Speaker 1: The US renewables industry is dead, killed by a president
Speaker 1: who hates wind turbines and loves supporting the fossil fuel industry.
Speaker 1: That's the narrative we often hear coming out of the
Speaker 1: US right now. But is it true? This is zero?
Speaker 1: I am Akshadrati this week. What's really happening to the
Speaker 1: renewables industry in the US. President Donald Trump's administration has
Speaker 1: taken a big swipe at clean energy policies in the US,
Speaker 1: gutting tax credits for wind and solar, removing subsidies for
Speaker 1: electric cars, and even using taxpayer dollars to haul the
Speaker 1: development of offshore wind farms. That has certainly heard the country's
Speaker 1: clean energy credentials, But if you look at the deployment figures,
Speaker 1: renewables are still winning. Ninety percent of all new power
Speaker 1: generating capacity added to the grid last year was made
Speaker 1: up of solar, wind, and batteries. The same thing is
Speaker 1: expected to happen this year. So why the discrepancy between
Speaker 1: the narrative and the deployment One place we can try
Speaker 1: to find an answer is in the US state of Arkansas.
Speaker 1: It is now home to the Steel River Energy Center,
Speaker 1: which will become one of the largest solar and battery
Speaker 1: storage projects anywhere in the US. When all three phases
Speaker 1: are completed in twenty twenty nine, it will have two
Speaker 1: point five gigawards of solar and two point nine gigaward
Speaker 1: hours of battery storage. That plant alone will be enough
Speaker 1: to power a small city. My guest today is playing
Speaker 1: a leading role in that building Frenzy, having secured three
Speaker 1: point five billion dollars in financing. His name is Kevin Smith,
Speaker 1: and he's the chief executive officer of Cypress Creek Energy.
Speaker 1: He spent the last two decades working in renewables in
Speaker 1: the US and abroad, and he believes everything points to
Speaker 1: a future powered by solar and batteries even in the US.
Speaker 1: But given the barriers that the Trump administration has put up,
Speaker 1: can that really happen? The government keeps raising tariffs in China,
Speaker 1: does it have enough of its own manufacturing capacity for
Speaker 1: clean energy? And do companies building artificial intelligence, the core
Speaker 1: reason for rising electricity demand in the US, really care
Speaker 1: if it comes from renewables. Welcome to the show, Kevin,
Speaker 1: Thank you very much.
Speaker 2: It's nice to be here.
Speaker 1: So you've been in the energy industry for forty years,
Speaker 1: two decades in oil and gas, and then the last
Speaker 1: two decades in renewables, and you've seen many ups and
Speaker 1: downs in both industries in the US specifically, right now,
Speaker 1: the narrative is that the US renewables industry is under
Speaker 1: attack from the Trump administration and the future for the
Speaker 1: industry is dire than it has ever been before.
Speaker 3: Is it true, Well, the first part is true, the
Speaker 3: second part is not true. So certainly the industry has
Speaker 3: been under attack by the administration. Frankly with them and
Speaker 3: struggling to pay their electric bills. Doesn't make sense to
Speaker 3: be attacking the most affordable energy cost out there with
Speaker 3: solar and renewables generally, So, yes, the industry has been
Speaker 3: has been under attack with policy changes and policy issues
Speaker 3: with the administration.
Speaker 2: However, the industry is thriving.
Speaker 3: If you look at twenty twenty five and twenty twenty six,
Speaker 3: you know upwards to ninety percent of all new generation
Speaker 3: is renewables, primarily solar and battery storage has been upwards
Speaker 3: to eighty percent of new generation is solar and battery storage,
Speaker 3: and largely that's because it's the most affordable cost of energy.
Speaker 1: And so right now you know the deployment figures do
Speaker 1: reach this record. But one of the reasons why we
Speaker 1: are seeing a sped up deployment in twenty twenty five
Speaker 1: and twenty twenty six is because there were these tax
Speaker 1: credits that are supposed to expire. So from July for
Speaker 1: twenty twenty six, if your solo plant is not under construction,
Speaker 1: you are not going to be getting US government credits.
