon Powers: Welcome to Experts Only podcast sponsored by Clean Capital, and learn more at cleancapital.com. I’m your host Jon Powers. Each week we explore the intersection of energy, innovation, and finance with leaders across the industry. Thank you so much for joining us. Jon Powers: Welcome back to a special Experts Only. Today we dive into the new FERC proposed final rule, FERC order 2222, with the CEO of Advanced Energy Economy, Nat Kreamer, and the managing director and general counsel, Jeff Dennis, who has immense experience with FERC. If you’re like me, you sort of know what FERC does, but you really don’t fully understand all of it. And you really want to dive in to get a better understanding of not just the organization, but what a rule like 2222 will do for the industry, and what, more importantly, the market opportunity is for those that want to be a part of it. For those that aren’t aware, FERC 2222 will help usher in an electric grid, the electric grid of the future. It’s going to promote competition in electric markets. The idea is it’s removing the barriers preventing distributed energy resources from competing on a level playing field with organized capacity, energy and auxillary service markets by regional grid operators. Jon Powers: So it’s a really interesting order that came out in September. The playbooks are being put together right now, the RTOs, and you can have an opportunity to engage, go to Advanced Energy Economies website, aee.net. There’s a lot more there on the order. And also you can learn from this conversation with Nat and Jeff about how you can get involved, how you can take action. And you know, if I’m in your seat, I’m really looking at where is the opportunity here, how can we really enhance opportunities for asset owners to aggregate and be a part of these markets? So I hope you enjoy the conversation. Jon Powers: Nat and Jeff, thanks so much for joining me at Experts Only. Nat Kreamer: Thanks for having us. Jon Powers: Yeah. So Nat, you’re the CEO of Advanced Energy Economy. You’ve got really sort of powerful background in the private sector, also the military, for folks that don’t know, you’re a veteran of Afghanistan and you served in the Special Forces, but you helped grow or found and grow SunRon and then moving into sort of growing and founding Clean Power Finance, which became Spruce. Just quickly, what got you excited about moving from that side to Advanced Energy Economy? Nat Kreamer: What I saw in running SunRun, Clean Power Finance, and then being chair of the National Solar Industry Association was that we were moving from an industry that were a set of insurgents, that we were trying to break into the energy economy, and that we were starting to become a dominant form of new energy and the biggest new source. And when you switch from being an insurgent to being the dominant new technology that people are investing in, you really have to change how you engage the economy, policy makers, frankly, your customers, and you really have to come to it and say, Hey, here’s my plan to power an entire economic system. And this is how clean technologies can do that. And so I saw a gap and that gap was that advocacy for our industries was tended to be siloed around specific business models or specific technology types. Nat Kreamer: And we really didn’t run the policy makers and say, Hey, here’s the plan to go to a hundred percent clean. Here’s the plan how we’re going to electrify transportation. Here’s how you can do that for an industrialized economy so that it is safe, it is clean, it’s secure, and it’s affordable. And nobody really was telling that story in a comprehensive way, except for AEE and AEE really was going out and bringing that message to decision makers, governors, PUC commissions, FERC, at Capitol Hill, and saying, here’s how we actually do this. Here’s how all of these different technologies work together. Here is how all of these different business models work together. And here’s how we actually execute the energy transformation. So I was attracted to the fundamental business model that AEE was prosecuting, one. And I’ve been excited to see while I’ve gotten to be here, AEE had some huge fit wins, for example, the Virginia Clean Economy Act. So that’s a huge market transforming example of the kind of work that I’m describing. Jon Powers: Yeah. Having been on the other side of the table when Advanced Energy Economy came in to talk to us at a place like the White House, what I loved about the organization, still do, is it’s not a think tank, it’s a do tank, right? It’s spending the time, really thinking about these issues, thinking about the market transformational piece of it, and then advocating those policies and pushing that forward leaning agenda, which is so key. Because there’s a lot of folks that think about it, not many people that do it, so. Nat Kreamer: That’s right. Jon Powers: And just so for folks that are aware, you guys are a membership organization, you can go to aee.net. Someday you got to buy.org, by the way, should be a business focus. How do you know, who are your members? How do people end up joining? Nat Kreamer: Well, we have basic members who join us for a relatively small amount of money per year. And what they get is they know we’re advocating on their behalf and they got a lot of intelligence that’s very granular about how we’re taking those big ideas and transforming policies so we can expand markets for them. And then we have members who will join us and spend more money with us, frankly, who help shape those policies. And so our members are everyone from folks who are involved in developing wind and solar and battery storage to people who are providing smart grid technologies to electrifying transportation, to energy efficiency. Nat Kreamer: So it really is the entire technology suite of transitioning our economy from dirty fossil to clean and renewable, and then doing that so we can also electrify transportation. We work at the state level and also at the federal level, we tend to focus on specific markets and we really are member driven in the sense that we ask our members to bid on places where they think we can have the biggest policy impact. So in a lot of ways we’re investors because really policy is effectively real options investing. So when people join us, we take their capital and we say, what’s the optimal portfolio you’d like to us to pursue, and we go pursue it. And what it’s meant for the time that I’ve been here is that really among advocacy organizations, the best track record of opening and expanding markets, clear above 20 gigawatts for renewables, many billions of dollars for storage and electrified transportation, as well as energy efficiency programs nationwide. Jon Powers: Love it, love it. So for the audience, we’re going to have a separate conversation, Nat and I about Advanced Energy Economy, the work they’re doing sort of postelection, and really, you may not know this, I’ve been really focused now on what the next 10 years look like for the industry so we can get beyond sort of the growth we’ve had today, which about setting the table to really expanding and growing the moving forward. So I’m going to shift to Jeff for a second. Jeff Dennis, managing director and general counsel. Jeff you’re sort of a nationally recognized leader here in energy law and policy. You haven’t always been on the advocacy side though, right? You served on the private side and actually sort of adjudicated stuff in front of FERC before? Jeff Dennis: Yeah, that’s right. Actually, I also spent over 10 years at FERC in a variety of roles, advising a commissioner, director of policy in my most recent stint there as well. Yeah. So a wide variety of experiences at FERC and then in the private sector as well at a couple of great law firms representing clients like AEE and others throughout this energy transition. Jon Powers: So I’m going to step back and simplify a lot of this for the audience who may not know this, but just first for folks that aren’t aware, first, what is FERC and what is the role does it play sort of in our industry? Jeff Dennis: Well, so FERC is what we call an independent regulatory authority. And so it is given certain responsibilities by Congress to regulate electricity, natural gas, hydroelectric dams, as well as some smaller things like transportation of oil and propane and products like that. But mainly when we think about FERC, we think about it’s regulation of wholesale electricity markets, the transmission grid, and as well as regulation of the transportation of natural gas by pipeline. When we call it an independent regulator, what we mean by that is that it is designed by Congress to be part policymaker and part adjudicator. So there are five members, there can be no more than three of any one party. Every year, one of those members’ terms expires. So there’s always the opportunity for a President to nominate and have confirmed by the Senate a new commissioner. So intended to be somewhat removed from everyday politics and to carry out that regulatory authority in that way. Jon Powers: Yeah. For the audience that don’t know, it is truly a regulatory independent organization. When I was at the White House, you could provide ideas, but you couldn’t influence FERC. And I think you saw this in this last administration or the current administration when they tried to move forward with putting on a premium around coal, for instance, in terms of utilities, it was a major push by the Department of Energy, but the commission stepped back and said, no, this doesn’t make sense to the market. And it was a pretty major victory for the industry as a whole. So. Jon Powers: So FERC, I want to get into FERC order 2222 for a second, and the process behind it. But before we’re doing that, let’s just talk process for a second. So when an order comes out from the Commission, there’s been a tremendous amount of legwork done ahead of time, research by probably folks that like yourself when you were sitting there, before they come out with this proposed rule. First of all, give a little bit of color on what that lead up looks like. And then what are the next steps beyond a proposed rule before it becomes the law of the land? Jeff Dennis: Sure. Yeah. So exactly as you teed up there, there’s a lot of pre-work that goes into an order like this. And so going all the way back actually to 2014, when I was in the policy office at FERC, I actually led a team that really started looking at this. Really focused on distributed storage, actually, mostly. And looking at, it seemed, the explicit growth of distributed storage and the potential of its impact going forward on wholesale electricity markets. That team did a lot of our work with outreach with industry actually. And then if you fast forward a couple of years, we started seeing entities like Advanced Energy Economy coming to us and suggesting that the Commission take the next step. And really look at how do wholesale electricity markets that FERC regulates, how do those market rules in those markets present barriers to energy storage and distributed energy technologies more broadly? Jeff Dennis: And those barriers are often a matter of the fact that these markets were created about 20, 25 years ago with a totally different set of technologies in mind, and a set of technologies that operate, that have technical characteristics and operating characteristics that are a lot different than energy storage, distributed solar, or even utility scale, wind and solar and all of these different technologies. And so these aren’t kind of what you’re thinking about, politically driven. We’re going to just say, we don’t want wind in our markets or this or that, but it’s typically because a market role was designed around a conventional technology and it needs to be adjusted to assure that that newer technology can provide the same service on a level playing field. Jon Powers: Yeah. Interesting. I mean, it’s a clear recognition of the energy transition that’s been underway and in a way to sort of play a major role of it. So I do want, so let’s dive into, oh, just quickly, the proposed rule comes out and then just process for a second here. Really the industry as a whole has a chance to comment over the next what was like, I think 90 to 120 days, is that correct? And then the commissioner will take those comments and then put a final rule out probably early part of next year? Jeff Dennis: So actually we already have a final rule. Order of 2222 is a final rule. Yeah. In 2016, the commission actually initiated this rule making, following up on really the suggestion of AEE and some other parties to put out a rule making that directed regional transmission organizations and independent system operators, the big grid operators that run the markets for two thirds of the load in the country. So big markets, big economic opportunity. And what FERC said in that rule making was we propose to direct you to open your markets, to participation by energy storage, as well as aggregations of distributed energy resources. Jeff Dennis: And so it put that out for comment. One thing that’s important to highlight there, which is hopefully not too in the weeds, but there’s two ways that things come before FERC. Either a utility, which can include an RTO on an ISO, files a proposal on its own, or FERC on its own gathers evidence, determines that these markets may no longer be just and reasonable under the statute because of market barriers, inhibiting competition, or something like that, and then proposes to take an action. And that’s what FERC did here based on information that… Jon Powers: Separate from the net metering effort this summer, that was a proposal with utilities to end net meter. Jeff Dennis: Exactly, exactly right. Yep. And so FERC said based on our review of the industry, our review of the evidence, we think these