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Energy Gang
Data, power and dollars: financing the AI energy boom | live from the ACORE finance forum in New York
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Foreign.
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Hello and welcome to the Energy Gang, a discussion show from Wood mackenzie about the fast changing world of energy. I'm Ed Crooks and this is the first of two special podcasts from the ACOR Finance Forum in New York. It's an event that brings together leaders from the worlds of finance and renewable energy to discuss the key issues in the industry today and what companies need to do to succeed. The overarching theme here is the surge in electricity demand from new data centers. But people have moved beyond generalities about this historic moment in the industry and onto the practical details of how do you plan, finance and build the new electricity supply needed to power those centers. To start off, I spoke to James Wright, who is a managing director and US Head of corporate banking at cibc, and asked him what CIBC was doing to finance investment in data centers and
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new power infrastructure From a sort of headline perspective. Our business is focused on many infrastructure verticals. So we do conventional power, we do renewable energy, we do core infrastructure, airports, tow rolls, that sort of stuff, oil and gas. And what we've seen at the last couple of years certainly is digital. And data centers has become its own vertical, it's its own thing. So we are heavily focused on it. We've been seeing a lot of activity, as every bank has in the space the last few years. And what I find super interesting, I'm a renewable energy guy by background as well. I've been doing it a long time, is those two thematics have merged. So renewable energy, power in the broader sense and data centers is all becoming one big thematic. And if I can, I can reference a bit of an analogy which I think is really helpful to think about it and why the power side is so important to us. This is actually credit to Jensen Huang, the CEO of Nvidia. He was saying you've got to think about the AI landscape as a layer cake, and the base of the cake is power. And then you've got the infrastructure on top of that, which is the data center piece, which we're talking about today. Then you've got the hardware, then you've got the AI models, and the icing on the cake is the AI applications. So those bottom two layers, the power and the data center infrastructure, we are seeing very intertwined.
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B
And so in terms of what you do at cibc, then are the two things kind of tied tightly together? I mean, do you work on kind of joint power and data center projects or how does it work?
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C
Yes, yes and no. In a sense, we get with so lots of our business is still obviously core financing of power, just standalone power, conventional gas, solar, wind, battery storage, all the above. But then more and more we're also seeing where we're doing data center deals. Those are often now being combined with power financings as well. So you're seeing that's where the thematic is merging. On the equity side of that coin, you're seeing lots of the sponsors in the space who are now doing what we're calling powered land joint ventures.
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So.
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So you'll see a well known developer or an IPP who's saying, look, I've got some advantageously located land where we know it's a great place to put a data center. Why don't we sell you that land on a powered basis? We're delivering a powered piece of land to you, the data center developer and then that's where the infrastructure is going to get built. So it's a good example of where the two are converging.
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B
There are a lot of those projects are quite speculative. Right? I mean, there seems to be, you know, you see these numbers, you see numbers of whatever it is, you know, multiple hundreds of gigawatts of new data center proposals that are out there, which presumably is including some of these kind of powered land type ideas as well. And the great majority of them are never going to come to fruition. Right?
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C
Yeah, I think that's fair. I think, look, speculation was the word used, which I think is right. I mean, in the sense of there is a lot of talk out there on this thematic because it's just, you know, it's driving lots of headlines, you know, lots of people talking about AI in the broader sense, in my world, in the financing world, it's now starting to become real. Real. So I think where there's been lots of talk on it the last couple of years, we're seeing now these deals becoming financeable. But for every 20 conversations, maybe a couple are financeable.
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B
Yeah, right. And so what is it that actually makes a deal real then? I mean, I can think of a few things that are going to be the kind of the gates you need to get through. In terms of things like getting a connection agreement from a utility, add a large load to the grid. In terms of getting the equipment you need, both to build the data center, the chips, whatever the steel, and also then the equipment you need for the power. And if it's gas or turbine, whatever it might be, are there particular ones that are more important than others or what do you see as being the most important critical factors?
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C
Yeah, great point. I mean, I think it's funny all those things you mentioned, Ed. I think about those, I'll go back to the cake analogy. They're the ingredients for the sponge to bake the sponge. And if I go through, I'll go back to that cake again. If I think about those layers, we in our world are often focused on those bottom two layers because it's typically when you've got all those ingredients and a hyperscaler, for example, who's coming in to then say okay, I'm going to then use this data center for the next 20 years. That's where the super senior secure project finance market likes to play. That's where the bank market wants to play. It's contracted revenue. You've got all the other ingredients you talked around which are the precursors to that. The interconnection, the transmission, the technology ticking, the box. Well known sponsors land in a place that makes sense, all the stuff you mentioned and then you've got the long term contracted cash flows off the back. That's where we play or our worlds I should say. It's really then as you're just finishing off the thought as you go up the cake, the middle layer, the hardware stuff is still really more of a private credit story. What we're seeing and then you know, the models themselves, the applications, that's still very much equity, venture capital, private equity, that's kind of where, where that, that that capital is coming.
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B
Right. And in terms then of that, the power, that bottom layer of the cake, what are you seeing in terms of what the demand is and what's getting built? I mean it seems like certainly if you look at our forecast at Wood McKenzie, basically the answer is gas plus solar plus storage are the three technologies that are most in demand. Is that the way you see it?
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C
For sure. I mean undoubtedly that's where most activity is happening. I mean probably 80% plus of what we're seeing is in those three technologies. Wind is still happening. It's obviously been a little bit more challenging in the current environment with some of the permitting issues around wind. But certainly those deals are getting done and we shouldn't discount battery storage. Battery is an important part of this and I think more and more usage cases have been recognized for how batteries can help with the data center thematic as well for providing long term reliable power. You mentioned just on the gas side, you mentioned gas, obviously super important for this space. I think the restriction there has been access to technology, equipment, it's been the gas turbines, I mean, trying to get your hands on a gas turbine now is good luck.
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B
Do you have any sense that that's getting better? We've had these announcements from all the big manufacturers of gas turbines from G Venova, Mitsubishi, Siemens saying, oh, we're adding a lot more capacity. Is that in practical terms actually helping to bring down.
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C
I'm not seeing it. We're not seeing, I mean, I think it might come, but I mean again, as you've probably some of your previous guests, you've talked on this, I mean it's going to take time for those supply chains to gear up again. I mean they've gone through a period of almost, I wouldn't say gearing down, but they were less in demand, you know, and now suddenly, you know, everyone needs a gas turbine again. So it takes time to get that supply chain moving. So not. We haven't quite seen that yet, no.
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B
So that's an issue then on the gas side. What about in renewables? Is equipment available?
