Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Podcast

How Jigar Shah Thinks About Risk

Inside episode 13 of Shift Key.

•
Robinson Meyer and Jigar Shah.
Heatmap Illustration/@bendroz

Jigar Shah might have more control over America’s new wave of industrial policy — not to mention its climate policy — than anyone not named Joe Biden. And he’s not even a Cabinet-level official. As director of the Department of Energy’s Loan Programs Office, which is akin to its in-house bank, Shah oversees how roughly $400 billion in lending authority will be spent. That money will help finance new EV factories, geothermal wells, carbon capture sites, and more.

On this week’s episode, Rob sits down with Shah to discuss the philosophy that he brings to his role. When financing new projects — many of which are the first of their kind — how does he think about cash flow, about technological innovation, about risk? Robinson Meyer is executive editor of Heatmap News; Jesse Jenkins, an energy systems engineering professor at Princeton, is off this week.

Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.

You can also add the show’s RSS feed to your podcast app to follow us directly.

Here is an excerpt from our conversation:

Robinson Meyer: I think one thing you’ve said often is that we have — and you alluded to at the beginning of the conversation — is that we haven’t built manufacturing in this country, basically, for 40 years. I think one note we’ve seen both from the president and from the partisan laws passed by Congress and the president — but also, frankly, from a more bipartisan set of lawmakers — is that there’s a lot of eagerness for that to change. So from your point of view as someone kind of in the weeds every day, what needs to change for the U.S. to build manufacturing and heavy industry domestically again?

Jigar Shah: Well, let’s start by saying that I think that the BIL and IRA that’s passed has been a huge success story, right? We’ve gotten 500 announcements of new factories in the United States. And so, these are communities like the one that I grew up in, that had the seventh largest steel mill in the country that shut down while I was there. And all of the people who went to high school there expected to have a job there, and they don’t. Right? These are folks who are pretty pissed off about the fact that their lot in life, really, was destined to not have family-sustaining jobs for 40 years, right?

And so now we’re giving people hope again that, for folks who have high school educations, that they can actually support their families and do these things, right? So in that perspective, we’re winning, right?

But on the other side, we still have a lot more work to do, right? So when you think about the underlying conventional wisdom, the conventional wisdom is that you’re going to start a factory, China’s going to dump product in the United States and going to put you out of business, right? And so the local bank is saying, prove to me that China’s not going to dump product and put you out of business. Those old habits die hard, right?

Now, the president has put together all sorts of belts and suspenders, but I don’t think that’s clear. I’ll give you an example. So in the EV supply chain — we have an extraordinary amount of lithium in this country. We made the announcements at Thacker Pass and Rhyolite Ridge, as well as recycling for Li-Cycle and Redwood. But we’ve got additional abilities to get lithium over in Arkansas and Salton Sea in California.

And a lot of folks are saying, lithium prices are down 70% from their highs, right? So therefore there’s no way you can make it work right now. Lithium was $5,000 a unit in 2020. Today it’s $20,000 a unit. It was as high as $80,000 — $20,000 is still 4x what it was in 2020. And so there’s a way to make it profitable, but we also have the 30D program where a lot of automakers get incentives to buy locally for domestic content.

And so I feel like there’s just so much in the IRA, that the belts and suspenders approach that the administration took is not something that most people understand. And as a result, a lot of dollars are not moving from the commercial markets. We’ve got to step in and move them.

This episode of Shift Key is sponsored by…

KORE Power provides the commercial, industrial, and utility markets with functional solutions that advance the clean energy transition worldwide. KORE Power's technology and manufacturing capabilities provide direct access to next generation battery cells, energy storage systems that scale to grid+, EV power & infrastructure, and intuitive asset management to unlock energy strategies across a myriad of applications. Explore more at korepower.com.

Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.

Music for Shift Key is by Adam Kromelow.

Green

You’re out of free articles.

Subscribe to access Heatmap’s expert analysis of energy, climate change, and sustainability, including coverage of our regular survey research. Save $57 on an annual subscription, just $156 $99/year.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Politics

The Senate’s Big Bipartisan Permitting Deal, Explained

The Bipartisan American Affordability and Jobs Act would remove longstanding roadblocks to expanding the power grid and developing new energy infrastructure. Here’s our guide.

