Jigar Shah is the head of the Loan Programs Office at the Department of Energy and thanks to the Inflation Reduction Act, he has hundreds of billions of dollars to lend to companies to accelerate the commercialization of clean energy technologies. The office has already been extremely active over the past year, and there's lots more to come. In this special episode of the podcast that was recorded live at the Texas Tribune Festival in Austin, Texas, we discuss his office's strategy and what it will take to achieve the clean, cheap energy system that so many people want. We also discuss specific industries, including nuclear power, and what it will take to build momentum towards more deployment. This transcript has been lightly edited for clarity.
Key insights from the pod:
How much money does the DOE’s loan office actually have? — 3:12
Why doesn’t private capital naturally go into energy projects? — 8:18
How does the DOE think about risks in energy loans? — 11:32
Can we have cheap, reliable and clean energy? — 15:19
How can the grid handle new demands? — 17:43
The role of permitting reform — 22:12
Why the US doesn’t have dynamic load ratings? — 26:21
How do you get utilities onside? — 27:52
Why do electricity rates keep going up? — 29:49
Progressive work requirements in the IRA — 34:38
Competing on labor with China — 39:37
What happened to nuclear power in the US — 42:34
The lack of a nuclear industry in the US — 47:47
Internal Resistance to change and breaking the knowledge gap — 55:20
What to expect in 2024 — 58:17
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Joe Weisenthal: (00:10)
Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.
Tracy Alloway: (00:14)
And I'm Tracy Alloway.
Joe: (00:16)
Tracy, today we have a special episode of the podcast.
Tracy: (00:19)
That's right. So we traveled to Austin, Texas. We were there for the Texas Tribune Festival, and we recorded a live episode with one of our favorite odd lots guests, Jigar Shah.
Joe: (00:30)
That's right. Jigar is, as listeners may know, the head of the Loan Programs Office at the Department of Energy. This is his third time appearing. The first time we talked to him was early 2022 when the loan program's office was this sort of small backwater office within the DOE.
Then we talked to him again about a year ago, right after the Inflation Reduction Act was passed, when his office got tons of money to lend out. And then this was sort of like a one year on episode. What are they doing with all this money at his office and what are the real prospects for sort of decarbonizing our electricity system?
Tracy: (01:08)
He's sort of in the groove now. He's spending some of the billions of dollars that he's been authorized to spend by Washington, and it's really interesting to see how he's actually putting that money to work and what's getting him excited in the energy space right now.
Joe: (01:22)
All right. So take a listen.
Jigar, we've talked to you a couple of times in the past on the podcast about the loan program office. Why don't we start just [with] like a quick summary and we've talked about what you do, real quickly, just what is the loan program office for people who may have not [be] familiar with it or past episodes and what do you do?
Jigar Shah: (01:44)
Well, thanks for having me back. The loan programs office was started in 2005. And the whole point of it was that for a lot of this technology, the DOE is awesome at inventing, it tends to not be able to get commercial debt for commercialization. So a lot of these projects might be a billion dollar project and going to get debt from the commercial markets for a first of a kind project. You know, namely like, you know, the Tesla's first loan or some of the large solar and geothermal projects we did, was just not feasible.
But what's more interesting is today, our remit’s been expanded substantially. So it used to be we had this innovation bucket and then we had this vehicles bucket. Basically today we have a tribal energy program. We have this energy infrastructure refurbishment program, right? So figuring out how to take old coal plants and turn of nuclear plants or old transmission lines and double them up or, you know, figuring out what to do with old refineries or tank farms. And so we have a much larger scope today. So we've got, you know, a lot more resources today.
Tracy: (02:53)
So how much money do you actually control now? Because of course I've seen variable estimates and I get that a lot of it depends on how things develop. But you've been doing this for a while now, you have extended some loans. Do you have a good sense of whether it's $400 billion or $500 billion or $600 billion?
Jigar: (03:12)
I mean, what's a billion between friends?
Joe: (03:15)
What’s a hundred billion between friends?
Jigar: (03:17)
I think, so when I first came into office it was roughly $40 billion of loan authority. Today, if all of our loan authority was used, it would be closer to $400 billion. We have no idea whether it'll all be used.
So the largest program there is this refurbishment program, which is $250 billion. Interestingly enough, it really is taking off. So I think when we first started talking to electric utilities and oil and gas companies and others about using it, I think they didn't want any part of it. They didn't really see how it was valuable. Today, um, I think we've already got about $56 billion worth of loans either received or being actively prepared that we've seen early drafts of. So we are seeing a lot of interest in that program. And so, you know, whether we get to that number or not will be determined on whether that program is successful.
Joe: (04:05)
Yeah, the first time we ever talked to [you], I think it was early 2022, and someone said, ‘Oh, Jigar, he's someone you should talk to, he knows about energy. He's sort of an interesting guy and knows about this stuff.’ And then I think it was about three or four months later and the Inflation Reduction Act passed and someone was like, ‘Oh, you know, that guy Jigar, you talked to his office, just got whatever, $600 billion.’ So you went from this sort of, I don't know [if] back water's the right word, but fairly like modest division of the Department of Energy. You are now a key player in essentially this massive effort by the Biden administration to decarbonize our energy system.
Jigar: (04:45)
Yeah. Look, I think that when you think about my own background having started Sun Edison and then generated capital, I think I have a unique understanding on how this stuff works. Which is that we have these extraordinary people who frankly bust their hump for 10 years in obscurity before they get to where the loan programs office can help them, right?
When you think about a lot of these companies who have figured out green cement or green steel or, you know, next generation transmission lines or next generation hydrogen facilities. I mean, they were in a lab getting some like $50,000 grant like 10 years ago, and then their thesis worked out, then they decided to get an A round and then a B round. Some of them may have SPAC’d prematurely, you know…
Joe: (05:30)
I remember those.
Jigar: (05:31)
And so, you know, I think that the goal for me is not to, you know, puff myself up, but to recognize that we have all these people and honestly the ecosystem that we have in this country to take them from ‘the technology works’ to connecting it to the American worker, building the facility here, doing all this stuff here, frankly, we haven't done it in 40 years here, right?
I mean, most of our technologies went to Asia or went to Europe to get commercialized. And now I think with the Inflation Reduction Act, it's sort of my job to convince them to use these resources to stay here and to do it here, right?
And I think a lot of that really means that we’ve got to do a lot more outreach. We’ve got to convince them that this is a place that wants them because you know how hard it is, right? I mean, you have to get permission from people, you have to get a permit, you have to get a governor who actually wants to put together an economic development package for you, right? And if you haven't done it in 40 years, then it could be that, you know, it's a little bit harder to do it here.