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C
There it is, I'd say speed of, again, speed of getting projects onto the grid. It's really been interconnection transmission. That's still a big issue for that industry. As we, as you. And you've talked about this before, I think it's a big thematic for the broader power space. Interconnection backlogs is a big problem. We've got to solve the transmission problem. We've got to get power from A to B better in this country fast. But the deals are getting done. There's, I mean, I think, you know, statistics wise, last year was again a record year for renewables in the U.S. macKenzie, you've got all the stats there. I haven't gotten to hand, but it's been undoubtedly a huge amount of solar getting done. We don't see that changing anytime soon. I think there's a recognition, it's, it's fast to the grid, the technology is well known, it's pretty cost competitive and we don't see that trend changing.
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B
And what about co located generation then? Or going behind the meter? I mean there's a number of different models that people can use for having power directly available to where the loads are going to be, as you say, particularly given all those issues with building new transmission distribution lines as well. There seems to be a lot of interest certainly in these kind of behind the meter resources. How much do you think is actually happening there?
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C
A bit. We are seeing a bit to be fair. Yeah. And that as you said, with sort of movable gen sets and reciprocating engines, you know, stuff that we haven't talked about in this space for a while. That's happening.
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D
Yeah.
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And those would be typically what, diesel engines or some gas as well.
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C
Exactly. Yeah. And we have seen a few of those deals getting done. I'd say they're still the exception, not the norm. Most of the action we're seeing certainly in our world is still, you know, in front of the meter. It's still grid connected, but those deals are getting done in locations where it makes sense.
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B
And are those kind of projects financeable? Is that something? Because I mean, you will hear people say, well, there's a lot of risk there. If you have essentially generation capacity, it's not connected to the grid, has that single customer. And what happens if there's something goes wrong with that customer? Yeah, that's a real problem.
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C
It is. It's certainly been typically more of a high yield capital market story. Some of those deals where it's been more sort of corporate, corporate level financings for some of the bigger players in that space who are then taken out into a high yield or leveraged loan type type situation. So yeah, I mean, as you said, the analysis on that from a credit perspective is much more of a sort of diversification portfolio story. Multiple sites, multiple places, you could potentially put the engines if you need to. So it's different to your typical single large utility scale project financing from a credit perspective.
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D
Yeah.
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So how do you think this industry is going to evolve then? Obviously we hear a lot of people saying it's a bubble. It certainly has some bubble like characteristics. Right. In the sense that it's growing very, very fast and the amount of investment is rocketing and you get a sense that some of the key players, they're viewing it asymmetrically, they would always rather overinvest than underinvest. Actually. I saw Dario Amadei of Anthropic talking about this the other day and he was one who said, actually we're not investing as much as we could because we do see potential downside risk. But if I look across the industry as a whole, everyone's just kind of going full steam ahead because they think it's much worse to be left behind than it is to kind of get ahead of where the market is. So you've got that dynamic going on. You've also got period of rapid technological change. We don't know exactly how AI is going to evolve. We don't know how the business model for AI is going to evolve. We don't know what's going to happen to computing is Quantum computing going to work, all these huge uncertainties here. How do you navigate your way through that crystal ball?
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C
No, no, no, no. I mean, it's a great question. I think it's funny. I mean, Ed, you'll appreciate this from your background as well. If I think about the broader project finance world, some of the other technologies you referenced, like, you know, lng, conventional gas, power, decades of track record of doing this stuff in our world, in the bank, senior secure, project finance space, the stuff we're talking about today, we weren't even really talking about it three years ago. So it's super new to this world and there's a lot of bankers are getting smart very quickly on all the stuff we're talking about. So people have been, there's a lot of capital flowing, but people are being cautious and certainly where we sit, everyone's very focused on the fundamentals that we've been talking about. It's location, location, location, access the right equipment, access the right interconnection, who's buying the data center capacity off the back end. Obviously it's most of the large tech names. We all know there are some interesting questions around how much exposure to those names is too much, when do we reach a tipping point there, which we'll have to think about on the banking side. But I think you say every banker in the room or here at the ACOR event will probably say the same thing. Stay close to the fundamentals and each deal on its own merits.
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B
Right. And while there are all those risks that I've just been talking about, it's also a very exciting time, right? I mean, it's exciting time in the tech industry and in energy as well.
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C
It's amazing. And look for people like us who just love. We're infrastructure junkies, right? We love doing this stuff. It's fascinating. And the type of deals that we're seeing, particularly as I said, the convergence of power developers becoming data center, quasi data center providers and teaming up and doing these projects together. It's fascinating and I think it's a moment in time for this industry that we're going to look back on and say it's really kind of transformed everything and it's keeping lots of bankers very busy at the moment, I can tell you.
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Indeed, indeed. And as you say, just, you know, it is, it's a privilege to be a part of it, to be kind of watching this happen because it is such an exciting time.
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C
Yeah, exactly.
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B
James Wright, thank you very much. Next, I spoke to another banker who also works on energy development. Adam Altenhofen is a senior vice president for impact finance at U.S. bank. Before we got into our discussion on his perspectives on energy, I asked him about what impact Finance meant at a time when ESG investing and climate goals in general are very much out of favor.
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D
So we started financing affordable housing projects in after the tax reform in the late 80s and have since grown to finance economic development tax credit investments through the new market tax credit program, historic rehabilitation tax credits. And as of 2008, we started investing in renewable energy tax credit investing. We now lend on all of those asset classes as well. So very active still in affordable housing, economic development, renewable energy financing. Within the energy, we've expanded our project finance to include all areas of energy infrastructure asset classes as well over the last 12 months. So I think long way of saying impact finance is focused on doing well by doing good. We feel like we make an impact in everything that we do by providing capital to our communities, serving the environment. And we still believe in the focus and the mission of the group, regardless of how the narrative may have changed broadly.
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B
And those tax credits that tax equity investment, that's still right at the heart of it, is it?
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That's right. I mean, that's still right at the heart of it and all the asset classes we do in the renewable energy space. Since 2008, we've invested over 3, 33 billion dollars of capital primarily through the tax credit programs that have been designed to incentivize solar, wind, battery storage development.
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Right, but those tax credits are changing very significantly, aren't they? You say that you have a strategy which is not particularly dependent on changes in fashion and changes in politics, but there have been very material changes to tax credits for wind and solar in particular, which are being phased out because of the One Big Beautiful build, as it's informally known, that was passed last year. So how is that changing your business?
