Solar and tigers and bears oh my! It’s not everyday you get to help install a solar system…it’s also not every day you get to do it in the jungle with elephants and rhinos passing by… Earlier this month I took an incredible trip to Nepal with GRID Alternatives where I helped install a 1.2 kW off-grid solar system in the Chitwan National Park. Often in the clean energy space, unless you are a developer or installer yourself, us computer and desk laborers can feel fairly far removed from the technology and often our knowledge of the technical side of the business can be intangible and learned only from drawings and maintenance reports. I wanted to get my hands dirty and help build a system from start to finish. Continue reading “Solar and tigers and bears oh my!”
North American Clean Energy: Solar Finance Pioneer CleanCapital Closes 3.7M Investment Round to Help Investors Tap Solar Market
Episode 9: Alicia Seiger [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ align=’center’ styling=” hover=” link=’page,249′ target=” caption=” font_size=” appearance=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ copyright=” animation=’no-animation’ av_uid=’av-jwwgyb48′ custom_class=” 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=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwwgxszg’ custom_class=” admin_preview_bg=”] Episode 9: Alicia Seiger [/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=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwl4lsb2′ custom_class=” admin_preview_bg=”] This week, Jon Powers is joined by Alicia Seiger, Deputy Director of the Steyer-Taylor Center for Energy Policy and Finance and Managing Director of the Precourt Institute Clean Energy Finance Initiative. This episode’s conversation focuses on the evolution of academic thinking on climate and finance and also what is driving the business case for investing in clean energy. Alicia leads the center’s work to develop and deploy financial innovations for philanthropic and long-term sources of capital to catalyze rapid decarbonization of the global economy. Ms. Seiger co-founded the Aligned Intermediary, an investment advisory group helping large-scale investors channel capital to resource innovation. She also serves on the board of PRIME Coalition and Ceres and advises student entrepreneurs building climate solutions. Alicia holds an MBA from the Stanford Graduate School of Business and a BA in Environmental Policy and Cultural Anthropology from Duke University. [/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’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwwh5253′ custom_class=” admin_preview_bg=”] Listen now [/av_textblock] [av_textblock size=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwl43nfd’ custom_class=” admin_preview_bg=”] [/av_textblock] [av_hr class=’default’ icon_select=’yes’ icon=’ue808′ position=’center’ shadow=’no-shadow’ height=’50’ custom_border=’av-border-thin’ custom_width=’50px’ custom_margin_top=’30px’ custom_margin_bottom=’30px’ custom_border_color=” custom_icon_color=” av-desktop-hide=” av-medium-hide=” av-small-hide=” av-mini-hide=” id=” custom_class=” template_class=” av_uid=” sc_version=’1.0′] [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-ksgfri59′ sc_version=’1.0′ 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=” template_class=” av_uid=’av-ksgg39k4′ sc_version=’1.0′ admin_preview_bg=”] Jon Powers: Welcome to the Experts Only podcast, sponsored by CleanCapital, where we explore the intersection of energy, innovation, and finance. Our host is CleanCapital’s co-founder and former Federal Chief Sustainability Officer Jon Powers. Learn how CleanCapital is revolutionizing clean energy finance, and find more episodes at 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. Jon Powers: Welcome to CleanCapital’s Experts Only podcast. Today we’re talking to Alicia Seiger, the Deputy Director of Stanford’s Steyer-Taylor Center for Energy Policy and Finance. We’re really going to explore the evolution of some of the academic thinking on climate and finance, but also Alicia has been a real leader at helping to drive investors into investing in the climate space. She wrote a recent paper and argued that the business case for acting on climate change has never been stronger, and never more urgent. We look forward to exploring this with her. Alicia, thank you so much for joining us here at CleanCapital’s Experts Only podcast. Really looking forward to talking about some of the things you’re seeing at Stanford. Focusing on the intersection of energy, innovation and finance, but really wanted to start off before getting into that, and really explore a little bit of your personal journey in this space. You’ve had an interesting career, that’s gone from foundations, to NGOs, to the investor side, and obviously now working at an amazing university. Can you talk a little bit about your career, and how you ended up where you are today? Alicia Seiger: Sure. I can trace it back to my freshman year in college, for a standard writing course requirement. I was charged with reading Earth in the Balance, and was really struck by what Al Gore articulated in that book, and transfixed by the challenge of harmonizing human and natural systems. That was early enough in my college days that I was able to shape my curricular experience around it. Did a program where I could design my own major, and put together a major in combining environmental science and policy, and cultural anthropology. Was able to write a thesis pursuing intellectual property rights for indigenous peoples as a means of preserving cultural and biological diversity, which I thought was really cool and interesting at the time. When I got out, I realized it was really hard to find work in [inaudible 00:02:26], or at least that would pay you anything. Alicia Seiger: Fortunately I was from the Bay Area. I came back here and got in early on the first wave of tech innovation, or I should say internet innovation. Found I really loved and thrived in an entrepreneurial environment, was taken by sales and business development roles and thrived in that space. At the time, I spent that chapter working for an internet advertising company, and keeping the internet free. Wasn’t quite enough of a mission for me to feel sated. At least the side of me that really wants to work for passion. I left that post, went and pursued my MBA at Stanford, and wrote my admissions essay on finding the intersection of sustainability and entrepreneurship, and developing market-based solutions for environmental problems. Seeing business school as a path towards being able to do that on my own as an entrepreneur, which is where I knew I liked to be. Alicia Seiger: I’m one of the few people. Jon Powers: Be fascinating to go back and reread that today. Alicia Seiger: Yeah. Hearing what they said they wanted to do. It was hard when I graduated from business school. The really clean tech hadn’t begun in earnest. There were few opportunities for entrepreneurship and impact to come together. I stuck around, wrote case studies for a couple of years for the Center for Entrepreneurial Studies here at Stanford. Then finally found that intersection at a company called TerraPass, which was one of the early pioneers of the carbon offset industry. The voluntary offset market in the US. Alicia Seiger: After the birth of my first child, wanted to change my pace a little bit. Having a startup at home, I didn’t need also one during the day. Jon Powers: Right. Alicia Seiger: I started working as an independent consultant for foundations, NGOs, and family offices, picking up projects around climate and energy strategy, broadly. That’s where I really saw a disconnect between best intentions of philanthropy, and through the scale and scope of the need. When I had seen the Steyer-Taylor announcement of the Steyer-Taylor Center, and having both gone to Stanford and then worked at the Center for Entrepreneurial Studies, I knew these centers could be really interesting places to affect change. I