Speaker 1: Is the boom then over?
Speaker 2: No, not at all.
Speaker 3: And in reality, the you know, projects to qualify for
Speaker 3: the tax credits, you know, have certain conditions where they
Speaker 3: can qualify for starter construction. They need to be in
Speaker 3: inter commercial operation by the end of twenty thirty, so
Speaker 3: we have you know, a number more years of where
Speaker 3: tax credits will be applied, and frankly that helps keep
Speaker 3: you know, electricity prices down. My view is with or
Speaker 3: without tax credits, and I think the industry's view is
Speaker 3: with or without tax credits, we're the most competitive source
Speaker 3: of electricity out there.
Speaker 2: You take away the tax credits, it raises the cost.
Speaker 3: Of the most affordable electricity price, but we're still you know,
Speaker 3: much more competitive than the natural game, or certainly more
Speaker 3: competitive than nuclear new nuclear or new coal.
Speaker 1: But I'm looking at bloomerg en ef forecasts for solar
Speaker 1: for example, and they peak in twenty twenty six and
Speaker 1: start to decline all the way till twenty thirty one
Speaker 1: and only really reach the twenty twenty six levels in
Speaker 1: twenty thirty two. So there is a decline. It's not
Speaker 1: like it's going to zero. It's going from something like
Speaker 1: fifty gig awards built, which includes all types of solar
Speaker 1: by the way, down to forty gigawats and then back
Speaker 1: up to fifty in six years time. But there is
Speaker 1: a decline, right.
Speaker 3: Well, I mean you could argue whether it's the decline
Speaker 3: or whether we have this you know, kind of short
Speaker 3: term boom that's resulting in an increase in renewables for
Speaker 3: a short period of time while the tax credits are
Speaker 3: still in effect, and then it goes back now down
Speaker 3: to a normal level. I mean even the normal level,
Speaker 3: I mean forty gigawatts a year.
Speaker 2: You know, if a decade ago you said.
Speaker 3: We're going to build forty gigawottes a year of when
Speaker 3: when we're building a tenth of that, it would be
Speaker 3: kind of an amazing figure to look at. So foty
Speaker 3: gigawatts a year is you know, one hundred billion dollars
Speaker 3: of construction on renewable energy projects, which is tremendous amount
Speaker 3: of growth.
Speaker 1: So you've just signed this three and a half billion
Speaker 1: dollar financingdea for one of US's biggest solar and battery projects.
Speaker 1: Just put it in context. China, India, and even the
Speaker 1: UE have built far bigger projects, but for the US
Speaker 1: it is one of the biggest. How long does it
Speaker 1: take to build it?
Speaker 2: It's about a two just over two year construction period.
Speaker 3: I mean the first phase will start generating electricity by
Speaker 3: say mid twenty twenty eight. The first two phases are
Speaker 3: one point six gigawatts of solar PV and then one
Speaker 3: point nine gigawatt hours of battery storage.
Speaker 2: There's a third phase.
Speaker 3: They're kind of three equal phases, So there's a third
Speaker 3: phase that we're hoping to start construction later this year
Speaker 3: or early next. That third phase would be into operation
Speaker 3: by the end of twenty twenty nine.
Speaker 1: Where are the solar panels and batteries for these projects
Speaker 1: coming from?
Speaker 3: Solar panels are one hundred percent US made for solar,
Speaker 3: so it's and they're you know for solo has some
Speaker 3: overseas manufacturing. But these these these panels are one hundred
Speaker 3: percent main in the US. We're also quite proud that's
Speaker 3: that it's the vast majority of the steel is actually
Speaker 3: being manufactured in Mississippi County, Arkansas. You know, we like
Speaker 3: to refer to the project as built on Arkansas steel.
Speaker 3: The batteries are coming from LG and their US manufacturing
Speaker 3: as well. You know, for those that think you can't
Speaker 3: supply the renewable energy industry with US manufacturing, that's happening
Speaker 3: as we speak. I mean, tens of billions of dollars
Speaker 3: have been invested in US manufacturing and that's continuing to
Speaker 3: supply and will continue to disupply US renewable energy projects
Speaker 3: for the foreseeable future.