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D
Yeah, you know, I think there's, there's still some good Runway in our business for wind and solar in particular through, you know, 2030, likely with the start of construction rules, you know, the treasury guidance on start of construction that was issued in, you know, shortly after the One Big Beautiful bill was passed in August, you know, codified existing rules, is going to allow for these, you know, these solar projects and, you know, certain wind projects that can get off the ground to, you know, can start construction before July 4th of this year and have until, you know, Approximately end of 2030 to place in service. So we still see good Runway in that business. The storage tax credit was preserved in its entirety. So that, that's, that tax credit is good through 2036. And we see that market continuing to expand with, you know, with load growth, you know, electrification, you know, so, so we feel like there's, there's still a lot of Runway and something we've navigated for well over 30 years is changes in tax policy.
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B
Right, so you mentioned load growth and electrification. That was exactly what I wanted to come on to talk about then. Because I suppose you could say that although renewable energy in the US has been dealt that blow from the end of the tax credits, it's also getting a boost conversely from electricity demand starting to head up after two decades of stagnation, driven in particular by data centers, obviously, and the excitement around AI and all the investment that that is generating. How are you approaching that at US bank and Impact Finance? Is that an important market for you at the moment?
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D
I'd say it's an important market for us insofar as a lot of our projects are still front of the meter projects, they have hyperscaler off takers. So we are focused on serving our customers as the developers and independent power producers and what their projects, who are their off takers, who are their customers, and how do we make sure that we can help them deliver that project to their customer? As far as financing projects that are tied directly to a data center and behind the meter, inside the fence is the old term, not as much. And that's partly just because the market doesn't seem to be there for behind the meter projects, at least not asking for project finance or tax equity. Because I think the behind the meter projects have different risk profiles for both the data center itself or the manufacturing facility. And then in particular, the project finance lender is now exposed on project risk. So there's just a different risk profile for behind the meter that is more difficult, I think, for traditional project finance and tax equity investors to get behind.
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B
Yeah, I have to say that's been very much the way we've seen it in terms of the people we've spoken to previously on this show. Every time we have on someone from a big tech company or a data center developer and operator, they always say being connected to the grid is our best option. That's what we'd really like to do. The grid, people always say is a technological marvel, one of the great achievements of our civilization. It has lots of great advantages in terms of efficiency and reliability. If you give that up by having an islanded project going off grid, as you say, there's all sorts of Risks involved with that. And that's very interesting hearing you talk about it then from a financial perspective as well. Again, that's something which as a lender investor, you're just going to have some additional reservations about.
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D
Absolutely. I mean, you know, just kind of stepping back to the core kind of project finance fundamentals. Right. In project finance we believe everybody in the project financing is replaceable. So the off takers replaceable, the the developer sponsors replaceable, the operator is replaceable, the lender tax equity, everybody should be replaceable. When you go behind the meter, you're no longer able to replace the one of the core tenants of that project, which is the revenue. So if the whatever is behind the meter, whether that be a manufacturing facility or more likely a large load data center, if that data center were to fail, were to the hyperscaler, chose to move to a different market, abandon that project, you now have a project that has no revenue, no source of going back to the grid. So the very least having export capacity to the grid provides a secondary source of repayment for that project finance lender in that scenario. And tax equity also. Similarly, while not as dependent upon the revenue, the project, the solar storage project, were to not have continuous use, you'd have a full recapture of the tax credits. So it's very important for all the financing parties involved to make sure that these projects are going to continue to operate.
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B
Yeah, I think that's really interesting, really important point and I think something that's often kind of glossed over when people talk about behind the meter power and it seems to be a fashionable topic at the moment, people get very excited about it, but some of those important, very important details often get obscured. I mean, I guess that's not to say that it's never happening, right? I mean people are doing things and perhaps in particular, given that this issue of speed to power is so important, that given how fast AI technology is evolving and everyone wants to get the maximum amount of data center capacity available to them as quickly as they can, everyone wants to get connected and powered up as fast as they can do it, then some people are clearly choosing options that allow for some off grid power initially in the expectation that they'll get grid connected later. Simply because, you know, for various reasons, not least issues with getting grid connection, the length of an interconnection queue and so on, the procedures you have to go through to get a large load connected can be complicated and drawn out can be complicated, particularly if you need to build new infrastructure, if need a new distribution or even a Transmission line being built. That of course is very, very difficult in America as in many other developed countries. So when you add all those things up, as I say, there can be a case for going behind the meter, having co located power, at least initially. Is that something that you're seeing? Is that something that you're financing and getting involved in?
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D
Yeah, we aren't seeing it a lot at the moment. We have seen some proposals for gas fired with storage, with solar. We've seen one proposal there. I think it will increase, as you say, speed to power is important. The market will develop there. As a project finance lender and investor, I think the important things for consideration of behind the meter projects would be, you know, what's the quality of the offtake? Right now we see a lot of hyperscalers that want to limit their parent company exposure both front of the meter and behind the meter. They'll have maybe a strategic subsidiary as the actual offtake and they'll provide a limited parent guarantee for say 12 months of revenue that may be sufficient for front of the meter projects. When you go behind the meter, while you're still waiting for that interconnection, I think the lenders and investors in this market would expect to see apparent guarantee for the duration of the contract. So that way you have the ability to look to the rated counterparty.
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B
Right. I'm sorry, so when you say for the duration of the contract, so how many years could that be to the right?
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D
Yeah, typically you would see a power contract 15 to 20 years. So for front of the meter, Hyperscalers are signing 15 year contracts typically for energy and Rex. So the expectation would be for the behind the meter that there would be this similar type contract. The loan's going to be generally sized to that length of that revenue contract. So the longer the loan, the better for the developer and presumably the better for the off taker as they can buy down that price of energy by extending the duration of that loan or duration of that contract.
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B
Right. And so then it becomes a question for the developer and the offtaker, which is how serious are they really about that speed to power? How much does it matter to them to get that? Are they prepared to make that 15 or 20 year commitment because they really need that power.
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D
Absolutely, yeah. And you're seeing different strategies too with, with some of the hyperscalers of Google earlier, you know, last year announced the acquisition of Intersect Power, a large renewable independent power producer and developer, as a means to have that Intersect team come over and develop their projects for them. On balance Sheet. So removing the capital markets from the equation, removing project finance and tax equity from the equation, I think that really de risks the execution risk on behalf of the hyperscaler, ensuring that they're going to be able to build these projects behind the meter, take the third party financing off the table and then moving
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B
away from that question about being behind the meter. Then as you say, there is a lot of activity still in terms of new generation being built in front of the meter, being connected to the grid because demand on the grid is growing and there is a big need for additional generation. How active is that in terms of renewables then? Are you still seeing a lot of demand for additional wind and solar capacity being added to grids?
