Speaker 1: This is Dana Perkins and you're listening to Switched on
Speaker 1: the BNAF podcast. Today we have an interview recorded at
Speaker 1: the BNAF New York Summit with Jiggershaw. He's an entrepreneur
Speaker 1: that founded sun Edison, a pioneer in building clean energy
Speaker 1: projects for large companies. He later went on to found
Speaker 1: the Carbon war Room with Richard Branson, and most recently
Speaker 1: he was the co founder and former president at Generate Capital,
Speaker 1: involved in financing sustainable infrastructure projects. But away from business,
Speaker 1: he's also an author and a podcaster, and for the
Speaker 1: US government, he worked for the Department of Energy before
Speaker 1: being appointed the Director of the Loan Program's Office in
Speaker 1: twenty twenty one, which is what he's doing now. Senior
Speaker 1: editor at bn EF, Van de Na Goombar sat down
Speaker 1: for a chat with Jigger. Together, they discuss the current
Speaker 1: DOE programs and loans that are available to help companies
Speaker 1: with their clean energy transition. They also discussed the application
Speaker 1: process and what's expected of applicants regardless of the size
Speaker 1: of their company, and they debate whether or not the
Speaker 1: utilities company's rate or customers should front the costs for
Speaker 1: the new transmission capacity that's required. If you like this podcast,
Speaker 1: make sure to subscribe to receive updates for future episodes,
Speaker 1: and if you're listening to us on Apple Podcasts or Spotify,
Speaker 1: consider giving us a review. For more information about BNF's
Speaker 1: summit like the one that this episode was recorded at,
Speaker 1: head to about dot bn ef dot com forward slash Summit.
Speaker 1: There you're going to be able to see the agendas
Speaker 1: and also videos from this event and other previous events.
Speaker 1: Please note, bn EF does not provide investment or strategy advice,
Speaker 1: and we've got a complete disclaimer that can be found
Speaker 1: at the very end of the show. But right now
Speaker 1: we're going to get to vandanas chat with Jiggershaw.
Speaker 2: Okay, so let me just get the headline numbers out
Speaker 2: of the way first before I ask you the other questions.
Speaker 2: How much do you have available to land today?
Speaker 3: It's upwards of four hundred billion dollars that we have
Speaker 3: to learn today across our three original programs. So that's
Speaker 3: the Innovative Clean Energy program that we did, solar and
Speaker 3: wind in geothermalt of the Advanced Technology Vehicle Manufacturing program,
Speaker 3: which is the one they got Tesla for Nissan, and
Speaker 3: then we have the Tribal Energy Loan Program. So across
Speaker 3: those three programs we have about one hundred and sixty
Speaker 3: billion dollars and those are our three oldest programs. Then
Speaker 3: we have a new program called the Energy Infrastructure Reinvestment Program.
Speaker 3: Really helped to design to help like utility companies and
Speaker 3: other owners of existing assets make the transition from coal
Speaker 3: to nuclear, coal to soil plus storage, or we do
Speaker 3: some pipelines that are currently natural gas and converting it
Speaker 3: to CO two or hydrogen. So we're very excited about
Speaker 3: those programs. And then we also have the SOFIA program,
Speaker 3: which is CO two trunk lines.
Speaker 2: So what part of this was the IRA jump?
Speaker 3: Yeah, so we had about forty four billion dollars of
Speaker 3: total loan authority before the IRA, and then we got
Speaker 3: one hundred plus two fifty in the IRA. In the
Speaker 3: omnibus bill for twenty twenty three, we got an additional
Speaker 3: fifteen billion for the Innovative Clean Energy Program.
Speaker 2: Brilliant. So the last time you spoke, the last time
Speaker 2: we spoke, Yeah, you were talking about amplifying the message
Speaker 2: that here is a part of money, come and take it,
Speaker 2: and you were talking to a lot of people who
Speaker 2: would be eligible a lot of prospects who would be eligible,
Speaker 2: and I guess that was phase one of your programmer.
Speaker 2: Are you still doing that amplification process or is that done?
Speaker 2: Everyone knows what the DOELPO does.
