Despite the pandemic, the amount of renewable energy deals announced by large-scale buyers set a record in 2020. Miranda Ballentine, CEO of the Renewable Energy Buyers Alliance (REBA), join the show to talk about how corporations are reshaping the large-scale energy procurement market. Ballentine talks about the new kinds of corporate buyers that are entering the market (9:02), how firms have shifted their goal from merely investing in renewable energy to decarbonizing the power system (12:20) and shares her reaction to the renewable energy proposals coming from the Biden administration (20:20). In light of the Colonial pipeline attack, Ballentine also highlights the importance of grid cybersecurity and resiliency (26:13). Ballentine also outlines the types of energy deals that are trending in the market and reveals some of the leadership tactics she uses (49:38) to guide an organization that is full of so many big-name brands.
The PodBrief in this episode focuses on how additional efforts from REBA members like Google and Microsoft stand to change the everyday lives of consumers (52:39).
Salesforce Best Practice Paper: "More Than a Megawatt"
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Sean McMahon 00:08
What's up everyone and welcome to the renewable energy smart pod. I'm your host Sean McMahon, and today we have a guest I've been trying to bring on the show since before the show even launched. Her name is Miranda Ballentine, and she's the CEO of REBA, the renewable energy buyers Alliance. The reason I've been so keen to get Miranda on the podcast is because she leads a group of companies that's reshaping the large scale energy procurement process. rebbes members are household names. We're talking Amazon, Walmart, Google, General Motors, Disney, McDonald's, Nike, Target, Starbucks, the list goes on and on. REBA also includes energy and service providers like Duke Energy, EDF Renewables, Engie, Primergy, and banks like Goldman Sachs and Bank of America Merrill Lynch. So yeah, I'm excited. Miranda's here to talk about the trends she's seeing and to share the insights from some seriously important stakeholders in the renewables industry. So let's get to it. But first, I want to say a quick thank you to the sponsor of today's episode: Infor.
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Joining me today is Miranda Ballentine. She's the CEO of the Renewable Energy Buyers Alliance. Miranda, how you doing today?
Miranda Ballentine 01:44
I'm doing really well. Nice to see you, Sean.
Sean McMahon 01:48
Good to see you, too. So let's start today's conversation by just kind of giving our listeners a little bit of background on what REBA is where it started and what your group does in the marketplace for renewable energy.
Miranda Ballentine 01:58
Yeah, great. So REBA is the Renewable Energy Buyers Alliance, we are a trade association that was built by large clean energy customers. For large clean energy customers, we have a simple but very powerful vision. We are driving a resilient zero carbon energy system where every organization has a viable, cost effective pathway to procuring renewable energy. So that's what we do. We have a goal of developing 60 gigawatts of new renewable energy by 2025. And bringing 10s of 1000s of energy customers into the market.
Sean McMahon 02:33
Tell me a little bit more about your members. Who are we talking about?
Miranda Ballentine 02:36
Well, we have members from across the clean energy value chain. So the majority of our members are large, clean energy customers, primarily commercial and industrial customers. But we do have members from the energy developer community, so energy providers, and we also have members from what we call the service provider community. So you can imagine it's all the businesses that help clean energy transactions happen. So that's lawyers and financier's and buyer's agents, and consultants, and that whole community as well. We have over 250 members today, total revenue across our membership is over $6 trillion annually. And there they have about almost 14 million employees around the world. So it's a really powerful movement. Again, largely driven by large, clean energy customers, that's the majority of our membership. But it really is a community that brings everyone together to solve the toughest barriers to clean energy deployment.
Sean McMahon 03:37
And what are the origins of REBA? I mean, was this just born of a bunch of companies trying to do the same thing on their own and then decided to get together? How long ago did things start?
Miranda Ballentine 03:46
Well, yeah, and in a sense, that's exactly right. So it all started actually back in 2013. At the time I was with Walmart, I was a global director on their the Walmart sustainability team, I was responsible for developing the strategy for Walmart to achieve its ambition of 100% renewable energy around the world. And in 2013, there actually weren't that many corporations that had either committed to procuring renewable energy or had actually done renewable energy deals. About a dozen of us came together in 2013, at a really great meeting held by the World Wildlife Fund, here in Washington, DC, to talk about what were the barriers we were facing as energy customers. What were the barriers we were facing to using our demand side power to drive the zero carbon energy system that we were committed to seeing? And one of those barriers we uncovered in that first meeting back in 2013, was we didn't have a community of our own. We didn't have an ongoing home and place where we could come together as energy customers, to collaborate, to identify barriers and to help tackle those barriers that were really bigger than any one company, even a company as big as Walmart, or Google, or General Motors, or Johnson and Johnson or Coca Cola, Who were some of the companies at that original meeting could handle on our own. So, you know, in short, what you just described is exactly how it happened. It did take us a few years, sort of 2013 to 17 ish, to kind of build critical mass and take it from that roughly a dozen companies to the 250 companies that are in the community today.