Tracy: (06:31)
Do you feel pressure to spend the money? Like, is there a sense of urgency here? And then how do you actually balance that with the need to make efficient and useful and ideally profitable investments?
Jigar: (06:43)
So I definitely don't feel pressure to put the money out the door. I think that the money should go out the door if it, you know, deserves to go the door. We have the 300 people who work for us at the loan programs office. And so they are the ones actually evaluating and, you know, doing the work to get the loan to the finish line.
I certainly have a lot of subject matter expertise, so I can be somewhat helpful, but honestly, the biggest part of my job is to get people to trust us, right? So getting the growth companies to trust us was something that was fairly easy for me because a lot of those people are my peers from my professional life.
But getting the electric utility companies to use us, I mean, that was not an easy task. And now I've got to get the oil and gas companies to get to use us, right? And that's not easy at all. Many of them feel like they're going to get stripped of their country club membership if they use the loan programs office, right?
And so, but they're not going to do the right thing unless they do it right? Because the numbers don't work without our debt. Like, the returns aren't high enough without our debt. And so I need them to come into the office. And so a lot of what I'm doing is trying to build trust.
Joe: (07:46)
So your company that you started, Sun Edison, I mean, it was a finance breakthrough, right? I mean, the solar technology has existed, but you understood that there was an opportunity to finance the deployment of solar in a new way. Can you just speak theoretically, or big picture, why are there projects that can pay back the debt, but [for] which private sector money is not there? Why is it important for the public sector balance sheet to be deployed for certain types of energy projects? And then maybe we can get into some of these specifics.
Jigar: (08:18)
There's a couple of reasons that I'll go through, right? One is, the Department of Energy has 10,000 expert scientists and engineers on the platform, right? Most of the fundamental patents on these technologies were invented by one of those 10,000 people. So when you have a methane pyrolysis project, like Monolith Materials that we gave a conditional commitment to in 2021, like there's somebody at a national lab who actually invented it.
And so when I go to him and I say, ‘’Hey, you know, what do you think about this thing?’ They're like, ‘Yeah, we've done like 18 demonstrations of this project and we think this will work, and the way that they're approaching it's going to work,’ etc. There's nobody for JP Morgan to go to for that . They're going to be like, ‘This scares the crap out of me, I'm not going to do this deal.’
And so you could imagine that there's a lot of technology risk that is perceived by the banks that we can actually manage because we have all these experts on our platform. The other piece of it though is that, you know, with the Basel III rules, you know, passing up to the global financial crisis for a lot of these banks, if they don't actually have investment grade offtake agreements for some of these things, I'll give you an example.
Like for a lot of these critical minerals projects, there's no history whatsoever for someone to say, ‘You know what? I'll pay a fixed price for that lithium for 10 years.’ Generally speaking, it's like, well, whatever the lithium price is, we're going to benchmark to that price. My lithium has gone down by 45% already this year, right?
And so the government is actually willing to take that risk because we know that, you know, we're going to have all these electric vehicles purchased over the next 10 years. The world's going to be short lithium. So even if in the short-term lithium prices went down, in the long-term, you're going to need these resources. Like that formula, under a bank's rules, would require a huge amount of tier one capital to be set aside for that loan.
So you can imagine them saying, ‘I'm not making investment banking profits on this. I'm not going to use my tier one capital for this, right?’ Because there's a bit of a friction, right? Because, on the other side you’ve got the Federal Reserve and the OCC commissioners who are saying, ‘That looks like a risky loan, we're going to make you put more tier one capital against it,’ right?
And so there's lots of reasons why you have friction in the marketplace. But before we were active, most of these companies had to a hundred percent equity finance everything, right? They would just have to raise a billion dollars in the marketplace and then do that. And you can imagine there's very few companies that could do that. So then we were restricting innovation and restricting its getting commercialized.
Tracy: (11:12)
I realized I made an assumption in my previous question because I said ideally you would make loans that make a profit, and that's probably true. But how do you think about profit versus risk? Do you have to make a profit or do you think there's a role for government to finance riskier projects that maybe have a public good or utility?
Jigar: (11:32)
Yeah, profit is a very strong word, right? Because we don't really make a profit in the government. So I don't think about it that way. I think the way I think about it is Congress gives us a couple of things. So let me just maybe help you understand how the money flows.
So, you know, when we give somebody a loan, the US Treasury Department theoretically issues bonds, and then we issue that loan. So the US government has to pay back those bonds. And so there's a certain cost to the US government of that thing. So if I'm charging someone US Treasuries plus 37 and a half basis points, which is a lot of our loans are at that rate.
Then the money I'm getting in for the US Treasury bond coupon, I'm not viewing as profit per se, right? Because that's just going back out the door to investors. So it's a 37 half basis points that, you know, was coming in above hand, right?
Separately, the US Congress gives us something called credit subsidy. And what we use that for is to put a loan loss reserve in place. So I might say like, our average loan is rated B-, right? What you guys would call junk bonds.
So like, you know, by definition, when we issue the loan, we are saying that we'll likely have a default, right? Of let's say maybe a 12% risk of default or a 22% risk of default, but it's not a 1% risk of default. And so then we put that much money to the side in a loan loss reserve. So the Congress is saying, you have this amount of money to quote unquote ‘lose.’
And that's the money that they allocate through a budget process. And what we've averaged to date is that we put aside $5 in loan loss reserve for every dollar of actually, like, realized losses we've had. So we put together roughly $5 billion of loan loss reserves and we've lost about $1.03 billion total. And so from that perspective, that's, you know, $4 billion that the Congress gave us to quote unquote ‘lose’ that we didn't lose and that we returned back to the taxpayer, so…
But I mean, the other way I think about it, right? So that's strictly answering your question, but the other way I think about it is, it is clearly the case that Tesla is the best electric vehicle company in the world, clearly. And they will fully admit that there is no chance that they would've gotten the Model S off the ground without our loan.
And so what's it worth to dominate these industries into the future? Not just electric vehicles, which happened in the first iteration there, but in the future, right?
When you look at methane pyrolysis, what they do is they take natural gas, they split it into hydrogen and carbon. Carbon black is something you need to make tires, even electric vehicles use tires. And so we need to use that, right?
And so right now the largest exporter of carbon black in the world is Russia, right? If this works, which I'm pretty sure it will, we will be the largest exporter of carbon black in the world, right? And that's a really important market for us to dominate, right? So the question really is like, you know, yes, there's, you know, being good with taxpayer money, but the other piece is actually reaching real outcomes.
