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Rohan: Danny Kennedy, welcome to the podcast.

Danny: Thank you. Great to be here.

Rohan: Well, Danny, let's start with a broader reflection on your career as an agent of social change. Now, one of the social change frameworks that I've been very inspired by over the past couple of years is one by Julie Battilana and Marissa Kimsey, who say that successful social movements feature three distinct kinds of roles: the agitator, the innovator and the orchestrator.

Now you've played all three roles, either together or separately at different points in your career in the climate change space. You've been an activist at Greenpeace, including spending three days in jail in Texas for urging oil companies to stop oil exploration. You've been the co-founder of Sungevity . And now you play sort of an investor-convener role at New Energy Nexus. As you think about your own trajectory, how have these three roles enabled each other, and how have you adapted your approach over the years?

Danny: I think the construct is really right on. I believe a lot that there are different roles in different stages of social movements that need to be emphasized and I think I have played those three. This resonates very closely with a model of social change I like by Bill Moyer from the 20th century , called the Movement Action Plan, that actually had four roles : citizen, change agent, rebel, and reformer. I think the rebel, reformer and change agent relate very closely to your agitator, innovator and orchestrator. So the missing one there is citizen, which we all are all of the time. I mean, that's the role that we should always be conscious of as good citizens in a democracy, et cetera. And that's who we're trying to organize when we do the agitator, innovator, and orchestrator work.

And so I think it is very fair description and I have done that, I have intentionally changed from one role to another at different phases in the sort of social movement that I've always felt myself part of, which has been the climate and energy transition. I've been doing this work weirdly since I was a teenager in the 1980s, I'm old Rohan!

But we knew we had to prove there was a problem first. And so, the rebel or the agitator did that for the late 20th century, right? Decrying the dying of the light with fossil fuels and raising awareness with direct action and doing all the things you do in non-violent, civil disobedience, social movements. But at some point, we sort of turned a corner and the majority of the world was actually aware, notwithstanding the US Senate, that we had a problem. And what we needed was solutions. And that's where the innovator came in. Entrepreneurs is another word for that. And that's what I did, not just at Sungevity, but with a number of companies. Sort of helped set up half a dozen or so solar businesses, because I had a thesis that solar would become this dominant force in the energy transition, which it is.

And then the orchestrator that I've taken on, the orchestra I'm trying to orchestrate I guess, is more of that - more entrepreneurs, more ways to support startups to start up and succeed. Which is what New Energy Nexus does. So I think it's right.

How do they interact as roles? You know, I think the skillsets are actually weirdly transferrable. People don't get this when I say it, but my years and decades at Greenpeace and other nonprofits actually set me up really well for being an entrepreneur. I mean, the Greenpeace campaigner doesn't take no for an answer. They just persist and do whatever they have to do to stop the stupid Oil Shale project and the Great Barrier Reef. And seven years later they'll stop it. It's sort of similar to the entrepreneur that has an insight, some technology or product or service they want to take to market. And everyone says, oh, that's never going to happen. Oh, the incumbent's going to win. Oh, your landline telephones are just too dominant, cell phones never going to make it . Until they do overnight. They're a success 10 years later, sort of story. Very similar, belligerent, bloody minded attitude you bring to the task as both an entrepreneur and a campaigner, activist, organizer.

Rohan: So let me ask you this. You mentioned the US Senate, and US policymaking more broadly, not being very cognizant of the climate change crisis. Or if they were cognizant, not responding to it as adequately as they should have. We are now at a point when we've begun to see some changes in the policy paradigm. How do you think these three sets of players - agitators, innovators and orchestrators - need to recalibrate with their roles now as they work on getting these coalitions and clusters on the ground to start working to implement the policy changes?

Danny: Yeah, they have to adjust their form and function basically as social movement succeeds. More in the sense of an evolutionary succession or an ecosystem succession than it's done in one, per se, as a success. Then you need different roles to do different things to what they may have done before.

So to your question about the US Senate. I didn't ever believe the US Senate didn't understand the basic science of climate change. They were just bought and sold, as many politicians are, by the vested interest of the day, which were - in the late 20th century, early 21st century - the incumbent oil, gas, and other fossil fuel interests.

And so they denied the science. They obfuscated around Kyoto. They didn't do the deal. They blocked Markie and others to make progressive legislation happen. And we know that. That's all old history. What do the agitators and campaigners have to do? They have to continue to hold their feet to the fire because those vested interests still exist, and they're still powerful, and they still buy and sell politicians in this country in particular where campaign finance and the like is really contaminating our democracy.

So, you still need people to expose hypocrisy and double standards. And now that they're sort of like - oh I understand the science and I'm going to do things on global warming, but all the things I'm going to do are sort of half baked, false solutions- we need to call that out and be clear about that as citizens and as change agents, which is what the campaigners and rebels really do well often.