Speaker 4: Yeah, you would think so.
Speaker 3: I mean, we've done a lot of interviews and a
Speaker 3: lot of podcasts other things. But I would say that
Speaker 3: we're continuing to meet people every day who don't know
Speaker 3: about the Loan Program's office but are perfect candidates for
Speaker 3: our program. And so I think, you know, we've hired
Speaker 3: an additional forty people or so into our outreaching business
Speaker 3: development group, and now we're covering way more conferences in sectors,
Speaker 3: which is wonderful. And you know, we're talking to probably
Speaker 3: about a how for trillion dollars worth of projects today.
Speaker 3: That number probably needs to get closer to a trillion
Speaker 3: dollars with the projects over the next year or so.
Speaker 3: So we're constantly pounding the pavement. But the other piece
Speaker 3: I would say is that what's happened since we last
Speaker 3: talked was that we've gotten a lot of these conditional
Speaker 3: commitments out the door and then we've closed loans. Right, So,
Speaker 3: there were a lot of people who were just very
Speaker 3: conservative and saying until you've closed more of these loans,
Speaker 3: we're just not going to lean in with your office.
Speaker 3: And now that we've closed loans and we've gotten a
Speaker 3: lot more visibility around the process, I think people are
Speaker 3: feeling far more comfortable expending.
Speaker 4: Resources to go through our office. So that's also very validating.
Speaker 2: Are you happy with the pace of approvals, because that
Speaker 2: was also something that you mentioned that you want the
Speaker 2: office to be like more agile and track the time
Speaker 2: it takes between an application and approval, and that was
Speaker 2: one of the things that you yeh, trying to address.
Speaker 3: I mean, I'm never happy, right, I mean, that's that's
Speaker 3: part of my personality. So I always think we can
Speaker 3: do better, and I think my team thinks it can
Speaker 3: do better, and we can continue to keep trying to
Speaker 3: find ways to improve. But I do think that at
Speaker 3: this point we have hit an absolute standard, which is
Speaker 3: about in line with the commercial sector. So in general,
Speaker 3: these really complicated technology heavy loans take sort of six
Speaker 3: to nine months to get through the private sector, and
Speaker 3: I'd say we do them in like eight to ten months,
Speaker 3: which is right around the same amount of time. So
Speaker 3: I think in general we're quite proud of that I
Speaker 3: think there's lots of ways we can improve and get
Speaker 3: even more efficient. The other challenge I would say is
Speaker 3: that our ecosystem continues to be weak. And so if
Speaker 3: you're an applicant who's just raised four her million dollars
Speaker 3: and you want to pay someone to help you get
Speaker 3: through the office, those teams are not very well set
Speaker 3: up at PwC or Deloitte or you know, KPMG or
Speaker 3: some of the law firms or other places like they
Speaker 3: just they atrophied over ten years of dormancy for our program,
Speaker 3: and they've started the process of ramping back up over
Speaker 3: the last two years, but they're not there yet. And
Speaker 3: so for many of our ecosystem partners, they're overwhelmed with business,
Speaker 3: and so we need ten or twenty more firms to
Speaker 3: set up an LPO division to help applicants get through
Speaker 3: our office. Because for some of these applicants, they're experts
Speaker 3: at raising equity and they have an equity forward CFO,
Speaker 3: but that equity forward CFO has never raised this much
Speaker 3: commercial debt. They've never put together a data room, they've
Speaker 3: never answered questions from a debt perspective, and so for
Speaker 3: some of those applicants, it's taking them a lot longer
Speaker 3: than it should because they're just not used to the process.
Speaker 2: My understanding was the kind of support that you provide
Speaker 2: loans and loan guarantees, it's kind of not available in
Speaker 2: the private sector space. But it's interesting that you're comparing
Speaker 2: your timelines to the private sector players.