logged a pitch in there, started in as a consultant, and I’ve been here now five years. Jon Powers: Talk a little bit about what the Center does. Alicia Seiger: Sure. The Center is a joint initiative of the business school and the law school. Our mission is to explore and develop economically sensible policies and financial mechanisms, to scale up financing for deep decarbonization globally. Bit of a mouthful, I realize. Jon Powers: Right. It’s a good mission, though. Alicia Seiger: Right? The way I think about centers, particularly at Stanford, is that they’re really in their best form of bridge between academics and markets. They all have an anchor of a faculty member, but they’re able to bring in practitioners who want to spend some time thinking deeply about really critical issues in interdisciplinary fields, and developing thought leadership to bring back to the market, but also to bring to the campus community. I think about this role is a continuation of my entrepreneurial path. In this case, I’m able to leverage the assets of Stanford University, including faculty, students, alumni, and the physical plant, through megaphone, and convening power we have, to develop and deploy climate solutions. Jon Powers: In your experience at Sanford, not just at the Center, but going back to even being a student, how have you seen the students’ interest change in climate and energy? Then also parallel, in financing, getting them interested in climate energy? Alicia Seiger: Yes. I saw Al gore speak here in 2005. At that time, there was certainly interest among students in sustainability issues, but finding the right channel for it. I’d say a couple things in particular have evolved. One, the language and specificity around how to develop curriculum and programming, that advances solutions and learnings in climate and energy has evolved. It was from sustainability, although in some ways it has come back to sustainability, in the nomenclature. Thinking of things as environmental issues, to an appreciation that climate is not an environmental issue, but in fact, a macro economic and productivity issue. Its pervasiveness, in terms of approaches to the challenge. Different avenues in different disciplines to approach the challenge has evolved. The students themselves are coming in now, with deep experience and expertise in related fields and roles. Alicia Seiger: They’re not coming out of investment banking and saying… I mean, some are, and saying, “I want to use this time to reinvent myself, and learn about stuff I had not been exposed to.” Then go off, and do something completely different. Many of them are coming in having worked in resource efficient innovations in various stages, before coming into Stanford, or working in the energy sector, even in the oil and gas sector. Developing knowledge and expertise they can then redeploy towards innovative solutions on their way out. The expertise and experience of the students has really evolved over time, in ways that I continue to be impressed by. Jon Powers: I want to dive, in a minute more into some content. Some of the stuff you’ve been working on and writing about. To stick with the academic track for a second, when you look across the way things have developed, if you had the ability to change some of the curriculum within the MBA track, or find ways to take the folks in the engineering school and the folks pursuing their PhDs, and make sure that they understand the business side of what they’re trying to achieve, what changes would you make? Alicia Seiger: I spent a fair amount of time thinking about this, although I’m not an academic, but having been a student, and being an alum and thinking about these issues deeply. I do think, particularly among MBA programs, there’s a lot of work to do here. Jon Powers: Right. Alicia Seiger: They’ve captured the themes of social innovation, impact investing, and even to some degree and in some programs, sustainability, but climate change is so much bigger than that. An understanding of it shouldn’t be confined to the self-selecting good kids who seek out those courses and themes. The motto here at Stanford is, “change lives, change organizations, and change the world.” My soap box I like to stand on in response to that is, “Fulfilling that mission really requires empowering students with knowledge, framework, and exposure, to the risks and opportunities they’re going to face as a result of a changing climate.” Alicia Seiger: That’s regardless of what sector of the economy you’re going into. Regardless of the role you’re going to play. We need to be training 21st century leaders for 21st century challenges. We are underdeveloped in that area, and it’s something that I’m working on. Not because I’ve been asked to, but because I care deeply about it. Trying to get more curriculum up here at the business school, I’m going to start teaching a class at the law school I’ve designed around some of these issues. Although trying to tailor it for law school audience, which is a challenge for me personally, having never been to law school. We’re going to have slots for other graduate students, so we’ll be able to bring in engineering and business students into that course. It’s a small seminar course. Alicia Seiger: Also, excited about a program that’s going to be happening at Duke in the spring. The woman Katie Kross, who’s leading that, has reached out to me, to help join a planning committee that is doing exactly this. Working with a coalition of other leading business schools, to try and really reinforce this idea that the climate change and climate leadership are central to an MBA curriculum. That students really need to be exposed to these issues on develop deeper understanding of the risks and opportunities they’re going to confront as a result. Jon Powers: Yeah, it’s so important for folks to understand that it really permeates everything we’re doing. Alicia Seiger: Mm-hmm (affirmative). Jon Powers: When I was working at the Pentagon, one of the things we were really trying to push down, was the effect of climate. Whether it be you’re talking about the mission in Sub-Saharan Africa, or in the Pacific Rim, or you’re talking about building out an installation here in the United States, and making sure it’s out of the hundred year flood water maps that they completely be rewritten here, in the next few decades. Alicia Seiger: You know, one other thing I just want to capture, and maybe we can throw this back in somewhere, but you asked a good question about how you navigate sitting at the intersection of academia and finance. It’s a tricky intersection to navigate. Jon Powers: Yeah. Alicia Seiger: I just want to answer that with a, “Carefully.” I’m always trying to keep in mind the mission of a University, and the unique role we can play, and the roles we should avoid, in terms of trying to do things the market’s going to do more efficiently and effectively. Think about that and in what I distilled into a tagline for the center, but it’s to innovate, teach, and connect. We come up with good ideas that can be distributed through traditional channels of peer reviewed journal articles, as a traditional product of academia, but also white papers, and short thought pieces that are easier to disseminate and digest. Alicia Seiger: Then we have a teaching mission obviously with the students, but also with practitioners, and bringing people together. Not only just bringing them together, but bringing them together in a learning posture without any hints of advocacy. That’s a unique role that academia can play. Then I try and keep myself grounded in the real world. I serve on a number of boards, and advise companies and students, and do some consulting work, just to make sure I’m grounded in what’s really happening. Academia can have a tendency to be walled off to what’s really going on and make the perfect ‘the enemy of the good’ and all those sorts of things. I really try and avoid that. Jon Powers: It’s really interesting. Having spent some time at Stanford in some