So there's still a role, but it's more about not allowing the success to slip back to the old ways and habits, and to keep progress moving forward. Meanwhile, because we're now in a situation where the majority of the world not only knows there's the problem of climate change, but knows there are solutions and they're better, cheaper, faster. Clean energy is simply good for customers and the economy, et cetera. EVs are better than ice cars. All these things. We need that role, , what I call the 'entrepreneur’, but you've called the 'innovator' to expand its spread of action and its function, to grow into a more dominant role and sort of eclipse the rebel agitator function in the social movement. Because we really need more solutions than anything. And that will move the movement forward faster at this stage of where we're at, given what majority public opinion is now looking for.

And you sort of see that in the electoral outcomes in the US in the last few years. The Republicans still bought and sold by fossil fuel interests, but were unable to resist the IRA, I mean did not even raise the Inflation Reduction Act as the Biden sort of mainstay legislation this year, because they knew it was a winner. They knew it was an electoral cat net for them to go after that, even though their masters wanted them to. They can't raise it as a problem anymore because the transition to clean energy is now baked and they've got to find other ways to fight , and culture wars, to divide and conquer, and do all the things.

Rohan: You talked about innovations now needing to spread and amplify their efforts. One of the flagship programs of the New Energy Nexus that you're the CEO of, is the Cal Seed program in California whose main goal is to help innovations overcome the value of death. Help us understand this value of death. What are the challenges clean energy startups have typically faced in this process of commercialization?

Danny: Sure. Just to say something about New Energy Nexus first. We run programs which are sometimes called accelerators, incubators, and funds. Different ways to support startup teams, founders, the entrepreneurs that drive companies, from "zero to hero" is what I like to say.

And we have programs designed to go from "Eureka" to "Exit". From, oh my God, I've got a better widget for that thing in the world in my head. But I need to actually take it from my head onto a laptop and then from a laptop into a market, and then test it with consumers and get it right, and then really roll it out, and then scale the manufacturing of it.

Think Tesla, which is actually a company many of us know the "lore" of, not necessarily correctly. Our organization, prior to my time so I'm not claiming credit for this, but just using it as an example- we invested in that company in 2005, very early about the same time Elon Musk did. You know, it wasn't actually him that started it, it was a couple of technical founders that wired together lithium-ion batteries from Walkmans to power a little go-kart kind of car. And that was the eureka. And obviously they've gone all the way through IPO and all the rest.

And the valleys of death. There are more than one along that journey for an entrepreneur. You have these phases where you need the big lift is to get it from will wiring the batteries together, make the road worth traveling or the car go down the street , and it does. Then you have a situation where you want to productize that and take that experiment to some scale of manufacturing production. And no one wants to invest in that because they don't know that there's going to be a market for it. It hasn't been tested. They don't know what the risks are, et cetera, et cetera.

So these moments in time when you have to eat while working, which is what entrepreneurs do all the time 24x7, are these sort of risk areas to pass through. So we design programs often to hold up companies through those passages. With non-dilutive grant capital, for example. So CalSeed, the program you asked about in California, which has backed over a hundred companies since 2016 in California to deliver on energy goals of the state of California, we provide $150,000, which is sort of maybe only ramen budgets for a team of two or three living in California, but maybe enough to do the next things.

And a bunch of training and support, including going through the Clean Tech Open, which is sort of an accelerator curriculum to help teams of founders learn what they don't know around running a business. And so we do all these things to lift them so that they don't crash into that Valley of Death, as it were.

And we've designed other programs in the world in different pipelines or trajectories for different companies. So in California we have a follow-on sister program, called Cal Testbed. Often the next problem for an entrepreneur is they prototype something, you've heard that word, meaning they have their sort of first version of the thing, but they need someone else to say that it works. Some third party validator like we hear of UL listing often in some manufactured products, something like that. A certification. So what we've arranged with the California Energy Commission, is to pay for products and services generated by these entrepreneurs coming through Cal Seed and other pipelines in California, to have their products tested and verified by the University of California system. So we engage students and faculty on campuses on the 12 universities of California. And they'll use the window film to see whether it bounces light into the room to reduce lighting load for six months. And they'll measure and test it and run experiments and do the things to say, tick box that window film works, it does what the entrepreneur thought it would do, and we can verify that and here are the measurements. And, and then that in turn gives confidence to investors to say, oh wow, that prototype worked and was tested and measured for six months by UC - let's dig in and scale it up and grow that business. So there are various tools in the toolkit, if you will, to help these entrepreneurs go the next mile on that journey.

Rohan: One of the things that I find interesting across all these tools is that you all take a very intentional regional approach to addressing entrepreneurial challenges. What is the significance of taking such a place-based approach to creating these entrepreneurship ecosystems and addressing entrepreneurship challenges?

And if I can ask you to dive a little more into that valley of death. Can you tell me a little more about which interventions you found to be particularly helpful in in affecting the success of an enterprise?

Danny: So the ecosystem design question. Some of it, I'll be real, is opportunistic and political, you know. We get supported by the California Energy Commission. We shouldn't use the funds which are basically rate based, not taxpayer based, but from the rates of the electricity customers in California, we shouldn't use those outside of California. But it benefits the world to have these companies coming up in California where there is a rich set of other resources. So the ecosystem is kind of co-located because, kind of like nature ecosystems depend on things in the nearby environment, the inputs of the system - the soil, the waters, whatever. Likewise, California has a very rich set of resources. The public university system spitting out smart kids doing stuff. The community college system, likewise . It also obviously has Sandhill Road and this sort of much storied venture capital community, which may or may not be the best of assets to bring to bear to be honest on some of these technologies. Because it's different to software and what they've learned to know in the last decade or so in that space.