Sean McMahon 05:32
I appreciate that background. And that really helps. So let's move forward to today. REBA recently released state of the Market Report, you want to walk me through some of the key takeaways from that?
Miranda Ballentine 05:42
Yeah, well is as somebody that's been in this space for a long time this year is state of the market report was really exciting. So keep in mind that the the first large scale corporate renewable energy deal was back in 2008, when Walmart did a wind project. When we started counting as REBA in 2014. We only had a small less than one handful of companies doing deals in 2020, despite the pandemic, despite the recession, despite the rolling climate calamity is across the country despite the racial reckonings. Which, you know, was just a pretty remarkable year. Despite all of that clean energy procurement didn't slow down last year. And in fact, it was our biggest year ever. 35 companies announced over 100 large utility scale, renewable energy deals, topping 10.6 gigawatts of new capacity. And that has brought us to over halfway to our 60 gigawatt goal, we're up above 35 gigawatts now as a community. So you know, 10.6 was our biggest year ever. And I'll tell you that the first quarter of 2021 is not slowing down. In first quarter of 2021. We've already seen 3.2 gigawatts of announcements. 18 buyers, I know that we have a we have a pretty wonky listenership to our podcast today, Shawn. So most of for most of you 3.2 gigawatts, the scale of that won't, won't be lost. But just if we have folks that need a little bit of perspective, you know, the 3.2 gigawatts for q1 of 2021. That is larger than the entire 12 month period of new deals, announced in 2014, in 2015 2016, and 2017. So to have one quarter that surpassed the entire year of 2017. It's it's really remarkable, we are on pace to just have a huge 2021.
Sean McMahon 07:43
Okay, now, when we're talking about I mean, the deals being done, what's this? What's the range of size on those deals? I mean, obviously, there's some smaller projects, bigger projects, you have some members that are big players in the space. So what's that range look like?
Miranda Ballentine 07:55
Yeah, so we track at REBA we specifically are focused on utility scale deals. So you know, these are deals and that, I'd say, probably 50 megawatts and larger. So we're not even tracking all those onsite deals, all those rooftop solar deals, there are a few on site projects across the country that are not solar. So you've got, of course, some geothermal on site you've got, believe it or not some wind, both large scale and small scale wind on site. At some large companies, commercial or industrial companies that have significant land or space, you are seeing some, you know, fairly large wind projects actually happening on site into our projects that we track, that 3.2 gigawatts for q1 of this year, and the 10.6 gigawatts for all of 2020. Those are really large or projects that are built off site. And SEIA, the Solar Energy Industry Association, actually does a great tracking of on site solar projects as well. So those are also accelerating. So there's just a lot a lot happening across the space.
Sean McMahon 09:02
Are you seeing any new buyers or any industries that are kind of coming to the table now and you know, doing more deals?
Miranda Ballentine 09:08
Yeah, again, as someone that's been in this for a long time, I really kind of get geeky about who's doing deals and what what, what are the sectors? What are the industries, you know, early in the early 2000s. It was really the retail companies and the CPG companies that, you know, the Coca Cola is and Unilever's and Kohl's and Walgreens and Costco and Walmart that really kind of were the early leaders in this space. And then the tech companies came in in a big way and took us all to a new level in the sort of, I'd say 2013 to 2016 sort of timeframe. And then we started seeing some some deeper industrial companies coming in from the oil oil majors coming in. And what was really exciting about 2020 in my view was the industrial and manufacturing sector really just burst onto the scene. So We had significant new procurement being done by steel companies meant companies. So we really saw an uptake there, which is really important, john, as you know, because while commercial energy related greenhouse gas emissions have been falling, in recent years, the industrial energy related greenhouse gas emissions have actually been increasing. So seeing the industrial companies and manufacturers really looking to electrify their processes, decarbonize the energy that they're using, recognizing that some of those, those heating needs are a little bit tougher, and we're gonna need a little bit more time to crack that nut of those technologies that can really get us to the levels of heat that we need for some of those industrial processes. Then the other industry that really came onto the scene, big time in 2020 is the real estate community. So of course, the real estate community and wreaths and large, you know, large real estate owners certainly have been in the energy efficiency space for a long time. But we're really seeing them now say, okay, we're, we've done a lot. And we still have more to do. But we've done a lot on energy efficiency. Now, how can we decarbonize the power that we're buying? And importantly, how can we work with our tenants to really begin to sort of disentangle whose emissions? Is it? Whose scope one whose scope two, whose scope three, how can we work together? And for those, for those of your listeners, which I'm sure are many who are landlords know that these are complicated challenges. So that was a really exciting development in 2020, as well.
Sean McMahon 11:38
So there's also been a lot of news about how energy storage is expanding, you know, the role it plays in the market, you know, what are you seeing there?