previous roles in Silicon Valley, it’s really being at that heart of action out there, has made us such a unique community. Whether it be the Hoover Institute, or some of the other really, really interesting dialogues that happen on the University are excited. Alicia Seiger: Yeah. [inaudible 00:12:25] lucky, because so many people come to us. Jon Powers: Right. Alicia Seiger: We can get a very diverse mix of ideas, and voices, and diverse in terms of viewpoints, but also in terms of geographic diversity and sector diversity. People come from all over the world, and pass through here. Jon Powers: Let’s change focus a little bit from the pure academic side, and talk a little bit about some of the work you’ve been focusing on. I’ve read some of your recent papers. One, I think, you published a really good friend of mine, Kate Brandt. It’s really exciting to look at the message investors hopefully are hearing about the opportunity, in terms of investing in climate, investing in clean energy. One of your recent papers, you argue the business case for acting on climate changes has never been stronger, and also never been more urgent. It really does seem we’ve crossed a threshold, where this went from an issue of doing good, or doing well for the planet, to now this is about real cost savings for companies. This is about profits. It’s about companies that really are driving efficiency through sustainability. Can you talk a little bit about the evolution of the market and why it’s, this time today, so critical? Alicia Seiger: Yeah, sure. Shout out to Kate, too. Jon Powers: Of course. Alicia Seiger: Let me break it up into the two fronts. As far as the evolution, one is the science and impacts. If nothing else, climate change is very good at reminding us of its occurrence. There now just a relentless onslaught of data, to keep it front of mind and top of mind. A simple survey of the headlines of the last seven days, both domestically and internationally, will give you that. A couple of data points I often reference are 10 odd years on record since 1998. Hottest year ever was 2016, which shattered the record from 2015, which broke the record of 2014. You get the idea. Jon Powers: Right. Alicia Seiger: Another really compelling data point I look to is the, “So what of that?” Which I then look to the economic impacts of extreme weather. If you look back, starting before 1990 to 35 years prior, there was an average of one, or excuse me, the average number of billion dollar losses was five per year. That’s globally. In 2016, there were 15 weather and climate related disasters, that exceeded a billion dollars in losses in the US alone. Jon Powers: Wow. Alicia Seiger: We’re talk about the last… If you just add up Harvey and Irma, we’re going to be off. Harvey’s already estimating over $100 billion. We’ll see where we end up with Irma. The economic impacts of climate and weather disasters are becoming un-ignorable, both in terms of private sector and also government policy, in terms of how taxpayers are going to have to respond to paying for these storms. Then you’ve got lots more scientific data that we could go through. I’m not an atmospheric scientist, and there’s plenty of data out there. I frankly don’t want to spend a lot of time on that debate, but those are my two favorite statistics for just setting the stage on the science and impacts. Alicia Seiger: The market evolution is really interesting. I look to summer of 2012 as a big turning point, or start of the dominoes falling, with Bill McKibben’s Rolling Stone article, Global Warming’s Terrifying New Math. What that did, you can watch these dominoes fall. It really started the divestment movement, which in turn started a conversation among CIOs, that hadn’t been taking place before. Force that conversation, but in forcing that conversation, a couple of things happened. One, you had some people that were really compelled by the morality of it, and started to get way more proactive than they would have otherwise. Looking for economic arguments, but also starting to make decisions just purely based on moral values. Alicia Seiger: It also ignited a series of efforts, that started to really quantify the economic impacts. Great work from folks like 2 Degrees Investing Initiative, and CDP, that started to really do the math on stranded assets, make the economic case for the oil and gas sector. Then you had the risky business report come out, that really made the economic case for the whole US economy. You started to hear Bill McKibben’s voice, you’re getting Mark Carney’s voice, and Mike Bloomberg’s voice, and two former US Treasury Secretary’s voice, sounding the alarm bell. That’s a big change in four years. In the middle of that you had, or towards the end, I should say you had, you had the Paris Agreement, and you started to really see an evolution of leadership, and data, and action around markets at a scale and scope that you really hadn’t seen before. The dominoes are down now. Jon Powers: Right. Alicia Seiger: One of the things I’ve observed, that I find interesting about this, from the investor perspective, and track progress of different types of asset owners. One of the things I find interesting is folks that started with the environmental posture, and coming at it, even from even the moral side, or just as thinking of climate as an environmental issue, have in some ways been slower to act, than those to just been looking at the data or the numbers. You’re seeing case in point. You’re seeing BlackRock, and Vanguard, and these big institutional investors, that aren’t acting on moral grounds, making tremendous steps and strides, in terms of mandating climate risk disclosure, and publishing reports, and voting proxies, to a degree that’s even bolder than what you’ll see from some university and foundation in balance. Jon Powers: Yeah, it’s interesting. I feel like with the university endowment side, where there’s the invest, the divest movement has been incredibly powerful. It’s driven by so many different factors, which involve students and alumni. There’s a strong case to be made for that to happen, but lot of them have struggled to make the next step, which is the invest step. Alicia Seiger: Mm-hmm (affirmative). Jon Powers: We understand why we should be divesting from these fossil fuels, but why are clean energy projects very solid investment to be making. You see insurance companies, and others. Full disclosure, at CleanCapital, we have Jon Hancock, the life insurance company, invested in a lot of our projects. They see the long-term potential of these deals, and recognize the great cashflow involved. As you said, BlackRock, Vanguard, and others, are starting to come along. How do we take those divestors, and move them to the next step? Alicia Seiger: Yeah, such a good question. We spend a lot of time thinking about this at the Center, have launched an investor round table series called Investing in a New Climate, to help bring asset owners together by cohort, to talk about this stuff. One of the things I’ve observed, that I just find fascinating and frustrating at the same time, and it gets back to my origins story, but it’s the cultural anthropology side. It’s the people problems. You’ve got, particularly for law, endowments. Large asset owners, that are supposed to be acting like long-term investors. They’re organized in a fund-to-fund model. They’ve been operating a certain way for decades, where they’re looking. They’re picking managers based on track records. Some long standing relationships where they’re being forced to confront really new ways of thinking about resources, and resource efficiency and availability, and new risk factors, and data sources, and tools, and strategies for managing that. Alicia Seiger: Yet, they’re still very much stuck in the 10, 15 year track record model. That, and it needs to be a 2 and 20 closed-end fund, because that’s what I know. Give me the product that looks exactly like all the other products I buy Jon Powers: Make it easy. Alicia