We are intentionally regional for a number of reasons, but one significant one is that co-location . And I think place-based innovation strategies that bring this private and public value building thing together this agenda. We are supported by the state and by philanthropy, and folk that care about California in this case, to do this work.

It makes sense that it has a geography and a spatial spread that's kind of localized and has partners at the same time. You could argue in this, what is the world flat, hot and globalized. With Zoom calls and all the technology that we now rely on, you could say that we can do all of this remotely and virtually and globally. And we try to leverage this across borders and across oceans and new energy. Nexus has nodes in a dozen countries, and we do see synergies emerge, which are really exciting. And we have a thesis that will accelerate the innovation we need in the energy transition more broadly. So, it's both, a very place-based localized strategy and trying to tap tools, tricks, techniques from places further afield and far away, and link those.

And to answer your second question around what sort of those techniques have worked well? I mean, it's honestly hard to say Rohan. I've got so many stories I could bore you with from 600 companies in our portfolios just this year, 2022 alone, let alone hundreds more annually before that. But one thing that we are doing quite well, I think, outside of the place-based strategy is what we're calling Landing Pads - bringing companies from one market to another where their service or product is needed.

Two come to mind immediately. One in New York where we've been working to decarbonize buildings with accelerated programs, we call the Clean Fight.

And this is the problem of New York's building stock - it's like a hundred years old, right? And no one's innovated a boiler in a basement in Manhattan for decades. They're the same dumb boilers that have no intelligence despite the incredible AI world that we live in. And so we ended up bringing a Malaysian temperature control thermostat unit to bear in that market and rolled it up with some other products in the sort of HVAC space, in Brooklyn and other borough markets . And did quite well with that.

Another example of that landing pad strategy that I am pleased about is a company doing a really innovative thing with transmission. And transmission is sort of this key to unlock the energy transition. There will be no mass renewables uptake without massive increase in transmission all around the world. Meaning high voltage DC cables and the like, that we see on those towers when we drive out of town. And that's a very clunky old business that really hasn't changed in its design and has no smarts on the wires for nearly a century. I mean, certainly since the fifties we haven't updated that set of things in the world. America, most of all, where it's really underinvested in that space. And this team are out of Australia, where they're using drone technology to string the wire, the cables, the conductor. And ask someone here in that industry in the States, and they're like, that can't be done. You know, it's literally done by choppers and ground crews. The incumbent utility in Northern California where I live uses two black hawk helicopters and has a third one to cannibalize for parts. And these guys are doing it with drones from the military in Australia. And they're quite successful in the Australian market and was sort of relatively happy there and doing well, with revenue and margin and all the rest of it. And, and we are like, come to America, we need you, the sector needs you. And so we've introduced them to parties here and, and helped them get set up in the States , and they're now spreading like wildfire. I mean, they're growing as fast as they possibly can because that technology is going to be desperately needed in the transmission space.

So they're just two examples. But I guess one of the realities is, a lot of the support to make people succeed and survive these valleys of death is quite bespoke. It's handholding and bringing you across the Pacific to enter a new market and meet an offtaker of your product or service. It's getting an introduction to a particular investor who's going to take that bet on you, so you can leap across that abyss. And the problem for us as New Energy Nexus is , we are trying to touch a hundred thousand diverse entrepreneurs this decade. We think that's the scale that the energy transition needs. You need something like 10 million startups to start up to deliver the sort of value creation that is this entrepreneurial capital story. And so we're going to do a percentage of that, in our minds. How do you do a hundred thousand of these things? You know, it's very hard to scale our business of supporting startups, particularly when we're trying to do it with a justice and equity lens. And this approach that ultimately - locally, regionally - specifically in the place that you're asking about originally, needs to be very culturally competent and relevant and savvy to the context.

So it's quite a trick and quite a lot of fun working out what we do as well. And in many ways, I joke that because we go to other countries to do this work as well and start up these entrepreneur-support organizations. So we’re a startups supporting startups supporting startups and have our own little valleys of death along the way.

Rohan: And I think that last set of points you made are a good segue to the next question I wanted to ask. Of course, startups have a really important role to play in in terms of getting a range of innovations off the ground and finding new ways to solve these problems. But there's a certain context within which they exist if they need to be successful. And one of the aspects of the Cal Seed program that I find intriguing is the work you do with the four regional energy innovation clusters to support these companies across about 20-21 counties in California.

Who are the players in these clusters? How do you bring them together? What are the kinds of institutional relationships that underpin these clusters? And how do you leverage them while you scale up these startups?

Danny: So it's quite well designed, the ecosystem. And then to give full credit, it's really the California Energy Commission, which funds those four cluster organizations. LACI, which is the Los Angeles Clean Tech Incubator. There's the San Diego Clean energy Industry Network, which has its own sort of programs. And then in Fresno there's something called Blue Tech Valley, which focuses particularly on the agricultural sector, which is enormous in California. So they fund those four organizations, plus our Cal Seed program, which is sort of statewide and brings the funding to the entrepreneurs, the $150,000, and as much as $600,000 for some of them that pass through certain milestones.