Speaker 3: I agree with you that in general they're not comparable
Speaker 3: per se. They're not really competing with us, and we
Speaker 3: would never want to compete with the commercial sector. But
Speaker 3: when you look at like Centender and their leading of
Speaker 3: the Vineyard wind proposal, that deal took over a year
Speaker 3: to close, and so I do think there are some
Speaker 3: of these complicated deals that the bank does when they've
Speaker 3: got very high profile clients that force them to do
Speaker 3: the deal, and those deals are complicated and they take
Speaker 3: a long time to close. I'm comparing us to those deals.
Speaker 3: But for many of the companies that use our office,
Speaker 3: these are growth companies who don't have some sort of
Speaker 3: like inside guy at a bank. We become their inside guy.
Speaker 3: Like we The goal for us is to try to
Speaker 3: make this a more fair process so that everybody can take.
Speaker 4: Advantage of this.
Speaker 2: You've often spoken about I don't know if you've spoken
Speaker 2: about it or write wait about it. Bridge to bankability,
Speaker 2: that's the that's the gap that you fail. I wanted
Speaker 2: to ask you, which are the sectors where you feel
Speaker 2: that the requirement of this bridge to bankability is more sturgent.
Speaker 3: Well, I'd say it's all of them. The goal here
Speaker 3: is for this to be a principle that really applies
Speaker 3: across all of the sectors where the International Energy Agency
Speaker 3: and others have highlighted sectors that are required to meet
Speaker 3: our decarbonization goals by twenty thirty five and twenty fifty.
Speaker 3: So when you think about the four reports that we've
Speaker 3: issued recently, right you have the Carbon Management Report, the
Speaker 3: Hydrogen Liftoff Report, Long grain energy storage, and nuclear those
Speaker 3: four definitely need it. The next set of reports that
Speaker 3: are coming out with or in the industrial decarb space,
Speaker 3: the virtual power plant space, they definitely need it. And
Speaker 3: in general, what you find is that we have a
Speaker 3: slightly different way of doing things than the Europeans do,
Speaker 3: but in general it requires roughly one hundred billion dollars
Speaker 3: of private sector experience to cross the bridge to bankability,
Speaker 3: no matter what the sector is. That's when you go
Speaker 3: through all four pillars, which is first of a kind deployment,
Speaker 3: and then engineering excellence, and then you've got the learning
Speaker 3: curve which we all rediscovered from nineteen thirties. And then
Speaker 3: this Wall Street acceptance and the one hundred billion dollars
Speaker 3: doesn't save you a gig a ton of carbon, but
Speaker 3: it does get you across the bridge to bankability, and
Speaker 3: then now you're available to save a gig a ton
Speaker 3: of carbon.
Speaker 2: I recently had a chat with the Hydrocobec team and
Speaker 2: they planned to start exporting clean power to New York
Speaker 2: by twenty twenty six the reison and they just got
Speaker 2: approval for the second line, which was held up in Cootes.
Speaker 2: So it took them fifteen years to get all the
Speaker 2: approvals for the transmission line which we'll carry that power.
Speaker 2: We heard about permitting issues at the summit at various
Speaker 2: panels this morning. So as you look at the project
Speaker 2: proposals that LPO gets and track their progress, which are
Speaker 2: the systemic weaknesses that stand out for you?
Speaker 3: Well, I mean weaknesses are a strong word in general.
Speaker 3: The federal government wasn't the reason why those projects were slow.
Speaker 3: The reason the projects are slow is because the New
Speaker 3: York ISO and then Nyserta and all these other players
Speaker 3: are like, do we want this line, don't we want
Speaker 3: this line. Here's like sixteen different political factions who have
Speaker 3: a role to play and have a voice they want
Speaker 3: to give, And so like, I'm happy for permitting reform
Speaker 3: to occur, and I think it's clearly needed. And even
Speaker 3: Bill mckibbon like wrote about how we need to build again.