Seiger: That’s run by someone who’s been doing it for 10 years. You can’t, it doesn’t work. You need new teams, with new experiences, that they’re not going to have that 10 year track record because it’s new. The models that worked for other asset classes don’t work for these themes and types of assets. They demand new models. Sometimes they do work, but oftentimes it demands new models. You’re recognizing the need for change, but have institutional and human capital barriers, that are preventing… Forget incentive structures and governance, that are preventing the scale and speed of transformation on the invest side, that is required. Jon Powers: Yeah. It’s interesting. Going back to your Bill McKibben comment earlier, about the dominoes beginning to fall, it’ll be interesting to see now, was really exciting is post-Trump administration, not to make this political by any means. The Trump administrations pull out a Paris announcement. All of a sudden you had literally hundreds of companies come forth and say, “Wait a minute. We’re not doing this because of Paris. We’re doing this, because this makes awesome economic sense, whether we’re Google, or Apple, or GE, or whoever. We’re making these major commitments, because this is great for our bottom line.” Jon Powers: Hopefully that business case now begins to permeate with some of those fund managers as a [inaudible 00:21:16] managers. It’s still going to be a little bit of a long haul to get there. The work you guys are doing is going to be really important to continue to educate them, and drive them to action, because it’s that capital that will continue to make the game-changing efforts we need to accelerate clean energy. For instance, worldwide, or accelerate efforts on water. If we have to keep going to those 2 and 20 managers, who have crazy hurdle returns, these projects aren’t going to get done at the scale that we need. Alicia Seiger: Right. Your comment raises another thought for me, and I think it’s really important. I fell in the trap of talking about investment in terms of funds, which leads you down the thought that just clean tech venture capital, that’s going to get us out of this, which is not what I meant to suggest. There’s plenty of types of private equity fund model, whether you’re into the really early stage stuff, growth, or whatever. I articulated the challenges there, in terms of fund-to-funds management. Let me also now make a plug for disclosure, because I think what you said is exactly right, in terms of the response from the business community to Trump’s pull out of Paris. Alicia Seiger: I think that is a very encouraging sign. You’re seeing leadership on this issue in a way we hadn’t seen before, based on economic arguments, which I think is a really positive trend. The challenge for those CEOs, and for the market in general, is that we don’t have good data on which companies are our future proofing. The CEOs are making compelling and fact-based arguments, that it is in their economic self-interest to respond to climate and become climate resilient, invest in opportunities, and mitigate manage risk. We’re hamstringing them, by not providing their investors with datas to separate the leaders from the laggards. The work of the G20, FSB, TCFD, if I can throw down a bunch of acronyms. We can clean up [inaudible 00:23:11] It’s so critical. The economic arguments are as good, as strong, as they’ve ever been. The science and impacts are as compelling and terrifying as they’ve ever been. Alicia Seiger: We’re just making it harder for ourselves, by not creating the transparency we need in the market, to track these risks and price them, and reward the companies that are investing in resilience. It’s something the change in administration has a significant impact on, because you saw the march towards a full G20 adoption of the TCFD recommendations. Now you have a G19 of those recommendation, or endorsement at least. It’s going to fall back on the private sector to try and create synthetic and voluntary engagement to get to that data. One of the bright lights I see in all this, and I see this on campus and in my travels with practitioners, is you’re seeing a lot of really cool innovation around data and disclosure. Throwing down more acronyms, but with AI, and machine learning, and satellite imagery, and ways to provide actionable data for investors on companies and assets, vis-à-vis climate risk and exposure. You’re going to see a proliferation of software tools, and software as a service, offerings and consultancies, that are going to try and help investors do this while we wait for our federal government to implement consistent rules of the road. Jon Powers: I challenge our listeners to go and Google ‘Stanford Social Innovation Review’, and you can find Alicia’s article on ‘Businesses and Investors Need to Act on Climate Now’. It’s a great overview of some of the stuff we’ve talked about today, and a really important piece to help drive the conversation. Alicia, I thank you for taking the time today. I wanted to ask. We have a standard final question here for folks. If you could go back to yourself, when you were graduating, before you went and sold internet heads and could have a conversation coming out of college, or coming out of high school, what piece of advice would you give yourself? Alicia Seiger: Sure. I’ll be succinct. I say, “Figure out what you care most about, and what you’re really good at, then find the best people you can to go pursue those things with. It’ll all make sense in the review mirror, and objects are closer than they appear.” Jon Powers: That’s great. Thank you so much, and thank you so much for taking the time. Look forward to seeing you in person here in the near future. Alicia Seiger: Thank you. This was fun. Jon Powers: Absolutely. Thank you to Alicia Seiger for joining us at CleanCapital’s Experts Only podcast. Challenge each and every one of you to go to CleanCapital.com and download and see our latest episode. I want to send a quick thank you to our producers, Lauren Glickman and Emily Connor for their work, and ask you to go to iTunes or wherever you get your podcasts, and give us a five-star rating. If you have any thoughts on who else we should be interviewing, feel free to submit those to us at podcast@cleancapital.com. Thanks. 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Four takeaways from Fintech Rising — How innovative technology is transforming finance I had the opportunity this week to participate in roundtable discussion with finance leaders on “Innovations in Finance” at the Fintech Rising Summit. While 2017 was a big year for the fintech space, there were four major takeaways from our roundtable discussion on Wednesday: Machine learning and algorithms are driving efficiencies and validating investment opportunities. Machine learning or an algorithmic approach to finance is actually not a revolutionary method to finance; banks and funds have been using algorithmic underwriting processes for decades. The exciting innovation is the application of data to these algorithms. With more robust data sets and refined algorithms, machine learning can now provide us with more accurate analysis to challenge assumptions and assess risk. We’re seeing this trend in all aspects of finance. It’s going cost $90 Trillion over the next 15 years to meet our clean energy goals but very few institutions have invested in this sector. To meet our global clean energy goals, we need to empower institutional investors with information that helps them understand clean energy investments and the underlying risk. Machine learning can play a big part in achieving this. Fintech is converging with traditional banks and financial institutions. Fintech has fully arrived on Wall Street with banking giants like Goldman Sachs and Royal Bank of Canada (RBC) entering the space. Just last month Goldman Sachs announced plans for generating as much revenue from online consumer loans as from buying and selling securities. RBC announced today the automation