Miranda Ballentine 11:45
Yeah, this is a great question, another one of my passions, I, I actually spent just a little bit of time as a CEO of an energy storage as a service company. I've been up in Toronto, so you know, storage and the role of storage, not just batteries, but all types of storage, and helping to smooth that both hourly and daily intermittency of the intermittent renewables, like wind and solar, but also importantly, the seasonal intermittency. It's going to be such an important piece, as we all know, to truly get into a carbon free energy system. I know you're gonna ask me, what were the big key trends. So I'm going to actually do a little bit of a spoiler here. One of the biggest trends that we've seen in the last few years, Shawn and the energy customer community is a real doubling down on the focus on the carbon impact of their energy procurement. So many of the real leading large clean energy buyers are now looking at renewable energy as one means to the end, where the end is a decarbonized power system. And that that may sound like a subtle shift, but it is an important subtle shift that, you know, 1015 years ago, many of us were just focused on deploying additional new renewable energy. And now we're really looking at how do we make sure that the new renewable energy that we're deploying actually has the highest decarbonization impact, so that I'm going to link now back to your question about storage because these two things are tightly related. Energy customers aren't interested in deploying storage just for the fun of a new geeky technology. They're interested in deploying storage on their renewable energy projects, because they can increase the decarbonization impact of their projects. That way, they can increase the quality of the power, they can increase the ability to deploy that zero marginal cost renewable power. So 2020 was the first year that we saw multiple large energy customers, adding battery storage to their projects for improving the economics and improving the decarbonization impact. We had five deals last year that included storage, and we've already had a couple of deals in the first quarter of this year.
Sean McMahon 14:15
Yeah, well, let's just get right into the other procurement trends. So you mentioned some of the more buyers are asking about battery and how they can you know, lead them down the path to decarbonization. Are there any other questions you're getting from either new buyers or even people been around in the marketplace for a long time that are just kind of, you know, wondering what other options are out there?
Miranda Ballentine 14:32
Yeah, well, REBA really is a community of both leaders and learners. So we don't really have laggards in our community because you wouldn't, you wouldn't opt in to a clean energy trade association if you weren't interested in deploying clean energy. So the questions that we get from those two halves of our community, the leaders and the learners are quite different. We still do have a significant group of buyers who are bringing New to the market. If you think about it, most companies just pay their utility bill, they've never really thought about how do I competitively procure power, they've never really thought about? How do I actually specify the generation type, or the pollution reduction that I want from my power? So we continue from our learner community to have a lot of those basic questions. How do energy markets work? There's a lot of acronyms floating around, what the heck do all these things mean? What's an RTO? What's an ISO what's a PPA? What's the difference between a PPA and a vppa? What's a green tariff? Why would I want to take a tax equity investment? Should I just buy this technology directly? The way that I do my h back system. So we get from our learner community, many of the same questions that we've you know, we've been working to bridge for the last couple of decades, in our leader communities, some of the trends that we're seeing so far, I've already mentioned, one of the big key trends that we saw starting around 2018 2019 and has really taken off is this deep focus on decarbonization impact from the projects that they're procuring being more technology neutral, and more focused on how can my procurement truly decarbonize the grid, not just give me renewable power to my facilities. So that's probably one of the biggest, most important trends that we're seeing in our leader community. The second trend and it may seem antithetical to the first trend, but it's actually not. The second trend is that we're seeing more and more of our leaders, saying, we want to make sure that our clean energy procurement fits in with our broader environmental, social governance ESG initiatives that fits in with our broader commitments to the Sustainable Development Goals, our SDG goals fits in with our broader social or sustainability or CSR goals. So we're seeing another trend, in addition to doubling down on the decarbonization impact trend number one, trend number two is saying, Let's take a broader look at how we can assure our clean energy projects are good for people are good for labor issues are good for equity issues are good for other environmental issues are conservation issues or our biodiversity priorities. So that's probably trend number two. And then trend number three that we're really seeing in our leader community is a much deeper engagement and focus on policy and advocacy. So if you looked 10 or 15 years ago, there were only one or two companies who had government affairs teams that were thinking about well versed in energy policy. Remember, most energy buyers are not energy companies. So their government affairs and policy and advocacy teams, they're well versed in their core business issues, not necessarily energy issues. So this is a really significant major trend. And just as you know, as one piece of evidence on that, in January of this year, and Shawn, remember what was happening January of this year, right, we were facing an insurrection in Washington, we were having a really challenging transition of power in Washington, we were still in the depths of a global pandemic, we didn't yet have vaccines rolled out. I mean, it was a really, really challenging time, we were questioning first amendment rights issues. And you know, there was a lot going on in this country. Despite all of that we had almost three dozen large energy customers, really iconic brands think Johnson and Johnson think Disney think Walmart and Target your iconic American brand, be brand forward and calling on the federal government to really deeply build a set of clean energy policies, not just climate change policies, but clean energy policies very specifically, to have 36 companies be brand forward on on that kind of request from our new federal government really, really demonstrates a significant shift. And that's really, I would say our third key trend.