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D
Absolutely, yeah. I mean we're still seeing significant growth in the market. I think some of that is a pull forward because of the tax credit expiration that you mentioned and a lot of it is because there is more need for the power at the moment. So still seeing a lot of front of the meter projects increasingly for storage with utilities again on the contracts themselves. There was a period of time, you know, the late teens, where the utility market was seemingly much smaller than the, you know, corporate offtake market, which was really primarily driven by wreck purchases. Now we're seeing, you know, more of the front of the meter projects with corporates, you know, still again a lot of the hyperscalers, but you know, increasingly more utilities as well, contracting for storage for reliability reasons and requirements. From regulatory perspective, are you seeing particular
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B
problems with wind projects? There's been some talk out there in the industry about it being really hard to get wind projects permitted. Now objections from the federal government to wind projects progressing. Are you seeing that? Is that a genuine problem?
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D
Yeah, we are seeing that. I think it's a genuine problem. You know, we're seeing it from, you know, not being able to get Department of Defense permits, just slow slowness in permitting, uncertainty in permitting. And as, again as a, as a non recourse lender investor taking change of law risk, change of permitting risk is just not something that most of the market is going to do.
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B
So how do you think in general then the industry is going to evolve over the next few years?
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D
I don't know if I have a view on power demand. I'll defer to the Experts at Wood, McKenzie and others for how power demand may influence the growth of solar and wind and other renewable technologies over the next several years. I do see that storage will continue to be an important market. I think the grid becoming more variable and diversified from A resource mix. I think storage plays really well and is an important aspect there has certainty on the tax credits with some certainty on the fiat rules that we talked about. I think you see a growth in this continued growth of the storage market. The solar market I think will continue to, you know, be very important for the next few years while these tax credits are available. But you know, absent an extension and absent more load growth. So the second I guess being again not something that I, you know, comfortable commenting on at this point. But yeah, you may see a drop off in solar installations however, you know solar remains very cost effective, it is easy to build, it's very quick to the grid. So I still think there'll be demand for solar post tax credits as well and the market will adjust and evolve and find new solutions to finance those projects cost effectively.
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B
Yeah and I think for what it's worth, Wood MacKenzie are still pretty bullish actually about that power demand growth certainly on a five year view, a ten year view. So as you say, if we're right about that, that will definitely continue to support that demand for solar investment.
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D
Absolutely. Yeah, exactly.
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B
I next spoke to Mona Dijani who is the co chair of energy infrastructure and real estate at the law firm Cooley. She's taken on that role very recently and I asked her to explain what her appointment meant in terms of the changing nature of the industry.
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A
So Cooley is a world class law firm known for their representing early stage and late stage and IPOs of technology companies, also in life sciences too. All the really cool sexy stuff, the new technologies and now we're combining that with energy because you need the energy to get all those technologies to work. So it's an interesting combination. It's not a traditional oil and gas as some other firms are. It's definitely at the forefront of all types of technology.
- [30:56]
B
Something that James Wright from CIBC was saying. We were just talking to him earlier, he was quoting Jensen Huang from Nvidia, the Nvidia CEO and he was talking about AI as being like a layer cake with different layers. And he said the bottom layer of that cake is power. That is the essential thing without the rest of it works. But also clearly having that sense that it's kind of completely integrated together, that it's one cake and that energy as you say is part of it.
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A
Absolutely, yes.
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B
So that's really interesting.
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A
Yeah, that's a very good analogy. A cake, like they're all the different layers but they're all one unit.
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B
Yeah, exactly. And then sort of as it were, as the Energy industry moves that way, the tech industry moves that way. So legal industry, which is providing services to those industries, moves in that same direction too.
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A
Yes.
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B
Yeah, that's interesting.
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A
Some of the firms, the ones that are really advanced.
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B
Right, right, right, of course, of course, absolutely. So the backdrop to everything that everyone has been talking about here at the ACOR Finance forum is data centers, electricity, demand growth. How is that changing what you do in terms of transactions, deal making? What are you seeing in terms of the way the industry is evolving in response to that?
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A
It almost is turning on its head. Everything is different. What I'm seeing now is hyperscalers that are behaving like utilities.
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B
In what sense? What does that mean?
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A
They are saying that they, they need to have power, speed to power as much as possible, and they are scouting locations on where they can get the best power and for how long and how reliable that power is going to be. That's unusual. Whoever thought that the hyperscalers technology companies would behave like utilities and are scouting data centers strictly on their ability to access power? I'm seeing that that's a really big change. I'm seeing utilities that are behaving more like infrastructure platforms and what they're doing is some of them are creating unregulated arms. We have some really big name utilities, some of the largest here in the United States, that are almost doing venture transactions where they're investing in new technologies. They're doing joint ventures with technology companies, with other utilities too as well, just to service the hyperscalers. So that's really fascinating. I'm also seeing private equity, I represent a lot of private equity and they are repricing energy security. Yes.
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B
Meaning what? In what sense?
- [34:07]
A
Meaning that there's an asset class now that's for how bankable is the power, the access to power for the project or for the data center for the manufacturing facility. And that security, and that also touches on cybersecurity too, will add value to the whole transaction. It's really fascinating. It really is. I mean, so they're not just the private equity, they're not just going in and buying a piece of a project or buying a piece of a data center or buying. A lot of them will buy developers, data center developers, or AI developers in hopes of they will expand and get bigger and then they can sell them and make money. So that energy security is something that they definitely are pricing now that they never looked at just five years ago, they never did. So I think that's very interesting. And then I think that, and this is very Important transmission and distribution assets now are extremely important. And my money is on those assets as the backbone, the transmission and distribution, because that's the backbone for energy and power to all these different facilities. And this was because all of this was accelerated by the growth of AI, which created this huge demand for electricity that has been pretty much flat until recently.
- [35:49]
B
Yeah. That is really interesting. And to your point then, about sort of the convergence of the different sectors, that is absolutely fascinating. Or as you say, sort of, you know, in a sense, tech companies are becoming more like utilities. Utilities becoming more like tech companies, certainly. And I can remember, I'm sure you will as well, let's say three years ago when people in both industries started kind of waking up to the need to cooperate and the vital importance of energy to the tech sector.
- [36:21]
A
Yes.
- [36:21]
B
They seem absolutely miles apart. You know, the cultures were so different and there was a real lack of mutual understanding. I think, I think there was often a lot of, I'm trying to avoid using the word arrogance, but let's say there was a lot of self confidence or on the part of the people in the tech industry who sort of looked down on the people in the utility industry and thought, you know, we know how to do this, we know better, we understand this. You know, we understand your own business better than you do.
- [36:48]
A
Yes.
- [36:49]
B
And you know, we'll be able to sort this out and fix all your problems. And then there was a kind of a learning period where they realized actually it wasn't quite that simple.
- [36:59]
A
Yes.
- [36:59]
B
And so now, as you see, we're kind of into a phase of much more constructive collaboration. Companies working together.
- [37:07]
A
Yes.