of personal finance and budgeting capabilities within their mobile app powered by AI. While startups might have initiated the disruption, incumbent institutions are now embracing fintech to drive efficiencies and gain an edge. Fintech is about technology and data, and less about crowdfunding and marketplace lending. While fintech may have started as a space for individuals and companies to raise money online, it has rapidly evolved into a category that is changing all aspects of finance. With advancements in machine learning, payments, and personal banking, tech and data make the entire finance universe more streamlined, transparent and accurate. This is important to CleanCapital, we deliver capital to capital-inefficient segments of the clean energy market. We leverage data and technology to attract more investors to clean energy, and accelerate clean energy adoption. Innovations like blockchain and cryptocurrency are still in their infancy but have large potential for disruption in finance (and energy too). Blockchain and cryptocurrency will continue to grow. Blockchain’s applicability appears more near term as it is being used for smart contracts, and you can see the use of smart contracts being applied to financial transactions. My co-panelist, Oren Bass and the team at Pave are using blockchain to better analyze credit. Just like machine learning is reducing inefficiencies in the underwriting process, blockchain can help connect parties in financial transactions more efficiently and transparently. Beyond finance, blockchain is playing a role in securing our energy grid from cyber attacks. Last month, the Department of Energy announced its intention to leverage blockchain technology to sure up grid resiliency by providing highly auditable and structured data trails which would allow for easy and early detection of fraudulent activity and potentially thwart cyber attacks by making the grid essentially unhackable. There are no limits to the potential for technology to eliminate friction in financial transactions, and for data to improve deal evaluation and underwriting. As CleanCapital accelerates clean energy by applying some of these innovations, it was amazing to see the numerous data and technology solutions that are on the horizon.
Episode 7: Tom Kiernan [av_image src=’https://cleancapital.com/wp-content/uploads/2019/03/podcast-image-pageheader2.jpg’ attachment=’4329′ attachment_size=’full’ align=’center’ styling=” hover=” link=’page,249′ target=” caption=” font_size=” appearance=” overlay_opacity=’0.4′ overlay_color=’#000000′ overlay_text_color=’#ffffff’ copyright=” animation=’no-animation’ av_uid=’av-jwwgyb48′ custom_class=” 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=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwwgxszg’ custom_class=” admin_preview_bg=”] Episode 7: Tom Kiernan [/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=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwl4lsb2′ custom_class=” admin_preview_bg=”] This week, Jon Powers catches up with Tom Kiernan, CEO of the American Wind Energy Association (AWEA). They discuss how Tom’s passion for wind power turned into a career representing the largest renewable energy source in America. Wind power is expected to be 10% of the grid by 2020 and is creating careers all along the supply chain. Tom Kiernan began as CEO of AWEA in 2013 and previously spent 15 years as President of the National Parks Conservation Association. Upon earning an Environmental Computer Modeling Degree from Dartmouth College, Kiernan moved to D.C. to join the EPA as a Special Assistant and was then promoted to Chief of Staff of the Office of Air and Radiation. Tom was instrumental in the Bush Administration’s efforts to implement the 1990 Clean Air Act. [/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’ av_uid=’av-jwwgzkyu’ custom_class=” admin_preview_bg=”] [av_textblock size=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwwh5253′ custom_class=” admin_preview_bg=”] Listen now [/av_textblock] [av_textblock size=” font_color=” color=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” av_uid=’av-jwl43nfd’ custom_class=” admin_preview_bg=”] [/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’ av_uid=’av-jwwgzkyu’ custom_class=” 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-l66lybmi’ 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-l66m0a7a’ sc_version=’1.0′ admin_preview_bg=”] Voiceover: Welcome to the Experts Only Podcast sponsored by Clean Capital, where we explore the intersection of energy, innovation and finance. Our host is Clean Capital’s Co-founder and former Federal Chief Sustainability Officer Jon Powers. Learn how Clean Capital is revolutionizing clean energy finance and find more episodes at 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. Jon Powers: On today’s episode of Clean Capital’s Experts Only Podcast, we interview Tom Kiernan, the CEO of the American Wind and Energy Association, AWEA. We’re going to have a great conversation about the largest renewable energy source in America. Wind is expected to be 10% of the grid by 2020, and many are calling it the new base load and how we’re really creating some great American careers in the wind industry. Tom, thanks so much for joining us on Experts Only Podcast, really appreciate the work you’re doing at the American Wind and Energy Association and really want to spend a little bit of time talking about your personal history, how you ended up at AWEA? How you got interested in the wind space? You’ve served in a variety of roles in government. I think saw you worked at one point at Arthur Andersen, you’re the President of the National Parks Conservation Association for 15 years. So what led you into this space? What led you into the wind industry? And obviously how’d you end up becoming the CEO of AWEA? Tom Kiernan: Great, Jon. Well, first thank you for having me on the show, wonderful to be with you and spend the time with you. So I guess, quick summary. Yes, I’ve had a number of different positions most recently as the President of National Parks Conservation Association, which was great, very bipartisan. I mean, national parks, you work on both sides of the aisle. Previously, I had been in business, as you said, Arthur Andersen and other ventures. Also, was an appointee in the George Herbert Walker Bush Administration, working the Clean Air Act back in the early 1990s. So through those different efforts, frankly, I’ve learned to, and very much enjoyed working with Republicans, working with Democrats, basically trying to advance good policy, advance good industries, create jobs in America. So when I was at NPCA doing the national parks work, I actually had, and you’ve got to love the journey of each of our lives, but just on the side of my work, I had joined AWEA as just an individual member, as an advocate, getting the emails and doing a few emails as encouraged by AWEA because I loved wind energy. Tom Kiernan: I mean, wind energy, we create jobs throughout the country, very much in rural America. So it’s a job creating, growing industry that no doubt we’ll talk about in a few minutes. But I was an individual member doing the advocacy and then when the position opened up as CEO, it was like, “Whoa, all right, this is a super opportunity.” So yes, applied and one thing led to another and so I’ve been here about four years and just love the work. I mean, we are advancing clean energy, we are growing rapidly, we are actually the largest source of renewable energy in the United States right now. And it’s great seeing that growth, we’ll no doubt talk about the reliability of wind energy. So there’s just so many strengths to wind energy, I’m thrilled to be a part of the team and help advance the industry even further. Jon Powers: Yeah. It’s an amazing time for the industry, obviously, for wind and clean energy as a whole. But just about the association for a second, talk a little bit about what’s the mission of the American Wind and Energy Association? What are AWEA