The Capitol and power lines.
Heatmap Illustration/Getty Images

It’s taken two presidential administrations, four years, and who-knows-how-many proposals that never saw the light of the Senate floor. But a long-awaited bipartisan deal to streamline the country’s permitting system is here.

On Tuesday, a bipartisan gang of senators — the leaders of the Environment and Public Works and Energy and Natural Resources committees — released an omnibus legislative package meant to streamline many permitting processes across the country.

Keep reading...Show less
Green
AM Briefing

A Quid for the Grid

On space solar, EU methane rules, and solar tariffs

Andy Burnham.
Heatmap Illustration/Getty Images

Current conditions: For the first time since 1914, the Atlantic hurricane season may pass without any major hurricanes, per an AccuWeather forecast • From Phoenix to Dallas, flood watches are in effect as the remnants of Hurricane Polo stretch inland from the Pacific through the Southwest • Surigae, now upgraded to a “severe” tropical storm, is set to slam into Japan’s Izu Islands, a partially populated archipelago in the same municipality as Tokyo.


THE TOP FIVE

1. Trump taps the Strategic Petroleum Reserve as diesel nears $7 a gallon

The Department of Energy has ordered the release of 40 million barrels of oil from the Strategic Petroleum Reserve as diesel surpasses $6.50 per gallon and Texas proclaims a statewide “disaster” over soaring prices. The move, which Secretary of Energy Chris Wright said would “stabilize the market,” comes as the Trump administration weighs whether to temporarily ban exports of diesel, a radical step that might only slightly lower American prices while sending Europe’s fuel costs skyrocketing, as the chief executive of the continent’s No. 2 oil company cautioned in a Bloomberg interview this week. The oil is expected to be a loan from the stockpile that would, Wright said, ultimately save Americans more than $3 billion. The transaction follows the same approach the Trump administration has taken since agreeing to distribute 172 million barrels from the Strategic Petroleum Reserve back in March, when the war with Iran began. Had the administration instead sold the barrels through an emergency drawdown instead of a trade, as it did previously, and simultaneously structured the deal to allow it to buy back oil at the lower prices the futures market is trading at presently, the Energy Department could have significantly increased its profits. That’s the finding of a policy memo from the think tank Employ America that I told you about a few weeks ago. The profit could, in turn, be used to invest in America’s fuel stockpile, clearing some of the $230 million backlog of physical repairs needed on the infrastructure that stores the crude. “The choice to deliver more barrels is fraught, but with that decision made, the administration missed an opportunity to set up the SPR for long-term success,” Arnab Datta, Employ America’s managing director of policy implementation, told me in a text message last night. “I hope they consider creative options to do so moving forward.”

Keep reading...Show less
Blue
Climate Tech

The Startup Raising $17 Million for Super-Thin, Wall-Mounted Batteries

Novele is aiming to smooth out power consumption for commercial buildings, saving tenants money and easing grid strain.

Novele batteries.
Heatmap Illustration/Novele, Getty Images

Electricity is more expensive in times of peak demand — that’s simply a universal truth. But for many commercial building owners and tenants, their most energy-intensive minutes of the month can have an especially outsized impact on their electricity bill. That’s because of the “demand charge,” a fee based on a building’s single highest burst of power consumption, which can make up over 50% of a customer’s monthly bill. Likewise, shrinking those bursts would not only ease strain on the grid, but could also dramatically lower commercial users’ costs.

Or at least that’s Novele’s pitch. The startup, which makes 2-inch-thick, fire-safe lithium-ion batteries that mount on the interior walls of commercial spaces such as offices, hospitals, and big box retailers, announced Wednesday that it raised an oversubscribed $17 million Series A led by impact-focused investor Boisei Labs. The funding will help the company scale its AI-powered battery system, which networks batteries placed throughout a building and uses software to predict impending spikes in power demand. Just before the peak hits, the system can automatically switch the building from grid power to battery power, helping the customer avoid those costly demand charges.

Keep reading...Show less
Green