markets are not just and reasonable because they’re not accommodating participation by these resources. And we propose to change that. Jon Powers: Yeah. Excellent. So I do want to get in the weeds here pretty quickly, but before doing that, just to help define for folks how FERC sees it, distributed energy resource, right. You’ve got obviously storage is piece of it. Is distributed generation solar, like what else would you put into that bucket as a definition? Jeff Dennis: Well, so FERC, in the final rule, defines distributed energy resources broadly and in a technology neutral way. To be anything essentially that sits on the distribution grid or behind a customer meter. In the commissioner’s own statements, and in a lot of kind of what’s inside the rule, you could tell they’re very focused on energy storage, on the distribution grid behind the meter. I call it distributed energy storage. Certainly rooftop solar, other forms of distributed generation like fuel cells, those kinds of things. They’re also very focused on electric vehicles and associated infrastructure. Yeah. So those are the technologies I think the commission has in mind. Jon Powers: Now, I think that’s one of the things I wanted to get. I think the EV space is really fascinating here where the opportunity sort of using it as a storage mechanism and aggregating that power is really pretty advanced thinking in terms of what the grid could do. So take us through order 2222, what just, I think from a very simple way, I think you’ve given sort of a great overview of it, what is sort of the major changes that are coming out of this for the utilities? Jeff Dennis: So what the order at its most basic level does is it directs the regional transmission organizations and the independent system operators to open their markets to participation by aggregations of distributed energy resources. The Commission’s order finds that existing market rules don’t accommodate the ability of these resources to aggregate together to meet whatever requirements there are to provide wholesale services, whether that’s a requirement that you be a minimum size or that you be able to operate for a certain amount of run time, for example, right? So maybe an individual storage resource or demand response or energy efficiency resource couldn’t do that. But when they are combined together, they could. So whatever the technical requirements are to provide wholesale energy capacity or ancillary services, this order says, allow distributed energy resources to aggregate to do that. And then the order goes into quite a bit of detail about exactly how the RTOs are to go about that. Various eligibility requirements that they need to define in their tariffs. Requirements for how all the various actors that are involved in a distributed energy resource aggregation will play together, right? Jeff Dennis: So admittedly, and understandably, distributed energy resource aggregation is a little more complicated that what these markets were designed around, which was a wholesale market operator, a very large conventional generating resource. Now you’ve got a distributed energy resource aggregator, an owner or operator of an individual distributed energy resource, the RTO of the ISO itself, the distribution utility and state regulators. So there’s quite a bit of discussion in the order about how the RTOs need to go about coordinating among those folks as well, but at a high level, those are the key requirements of the order. Jon Powers: So back to process for a second. So the order then tells the RTOs, here’s what you need to plan for. And then the next step, they actually have to put out plans over the next certain window, right, so that people know how to execute within it? Jeff Dennis: That’s right. That’s right. And because this is a relatively, obviously this is an area where the RTOs in the ISOs will need to adapt how they comply to their own particular market design. There’s a lot of similarities among these markets. But they’re also quite different in their own ways. And so the RTOs and the ISOs are given 270 days to come back on compliance with plans to actually put this into their FERC regulated tariffs. So the things that are on file at FERC and that actually govern the markets from day to day. Jon Powers: So let’s get out of the weeds and out of process for a second and talk about what really the market opportunity, or go ahead if you got another point. Jeff Dennis: Well, no one more process point that I don’t want to leave out, because it is really important, is the RTOs won’t go do that in a vacuum. Jon Powers: Right. Of course. Jeff Dennis: They will work with their stakeholders to develop those plans. And that’s a really critical part of this process for anybody who’s interested in the market opportunity of this order will ultimately present, or any of the other details of the rule, how the RTOs actually comply, develop those compliance plans and the input they take from industry is going to be really important because once those get to FERC, FERC’s window for making detailed changes to those becomes more limited. So it’s a process point, but it’s a really important one. Jon Powers: No, super important. So if I’m an aggregator ,right, of storage or I’m a member of AEE, how do I take part in that campaign and help weigh in on, I think what, really the critical formation of this plan. Jeff Dennis: So we as AEE will be carefully monitoring all of the stakeholder processes and engaging in each of them on priority issues that we determine with our members. So Nat talked a little bit about our membership structure as well. And for folks who’ve kind of bought up to that level where they influence our policy, we’ll be working directly with them in market, in a working group, to determine what their priority issues are and then determine the best strategy for getting those in front of RTOs and ISOs. Those processes will play out in various RTO and ISO committees. And so we also have a tool called Power Suite that we’ve recently upgraded to allow you to actually track those processes. And that’ll be a tool that’ll be really important for folks who want to track those processes directly and get engaged in them. Jeff Dennis: But being at the RTO and of course in this time, virtually at the RTO through WebEx and whatever their preferred option is going to be really important. And so one of our focuses at AEE is really facilitating the ability of our industry to participate in those processes because they are resource intensive. They are a bit of a… They have their own language and their own culture, if you will. And so helping companies who might not be longstanding market participants, or may even be new to the energy industry because of their investment in distributed energy, helping them unpack all that is one of the key things that we do. Jon Powers: No, I think that’s such an important point. Not just unpack it, but then understanding what actions to take, right, because I feel like for companies like Clean Capital is a growing company, we don’t have a policy shop, a dedicated policy shop that we can access for FERC regulatory folks to weigh in on this. We would look to an Advanced Energy Economy to give us marching orders and how we can play a role, whether it be simply slapping a logo onto letter or providing comments. Will that quote unquote campaign be driven, will you guys be driven driving that campaign to the different RTOs across the country? Jeff Dennis: We’re going to do everything we can to drive that campaign, right. It’s resource intensive. So we’re out there looking for more partners to come in and join us. But yeah, that’s our mission and our focus and what we’ve really focused on in the last couple of years across the board, not just with this issue, is getting our companies more engaged in that stakeholder process on a day to day basis because the way you influence it is no different than a legislative process. You’re there in the old in-person times, you’re there every day drinking the coffee and eating the bad pastry and talking about your kid’s soccer game on the weekend and all of that. And our industry needs to be in there doing that with the utilities, with the conventional generators, and other traditional stakeholders. Jon Powers: Excellent. So let’s, before we ask people to sign up and become members to do that, which I’ll be able to be doing for sure here, Nat, just to give you a heads up. What I get excited about is the market opportunity this means for not just a company like Clean Capital, but folks that are aggregating DG and really looking beyond the standard power purchase agreements that we have in place today, because the market is moving in some really interesting places with community solar, obviously with storage, the DG energy transformation is underway. Can you give us some color on how you guys view the changing market and what this means for DG over the next decade? Nat Kreamer: Yeah. I might be able to take a little bit of a stab here and I think Jeff can too. When I originally co-founded SunRun, we called it SunRun Generation back in 2007 and the vision was we would own this fleet of distributed power generation units which nobody had at that point, right. It just didn’t exist. We didn’t even have smart metering that had route density, everything had route density so we couldn’t even meter things the right way. But the idea was one day we’ll be able to take these assets and we’ll be able to aggregate them and use them in the wholesale power markets just like you would use a big central station, power generation unit. And I think what we see today is 2222 basically codifies that you can do that. We see it being done in patchwork ways across the country. Nat Kreamer: This basically opens up the market and says, if you can imagine taking a bunch of small energy assets, whether they’re reducing the amount of load you need or they’re providing capacity or they’re providing some other ancillary service or they’re just aggregation of generation at the right time of day, you can batch them up cost effectively and bid them into the market and participate alongside the two gigawatt nuclear power station in Palo Verde, for example. And so I think that’s the beauty of it is now there’s an opening for innovation to happen where there’s a clear path where this is how you take your assets into this big market. And I think there’s been, historically it was a vision and then it became something people could test. And then there were some trial markets like the market out here in California. Nat Kreamer: And now what we’re saying is you can go into the big market. I think what, on a large scale, what this is going to do, it’s going to position distributed energy to be able to provide more value to the market. The reality is that a lot of value is moving to the customer location and as we electrify transportation, a lot of load is going to move to the customer trip location. I mean, just to put it in people’s perspective, your average six pump gas station is going to need as much electricity to fuel that many vehicles as your average factory. So the amount of load density per square foot is going to go way, way up in the energy future. And for us to be able to manage electrified transportation in intermittent clean energy, we’ve got to have a way to get all of these resources into the market, which creates a lot of innovation. And I think that’s the big framing here. Jon Powers: That’s a really interesting example, right? So you’re saying in the electric vehicle world, the six pump station is going to need as much electricity as a warehouse. That’s fascinating. So I’m going to ask you to put your investor hat back on and you were looking at opportunities aggregating these, most asset managers don’t have the capacity yet to begin, or the technology solutions in place, right, to aggregate and take advantage of this. Do you see sort of a development in this, whether it be the stems of the world or others that are starting to aggregate in support of asset managers and then selling into that market. How do you sort of see that part of the market development? Nat Kreamer: Yeah, I think historically what people would say is, well, wow. If one day I could play in the capacity market at PJM, or I was able to dispatch generation at the right time and trade around this asset, well that’s just upside in my financial model that I can imagine, it’s just optionality in the terminal value of the investment. Now you can say, look, is there a cost effective way for me to actually monitor and control that asset? And if I can monitor and control that asset and I can do it at the standard the RTO or ISO requires, now I can deliver. And so those are two parts. And the second part is, am I credit worthy to participate in the market, whether I’ve got the balance sheet to do it, or I rent the balance sheet of a credit worthy institution, which is a form of borrowing so I can basically get a facility. And there are plenty of people out there who will do that for you. Nat Kreamer: And once you have those three things, which is, you can monitor it, you can control it, and you’ve got the credit to actually make sure that you’re going to do what you say you’re going to do, which is dispatch or you’re going to pay. You now can turn that into an asset. There are, I think, businesses and you noted one of them, that’ll be able to say, listen, I can monitor for you and I can give you control. And that’s a software and a little bit of commodity hardware, frankly, technology. Matching that with credit, this becomes really an underwriting activity for investors who really specialize and understand these markets and these assets. In other words, has an asset actually been created and can I actually match that to a credit facility? Nat Kreamer: So I think there will be a set of investors who can specialize in this area