- [37:08]
B
Finding solutions together. Much more kind of mutual understanding. Tech companies understanding what utilities need and how to get the best out of them. Utilities understanding what tech companies are asking for. And so it does feel like that's a much more positive spirit for everybody. You know, that's the way you're going to get absolutely real progress is going to be made. So we are seeing, you know, ideas and projects and, you know, very constructive steps forward, actually happening.
- [37:35]
A
Yeah. And that's. And that, you know, they're all converging together now and to be, to have a really successful deal that I can structure and put together, they all have to get along and they, you know, they can't. The utility is just as important as the technology and the tech companies and the hyperscalers and the developers and the sponsors. They're all very important. And so my job is to put deals together that make sense for all the parties together and then we rinse and repeat and do the same deal at another location. What I see happen is, which is interesting, the hyperscalers and the technology companies are much more agile and they're adept at pivoting pretty quickly, whereas the utilities tend to be historically much more conservative and they feel more confident. If another utility accepted that particular structure before and they said, like, there's precedent, so to speak, then they know that, okay, this is doable because we had this utility nearby that just accepted this. So that should be okay here and we shouldn't run into problems.
- [38:49]
B
Yeah, I mean, no, I think that that's really interesting and I think that's absolutely right. That is definitely what's happening and the way the industry is changing.
- [38:57]
A
Yes.
- [38:59]
B
I always get a bit defensive of the utility industry when this subject comes up because I feel like if the utility is conservative, which it is, it is conservative for a very good reason, which is if you try risky ideas and they don't come off, the lights go out and people die. And so it's entirely justifiable to err on the side of caution.
- [39:24]
A
Yes, yes.
- [39:25]
B
And you know what, was that the Facebook slogan about move fast and break things? That's really not what you want to do in utility. Go slowly and don't break anything actually is a good motto.
- [39:38]
A
That's so spot on. And I would just say that the utility is a regulated industry and that. And they have. Some of the utilities have an unregulated arm like I was talking about, that does some investments, but it's a regulated industry, so it's highly regulated versus the tech industry, which really isn't as. Not even close to where we are with utilities. And they have FERC and they have state regulators too, as well. And also the other thing that the utilities are used to and concerned about is they can't just raise their rates or price something based on a design like the tech companies do that they say, this is really cool. Cost us X. This is how much we think doing these focus groups we should sell this widget for. Utilities work totally different. They have to get approval both from federal and state. And the ratepayers truly have a voice. And so they're reluctant to make big moves unless it's going to benefit their ratepayers too. So it's been very interesting for me and I. It's fascinating and I love it to be able to structure these deals where everyone makes money at the end of the day. And that's how you have to look at it.
- [40:59]
B
Which is. Which is the Point of the exercise.
- [41:00]
A
Right, which is the point. Yeah. To make money and to provide the power. And it's a circle.
- [41:07]
B
Yeah. And the opportunities are there to do that.
- [41:09]
A
Oh, yes.
- [41:09]
B
And to reach agreements. That's kind of. That are in everybody's interests.
- [41:14]
A
Correct.
- [41:15]
B
Partly because. Or maybe principally because the market is growing then and so all these new opportunities and the demand.
- [41:23]
A
Yeah.
- [41:23]
B
Is that right?
- [41:23]
A
The demand?
- [41:24]
B
Yeah, yeah.
- [41:24]
A
The market is growing, the demand is pushing it and there's a real opportunity. So everyone's working together.
- [41:35]
B
So what are you seeing in terms of solutions for meeting that growing demand then? I mean, are there particular technologies or particular kinds of corporate structure that people are favoring? I mean, what are the key trends at the moment?
- [41:50]
A
So some of the key trends at the moment, right now, I'll just tell you, which is super important, is that you have to think outside the box and be very creative. You can't think of using a same corporate structure that we used even three years ago. It's totally different now. It's out the door. So there's different demands, there's different.
- [42:12]
B
And why is that? Why have things changed in just three years?
- [42:17]
A
Because of the big thing is the speed, the speed to power. That has changed everything. The speed to power. And also as a result, you're seeing a lot of proliferation of data centers and manufacturing plants and such. And there's been some pushback. We were talking about earlier the ratepayers and the utilities being very careful that they didn't raise the rates too high. So there's some pushback. There's some legislation in certain states to limit the amount of data centers that are in their cities or in their state. So there's that. And one of the solutions is you're seeing a lot of the data center operators or the data center developers saying, okay, we're going to do a temporary fix this behind the meter.
- [43:11]
B
Right. Which, what do you mean by behind the meter? Because it seems to me, I'm always very interested in this because sort of having some kind of co located generation near where the load is is very much discussed, very popular, a lot of buzz about it. Being behind the meter can cover a variety of different structures in the terms of the way you relate to the grid, or indeed presumably it includes being off the grid completely being actually islanded.
- [43:41]
A
Right, right.
- [43:43]
B
And it also seems to be an area where there's a lot more kind of talk and discussion and kind of general sort of froth than there is perhaps actual activity going on. I mean, there is some. I don't want to suggest there's nothing happening, but yes, you know. Well, anyway, what do you think? How do you see it?
- [44:00]
A
Well, I think, you know, most, most of the data center developers, sponsors, operators want to come in and build and go fast, as fast as possible, and they don't want any pushback. So some, yes, but they do also
- [44:19]
B
want to be on the grid generally, don't they?
- [44:20]
A
Oh, yeah, that's the number one. They definitely want to be on the grid. But the problem with that is that there is interconnection queues that could take years depending on where you're at. There's regulatory approvals too. That could take a long time too as well. That is very much dependent on the state and federal environment, the political environment. So some are saying we're going to bring our own, we're going to bring our own power for now. Some do it just temporarily, just to get things up and running. And that could be in the form of solar and battery and gas. I'm doing a lot of those kinds of deals. Sometimes I'm doing just solar and batteries, the hyperscalers. And I will just say this, the majority of them have made pledges on clean energy. So they definitely want clean energy to be powering the data centers, which is
- [45:14]
B
interesting because you also hear a lot of kind of rumblings that, well, they're actually going to have to put those commitments to one side, at least for the time being because as you say, speed to power is the absolute priority. And so you have to do whatever you can to get that. And if at the same time you can cut emissions, then great. But if you can't, then okay, that's just something you'll have to accept.
- [45:35]
A
Right? Exactly. Well, look, it's very. You can build solar and batteries very quickly. Very, very quickly. And if you have access to the grid, amazing. But let's assume you don't for now, only because it takes so long and there's a queue. But if you have solar and batteries that can be built relatively quickly and, and let's say you have also access to a gas line, that's ideal. And you see a lot of developers and when I'm talking about developers, independent power producers that have now that used to be solar and wind focused now are still doing that, and batteries, but they're really focused on the data centers because of the huge demand that there is.