Speaker 3: But I do want people to recognize that for all
Speaker 3: of these long transmission lines, whether it's trans West out
Speaker 3: of Wyoming or whether it's Sunsea New Mexico or Grain
Speaker 3: Belt that Inventergy's building, there's a lot of competing interests
Speaker 3: for these lines, right, And the way that the US
Speaker 3: economy is structured, each state makes the decisions for electric
Speaker 3: utility work. And so I understand that people want the
Speaker 3: federal government to step in and say we will just
Speaker 3: force everyone to do these things, but that is not
Speaker 3: the democracy that we live in. And so I just
Speaker 3: want to make sure that people understand what they're really
Speaker 3: asking us to do and what limits they want to
Speaker 3: put on us. Now, the other way to solve this
Speaker 3: problem is through technology, which is where we come in,
Speaker 3: and we have the technology to reconductor all of the
Speaker 3: existing transmission lines and three x the capacity of them.
Speaker 3: But that requires the electric utilities that own the lines
Speaker 3: to want to do that and so, and it also
Speaker 3: requires the renewable energy companies who currently get all that
Speaker 3: access capacity for free, to pay for it. Right now,
Speaker 3: they're saying, we'd like to build our projects at twenty
Speaker 3: nine dollars a megoat hour, and we'd like to socialize
Speaker 3: the cost of transmission amongst all ratepairs. Well, guess what
Speaker 3: that business model is over And so if you want
Speaker 3: to continue to build eighty gigawatts one hundred gigawatts a
Speaker 3: year of renewable energy, well you have to pay for
Speaker 3: the transmission required to do that. And guess what that
Speaker 3: increases the cost of that power from twenty nine hours
Speaker 3: a MEGO hour to almost sixty nine hours in MEGO
Speaker 3: what hour?
Speaker 4: And they don't want to do that. So then we're
Speaker 4: in an impasse. So I'm happy to.
Speaker 3: Take full blame for all of the things that's wrong
Speaker 3: with the entire innovation economy. My shoulders are broad enough
Speaker 3: to do that. But it doesn't solve the problem for
Speaker 3: me taking the blame. What solves the problem is people
Speaker 3: recognizing what the actual problems are, not what they pitch
Speaker 3: to the press, and then figure out how they work
Speaker 3: through them. These are real cost allocation issues. Do you
Speaker 3: want rape payers to pay for them? Or do the
Speaker 3: customers who want that new transmission capacity have to pay
Speaker 3: for them? And there's arguments on both sides. I understand it,
Speaker 3: but let's not trivialize these conversations and say it's just permitting.
Speaker 2: So since we out talking about increasing the transmission capacity,
Speaker 2: that's part of the plan. Biden has spoken about it.
Speaker 2: What's the way out? This debate can go on for
Speaker 2: a long time, But what's your recommended solution.
Speaker 3: Well, it's not my recommended solution. We have ten reports
Speaker 3: we've written on this solution, and the answer is cost allocation,
Speaker 3: Like someone has to pay for this new capacity. What
Speaker 3: the utilities are saying is we don't need this new capacity.
Speaker 3: We can use cold and natural gas and potentially nuclear
Speaker 3: in the future within our existing transmission And there are
Speaker 3: others that are saying, no, we need a three XR
Speaker 3: capacity so we can build a lot more solar and wind. Great, okay, Well,
Speaker 3: then then who pays for all that extra capacity? You
Speaker 3: can't just socialize it when the utilities are saying we
Speaker 3: don't need it. So then the question becomes who pays,
Speaker 3: and so we have to decide who pays, and then
Speaker 3: maybe they pay for fifty percent of the cost, maybe
Speaker 3: they pay for one hundred percent of the cost. But
Speaker 3: like it can't be well, we want it for free
Speaker 3: because that's what we're used to and we're just going
Speaker 3: to stand in the queue, in the interconnection queue for
Speaker 3: seven years, okay, But like I just feel like sometimes
Speaker 3: we try to like say these things are simple to solve,
Speaker 3: and they could be simple to solve. It's like a
Speaker 3: straightforward answer.
Speaker 4: But it's not. It's not easy.
Speaker 3: When they say it's it's simple, not easy, and that's true.
Speaker 3: We know what the answer is, but it's not easy
Speaker 3: to implement it.
Speaker 2: Do you have any projects in queue that are impacted
Speaker 2: by the interconnection queue?
Speaker 4: Not really.