and that they’ll be able to take, if you think about it, they’ll be able to take a fixed income or a merchant risk profile on the equity returns around these assets. They’ll be able to take a piece of that action. Jon Powers: Yeah. Let me ask you on that because I talk a lot or having been talking a lot about obviously the movement of the institutional investor into the distributed generation space or clean energy as a whole, they’re just now really trickling into the DG space, but that’s because they understand what PPAs are, right. So now we’re going to add this extra level of complexity and opportunity. What do you think that’s going to do to the capital providers? Is it just going to make it sort of a boutique pool of folks that are playing here or are we going to get the pension funds down the road that okay, I can… Merchant scares them, right? The idea of merchant rates, just like, I don’t know what you’re talking about, that’s Chinese. I don’t get it. So how do we sort of educate them that this is a very valid place to be investing? Nat Kreamer: Yeah. I think what we’re going to find out is that large scale institutional capital will back specialists who have an improving investment track record and really understand the esoteric nature of parts of these markets and understand how to perfect an asset and underwrite and manage that asset. I think that’ll accrue to a set of platforms that are already out there. They may be control as you do, controlling a bunch of DG assets. They may be playing the storage space. I think there would be some, one of our members is in the electric transportation space and they’re providing school bus fleets as a service, pay per mile, to school districts. But then the bus doesn’t operate for a lot of the day and it doesn’t operate during the summer. It’s a grid asset, using it is a grid asset. Nat Kreamer: I think the institutional capital will come into those platforms where there’s a manager, as opposed to what we’re starting to see in the renewables market where the institutional capital will do a direct into projects or might say, listen, I’m not going to pay a lot of money to a financial manager, like as you see in the Black Rock, Goldman, Capital Dynamics platforms where they say, listen, I’ll pay you very low fees, go out and put a lot of money into renewable energy projects. I think we’re a long way from that moment. But I think we are in this moment that this gives the opening for platforms to be backed. Jon Powers: Yeah, it’s super interesting. And then I’m going to ask one more sort of finance oriented one and it’s around tax equity, right. Where depending on the Biden administration, if there’s a Biden administration, there may be a push to move away from just a pure tax credit. It is a choke hold in the distributed generation space, for sure. Nat Kreamer: For sure. Jon Powers: For sure. And this just adds an additional layer of, I mean, community solar itself scares a lot of tax equity investors who aren’t going there yet, just worried about getting enough subscribers, you’re going to put this layer in. So how do we either educate that community on the opportunity here or put a policy in place on the tax side to help eliminate that trickle, right, because I feel like that’s holding up so many deals right now, just trying to find the tax equity. Nat Kreamer: Yeah. Yeah. Jon, I appreciate you asking that. Earlier this year I think I came out and, not think, I did. I came out and I wrote an opinion piece and we put forward and a piece of policy that said, look, the tax credit should be refundable and you should basically be able to safe harbor things that are refundable and carry it forward. And by the way, if you use domestic content, you should be able to get that for even longer. So let’s help American workers, let’s help American manufacturing, but let’s take the constraints off of the tax equity market. And the reality is that 11 cents out of every dollar of tax credit is going to a financier. And there’s really not a great reason for it as you and I know. Nat Kreamer: I’m probably the person who’s done the most tax equity and the most first time tax equity in the order of billions in creating an industry. And then second, who’s willing to say this, because everybody else is getting tax equity and is scared to say it. And the truth is, look, love my friends who are doing tax equity, love the market, but guys, you should go back to a world where you were doing three times as much volume like we did on the 1603 grant program at one third of the fees. Having the tax equity market constrained has really gotten in the way of innovation. If it looked more like a lending market against the government refundable receivable, the industry would grow a lot faster. The financial institutions who are in the tax equity business would have much bigger businesses. Nat Kreamer: They wouldn’t be niche portions of their respective financial institutions. I know that would be better for their personal careers. It hella be a lot better for the broader industry and all the businesses. So I’m hoping for Biden administration, I don’t think we need to go back to 30%, but I think for the mainline renewables, I think if we could be 26% and refundable, you’re right, we would unlock capacity that would be able to address all these new segments in the industry to take advantage of this. I’ve taken too long in saying that, but I totally agree. Jon Powers: No, no, no. So this I part two of our next podcast. We’re going to talk very much on this, Nat. Because I feel you on this. This is something I’ve been pushing pretty heavily and advocating for. I do want to go, before we end here, and go back to FERC 2222 and Jeff, if you have a message to the audience on what they need to be doing now over the next six months to ensure that this market opportunity is there for the industry, other than listening to the podcast and signing up at AEE to learn more, what do you want them doing? Jeff Dennis: I think there’s a couple of things. I mean, one we hit on earlier, of course, which is engage in those RTO and ISO stakeholder processes with your associations like AEE, with partners, however you can get in the door because the RTOs in the ISOs need your input. And in fact, a lot of times what I heard, when I first came over to AEE and was working on the side of the industry was they often said to me, we don’t hear enough from distributed resource providers. We don’t know exactly what they need. So that’s always job one for me. I think the second one is working closely with… Jon Powers: Can I just follow up on that? How can they do that? If we are members of CAO or we need to become members of AEE, Nat, we talked about that, but how do they, if they’re not aware, right, and I would say most of the reasons that DG people aren’t bringing those messages forward, they don’t exactly know how, right. They don’t have the big checkbook to have a policy team. What do you suggest they do to be part of that coalition? Jeff Dennis: You find somebody who will knock on the door for you. So what we do for our members and not just really our members too, I mean, we build broader coalitions as well, right? Because we’ve got a public interest mission that extends to our entire industry, right? So we knock on the door at PJM and we say, we’d like to bring in these five companies. And going back to where Nat started, one of the great things about AEE is I can bring an EV charging infrastructure developer. I can bring a distributed solar developer and I can bring a battery energy storage developer and I can sit them all in one room. And they’ll all say the same thing about what they need from the RTO and ISO market rules to allow them to build out the business in a reliable way. So that’s a big part of what you need to do is just find somebody who will help you knock on the door and then go knock on the door. Jeff Dennis: These markets and the RTO on the ISO staffs are much more open to conversation than I think a lot of people give them credit for. You have to recognize the position they’re in, which is they have a compliance obligation. They are dealing with a stakeholder body well beyond you. But part of my job is to help folks understand that. Because I’ve been at this for 20 years now, right. So here’s what you’re going to hear from the natural gas fired. Here’s what you’re going to hear from the consumer side and the distribution utilities and being able to put all of that together and form a coalition. That’s why I talk about it like a legislative process because in a lot of ways, that’s what it’s like. But it starts with showing up. Jeff Dennis: The second piece I wanted to mention too was so many distributor energy resource providers today and in the future are participating in retail programs. Retail programs, they help shape at the state level, whether it’s things we’re seeing more recently like Plain Peak standard programs on other things like that, whether it’s like Smart Massachusetts or any number of those programs, work with your state regulators to make sure that this is not viewed as a threat, but as an opportunity to capitalize on investments they’ve already made. Jeff Dennis: So when I advocate for policies like what became order 2222, and I put on my old regulator hat, the thing that I emphasize the most is how much value the entire grid and customers will get from taking these assets and utilizing them for more services. And it’s not unlike any other asset on the grid. The more you get out of it, the less customers have to pay to invest in some other asset that they wouldn’t need to build, right? Jeff Dennis: And so the opportunity to defer expensive distribution upgrades in particularly hard to build places. The opportunity to defer a 30 year investment in a generation asset that climate policy may make obsolete. All of those kinds of opportunities are critical to what states want to do with their own policy and with their own clean energy economies. And so really talking about that with them and making sure they understand the opportunity as well, I think is going to go a long way to ensuring that at the end of the day, we have RT-ISO markets that not only provide the opportunity for these assets, but harmonize well with the opportunity at the retail level as well. Jon Powers: I love it. And then one last question, what’s the numbering system? We just get lucky it’s 2222 or just how that happens. Jeff Dennis: So it’s interesting. There is actually a sequence of order numbers that FERC uses. Not every order gets an order number and I won’t go into that, but then the chairman at his or her discretion can decide to assign a different order number out of the sequence. So for example, the commission’s landmark order that restructured the industry, order number 888 was named by chairwoman Betsy Moler because the commission had just moved into a brand new building at 888 First Street. So that’s just one example. Jon Powers: Neil’s like 2222, that’s it, we’re doing it. Jeff Dennis: Yeah. I think it was a combination of his kids’ birthdays and other things I think he explained. Yeah. Nat Kreamer: Oh, that’s the circle. That’s good. Jon Powers: Well, Jeff, thank you so much. And Nat, thanks as always, I look forward to continuing the conversation. Sort of challenge our audience to go to aee.net. First of all, there’s great detail and information on a blog that Jeff did around FERC order 2222, you can find it there, learn more about Power Suite and how you can sign up to be part of the campaign. Jon Powers: I want to thank Monique from your team for helping to put this together and our producer, Carly Batten and Colleen Young for helping to sort of manage this on the Clean Capital side. As always, you can find more episodes at cleancapital.com and I look forward to continuing the conversation. Jon Powers: Thanks for listening to today’s conversation. Find more episodes on cleancapital.com, iTunes or wherever you get your podcast. If you like what you hear, be sure to subscribe and leave us a five star review. We look forward to continuing our conversation on energy, innovation and finance with you. 