So naturally, I asked him about this – and NIMBYs, and the Inflation Reduction Act, and also about what gives him hope for the future. This interview has been edited for length and clarity.
These days there’s a lot of folks out there who a few years ago were more optimistic than they are today given all kinds of industry trends, policy trends … how would you characterize the pace of the transition right now? Is it speeding up or slowing down?
I actually go into the room today more optimistic than I would’ve been two years ago. I think at the end of the day what we need to think about is, in the electric power system, we need growth to be able to innovate. We’re about to get the most growth that we’ve had – the most load growth in the U.S. – in multiple decades. That actually is an opportunity for us to transform how things work. It’s a lot harder to do that in a flat demand environment, and for the first time in a long time we don’t have that anymore.
So I find it quite interesting when you have conversations about oh my gosh, the hyperscalers need a ton of electricity for data centers, what is this going to do to the energy transition? Hyperscalers, as an example, are amazing customers who care immensely about sustainability. They do need electrons tomorrow but those are electrons they’re committed to decarbonizing over time. So I like our chances now more than I would’ve two years ago.
How has your experience in wind informed your approach to emerging technologies generally?
Well I think in a lot of these cases, this is an all-of-the-above energy technology opportunity for us. We’re going to need a lot of different technologies to solve our challenges and then the real question becomes how do we develop products that can industrialize at scale. And that is really at the heart of the challenge for the wind industry today.
The reality is there’s an incredible amount of innovation with wind. A lot of accelerated larger products. And as they got larger and larger, they got harder and harder to make, and the harder and harder they are to make, the bigger the industry’s quality challenges. And at the end of the day, if we produce products that ultimately don’t work, it doesn’t electrify and decarbonize the world.
When I think about what we do in places like [a startup summit], the technology is the start but it’s also simultaneously saying, is this something we can make at scale?
Do you think we’re not going to be able to manufacture wind at scale?
No, I think we’re definitely going to be able to do it. But I think the industry has gone through such an incredible amount of growth fairly quickly with different product variants that the industry struggled in that regard. The availability of the global install base of wind turbines from an industry perspective has gone down as the growth has gone up. And that’s a bad equation. We need the availability of the product to be working at the same static pace as we plan more and more wind turbines. Do I think we can do that? I think we can. But something I reference a lot is the risk of developing products and businesses on PowerPoint economics versus actual engineering and manufacturing discipline to make sure we can do things right the first time.
I write a newsletter for Heatmap about conflicts in the energy transition – local, state, federal – and I’ve covered conflicts over wind projects, solar projects, battery storage. A trend I’ve seen, especially within first-moving space, is one involving opposition. Because people aren’t familiar with these technologies, it’s easier to scaremonger or get people opposed. I’m wondering, how do you think companies like yourself are doing at handling community engagement and communities’ reception to emerging technologies?
I think what’s critical here is that we all are a catalyst to a conversation. I think the challenge we have sometimes with the energy transition is we actually let the conversation go on for too long.
I actually think the debate is crucial. The debate within communities where there are trades being made – for example, for space or resources — are critical. But the adult conversation is how we converge. Ultimately you need to govern those conversations, make decisions, and go. And today I don’t know if that adult conversation happens fast enough.
For anyone here involved in deployment, are we in a place where people aren’t willing to go? I know at least in some parts of this country, that’s certainly the case. I write about NIMBYs all the time.
Well I think – and again, we need people to be heard, we need communities to be heard – projects do take longer to get done today. That’s a dynamic when you think about industrializing products at scale, a lot of products within the electric power system need to be connected to the zero-carbon power sources that we’re creating. That connection does require new transmission lines to get the electrons to where they’re ultimately needed. That is a long, drawn-out process today in the U.S. It’s longer in our U.S. markets than it is in Europe, it’s longer than it is in Asia. That doesn’t mean the conversation shouldn’t happen, because if a transmission line goes through a community that ultimately isn’t benefiting from that transmission line, we’ve got to solve that problem. But the country needs the transmission lines, because without it we’re not going to decarbonize the electric power system.
In my mind this is less about whether we’re having the debates. It’s more about how do we have them quicker and then make decisions and go.
Given the timetables for developing a transmission line or developing a wind farm, those can be decadal timetables. Next year we’re looking at Congress potentially writing a new tax bill. How bankable is the Inflation Reduction Act in a decadal investment landscape?