- [46:21]
B
And that might mean that they are solar and wind and batteries and gas as well.
- [46:25]
A
Everything, right? Everything. We're even doing some, we're even doing some pilots I'm representing some utilities that are doing some pilots on SMRs, you know, small nuclear reactors too. That's still a ways, but you know, it is, it's like we have to use everything, we have to use all different types of energy sources to get where we need to be.
- [46:50]
B
I next spoke to an executive from one of the companies that is building and operating a lot of these new data centers. John Edwards is executive vice president and head of capital markets at Switch. And I asked him first how he approached the task of securing power supplies for his data centers.
- [47:07]
E
So power consumption needs to be done responsibly. Right. We talk about many things internally and one of them is not impacting the consumer and it's also about being green. So Switch today is 100% green power. That doesn't mean we only purchase green power, but we, we use REX to substitute our consumption of, of non green power. But it's about buying power in a responsible way. And, and that usually comes down to generation. And how do you, how do you consume generation in a way that doesn't impact consumers? I think an interesting stat that I kind of guess at this point how we do it is in Nevada. Switch consumes roughly one third of the power generation in Nevada.
- [47:48]
B
In the whole of the state.
- [47:49]
E
In the whole state of Nevada. Right. And that provides a few benefits to the grid. One, and this doesn't get talked about a lot in, in the press, but data centers provide a very good baseload of demand. Right. We're consuming power 24 7, 365 days a year. So even when consumers, businesses are not consuming power, we still are. So we provide the grid a lot of stability and moving electrons around, around the grid. And then second is we decoupled from the grid, I think it was 2015. And what that means is we buy our generation outside of the utility, but we use the utility for transmission and distribution. So when we're buying generation, we're not impacting the consumer, but at the same time we're using the grid to move our electrons around to, to our various data centers. And, and in 2025, consumer prices went down double digits in Nevada. And a lot of that was in part to how we responsibly procure power. And we try to use that same, that same method everywhere else we go.
- [48:59]
B
Right. So that's really interesting because this is something that's obviously talked about a lot. Right. Anytime you speak to someone, both in the power industry and in the tech and data center industry, they always sort of say we accept the principle that when we add capacity, when we add new large loads to the grid and the capacity to serve those loads, it can't have an effect on the bills of ordinary household ratepayers. That's something which is very well agreed. That's something which is an imperative as well, coming down from the White House, the highest level of government. But very often it seems to be the case that it's easy to sort of say that it's easy to kind of say we're committed to this and not having an impact on ratepayers. Then when you actually look at the details of implementation, there is some impact on ratepayers or at least the potential for an impact. But you're saying that you can, in terms of what you've done in Nevada, you've actually managed to achieve reductions, reductions, bills. How do you do that? And do you think this is a sort of a generalizable model? Has it been something particular to the conditions in that state that's made it possible to do it there, or is there something that could be done across the rest of the country?
- [50:18]
E
It's. It's certainly something that is unique to Nevada, but it's also something that can be replicated in other. In other jurisdictions. It can't be done in every jurisdiction. I think what's important is the way that you purchase a generation. That generation consumption is not impacting the rate base. Atlanta is a location that is out there in the public. We bought a lot of land in Atlanta. We specifically went outside of the utility where we, where we purchase our land so we can purchase our generation from a co op of, I believe is 12, 12 co op members. And that enables us to be more selective in how we purchase that generation, which enables us to limit our impact on the ratepayers.
- [51:03]
B
Although then there's also a question, presumably because generation is one thing, but then transmission and distribution are another. And for the customer's bill, both are important. And so even if the generation is separate, is there not sometimes an issue then with new transmission and distribution capacity? Because if there's more load on the grid, you sometimes need to build new wires to support that. And that will often have to be done by the utility would have to come into the rate base and therefore would affect bills generally. Or are there ways to again stop that investment cost being passed on to consumers?
- [51:41]
E
Many times you do need grid upgrades to support the generation coming to the data center. And I think there's ways that that data center developers can support the utility in that construction and those costs so that it has limited impact or no impact on the consumers. And I think that's part of what we spend time and effort in, working with utilities to ensure that the way it's being done is responsible and done in a way that doesn't impact the broader market.
- [52:11]
B
So the other thing you've mentioned is green power and having that as a priority, it feels like in general, certainly at a political level, but also across the power industry and in the tech industry, that pressure to have 100% zero carbon energy has faded. Speed to power is the priority for a lot of data center users. The AI industry is moving very fast. No one wants to be left behind in that race. And so other objectives, including emissions reduction, are getting left behind. Do you think you're going to be able to maintain that commitment then to keeping 100% green power? And is it a competitive advantage then when you're looking for customers, as you say, trying to get hyperscalers to use your services, is it still something they look at the question of the emissions profile and the source of the energy used to power those data centers?
- [53:16]
C
Yeah.
- [53:16]
E
So I think historically we have been 100% green. In the future, we, we're still trying to be as green as possible. It's hard to predict whether we'll not always be or always be 100% green. I think when we, when it comes down to the type of power that we're procuring, obviously customer discussions are, are critical to that decision making. And many times we'll take their lead on not their lead, but we'll work with them on finding the right mix of power and how to substitute REX to achieve those emission targets. But it is definitely a focus on our power procurement strategy.
- [53:57]
B
Something else that's talked about a lot in the industry at the moment is co located generation behind the meter power. However that might be structured, having some kind of relationship with the grid that could even be detaching from it completely and having islanded power or having a connection, but having local generation that's used to provide a lot of the supply for the facility. Is that something you do? How do you think about questions about having behind the meter power as opposed to being grid connected?
- [54:34]
E
So similar to the green power, we're today 100% connected to the grid utility. Grid connected power is very important to the customers that we serve. It's the most reliable form of power, the most redundant. So historically we have been 100% grid connected and that is part of our overall strategy for power procurement. Does that mean we Will in the future maybe look at behind the meter power as a bridge to utility power? Yes, we will look at that. It's not something that we've executed on or are planning to execute on, but it's something that it is a tool in the toolkit that we could use. But there needed to be a very clear line to great connected power for us to be comfortable with the behind the meter solution.
- [55:15]
B
Because what's your sense of how the industry is going then? As I say, it feels to me as though a lot of talk about being behind the meter power, perhaps rather less actual investment going in. There are a few high profile cases that have been discussed, but in general a lot of people seem to think that the grid connection is the right way to go. Do you think that's right? Is that still where the kind of the center of gravity in the industry is going to be?