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Experts Only Podcast #77 With Generation Investment Management’s ESG Expert, Colin le Duc [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=” target=” title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-jwwgyb48′ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” template_class=” av_uid=’av-jwwgxszg’ sc_version=’1.0′ admin_preview_bg=”] Experts Only Podcast #77 With Generation Investment Management’s ESG Expert, Colin le Duc [ Founding Partner, Generation Investment Management ] [/av_textblock] [av_hr class=’invisible’ height=’10’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwl4lsb2′ admin_preview_bg=”] This week on the Experts Only podcast, we’re thrilled to welcome the passionate Colin le Duc, Partner, Generation Investment Management. In this episode, host Jon Powers discusses sustainability, sustainable investing, and Generation Investment Management with le Duc. Hear from someone who’s been on the frontlines of ESG investing as he and Powers discuss the end of incrementalism and the exciting future of sustainable investing. Expert or not, all listeners are welcome to tune in! We hope you enjoy. [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’20’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Listen now: [/av_textblock] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ id=” custom_class=” av_uid=’av-k4so2umi’ admin_preview_bg=”] [av_image src=’https://cleancapital.com/wp-content/uploads/2020/10/ExpertsOnly-bar-le-Duc.jpg’ attachment=’7807′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=’manually,https://link.chtbl.com/dOxMSxMi’ target=’_blank’ title_attr=” alt_attr=” lazy_loading=’disabled’ id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-k37p0z0j’ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’40’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Full transcript: [/av_textblock] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Jon Powers: Welcome to Experts Only Podcast, sponsored by CleanCapital. You can learn more at cleancapital.com. I’m your host, Jon Powers. Each week, we explore the intersection of energy, innovation, and finance with leaders across the industry. Thank you so much for joining us. Jon Powers: Welcome back to Experts Only. I’m your host Jon Powers. Today we speak with Colin le Duc, who is one of the original founding partners of Generation Investment Management. Colin has a incredible track record in sustainable investing, having been at Sustainable Asset Management in Zurich and with Total in Paris, but he’s also really been on the front cutting edge of ESG investing. And in our conversation, we talk about the end of incrementalism and how the future of sustainable investing is exciting and bright, the groundwork is laid, and the capital is continuing to flow. I hope you enjoy the conversation. Colin, thanks so much for joining us at Experts Only. Colin le Duc: Great. Well, thanks so much for having me. I really look forward to talking about sustainability, sustainable investing, and generation. Jon Powers: You obviously have an incredible passion in this space, but I sort of want to step back and ask what got you interested in sustainability, and climate, and the environment? Colin le Duc: Yeah, well, I have a bit of an eclectic upbringing, actually. I was one of these children that grew up all over the world and traveled a lot as a kid and saw lots of things. And I was just reflecting on that, and one of my seminal events was living in South Africa during apartheid. And actually, the person I was named after, my grandfather, Colin Bennett, was actually a shadow minister in the Liberal Democratic Party that was the opposition to the apartheid government. Colin le Duc: And so, growing up in a family like that made me very aware of social justice issues in particular. And what was interesting, that was also the beginning of the time of the divestment movement, because a lot of investors and businesses were pulling out of South Africa because of apartheid. So that got me onto the idea that maybe capital could be used for a force for good. Colin le Duc: I then went to a boarding school in the UK, which was actually run by a bunch of Benedictine monks, actually. So we basically had to focus a lot on theology and ethics. And I had to do that at A level, which is the high school equivalent in the UK, which I’m sure you’re aware. And that really taught me a lot about environmental justice as well, and environmental responsibility through ethics and morality. And that sort of led me into really understanding that really, ultimately, climate was something that I wanted to focus in on and got very interested in it at undergraduate level and beyond. Jon Powers: Yeah. And when did you start to really identify as you’re going through this transition? Colin le Duc: As far as climate? Jon Powers: Yeah. When did you realize that it was… It seemed like the… I asked, I think, about the period you guys started Generation, which we’ll come back to, in 2004, climate change has been there and there’s been undertones of conversation in the academic community, but really from a cultural perspective, it didn’t really come to light until into the nineties and early 2000s. Colin le Duc: Yeah. I mean, I was very fortunate. At undergrad level, I did an internship with Total for a year in Paris. That taught me a lot about low carbon and the challenges of energy, et cetera. And that was in 1993. And then I went back to university for a year to graduate, and then they offered me a job in London, which I took because I thought the energy companies, the large international energy companies, would lead the way to a low carbon future. Colin le Duc: And then that was, I started work in ’94. And I very quickly realized, actually, that the big successful incumbents were actually not going to accelerate the transition to net zero and low emissions as quickly as the scientists were telling us we needed to. And I also subsequently had a series of friends who were working in the city of London at the time, and were meeting CEOs of all sorts because they held shares in those companies. Colin le Duc: And that got me very turned on to the idea that investing is a very good way to influence outcomes of companies. And if you really want to drive sustainability, then being a shareholder is actually a pretty good idea and a very good leverage point. And that got me thinking about the power of capital and investing as a force for good. Jon Powers: Interesting. You’ve built an amazing career around that, and I think we’re really at an inflection point today, where ESG is not just a term anymore. It’s becoming a mainstream initiative that’s bringing some significant capital to market. So I want to talk about the founding of Generation, flashing back to 2004. By the way, were you still in London at the time? Had you made it to San Francisco? Colin le Duc: Yeah. No, no. I was still in London. Yeah. And I was in London for the first 15 years of Generation, and just been out in California for the last few years. Jon Powers: I didn’t realize that. Okay. Excellent. And yeah, you guys have a pretty major London operation. Colin le Duc: Well, that’s our headquarters. That’s what we were founded. So yeah. Jon Powers: Yeah. So what led to the founding of Generation? I mean, you guys were a little bit before the time, which is amazing, that you guys are visionary in terms of figuring out where to put significant capital at work in solving these climate challenges. Colin le Duc: Well, I think it was a series of very serendipitous events. I mean, timing was very much a driver. I think there were a number of the founders that were at a point in their careers where they either had outlived their current institutions or were looking to do something on their own and were looking to do something that was a hundred percent dedicated to sustainable investing. Colin le Duc: And there was a series of relationships that really came together. I was working for a fund in Switzerland called Sustainable Asset Management that did a lot of work around the Dow Jones Sustainability Index. And that had attracted quite a bit of interest from both Al Gore, who’s one of our founders and our chairman, as well as Goldman Sachs actually, which is where two of the other founders, David Blood and Mark Ferguson came from. Colin le Duc: And we all sort of connected and got together and talked a little bit about the shared mission and vision to create a dedicated boutique focused purely on sustainable investing, where you would put the disciplines of investing in finance, in terms of world-class investing in finance capability, really on par with world-class sustainability expertise, and put those two things together in a very integrated way. So we really found a generation on the principle of fully integrated sustainability into traditional asset management structures. Colin le Duc: And if you take David Blood as a senior partner and Al Gore as the chair, the two of them really epitomize what we were trying to do. And fusing those two worlds together was really a core part of the founding. So it felt like this idea was very much the right idea, and it took us a while to educate folks that sustainable investing is best practice and that we could generate better longterm returns by investing sustainably. So the first few years, it took us a lot of advocacy and education work of the investor base to achieve what we’ve achieved. Jon Powers: Yeah. I want to come back to that. Because I feel like the time that you guys launched this, today, Q1 of 2020, before COVID, record ESG investing. And I think the trends are there, but you’re out raising from LPs when people are barely talking about this issue and you’re able to be successful. What was that like, cutting the teeth of a lot of these investors and bringing them to the table? Colin le Duc: Well, we’re incredibly grateful for our clients’ support, in particular in those early days. And it does take a leap of faith from people to back a first-time fund of whatever, including our own. And I think the cast of characters that we had around the table at the founding was particularly powerful. And what we’re talking about here is common sense, long-term investing. Colin le Duc: So it was not as if we were talking about a black box methodology or anything of that nature. We were just very simply talking about a common sense worldview, which basically talked about sustainability being a driver of change in the economy, and picking a small number of very high quality companies and owning them for the term would outperform the market. So we weren’t selling anything that was particularly complicated. Colin le Duc: It was just an innovation relative to the rest of the market at the time, which was to take ESG seriously as a risk and return perspective that would help us generate better longterm returns. So I think we had a lot of innovative groups that backed us at the beginning and we have moved on from there. And obviously, as the track record has built up over the years, that has helped us bring in bigger clients, pension funds, other foundations, charities, that kind of client base. Jon Powers: And as the overall market around sustainability has as improved and the understanding of it, how have you seen your investing thesis change or not change over that time? Colin le Duc: The fundamental philosophy and principles of what we’re doing have not changed. I think the notion that taking a highly focused approach to investing, so we do public equity and private equity investors, so we feel we have a level of expertise around equity investing, and taking an approach to fundamental, bottom-up, research driven stock selection, and putting that into a long-term investing context, that has not changed at all. Colin le Duc: I think what has evolved is the level of sophistication and judgment associated to how that asset selection process is going on. So I think the influence of ESG and the availability of information around ESG has actually come up a lot, and that has helped as well. And the specification and the nuance of the debate has come a very, very long way. Colin le Duc: But the fundamental philosophy and thesis of Generation remains very firmly that we are in the early stages of a transition to a sustainable economy, and that that secular shift is affecting every aspect of the global economy and is playing out over the long term. And that presents enormous investment opportunity if you are granted the license from your clients to take a long-term perspective. And that has basically remained very consistent over the last 15-16 years that we’ve been in existence. Jon Powers: So for audience members that may not be as familiar with Generation, can you talk a little bit about some of the companies and some of the investments you’ve made along the way? Because you guys do cover a variety of different fields here helping to identify or helping to hopefully solve the climate crisis. Colin le Duc: Sure, sure. So just to remind folks, Generation manages somewhere around $25-26 billion today, and that is split across four different investment strategies. So there are two public investment strategies, a global equity fund, and an Asian equity fund, and they are investing in mid to large cap public equity companies that aren’t listed, obviously, on stock exchanges. Then we have two private equity strategies, a growth equity fund, and then a long-term equity business. Colin le Duc: So I’m going to focus a little bit on the growth fund, because that’s where I spend most of my time personally, but I’m sure you can appreciate there are certain aspects of the public markets, so I can’t talk about specific companies. So I think if you look at the growth strategy in particular, we’ve got three legs to the semantic focus of that strategy, and that’s planetary health, human health, and financial inclusion. And those would be three core pillars to a sustainable solutions type investing strategy. Colin le Duc: And so if you look specifically within the planetary health dimension of that, we will look at companies, for example, that are enabling the transition to clean energy, for example, or sustainable mobility, or a sustainable food system. So if you just take a look, for example, at the energy space, we will look at grid integration opportunities, we will look at anything that will help the scale up of renewables. We’ll look at things like pay-as-you-go energy access in emerging markets. So one of the companies in the portfolio is a company called M-KOPA SOLAR that does that in East Africa, for example. Colin le Duc: We’ll also touch on energy efficiency and building efficiency and things like that in the energy complex. If you look at the transition to sustainable mobility, we’re obviously extremely focused on the electrification mobility, so that would be expressed through investments in an electric technology company that enables electric buses and other types of form factors, a company called Proterra, that you may be familiar with. Colin le Duc: We’ll also look at swappable battery systems for electric motorbikes. We’re invested in a business in Taiwan called Gogoro that does that. We’ll also look at things like fleet optimization. So, how do you drive efficiency across the trucking market? So we are invested in a business called Convoy, for example, that runs a digital freight marketplace that enables much better matching of loads with trucks to drive efficiency in that market. Colin le Duc: And then if you look at something like the food system, we’re obviously focused on anything