Speaker 3: I mean the loan Program's office in general doesn't do
Speaker 3: established technologies, right, so solar and wind, so we don't
Speaker 3: have a lot of impact there. And frankly, most of
Speaker 3: the rest of our projects, whether it's the nuclear plants
Speaker 3: or the geothermal facilities or hydro facilities, they actually have
Speaker 3: access to interconnection, so that hasn't been a challenge, But
Speaker 3: I do think we have a really big problem around
Speaker 3: like figuring out how we do big thing right and
Speaker 3: how we give people certainty around how to do it.
Speaker 3: But I do think that we can actually perform NEPA
Speaker 3: in a very efficient way. Our office runs NEPA for
Speaker 3: projects on private land and we're able to do it
Speaker 3: in less than eighteen months usually, So I think we
Speaker 3: can be very efficient about things. I think there are
Speaker 3: ways for us to work with tribes and local communities
Speaker 3: to make sure that their.
Speaker 4: Voice is heard.
Speaker 3: But I do think that we allow for properly permitting
Speaker 3: projects to continue to be sued and sometimes you get
Speaker 3: more delays there, and so we should figure out how
Speaker 3: we prevent these projects who don't like the answer that
Speaker 3: comes out of the process from continuously delayed from lawsuits.
Speaker 2: So shifting the focus back to LPO, I had like
Speaker 2: one question trying to understand what has changed in the
Speaker 2: last twelve to eighteen months. If Elon Musk was starting
Speaker 2: his business today and came to you for an ev loan,
Speaker 2: what would be his chances of success and how soon
Speaker 2: would he get the money?
Speaker 3: Well, it depends on how prepared he is to get
Speaker 3: through the office. So we have of the one hundred
Speaker 3: and thirty four our application applications that we've received, I
Speaker 3: think I've said in the past, about thirty five of
Speaker 3: them are prepared to get through the office in sixty
Speaker 3: six to eight months. And those we can get through
Speaker 3: they have professional representation, they not answer our questions with
Speaker 3: twenty four hour response time all that stuff. And then
Speaker 3: we have almost one hundred applicants who probably can't get
Speaker 3: through the office in that amount of time, and they
Speaker 3: need to hire professional representation, They need to upgrade some
Speaker 3: of their staff to be able to like do commercial debt.
Speaker 3: They're experts in raising equity, which is great, but that's
Speaker 3: not the same as us. Right, So in general, I'd say,
Speaker 3: you know, like I think Syrah Resources got through the
Speaker 3: office in four months because they were really well prepared.
Speaker 3: And then there are others that I think were borderlined
Speaker 3: two years. I think if you talked to Rob Hanson,
Speaker 3: a model of materials, he'll say that with borderline two
Speaker 3: years and he wasn't ready when he first came into
Speaker 3: the office, And we help his organization take a more
Speaker 3: professional approach to under the underlying risks of his project.
Speaker 3: And his company is better for it, and we're equally
Speaker 3: excited about both types of applicants. So I don't mind
Speaker 3: spending twenty four months with somebody, but I don't want
Speaker 3: their expectations to be they can come with less preparation
Speaker 3: and then get through the office in six months.
Speaker 2: So that was one of the things that I wanted
Speaker 2: to ask you. Are you getting like is the percentage
Speaker 2: of applications that are more complete? Has that increased over
Speaker 2: the last few months or no?
Speaker 3: I mean, I mean, certainly with the seventeen oh six program,
Speaker 3: we have more electric utilities coming in and other more
Speaker 3: established players coming in, and they have the staff to
Speaker 3: be able to do a lot of this stuff. So
Speaker 3: those are higher quality applications. But there's still a huge
Speaker 3: number of extraordinary entrepreneurs and innovators in our country who
Speaker 3: don't have the ecosystem support that they need to be
Speaker 3: able to get through our office efficiently. And so we
Speaker 3: continue to work on the big accounting firms and the
Speaker 3: big services companies and others to try to get them
Speaker 3: to set up an LBO specific division to help those companies.
Speaker 3: But we can't lower our standards to rush them through
Speaker 3: a process. Right our standards are set by Congress, and
Speaker 3: so we have to get everyone up to those standards.