Speaker 1: And what about the battery metals that LG users to
Speaker 1: be able to make those batteries.
Speaker 3: Well that I mean there are some certainly there are
Speaker 3: some components that are coming from overseas.
Speaker 2: You know, I don't think.
Speaker 3: You could pull look at one energy industry supply, whether
Speaker 3: it's natural gas or nuclear or coal, and look at
Speaker 3: and say, are one hundred percent of all components coming
Speaker 3: from US manufacturers. I would like to think that renewable energy.
Speaker 3: You know, the percent of components that are coming from
Speaker 3: US is greater than most of those other other electricity supply.
Speaker 3: You know, a lot of the nuclear technology now is overseas.
Speaker 3: Two out of the three main gas turbine manufacturers are overseas.
Speaker 3: Like I said, I think renewable energy and solar and
Speaker 3: battery storage specifically are being dominated by US components supply.
Speaker 1: And you talked about the fact that you know, solar
Speaker 1: and batteries are now the cheapest that can be offered
Speaker 1: to US consumers. How much cheaper would they be if
Speaker 1: there were no restrictions on imports.
Speaker 3: Well, if that would you know, I mean, we've got
Speaker 3: two things happening. One is is that the tax credits
Speaker 3: are being taken away, and you know, we're paying you know,
Speaker 3: probably for solar panels. We're probably in some cases paying
Speaker 3: triple what the rest of.
Speaker 2: The world is paying.
Speaker 3: You know, you know, we're you know, panel prices right now,
Speaker 3: Solar module prices are in the you know call it,
Speaker 3: you know, thirty two to thirty eight cent range, depending
Speaker 3: on the time of year and who your supplier supplier is.
Speaker 3: You know, the rest of the world can can get
Speaker 3: less expensive panels in the in the low teens twelve
Speaker 3: thirteen cents a lot, and all that all that tariff
Speaker 3: is being passed through to electricity consumers. So you and
Speaker 3: I are paying that in our electricity bills.
Speaker 1: Well I am based in london' so not me yet, but.
Speaker 2: Certainly I pay it in my electricity bills.
Speaker 3: All those tariffs are you know, have to be passed
Speaker 3: through into capital costs and passed through to electricity prices.
Speaker 1: And what about batteries If you compare no imports with tariffs.
Speaker 2: On yeah, I mean we're similar issue. It's probably not triple.
Speaker 3: I would probably say it's it's certainly close to double
Speaker 3: what international projects are dealing with with regards to battery
Speaker 3: costs because of the tariff issues. So, as I said,
Speaker 3: that increases capital costs and it increases prices to consumers.
Speaker 1: A solar battery project right now is about twenty five
Speaker 1: hundred dollars a killer. What in the US you said, roughly,
Speaker 1: if you take these reductions and tear away the trade barriers,
Speaker 1: what could it come down to?
Speaker 3: You're certainly probably under fifteen hundred, I would think.
Speaker 1: Given where the cost is today and where the trade
Speaker 1: barriers are and where future looks like, which doesn't look
Speaker 1: like it's going to come down anytime soon these trade barriers.
Speaker 1: How does the pipeline for you and developers like you
Speaker 1: look like today?
Speaker 3: Well, obviously, we have projects that we're proceeding with in
Speaker 3: the over the next several years that would qualify for
Speaker 3: tax credits. As the tax credits start to roll off,
Speaker 3: we're going to have to increase our electricity prices, you know.
Speaker 3: So I like to talk generically about a sixty dollars
Speaker 3: a megawat hour solar project today with tax credits, without
Speaker 3: tax credits is probably more like eighty five or ninety
Speaker 3: dollars a megawat hour. But you compare that against a
Speaker 3: natural gas project combined cycle project with you know, top
Speaker 3: of the line equipment, you know, high efficiency gas turbines,
Speaker 3: you're probably in the one hundred and twenty to one
Speaker 3: hundred and.
Speaker 2: Forty dollars a megawatt hour range.