that is enabling a much more sustainable food system, and that would range from food waste in restaurants, through companies like Toast, for example, that provide ERP and software systems to restaurant owners. We’ll look at precision ag-tech, so we’ll look at companies like Cebo that deliver highly precise insights to farmers for yield prediction on farms. Colin le Duc: We’ll look at, obviously, the alternative protein space, which has got quite a bit of attention. We’re invested in a business with Nature’s Fynd. It is a microbe-based protein for meat substitutes, et cetera. So those are just a few of them, very much technology, innovation driven businesses that are accelerating the transition to sustainability across core areas like energy, mobility, and food. Jon Powers: I do want to get into some of the underwriting, or not the underwriting, the education you guys do and look ahead. Before doing that, where in the underwriting process for these companies, obviously you’re doing traditional classic underwriting, but where do you start to layer in the sustainability piece of that? Colin le Duc: Sure. So one of the founding principles of Generation is the integration of sustainability into the investing process. And what that means is that we integrate that in every aspect of the investment process. So Generation starts with research. So we do a lot of primary research, which is sort of epitomized and delivered through what we refer to as roadmaps, which are essentially sector deep dives that look at what is going on in a sector, and explicitly recognizes the environmental and social drivers in that sector, alongside quite traditional drivers of change, and then we’ll identify. Colin le Duc: And in that, so the sustainability is integrated by looking at environmental and social drivers alongside traditional drivers, and then we’ll identify which companies are well positioned. We will then get to know them. And if we do want to really look at underwriting and investment in these companies, we will then drive to the next level of the investment process, which is really about evaluating the quality of the business, the quality of the management team, and evaluation and the security. And in each of those, we will integrate what we refer to as longterm success factors or sustainability factors in our definition of quality. Colin le Duc: So within the management quality space, we will look at, is the company taking care of all it’s stakeholders properly? What is the culture of the company? Is it truly managed for the longterm, for the benefit of all stakeholders? Those kinds of questions. Equally, on the business quality level, we will look at questions like the durability of returns. We will look at things like, is the company providing something that society truly needs and is system positive, for example, as a product and service as it gets built up. And then when you’re thinking about the evaluation of the security, we will very much look at aspects around the sustainability of the competitive advantage period. Colin le Duc: So, how long will this company be able to generate the kind of returns we think it can generate, which is often just an expression of the sustainability and the competitive advantage of a company. And then there’s a whole bunch of stuff that we do post ownership, as well, in terms of engagement with companies, both public and private, which is a very, very important aspect of what we do. Colin le Duc: So it’s really about integrating sustainability right across the investment process, rather than having a separate group, for example, that is doing this work. Our analysts do all of the work. They’re kind of super human. They do all of the financial analysis, all of the research, all of the analysis together to get a very complete and holistic view so that we can invest with very high conviction. Jon Powers: Amazing. And looking back, I was just reading some of the history of Generation, you guys have helped define some of the metrics around sustainability as a whole, where we’re now getting into a point where folks have some common metrics to measure off of as an industry. What was the importance, whether it be helping to lay out the sustainable accounting, the SASB standards, for instance, or really helping to define impact investing as a whole? I mean, when you look at when you started to where we are today, impact investing was hardly a nomenclature at the time, and now it’s its own genre. Why did you guys, as leaders, feel that it was really important to engage in those conversations and help develop those metrics? Colin le Duc: Well, first and foremost, we’re a mission driven business. So we are trying to prove the investing case for sustainable investing, and we are trying to advocate for sustainable capitalism broadly speaking. So we actually allocated a certain proportion of our profits directly into the Generation Foundation to really try and perpetuate this way of thinking across capital markets. Colin le Duc: So we felt that part of our mission was essentially ecosystem development and field building. And there’s obviously a level of self-interest in that. I think it was actually really about driving our mission, and we’re incredibly proud of the founding work that we’ve done with many of these organizations to get them going. And they’re now scaling up and helping mainstream some of this thinking across the market. Colin le Duc: Because I think one of the big dangers of what is going on with the mainstreaming of ESG and sustainable responsible investing is the patchwork approach that the market is taking at the moment. Some people are implementing with a lot of rigor and integrity, others are not. And I think that’s an important part of the maturation of the market, if you like, as it comes to ESG and sustainable investing, that there is rigor and integrity to what is happening. And so, we want to share our thinking, and we’re very open book about that, as to how we do that and what we think should happen in terms of some of these definitions. Jon Powers: Yeah, I think about whether it be the SASB standards or folks… I’ve got a good friend who works in the corporate risk space, who doesn’t come from climate at all, but now has a piqued interest in it, and him understanding the metrics that have been developed and the importance of having that baseline to educate himself. And you get folks who have been in these industries without the sustainability lens now understanding how to implement it, it will be that much more important to growing the space you’re going for in the next 10 years. Jon Powers: So I do want to talk about, you guys have an amazing Sustainability Trends Report. I think this is the fourth version that you guys have published. I’m going to ignore for a second, the COVID impact, which is obviously hard to ignore in 2020. But what trends have you seen over the last four years of publishing this report that are important to pull out? Colin le Duc: Yeah. And I appreciate you highlighting that, Jon. The Sustainability Trends Report is an annual attempt to really just put a bit of a stake in the ground as to what we’re seeing with regards to the state of the sustainability transition. And it’s really mining a lot of what Generation is doing at the investment process level and trying to put it into the public domain. It is also attempting to use very objective data sets to just demonstrate what is happening with sustainability and the sustainability transition. Colin le Duc: So this is indeed the fourth year that we’ve published it. And to your question about different trends beyond COVID, I think maybe three worth highlighting. I think in the healthcare space, I think we’ve seen a massive uptick in the trend to highly personalized healthcare. So that is obviously driven by a lot of technology adoption and is also increasingly enhanced by some of the remote capabilities that we now have with regards to healthcare. So there’s quite a bit of work around that and how that relates as well to accessing healthcare for underprivileged people. So that’s one major trend. Colin le Duc: Another may be the commitments that are being made to net zero by the corporate community that have been following a lot of the government commitments that have been made. That has been fascinating to watch over the last two or three years. It seems like companies are sort of stumbling over themselves to make these net zero commitments. I think that is a real trend and worth keeping an eye on. Colin le Duc: And then I think the whole debate around the future of work, which has been accelerated and influenced by COVID, but previously was a very hot area of debate around sustainability. So what does meaningful work mean? What does a minimum wage mean? What does automation mean for jobs? All of that work and defining how work looks like going forward has an enormous impact on the social dimensions related to sustainability. And that is a trend that we’ve been tracking within the STR report for the last few years as well. Jon Powers: I love the recent version. I’m just going to quote it for a second because I think it’s phenomenal. We believe the action and momentum triggered by events in 2020 will be powerful catalysts for sustainability going forward. First of all, why do you guys believe that? And then second, how do you use, then, this tool within… Do you use this within underwriting going forward? Is there a lot of market research that’s pulled into these sustainability reports that you’re able to then use as a lens to look at companies? Colin le Duc: Yeah, I mean, I think, just to coming to your second part of your question first, the STR is really an expression of what is happening in the investment process. So it’s actually, the STR is informed by the investment process rather than the other way around. So it’s really a summary, if you like, of some of the thinking that you see if you were to look beneath the hood of Generation, in terms of the roadmaps, in particular, that I referred to earlier. Colin le Duc: But to your first part of the question, how is COVID accelerating sustainability? I think it’s really along two dimensions. One is cultural, where I think COVID has demonstrated the futility of much of our activity pre-COVID, be it hedonistic consumption, and how that just does not lead to happiness, frankly, or to the very unnecessary amounts of business travel that was going on, for example. Colin le Duc: And so, what has been very interesting is that a lot of sustainability advocates have been saying this stuff for a long time, stop traveling so much, stay more local, live a more humble life, you don’t need to be so asset heavy. All of these things have been massively accelerated by COVID. So we think the behavior change associated to sustainability and a sustainable lifestyle has really been demonstrated through COVID. Colin le Duc: Obviously, there are other sides to that story in terms of the abruptness of the lockdowns and the effect that has had on the social capital in society, and within families, and in communities, and et cetera, and in companies, and whatever. But I think that that notion of just shining a light on how crazy our lifestyles were pre-COVID is a big part of it. I’ll come to the second bit in a second, but you’ve got a question? Jon Powers: Yeah. I want to follow up with… That’s a fascinating view, and I feel like… So I wrote a piece earlier this year, From Greta to the Board Room, looking at 2019 and how there’s both this cultural growth in the discussion of climate as an issue, of course, and this, as you mentioned in the second part of the report, amazing trends happening in the corporate leadership perspective. Jon Powers: But then, how do we take what you just laid out as the drive, on an individual level, around sustainability, and communicate that out to folks, so they understand the impacts of the life changes they’ve made this year on climate and sustainability? I think people may not think of it that way, so how do we take advantage of this situation we’re in and communicate out to folks beyond those of us that track these issues, that this is actually really important for climate and sustainability? Colin le Duc: Yeah, well, I think a lot of people have actually realized the silver linings relative to their own wellbeing within… It’s sort of like this weird mix of, on one level, people feel a lot of mental anguish, but on another level, they feel a higher level of life satisfaction. So, I think highlighting that is important. I think also, as you may know what’s happened to emissions this year globally, but initially in March-April, they dropped by about 8-10%. Colin le Duc: They have come back pretty strongly, mainly because a lot of the restarts of many global economies has actually been a bit of a brown restart more than a green restart, unfortunately, where firing up coal plants is quicker than building a whole bunch of renewables. So that has happened, unfortunately. So the emissions story this year is going to be a bit of a wash actually, by the look of it, in terms of how we’re powering back. Colin le Duc: So I would just come to the second part of the answer around how does COVID accelerate sustainable trends. I would say the role of the public sector has been demonstrated in how, when governments want to act, they can, and they do at epic scale. So I think what that has said to me, anyway, is that it has shown how pathetic the attempts on climate have been. Colin le Duc: Because the governments are capable of doing what they’ve done on COVID, which is basically really directing society very aggressively and pumping loads of money into something. And it just shows you that, even though they understand that climate is an issue, they just have not acted at the same level of seriousness with regards to climate. And we think that will change. We think that will