members? Who are they? How do you engage them? Tom Kiernan: Yeah, it’s a great association, about a thousand members. We’ve got all sectors, if you will, of the wind industry. So we’ve got the original equipment manufacturers, so the Vestus or GE or Siemens that make the big turbines or the blades and the towers. And then there’s this huge supply chain behind them, folks that are making the steel, the bolts. And then you also obviously have the financiers, the attorneys, the environmental folks that do the wind assessments or what have you. So there’s this wonderful diversity of members within the wind industry. Tom Kiernan: And it’s also fun. One of the other superlatives about the industry, the wind technicians, the men and women out there maintaining the turbines, that’s the fastest growing profession in this country are wind turbine technicians and that’s per of the Department of Labor. And so many of them are members AWEA as well. So we’ve got this wonderful team of members, again, throughout the country, Republicans, Democrats, rural, urban, just throughout. And so it’s great to have all that diversity come together at AWEA, where here we can help craft the policies and do the communications and the education that advances wind energy. Again, we’re growing rapidly, we’re approaching 10% of electric generation in this country is wind energy, we should be there about 2020. So it’s great, AWEA is a really vibrant, fun place because it’s a vibrant, fun industry itself. Jon Powers: Yeah, it is an exciting time. I mean, think about the fact that none of those technician jobs are jobs that can end up getting shipped overseas. They are jobs that are here to stay, they are jobs that everyday Americans can do. When I drive and my family drives from Washington where we live to my hometown up in Buffalo for the holidays, which we’ve done too many times. We drive up through rural Pennsylvania and Western New York and the utility scale projects you see now running some of those ridges, it’s amazing and it’s growing. Can you talk a little bit about the growth of the industry and really looking back over the past decade, what’s helped cause that to happen? And then I do want to talk about the state of the industry today, where we want to go going forward. Tom Kiernan: Good. Happy to do that. Let me just go back and say a word, because it’s a wonderful story where I was corrected by one of our members. We were up on Capitol Hill meeting with Kevin McCarthy, majority leader in the house. And this wind worker is a vet, he was managing a wind farm and I was talking to Kevin McCarthy about the jobs that we’re creating. And it was wonderful, he corrected me by saying, “No, Tom, these aren’t jobs, these are careers.” And he went on to explain that when you build a wind farm, it’s obviously a lot of investment to build the wind farm, but once it’s there, you got to maintain it, all the money that you’ve put into it’s got to be maintained. Tom Kiernan: He said, “Hey, I’m going to have this job, presuming I do a great job, which I will, but this wind farm is going to need me for the next 20, 30 years at a minimum. I’m building a family around this job, I’m building a house, this is my life. This isn’t a job that’s going to come and go with some boom or bust, this is going to be here the next 20, 30 years.” So this vet, he was talking about how it was such a wonderful, in a way, transition out of the military because he was looking for the strength, the security, he didn’t want a boom bust and that hire, fire, he wanted the strength in the wind industry was given to him that credibility and that the job would be there for the next many years. So just FYI on that wonderful story. Jon Powers: Yeah. So let me ask you a quick follow up and then we’ll go back to the original question. So I’m going to Iraq veteran myself and I know in the solar industry, they’ve done some really great work on laying out the incredible influx of military veterans that are getting into that industry. Are you seeing the same thing in wind? Tom Kiernan: Oh, very much so. We hire vets at 50%, a faster rate than the average industry here in the United States. And why? Because it’s a growing industry and the vets are finding their skills from the military transition over quite well. Whether it’s working with your hands and somewhat extreme conditions, I mean, you’re up 100 plus meters up in the air, but some of those wind techs just say, “Hey, this is the best office in town,” so to speak. They’re up there, they’re doing great work and they’ve dedicated their lives to this country and to our independence and strengthening America and strengthening our energy independence. And what better way to continue that work than with wind energy that we’re making it here in the United States, majority of all the parts are made here in the United States, it’s helping to get us off of foreign sources of oil or energy or what have you. So wind energy is all about America energy independence and dominance. And so for many of these vets, it’s a perfect fit to the work they have been doing with the military, to now joining the wind industry. Jon Powers: Excellent. So let’s go back to that original question. So what has helped really create that growth that we’ve seen in the industry over the last decade that’s gotten us to where we are today? Tom Kiernan: The main driver has been the continued reduction in the cost of wind energy. As America’s innovation and manufacturing capability has enabled us to build taller towers, longer blades, improve the efficiency of the wind turbine, so our costs are down two thirds. So it’s two thirds less expensive for wind energy than it was a mere six, seven years ago. So the costs are driving down rapidly. In many parts of the country, we are the cheapest source of new electricity. So we’re the cheapest thing out there and it’s because we make most of the parts here in the United States, this is an American industry and we’ve been able to innovate and have it become more and more effective. Tom Kiernan: So that’s frankly, the main driver and why we are growing so rapidly. I will also say that an important part has been in 2015, we finally were able to have a more stable policy environment. All sources of electric generation have different incentives to encourage them. And ours had been on again, off again, on again, off again, and that’s no way to build an industry. And finally, Congress passed a five year, be it a phase down, which we supported, but that five year tax credit, again, phasing it down, but gave us some clarity and certainty and that as well has helped continue the growth and why we are the number one renewable energy source in the country now. Jon Powers: So we’re seeing a shift in a lot of the distributed generation sources where the federal policies helped lay the framework to get to the point where those cost reductions have happened and the industries have accelerated. And now the shifts are happening to state level policy to really drive implementation, which I think is exciting. And when a customer, be it a General Motors or Walmart or whoever is buying power, it’s complicated for them to buy across 50 different energy systems. Is wind seeing the same transition from a policy level? Tom Kiernan: To some extent we are finding, yes, we’re doing a lot of work in states and state capitals, with public utility commissions. And so yes, we’re in states and regions and we continue to work here in Washington DC to educate Congress and work with the Trump Administration, Department of Energy, Secretary Perry, who’s a good leader and champion for wind energy, et cetera. So we’re working at the local state and federal level to educate folks about the benefits of wind energy. And you did allude to some of the corporate purchasers. Let me go on a quick tangent because it’s really exciting. Tom Kiernan: The number and, frankly, diversity of companies that are out there now buying wind energy. Why? Because it’s affordable, it’s reliable, it’s clean. So we’ve