Joe: (14:38)
Alright, so we sort of, we've covered in the very broad strokes the bank that you basically run within the Department of Energy. Zooming out as part of this whole project, and we're here in Texas, in Austin, at the Texas Tribune Festival. This is a state, of course, where energy and the grid has been in the news a lot in the last few years. And it seems to me when we think about the grid, well, a few years ago, most of us weren't even thinking about the grid. We just sort of took it for granted. It just worked. Over the last few years, in various states, we've had these problems. People want cheap electricity, they want reliable electricity and increasingly clean electricity. Can we have all three?
Jigar: (15:19)
We're delivering all three. I mean, look at Texas, right? Texas is the like ground zero here, right? You're talking about the state that has installed more wind power and more solar power over the last five years than any other place in the entire country. I think it's number one in the country in wind and number two in the country in solar, and will be number one in the country in solar in like 18 months.
It's also number one in the country and on ongoing basis in installing battery storage, right? I mean, it's also the one that's actually like, you know, piloting these virtual power plants where there were Tesla electric company customers this last summer who had like negative $600 bills because they were selling power from their power walls into the marketplace at $5 a kilowatt hour when market prices dictated it.
And so they were helping their neighbors, right? And so that is not allowed in California. That is allowed here. So when you think about the level of innovation happening in Texas right now, it is at an all-time high. And, you know, I think that part of it is because Texas needs that level of innovation, right?
I mean, their natural gas fleet didn't perform as well as they wanted it to during, you know, [Winter Storm] Uri and then some of the other issues. So they've recognized that they need to diversify where the electricity comes from, which is why they're building so much solar and wind.
But also they've decided to put two new semiconductor plants here in Texas. They have all this growth. All these companies are deciding that Texas is where they want to build stuff. If you fly into DFW airport, there's all these roads and you're like, where are the houses? They're coming in like the next 18 months. There's so much load growth here. So now the question really becomes like, how do we build the grid of the future? And they're figuring that out here in Texas. It's pretty exciting.
Tracy: (17:09)
Well, setting the great state of Texas aside -- and we are recording this live in Austin, so I feel like I should describe it that way -- setting Texas aside, I mean it is true that you have seen demands on the grid rise and in particular, I think I saw a statistic saying that something there was a 40% increase in the amount of grid connection applications in 2022 alone. And a lot of this is coming from, you know, renewables, solar wind, that need electricity and want to feed it back into the grid. How do you solve that problem?
Jigar: (17:43)
Let me back it up for a second and then explain to you, you know, where the friction points are, and then maybe we can talk about how we solve it. So in general, you've got three major pieces here, right? You've got generation of electricity, you've got the transportation of that electricity to your home or business or whatever. It's the transmission distribution grid. And then you've got the load itself, right?
And so you've got a lot of load growth from new manufacturing facilities being announced because of the Inflation Reduction Act. You've got electric vehicles being added to the grid at record numbers, you've got heat pumps, all these other things, right? So the main thing that I think you're asking about is the transmission grid. So you've got a whole bunch of people who…
Tracy: (18:24)
Wait, can we back up for a second? What's the difference between transmission and distribution?
Jigar: (18:28)
So the transmission grid is generally at much higher voltages and they're transporting power long distances from where, you know, like the panhandle of Texas where they have a lot of wind down here to populated centers, right? The distribution grid is what's in your neighborhood. And is, you know, basically having to manage, you know, making sure that you have power for your 400 amp service. Because if you plug in 15 electric cars at the same time, then the distribution grid has to either be able to handle it or be able to throttle the amps to each home so that the distribution grid doesn't, you know, get overloaded.
Tracy: (19:04)
So what are the issues facing the transmission aspect of the grid at the moment?
Jigar: (19:10)
So basically what happens is that, you know, someone says, ‘I've got a fantastic piece of land, I think I can put wind power on it, or solar power.’ Mostly it's solar. These days there's a lot less wind in that transmission queue. And they say, ‘Great, you know, I'd like to apply to be able to use that transmission line.’
Now there's many different regions of the country and each one of them does it differently. Texas is arguably the best region for this. And so what they do is they check to make sure it'll be safe. So when you connect it to the grid, it won't actually make the grid unstable and then take something down. So they'll check that, but then they don't actually check necessarily that there's capacity for you.
They sort of say, ‘you should just interconnect and if there's too much on the grid at one time, we're going to tell you to curtail, so we're going to tell you to shut off.’ And, you know, you could imagine you're not making any money when you shut off, right? And so, but Texas is like, ‘That's your problem,’ you know?’
And then separately they actually calculate really well what the loss to rate payers are for that congestion, right? So if there's not enough transmission capacity, then the coal plant that's next to somebody's house has to turn on and be used more, that's more expensive.
They say, ‘Oh, if there was enough transmission capacity, then that would've been cheaper and better, right?’ And then that's what they justify paying Encore, which does a lot of the transmission distribution to be able to build new transmission. They're like, ‘ Well, the congestion charges were so large that we should build new transmission to make sure that people have lower bills.’
So that is the ideal situation. And that's what Texas does. And you get a lot more movement. I mean, even Texas is clogged up just because there's so many applications, but they're the fastest. But places like the Northeast or the mid-Atlantic states or the Midwest states, I mean, people are actually waiting like four to five years to get permission to interconnect. Because in those states, they largely say, ‘Well, we want to know that there's actually a piece of transmission that's available for you. So we're waiting for this coal plant to, you know, cease operations or this natural gas plant before we allocate that transmission for you, because we don't want to do this curtailment thing.’
And so as a result, we, we have 1,200 megawatts, sorry, 1,200 gigawatts of roughly of generation in this country. We have the same amount -- 1,200 gigawatts -- waiting in queues for permission to be added to the grid right now.
Tracy: (21:38)
Wow.
Joe: (21:39)
As soon as the Inflation Reduction Act passed and everyone got really excited about all of this new, you know, energy that was going to be, you know, wind and solar, etc, then immediately people started saying, ‘Oh, but we don't have the transmission capacity.’ And then there was this big fight. We need permitting reform and we need that because that's the only way, otherwise we're going to have all this stranded energy. Are we at risk of having a bunch of government subsidized or government influenced energy that ultimately does not make it onto the grid because of some other fight that hasn't gotten taken care of yet?
Jigar: (22:12)
So let me answer that question from the other side, but I will answer it. I think that in general, the question is why does any of this stuff matter, right? Like, I mean, why do you care? Rather, we actually interconnect all this solar and wind or new nuclear plants or a geothermal facility. You know, we want to relicense 37 gigawatts of hydrodams that are like from 1910, right? Why do we even care? It's because everybody wants to use chat GPT right?