So between them we've got these specific place-based cluster organizations that also bring local resources to bear. You know, at the Los Angeles Clean Tech incubator, you have great access to the Los Angeles Department of Water and Power, other LA based corporates, and the local government is very connected to that accelerator and incubator program.

And so I guess to answer your question, the players are many and varied. From the sort of state level in Sacramento with the CEC, that California Energy Commission, to the local-specific with knowledge of the space. in Fresno, Blue Tech Valley knows a lot of the farmers and the Ag implementers that do the work with irrigation, which is this huge energy load in the state of California moving water around. And Cyclotron Road up in Berkeley is sort of the high tech activate energy anchor organization to really help get things out of the lab and into the world. And they've all got their own connectivity.

So it's a similar game, I guess to what we were talking about earlier. Of trying to match the right resources at the right time to the journey of the entrepreneur. Most classically we think of that as financial capital. Do you need a grant at this point because your things so unproven that you just should just test it with some R&D money? Or do you need angel investment? Or do you need debt, because you're there, you've got what you need, uou just need to borrow some money to buy some equipment? And then go from there or materials input to your product.

So matching resources is the game, but it's not just that financial capital. It's also human capital. It's social capital. It's the network into the policymaker who can explain the thing, you know. regionally to your question. There are regional energy networks, RENS, in California, and institutions like the air quality management districts, which have funds. Like BAAQMD, the Bay Area Air Quality Management District, has a technology commercialization fund that's very aggressive and innovative, I think. They'll invest in companies or lend money to companies that might come to the Bay Area to help clean up the air. If there's an EV charging tool or infrastructure technology that might cause more uptake of EVs sooner , then BAAQMD may be your best bank to go and get finance to deploy that in projects across that region.

So knowing all those players and making those introductions is sort of the work of our team. And the teams of these cluster organizations that are really the local implementers and excellent provisioners of that support.

Rohan: Let me ask you a follow up question to this. So a lot of President Biden's new policies, including things like the Build Back Better Regional Development Challenge, are predicated on exactly this kind of cluster approach of different organizations working as coalitions. What are the lessons based on your experiences that you have about building and maintaining such coalitions in leveraging them successfully, to achieve these bigger goals?

Danny: Look, the lessons are many. I may not want to bore your audience with everything I think about this but a few things.

One is you need to put entrepreneurs in charge of this stuff. It's great that Biden's got it. And that people are back to industry strategy and policy in America, which is kind of this funny thing we forgot for 50 years because we believe that there is no society and we're all a bunch of individualist automations, rolling around in some free market. And markets aren't regulated and controlled and, and states don't actually have a hand in dynamized economies to deliver outcomes. We've given up on that myth in the 2020s, I believe. I think Covid kind of taught us that in a shock kind of way. Oh wow, we need to step in and close sectors of the economy. We're not going to do tourism this year. We're not going to do retail. We're not going to do X, Y, and Z because public health is more important than those businesses just surviving. So government remembered what it was for, and Big Government. I think that that's a lesson.

Rohan: From an audience perspective, what's good about you saying this is , just as you say you're also someone who supports entrepreneurs, and no one can accuse you of taking the side of one party here.

Danny: A hundred percent. I'm just not stupid enough to think that the social contract disappeared , and state and merchants don't have a role with civil society. Anyway, my point was, it's good to know that they've got that mojo and Republican states too, and always have honestly . They have this pretense of Reagan Republicanism but love the feeding at the trough of government support for certain local industries.

We're trying to design that support in these specific geographies per this cluster strategy, but we shouldn't now empower bureaucrats to run that. So that's my first lesson I was trying to offer you. Entrepreneurs should be actually asked to guide it. So you see something like the Loan Program Office in the Department of Energy, which is this sort of on again, off again agency of support to energy innovation in the country. And putting someone like Jigar Shah, who your listeners may have heard on other podcasts and in the media on the energy transition. You know, a really dynamic dude who's been there, done that on building innovative financial instruments and other things across the energy sector, and is now going inside government to give something back, and doing some public service for a period of his life, I think is a really great move. That's an example of how locally we should run this. Use entrepreneurs to support entrepreneurs, not people whose careers and experience is not building this private enterprise innovation engine that we are looking for. And it's no diss on the lifelong civil servant either. It's just trying to be real about what are we looking for and who should we put on the bus to drive it at this stage. So that's one.

The second is, you've got to be serious about the resourcing of this and the timelines of this. Things don't happen in a year, and too many of these programs are designed for this cycle of the election madness or circus or whatever it is. We need to commit to like, "this is going take a 10 year timeline to dynamize this Rust Belt community and turn it into something new and different." the training, the transition, the culture change, all of it is just going to take more time than we want. The duration or commitments. Which is why we are really pleased with the California Energy Commission, for example. They throw down on four and five year runways. We are tested annually against our commitments and milestones and what we said we'd do. And then every five years or so, they're really taking a pause and reviewing whether the program's delivering what the state needs overall. But it requires something like that, in terms of duration.