got, whether it’s Anheuser-Busch or General Motors or Kimberly-Clark that makes toilet paper, including also then Apple and Facebook and Microsoft, et cetera, all the high tech. But we’ve got this wonderful diversity of companies saying, “Hey, wind energy, it’s affordable, it’s reliable, it’s clean.” They’re asking for it and we’re seeing this throughout the country. So those corporate industrial purchasers are affirming the value proposition of wind energy. They’re not doing it because they’re forced to do it or told to do it, they’re doing it because it makes good business sense for them. Jon Powers: Yeah, absolutely. I think it’s an exciting time where it’s not just the Fortune 50s anymore, it’s trickling all the way down into everyday businesses, people are seeing the cost effectiveness of these renewable energy sources. When they’re making these purchases… Let’s talk technically for a second. When a data center’s doing a solar fuel cell project, they’re putting it on site, they’re doing a power purchase agreement, in most cases, to that power, how is GM buying that wind power? And how is that managed? Tom Kiernan: Yeah. It’s exciting. One of the innovations in the industry now are different ways, different financial structures, different ways of working with corporate America. So we’re creating new products, different products, whether it’s a virtual PPA or whether it’s a direct connect. So there are a bunch of different options, but let me just give a couple of examples that speak to it. It was exciting, General Motors, I was down at their enormous assembly facility down in Arlington, Texas that builds many or most of their big SUVs. They announced, this was I think last year, but going from 50% wind energy to 100% wind energy powering that facility. And it’s down in Texas, there’s a lot of wind energy and so there was a wind farm that they contracted with nearby. It was connected through the grid, so that wind farm was connected to the grid, the grid connected to General Motors, but they were able to negotiate a PPA and therefore have 100% of their electric needs provided by that nearby wind farm. Tom Kiernan: So you’re seeing that type of situation. Also, different tangent, but it’s exciting seeing when companies, whether it’s a Facebook or an Apple or others are looking at a new plant or a new data center, they’re going to the states that have renewable energy or wind energy in particular available. So those states that are making it effective and cost efficient and welcoming for wind energy are getting the benefit of also then attracting these data centers and other manufacturers who want wind energy. So it’s a great partnership and the states are seeing that, “Hey, if we create the opportunity for renewable energy, for wind energy, we’re going to also, not only get the benefits of that wind energy and the jobs that are created by the building and maintenance of that wind farm, we’re also going to likely get some new data centers, there are some new manufacturing facilities that’ll want that clean energy.” So a bit of a tangent, but it’s a really exciting evolution where so many people are seeing the benefits of wind energy. Jon Powers: Yeah. It’s interesting that there was a recent comment from the Republican governor of Ohio about the Amazon headquarters, I’m not sure, did you see those? And I’ll paraphrase them here, but he said, “If we don’t have renewable energy here in Ohio, they won’t come.” Tom Kiernan: Yeah. It doesn’t get clearer than that. The governor making that direct connect and other CEOs, Apple’s Tim cook, has similarly talked about, they wouldn’t have gone to Iowa, if it weren’t for all the wind energy that’s affordable and clean, et cetera, in Iowa. So it’s CEO after CEO that are saying it. And then at the same time you still have the utilities, Ben Fowke at Xcel, one of the largest utilities in the country talks about buying wind energy. He says, “Hey, wind energy is on sale, I’m going to back up the truck, I want more wind energy.” And he’s just a great advocate because it’s, again, clean, affordable, et cetera. So it’s great, these companies and the traditional utilities, they’re all buying wind energy and we’re thrilled to see that success. Jon Powers: So I want to get into the financing part of this in a second. But one of the things that I think is exciting is what we talk about renewables now, it’s not only individual technologies, wind, solar, fuel cells, but people are starting to look at an ecosystem approach to this. And the army at Fort Hood recently did an amazing project with Apex where they’ve got significant wind portion storage, solar, the whole… It’s bigger than a micro grid, it’s a smart grid they’re putting in place there. Can you talk about how the industry’s looking at this integration? And people hear a lot about storage and solar, but not as much about storage and wind. Tom Kiernan: It is exciting and this as well is some of the innovation and evolution of the grid and of renewables. It does speak to, and this is something that we’ve been working with Secretary Perry on his recent grid study, that you do need and want a diversity of sources of electricity on the grid. But the reason you want them is you want a diversity of attributes, a diversity of strengths and weaknesses because the grid benefit is more reliable and in the long run, more affordable and cleaner, especially if you have wind and solar and storage and other sources of electricity working well together. So the Fort Hood example, what you’re seeing is first of all, wind tends… Obviously there’s some variability of wind out of one wind farm or another, but you’re seeing when you have a number of wind farms and we’re seeing this on the grid, to some extent, wind self- balances itself. It may not be blowing in Eastern Texas, but it’s ripping in Western Texas or whatever. Tom Kiernan: So you’ve got wind that as others have said, it’s kind of a new base load. And then you put some solar on top of that, obviously solar really strong during the daytime. And then some storage that can help smooth out both solar, but also extend the benefits of solar where towards the end of the day, as the sun’s going down, there’s a lot of demand and storage can help shift some of that electric generation, if you will, from solar an hour or two to hit some of the peak demand. So the combination of having wind that spans the day, there’s some variability, but it pretty much spans the day with storage and solar, it’s a heck of a combination. Tom Kiernan: We’re seeing it in some examples like Fort Hood, you’re seeing out in California, in many parts of the country where utilities and others are learning how to piece it all together, so to speak, in a really effective way. And you get situations where the largest grid operator, PJM, was referring to wind as the new base load and talking about how reliable it is and how they can add a lot more wind under the grid because they’ve learned how to do it. So it’s exciting seeing that entrepreneurial, creative culture we have in the United States get applied to renewables and show how we can put a lot more renewables on the grid and thus have a cleaner and very affordable grid. Jon Powers: Excellent. So let’s dive into the financing of this a little bit. With wind, like a lot of other energy sectors, it relies heavily on project finance. The markets to fund these projects, institutional capital, private equity, tax equity and there’s a lot of other sources that need to get brought into these initiatives to really get the projects out there and running. So what is the state of capital today in wind? And then how can we help recruit more capital to this space? Tom Kiernan: It’s wonderful over the last several years to see the increasing diversity of sources of capital coming to wind as investors are hearing about solid returns and reliable returns. So traditionally because of our production tax credit, we had tax equity investors, but we’re seeing more private equity and, as you said, institutional