Checking in from RE+ with Ryan Pfaff from EDF Renewables

Sponsored by KPMG

In this special episode from RE+, we connect with Ryan Pfaff, EVP of Grid- and Distribution-Scale Power at EDF Renewables. Ryan discusses the massive growth in energy demand from companies and utilities, the geographic distribution of clean energy jobs across the US and what the future of automation might look like for renewables. Ryan explains how the longer duration of incentives in the Inflation Reduction Act is boosting renewables and he also outlines what customers and developers can do to quicken the pace of projects and bring more clean energy to the grid.

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Transcript

(Note: This transcript was created using artificial intelligence. It has not been edited verbatim.)

Sean McMahon  00:00

This special episode of the renewable energy smart pod focused on RE+ is brought to you by KPMG. This year, KPMG canvassed hundreds of us executives across the renewable energy industry and found that industry momentum is being fueled by three key factors, demand innovation and incentives. Visit kpmg.com/us to explore the detailed survey results, or just click on the link in today's show notes. 

What's up everyone and welcome to the Renewable Energy SmartPod. I'm your host, Sean McMahon, and this week, we're bringing you insights from RE+, which is a massive gathering for the entire renewable energy industry. The conference is taking place this week in Anaheim, California, so I've invited guests who are at the show to join me on this podcast to discuss the hottest topics from the event. Joining me right now is Ryan Pfaff, the Executive Vice President of Grid- and Distribution-Scale Power at EDF Renewables. Ryan, how you doing today?

Ryan Pfaff  01:16

Hi, Sean, I'm doing well. It's a pleasure to be here with you from beautiful Anaheim, where the weather is very nice today, following a few very hot, sweltering days, but we're back down to kind of normal Southern California weather for all of the attendees here. 

Sean McMahon  01:30

Yeah, more that miserable Southern California weather, I'm sure. So tell me, what's the vibe like at this year's RE+,

Ryan Pfaff  01:38

So, thrilled to be here, and I should give you a disclaimer up front that I'm also on the board of the RE+ events entity itself, so I'm fairly involved with the organization, and can't say enough about what a great organization it is, which has grown from being focused around a single event, which was solar power International, to the rebranding into RE+, and also the expansion into a number of regional events over the years. I think we're at eight or nine events now, including RE+, a lot of regional events around the United States, and also partnerships internationally as well. I heard we were at about 40,000 people this year again, so similar size to last year, and there's a high level of energy and activity. And it makes sense, you know, renewables are very active right now. And you know, they're active for the reason that renewables are in demand, but also something that is, you know, new in the last year or two is that for the first time in a long time, we have really massive load growth in demand across the United States and in areas where growth was one to 2% for decades. Suddenly you have large utilities recognizing that they have like, a 10, 15% increase in demand. And that means the demand for what the attendees at this conference provide, which is new generating capacity of all types, is greater than ever, and the product is needed, the service is needed. And so it's nice to be in a business where there's a lot of demand for what you you can provide, yeah, so, a lot of energy, a lot of old faces and contacts that are here, and it's great to see them, but a lot of of new people as well, who are, you know, interested in getting into this sector, and, you know, have decided to come to RE+, to kick the tires on it and learn a little bit more. 

Sean McMahon  03:38

Okay, and what are they all talking about? You all talking about, you know, I'm really curious to kind of pick your brain. What are the hottest topics so far this week? 

Ryan Pfaff  03:45

So I think one is, you know, even though I just mentioned it, it's worth repeating twice, the fact that this growth in demand is there for a lot of reasons. You know, manufacturing coming back to the US, but also the growth in the need for computing capacity based on AI and associated data centers. Now means that even more of what this industry does is needed. There's an element of meeting climate objectives and cleaning up the power system itself, but now there's just a raw need for more energy. And you hear a lot of people talk about this, so that that creates some excitement, because, you know, it's going beyond goals related to climate, which are essential to we just need more of this. How can we get more sooner? So getting a sooner is a challenge, because it takes a long time to get these projects built and connected. There there are still some supply chain challenges that are more often than not pushing projects out in time, not pulling them in yet. What the system needs is projects sooner, not later. So there's a lot of talk about, how can we accelerate things? The other big topic I would mention is. That all of the jobs coming up about as a result of the IRA. So with the IRA, for the first time ever, we have a long runway of support for clean energy. In the past, you had, you know, some of the main federal incentives would expire, get renewed for a year or two, expire, and then you suddenly have a 10 plus year runway, and what that has enabled, partly because of the length of that runway, but also provisions embedded in the inflation Reduction Act, which were intended to spur the development of a US workforce to support the build out and also US manufacturing based on manufacturing incentives, it creates a lot of buzz around big job growth in the US, a lot of it union. It's not all union. You know, union, union and non union depends on the area you're in and the union presence. But these are good paying jobs. They're jobs and careers where people can get in and expect to be in that line of work for a long time, you know, like at least in the 2030s and beyond. That's on the job growth side. And then the other thing is manufacturing. So I don't have the exact number, and so I don't want to misquote it, but I can tell you that, you know, I've met with manufacturers who have set up 510, 15, in one case, 20 manufacturing facilities in the US, based on the support from the inflation Reduction Act. It's really exciting. It's exciting to have to be able to point to domestically produced components in the projects. And secondly, the impact of that is very distributed. So it's across a number of states. Based on logistics, you want to have manufacturing close to large pockets of of activity and development. And that means that jobs are hitting all over the US, right? Construction jobs, manufacturing jobs. So there's a lot of talk about that and that. I think, I think that's attracting a lot of people to the industry right now, the potential to actually work in this industry, so that that's very exciting. The latest stat I saw was that from the Solar Energy Industries Association was that there were, like 263,000 people employed in solar alone at the end of 2023 and I think when you add in the other clean technologies, you're, you know, hundreds of 1000s. Beyond that, probably a half million or so. So it's starting to be a major, major job creator for this country. 