And then the third lesson, I'd say just a little bit more sort of attitudinal or philosophical or something. When trying to do this, as America has its Sputnik moment, realizes it's been vested across all these technologies that are going to dominate the 21st century, even though we'd invented them in the 20th century. Photovoltaic, lithium ion batteries, electric vehicles, hydrogen, electrolyzers, you name it, we, we were the pioneers, or we were very early movers in these markets. Wind turbines would go in there as well. We are now catching up to China and Europe and other places on those technologies. We need to go back to what we claim to be, which is an innovation nation that values trying, and action, and failure. And that, over result, in a weird kind of way. We need people to do things and try to do hard things and support that. If all we support are banner results on the stock exchange and IPOs of unicorns that actually add little value and do nothing hard, provide a software solution for brats that don't know how to do their dry cleaning or something like that, but make a billion dollars out of it, then guess what? We are not going to catch up. If we give support and meaningful resources and the best and brightest , and the monies of the state, to entrepreneurs that are trying to do the transmission fixes this country needs and the build out of that infrastructure. You know, old hard things: deployment of concrete and steel.

And sometimes they will fail, and their businesses will struggle, and the economics of it won't look as attractive as the software app . For that we've really got to get behind that ethic again. Which, as I say, is a more zeitgeisty sort of thing. But I want to see us back builders of real things and acknowledge that sometimes that means not doing well or apparently well in the way that stupid social media stories just grow , and make you believe that the world can just move without much hardship and much struggle. We've got to get back into it and roll up our sleeves. Does that make sense?

Rohan: Absolutely. So to dive further into the folks that need to build now. I want to get into some workforce implications of all of the things we've been talking about. I know both you and the New Energy Nexus have been very optimistic about the jobs potential of clean energy, and I'd love for you to tell us a little more about that. But simultaneously, policy makers face dual mandates or reducing carbon emissions on the one hand, but also helping rehabilitate workers in traditional industries. Per a World Bank report, over the last half century, large scale changes to coal industries across Europe, and also in the US and China, have resulted in as many as 4 million coal workers losing their jobs. So what are the workforce implications that policy needs to be aware of at this moment? And how can these dual mandates be addressed?

Danny: So this is the meat of the politics, right? People being displaced from what we knew and what we've done, in order to move to what we are learning and know we need to do. And that gets hard. And for those 50 million folks that were displaced as coal crashed over the last years and decades, I don't think that should be put on the renewables industry and the people that replaced that. I think that sits squarely at the door of the coal barons and the people that made their motza running that industry, recklessly I believe. And the politicians and people that supported them without thinking about the fact that that was going to go away. That the economy is dynamic. Creative destruction does occur. Horses and buggies do get replaced by better technologies called cars and trucks and buses. And we should work with communities and ensure that they're buffered from the shocks of that and retrain and re-skilled. But that sits with the incumbent more than the innovator, in my view of it.

But to say, absolutely we should take care of folk. That does not mean corporate welfare. That means taking care of communities and workers. It doesn't mean taking care of the C-suite and saying, oh you should continue to do what you do, despite the fact coal's inefficient, stupid, and polluting and killing the planet. That was the mistake. We sort of subsidized the top end of the town, and not the people in the mines and the pits and supported them to get into what was next.

But what is next is exciting, it's the thing I do want people to go away with. Just at a very high level, to answer your question about jobs in renewables and why we are bullish about it. It's between 3-7x as much human labor required to produce the electricity with renewables than with fossil fuels. The reason I say between three and seven times, it sort of depends on which model of the renewable revolution you're moving to. If it's the very central station, a few big wind turbines offshore and some huge solar farms, say in California, we could do it that way. Like a hundred percent clean energy, which is the law by 2045, we could deliver with just that sort of central station architecture, very large infrastructure. That's going to employ less people than a distributed version of that, with lots of smaller wind, say onshore, lots of solar on rooftops and community scale installations, and batteries and such in between.

So that's why the three to seven, but it's still more than three times more labor per unit of electricity than the very centralized, very capital intense fossil fuel sector. The design of that business was capital: machines turbines, concrete, build big buildings with those huge stacks that pollute the skies that we see sometimes when we drive around the outskirts of towns. Those things employ dozens, maybe 50 people. If they're a nuke, they employ more people in security than they do in power generation, per se. So the number of jobs in the renewable future is one of the big upsides of this thing.

And just to be clear, Rohan, this is electricity which is still cheaper. So the labor cost per unit of that electron that you need at the end of the wire, is a higher percentage of the levelized cost of electricity, which is really exciting! Like people just don't get this. We pay for more humans than we do for machines, which just means the benefits of that payment go into the community, through their ongoing expenditure and all those dynamics that you know well as an economist to model. Rather than it goes offshore to some seller of a turbine that's only possible in France, Korea, and the United States. And that alone should be reason to do this. But there are plenty of jobs in this. And now we are seeing in the world more renewable workers per annum mattered than fossil fuels employed in some markets, it's quite remarkable in fact. So we have that advantage with this future. We can employ more people.