change. We think the pendulum is swinging quite aggressively to a much, much more public intervention with regards to dealing with the climate problem in particular. Colin le Duc: And that will come through Green New Deal type stuff, or, depending on who gets into the White House, different climate plans, all through to the EU recovery plan, and et cetera, which are all very green in the way they are approaching a recovery of the economy. So I think what it has shown is there are limits to market-based solutions to collective challenges, such as COVID, such as climate, and COVID is truly a dress rehearsal for climate. And I think that there’s a lot of positives to be taken out of that, in terms of the levers that government can actually pull. Jon Powers: Yeah. Interesting. Yeah. I really look at 2021 as a pretty… It’ll be really interesting, obviously, depending what happens in the White House race, but it could be a monumental, significant infrastructure investment that we’ve never seen before in this space if we take the right steps. So I do want to look ahead for a second before wrapping up. I like to talk a lot about 20… I have a thesis that the last 10 years are about setting the table for addressing climate, the next 10 years is about implementation and real action. Jon Powers: So I do want to step forward to 2030, but I’m just going to quote Morningstar here for a second, who looked at ESG investing during the trends, but also what’s happening here in our current recession and the positive story that’s actually to be told about how the returns continue to be positive in ESG investing. And we haven’t made it through a downturn yet, of course, but the trends are looking good. So looking at the work you guys have done since 2004, for you personally, it would be before that, what is the next… If you step forward to 2030 and look back, what does the next 10 years look like for ESG investing? Colin le Duc: Well, I think we’re coming to the end of the beginning of the mainstreaming of ESG. So I think there’s maybe three things to think about in the next 10 years. One is that the era of greenwashing, I think, is coming to an abrupt end. So there has been a lot of greenwashing, there’s a lot of focus by regulators on this right now. So I think that rigor of scrutiny around ESG claims for investors is going to be a major topic. Colin le Duc: Somewhat related to that is the second bit, which is reporting. So reporting will become mandatory on sustainability factors in a very serious way. And that is through the TCFD, through the EU taxonomy, through a whole bunch of other things. Because central banks in particular are trying to aggregate up an understanding of systemic climate risk. And they cannot manage central bank levers of change without understanding the level of risk that’s being run in the system. So they will be imposing that, so expect a lot more and a lot more rigorous reporting. Jon Powers: Do you feel like the standard is there in the US to accept that reporting? Colin le Duc: I think it’s coming. I think it’s coming. I think other areas of the world may be a little bit further ahead. But I think, obviously, the US, when it moves, it can move very quickly and is obviously such a powerful force in the global economy. And let’s not forget things like America’s pledge, where there’s so many businesses moving in this direction already, and states moving in this direction, and the innovation here is unparalleled, and et cetera. So there’s lots of very positive things to say about the US’s journey to reaching the Paris Agreement, despite their federal position currently. Colin le Duc: And I think the third thing is, I would say in the next 10 years for ESG is the notion of the end of incrementalism when it comes to transition risk. What I mean is a transition to a sustainable system. So, that is both in terms of transitions being imposed on us, through more extreme weather events, for example, shutting down economies like it’s done on the West coast of the US last week, et cetera, as well as transition risk being accelerated through marketplace changes or rule changes, shifting people to a much more transformational response to dealing in particular with climate, but other sustainability topics as well. Colin le Duc: So I think the notion that the markets are just going to be left to inch their way towards a sustainable system is basically naught. You can’t plan on that for the next decade I think there’s going to be very large, very profound changes, which will leave a lot of assets stranded that are not on the right side of history, and will accelerate the positive outcome from any other types of assets in economies. Jon Powers: I hope you’re right. I agree with you on the approach column. Thank you so much. And I’m going to end a question I ask everyone who comes on. But if you could go back to yourself, coming out of boarding school in London, and could sit down and, I guess in London, you probably could have a beer when you’re coming out of boarding school, what piece of advice would you give yourself? Colin le Duc: So, yeah. I think it would be… So I’m half Dutch actually. One of my favorite sayings in Dutch is, “Nee heb je, ja kun je krijgen,” which basically means that you’ve always got no, but you can always get yes. So my advice to myself would be, “Don’t accept no, because, basically go out and have the courage of your conviction and keep asking for a yes.” So, that would be my advice to myself. Jon Powers: That’s amazing. Well, Colin, thank you so much for the time and thank you so much for joining us at Experts Only. Colin le Duc: I really appreciate it, Jon. Thanks a lot. Jon Powers: Thanks so much for joining us at Experts Only. Really lucky to have Colin on today and to really get an in-depth look at a little bit of the history of ESG and where things are going. I want to thank our producer, Carly Baton and thank the team at Generation Investment Management for helping to put this together. As always, you can find more episodes at cleancapital.com, and I look forward to continuing the conversation. Jon Powers: Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes, or wherever you get your podcasts. If you like what you hear, be sure to subscribe and leave us a five-star review. We look forward to continuing our conversation on energy, innovation, and finance with you. 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Episode 76: Heather Reams [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” link=” target=” title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-jwwgyb48′ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwgxszg’ admin_preview_bg=”] Episode 76: Heather Reams [/av_textblock] [av_hr class=’invisible’ height=’10’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwl4lsb2′ admin_preview_bg=”] This week on the Experts Only podcast our guest is Heather Reams, Executive Director of Citizens for Responsible Energy Solutions. CRES is a right-of center non-profit organization based in Washington, D.C. that engages policymakers and the public about responsible, conservative solutions to address our nation’s energy, economic, and environmental security while increasing America’s competitive edge. Host Jon Powers dives into the conservative case for clean energy and how each of us can become better climate communicators. Check out National Clean Energy Week, happening now! [/av_textblock] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’20’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=’av-jwwgzkyu’ admin_preview_bg=”] [av_textblock size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” av_uid=’av-jwwh5253′ admin_preview_bg=”] Listen now: [/av_textblock] [av_hr class=’invisible’ height=’20’ shadow=’no-shadow’ position=’center’ custom_border=’av-border-thin’ custom_width=’50px’ custom_border_color=” custom_margin_top=’30px’ custom_margin_bottom=’30px’ icon_select=’yes’ custom_icon_color=” icon=’ue808′ font=’entypo-fontello’ id=” custom_class=” av_uid=’av-k4so2umi’ admin_preview_bg=”] [av_image src=’https://cleancapital.com/wp-content/uploads/2020/09/ExpertsOnly-bar-Reams.jpg’ attachment=’7784′ attachment_size=’full’ copyright=” caption=” styling=” align=’center’ font_size=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ animation=’no-animation’ hover=” appearance=” lazy_loading=’disabled’ link=’manually,https://link.chtbl.com/dnQPzFGz’ target=’_blank’ title_attr=” alt_attr=” id=” custom_class=” av_element_hidden_in_editor=’0′ av_uid=’av-k37p0z0j’ admin_preview_bg=”][/av_image] [av_hr class=’invisible’ icon_select=’yes’ icon=’ue808′ font=’entypo-fontello’ position=’center’ shadow=’no-shadow’ height=’40’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” id=” custom_class=” av_uid=” admin_preview_bg=”] [av_textblock textblock_styling_align=” textblock_styling=” textblock_styling_gap=” textblock_styling_mobile=” size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” template_class=” av_uid=’av-l6cbs4sy’ sc_version=’1.0′ admin_preview_bg=”] Transcript: [/av_textblock] [av_textblock textblock_styling_align=” textblock_styling=” textblock_styling_gap=” textblock_styling_mobile=” size=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” font_color=” color=” id=” custom_class=” template_class=” av_uid=’av-l6cbsrn5′ sc_version=’1.0′ admin_preview_bg=”] Jon Powers: Welcome to Experts Only podcast, sponsored by Clean Capital. Learn more at cleancapital.com. I’m your host Jon Powers. Each week, we explore the intersection of energy, innovation, and finance with leaders across the industry. Thank you so much for joining us. Jon Powers: Welcome back to Experts Only podcast. I’m your host Jon Powers. And today we have a really interesting conversation with the executive director of Citizens for Responsible Energy Solutions, Heather Reams. CRES is a right of center nonprofit based in DC, and it focuses on engaging conservatives and Republicans on issues of climate and clean energy. Jon Powers: They are hosting their fourth National Clean Energy Week. You can learn more at nationalcleanenergyweek.org. This annual conversation is focused on highlighting the progress of clean energy and helping to communicate the need for action. So, for those of us in the industry, it’s really important to be part of this conversation. And again, I challenge you go to nationalcleanenergyweek.org. Jon Powers: We learn from Heather not only about the progress that’s being made in Washington, but also ways to help communicate to a conservative audience and how to get some Republicans to take action on issues that we care about. So, thanks to CRES for helping to put this together, and I hope you enjoy the conversation. Jon Powers: Heather, thanks so much for joining us at Experts Only. Heather Reams: Hey, great to be with you. Jon Powers: Really excited to talk about the work you all are doing to help educate and engage conservatives and Republicans on clean energy. But before doing that, I want to step back and talk a little bit about you. Before we joined, you told me you grew up in Virginia Beach. What sort of got you interested in politics and advocacy? Heather Reams: Well, Virginia Beach is 200 miles south of Washington, DC, so I would come up to DC as a kid and was really captivated by these majestic buildings and what went on in them. Heather Reams: Virginia is also rich in history. We’ve got Williamsburg, Jamestown nearby. I really liked the history as well. So, as you get older and you’re, what are you going to be when you grow up, kind of junior year, senior year of high school, I really took a liking to what does this look like with something in Washington? A government class in my senior year kind of sealed the deal. Jon Powers: Wow. Heather Reams: And with that, I participated with some fundraising opportunities with those who were running for office and just thought it was exciting. And it had so many facets, whether it’s the communication side, the political side, the policy side. It mattered. That was the other thing, it mattered. Jon Powers: Yeah, of course. Heather Reams: Affecting change in some way. I feel like it was purpose-driven. So, I dove in. Jon Powers: And then you end up going to school at University of Washington and focusing on political science. And then did you intern in the Hill? What drove you to the Hill and sort of getting deeper on the policy side? Heather Reams: I interned for a senator from Washington state, Senator Slade Gordon, who actually just passed away and- Jon Powers: Had the honor of meeting him, amazing guy. Heather Reams: Terrific guy and a Republican from Washington state, too, so he really had a pragmatic approach that I really didn’t appreciate at the time, being just trying to get myself through school. And I put myself through school, so taking an internship meant I also wasn’t getting paid. Heather Reams: So, I had to pull out some extra loans to make sure I could participate. But thank goodness I did because that really sealed the deal that I did want to go to Washington. I wasn’t going to stay in Seattle and go to grad school, which was an option. Heather Reams: I also was offered a job in Senator Gordon’s office full time and decided no, I want to go to Washington and be where the action is. It was an easy enough move since I was from Virginia. So, I just started blanketing the Hill with resumes like every other kid who wants to get a job on the Hill. Jon Powers: Right. Outstanding. You ended up working for the senator from New Hampshire, Bob Smith at the time. Heather Reams: Bob Smith in New Hampshire. I was in Washington state. I’m a conservative. And being at the University of Washington, I was one of a handful of conservatives, especially in my poli sci classes where you could imagine it got heated discussions and a lot of difference of opinions. Heather Reams: So, I wanted to go to a super conservative member. That was what I