Sean McMahon 19:23
We're gonna take a quick break, but when we come back, I'm gonna get Miranda's reaction to all the big renewable energy proposals coming from the Biden administration. And I'm also going to ask her what it's like to lead a group that consists of so many influential companies across various sectors.
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And now, back to my conversation with Miranda Ballentine, the CEO of the Renewable Energy Buyers Alliance.
Okay, so we're a few months into the Biden administration, and, you know, circling back to, you know, the brand for kind of, you know, messaging and ask that, you know, 36 companies and REBA kind of put forward in January, what are your What is your reaction been to what the Biden administration has proposed so far, when it comes to, you know, clean energy proposals?
Miranda Ballentine 20:39
Well, you know, I've obviously been really excited to have an administration that is focused on decarbonizing the power grid app to have a president come in this early in his administration calling for 100% carbon pollution free power by 2035. That's an incredibly bold ambition. So that sets the stage for us to begin to have some some deeper conversations around, what is it going to take to get us there? What are the types of policies and regulatory frameworks that we're going to need to get there. So I've obviously been very, very pleased about that. The administration and for, you know, the Federal Energy Regulatory Commission, as well as the leadership at DMV, and across other parts of the government, as well have been really, really interested and hungry to hear from the corporate community, particularly to hear from corporate energy buyers. If you think about it, Shawn, I'm sure you and most of your your listeners know that the federal government, in addition to being the policymaker, and the regulatory maker for the energy community is also the largest energy consumer in the entire country. So they are really interested in not only developing the right policy and regulatory framework to support clean energy markets, thriving, but also using their procurement power. So we've also been deep in conversation with the different agencies about how we can really lock arms and and use our procurement community, whether you're a federal government agency, or a city or university or corporate industrial energy consumer, how can we really use this broader community to create a market space where our economy is thriving, jobs are thriving, and we're really growing not only clean energy for this country, but but growing our entire industries so that we can really lead the world again in energy. So I'm excited about all of those things. There's a bunch of additional components of their plans that that I'm also excited about.
Sean McMahon 22:45
Yeah, there's loads of components. I know, obviously, you know, there's wind, and there's EVs and stuff, but are there any pieces you think might be missing, or just perhaps not announced yet that you'd like to see, you know, still rolled out?
Miranda Ballentine 22:55
So there's a couple of things. One of the most important elements, in our view, to unlocking clean energy markets to decarbonize the power system, is ensuring that we have wholesale organized markets in every region of the country. We know that over 80% of the commercial and industrial renewable energy projects today have happened in organized markets. And that's not because 80% of the facilities are an organized markets only about 60 65% of CNI facilities are an organized markets yet, about 80 to 85% of the deals are happening in organized markets. So having wholesale markets is really, really fundamental to unlocking the marketplace. And competition is good for clean energy is the bottom line. And in fact, if your listeners haven't seen an even with your your wonky audience, they may not have seen nine former for commissioners from both parties who have served under five presidents of both parties, wrote a letter to for calling on firk to really finish the business of expanding organized markets across the country. There is just widespread consensus amongst that community and amongst the energy customer community, that wholesale markets are really a fundamental underpinning. Now, I wouldn't say that's necessarily missing in the administration's plan. It just hasn't been as much of a focus as we would love for it to be. There is one other thing that's a little bit in the weeds, but is really important as well, and that is greenhouse gas data. We all know that the best way to change something is to first measure it and have clear visibility into what your impact is. And unfortunately, the greenhouse gas data and emissions factors that are provided to large energy customers are woefully out of date and we really need time and location matched greenhouse gas data for every load center. That way large energy customers really understand which of my facilities were have the greatest impact? And how can I actually decarbonize the power that I'm using, at every location all the time. So that's a little bit of a wonky in the weeds, one. But it's another space where the federal government, and the Energy Information Agency really has an opportunity to play a big role.
Sean McMahon 25:33
Yeah, I couldn't agree with you more on that one. I did a little riff on that in a previous episode about the data and how we need that need to be reporting it and things like that. I mean, I, I kind of laugh, because it's like, I come from financial markets. And that's my background. And every day, we hear what the Dow did, but how many people really, how many people's lives are affected by the Dow going up? 5050 points or down? 50 points, right. But every new bet every newscast and every newspaper has it? You know, why don't we have some kind of data point like that on on greenhouse gas emissions? It seems like, you know, if we're keeping track of our progress, either, you know, daily, monthly, even quarterly, it might help, like you said, keep people's eyes on that. So I couldn't agree more. It's not in the weeds. I think it's an important piece. So now kind of getting back to, you know, the policy side of things. Are there any state or local initiatives that REBA’s tracking, or you're tracking that you might view as bellwethers for what might take off nationwide?