Chat GPT is 10,000 megawatts of compute power by itself. Now you add like Google and all this other stuff, and then people want electric cars. They like it, you know, like my son yells at the car in front of me because he is like ‘They have a tailpipe!”
Joe: (22:56)
My daughter does the same.
Jigar: (22:59)
That's how it is, right? So that's why we care about this stuff. Like, we're not doing it because we're trying to just make everything more complicated. We're doing this because Americans believe that using more electricity makes their life better, right? Whether it's storing photos that they probably should delete, but they're going to keep them around anyway, and then paying like Apple another $1.99 a month, right?
That's why we care about this stuff, right? So now the question becomes like, if we all care about this enough, right? If we all want this enough, what are we willing to do to accelerate it? Right? So you've got permitting, you've got the National Environmental Protection Act. And so people talk about NEPA and all this other stuff, and so do we want to make this stuff easier, right?
And you've got Bill McKibben who wrote a big article about saying it's time to build. I mean, this is the guy who led the movement to kill the XL pipeline, right? And so even he's saying like, ‘Ah, we sort of need to build,’ right?
And so now the, the question really becomes how do we build and how do we do it in a way that's equitable that make sure that we're, you know, paying people a fair wage and all these other things.
And what we're looking at doing is, you know, figuring out how we actually check to make sure the things that we really care about are checked, right? We don't want to, you know, just gloss over things and just say, ‘Ah, whatever. We should just lower our standards.’ We're just saying that we might be applying the standards in an incorrect way for certain projects, right? Because certain projects really don't have the level of toxicity within air pollution issues or local impacts or other things.
And certain projects maintain those things, right? Like green chemical plants or some of these other things. And so we just need to be more appropriate in the way in which we implement those rules, right?
So that's one piece of it. The other piece of it is, you know, we need to do things differently, right? For a long time, for 20 years, we have not had load growth in this country, right? So we basically sell the same number of terawatt hours today that we did in 2003. And largely that's because of all these.
Joe: (25:08)
So there was a good reason that no one really paid much attention to this stuff. There just wasn't the need for it.
Jigar: (25:13)
There was no need for it, right? But now everyone is like, ‘Oh my God, we gotta grow again?’ That's a lot, right? But the beauty is we actually have solutions to all of it. Like the crazy thing is like, on the grid, right? There are all these things called grid enhancing technologies.
I'll give you an example. Like the grid basically is operated by slide roll. And so people say this thing basically has 3,000 megawatts of capacity, right? That's actually not true, right? What's true is that the capacity changes based on the temperature outside, right? So there's less capacity when it's like 102 degrees outside, way more capacity when it's 45 degrees, right?
So you can put in dynamic load ratings, right? Guess who does that? Everybody but the United States, right? And we invented it! So the UK has fully deployed it, Belgium's fully deployed it, all these others -- Brazil, India -- everyone's doing this stuff except for us. So this is what I was saying, we have all these entrepreneurs who invented all this stuff and we didn't deploy it here. We let them go overseas to deploy it there.
Tracy: (26:17)
Wait, why? It seems like a slam dunk. Why not?
Joe: (26:20)
What’s the impediment?
Jigar: (26:21)
So PPL was on a podcast the other day, which is Pennsylvania Power and Light. And they were saying, you know, basically they had this thing where they had to solve it. So they put in dynamic load ratings. It was only like $900,000 to do it but it saved $50 million of upgrades.
And they were like, ‘We make money to deploy dollars. Like, this was a terrible decision for our shareholders. We did it because there was no other way for us to upgrade that line. And we had a customer that really needed it., And so to upgrade the entire United States of America with grid enhancing technologies to unlock 30% more transmission capacity would cost a total of $3 billion. Let's do it.
Joe: (26:59)
Let’s do it.
Jigar: (27:00)
Right? But you have, but you have all these competing interests of people who are like, ‘But Jigar, I was going to spend $23 billion to upgrade the transmission grid that was going to be rate-based for my shareholders. Why would I want the $3 billion?’
But you know what? All of that is evaporating away today because they're all just saying we can't keep up with load growth, so we'll do the $3 billion and we'll invest even more money because a lot of our stuff's 50 years old, so we kind of have to like replace it anyway. And so all of these traditional like loggerheads that we've been at for 20 years are really going away because people know that we need both.
Tracy: (27:39)
Right, I'm going to take a cue from a member of the audience and ask, how much interest do you see from the utilities themselves when it comes to your loan program? Are they knocking at your door or is there still a lot of reticence?
Jigar: (27:52)
So when the Inflation Reduction Act first passed, we got this, you know, energy refurbishment sort of program and, you know, I reached out to them all and they said, ‘Jigar, we can raise money ourself. We don't need to use your program. We're never, never going to use your program.’
Then I was able to recruit Leslie Rich, who's the most feared stock analyst on Wall Street for the electric utility industry, from JP Morgan to come run the program. And suddenly I've got like $58 billion worth of loan applications in the loan programs office. So, you know, people really do matter. And so she's been able to convince them. She's like, ‘Well, you know, you kind of are at a soft rate cap. You can't keep raising rates 10% a year and continue to have a social license in your state. Like, you should actually figure out how to reduce rates for rate payers.’
And so the arguments are, you know, filtering through. People are having these conversations. I do think that passed for sure in 2019. People are not internalized it about the fact today, no matter where I go, people are actually actively interested in learning about how they should do things differently within the utility sector in all three areas, right? So generation, transmission, distribution, and what we call virtual power plants, which is actually, you know, flexing demand with the same level of dexterity that we currently only flex supply.
Tracy: (29:11)
I definitely want to talk about virtual power plants, but since you mentioned electricity rates just then, I mean both Joe and I live in New York. We are the slaves of ConEdison in some respect. And every year it seems ConEdison will announce a rate hike. And a lot of that goes into not necessarily the price of electricity, but the distribution costs. And I think that's been a trend for a few years where, you know, actual load demand or consumption of electricity has been pretty stable, but distribution costs have gone up and up. Can you explain what's happening with that dynamic and how, you know, the DOE can help with that aspect of it?
Jigar: (29:49)
Yeah, so let me start from first principles and then I'll answer your question directly. So in 2000, right, the National Academy of Sciences said, you know, the, the most important machine in the whole world was the electric utility grid, right? Of the 20th century, right? And so they got this award for, you know, the best engineering marvel of the 20th century, right?