wanted. I wanted a really conservative member, so I found a ranking I think in National Review or Weekly Standard, somebody, and started going down the list and prioritizing members by who was the most conservative and applying. Jon Powers: Wow. That’s amazing. That’s amazing. Did you focus originally on communications? Was there a policy area you focused on when you started? Where did you sort of cut your teeth? Heather Reams: I wanted to be a lobbyist eventually in some way. So, when you start on the Hill, especially in a senator’s office, they relegate you to the mail room. Jon Powers: Right, right. Heather Reams: So, was in the mail room, but in that, of course you feel like you should be making policy at the age of 22, you also recognize that in the mail room, you’re reading about everything. Jon Powers: Of course. Heather Reams: And you start to learn about the things that you care about or you have more of an interest in and things you don’t. You start to listen in on floor speeches or committee hearings that you like a little more. You start hanging out with different staff people who have this expertise. So, I liked a lot of things. It was a smorgasbord of policy really. Jon Powers: I bet, yeah. Heather Reams: I thought I would just maybe get in on the lobbying side at some point and let it flow. I eventually left the Hill to start lobbying because I thought these guys came in and slick suits and nice dresses. Jon Powers: Right, of course. Yeah. Been in a lot of those meetings. Heather Reams: And fancy shoes and handbags. I thought, well, wow, that’s nice. Why don’t I do that? Jon Powers: Right. When I first got interested in clean energy, I came to it in climate from a national security perspective. And John Warner had just retired from Virginia, so I had a chance to testify to the Senate. I testified with Warner, and he sort of adopted me. He and I did a bunch of work together for a few years. Jon Powers: It was just really interesting to see someone with his background come into these climate conversations. Your traditional sort of environmental community wasn’t exactly sure how to handle it. I mean, he was the former chairman of the Armed Services Committee. He was such a beautiful messenger on these topics and helped drive such significant change because of the way he sort of brought his message forward. Heather Reams: Well, you and I shared that in common with the Senator because when I mentioned my high school engagement with some politics in Virginia and being from there, he was there. Jon Powers: No, okay. Heather Reams: He was there, and it was just amazing, my first time I had met sitting Senator. At 17, 16, 17 years old, I was in awe. Jon Powers: Yeah, yeah. I was in my 30s and I was in awe. I had come to the Pentagon to an army energy conference after I’d taken the job in the Pentagon. And I don’t think I realized how respected he was by the military until I got a chance to walk him around and all of these four star generals were coming out to pay their dues to him. It was just a really amazing sight to see. Jon Powers: So, where in this path did you get interested in clean energy issues? Heather Reams: Later in my career, I’ll say. And I have worked on a number of issues being a public policy or public affairs professional. But what struck me, I mean, one of the things I’ve done in my career is finding ways for Republicans and Democrats to come together. I myself am a conservative, but for instance, I’ve done a lot of work on education reform where there is, how can we get things done together? Heather Reams: This issue seems to be one of those issues, climate, clean energy, where there are opportunities. Similarly, with education, the dialogue has been very much… I wouldn’t say controlled, but a lot of voices coming from the left, through teacher unions and others. So, what is the voice of the right, and how can they come into play? What does more compromise look like, and how can all votes rise? Heather Reams: That’s a lot of my background, but I’ll tell you when I really got interested is becoming a mom. I’ve got children who are now 11, 11 going on 21, it feels like, but 11 and almost six. Jon Powers: Wow. Heather Reams: There’s just something about passing on to the next generation and a responsibility that makes this work now more personal. And also it was professional work. Jon Powers: Yeah, of course. Heather Reams: But it makes it more personal about what you’re doing. It’s also seeing how being a conservative woman and mother, being just a voice out there that’s a woman, women care about these issues. Jon Powers: Yeah, of course. Heather Reams: Major voting block. And how can conservative women be bringing their voice forward? I mean, I’m working with all conservatives, but I think the women do have a important part to play. We care about the health of our children. We’re raising our children for the most part, not singularly, but we’re got an eye on that, a lot of us, even if we do work full time. Jon Powers: Yeah, right, especially today, when many of our kids are at home having to do school as well. Heather Reams: Yes, exactly. Anyways, that’s really where in the last few years has really it’s blossomed into something that’s both professionally and personally rewarding. Jon Powers: Yeah. Interesting. And so, I want to talk a little bit about the organization you lead, Citizens for Responsible Energy Solutions, because you said about being sort of the voice of the right on these issues. I think what you guys have done so well, and I’ll let you talk more about it here in a second, is take these issues that so many Americans care about and find ways to communicate and educate and advocate for folks that maybe aren’t traditionally as comfortable on these issues or understand them is a way that you can bring a unique voice. Jon Powers: What drove your interest in the organization? Can you talk for the audience who aren’t as familiar with CRES sort of the mission and what you all do? Heather Reams: Yeah. CRES is a nonprofit organization in Washington, DC. I’m the executive director of it. We engage Republican policy makers about conservative solutions to address our nation’s need for abundant, reliable, and affordable energy. But also we want to preserve the environment through this process, and we want to maintain America’s competitive edge. Heather Reams: So, from a conservative standpoint, we would see some policies that have been proposed by the left center to be too heavy-handed on mandates and can have a detrimental impact on jobs or the economy. So, we’re looking to create more of a balance to the economic energy and environmental needs of our nation. Heather Reams: I mean, everyone will say that, right? We want to do that. Jon Powers: Of course. Heather Reams: But I think with Republicans, it’s more woven in to our policies. We don’t say this is just our environmental policies. Conservation is a part about what Republicans have done and have been for generations. Heather Reams: Many always point back to Teddy Roosevelt, but the EPA was created under Nixon. Lest forget. So, getting the politics out of it and looking at just the policies, where do Republicans, how do they want to engage? And they do. I think the messenger and the message has been off for a period of time now. We’ve gotten off track. And who suffers? Well, our planet, and we all will. So, getting us back to navigating to a common sense place where all votes rise is what we want to do. Jon Powers: Yeah. And what you guys focus on, is a lot of education and advocacy for specific topics to these policy makers? And how do you sort of go about doing that? Heather Reams: Yeah. A lot has changed in the last, the last four or five years. First of all, if you said the term climate change to a Republican member, they went running down the hall with hair on fire. You can’t do that. That’s changing in the last couple of years. Heather Reams: What really was starting about the economic message about the value of clean energy, the number of jobs it brings into a state or district. That’s not just the energy generation, but it’s also the other kinds of jobs that are there, the manufacturing, the shipping. There’s just a lot that’s there. Heather Reams: So, when you can go and talk to a member of Congress from an oil and gas state, let’s say from Louisiana, and then talk about the importance of the ports in Louisiana and New Orleans and others, and what comes through there in terms of supplies and parts, and how important the shipping is for that, it becomes a different conversation. You’re not having a conversation about which kind of energy is better. You’re having a conversation that’s about economic development. Jon Powers: Of course. Yeah. Heather Reams: It changes the dynamic of the engagement, and that framing matters. That’s why I think we and others like CRES have been able to move the needle with Republicans. You see much more support from Republicans than you ever had because we’re getting out of the which energy is better conversation. Jon Powers: Interesting. And so, in those conversations, and you talked a little bit about the economic impact, what do you find is the most… If I’m going to turn to an audience member, say, maybe a solar developer in Georgia or South Carolina, what are the messages they should be taking in to their conservative or Republican lawmakers to help them build the support to get good sort of clean energy policies out there? Heather Reams: Certainly number one point to the jobs, on the job creation and the potential for jobs, especially if a piece of legislation is holding it back or a tax credit that needs to be renewed, for instance, what it would mean in terms of jobs and economic impact. That’s number one. I mean, that’s like number one and two. Put it that way. Jon Powers: Right. Heather Reams: Also, that if a lot of members tell us they’re all the above, which means all kinds of energy, well, solar is in all the above, right? Jon Powers: Yep. Heather Reams: Right, we’re part of that. So, in competition and having different energy sources and choices for consumers is good. And the likelihood of the competition lowering the price for consumers is good. So, all the above and the consumer cost piece of it. Heather Reams: I think the other piece is the what can be, the energy innovation, the advanced technology, the research and development pieces that are going into this, into universities that industry is putting in there into jobs. We’re especially thinking about university systems and whatnot. Heather Reams: But the idea of energy innovation, this is the future. We’re thinking about the future. People like me are innovators and investors. It’s where the industries are going. Wall Street’s there, or industry is there. We’re helping policy makers get there as well and get good ROI from the taxpayer. Jon Powers: Yeah, absolutely. No longer this is a emerging market, the clean energy market. It’s a mainstream play where you have significant capital moving from all versions of Wall Street to institutional investors into the space. Jon Powers: What’s interesting is you have, from a state perspective, some very strong… I think about Charlie Baker in Massachusetts, the governor South Carolina. Virginia even, it’s a democratic state, it’s traditionally been pretty conservative, just passed some really groundbreaking clean energy policies, getting a group like Dominion to actually move on these issues. It’s really fascinating to see this emergence that’s happening. Jon Powers: If we could flash ahead, I talk a lot on this show about 2030, because I think the next 10 years are so critical for us to solve these climate challenges, what do you sort of see over the next 10 years in the conservative space to help move these issues forward? Heather Reams: Yeah. I’m a pretty big advocate on taking advantage of opportunities. We’re in a political quandary right now, I guess, leading up to the election, but we also are in a kind of a disastrous situation in dealing with COVID. I think there’s some opportunity to talk about community preparedness and what that means beyond the solar and thinking about CHP or different kind of microgrids or distributed energy. And we’ve got Hurricane Sally just having hit the Gulf. Jon Powers: Sure, of course. Heather Reams: And we’ve had a number of hurricanes this year, the fires out west. I think that the electorate, and I think as a result of the policy makers, are in tune to how to plan for the future. I think there’s more of that. I’m not saying it’s the climate change and it’s the Celsius type of argument because I don’t know if that’s as effective as how are we planning for the future, and this is a role that’s appropriate role for government. I see that as a very big lens right now over the next couple of years. Jon Powers: Interesting. Heather Reams: That needs to be an undergirding. It’s becoming just more and more apparent to me, especially as we just see one challenge to our nation after the other coming our way. That’s one piece I think is important. Heather Reams: I think the other is how do we get out of the picking winners and losers? I don’t mean that in terms of the energy generation, but also of things being more tech neutral. Who knew that we’d be using Zoom even a year ago or anything, much less an iPhone 10 years ago? You don’t know. Heather Reams: That’s the the exciting part about innovation is we don’t know where it’s going, but having something more tech neutral, I think frees up Congress members to make decisions about getting out of what they’re for when those members need, that they need to be pro solar, but they also can be pro all the above. Giving that more tech neutral approach I think is there. Heather Reams: We also unfortunately have a problem with some members of the Republican party on tax credits and is there a giveaway? It’s considered government