Speaker 3: So we're still even with rolling off the tax credits
Speaker 3: and with paying all these tariffs, we're still cheaper than
Speaker 3: a natural gas combined cycle facility.
Speaker 1: And so for this first phase of the Steel River
Speaker 1: Energy Center in Arkansas that you're building, where is the
Speaker 1: electricity going to go. I'm assuming a data center.
Speaker 3: In reality that that project is grid connected. Okay, so
Speaker 3: we we sell a hundred percent of our electricity to
Speaker 3: the grid. We have a i'll say a financial contract
Speaker 3: with a tech player that will.
Speaker 2: Be announced next month.
Speaker 3: But Entergy Arkansas is receiving all the energy under their
Speaker 3: transmission system and they're distributing it across their network. Like
Speaker 3: I said, we have a financial structure with a tech
Speaker 3: player to give us a guarantee on the price that
Speaker 3: we're getting for our electricity.
Speaker 2: That's a bit more financial transaction.
Speaker 3: The actual electrons are going to the grid and being
Speaker 3: distributed by Entergy Arkansas.
Speaker 1: Seven eight years ago, you did an interview with CGTN
Speaker 1: where you said, you know, India and China are building
Speaker 1: a lot of renewables because those are the countries where
Speaker 1: electricity demand is growing at seven eight percent, and when
Speaker 1: there's growth, the industry grows. You can now say the
Speaker 1: same thing in the US for that electricity demand is
Speaker 1: now finally growing, maybe not eight percent, but it's growing
Speaker 1: three four five percent, and a lot of that is
Speaker 1: to do with AI and data centers. One thing that
Speaker 1: we've seen in these data center stories is that these
Speaker 1: companies want to build these data centers really quickly, and
Speaker 1: then they want an uptime that is ninety nine point
Speaker 1: nine percent of the time. Now, solar and batteries can
Speaker 1: be built fast. You know, you're talking about two year
Speaker 1: project to build one of the largest solar and battery
Speaker 1: project in the US. But gas and batteries can keep
Speaker 1: the uptime that they need, and right now it seems
Speaker 1: like gas plus batteries are winning out. How can renewables
Speaker 1: compete with those constraints.
Speaker 3: I mean, that's interesting, interesting, I'll say statements in there.
Speaker 3: So there's a few things going on. One is my
Speaker 3: view is the vast majority of data centers, if in
Speaker 3: order to get ninety nine point nine nine nine or
Speaker 3: even ninety nine point nine, really need to be grid connected. Okay,
Speaker 3: so there are a number of projects. You know, we
Speaker 3: had a debate internally about how many of those behind
Speaker 3: the meter projects we're getting built that we're off grid
Speaker 3: and had this mix of gas and batteries and solar.
Speaker 2: It's really kind of a handful.
Speaker 3: Okay, The vast majority of data centers are in order
Speaker 3: to get that reliability, are going to need to be
Speaker 3: grid connected. With that as a backdrop that most of
Speaker 3: them will be grid connected. Then solar and battery storage
Speaker 3: is a great tool for the utilities to provide you know,
Speaker 3: affordable energy. They've got to mix you know, their own
Speaker 3: base where where it includes a mix of fossil fuels
Speaker 3: and nuclear and renewables to serve that load. So, you know,
Speaker 3: and we are looking at, you know, for a data
Speaker 3: center that does need a behind the meter solution, we
Speaker 3: are looking at a mix of solar and battery storage
Speaker 3: and potentially some natural gas in there. But like I said,
Speaker 3: my view is eighty percent plus of data centers that
Speaker 3: go in are going to be grid connected.
Speaker 1: That might be true this year, next year, but it
Speaker 1: looks like when I look again projections from bloomaginnyf's new
Speaker 1: Energy Outlook that was just recently published purely at data
Speaker 1: Center driven edition on the grid, it starts to become
Speaker 1: gas heavy starting in twenty twenty seven all the way
Speaker 1: to twenty thirty five. By twenty thirty five, we are
Speaker 1: looking at eighty to ninety percent of the additional power
Speaker 1: demand for data centers being met by gas. Are they wrong?