Sean McMahon  07:32

Yeah, it sounds like there's some, definitely some fascinating topics going on at the show. So I want to circle back to what you mentioned about supply chain a little bit. I imagine a person in your position, you get a lot of questions from potential customers, but like, hey, how long is this going to take? Yeah, what kind of answers you got to give them on questions like that? 

Ryan Pfaff  07:50

So, you know, it's very, no surprise, very specific to the situation, the project, the location. One of the things that EDF Renewables has done is we have gone out and entered into multi year supply agreements on the on the module side, in the case of solar, also on the tracker front, one of the other components of a PV system for us produce components, and that gives us an ability to know that we've got supply to build these projects. You know, one of the more challenging areas right now in the supply chain is shortage of electrical equipment. So main power transformers and and a component called High Voltage breakers, depending on the manufacturer. Lead times are out as long as far as 200 weeks, you know, so four years and so one thing we talk about with with entities, we're discussing it, is the need to make decisions quickly, because the longer you take to reach agreement on wanting to move forward on a project, the longer it takes to start that long lead time. And that's at the extreme end the 200 weeks. It might be 100 150 but, but still, you're talking two to four years. So the neat everybody needs to move quickly, because you you can't really speed up that long lead on the electro equipment, although that's another area where a lot of manufacturing is coming to the US. So it does create an opportunity for for companies to start building more of that equipment in the US, which is another positive thing, you know, the other thing that I should have mentioned earlier, Sean, I almost can't believe it, maybe I'm blocking it out of my mind, is the other topic on everyone's mind is the election. And, you know, no surprise there. Everyone asks everyone else, you know, what's going to happen? Who they Who do they think is going to win? But if we call it a toss up, you know that could have serious implications for for the people attending this show in this industry, and you know you have different policies between the two presidential candidates, one of the things that I think is most positive about the clean energy industry right now. It should appeal to both presidential candidates is the job growth I've mentioned, and the distribution of that economic development all across the US, because it's not concentrated in left leaning or right leaning districts, it's actually all over throughout Republican and Democratic areas. So it's really a you know, rising tide lifts all boats scenario, and it's, I think it's a very positive story that should, should garner support no matter what happens. Yet, there's no denying that the industry is is viewed a little bit differently by the two political parties. And so I think you're also going to see a lot of people trying to develop two types of plans for the next six months, depending on who's elected, you could have something where it's a continuation of the status quo and and you have a lot of tailwinds behind you, and maybe even more ambitious goals. And then the other would be, you know, something that's not quite that, but leaning into the job growth and the fact that utilities around the country need everything we can produce, and they almost don't care what it is, whether it's clean, whether it's fossil, they just need generating capacity. So there's really no logical reason to slow down what we're doing. And hopefully those common sense messages will resonate with whoever ends up in the White House in January,

Sean McMahon  11:25

We'll be right back 

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This year. KPMG canvassed hundreds of us executives across the renewable energy industry and found that industry momentum is being fueled by three key factors, demand, innovation and incentives. Visit kpmg.com/us to explore the detailed survey results or just click on the link in today's show notes. 

Sean McMahon

And now back to my conversation with Ryan Pfaff from EDF Renewables.

Getting back to RE+, and what's going on this week. You know, you're very experienced. You've been in this tree a long time. And are there any technologies or issues or companies that you know caught your eye, or you've noticed this week that are really kind of interesting to someone with your background.