- [55:44]
E
I think grid connected power will always be the primary source. There's certainly the high profile and the low profile projects where you do see behind the meter being used to accelerate power availability at certain sites. It's not a great long term solution. It's not the most reliable solution. And for those reasons, I think that's why when you're looking at building data centers around major metropolitan areas, which is what switch does, you're really looking for that long term stable supply of power, which behind the meter power is not the great solution.
- [56:23]
B
And your role is head of capital markets then. So that's an important consideration in terms of getting power supply. Right. Because you need financing, you need to make commitments typically, I mean, can you explain a bit about how that works?
- [56:39]
E
Sure. So before we build a data center or finance a data center, we want the projects to be de risked. Right. That means we have power secured, we have long lease supply chain secured, we have GMP signed and a customer contract signed. Right. And to get the customer contract signed in most cases you need those other factors secured as well. And once you have that package of, of that development package ready to go, you're ready to put shovels on the ground and start building. And that's when you're really raising capital to from banks or from other sources of debt financing to build the data center. But it's all about having a de risked project to ensure as much as possible. Obviously there can always be issues down the road, but ensuring that you're going to have a data center operating, pulling power, providing your customers the capacity they need when you expect to.
- [57:41]
B
Right. Because your power suppliers want to know
- [57:43]
E
that you've Been the power suppliers want
- [57:44]
B
to know and they want some kind of financial guarantee there.
- [57:47]
D
Yeah.
- [57:48]
E
Yeah. So I think a big trend that we're seeing with utilities is we hear about the queues. Where you at? In the queue? Are you in the queue for 28, 29, 30? The utilities have gotten smart and they're looking at this fact pattern. They're saying, well, I'm going to have to spend billions of dollars, tens of billions of dollars to upgrade transmission, to upgrade generation, to deliver power to the data centers. I want certainty, I want credit support from those developers to ensure that they're actually going to build the data center and deliver it. And this is, I think this came out a few weeks ago where we raised a $2.6 billion letter credit facility supported by a bunch of our relationship banks. And this credit facility is primarily intended to be used to post credit support to utilities to effectively give them a guarantee that we will build the data center and be pulling the power from it. When we tell them that we're going to. Because we don't want. The utilities don't want to be left with unused infrastructure. They're putting that capital into the rate base in many instances, and they expect to return that capital. And this is, I think, where the industry is going. And I think you're going to see a lot of issues, a lot of
- [59:06]
B
issues in the sense of what.
- [59:08]
E
So I think providing credit support is, is not cheap, right? If you're, if the utility is requiring 1 to $3 million per megawatt, if you have a 500 megawatt project, that's $1.5 billion of credit support right on the high end, Even, even a 200 megawatt project, that's still a very large number. And that's where scale and, and a company like Switch, we can, we can deliver that type of credit support because
- [59:32]
B
there is an enormous amount of speculative development out there, isn't there? So people will just kind of acquire.
- [59:37]
E
Everyone, everyone's a data center developer now. You go and you buy 100 acres, 200 acres of land. You go and you, you find power and, and you now have a data center site. I mean, that's, that's what you see out there a lot. But not everyone can deliver. It's all about execution, right? Execution at a high level is, is important, right?
- [59:58]
B
Because sometimes when you see these very, very large numbers, about hundreds and hundreds of gigawatts of new load being added to the grid, presumably a lot of those projects are never actually going to materialize, right? That is that kind of speculative development. Yeah. And so that's for a company like Switch then if you kind of, you want to show your serious, you are actually going to build these projects, there is going to be real capacity there.
- [60:20]
E
That's right.
- [60:20]
B
You need to demonstrate that we're putting
- [60:22]
E
where our money, where our mouth is. Right. If we tell the utility we're going to be pulling power in 28, 29, where we're putting our financial backing behind that to give them certainty and support them in a smart financial way, to give them confidence that we will be a good partner and we'll deliver a project on time.
- [60:41]
B
And how do you think about risk in the industry then? We've been saying the AI business is changing very fast. There's speculation, a lot of people say it's a bubble. The revenues will never be there to justify the investment that's being made. Who knows what kind of breakthroughs are going to come that might render current technology obsolete. Maybe if quantum computing happens or something, you know, it's going to be a whole kind of new generation of hardware that's going to be needed. How do you navigate those risks?
- [61:13]
E
So I think first and foremost are who the tenants that we contract with. Right. We're primarily building data centers for the top credit worthy Hyperscalers and signing 15, 20, 25 year leases. So a lot of our credit risk is the credit risk of double A or better counterparties. And I think that gives us comfort in spending the capital and building those long term data centers with companies that have very high credit quality, have been around for, for a long time for Switch and for data center developers generally. We're not spending money on the chips and the servers which need to be refreshed every few years. What's important for us is that we're building data centers that our customers are going to be able to use today. They're going to be able to use 5 years, 10 years from now when Nvidia comes out with new servers or they need to upgrade. Is our data center still going to be able to deliver what they need without significant upgrades to. And if you dig into the design of Rob's EVO data center, which is his latest data center, it is very flexible. Right. You can consume 2 megawatts per rack, liquid cooled in one chamber. And right next door you could consume 50 kilowatts per rack, air cooled. Right. It's all about flexibility. And the way the technology is going to evolve over time is not every rack is going to consume the same amount of power. Right. And that's, that's where the design element of how are you building a data center? Not for today it's not, it's not about today. Everyone can build a data center for today for Nvidia's latest chips. But how do you do it in a smart, cost efficient way that's going to enable you to, to give the big tech guys what they need 15, 20 years from now without having to invest significant capex to, to upgrade it. And we have a great product that, that, that we're delivering.
- [63:05]
B
Yeah, that is really interesting. It certainly is a very exciting time, isn't it? Tremendous amount of change going on. John Edwards, thank you very much indeed. Great to be here.
- [63:13]
E
Thank you for having me, it's been great.
- [63:15]
B
And finally we welcome back to the show Leslie Hunter, she is the senior Vice president for Policy and Engagement at our host's acor and I asked her how the renewable energy industry was coping with withdrawal of tax credits for wind and solar in the budget legislation of last year.
- [63:29]
F
We are in a unique situation right now where there's never been as much focus on the energy sector and bolstering domestic energy as there have been in recent history. So there's a clear market opportunity and capital clearly wants to invest across energy technologies, but in particular in clean energy. And we have numbers out for 2025 that show that there was an uptick last year. There is expected to be an uptick this year as well as, as companies look to the cliff, the July cliff associated with the start construction deadline for wind and solar. But then also there are core tax credits that remain available around energy storage, around nuclear and for storage. Also applicability to hybrid generation projects as well. Are optimistic about the potential for continued investment in the sector. The challenge though is policy uncertainty and whether investors have the rules of the road that they need to innovate in the market as policy continues to evolve.