Miranda Ballentine 26:25
Yeah, there is. And actually, before I jump into that, I do want to name one other thing that I'm actually really excited about with the administration. And that is focused on resilience. And certainly after, after the ransomware attack on the colonial pipeline, that has really opened the eyes, I think of the broader community. And I spent a few years as the Assistant Secretary of the Air Force working on energy security and and energy vulnerabilities and what we called mission assurance. Now, of course, for the Air Force, mission assurance has a very particular meaning. But whether you are a retailer or a tech company, or a manufacturer or your you know, healthcare company, you can translate mission assurance into what that means for you. And you know, that that cyber attack could could just as easily have been on a major artery of our power system. And we as a nation need to be doubling down on that focus on resilience. And that includes ensuring regional redundancies, that includes ensuring hardening of the system against cyber and physical attacks, it includes deep study of our system and understanding where our vulnerabilities are. And I think, of course, what we saw with the rolling brownouts in California last summer. And what we saw in Texas with the widespread blackouts because of the the polar freeze, those are also we've seen in the last 18 months, the very real effects of Mother Nature's attacks on our system, and how that is changing because of climate change, as well as the cyber, the cyber threats of determined actors, disrupting our systems. So that's an area where I think this administration is focused and has an opportunity to really go even further.
Sean McMahon 28:24
Well, but let me let me just jump in there. So where do you think the trend will go there in terms of resiliency? Will companies call for the more resilient grids and interconnected lines? Or will they kind of start leaning towards more distributed energy and islanding and things like that?
Miranda Ballentine 28:40
Oh, I think it's gonna be all of the above. For many companies, I would say for for the vast majority of companies, they really need these solutions to be economy wide and nationwide. And they are dependent on on their their regulators and their power companies to provide those solutions. And I think many companies are now recognizing that two very significant things have changed in the last couple of decades. First and foremost, our dependence on electricity has dramatically increased. There was once a time where our heating and cooling systems were quite separate from our power systems, our water systems were quite separate from our power systems. That's just no longer the case. We are dependent on electricity and in ways we never were before. Well, I should say there are three big things that have changed. The second big thing that has changed is that our system has continued aging. So we do have an aging power system. If we were on a webinar instead of a podcast today, your viewers would see that behind me I keep a a hollowed out power pole from an Air Force Base. That is a visual demonstration of how fragile and aged our power system is. cross this country. And so that's sort of thing number two that change. And then Thing number three, this change is that the threat environment has changed. Climate change means that looking back at 100 year weather models is no longer the right way to predict the kind of weather impacts we're going to have against our power system going forward. And the advent of cyber warfare and and cyber espionage and cyber attacks has changed dramatically. So when you put those three things together an increased reliance on electricity, and aging power system that was built for a different time, and the change in the threats against the power system, we have this sort of perfect storm, that we as a full community, this can't be done company by company, we have to solve that as a full community. At the same time. I do think that more and more companies are saying, alright, but I'm not going to leave it up to big brother to solve it for me, I'm going to make sure that I have a resilient and low carbon backup system. We see companies like Microsoft actually setting goals to fully decarbonize their backup power. Google did a project this year that replaced their DSR in 2020 that replaced their diesel gensets with carbon free backup power. So we are seeing more and more companies say how can I bring together my resilience goals and my carbon free goals?
Sean McMahon 31:25
Okay, I'm glad you brought up the resiliency piece. It's important to talk about that. And I want to get back to just the policy side of it. What are some of the state or local initiatives you're tracking?
Miranda Ballentine 31:35
We operate more at the regional level. So we're not deeply engaged at the state level. However, we do stay closely closely monitoring state level issues. So first and foremost, obviously, we're tracking 100% clean energy standards at the state level. This has been a great transition from the RPS world to the CES world where we are again, from a policy perspective starting to see more and more states focused on clean energy standards that are technology neutral and focused on decarbonization . So, you know, we're watching, for example, the CES rules in Arizona, which is the first standard that could be passed through a regulatory approach. So that could set a new trend for how PCs may start to, to get involved. We're very focused, of course, on the west and the southeast. So we're watching both Oregon, that's legislation that was passed to study the benefits and costs of developing or expanding and RTO in the state. We're watching do we funded state led market option studies in the West, which are really being facilitated through the energy offices of Idaho, Utah, Colorado, Montana. And so we're, you know, we're looking at that sort of state level, work, but in the region, we're really watching in the West, wholesale market expansion work at the state and regional levels. So the Nevada sb 448, which really is looking at requiring transmission providers to join an RTO. And that's it passed both the Assembly and the Senate. So we're seeing some interesting movement. And then of course, the southeast is another region of great import to our, our CNI customers there, it's a very industry heavy region of our country. And, you know, has been pretty solid for onsite renewables, but has been very challenging for corporations to do utility scale off site renewables or utility scale off site, zero carbon power in the ways that they have an organized market. So, you know, we're following closely, the southeast energy exchange market discussions, and we're engaged with filings at work on that. We are following closely the southeast organized wholesale markets study legislation in both North and South Carolina's and really looking to support beginning to do some real studies to to take a look at the customer and climate benefits of wholesale markets across the southeast. So those are some of the areas that we're looking at. And then there are a couple of key things that we've been engaged in this year, Shawn, at the state level, even though we don't do a lot of state level work, but there have been a couple of really important issues at the state level that we have jumped into an existing wholesale market. So down in Texas, after the polar freeze, there was some really, really anti renewable legislation that had been proposed. And so you know, we've been deeply engaged in our customers have been deeply engaged in imposing that in and in Ohio, SB 50. 52 would really increase barriers to solar and wind projects. So we've we have been engaged in in a couple of state level issues as well.