Ryan Pfaff  12:24

Yeah. So one of the areas that is of interest to to me and the industry overall, and I would say it's an emerging area, but at some point it's going to kind of blow wide open and become very real, is the potential to automate parts of what we do, designing projects, building projects, operating projects, in many of the meetings I've been in, even though it's not the core part of the meeting, there's discussion around, you know, the use of robotics to, you know, assemble projects and potentially even maintain projects in the long run, which could have a cost impact. Hopefully, the cost to be lower. It could also keep people safe. Could increase the safety on the side by, you know, sending some of the tasks to machines, rather than the humans. That allow humans to be in jobs or they're more in charge and making decisions and directing things, as opposed to, you know, straining in the 100 and 105 degree heat to do difficult things. So I think that's a very interesting trend, and that, you know, I'm touching at a very high level, or a lot of interesting ideas, and it's hard to know which ones are, are going to be realizable the soonest, but it does feel like there's real potential there, that it's not, it's not science fiction. There's a way to do this more efficiently and also potentially have a lower impact on the environment. You know, there may be ways to do this in a less invasive way, in terms of building projects that would potentially require less disturbance of terrain, for example, while doing it faster, while doing it more safely, potentially at a lower cost. So I think, I think that's a very interesting area. And it's an area where, as we go to these events over the years, I expect to see more and more of that becoming real.

Sean McMahon  14:09

So, you know, I had your CFO, Louis Silva on this show last month, and I asked this question of him, and he very diplomatically redirected me to someone like you. And so here it is, when you think of all the technologies out there, you know, wind, solar, battery, everything across the renewable energy landscape, which technologies are clients and potential clients inquiring about the most are you getting? Uh, is it all kind of an even pie? Or is it a trend where some sometimes it's more solar and then there's wind questions? Or what does that look like?

Ryan Pfaff  14:40

I think it's very region specific, depending on on the resource in the area. So there are areas where the wind resource is strong and the solar resource is not that strong. There are areas where the opposite is true. So those two examples could be, you know, Canada and. Southern us, for example, they're kind of at the opposite end of the spectrum. I think there is interest in all of it, and there's a need for all of it. And what you tend to find is in a region where one technology is dominant, right now, the customers then would like more diversity, right? So in the you know, if you use California as an example, for years, it was a wind market. Then solar started. Now you have a lot of solar, so much so that it created the opportunity for storage, because you start over generating solar in the middle of the day. Now you're shifting some of that production to the evening. So if you know, you asked a lot of customers whether they would prefer wind or solar in California, where now they would probably want wind. If you go to areas where there's been a massive wind build out those customers White might want some solar to diversify. So it's very region specific. One area that where I think there is a need and perhaps not a great solution yet, although a lot of concepts out there that are trying to prove themselves out would be for a longer duration type of storage for renewables. So, you know, many of the solar projects, particularly in the southwestern US, are PVS, you know, PV and storage, and they have what's, what's typically becoming a four hour storage system attached to the PV to shift some of that generation into non sunny hours into the evening. But there's a greater need for systems that have massive amounts of renewables to come up with longer duration storage solutions. You know, 10 hours, 12 hours, perhaps multi day, perhaps multi week. And I think there is a general view that, well, it's not totally clear what the solution is for that, yet, that if that can be developed, it really opens up the potential to do a lot more renewables, and perhaps in areas where you're you're hitting limits right now in a certain time of the year, because then you could shift that energy to different hours or different parts of the year. So, so I think that's an interesting area. But, you know, I really feel that in certain parts of the country, almost as much wind, solar and storage that could be developed there's a customer for there just isn't enough period. I think the challenge has changed a little bit from which technology to there's a need for all of it, and as much as you can deliver, not everywhere, but in, certainly in the populated parts of the country.

Sean McMahon  17:35

And then so I know you mentioned you're kind of on the organizing team for RE+, and I want to ask you to make some bold predictions when we get together next year, what are the hot topics going to be?

Ryan Pfaff  17:48

So I saw a stat a little while ago that renewables represented 85% of generation capacity installed in 2023 so I hope it's more of the same. You know that we're talking about 2024 in the same way, and hopefully 24 is a little bit larger than than 23 I think a continuation of some of the themes we talked about earlier, which may not sound like the most exciting themes, but they're critical to the success of this industry, that we've continued to develop out the workforce, and that we have a stream of emerging talent coming into to help us build out this industry over the next 10 years, that manufacturing has continued to come back to the US, and that as demand is growing across the country, as we've talked about that Clean energy is increasingly seen as one of the solutions to plug that gap and provide customers what they need.

Sean McMahon  18:45

All right. Well, I certainly hope that comes true. And Ryan, listen, I know this is an extremely busy week for you, so I appreciate you taking the time to talk to me.

Ryan Pfaff  18:55

Thanks very much, Sean, it's been a pleasure being here with you.

Sean McMahon  18:58

Well, that's our show for today, but before we get out of here, I want to say one final thank you to the sponsor of today's episode, KPMG.

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