This engineering marvel has cost us over a trillion dollars to build right over time. And we use it 40% of the time. So if you're a private sector company, which some of these utilities are, and you have a machine that you built that costs a trillion dollars and you only use it 40% of the time, you'd be like, usually we're trying to maximize the operational, like, you know, capacity utilization of this machine. We spent a trillion dollars on it, we should use it more, right?
So the reason they don't use it more is when air conditioning came in in the 1970s, right? Then you had this peak, right? So whenever you have a hot day, you have this peak. And so they built the transmission distribution grid to handle air conditioning and they built a bunch of natural gas peaker plants to be able to power that air conditioning. And so the peak to trough utilization has gone bigger, right?
So now you're using a hundred units of energy at the top and you're using like 25 units of energy at the bottom, right? And so what they have said to homeowners or, you know, condo owners or you know, renters, is you can do whatever you want with your demand and we will make sure that the lights work. That's really expensive, right? So every time you buy something, whether it's a hair dryer or an espresso machine or whatever it is, they have to upgrade the service to make sure that if all of you turn it on at the same time or some reasonable amount of you turn it at the same time, then you can be accommodated, right?
The other way for them to do that is to say there are some loads that you just don't care about, right? Like your water heater, you don't really care whether your water heater turns on right after you finish taking a shower or whether it turns on like six hours later when there's excess capacity in the grid.
And a lot of rural electric co-ops have controlled those water heaters for 30 years. So it's not new technology, but like, if you flatten the load and you shift, you know, and the reason this is coming back in a big way right now is because of electric vehicles, right? Like most people who have electric vehicles, they plug in their car when they come home from work or school or whatever, and they leave it plugged in for 13 hours, but it's only charging for three of those 13 hours, right?
So people don't really care which three hours they're charging as long as it's charged by the time they wake up in the morning, right? And so people are like,’Oh, we can actually accommodate a lot more electric vehicles if we do managed charging.’ And so now once you open that door, well now you’ve got to allow water heaters and thermostats and all sorts of other stuff that you have an app for on your phone to be able to do managed charging. And so the old paradigm was that ConEd just upgraded the distribution circuit every time you found some cool new thing that you wanted to buy. And now we're saying, ‘Ah, that's kind of getting expensive. You should actually do managed, you know, charging.’
Joe: (33:33)
So we're about halfway done with our time with you here, and I want to like get into some of the specific source of generation we should talk to -- the wind and nuclear and all that. But before we do, I have, there's this critique of the way enter infrastructure in the US has developed these days, particularly under the Biden administration.
And the critique is basically, okay, we have this mission to decarbonize the grid, add capacity, all that, but that the administration adds all these other requirements, social requirements. ‘Oh, the companies have to provide childcare and they have to do this or that, all these other things that maybe didn't make it into the bill and maybe other progressive or liberal interests, like want to squeeze it in somehow to how we build out.’
And they're like, ‘Oh, we're never going to accomplish these goals of decarbonization if the company's building this or that also have to satisfy X, Y and Z, you know, sort of liberal wishlist, progressive dreams or, you know, whatever it is.’ Do you see that in your day-to-day that this is an impediment? That things that are not directly related to building and electrification get in the way of new construction?
Jigar: (34:38)
No. So in general, I'd say that we have statutory requirements, right? So for our office, you have to pay Davis-Bacon wages for construction. You have to use this thing called the Cargo Preference Act. But other than that, there are no other requirements of my office, okay? And so we don't impose any other requirements onto, you know, our applicants.
Now that being said, remember we haven't done this in 40 years, right? It's not like the United States of America has been building manufacturing facilities, brand new manufacturing facilities for 40 years. We haven't.
And so, you know, yesterday I was in Georgetown, Texas, one of our companies, CelLink, right? Is building their facility up there. They make these extraordinary wire harnesses for electric vehicles that are like 95% less weight, which is amazing. But, you know, the thing is, and you would think wire harnesses are things that, you know, you can only make in low wage countries around the world, but they have this innovative process, and so they can make it here in Georgetown, Texas.
We asked them to put together a meeting, right? For, you know, workforce. They have to hire about a thousand people. And so, you know, how are you going to do that? Where are you going to go? Etc., Etc. There were a lot of people who came and, you know, we facilitated a conversation.
There's no mandate there. I wasn't suggesting that they had to hire, you know, a good mix of this group or that group or whatever it is. It's more like, let's have a conversation, right? It was very clear to me that most of the people in that room were so appreciative of CelLink creating a thousand jobs in that community, but had never had the chance to provide CelLink any feedback about how they might recruit better.
Now that's not because CelLink’s a bad company, right? Cell's a startup company that probably almost went bankrupt like three times and, you know, thank they're lucky stars that they got the capital when they needed to actually get to this point and now they're building a factory. They're like the American dream. So I'm not surprised that the number one thing that he's working on is not figuring out his workforce issues, right?
The number one thing he's working on is making sure that the Chinese don't steal his technology and that he's continuing to, you know, succeed on this stuff, right? And so he came up after me, his name is Kevin Coakley, and he's great. And he said, ‘You know, Jigar, this was super helpful. I want to do right by these folks in the community. I want to actually meet all these people,’ etc., etc.
And so it was a good conversation. I didn't force him to hit some sort of metric or do this thing or whatever else. But, you know, in general, what I find is all of the people [who] participate in the loan programs office are, you know, Americans who are quite proud of their country. They want to do right by their workers, they want to do right by the communities that they're in, etc.
But it's not surprising to me that they're not experts in that part of, you know, building a company. They're experts in their technology. And so we do facilitate good conversations.
I'll give you one more story. So there's one company that we provide a conditional commitment to. I'll try to keep the details sparse so they have no, you know, outing them. They are going into a state that has an extraordinary shortage of construction workers, right? And they said, ‘Look, Jigar, I'm just not going to be pro-union. Like, that's not going to happen,’ right?
Fine. So I said, ‘Well, but you should sign a project labor agreement.’ They're like, ‘Jigar, that sounds like a union term.’ And so I was like, ‘Well, it kind of is a union term, right? So you should sign a project labor agreement.’ And what that does is it mandates and requires the union do a couple things.
One is start training workers for you right now, right? Six months, eight months before you actually need them. But two, if there's actually too much work and not enough workers, you get first in line. Right? Now if you end up doing an RFP and you pick a non-union contractor, right? That's fine. They would still pull from this union hall or not, or whatever. Like union workers do a lot of non-union contractor work, right? He's like, ‘’I never understood that. They never taught me that at Harvard Business School. I don't know how any of this stuff works,’ right?