Speaker 3: I've looked at other projections, you know, from the International
Speaker 3: Energy Association from you know, the National Energy Resources from
Speaker 3: you know, Wood Mackenzie. We're still seeing substantial amount of
Speaker 3: growth and supply from solar and battery stores. I mean
Speaker 3: you you talked about forty gigawatts a year. Even five
Speaker 3: years ago, forty gigawatts was would be viewed as a
Speaker 3: tremendous amount of growth in the solar space projections.
Speaker 2: Will be interesting to see how that all sorts itself out.
Speaker 3: What's happening today, ninety percent of all new generation is
Speaker 3: coming from renewables in battery storage.
Speaker 2: Now will that change?
Speaker 3: Yes, I believe there will be more natural gas put
Speaker 3: on the under the system. But when you talk about
Speaker 3: i'll say grid connected, you know nuclear and natural gas.
Speaker 3: You know they need that one hundred and twenty one
Speaker 3: hundred and forty dollars price round the clock. Okay, So
Speaker 3: even when power prices drop to twenty or thirty dollars
Speaker 3: in the middle of the night, and the grid could
Speaker 3: provide very cost effective power because demand is low in
Speaker 3: the middle of the night, that gas turbine project or
Speaker 3: that nuclear project's got to continue to generate in.
Speaker 2: Order to pay its off its its capital costs.
Speaker 1: So this is where I think the global numbers and
Speaker 1: the US numbers actually diverge drastically. And you look at
Speaker 1: a global picture, and the global picture certainly says that
Speaker 1: a lot of the power demand will be met by
Speaker 1: solar and batteries, a little bit of wind. But when
Speaker 1: it comes to the US, it's the only place, the
Speaker 1: only large economy that is increasing its gas power load
Speaker 1: from twenty twenty five to twenty thirty five. But you
Speaker 1: don't think that's the case because financially, renewables have to win.
Speaker 3: I'll say yes, simpler answers, yes, I mean the dynamics
Speaker 3: in the US are a little bit different. Number one
Speaker 3: is we're penalizing heavily with tariffs renewable energy, so we're
Speaker 3: we're forcing prices higher than they normally would be.
Speaker 2: The rest of the world isn't doing that.
Speaker 3: The rest of the world is trying to do the opposite,
Speaker 3: is restricting barriers. The other dynamic is that US does
Speaker 3: have an abundance of natural gas, and our cost of
Speaker 3: natural gas is cheaper than the rest of the world.
Speaker 3: Now as we build more LNG terminals and natural gas
Speaker 3: becomes a bit more like oil a commodity, a worldwide commodity,
Speaker 3: as opposed to trapped gas in the US, then the
Speaker 3: price of natural gas will rise and that'll affect obviously,
Speaker 3: you know, the build I'm you know, very bullish on
Speaker 3: solar and battery storage, even at the forty to fifty
Speaker 3: gigawatte level that we talked about, you know, because I actually,
Speaker 3: you know, solar largely if you look at the projections,
Speaker 3: you know, from twenty years ago and from fifteen years
Speaker 3: ago and from ten years ago, solar has beaten all
Speaker 3: of those projections, and I'm pretty bullish that it'll continue
Speaker 3: to do that.
Speaker 1: One other bearish note on solar that I should bring
Speaker 1: up then is the residential solar industry in the US,
Speaker 1: which install about four gigabitz of solar in twenty twenty six,
Speaker 1: fifteen percent lower than last year and less than half
Speaker 1: of what was installed in twenty twenty three. And a
Speaker 1: large part of that is because of the removal of
Speaker 1: federal subsidies on rooftop solar and the fact that you
Speaker 1: have all these startups, et cetera. You don't worry that
Speaker 1: that kind of impact that's come on a residential solar
Speaker 1: will come to the utility scale projects that you work on.
Speaker 3: It's a completely different market, you know, I mean, putting
Speaker 3: twenty or thirty panels on a roof is a whole
Speaker 3: lot more expensive than you know, building two million panels
Speaker 3: on farmland in Arkansas or in a ranch in Texas.
Speaker 3: So the demand that we're seeing on the solar side
Speaker 3: is going to continue to grow our business.