Sean McMahon 35:10
I mean, you mentioned Texas, I'm just gonna come and ask you like, does all that anti renewables rhetoric? give any of your members pause about developing projects out there? No. They're just they're just, they just kind of treat it like just political rhetoric.
Miranda Ballentine 35:27
I think I think what you saw happen in the days after the polar freeze is it was in some ways, just so predictable. So you know, that the anti renewables folks pointed to pointed to wind turbines freezing. Did that happen? Sure it happened, but we have wind power in Antarctica, we have wind power in North Dakota. The anti gas folks pointed to the gas pipeline pipelines and gas wellheads freezing, did that contribute? Sure it did. But we have gas all over the world and in polar zones? Did did the, you know, anti markets folks point to the lack of not not robust enough capacity market? Was that did that play into it? Sure. It did did the lack of regional interconnection to depend on our friends and neighbors plan to it? Sure it did. So to me what all of that rhetoric was just highly predictable. It's much more worrisome when that rhetoric turns into legislation against one piece, one piece of that, when we know it was a complex amalgamation of a bunch of different challenges. And that's exactly what you see in resilience breakdowns. This is a system of systems, you have to take a system approach. And a lot of what happened was just good old fashioned weatherization that needed to happen. You know, this was the third time that the system has froze since the 90s. And we need to be planning differently. So I actually written a couple of blog pieces about this. It's, I think, states and regions can really take take some lessons from the military in this way. So anyway,
Sean McMahon 37:20
okay, that's about to pick your brain on that. Because Yeah, there was definitely a lot of verbal warfare going on.
Miranda Ballentine 37:27
So verbal warfare is one thing, but when it turns into legislation, that's where it's really starts to get dangerous, you know, let's not take, let's not take one piece of the failure and legislate it out it. I mean, that was it has just been a real blatant anti renewables play there. And so we're trying to combat that.
Sean McMahon 37:49
All right, now, let's pivot just for a second to supply chain. Right. And I want to take this in two parts, because first, there's been some human rights concerns in the news about the supply chain, anything coming out of China, specifically solar panels, but also on US soil here. You know, President Biden and Secretary Granholm have been talking about bringing a lot of that manufacturing, you know, back to back to us soil. So, you know, in two parts A what is what is what a REBA member is doing, and how are they addressing concerns about the human rights, things of the existing supply chain? And do you think that, you know, the US could build out that kind of supply chain right here within our own borders? And how long you think that would take?
Miranda Ballentine 38:27
Yeah, two great questions. So let me take the first one first. As I mentioned earlier, in the podcast, one of the big key trends that we're seeing his energy customers looking to incorporate all of their environmental, social and governance priorities into their clean energy procurement. And I would say Salesforce has really led this they they released a paper early last year, I think it was January or February of 2020, called more than a megawatt where they really laid out all of the questions that they're asking their renewable energy suppliers, when they are going into an RFP process. And that that paper has sparked enormous conversation, many companies were also asking those kinds of questions already in their RFP processes, but Salesforce making that very public and putting it out there in that way really opened the conversation so you see now especially in the leader community, and this is being passed very quickly to our learner community. But what you see now is RFPs that do a lot more than just ask for is this an additional wind or solar project? Can I get Rex for it? And what's going to be the price Can I can I save in the long term over the course of the PPA, can I save money on my power bills or or manage the volatility that I'm seeing in my in my regular electricity bills? Now you're seeing questions like Tell me About the supply chain of the solar panel, who are you buying from? How are you ensuring that there's not forced labor or slave labor? And these are questions that most of these companies have been asking their other supply chains for years. And so it makes, it makes a lot of sense that as this market matures, and as our energy customers mature, they're bringing that same set of supply chain standards, both for human rights, but also for environmental issues into their questions. And I would say that the human rights impacts of clean energy supply is going to be such an important issue going forward. Many clean energy projects do require a significant amount of mining for for irons and ores and minerals. And those are areas where if we're not thoughtful, and careful about the standards, they are fraught for human rights issues and violations. So it's a space where our community is really getting very active.
Sean McMahon 41:12
Okay, and then now on building out domestic supply chain, what are the biggest hurdles of that? And how far do you think that is to becoming a reality?