And so he was appreciative, you know, it wasn't like he was union, anti-union, like pro-union. He was like, ‘I'm probably not inclined to go union, but I do need workers that are trained to actually start working on my job site as soon as I'm ready and this is going to make it easier for me to meet my schedule and my cost. Yeah, I'll do that.’
Tracy: (39:00)
So you sort of suggested that some of these executives, maybe they just hadn't thought about it before or weren't experts in it because they were focused on other things like competing with China. But just to press on this point, because I think it's kind of timely at the moment, especially given the UAW strikes, but one of the arguments that you hear is if you attach a lot of expensive conditions to the labor force within the US that makes it uncompetitive compared to places like China or Mexico where the cost of labor is not only cheaper, but also not unionized and is probably not providing things like childcare. How do you think about the competitive aspect of that?
Jigar: (39:37)
As I said before, the Loan Programs Office requires Davis-Bacon wages for construction in general, that hasn't been a problem. You know, in general, when you construct something, you want the folks who have the most training doing your construction as you know, firsthand and, you know, and so it helps.
And so, you know, that really isn't something that we fight over. They're like, ‘Yeah, that makes sense.’ So we want the highest quality workforce so that, you know, when we build this building, it'll last for 30 years and it'll be done properly, right? So that isn't really a problem.
There's no requirement for folks to go union for the operating jobs. And so we're not requiring that. That being said, we're saying to people that these are, particularly in the manufacturing space again, which we haven't done really in 40 years. You know, these are craftsmen, right? They're actually, like, the more they work at that place, the better they get at that job and they become more productive and they provide a lot of insight. I think when you hear Elon Musk talk a lot about this at Tesla, you know, they've sort of onshored almost everything that it takes to make a car, right?
So they don't really import from, you know, 1,000 different suppliers. They do stuff here. And what they say is actually the folks who work on the line, actually bring a lot of the best innovations to the table, right? They're like, ‘Oh, this could be done smarter, this could be done better…”
So in general, you know, I feel like we're having these false arguments because this is something that I don't know, it feels like certain tribes want one thing, certain tribes want something else. So it's a great fault line to create. But I think we all agree that you want workers who actually want to be there. You don't want turnover. You don't want like 10% of your workforce leaving every month and, you know, you want folks to believe that they can, you know, feed their families and, you know, support a community and all that stuff on that.
So I don't think we're arguing over those things. And we're also not saying that a hundred percent of everything that America consumes -- we consume a lot -- is going to be made in the United States of America, right? And so I think the administration has gone to China, gone to other things saying we're not decoupling. So it's really, there's a lot of these high value innovations that we've invented out of the Department of Energy. And instead of licensing them to other countries, which is basically what we did for 40 years, we're saying, why don't we tie it to the American workforce and make them here?
Joe: (41:58)
Nuclear power. Two questions. What is the role, in your view, in terms of meeting all this demand of nuclear growth in the US and is the reason we haven't had much nuclear expansion in the US because a bunch of people, there's like some combination of anti-nuclear hippies and people who watch the Simpsons too much?
Jigar: (42:22)
I challenge the premise of your question.
Joe: (42:25)
No, I'm just asking is that the reason or not? Am I wrong? I'm not necessarily assuming that, but I believe a lot of people blame them.
Jigar: (42:34)
There's a lot of stuff going on. Let me try to unpack it for you. I think, so basically nuclear power really had its heyday sort of in the sixties and the seventies, right? That's when we built a lot of our nuclear power plants in the seventies, it was already the case that nuclear power plants were becoming more and more expensive.
You had the nuclear regulatory commission, you had a lot more regulation. And so, you know, you were already getting people less interested in doing nuclear power by the time you got to the late seventies, then you had three mile island, right? You can imagine that sort of scared people. And so no one died. Everyone's fine. You know, nuclear is one of the safest technologies in the world, but you know, it scared people. We basically didn't approve any new nuclear plants after that.
We finished the Byron nuclear power plant, which I grew up next to, in Illinois in 1984. And then we finished Watts Bar recently. And so we've had a couple of nuclear plants come online. Vogtle Unit 3 just came online. Vogtle Unit 4 should come online at the end of the year early next year. So in Georgia, so I think that in general, the nuclear power fleet that we have now was largely built in the 1970s, right? Nuclear power is one of those things where the frustration that I have, and I was on the board of Greenpeace for six years, is that they don't actually try to do it better, right?
It's always someone else's fault. It's like nuclear power is just so complicated. It's so hard to build this, solar and wind stuff is so easy. Like we build complicated stuff all the time. We build like oil refineries, we build, like there's like a lot. Semiconductor fabs are no picnic, right? .So it's not like we don't know how to build complicated stuff, right? But what I find is that in nuclear power, it's always something like, well, if the federal government would just do it, we should just get the Department of Defense to just do it, right?
You know, okay, but like that hasn't really worked for you since the 1970s, so let's not try that because that's not working. So I think a lot of what we've done is rightsize the nuclear energy industry by saying, ‘Look, you know, these $10 to $15 billion nuclear plants,’ it's not something that utilities want to build, right? Like in fact, if you look at like the last 40 or 50 years of utility bankruptcies, like half of them were because of nuclear plants really. So, you know, I can imagine like a CEO of a utility company is like, ‘I don't know, I don't want to do a nuclear plant. ‘
Tracy: (45:02)
I like my job. Maybe not.
Jigar: (45:03)
Yeah, exactly. Right? And so now we have this thing called small modular reactors, which are neither small nor modular, but like, that's fine. But they basically cost $2 to $4 billion, right? And $2 to $4 billion, utilities know how to do $2 to 4 billion projects and they can find bonding for that and insurance for that. There's EPC contractors that have a balance sheet that's large enough to wrap a $2 to $4 billion project, etc.
So we now have a size that we actually can handle. When you look at like Vogtle 3 and 4, Vogtle 4 was 30% cheaper than Vogtle 3, right? Because the same workforce was working in the same reactor and they did it better the second time around, which you can imagine.
So the way that these small module reactors work is that you build four in one place. So you build 300 megawatt reactors, you build four of them in one place. And so you have 1,200 megawatts. The first one's probably going to come in closer to $4 billion, the second one's 30% cheaper, the third one's 20% cheaper, the fourth one’s 7% cheaper.
And so now you get to a place where it can be cost effective, folks can handle it, it's bite-sized. You can end at any time if you don't want to build the third one or the fourth one. And so you're starting to see a formula that people are getting excited about. Not only are people getting excited about, they're getting excited about US designs, right? Because there's Korean designs and Russian designs and Chinese designs. And so, you know, our good friends in Canada chose a US design, the GE Hitachi BWRX-300. So they're building four of them at Darlington. The folks at Synthos in Poland also chose the design.