Speaker 1: After the break, I asked Kevin whether President Trump's anti
Speaker 1: wind crusade is going to come to solar. Going back
Speaker 1: to your point about electricity demand and that sort of
Speaker 1: helping the solar and battery boom in the US, there
Speaker 1: is a fear that perhaps maybe all those demand may
Speaker 1: not pan out. That could be a bare case for
Speaker 1: here data centers. The other bare case could be that
Speaker 1: air data centers are not popular. Lots of people oppose
Speaker 1: them just for how they look or the noise they produce,
Speaker 1: or others oppose them because they are increasing power builds.
Speaker 1: As you talked about, that could also start to reduce
Speaker 1: the number of data centers that get built in the
Speaker 1: US just from a power demand perspective. If that comes
Speaker 1: to pass, If there is not quite the bull case
Speaker 1: for power demand for data centers, does it affect the
Speaker 1: future for renewables? You think in the US.
Speaker 3: Well, you know, as I've kind of said, you know
Speaker 3: multiple times, the solar and battery storage is the most affordable, okay,
Speaker 3: and it's also quickest to market. Now, a behind the
Speaker 3: meter natural gas fire project for a data center that
Speaker 3: needs to provide five nine's reliability is a very expensive facility.
Speaker 3: If the data center load goes down and you don't
Speaker 3: have as many of those behind the meter product, then
Speaker 3: you'll likely it'll come out of the natural gas side
Speaker 3: of the of the model, not so much out of
Speaker 3: the solar and battery storage, which is largely grid connected solar.
Speaker 3: Some people talk about data center is about fifty percent
Speaker 3: of the growth, you know, or sixty percent of the
Speaker 3: growth that we're.
Speaker 2: Going to see in electricity demand.
Speaker 3: But there's electrification going on across the across the country,
Speaker 3: you know, manufacturing activities, you know, electric vehicles. We are
Speaker 3: continuing to see growth that is non data center related.
Speaker 3: But as you point out, if that data center growth
Speaker 3: doesn't materialize as we expect, my expectations are probably means
Speaker 3: that we build blessed natural gas.
Speaker 1: It's worth mentioning wind as well. In twenty twenty five,
Speaker 1: President Trump signed an executive order holding the permitting of
Speaker 1: new wind projects. That was challenged in courts, and a
Speaker 1: federal judge blocked that executive order, and this month the
Speaker 1: Trump administration has decided not to appeal. But then there
Speaker 1: is a new case that's been brought by renewable groups
Speaker 1: who are suing the US government because the Pentagon, the
Speaker 1: Department of Defense is holding back the review of wind
Speaker 1: power projects, which has really brought wind development to a halt.
Speaker 1: Do you think this anti wind crusade is going to
Speaker 1: come to solar?
Speaker 3: It doesn't appear that it will, okay, And and mostly
Speaker 3: because I think I think the economics are clear, and
Speaker 3: the and the the amount of solar and battery stores
Speaker 3: that's that's helping helping the grid and helping keep electricity
Speaker 3: prices down. It doesn't make any sense to try and
Speaker 3: shut that off. It'll likely raise electricity prices. But the
Speaker 3: administration seems to have i'll say, a non economic, non technical,
Speaker 3: adverse reaction to building wind, which doesn't make a whole
Speaker 3: lot of sense either.
Speaker 1: Quite frankly, now taking more of global view, and you
Speaker 1: know you've worked in renewable energy projects outside of the
Speaker 1: US as well. One framing that shows up again and
Speaker 1: again is that look oil and gas companies, they are
Speaker 1: high risk but high reward. Renewable energy companies now they're
Speaker 1: kind of low risk, low reward. Do you think low
Speaker 1: profitability in renewables is holding back the industry historically?
Speaker 3: Returns you know, over the last five years, returns on
Speaker 3: investments in renewable energy have been lower than and the
Speaker 3: oil and gas sector. Post COVID and the and the
Speaker 3: war in Ukraine and now the war in Iran, we
Speaker 3: have seen over the last couple of years returns because
Speaker 3: of the demand.