Miranda Ballentine 41:20
Oh, gosh, well, now you're really pushing the edge of my expertise. So I might leave that one for for some of our other members who are who are a little bit well versed, we've got, we've got a couple of leadership circle members, First Solar and HSC Semiconductors, who are, you know, very, very deep in those kinds of issues, who could probably speak to them better than I could, you know, what I will say, having, having come from, you know, to global companies that have supply chains that are truly global, is that whether we like it or not, most supply chains are global. Now, our world is highly interconnected. And we're going to need to build resilience in our supply chains by by ensuring that we have distributed supply chains, we have global manufacturing, that we're not too centralized in any one location. So that so that we can be agile if we find violations or, or practices in certain parts of the world that don't align with our corporate or national values.
Sean McMahon 42:33
Okay, and then certainly back to the Salesforce paper, more than a megawatt. And I'll make sure we make that available in the show notes. So that listeners can kind of check that out. I was looking through it. It's pretty awesome. Yeah, it's great. So next question on procurement trends and preferences. So there's all kinds of different, you know, deal structures from you know, vppa to direct ppas? Are there any, you know, what do you think the most of or any preferences among your members?
Miranda Ballentine 42:56
Yeah, so, so this is a great question. So power purchase agreements are now sort of the standard go to whether it's a power purchase agreement for a rooftop solar project or a virtual power purchase agreement, which essentially is a contract for differences, it's more of a financial arrangement than an actual electron arrangement. Those have become sort of the go to approach for procuring renewables, right. And it's, it's funny, Shawn, because if you think about it, the first PPA, the first ppas were done and maybe 2006 ish for solar and 2008 ish for wind. So it's not like these, this approach to buying renewable energy has been around forever. That said, I will say that, that we are seeing some real shifts away from the PPA. So for some companies, particularly v ppas, which are really financial contracts as opposed to electronic contracts, there are some risks to them, we've got a whole paper for our members around the risks of V ppas. And they don't meet all of the needs of some of our members. Some of our members want projects where they are actually procuring and consuming the electrons from projects. Some of our members just don't want to bear the risk of that contract for difference and the potential ups and downs of that. So we are seeing more and more different kinds of structures. We're seeing more and more companies getting involved directly in tax equity investments, we're seeing more and more companies particularly with rooftop solar, just directly procuring the equipment the way that they would their h vac systems. We see more and more companies working with their banks working with they're working with their their banks commodity trading desks to have their banks help them by by power, we are seeing more and more companies working directly with their utilities and utilities are getting more and more excited about working directly with our customers on clean. Energy deals, whether it's through a green tariff offering, or a green power offering, or bespoke, bilateral deals between between utilities, the CO ops and the moonies in particular, who are obviously extremely member and customer oriented and community oriented, are really cleaning up their power grids. I want one that I love to call out is Holy Cross energy have been Colorado led by by a good friend of mine and former NFL leader, Brian Hannigan, who has really I think, just set a new level of ambition for what utilities co ops and unis can do. In in a part of the world where you've got a lot of cheap gas, right, and they've they've set these incredible, incredible milestones and standards for decarbonizing their their grid up there. So we are seeing a range of different types of models now where it's not just the PPA and the vppa anymore.
Sean McMahon 46:02
Okay, in the last episode I had I talked to Steve McComb from cubex. And we talked about renewable energy certificates or credits. What are your thoughts on on how RECs fit into this space? And whether those are becoming more popular or less popular? What kind of solution are they providing?
Miranda Ballentine 46:16
Well, RECs have been a really important instrument for for measuring procurement of renewable energy in our first couple of decades. I do think that we are now we are now facing the limitations of Rex as an instrument they really are not designed to measure the carbon impact of a project. And as we see customers shifting from just procuring new renewables, which is what our rack is designed to measure. And now we see customers saying, I want to ensure decarbonization impact of my project, we really need to look at the attribute system and the certification system very differently through that lens. So if I'm a customer who says, hey, what I'd like to do is, let's, let's go to West Texas, where we've got a lot of wind, and and use that otherwise curtailed wind to make green hydrogen. And then I want to procure that green hydrogen, for either electricity or my vehicles, we need an attribute system that incentivizes a company to do that, because that may be the most carbon optimized project, you may have a company up in the Pacific Northwest, who says, hey, there's this 50 year old hydro power plant that's aging and underutilized and not efficient and potentially not not salmon friendly. I'd like to do a power purchase agreement with my utility to revitalize this hydro power plant, to potentially eliminate the need for a gas peaker plant. Again, today, the rack system is not designed, you can't get a rack for that project. But that might be the carbon optimized project to do. Likewise, with long duration storage and California, maybe instead of another additional new solar project, what what would be the carbon optimized project would be to be the off taker for storage. So we need to design a 21st century attribute system that really incentivizes the customer community and rewards the customer community for carbon optimized projects. And we actually have a sister organization called the REBA Institute, it's a 501, c three sort of thinking do tank. And we're actually launching a project now called next generation carbon free energy, that really is going to start to dive into some of this with our with our key partners in the NGO community to say, what is the attribute system we need for a truly decarbonized power grid? How can we widen the aperture open the goalposts so that more carbon free projects can actually be rewarded in this in this community? So that's what I would say about Rex, are companies still buying them? Absolutely. Do companies don't still swap them to make sure that they can get credit in their, you know, in their renewable energy reports and in the EPA, green power partner program, and they're already 100? Gold accounting? Yes, absolutely. And we are definitely at that moment in time where we're bumping up against the limitations of what that attribute was designed to measure and incentivize.