There's a lot of lessons learned. We're following those lessons learned. So I could go on and on and on in an entire podcast about this. But I would say that in general, I don't think it's the fault of the environmental groups or the fault of the nuclear regulatory commission, which everyone likes to blame, or the Simpsons.
I think it's the fault of the nuclear energy industry to not say, look, you know, modern finance works this way, right? Modern utility CEOs work this way. Modern public service commissions work this way. Let's create a product that actually works within the framework that we have in the United States of America.
And they've now done that. So I think we now have a product that people can get excited about. And you saw the governor of Texas announced that he was directing the Public Service Commission to figure that out here. And you've seen announcements from Duke Energy and announcements from Dominion and announcements from the Tennessee Valley authorities. So you're starting to see utilities, you know, say this is actually a really interesting approach. And so we'll see if it works. But I think that there's approach now that's fit for purpose.
Tracy: (47:31)
Setting three eyed-fish aside and other Simpsons references, I mean, can you talk a little bit more about how you see it developing? Like what are the hurdles to actually getting some of these smaller plants set up? Can you walk us through what the process would be and how you would imagine it unfolding?
Jigar: (47:47)
So one of the challenges with the nuclear power industry is that there's no nuclear power industry. So you have like the Nuclear Energy Institute, right? And they're made up of a bunch of utility companies that basically own nuclear power plants.
Like if you ask the CEO of like Entergy or, you know, Duke or Dominion and say, ‘Are you a nuclear power person?’ They're like, ‘No, we own nuclear power plants. We own renewable energy power plants, we own coal plants. We own natural gas plants,’ right?
And so you can imagine they're not necessarily like the driving force behind new nuclear, right? So then you've got a bunch of other companies you've heard of, like NuScale, Oklo, you know GE Hitachi, Holtec, TerraPower, X-energy, right?
But they're also not the nuclear power industry. They are nuclear power designers. So that's like saying, ‘I have an architect and the architect designed the beautiful house.’ Yes, they've designed a beautiful nuclear power plant and it works. And you know, when I say it works, like they've spent a lot of money at a supercomputer and told me that it works, right?
So it's not like they've actually built one of these things before. So now you've got that. So then the question becomes like, who is the industry, right? And so in the case of the GE Hitachi BWRX-300, right? GE Hitachi is only a design firm. GE does not make any of it. They don't like, all they do is design it, right? And then they'll probably take it through the Nuclear regulatory commission.
BWXT is the company that actually has been hired to make it, and they are in the nuclear submarine and nuclear navy business. And so they make a lot of parts for the military. And so they have some knowledge of how to do this, right? And so that's great. And so they're going to do parts of it. And then we have to now find an EPC contractor that wants to do this.
Remember the ones who worked on Vogtle went bankrupt, right? So it's not for the faint of heart for them to decide to get into the nuclear energy industry, but we're, you know, like aspirational ambitious folks, right? And, and think about it from a national security lens, right?
I mean, once a country chooses a nuclear power plant, let's say from Russia, they're tied to Russia for 80 years. You can imagine the national security complex with the United States would rather that country pick a US design and tie them to the United States for 80 years. So there's a lot riding on figuring this out.
So a couple things. One is that if you're a supply chain provider for nuclear, so you're making a forge or whatever it is, you can imagine ramping this whole thing up for one nuclear reactor is not your idea of awesome So you're like, well, where are the 10 reactors going to come from? So after I do this one, where's the next one going to come from?
So, in some ways when I say that, like Duke has put nuclear into their integrated resource plan and Dominion, you know, the governor has been talking about it, and then you've got, you know, the Tennessee Valley Authority where Jeff Lyash has talked about, you know, putting four reactors at Clinch River, and then you've got the Governor of Texas directing the Public Service Commission to do this stuff.
Well, now you've got like a critical mass of people that are saying we should do this. And then the question becomes, what do you need to go from ‘this would be really awesome to do in our state to here's an order, right? For the nuclear reactor.’ And so we wrote a liftoff report at the loan programs office, and the Department of Energy was led by Vanessa Chan at the Office of Technology Transitions and the Office of Plan Energy Demonstrations, which runs the advanced reactor deployment program…
Tracy: (51:18)
These are very cool, by the way. I don't normally say this about government publications, but these ones are worth reading.
Joe: (51:24)
Yeah, I was going to say the exact same thing. They’re all really worth reading, very readable, and really good entry points just to understanding some of these technologies. So well done on that.
Jigar: (51:32)
Thank you. Thank you. We like kept it down to like 30 pages or so and then, it was a really extraordinary effort. And then the woman who was the lead there, Julie Kozeracki, is like on a speaking circuit. She's going to all these places and figuring out how to get this person to move one inch this direction and this person to move one inch this direction.
And so there's a lot of facilitation and technical assistance that we're providing in this process. But the roadmap is there told to us by the industry in that nuclear liftoff report. So, you know, I don't know whether we're going to get there, but like those are some of the tenets, right?
Is you need a design that multiple people pick. You need to at least build 10, hopefully 20 of them, right? You need to make sure that the supply chain gets built out. You need to have a trained workforce, which, we have 13,000 people now that have been trained out of the Vogtle nuclear plant. You know, you need all these pieces in order to attempt this.
Joe: (52:30)
I just thought of a question and I've been meaning, I've been wanting for like two years to do a whole episode on this and it just never happened. So now I'm going to ask to answer this in literally one minute. I read the ISM manufacturing report every month, and there's this section on things that are in short supply. And as the supply chain has healed over time, that list gets shorter and shorter. But the most persistent thing that is in short supply for manufacturers is just electrical components. And they complain about that and it's been this issue. What is going on there? Do you know what the source of this bottleneck is and what is driving it?
Jigar: (53:05)
Well, I don't know that I know for certain what the source of the bottleneck is, but I would say that in general, when you look at manufacturing companies, the dynamic with manufacturing is if you build it, they will come, right?
So like I build a factory and you buy one piece and then the next week you buy one piece, and then you're going to buy a piece and then you're like, ‘Ah, I think I'm going to wait two weeks and I'm going to buy something.’ Right?
I don't know, that's not like a reassuring model by which I want to stay ahead of the market. I like to stay slightly behind the market so that like I could charge a higher price and you know, etc., right? And so for those folks who want us to accelerate investments in the supply chain, they need to make a long-term order, right? And so for a lot of the electrical contractors or a lot of the utility companies who are wanting transformers or a lot of these other folks…
Joe: (53:58)
Transformers. That’s the one that they always say is in shortage.