Two thoughts on that.
First, it can’t take decades to build a transmission line or a wind farm. I can tell you, as one of the biggest players in the space, it sure as heck doesn’t take that long to physically build them. It takes that long because the conversation takes too long before we push go. That’s the challenge. We can do this much quicker, we just have to do it.
Now, on the Inflation Reduction Act – and there are many elements of the Inflation Reduction Act – I’m certain that with the next administration, regardless of who is in it, they’ll scrutinize all the decisions the last administration made. That’s the beauty of our government. All that said, when it comes to most elements of the Inflation Reduction Act that are tied to creating jobs, manufacturing growth, U.S. competitiveness, energy security – it’s becoming very, very clear that building out and really transforming the electric power system in the U.S. supports all of those priorities. Those are things that both sides of the aisle support.
When I look at the things we’re investing in — and we’re investing heavily into expanding U.S. factories to grow the wind industry, to grow further into serving the transmission and switchgear market — we’re not hesitating one bit because of the bankability risk of our democracy. We think both sides of the aisle are going to support things that are aligned with competitiveness, innovation, jobs, and U.S. national security. And that’s what we’re investing in every day.
So, what gives you hope? You’re certainly brimming with it.
We’re in this every day. We added 29 gigawatts of new power globally last year. Forty-four percent of it was in developing countries. That new 29 gigawatts of power we added to the grid was about 25% cleaner than what the grid is in totality and we see a very clear pathway to add a lot more gigawatts every year, and for it to be even cleaner than what we delivered this year or last year. We know how to do this.
I come into rooms like this and listen to the last 20 minutes of [startup] presentations and I say to myself, okay, we’ve got a lot of young companies that are working on really important stuff. Do they know exactly how to industrialize their product yet at the level that it can make an impact? Maybe not. Do they have the customer reach they’re going to need to accelerate the commercial momentum? Probably not in all cases. Guess what: Those are things Vernova can help with. That’s why we like hanging out in a room like this. There’s a lot of companies that operate in this building every day in which that art of the possible is exciting. There’s a lot of other buildings in the country, in the world, where it’s hard to not have a kick in our step. So this is there for the taking.
I’d rather go at it with that mindset than with the alternative because if I go at it with the alternative, I’ll definitely let down my kids. I’ve got a 12 and 10 year old. They already believe that this is their generation’s greatest challenge. So are we going to take it on with optimism and go after it, or the alternative? And I do think that’s an important point I want to hit on is, something I shared with my broad leadership team: I do think at times, as it relates to energy innovation with climate change and the energy transition, we can lean into conversations with pessimism. And I don’t think that helps our industry.
If I do a compare-contrast with the tech industry on the West Coast, where I’m spending a lot more time now, they’re a lot more optimistic about things they have no idea how to actually make a reality. But the optimism is there. And that optimism can sometimes be half the battle. So are we going to scare everybody? Or are we going to frame up what we know how to do, be honest about what we don’t know how to do, and go after it?
I’ll tell you, any time an oil rig fails, no one is having a conversation about the technology. Is this a public perception problem and a media problem with trade-off denial? Is there some sort of double standard going on in the energy transition space versus fossil fuel space?
I don’t think that is the case. I think we want to hold to the standard the media and the communities are expecting of us. There [are] no trade-offs for safety and quality. And when things don’t work, whether it be a solar farm, a wind turbine, a transformer goes down, I’m not crying in my beer over those communities pushing on whether the industry is good enough.
I think a similar thing happens in the fossil fuel industry when things don’t work, but I don’t want a different bar. I don’t think this is about having a different set of expectations for what we need to deliver. We talk every day about the fact that if this industry is going to thrive, it needs to start every single day with safety and quality at the forefront of what we do. Delivery comes next and that’s where I talk about industrializing things at scale. We don’t really have time for hobbies. These things need to be built at scale. And then the economics need to ultimately work because if the economics don’t work and we push this price to everyone with just exponentially higher electricity prices, that’s not going to work either.
But you can’t start with the economics. You can’t start with whether you can make it at scale. First it has to be safe and it has to be high quality. And I actually think communities, the media, investors holding that bar to every element of the renewables industry is a step in the right direction.