But your question's really getting to how we take care of the folk that were in the regions. And again, industry strategy and policy in the early 20th century and late 19th century meant that there were regions that were emphasized by industrial policies. The Appalachian region, the Midwest and the auto supply chain and so forth. How do we get them engaged in this next century, is the question you're kind of asking. And that's the craft of politics , and training. And it may also result realistically in relocation and dislocations. That does come unfortunately as part of this wheel of creative destruction in the society that the economy goes through.

But I think that at a macro scale, most of those folk are going to ultimately, if they get involved in the training programs and we make the right offers and we work with the unions and the trades halls to do apprenticeships, and we get the community colleges to offer the vocational curricular in these new industries, they're going to benefit from this by better jobs , better pay and all the conditions and things that they want. Which are all possible in a world where we are getting lower cost electricity.

You know, that's the thing. We're not just paying for fuel to be burnt and aspirated into the atmosphere. We're paying for smart technology that produces the thing we need in the society, the service of electricity at a cost that allows us to pay people fairly and affords us investments in things like training and retraining and re-skilling.

But I'm being very general here. I think rubber hits road in these communities. And each one's going to be different, and how you retrain people that have worked in coal to work in solar in Appalachia. There are companies, startups like Solar Holler and Green Skills Networks, and others that are doing this very thing. We are in heavily involved in Navajo, which is a co-dependent community for 50 years, in retraining folk there to be in the solar industry. It's possible. It's just grist, it's hard work.

Rohan: Yeah. I do want to get back to Navajo as well, for various other equity and power structure reasons. But before I do that, I think the second aspect of what you said about recreating workers, or creating the workforce that clean energy industries actually require, is probably going to be the big challenge that workforce development and community colleges face moving forward. Especially with things like the Inflation Reduction Act, which has very embedded domestic content requirements.

But here's my question. So the New Energy Nexus has been studying the mining processing and production of lithium, for instance in Imperial County, California. How do we think about addressing the human capital components of this entire value chain? I mean, let's think regionally about Imperial County. How do you engage community colleges in the process? How do you engage workforce development boards? What is that? What does that entire process look like?

Danny: It's a lot of organizing and convening and sharing information and data. Just to give your listeners a little background, the Imperial County, which is the county on the Arizona-Mexico border of California. If you think about the bottom, southeastern edge of California and nearby Riverside County, Coachella, towns like Palm Springs, you might have heard of just north of Imperial. But Imperial is the poorest county in California, very high unemployment. Lots of public health issues, was really wrought by Covid. And it sits across this thing called the Salton Sea, which is this huge environmental disaster zone. Underneath it is the San Andrea's fault and hot water bubbling up out of the magma, which we are tapping in the Californian electricity market for geothermal power. That power comes to the surface, we take steam out of it, and about eight percent of the electricity in the network. The steam also, when it condenses, has metals in it, including lithium. And so we've been pursuing the opportunity that a bunch of startups raised our attention to, to produce green lithium, no carbon footprint, as a byproduct of this geothermal renewable power sector. And then to build a value chain downstream of that, of adding value to the lithium powders that would be produced to make batteries, basically to fuel our cars and electrify everything.

Okay so that's the setup to your question, about what does the engagement look like. It is going to the workforce development board of the state and the county. It is going to the community colleges of the region, the College of the Desert , and various others who we've sat with and talked to about this coming economic prospect, this boom time we think which could come if we lay the ground for it this decade. And sitting with them and saying, this is the stuff we'd need. And then trying to find out whether they offer any relevant courses or do they have any of the kinds of technicians and academics and others that could provision that. Working with labor, as I mentioned. The trades halls locally need to be engaged in this to think through how to prepare the workforce and then scoping the broader markets that could sort of feed into that regionally. And you know, one fun twist in that story is that 20 miles south of the geothermal province, where this lithium industry would come up, is the border with Mexico and Mexicali, this large city where a lot of maquilas were set up under NAFTA - these factories for auto and other supply chains into America.

And so it actually has a number of great universities producing really quality engineered graduates. And so Mexicali we found when we were scoping the kind of ground for where could the potential thousands of folk in these battery factories and related industry be coming from. And one answer might be if we in America could get over our immigration issues.

So I mean, what does it look like? It looks like a long conversation with different parties and trying to meet in the middle. It looks like politics and praxis, it's again, the work. And back to an earlier question you asked me about why and how do we need to think about these regional approaches? We need to think about them long term. We need to think about the multifaceted, multidisciplinary way. It is integrating all of these interests and trying to meet them in the middle, while trying to keep moving the ball forward. And in this case, in Imperial County, I see a potential and beyond it's a regional thing. Imperial's a relatively small place with a small population, you could uplift that whole corner of California. And for folk that don't know, this is four hours from Hollywood, but it's a world away. It's broken, it's got a lot of social issues. They could have a lot better chance at solving for their own issues if they had an economic engine that was producing something of value that the society knew it needed. Low carbon lithium to electrify everything is exactly what America needs, in fact, for this energy transition to do the speed and scale we have to do to beat the climate crisis. And they could be front and center of that and they could capture value.