Sean McMahon 49:29
Okay, I appreciate that. It sounds like there's definitely room for updates, or I guess, you know, Rex to evolve or even just a brand new product to come out. So I know we're coming up on time, I could ask you more more questions and just go in the weeds on this stuff. But I do want to step back for a second and ask you about you and kind of your background and your leadership. You know, you've talked about how you need to spend time in the Air Force and Walmart and you know, CEO of a energy storage service, energy storage as a service startup. Gosh, that's
Miranda Ballentine 49:55
a lot to say about it.
Sean McMahon 50:00
Now you're sitting atop an organization that that's full of, you know, some of the biggest corporate names out there. All these companies and all these individuals are, you know, hugely successful. And now you've got to got to go wrangle all them together. So we have a lot of listeners who come from the trade association background. So what kind of advice would you have for them? What kind of leadership tips do you deploy at REBA to make sure everyone's kind of, you know, rowing the boat in the same direction?
Miranda Ballentine 50:23
Well, as the CEO of a trade association for only two years, I could probably use some some advice from some of your listeners, as opposed to me giving advice to them. Yeah, I've been very, very lucky to have a fun and an interesting career so far. And hopefully just so far, I've got a little bit more time left. But, you know, a couple of things that I've always brought brought to the to each of my roles as find those connections, whether you're a trade association that has really desperate membership with different perspectives and and desires in trade associations, I think it's particularly easy to have a race to the bottom to find consensus. We're not always going to find consensus. And you know, here, Reba, there are, there are times when we say, okay, there's not consensus, but this is what our mission determines that we need to do. So, but finding the connections, bringing people to the table, this is such a small but important tip, in my view, having conversations with multiple people in the room, particularly in the membership space, is really important, because the members have to hear from one another. Otherwise, you get on a phone call with one member who says don't do it, you get on a phone call with another member who says do it, and you're just to go between, but when you get them on the phone together, then everyone hears everyone else's perspective. But we're all focused on our mission, which is a zero carbon energy system. So I think that the importance of bringing people together for those conversations can't can't be overstated. These are problems for which there are no clear cut solutions. We're trying to solve things that have not been solved before. So we got to come up with the right solutions that we think are going to work knowing that there is no perfect solution.
Sean McMahon 52:24
All right, Miranda, well, this has been a great conversation. And I could go on for hours, but we gotta go. I really appreciate your time.
Miranda Ballentine 52:30
Well, thank you, Shawn. I look forward to the day when we can all get back together in person. But in the meantime, this is a really fun way to stay connected.
Sean McMahon 52:39
All right everybody. Now it's time for the pod brief segment of the show. What I really want to talk about is sort of an extension of what Miranda and I just discussed. It's exciting to hear about all the innovative ways REBA members are looking to procure renewable energy. But I want to shine a spotlight on what some of those very same firms are doing. That may also prove to have a major impact on decarbonizing our economy. Rather than just adding more and more renewable energy sources. These firms are always trying to optimize and in some cases reduce their energy use. For example, Google has developed algorithms that determine the best time the company should performance most energy intensive tasks. And by best time, I mean, the times at which intermittent energy sources like solar and wind are most abundant. That's pretty cool. And it also might lead to changes in the way we all operate our households. You see, I don't know about you, but I was raised to not run the dryer in the laundry room during hot parts of the day, because that's when there's already peak energy demand. What if Google's algorithm flips that notion on its head, and one day leads to a smart home solution that sends a message to someone in real time that perhaps they should run the dryer at a certain time, even if it's hot outside? Because that's when nearby solar farms, or the solar panels they might have on their very own roof are generating peak energy. Another example is Microsoft. Microsoft is developing underwater data centers. Yeah, you heard me right. Underwater data centers. These data centers are placed in capsules that look like submarines and dropped to the bottom of rivers, lakes, and maybe even one day the open ocean. These data centers are more energy efficient, because the water keeps them relatively cool. They're also more efficient because there aren't any humans fidgeting with the equipment and breaking things. But that's another story. My point is that these underwater data centers might one day be placed in bodies of water near large cities, where there is serious demand for their services. placing them closer to population centers, cuts the distance the data has to travel, which reduces latency. Will we one day live in a world where these underwater data centers are co located with offshore wind turbines, and then sharing the transmission routes back to shore? I like to think so. And if we do, I'm pretty sure the big companies leading the way on renewable energy companies like the members of REBA will be the ones we have to thank
That's it for today's show. Stay tuned for our next episode, where I'll be talking to Greg Hopkins from RMI about how to grow the green mortgage market. Once again, I'd like to thank the sponsor of today's episode: Infor.
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