Jigar: (53:58)
But think about it, if you're a running electric utility company, do you not have a predictable track record of how many transformers you install every year? Do you not have like an integrated resource plan that says ‘Over the next 10 years, I think we're going to buy this many transformers?’ Well then why wouldn't you just make an order for like 10 years’ worth of transformers this week?
You and like 10 of your closest friends, and then you build a transformer manufacturing facility in your community and then they feel confident because they've got orders for the next 10 years and you feel confident because you've got a local supply of transformers.
Instead I got a bunch of people going ‘Ugh, Jigar, we need to fix transformers.’ And I’m like, ‘You should give me an offtake agreement.’ ‘Ugh. I don't know. That seems like a lot of work.’ And I was like, but there's a formula to how this stuff happens. Like, it's not like one of those things where it's like, ‘I wish I had an oversupply of the components that I want and I'm not willing to do anything to actually make that happen.’
Tracy: (54:54)
Speaking of bottlenecks, this is kind of a cliched question, but I'd still be curious to get your answer to this. If you could wave a magic wand and make, you know, one aspect of the industry or the political landscape or the regulatory landscape go away to make the process of transitioning to cleaner, cheaper energy better, what would it be?
Jigar: (55:20)
Oh gosh. This is definitely going to get me in trouble. So maybe let me say it this way. I think, in general, as I've said before, we have all the technologies we need to not only tackle this problem but dominate not only, you know the sector here, but then to export and dominate around the world.
Like whether it's hydrogen or transmission or, you know, whatever it is, solar, wind, all these other things. We have all those technologies and frankly we invented them. Everyone's like ‘Oh, China makes solar panels.’ We invented all that technology right along with Martin Green at the University of New South Wales.
And so like, you know, those are the two places where it all came from, right? We were forced to license it to them because, you know, we weren't manufacturing it here. And so one of my big challenges is that as we learned to build again, what we did in the 1970s is basically divorce all politicians from knowledge in this area. Right? So all politicians basically have like an airport authority and…
Tracy: (56:21)
That’s very diplomatically put by the way.
Jigar: (56:22)
Right? And they have like a sewer authority, an electric utility, and a, you know, whatever it is, right? So when you ask them like, ‘Hey, how do we lead in this area?’ They don't know, right?
And so they go to the guy who runs the sewer authority or the water authority or the, you know, airport authority. And that person says, ‘I want to do things exactly the same way as my grandfather did in the 1970s and we should replace everything exactly the same way. I don't want to install new technology. I've already got people who are like trained in the old technology,’ right?
And so why do we do this stuff, right? And so we need to come back together and commit ourselves to actually taking US technology and deploying it here, right? And the risk aversion is like leading to a lot of increased cost because doing things the same way as [in the] 1970s is crazy expensive. We have stuff that's 90% cheaper.
But what happens is you go to the consultant, who you pay and they say, ‘I don't know if that's going to work. I don't know, like I know it's been deployed like 40 times in China and 50 times in the Middle East and like in Europe, but I don't know if it's going to work here. We should do exactly the same thing we did in the 1970s.’
And so it'd be nice to figure out how to break that sort of knowledge gap so that we're doing stuff here again.
Joe: (57:41)
One last question. You know, it's kind of, it's an exciting time and it's fun. It feels like every day, or at least every week, there's some new announcement. Some of it comes from loan program office funding, like some new battery factory or some new technology or breaking ground on some new geothermal, etc.
Jigar: (57:57)
So much winning .
Joe: (57:59)
So much. We're getting tired of all the winning with all this. But like 2024, what are we looking for? Are we, is 2024 going to be another year where there's just like tons more in the pipe and we can expect a lot more out of all these announcements? Is there a lot more coming?
Jigar: (58:17)
There is a lot more coming, some of which is predictable, right? You’ve got the hydrogen hubs announcement coming out later this year. You know, you've got the GRIP funding for like grid resilience coming out here pretty soon. And so some of it's predictable, some of it's not predictable because like all the folks who've applied to my office are confidential.
But, you know, I think that the part that is the most exciting to me is that you're starting, just starting to get mayors and county commissioners and others going, ‘Wait a second, how do we make our town or our county attractive to the next announcement,’ right? And so, you know, we have like, I think less than 1% vacancy rate right now in industrial properties.
And so if you talk to brokers, they're like, ‘We have no more properties left.’ I have like four applicants who are waiting to pick a site, and that's what's holding them up to like actually make an announcement, right? But then, I talked to this guy in Ohio and he's like, ‘Oh yeah, I have like five sites. We just forgot to like rezone them and we forgot to re-register them this way.’
And so now he's doing that and that property doesn't actually earn any property taxes right now because it's classified as a brownfield. They are cleaning it up, putting it back into circulation and like, you know, folks can pick it and then they can like put jobs there and all this other stuff.
We just, it's one of those weird things in the United States where like we have all this extraordinary wealth, right? A wealth of innovation, wealth of engineering talent, applied engineering talent, all this stuff. And we forgot about some of it, it's just there. It's sitting there and so, like, there's all these pieces that we have to get out.
So part of what's going to make next year so successful is not just the announcements around, you know, the funding opportunities and that kind of stuff, but also all these micro decisions that are being made by local towns and communities going, ‘Wait a second, you're saying that that piece of property that's just been sitting there is actually like an asset?’ Yeah, it's an asset. Clean it up, let's put it back into use. Like they have a rail spur that goes to them. It’s actually on the river. People want to like use that so they can transport their goods. They're like, ‘Oh man, I thought that was just an eyesore in our town.’
And so that to me is super-exciting, right? And then we're starting to get a ton of people who are saying, maybe I don't have to go to a four-year college and maybe I can go to Texas State Technical College and do a two-year degree and make a six-figure income. Like actually becoming really good at my trade. Right? And also this stuff.
And that's bringing pride to people, because for a long time people were like, ‘I like to work with my hands,’ right? That was like a euphemism for ‘I wasn't like a book person,’ but like we actually need a lot of people who want to work with their hands, right? And so, I find that what's most exciting is not the announcements we're making here, but it's leading to a level of confidence in all these other parts of the economy where people are like, maybe we can actually pull this off.
Joe: (01:01:17)
Jigar Shah, thank you so much. This is a real thrill. Always love catching up, great note to end it on. Thank you to everyone, the Texas Tribune Fest and appreciate everyone coming out.
You can follow Jigar Shah at
@JigarShahDC
.