- [64:44]
B
Right. So let's think about that policy uncertainty then in terms of the wind and solar tax credits. There is this cliff coming for eligibility where you have to what if you have started construction by the 4th of July of this year, then you can claim the tax credit for your project. Right. So that seems to be kind of generating a burst of activity as developers rush to kind of try and get their projects in under the wire to be eligible for that tax credit or those tax credits. Is that then just going to be a very sort of short lived boost? Are we going to see activity drop off very markedly after that?
- [65:25]
F
Yes. So the, the cliff in July allows projects to start construction and retains the safe harbor that is four years for them to enter into service afterward. After July, projects would need to be placed in service if they start construction after July, would need to be placed in service before the end of 2027 to obtain tax credits. And from what we've heard in the industry that it's difficult to construct one of these projects in under, under two years. So we do see heightened market activity that is really driven by, by that change in credits. But then also I think there's a continuation of the market preference for wind, solar and storage that we've seen over the past decade now. Right. These remain competitive technologies. While the fewer than a two year deadline is tough, they can be deployed more rapidly than most other technologies that the administration and others are looking to as long term solutions like nuclear and, and natural gas that has not yet begun construction.
- [66:45]
B
When you talk about policy uncertainty, do you mean other issues then beyond the tax credits? Are there other concerns you've got or is it the tax credit that's the big thing really, that you worry about?
- [66:56]
F
The implementation of the new rules associated with the tax credit. So the foreign entity of concern requirements still are not fully clarified by Treasury. So we are awaiting the formal proposed rulemaking. What came out earlier this year was interim guidance. It addressed some of the component level and material assistance questions associated with those rules, but did not address the taxpayer level issues such as debt issuance, such as partnerships and other issues that affect clean energy investors, investors, utilities in particular. So we are sending a message to the administration and working with the industry to help make sure that they have the resources that they need to make the changes required to allow investment to continue to flow. So tax is one area also very focused on the impacts of permitting uncertainty with the red tape associated around approvals for wind and solar projects through the Department of War, stalling the mitigation agreements for certain projects as well.
- [68:10]
B
And that's particularly an issue for wind, is that right?
- [68:12]
F
Mostly wind, yes.
- [68:13]
B
Right. And what's been happening there?
- [68:16]
F
So many of these projects are just being held up by this really critical stage of being able to obtain a mitigation agreement to show that they would not interfere with military operations. This is part of the siting clearinghouse of the Department of War that's existed for a long time to evaluate the impacts of projects and how they play a role when they're cited next to military installations and has allowed many projects to get built after rigorous review. But now over the past year, we've seen the holdup of, of over 160 projects, that's the core ask of the industry right now, is to ensure that players have the rules of the road, that those rules won't change midstream and they're able to deploy capital and trust the federal government when making these long term investments in US Infrastructure. And there's the risk, even if actions are intended to be limited to one asset class like offshore wind for example, that sends a signal to investors that other areas may also be risky to invest. So could have an impact on investment across other US infrastructure categories as well.
- [69:44]
B
Right. And the survey then that you're publishing this week, that has some interesting results, doesn't it, on investors views of the US in terms of its attractiveness as a location for low carbon energy investment. And that's, I mean the numbers there are not good, right? I can't remember the data, but what does it show?
- [70:02]
F
Yes. So we released a report today which contains the results of surveys of capital providers and developers in our space. Most of them invest or participate in the market at a very high level, invest billions of dollars in the clean energy sector annually, and asked a wide variety of questions about the state of the investment market in clean energy finance. Right now one of the core findings is that this year many of them do plan to increase their investments, but as underlying that they are viewing the US as less attractive for investment, as a venue for investment than other leading countries. And this is a significant change in our previous years of conducting these surveys. So 70% of capital providers see a decrease in investment over the past year and many of them expect that trend to continue over the next three.
- [71:03]
B
And that's. Sorry, that's a decrease in investment what in clean energy in the U.S. to
- [71:09]
F
clarify, that's a decrease in their perceived attractiveness, the attractiveness of the US market compared to other leading markets and as we've seen with Iran and heightened geopolitical tension and increase in oil prices, bolstering of clean energy markets in Europe and elsewhere. So there's also the risk that capital that could be deployed in the US goes to other jurisdictions.
- [71:38]
B
So of course, I mean, as you'll be well aware, the administration has been very skeptical about renewable energy in general and in particular about wind, but to an extent about solar as well, and is very much stressing the importance of baseload power and actually sometimes that could be renewable. Geothermal could be, is definitely a technology that's very much supported by the administration. But they also support nuclear and fossil fuel power generation. If you're trying to convince them that Renewable energy does deserve support. Wind and solar and storage perhaps specifically do deserve support. What do you say?
- [72:22]
F
Yeah. So speed to deploy is core to our messaging in that regard. And two, the economic growth opportunity associated with these technologies we've seen. I mean, wind, solar and storage have represented over 90% of all capacity additions, hundreds of billions of dollars of investment over the past decade and real potential for continued growth here. So by cutting off the opportunity that the sector provides, there's also a risk of ceding this investment to other countries as well.
- [73:05]
B
And what about the prospect for permitting reform in Congress? That seems to be a perennial subject, which has been talked about a lot in recent years, has never actually made it to legislation getting passed. But we seem to be coming to another moment where there is bipartisan support for some kind of reform that would help give all industries, including the energy industry and including renewable energy, more certainty about what they need to do to get projects built and to expedite development. Is that something you're expecting? Do you think there will be progress there in Congress? And if it did happen, would it make a material difference to renewables?
- [73:50]
F
That is something that we're hopeful for. And as you mentioned, the industry has been championing permitting reform for the past decade or longer. We came very close with EPRA a couple years ago. But the key things that we like to see through permitting reform are transmission provisions because one of the core constraints to the expansion of clean energy right now is how difficult it is to build new transmission in this country. So that that is a key focus and also the technology neutral provisions and seeing if legislation can meaningfully address some of the red tape and slow walking around specific energy technologies. So this remains in play. There has been progress. The White House is interested in seeing a deal move forward and you've seen a wide variety of, we like to call them, strange bedfellows of different groups working together, alligned around the need for permitting reform on a technology neutral basis.
- [74:57]
B
Lizzie Hunter, thanks very much indeed. So that's all from us from the first day of the ACOR Finance Forum in New York. Thanks also to John Edwards, Mona Tajani, Adam Altenhofen and James Wright. Many thanks to our producers, Dan Cottrell, Molly Merwin, Toby Bingins, Gilchrist, and above all, many thanks to all of you for listening and watching. We really value your feedback. So please do keep that coming. And we'll be back very soon with all the latest news and views on the future of energy. Until then, goodbye.