investors and sovereign wealth funds and banks, obviously on the debt side of things. So you’re getting a suite sources of capital to potentially tap into the different wind farms. So just by way of example, in 2016, we had in total $9.7 billion of third party capital invest in the wind industry. And that was up from $8.8 the previous year. So we are seeing- Jon Powers: That was ’16 was $9.7 billion? Tom Kiernan: Exactly, $9.7 billion in 2016. Jon Powers: And here in the US? Tom Kiernan: In the US. And that’s again of third party folks and then obviously individual companies, et cetera, are investing significant amount of their own capital as well. But we’re seeing third party investors increasing in the wind space because obviously they’re hearing about good returns, seeing these good returns from the wind farms that have been established here in the United States. Which are, this is a quick side point, but increasingly productive, the net capacity factor of different wind farms is growing. You’ve got some new wind farms that are at high 50% capacity factors, which are really exciting to see as we’re both, getting longer blades, getting improved software. So as a result of that, we’ve got more investors coming forward with more capital at a time, also, when tax equity is seeing the PTC, the production tax credit, phasing down. So it’s a good transition we’re working our way through as we’ve tax reformed ourselves, moving away from the tax equity, or beginning to, to now a lot of these third party investors. So it’s exciting and so far pretty successful transition. Jon Powers: So what do you see coming down the pipeline? What are some of the major challenges that are going to maybe handcuff wind? How do we overcome them? And then also in that, what are some of people’s biggest misconceptions of the space? Tom Kiernan: And these are both challenges, opportunities, but transmission, clearly we need as a country to have more transmission for any number of reasons. One, grid stability. The more transmission you have, the more stable the grid is, the more able the grid is to be resilient. We have seen case examples, whether it was the polar vortex a couple years ago here on the East Coast or the cold snap in Texas, where wind was really important in powering the grid through some of these weather disruptions, where fossil sources of electricity had forced outages, were not able to keep producing for one reason or another, wind was able to power through it. Tom Kiernan: The more transmission we have in the country, the more resilient the grid can be. Also, the more transmission you have from the middle part of the country, where you’ve got a lot of wind energy to load, to demand for electricity, which is a little bit more towards the coasts, then the more opportunity we’ve got to move this affordable, clean wind energy. And also just say, I mean, more transmission is also good for natural gas, for other sources. And a final point on it, there are some that talk about congestion or negative prices is a problem and transmission solves some of those problems. So transmission’s a big one. I will just do a- Jon Powers: By the way, for those who are new to the energy space, transmission literally is getting from the source, from the windmill to the turbine, to the end user. So how does that power get from Iowa to maybe Cleveland? So it’s got to move across these transmission wires. And it’s a complicated challenge to put new transmission in because of issues like running those wires through neighborhoods, there’s permitting requirements, and other major initiatives and it’s a constant wrestling match from a policy makers on how to solve that problem. Tom Kiernan: Well said, yes. And another different example, but it’s like our highway system, our highway system enables the economic engine of this country to really work, because we’re able to move goods back and forth and around and everybody understands the benefits of our roads and when you have a good, healthy, well maintained highway system. That’s what we need on the grid, is a better, stronger grid that can move electrons instead of cars like our roadways. So transmission’s important. I’ll also just observe offshore wind energy is no longer an idea. We’ve got the first offshore wind farm off of Block Island, Rhode Island, it’s a deep water wind project that’s up and running with five turbines and is going great. We’ve got a number of other projects that are at different planning phases, especially on the East Coast. Tom Kiernan: So that industry is getting up and running, it’s partnering well with some of the other offshore oil and gas type companies, they’re saying, “Hey, how can we help? How can we part of the team or the supply chain to build some of these offshore wind farms? So that’s an exciting opportunity as well for the country. So I think for us, we need more transmission, we need to keep driving down costs, we need continued, stable policy, predictable policy, both at the federal and state level. And then with that environment, the men and women in our manufacturing facilities, we’ve got 500 manufacturing facilities, 25,000 men and women in those manufacturing facilities, they’re going to keep driving down costs and getting more efficient. We’ve got over 100,000 employees in the industry, they’re going to keep driving down costs and that’s all to the betterment of consumers throughout the country. So that’s where we’re heading. Jon Powers: Well. Excellent. Well, we obviously appreciate it, we as continued leadership in this space and helping to drive the industry forward. I want to end on a final question that just goes back to your personal story for a second. And we end all of our podcasts with this question because I think it’s important to look back and for folks that are thinking of getting in the industry, look for advice from leaders in the industry. So if you could sit down with yourself coming out of high school or college, what advice would you give yourself? Tom Kiernan: What I’ll share with you is something I actually share with a lot of younger folks because it has worked for my life and that is, follow your passion. Understand what is it you care a lot about? What really gets you excited? What do you believe in? Why do you believe in it? Understand that and then build your life around that, pursue that, follow your passion. And a career, you’ll figure out a way forward but that’s, I think, the way to add a lot of joy, a lot of meaning to your life. Tom Kiernan: And I would also say, to be successful is to care about what you’re doing, have that passion and you’ve got to do a little self-exploration. What do I really value? Who am I? What do I believe in? Where do I get meaning? And I think that can fuel a meaningful life. And I continue to work on it but for me, wind energy, it’s a passion of mine, I love it, I believe in it, I believe I’m helping this country, I’m helping to create jobs, I’m helping to create clean, affordable energy. This is good stuff. So that would be my encouragement to folks in high school or college, follow your passion. Jon Powers: Tom, it’s absolutely clear that wind energy is a passion of yours. So thank you so much for taking the time and being part of the Experts Only Podcast. Tom Kiernan: Jon, wonderful to join you. Thank you for your good work on this podcast and in other ways. Jon Powers: Thanks. What a great conversation, exciting stuff happening in the wind industry. $9.7 billion in capital in 2017 and I think the space will just continue to grow and provide some real opportunity for investors and others. I wanted to thank our producers, Emily Connor and Lauren Glickman for their hard work. And as always, ask you to go to Clean Capital.com and the Experts Only Podcasts and feel free to send us ideas and thoughts and advice. Of course, we always appreciate those five star ratings and you can find our episodes wherever you get your podcasts. Thanks so much and talk to you next. 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