Speaker 2: We have seen returns for renewable energy projects improves substantially.
Speaker 2: But they are lower risk, okay, which you know, you know,
Speaker 2: a lot of utilities, pension funds, you know, other investors
Speaker 2: like that low risk profile that renewable energy provides. So
Speaker 2: there is a segment of the market that likes to
Speaker 2: drill and.
Speaker 3: Is willing to take those high risk, high return, higher return,
Speaker 3: potentially higher return projects. And there's also a significant segment
Speaker 3: that's looking for lower risk but still strong returns. I mean,
Speaker 3: we're seeing pretty strong returns in the renewable energy sector
Speaker 3: these days, maybe not quite as high as a return
Speaker 3: if you decide you want to do a weldcapt drilling
Speaker 3: program in West Texas, but it's a completely different risk profile.
Speaker 1: Is there anything that can be done to increase the
Speaker 1: profitability of renewable energy industry?
Speaker 3: You know, those things have a tendency to sort itself
Speaker 3: out based on supply and demand of investors as well.
Speaker 3: If there was a shortage of investors in renewable energy,
Speaker 3: you would see returns rise, okay, but there isn't a
Speaker 3: shortage of investors in removal energy sector, both on the
Speaker 3: debt side, you know, tax equity. You know, while those
Speaker 3: tax credits exist and the equity players like ourselves, you know,
Speaker 3: there isn't necessarily a shortage. But like I said, returns
Speaker 3: have have have risen, you know, to double digits over
Speaker 3: the last several years, and so you know, we see
Speaker 3: adequate and I'll say substantial amount of investment, investment appetite
Speaker 3: still looking at investing tens of billions of dollars of
Speaker 3: a year per year in in renewable energy projects.
Speaker 1: We are seeing though, in markets where solar penetration has
Speaker 1: been high, that investments are starting to slow down because
Speaker 1: you're getting so many hours of what we call negative
Speaker 1: electricity prices essentially, this too much solar than what the
Speaker 1: grid can consume. That of course is encouraging battery storage,
Speaker 1: but it has just because of the negative electricity prices
Speaker 1: and hours hundreds of hours now here in Europe for
Speaker 1: a sample, it's starting to slow down the deployment of
Speaker 1: solar as a result, and also, of course it affects
Speaker 1: the profitability of those projects. Is there a way that
Speaker 1: not just batteries, but other demand side projects could take off.
Speaker 1: Are you seeing the growth of projects that want to
Speaker 1: take advantage of negative price to electricity come through run
Speaker 1: only in the hours when those prices exist.
Speaker 2: Yes, I mean there are industries there, you know.
Speaker 3: I mean, cryptocurrency is probably the one of the bigger ones.
Speaker 3: You know, they you know, where where they can kind
Speaker 3: of run when electricity prices are low. You know, there
Speaker 3: are other industries that are looking at that. I mean,
Speaker 3: the US market is quite a bit different in you know,
Speaker 3: to a large extent, less advanced from renewable energy than
Speaker 3: some of the European countries. So, you know, while California
Speaker 3: and Texas talk about times of the year where there's
Speaker 3: fifty percent of the energy is coming from renewables, you
Speaker 3: don't see that in you know, Arkansas and Indiana and
Speaker 3: Pennsylvania and Alabama, and you know those kinds of places
Speaker 3: where you see maybe a few percent coming from renewable energy.
Speaker 2: So the ability and.
Speaker 3: The areas for growth across the US are still, you know,
Speaker 3: still pretty tremendous. I mean, you could see you know,
Speaker 3: dramatic increases in those markets over the next couple of decades,
Speaker 3: and it would take them a while to get up
Speaker 3: to fifty percent supply from renewable energy.
Speaker 1: So one thing that's worth noting in these twenty twenty
Speaker 1: six record figures for solar installation is that seventy four
Speaker 1: percent of all solar capacity that was installed in the
Speaker 1: first quarter of twenty twenty six was in Texas, Florida, Ohio, Indiana, Michigan, Arizona,
Speaker 1: and Mississippi, all that voted for Trump. These are the
Speaker 1: places that are seemingly loving solar. Do you see that
Speaker 1: kind of veg showing up at US politics in maybe
Speaker 1: the midterms or the next presidential election, where this attack
Speaker 1: on renewables turns into people wanting a leader that actually
Speaker 1: brings renewables regardless of climate goals, but just because it's cheap.