Speaker 3: And we think that all of these people can. If
Speaker 3: we don't think they can, we tell them that and
Speaker 3: we encourage them not to apply. But for all the
Speaker 3: one hundred and thirty four applications we have now, we
Speaker 3: believe that they can hit our standards, but they still.
Speaker 4: Have to do it.
Speaker 2: You said, it's not easy to make you happy, but
Speaker 2: I was. I really wanted to ask you in terms
Speaker 2: of pace of applications. I just looked at some data.
Speaker 2: So March twenty twenty two you had seventy seven applications
Speaker 2: and seventy six billion dollars in loans requested. And the
Speaker 2: latest update, it is, the one I have is March
Speaker 2: twenty twenty three is one thirty applications and one hundred
Speaker 2: and eighteen billion in loans requested. And of course you
Speaker 2: have the sectors that keep going up and down, and
Speaker 2: the last time business mostly up in terms of like
Speaker 2: the number one sector.
Speaker 4: So yeah, that's true on a relative basis.
Speaker 2: Yeah, so that is not a pace you're happy with,
Speaker 2: Like where would you like it to be?
Speaker 3: Well, I mean, we have four hundred and twelve billion
Speaker 3: or so to put out the door. And so in
Speaker 3: order to put that much money out the door, we're
Speaker 3: going to need at least that much in loan applications,
Speaker 3: and probably more than that because some people fall through.
Speaker 3: And so I think that the US has the ability
Speaker 3: to do big things. I think we have a tremendous
Speaker 3: number of entrepreneurs and innovators here that need us to
Speaker 3: do big things for their companies to be successful. But
Speaker 3: also we have a number of foreign companies who want
Speaker 3: to come to the United States for their technology to
Speaker 3: be commercialized, and so we want them to come here
Speaker 3: as well. And so I have a lot more work
Speaker 3: to do. Look, I mean we have. We have been
Speaker 3: given these resources by congres I don't think that they
Speaker 3: chose these numbers randomly. They believe that in order to
Speaker 3: unlock ten trillion dollars worth of investment, we have to
Speaker 3: do this first four hundred billion to unlock folks across
Speaker 3: the bridge to bankability. And we've used these lift off
Speaker 3: reports to help understand where we are on that continuum.
Speaker 3: So I'm very happy with my team. I think they
Speaker 3: do an extraordinary job and they work really hard, but
Speaker 3: we have to continue to do better. To hit these
Speaker 3: absolute targets.
Speaker 2: How big is your team now?
Speaker 4: We're up to about two hundred.
Speaker 3: And fifty people, so it's pretty exciting. And we have
Speaker 3: about one hundred new FED positions that'll be posted over
Speaker 3: the next few months, and so we're excited about the
Speaker 3: long term prospects of how we're building this place up
Speaker 3: as an institution.
Speaker 2: In terms of choosing projects, is kaling up a big
Speaker 2: part of the decision, the potential to scale up.
Speaker 3: I mean to be clear, we don't choose any projects.
Speaker 3: What we do is say to people, do you have
Speaker 3: a project that fits within the four milestones on the
Speaker 3: bridge to bankability? And then they submit a Part one application,
Speaker 3: and then we say do you meet the statutory required
Speaker 3: of the Loan Program's Office, And if they do, we
Speaker 3: are now equally excited about every project. So I don't
Speaker 3: care whether it's carbon sequestration or nuclear or hydrogen or
Speaker 3: long dration energy storage, renewables, and I don't care whether
Speaker 3: it's one hundred million dollar loan application or a six
Speaker 3: point five million dollar load application. We care about both
Speaker 3: of them equally. Everybody who uses a Loan Program's Office
Speaker 3: should believe and we are certainly trying to make it
Speaker 3: so that they will get a uniform experience no matter
Speaker 3: what sector they do or how big their loan application is,
Speaker 3: as long as they meet our criteria. And I do
Speaker 3: think it's important for us to be viewed as an
Speaker 3: independent arbiter of the statute. So if you qualify, we
Speaker 3: will prioritize you.
