Podcast Summary: Inevitable (An MCJ Podcast)
Episode: Accelerating Data Center and Renewable Energy Siting with Paces
Date: March 13, 2025
Host: Cody Simms
Guest: James McWalter (CEO & Co-founder, Paces)
Episode Overview
This episode features James McWalter, CEO and co-founder of Paces, an AI-powered software platform aimed at optimizing site selection for clean energy and large-power-demand projects such as data centers. Host Cody Simms dives deep into the complexities of modern energy project development, the compounding challenges of grid interconnection, permitting, and the rapid rise of AI-driven data center demand. The discussion spans James’ personal journey from farm life in Ireland to clean energy innovation; the foundational problems Paces is built to solve; the intersection of data center growth, grid constraints, and renewable energy siting; and the pragmatic realities of decarbonizing large-scale power deployment.
Key Discussion Points & Insights
1. The Origins and Mission of Paces
[02:48–09:18]
- Paces' Role: Provides AI-driven tools to help developers of large-scale power projects (solar, wind, battery storage, data centers) identify and secure optimal sites by analyzing grid capacity, permitting requirements, and land data.
- James’ Journey:
- Grew up on an Irish farm, immersed in agricultural practices and organic certification (his mother led organic standards in Ireland).
- Worked across finance, tech, and startups before pivoting to climate after COVID democratized remote collaboration and access to climate circles.
- Initial motivation stemmed from tackling carbon in agriculture, but soon recognized solving for energy siting was a more critical, scalable bottleneck.
- Startup Story:
- Early validation involved direct customer conversations, ultimately leading to a Y Combinator batch (even after raising pre-seed beforehand).
Notable Quote:
"I was like, look, nobody I know who's working on climate. How dare they? Then I have the cognitive dissonance of how dare I? I'm not doing anything either." — James [03:14]
2. Deep Dive: Renewable Project Development Bottlenecks
[09:25–15:51]
- The Site Selection Workflow:
- Identify suitable land (sufficient acreage).
- Proximity to grid infrastructure with available capacity.
- Assess environmental and permitting viability.
- Major Pain Points:
- Roughly 80% of projects fail before construction.
- 60%+ are due to interconnection (insufficient grid capacity or costly upgrades).
- 20–30% fail on permitting, often due to local moratoria or negative regulatory changes during drawn-out development cycles.
- U.S. grid interconnection queues are strictly first-come, first-served, often leading to high attrition as true costs (like unexpected substation or transformer upgrades) are only revealed late.
- Permitting Gridlock: The regions with the "easiest" grid availability are frequently those facing emerging anti-renewable permitting stances from local communities overwhelmed by developer interest.
Notable Quote:
"Developers were finding sites that met certain criteria... but additional de-risking was just super expensive. Only one in five of these projects would actually get built, the other 80% failing primarily because of power interconnection and permitting." — James [09:35]
3. The Technology: What Does Paces Actually Do?
[16:01–24:51]
- Core Product:
- Site search engine that allows developers to filter for land based on grid, capacity, permitting, and environmental factors.
- Scores sites by likelihood of project completion.
- Automates early de-risking—front-loading risk analysis to accelerate site selection and increase project viability.
- Centralizes tracking of all ongoing site-specific risks and project tasks.
- Unique Value:
- Aggregates disparate data sets (28,000 permitting jurisdictions, 2,000 utilities, varied state laws) into actionable insights.
- Enables developers to "fail fast" and focus on the most winnable prospects.
Notable Quote:
"Permitting has 28,000 jurisdictions in the U.S., 2,000 utilities... You can be a world-class expert in New York and have nearly no ability to understand solar development in, say, California." — James [18:02]
4. Understanding Permitting and Community Pushback
[19:10–22:28]
- Permitting issues mostly arise on-site, not from connecting new transmission lines.
- Local opposition is often driven by:
- NIMBYism (“not in my backyard”)
- Worries over declining property values
- Resistance to converting agricultural land to industrial use
- Small-town permitting offices being overwhelmed by the complexity and scale of renewable projects.
- Misalignment between where communities are willing to allow renewables and where grid proximity makes economic sense.
Notable Quotes:
"It is a remarkable thing how much folks hate solar... There is NIMBYism, right? Not in my backyard." — James [19:24]
"America, the land of property rights, is like, hey, why do people get to tell you what to do with your property when it literally doesn’t affect you?" — James [20:07]
5. Market Segmentation and Go-To-Market Strategy
[24:51–27:47]
- Focused first on small/medium community solar developers in New York; rapidly expanded state-by-state based on customer demand.
- Built out U.S. coverage methodically to ensure data quality and compounding value.
- Paces will not support oil and gas projects; their mission is to enable clean transition.
- Platform best suited for projects >1MW in size across power generation or load (e.g., data centers).