And some really good news. The budget of California this year, 2022, had in it basically a tax on lithium production which the nascent industry screamed bloody murder when it was mooted by the legislature. But they stood firm and basically imposed what California has never had on the oil industry. It's what's called a severance tax. So for every barrel of oil comes out of the ground, and remember, until the 1950s, probably California was one of the largest oil producers in the world, right? And still to this day, is a big oil producer. But unlike Alaska, which takes a tax and rents and royalties out of oil, which is why every Alaskan gets paid a check in the socialist state of Alaska, contrary to public opinion, California has never done that with the multi hundred billion dollar industry of oil that grew up there. So with lithium at its very start, which is going to be the oil of the 21st century, according to some, California imposed this tax. It's a progressive tax. So early on it's only going to be, I think at $400 a ton. Currently lithium's sold at $70,000 a ton. So it's hardly an imposition. I think it gets to a thousand dollars a ton at a steady state. And that money is earmarked for Imperial and nearby. Which I think is awesome ultimately, because it means the communities buy in, and opportunity to grow and do right by the community is built in from the start. Unlike the oil boys that just plundered the place ultimately.

Rohan: Mm-hmm. Yeah, it just reminds me of something you had said the last time we talked, about things needing to be more public-private-community partnerships as opposed to the standard PPP. And I think this is taking us in that direction, keeping the needs of the community front and center.

Before we conclude, I have a couple of questions on power structures and equity, again, issues I know you personally as well as New Energy Nexus care about. You stated in the past that "California has been a leader in energy and climate in many ways, and yet the benefits of the energy transition are not accruing to everyone." Help me unpack the inequities embedded in the energy transition process. And how have you and New Energy Nexus been chipping away at these?

Danny: Well, you got to start with where we have been for a century or more with fossil fuels. And it's really been prosperity on the back of some communities where the extraction took place. Often on indigenous land where the refining takes place; often in black and brown communities in this country, with lower protections because of their disadvantage and political power. So those fence-line folk are suffering first and worst from the fossil fuel local impacts and also climate impacts. The way that has worked out, where they are is disproportionately impacted by the coming weather and extremes. And so we have to redress the historic injustice as well as try to address a more equitable outcome in this go round.

This opportunity space coming with the energy transition. And in the early years, this first couple decades of the 21st century, which is going to be dominated by this new climate economy, you could argue that we've done better than the fossil fuel market, I would argue. But we are still tending towards preferring people of wealth and privilege, I guess. And that's things like, who were the early adopters of solar rooftop solutions, which then save money on their operating cost of their houses? And I'm guilty of this. I helped build the retail solar industry. It was a necessary first mover market for us in some ways, but if we designed the policies right, we might have done differently and delivered more to low income housing or multi-tenant dwellings or other things. And likewise, some of the entrepreneurs to create business models and innovations that can serve those markets. And so New Energy Nexus strives very hard to do that. To find the multi-tenant dwelling proposition that can deal with the split incentives of landlords and tenants, and help them go solar, and all benefit from lower cost electricity running off the rooftop. We've just got to be creative and think about justice and equity outcomes first amongst our initiatives.

EV adoption is another thing. Dealing with the range anxiety of private vehicle owners is maybe not as important as electrifying the bus fleets, which the communities of California that have the lowest socioeconomic outcomes depend on. Things like that. School buses for kids that get bused to school could be electrified as a matter of public policy and private enterprise. Both are possible. So that's what we mean when we say we want to do that. And California is very intentional about this, and really is uplifting and rewarding those entrepreneurs.

And it really made it a part of our work. We've supported a lot of women-led businesses, and not yet a majority of minority owned businesses. But we are really striving in our outreach and solicitations and things to surface those diverse entrepreneurs and to support them rather than just the privileged kids out of Stanford and Cal, as I often say.

That's important, but also where we work is important. So in the case of Imperial and southern inland counties of California, we are really focused on partnering with tribal governments down there. There are a band of Cahuilla Indians that are called the Torres Martinez, who own a lot of the land - both under the Salton Sea that was buried by this accident of history and also land around it, which will be critical to this opportunity for an eco-industrial precinct around this lithium. And we want to build them in and support them to own some of that opportunity space, and work with them to redress that. Because we can.

And the opportunity right now knowing that we're going to transition to clean energy, like that's baked. Shell will tell you that; the IAEA has said that; like no one debates that by the end of the 21st century, we're going to be running on wind and solar. I think it needs to be done by the middle of 21st century. That's the trick. So how fast is the only question. And the other questions below that, that we should ask ourselves are, how do we do this in a better way? How do we buy more people in? How do we deliver the outcomes, the wealth and job creation, and all these real values that matter most over decades and generations, to the people that deserve them, rather than just the money center banks back in New York and London and wherever? Which is what the capital concentration and formation process of the fossil fuel industry delivered over the course of the 19th and 20th centuries with those industries.