Speaker 2: That's really interesting. I thought there was some intervention on
Speaker 2: your behalf. You're just saying you meet the eligibility criteria,
Speaker 2: and whether it's five million dollars or five billion dollars,
Speaker 2: you're kind of treated equal.
Speaker 3: Yeah, I mean five million is more difficult. So we're
Speaker 3: doing the small deals like that in the Tribal Energy
Speaker 3: Loan program, but I'd say the vast majority of the
Speaker 3: other programs and applications that we have started roughly one
Speaker 3: hundred million. There's no statutory minimum, so they can certainly
Speaker 3: come in for five, but there's like three to four
Speaker 3: million dollars of cost associated to go through our program.
Speaker 4: So it's hard to bear three to four.
Speaker 3: Million dollars of cost and a five million dollar loan.
Speaker 2: And in terms of what has been approved, I just
Speaker 2: have a few headlines. Do you have a number or
Speaker 2: can you just share the headlines. As far as I know,
Speaker 2: it's probably three or four large projects which are approved.
Speaker 3: Well, there are three projects that have closed their loans
Speaker 3: and started drawing on the capitol. There's a number of
Speaker 3: additional projects where we've done a conditional commitment, things like
Speaker 3: lie cycle or redwood or model of the materials where
Speaker 3: they haven't closed the loan yet but they're expecting to
Speaker 3: and so we're excited about that. And then we have
Speaker 3: many more applicants, mainly these thirty five I was talking
Speaker 3: about that are fully prepared to get through the office
Speaker 3: that I can confidently say they're going to get through
Speaker 3: the office over the next twelve months. There remaining one
Speaker 3: hundred depends on whether they can get the right representation
Speaker 3: to really fill out our paperwork preper like I said,
Speaker 3: like we equally are enthusiastic for all of them to
Speaker 3: get across the finish line, but they have to meet
Speaker 3: our absolute standards, like we're just not allowed to drop
Speaker 3: our standards to push them through.
Speaker 2: I was speaking to some bankers and they were talking
Speaker 2: about actually at the summit, and they were talking about
Speaker 2: how supply chain stress is still visible in terms of
Speaker 2: lower disbursements, is that. Something that you're also noticing is
Speaker 2: the pace of the actual money out go there than
Speaker 2: it needs to be.
Speaker 3: The deals that we're doing have a lot less impact
Speaker 3: from supply chains because they're first of a kind deployments
Speaker 3: or something.
Speaker 4: It's right.
Speaker 3: You have much more supply chain impacts on solar panels
Speaker 3: or wind turbines or cable or some of those things.
Speaker 3: And so I'd say our projects are far less susceptible
Speaker 3: to supply chain delays because we're doing like the first
Speaker 3: six deployments and some of that stuff.
Speaker 2: So how would you sum up your Like, it's two
Speaker 2: years at the ESPO. Now, did they pan out as
Speaker 2: they as you expected them to? And how you know?
Speaker 2: You've told me you're never happy, So I'm going to
Speaker 2: put that into every question. What has been the biggest
Speaker 2: challenge for you?
Speaker 3: Yeah, maybe I should correct that I'm always happy, but
Speaker 3: I've never satisfied.
Speaker 2: That sounds better, Yeah.
Speaker 3: I mean, look, I think the first two years was
Speaker 3: about proving to the marketplace that we were capable of
Speaker 3: returning this program to its prominent place within commercialization. I
Speaker 3: think when we first came into office, there was a
Speaker 3: lot of high hopes, but we hadn't really.
Speaker 4: Proven to people that were able to do it today.
Speaker 3: I think when you look at the diversity of projects
Speaker 3: that have gone through the office, whether it's manufacturing loans
Speaker 3: or project loans model for materials as natural gas as
Speaker 3: an input. So people were worried that we'd be anti
Speaker 3: fossil fuels or whatever. I think people recognize now that
Speaker 3: we really are taking a very agnostic, dispassionate view of technology.