Speaker 3: It definitely should and it's not just what's critical is
Speaker 3: It's not just we're building projects in those in those markets.
Speaker 3: You know, the vast majority of the manufacturing jobs they've
Speaker 3: been created over the last five years in the renewable
Speaker 3: energy sector is in those same same states. I mean,
Speaker 3: first soldiers, manufacturing facilities, you know, historically the Legacy facilities
Speaker 3: in Ohio, they built new facilities in Alabama, Louisiana, South
Speaker 3: South Carolina.
Speaker 2: Okay, next power LG you know Q cells.
Speaker 3: There's and there's just a long list of manufacturers that
Speaker 3: are built manufacturing, tens of thousands of jobs, tens of
Speaker 3: billions of dollars of investment in Red states. Okay, the
Speaker 3: figure was more than eighty percent of all manufacturing for
Speaker 3: renewable energy is in Red states. So I mean that
Speaker 3: is not having as a big effect as you would think,
Speaker 3: but it's starting to resonate.
Speaker 1: One reason why the oil and gas industry seems to
Speaker 1: get sway is because it has had for a long
Speaker 1: time a very powerful lobby. The renewable energy industry is newer,
Speaker 1: but it's also, as some people say, not as organized.
Speaker 1: You're part of that industry, what are you doing to
Speaker 1: try and improve your political chances in the elections to come.
Speaker 2: We're participating in the industry groups.
Speaker 3: I mean there's you know, the three main industries groups
Speaker 3: that affect renewable energy and solar. You know, the Soul
Speaker 3: Energy Industry Association, you know called CIA. There's ACP, which
Speaker 3: is American Clean Power, and there's and there's a CORE
Speaker 3: which is American Council Renewable Energy. Those three groups are
Speaker 3: the three largest industry groups, and we are trying to
Speaker 3: kind of mobilize from a lobbying activity and policy and
Speaker 3: also trying to make sure that those three groups are
Speaker 3: working together.
Speaker 2: I'll say the main difference is, you.
Speaker 3: Know, while you know, renewable energy is the most affordable
Speaker 3: supply out there, it's also and as you mentioned, it's
Speaker 3: a lower risk, low lower return. So you know, the
Speaker 3: oil and gas industries have been have been thriving for
Speaker 3: one hundred years. You know, you've got you know, record
Speaker 3: profits during the current war in Iran and record profits
Speaker 3: when the war in Ukraine broke out. That profitability is
Speaker 3: a lot more muted in the renewable energy industry. So
Speaker 3: the oil and gas industry, you know, outspends probably one
Speaker 3: hundred to one the renewable energy industry and lobbying efforts,
Speaker 3: and unfortunately, I think that's likely going to continue. I
Speaker 3: think we've got the right message, we don't have the
Speaker 3: right lobbying dollars behind it. We're trying to figure out
Speaker 3: ways to increase the voice of renewable energy and get
Speaker 3: that message out that this is the most affordable electricity
Speaker 3: supply out there without having to spend the massive dollars
Speaker 3: that the oil and gas industry does on lobbying and
Speaker 3: policy activities in DC.
Speaker 1: So, would you conclude that the narrative that the renewables
Speaker 1: industry's future in the US is dire is not true?
Speaker 2: Absolutely not, absolutely not. I've made a conscious choice. Okay.
Speaker 2: You know, I was in the nuclear industry.
Speaker 3: I spent a good portion of my career, you know,
Speaker 3: upwards to twenty years developing natural gas projects, both in
Speaker 3: the US and internationally.
Speaker 2: My view is this is going to be a solar world. Okay,
Speaker 2: it's just a question of when.
Speaker 1: Thank you, Kevin, Thank you very much, and thank you
Speaker 1: for listening to zero. Now for the sound of the week.
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