Rohan: I said earlier that I wanted to come back to Navajo Power. A report, and you just talked about the location of energy reserves as well, a report by the MSCI finds that the majority of US reserves of energy transition materials- cobalt, copper, lithium nickel - are within 35 miles of Native American reservations. Now, you've written about Navajo Power, a largely native owned company, which has rewritten the rules in a context where fossil fuel ventures have typically exploited the territories of native peoples. Tell us a little bit about Navajo Nation and how have they been able to reclaim their power? And what are lessons that the US can derive more generally from this experience?

Danny: Yeah, thank you for asking, what I think is one of the most uplifting stories in America. And little known. This is the largest native nation, I believe, by population in the United States. We're talking Northern Arizona, straddling the New Mexico border. Huge reservation, I think on par with West Virginia as a state, if it were a state unto itself. And it's actually a sovereign nation. It's more than a state, with its capital and wind rock and incredible history of resistance to the western expansion of the United States of America across their territory.

And then in the second half of the 20th century, was sort of turned into a bit of a resource colony for particularly the energy industry. I mean, sometimes Navajo was known as the battery of the southwest because it had uranium, which was exploited for the nuclear industry with terrible consequences. The uranium mining there was very poorly managed with, still to this day, all sorts of problems. Cancer clusters and the like in the community.

And then coal. On many quarters of the reservation, you had coal deposits and then they ended up doing power plants. There are at least four or five large power plants, including the Navajo generating station, which was the largest I think at the time anywhere. That was built pretty much to provision Los Angeles with electricity. So power lines run across the west to LA, but also Phoenix, Vegas. Big cities in the southwest got served by electricity generated from coal on Navajo reservation. As coal's economics have crashed, and 2014 was sort of the turning point in coal's fate in this country. And despite Trump's war on the war on coal, couldn't turn that around. Most of these plants have either closed or are on their way out, they're being decommissioned because their economics just can't compete with the low cost electricity that we can make elsewhere with renewables. The Navajo Power story, and another company called Native Renewables that we've backed, is that they saw this change coming; a microcosm, if you will, of this global conversation we've been having, that we are going to transition off the dirty into the clean energy systems. How can Navajo too benefit from that?

And you know, another twisted irony of the, the fossil fuel legacies there is that on the reservation there are 15,000 families at least without electricity. So this is in the middle of America, right? This is a couple of hours from Scottsdale and all these gorgeous parts of Arizona. And you've got people living without electricity and running water for that matter. In their houses. Americans don't realize there's a sign. Population tens of thousands of people without electricity in the middle of America. So one of the first things that young Navajo coming up in this period of turmoil, as the coal industry was crashing and unemployment was growing on the reservation, was what do we do about replacing that industry and doing it better? Particularly for us and our folk and providing electricity to these communities.

So let's just take the Navajo Power story. It's a company we helped spin up and supported from its very inception. Their big insight, the "eureka" moment we talked about earlier for entrepreneurs, was - we've got this asset called transmission lines that go to Phoenix, Vegas and Los Angeles from our territory. That's incredible. Like, that's a sunk cost that someone else paid for in the 1950s, 60s, 70s, whenever. And it's very valuable. Billions and billions of dollars of infrastructure. The hardest thing for renewable developers, wind and Solar Farm project developers is getting interconnected to transmission that can sell their product and markets. These guys have easy access to that because they're sitting under these transmission lines that were already up for the coal industry to sell. Its electricity to market. So effectively, Navajo Power has become a development company building out major projects. And I could go into the weeds if you want, on the details of those projects, but believe me, they're simply better for the community in all ways. They don't desecrate the earth; they don't pollute it. They bring revenues back at a scale that the coal industry never did. And they provide more employment than the coal industry ever could once they're built. I mean, they're in the phases of development now; they're yet to build one of these at scale although they've got probably a gigawatt coming quickly.

And that's another great part of this. Whereas a gigawatt or two of the Navajo Generating Station probably took two decades to build, from inception to done, in the 1960s I think it was that they started. This stuff will go up in years and employ people ongoing from there. And return royalties and such community benefit streams into the community for decades.

So really incredible opportunity. And Navajo Power has built a spin out of its own company called Navajo Power Home, which is actually partnered with an energy access company from Mexico. Love this story. You know, you have to go to Mexico to service Americans with electricity these days to build solar home systems and the like. I think they've done certainly in hundreds of homes so far, of those 15,000 families that don't actually have electricity there. And they're using proceeds from their development income to pre-fund the buildout of those solar home systems. And this is a Navajo owned and led company; this is not some distant capitalists who's coming in and building a coal plant on their land at their expense.

This is them building it for them, in a way which I think is the great promise of renewable electricity. You know, we talked about jobs, but ultimately it goes deeper than that even. It's wealth in the true sense of the word. It's like democratically owned and controlled wealth creation machines. You know, everyone needs electricity, give fossil fuels credit for helping bring that on in the 20th century. They just did it the dumb way. They did it by burning stuff. We've got to get over that and make electricity the smart way that we know how to. And the benefit of the distributed architecture of that, the nature of those technology sets is that they that power can literally and figuratively sit in the hands of the people. And that's a beautiful thing.

Rohan: Danny, this is such an incredible inspiring example. So very much in line with the podcast you host, I'm going to draw this to conclusion on that optimistic note. Thank you so much for your time. Really appreciate it.

Danny: Thank you.