Speaker 3: They have to reduce greenhouse gas emissions, and that is
Speaker 3: something that we do care deeply about. But they don't
Speaker 3: have to be from one tribe or another tribe, like
Speaker 3: we're open to all great ideas, and then they do
Speaker 3: need to meet certain absolute standards, and we're happy to
Speaker 3: keep working on improving our ecosystem and all these things.
Speaker 3: But I think that ultimately where we are now is
Speaker 3: that the marketplace has still not figured out how to
Speaker 3: efficiently go through our process, and so they believe in us,
Speaker 3: they believe that they'll be treated fairly by us, but
Speaker 3: they don't believe that they actually know exactly how to
Speaker 3: get through our process efficiently, and so we have a
Speaker 3: lot more work to do to help them understand how
Speaker 3: to do that. And most of their friends are not helpful.
Speaker 3: They're venture capitalists, their board members, their bankers, like, none
Speaker 3: of them are actually helpful. They're wishing them well, but
Speaker 3: they're not actually able to help them. And so that
Speaker 3: falls on us because we believe very strongly that this
Speaker 3: is the future of American success, and so we have
Speaker 3: a veested interest in their success and we want them
Speaker 3: to be successful.
Speaker 2: Is there a personal Is there a challenge that was
Speaker 2: more personal that you may like to share? What were
Speaker 2: these two years?
Speaker 3: Well, in general, I'd say that I make commitments to
Speaker 3: people to get them to invest their time and ultimately
Speaker 3: money into getting through our office. And so it's at
Speaker 3: least four hundred hours worth of work to get an
Speaker 3: application put together. Then there's staff time involved, and sometimes
Speaker 3: they have to pay third parties to get through this.
Speaker 3: And there have been times where they have not received
Speaker 3: what I believe to be a five star experience through
Speaker 3: our office, and that bothers me because this is America's
Speaker 3: best and brightest, and I made personal commitments to them
Speaker 3: that they'd be treated fairly by the office, and some
Speaker 3: of them have experienced hurdles that I wasn't expecting, or
Speaker 3: delays that I didn't expect. And I just think that
Speaker 3: in general, the US government in this program have to
Speaker 3: become a more predictable place for them to do business,
Speaker 3: and we're striving to get that done every day. But
Speaker 3: it is a personal failing that I feel, you know, emotionally, personally,
Speaker 3: because I'm making personal commitments to people that they're going
Speaker 3: to be treated fairly and I want to make sure
Speaker 3: we honor those commitments.
Speaker 2: And I did not know that an application, a complete application,
Speaker 2: would take about four hundred hours of preparation time.
Speaker 3: I mean, it's no different than a commercial bank, as
Speaker 3: someone who's closed over one hundred billion dollars of commercial debt.
Speaker 3: It's a lot of work to put together at data
Speaker 3: room with three hundred files and all the work that
Speaker 3: goes into putting those together and all that stuff. But
Speaker 3: our average loan size is nine hundred million dollars, Like
Speaker 3: four hundred dollars is not a lot of time takeet
Speaker 3: a nine million dollar loan.
Speaker 2: That it's a good ratio. So just to wrap up
Speaker 2: any headlines that we can expect from you in twenty
Speaker 2: twenty three that go beyond what you've already told me,
Speaker 2: you know you're expecting these thirty five applications to be
Speaker 2: through in the next twelve months or so.
Speaker 4: Yeah.
Speaker 3: Well, we have our first applications that have come in
Speaker 3: for the seventeen oh six program, and we have our
Speaker 3: first applications that we feel really good about in the
Speaker 3: Tribal Energy program, and so we're hoping that those two
Speaker 3: programs really come into their own this year.
Speaker 4: So we're excited about that.
Speaker 3: But we also have I think over seventy billion dollars
Speaker 3: worth of innovative clean energy loans in here and over
Speaker 3: twenty six billion dollars worth of ATV Advanced Technology Vehicle
Speaker 3: manufacturing loans to get through.
Speaker 4: So we're busy.
Speaker 2: Thank you very much for your time and it was
Speaker 2: a pleasure to hear your thoughts and all the best
Speaker 2: to the Department of Energies LPR.
Speaker 4: Well, thanks for your continuing interest. It's really important.
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