6. The Data Center Boom & Behind-the-Meter Microgrids
[28:08–35:38]
- AI-fueled Data Center Demand:
- Data center siting is now a crisis—existing grid sites are exhausted, urgency to deliver capacity has made new behind-the-meter models (including microgrids) a must.
- Traditional grid connections take too long (sometimes not available until 2032 or beyond).
- Developers are therefore building their own hybrid power plants (solar+storage+gas) directly adjacent to data centers.
- Main constraint is increasingly equipment procurement (e.g., gas turbines) rather than just siting or permitting.
Notable Quotes:
"The massive ramp up in AI data centers... pulled a lot of things we were expecting to happen three years from now to now." — James [28:16]
"We basically had to ship multiple things in Paces very rapidly ... to productionize the white paper." — James [34:54]
7. The “Fast, Scalable, Clean and Cheap” White Paper
[30:16–44:36]
- Co-authored with Scale Microgrids and Stripe Climate, the paper investigates whether off-grid solar microgrids can meet spiking AI/data center loads.
- Main arguments:
- Speed (time to power) is now king; cost and even cleanliness have shifted down the priority stack.
- Hybrid models (solar plus gas, sometimes 60:40 or reversing) are technically and economically superior to pure gas or pure renewables—for now.
- 100% renewables is technically possible, but overbuild requirements for storage (batteries) can make capex balloon at very high penetrations.
- LCOE (levelized cost of energy) modeling shows that high-renewables (70–90%) blends are feasible without “breaking the bank.”
Controversy Addressed:
- Some climate advocates criticized the report for normalizing gas in data center microgrids.
- James’s position: “If we can decarbonize 1% of these systems via hybridization, that’s a massive real-world win.” [40:02]
Notable Quotes:
"If you build a 100 megawatt data center, you will completely return the entire return on investment on that in months, not years—time to power becomes the primary metric." — James [34:00]
"Of all the things we've put our name to at Paces, this white paper has had by far the most impact, not just from us as a company perspective, but for climate." — James [35:14]
8. Regional Dynamics and Siting Trends
[41:26–45:14]
- Most large-scale data center+siting activity is focused in Texas and surrounding Southwest states, due to land availability, grid rules, and speed of permitting.
- Some effort to co-locate close to existing renewables with expiring PPAs (Power Purchase Agreements).
- Building grid intelligence to carefully recommend optimal mixes of grid-connected and off-grid resources per site.
9. The Business Path Forward and Call to Action
[46:10–47:51]
- Paces closed a Series A led by Navitas and MCJ Collective in summer 2024, focused on deepening automation across the development workflow.
- Company’s mission-oriented KPI: “If we can’t point to specific projects built because of Paces, we haven’t done our job.” [47:07]
- Who James wants to hear from:
- Developers interested in siting and permitting tools.
- Capital providers willing to invest in new, “behind the meter” energy projects who need help evaluating and underwriting emerging risks.
Notable Quotes & Memorable Moments
- "The AI was actually Charles in the background." — Cody [09:14]
- (On grid capacity): "As the queue increases, that capacity is being grabbed by other developers..." — James [15:16]
- "Most of the queue, where there's a high likelihood of the project actually moving forward... is actually in jurisdictions that have negative permitting outcomes for renewables." — James [13:23]
- "Machines do machine things, humans do human things... The person who is going to call the farmer and talk farmer talk is a very key skill." — James [22:43]
Timestamps for Important Segments
| Timestamp | Segment | Topic/Highlight | |:----------:|:---------------------------------------------------------------:|:--------------------------------------------------------------| | 02:31–04:45 | James’s background and founding motivation | Personal story, shift to climate, startup lessons | | 09:35–15:51 | The workflow and attrition of renewable development | Why most projects fail; deep dive on interconnection/permitting| | 16:01–18:42 | How Paces automates risk and de-risks sites | Core product features | | 19:10–22:28 | Permitting, NIMBYism, and local opposition | Root causes of pushback, community dynamics | | 24:51–27:47 | Go-to-market, product expansion, and use-case boundaries | Market approach, mission, customer types | | 28:08–35:38 | Data center boom and rise of behind-the-meter microgrids | New load, procurement, productionizing the white paper | | 36:02–38:38 | Equipment and procurement as emerging bottlenecks | Why relationships matter, capital stack discussion | | 39:43–41:26 | Hybrid power, controversy, avoided emissions vs. 100% renewables| Debate on mixing gas/renewables, market response | | 46:10–47:51 | Business update and forward path | Series A, focus on delivering real-world impact |
Conclusion and Tone
The conversation is energetic, pragmatic, and focused on real problems and opportunities at the front lines of the energy transition. James is candid about the non-ideal realities of project bottlenecks, community resistance, and the practical challenges of decarbonizing huge spikes in digital infrastructure demand. The episode is essential listening for anyone interested in renewable project development, energy policy, or the practical intersection of AI, grid, and climate infrastructure.
For more details, including the white paper discussed, visit: OffGridAI.us
Contact James: james[at]paces.com