giveaway. This is actually proven to show it’s spurring good innovation investment. I don’t know how we get out that- Jon Powers: And jobs. Heather Reams: Yeah, and jobs. How do we get out of that line of what’s the appropriate role for government. And showing the success stories, I think we need some more education there about how to move forward. But those are some opportunities that I see. Jon Powers: We’re going to talk here in a second about National Clean Energy Week, but one of the things that we talk a lot the show is about my background is in policy, but I actually got into the finance space. Actually, there’s not a lot of policy makers that understand finance, and the ability to actually in this next phase of policies around clean energy is how to unleash the market. Jon Powers: I mean, there’s really a significant amount of progress right now in the sort of ESG space right now, where there’s significant funds moving in sort of record numbers every quarter. I mean, the head of research at Morningstar actually just reported recently that during this economic downturn, sustainability investing, so investing in things like clean energy, has not taken a downturn. Jon Powers: The numbers continue to be positive, and it’s making its way through a recession, and we’re going to come out of the back end with more capital moving in this market. So, how do you unleash that capital? I think interestingly you said it may be tech neutral, but really it’s not all about the public dollar. It’s about unleashing these private dollars to get some of the stuff moving forward. Heather Reams: For sure. I think it’s also, this is what I’ve observed on Capitol Hill over the last four and five years, is the message in the messenger. And then the messenger is coming through is someone who’s had an association who used to work for a democratic member of Congress. So, they’ve already had that lens of at a trade association, for instance, doing that. Heather Reams: I think we do need to have more of the people, probably your listeners, coming together in and briefing members. And it’s something certainly my organization would love to be part of, and being that new voice, new kind of voice, and getting out the same old, same old with trade associations. There’s nothing wrong with trade associations, but I. And the messengers sometimes are not going to be the right people to bring forward to Republican policy makers. It’s just a fact. Jon Powers: No, it’s a fact. I think having people who having been on the other side of the table, when you can come and say, we own a project in your district, it’s way more powerful than the head of a… nothing against lobbyists because I know you come with that background. Heather Reams: Oh yeah. Yeah, no. Jon Powers: It’s way more powerful than the person you saw the week before pitching another issue. Jon Powers: Let’s go to National Clean Energy Week for a second, which is a really amazing initiative. And you have such a breadth of sponsors. Talk a little bit about why you guys started National Clean Energy Week, sort of what’s the purpose, and how you got such an array of folks involved in this. Heather Reams: I came to CRES, and when you’re coming on as the new director, you’re supposed to bring in all these good ideas with you, fresh ideas. You kind of assess what’s there. So it’s like, okay, well where’s the awareness week for clean energy? And you have people around you saying, “Well, there’s Earth Day.” I’m like, “Ah, we’re Republicans. Earth Day?” You know? Jon Powers: Right, right. Heather Reams: Where can Republicans engage if we know that there’s some political challenges maybe with Earth Day? Jon Powers: Yep. Heather Reams: There’s a day or awareness week or month for like everything, right down to donuts and martinis. I couldn’t find one for clean energy or for really renewable energy, just couldn’t find anything. There’s climate week and looking at that, but just clean energy. Heather Reams: This is in 2017 when we have a new administration just coming into play with Trump and a lot of questions and new secretaries and a lot of talk about the economy and jobs. And I thought, economy, jobs, and clean energy, this is where it’s at. This is the dialogue. This is it. Heather Reams: So, we pulled together. I talked to a few friends at trade associations, the ones I said sometimes aren’t the best messengers, but for this, looking like this is the solar association, here’s the wind association, and making it also big tent. Who’s interested in lowering emissions? Who’s interested in Washington about lowering emissions? Nuclear is into that. So big tent, getting out of the politics and just thinking about big tent lowering emissions. Heather Reams: And we created a steering committee that are now with CRES Forum, which is our C3 arm. And 12 other organizations created the steering committee. And we had a number of calls. First of all, they’re like, who are you, and what do you want? It’s like, I really just want you to help me build this, help me create panels, help me bring people to the table. Heather Reams: People were kind of like, we’ll see it when we believe it, but now we’re in our fourth year, and it gets bigger and better every year. The undergirding this whole thing is one thing. Clean energy is good. Lowering emissions is good. Heather Reams: However you want to take or an organization wants to take that message forward and to expand upon, that’s up to them. That’s not National Clean Energy Week. That’s not what we need to do. We just want to create an opportunity to create awareness about the value of clean energy. And there is a lot of value as we know in clean energy advancement. Jon Powers: Yeah. And it’s such a diverse group of speakers. I think folks should check out nationalcleanenergyweek.org. If you haven’t signed up, definitely sign up. This is coming out sort of parallel with that. And you’ve got folks like Paul Tonko, who’ve been a great advocate on the left, and Senator Murkowski on the right talking about these issues. Jon Powers: I think it’s very, very exciting and really an important dialogue. Your main audience here is Washington. It’s like, how do you sort of focus the message on getting those folks to take action? Heather Reams: Yeah, in Washington, but also we’ve partnered with some state groups as well to bring some of the more local issues into place, because we all know what’s happening. Federal affects state, and state can affect federal, right? Jon Powers: Of course. Heather Reams: And you’re thinking about issues like net metering or citing issues that we’ve had, property rights issues we’re bringing into this year. From a corporate but also right of center, how Republicans can engage in these issues is a lot of what we’re doing. We know there’s a lot of support on the left from these issues, generally expansion of clean energy, but we’ve got to also bring that same message and messenger down to the state and local levels as well. Heather Reams: So, we’ve got some case studies in states, from Colorado and Texas, from the Midwest and citing issues, from the Southeast and net metering issues. We’ve actually got a little something for everybody. But yes, then we also look at a higher level, talking about finance and investment for instance, and talking about innovation kind of at a national level, since there is where conversations tend to happen, it can be most influential to get policy changed and get it downstream. Jon Powers: Yeah. What a diverse group of organizations involved covering all spectrums, I think all parts of the industry. It’s great. It definitely is worth flipping through the participating organizations just to get a sense of the diversity of voices that are coming to the table on this. So, thank you so much for organizing. It’s such an important conversation. Heather Reams: Yeah. And we really want to invite your listeners. There’s a lot of ways to engage. One, there’s a policymaker symposium that we do every year. This year with COVID, everything’s virtual. But with that means that we get to reach more people, and we’ve put a five day symposium on as opposed to one day. That’s really all our major programming we’re putting together in one place. Heather Reams: But a lot of people are having events in their own areas. My goal eventually would be if you are doing something in the clean energy space, you’re just taking this week, even working with your staff and saying, we’re doing good things here, we’re doing good things in clean energy, and making it just a place for us to pause and remember the value that we’re doing and being that mission-driven. Heather Reams: Some of us are still mission-driven, what we’re doing. And it’s nice to reflect upon that the good work you’re doing and then sharing it with people you know. Your children, I mentioned that the top of our conversation, it matters. I tell them about what mommy does, and they’re very proud. Jon Powers: I challenge everybody to listen at four o’clock on Monday who are survive, thrive and dive panel where I’m talking with some great finance folks, but there’s just phenomenal panels and a lot to learn. Looking forward to today, we can actually fly in again and advocate around this event. Jon Powers: Just to step back, let’s look out sort of post November, because obviously the whole country is sort of locked up thinking about what’s going to happen in November, what’s ahead for America on these issues? And will we really begin to see sort of bipartisanship begin to emerge on clean energy and climate policy? Heather Reams: Well, I think what we have to find those common denominators. I’ve talked about the economic piece of it, and I think getting America back to work is a pretty important part. I think what we’re seeing now is we’re seeing a lot of research on and information about how robust the energy sector, clean energy sector has been, how it’s been growing and outpacing the other growth in other areas of the economy, and how it’s taken a beating in some areas. But also it’s been fairly resilient, too. How do we get people back to work with tomorrow’s jobs? Heather Reams: The clean industry sector, it’s not the only place, but if you were thinking about getting Americans back to work, whether it’s in the rural areas or the urban areas, at every state and every district in America, clean energy is there. And I mean, that is- Jon Powers: It’s amazing. Heather Reams: … pretty amazing and exciting for anybody who wants to problem solve. And we’d like to thank our elected leaders. We get excited by that. Jon Powers: Yeah. Hope we can get back to that after the election. Heather Reams: Yeah. The politics right now, you have to have pretty thick skin right now. But on the other side of that, we know that Americans want to see something done. And I think the polling that CRES has, my organization has done over the last couple of years, Republicans are there on clean energy, and they’re really coming around on climate change. Heather Reams: So, culture wars are really falling aside. I think it’s how we get there is where you’re starting to see the disagreements. It’s not the climate and the science. I’ll set aside the president. I know a lot of people will say the president says whatever, but everything’s still going on. There’s two of Pennsylvania Avenue. Jon Powers: Right. Heather Reams: Yeah, but I think there’s just a lot that’s happening, and people want it. I mean, consumers want it. So, we know consumers, they have a lot of power and voters. When they want something, the market usually responds. That’s what’s going to happen. Jon Powers: Yeah, I agree. Heather Reams: It’s just being there, being ready, and educating and advocating. Jon Powers: Oh, excellent. Well, we hope to continue to share this message and have a similar conversation next year around National Clean Energy Week. Jon Powers: One final question I’ve got for you, Heather, I ask all my guests. If you could go back to yourself in Virginia Beach, your senior year high school, or when you’re graduating from college in Washington, and could sit down and just have a conversation, what would you tell yourself? Heather Reams: I would tell myself to be a little bit more patient with the- Jon Powers: Oh, interesting. Heather Reams: … the process. Yeah. I said, “These lobbyists look pretty slick,” and you just want to do something really fast sometimes. And it takes time. It takes time. You got to build, you got to build, you got to build your knowledge. Heather Reams: I mean, what I know now and how Washington works and to be effective is pretty incredible, not everything, but compared to where I was. We all wish we had the knowledge we did when we were younger, but there’s a patience part of this, I think, that I would’ve benefited from. Jon Powers: Yeah. Interesting. Jon Powers: Well, Heather, first of all, thank you so much for the time. And thanks for being a guest here at Experts Only. Heather Reams: I am thrilled to be with you. I hope we visit again soon. Jon Powers: Absolutely. And again, I challenge all of our listeners to go to nationalcleanenergyweek.org and sign up to listen to some of these amazing conversations this week, and hopefully next year, take action and fly in to advocate for some of these issues. Jon Powers: I want to thank your team and thank Ross particularly for helping to put this together, and our producer Carly Battin as always for helping to put together these episodes. For more episodes, you can go to cleancapital.com. As always, I look forward to continuing the conversation. Thanks. Jon Powers: Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes, or wherever you get your podcasts. If you like what you hear, be sure to subscribe and leave us a five star review. We look forward to continuing our conversation on energy, innovation, and finance with you. 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