Green Giants – Episode 40

Michael Rucker (01:44)

Well, I think I’ll take a long step back, but hopefully not spend too much of our time on it, but I think it’s very relevant to a lot of kids in school today.

When I was in college, my industry really didn’t exist. So there was no way I could easily prepare for it at the time. Renewable energy was really just getting started at kind of a commercial scale at that point. So it was really climate change that brought me into the industry. I focused on energy and environment, ended up going to graduate school in energy and environment and international economics, quickly got caught up into the climate change issue as a real driving force and really my mission in many ways. And that took me to the International Energy Agency.

In that context, while at the IEA, although I appreciate just the world’s best statistics and research, probably in energy and now renewables, still for me personally, was, you know, writing reports that were being developed, attending international meetings, particularly the early climate change meetings. Although, you know, we need to do this in order to craft international solutions. For me personally, I didn’t feel like I was achieving much. So that drove me into the private sector. The driver there was really just to mobilize private capital and focus it into the energy transition. We didn’t call it energy transition at that point, and that is indeed what we need to be successful worldwide at the scale that we need to invest to achieve this.

So I’m really happy to be a part of that and I’ve been happy to see the industry grow alongside my companies and my interests and you know we’re at a point that those technologies are so commercial and so competitive that we have the ability to really affect immense change and also leverage private capital and just create win-win for investors and consumers alike.

Wes Ashworth (03:27)

Yeah, I love that. I was wondering if you were going to share something very similar to that in terms of what drove you back to entrepreneurship and getting a little bit more hands on. Having worked on some of those climate initiatives at a global policy level with the IEA and Edison Electric Institute, as we shared, how did those experiences shape your perspective on the pace of change in renewable energy adoption and maybe just perspective on what you use today as a private company and kind of taking that stance on it.

Michael Rucker (03:56)

I think in a way it probably prepared me pretty well to be a developer at the end of the day, because it’s a long, painstaking process and oftentimes you just can’t seem to see the end of it. And certainly in those first five years of the Conference of the Parties after the Kyoto Protocol when I was involved directly in those negotiations, it felt like we were getting nowhere.

It really took until the Paris Accords, I think around 2017 or so, when you really started to see the momentum build for international agreements. But even then, as we’ve seen recently here in the United States pulling out of the Accords and the whole process for the most part, it comes in fits and starts. But you just have to, like development, you’re on a very, very long cycle process. It’s difficult to see the end of the process. You have to have confidence that when you reach the end of the process that you’ll be successful in business and likewise in the negotiating process, you have to understand that there are going to be ups, are going to be downs, you just need to keep the momentum going and as it grows hopefully we come to a point where realization of the need for this just becomes more acute and I hope it passes into the mainstream. That’s really the next step we need to do particularly in the United States.

Wes Ashworth (05:04)

Yeah, without a doubt. Thinking about those early days of Scout, I guess maybe even before that, I always love to hear the origin story of like, what really led to the founding of Scout Clean Energy 2016. You know, what challenges or opportunities shaped its early days? What problem were you trying to solve when you first started?

Michael Rucker (05:22)

Well, you know, at the time I had co-founded Harvest Energy Services. So we were working on construction management and operations maintenance for wind and doing a fair bit of business in Latin America as well as the U.S. That company was growing well, you know, around the year 2013 with a lapse in the production tax credit and a lot of uncertainty in terms of the long-term incentives for renewables in the United States.

It was a pretty slow period for development, so when we started the O&M company, I really thought I’d be fixing turbines for the rest of my career, but I’m a developer at heart. When we saw the 2016 first time long-term extension of the production tax credit in my whole career, dating back into the 1990s, it looked like that this was really the opportunity for development to come back into style, so to speak. We’d need investments in those kinds of pipelines to really, you know, take advantage of that opportunity. And Scout itself was born on a chairlift.

I ski about every weekend there with a close friend named Greg Poulos, who’s actually the president and owner of Arc Vera Renewables. He recently sold it to Bureau Veritas, but we would ride on the chairlifts and scheme about what we were going to do in order to take advantage of this tax extension. We decided to go back and get the wind data from projects that I had worked on years before at a former employer. And these were projects that were basically reduced now just to data. There was no assets, no agreements. There’s nothing associated with them, having wind data is like being able to see the future when it comes to a site, because usually it takes years to establish what the actual wind profile and wind energy resource is at a site.

So when you go into that and you know it for certain, and also I had experience working at a number of these sites, knew the landowners, a lot of the details that you would find out during that early, very high risk development phase. I already kind of knew those. So we were able to really accelerate a portfolio of projects and that was the initial scout portfolio. We called it Project Phoenix. So projects would come out of the ashes. Yeah. And I think we built maybe half a dozen of those now.

Wes Ashworth (07:23)

That’s super cool. And I know traditionally, so you’re very wind focused, but Scout recently commissioned his first solar project. Can you talk about what it took to transition from being primarily a wind developer to incorporating solar and energy storage even into your portfolio?

Michael Rucker (07:47)

Yeah, we’re renewable technology agnostic, certainly. I mean, I think in order to really provide what customers want, and I’m thinking about the loads, know, everything from the utilities to the hyperscaler data centers, they really need renewable energy on a 24-hour basis if possible. At least zero carbon emission energy on a 24-hour basis. And you just can’t provide that with any one of those technologies alone, right? Wind is very good at covering the off-peak periods.

It’s also the most efficient if you have a good site, even today. Solar, faster to deploy, it produces in those traditionally on peak hours. Now granted that’s changing in California and Texas, but we can talk about that.

But that fills in another part of the curve and then you need batteries to be the transition between the two. So we actively pursue all three of those technologies now in order to create basically the product that folks are looking for. The transition for us between wind and solar, it was relatively easy, I would say, from a development perspective. Really the same skill sets that we have here to develop wind are easily transferable when it comes to interconnection, real estate, land acquisition, permitting, where they start to diverge really comes down to supply chain, engineering, site design, and construction process flowing down from that, but those were things that we were able to fill in by getting good experts who already had been working in the solar industry and the battery industry, brought them in to complement the team. And we found the transition to be relatively easy for us.

But like most projects in the cues right now, it’s going to be a slow unfolding of our greenfield opportunities. We’re traditionally a greenfield developer. We actually like to start projects from concept. I think that way we can have the best siting, the best locations on the grid, meet specific customer demands, also just keep the quality high. However, we just can’t do that and meet the demands for growth for our company, let alone the whole industry, so we’re very active, particularly in solar, in acquiring projects from other developers.

They’re in the mid stages and then completing the development, the financing, the construction, and then ultimately operating them in order to make sure that we can deploy more solar. We have a lot of wind that we’ve been working on literally for more than a decade that slowly will be coming online. It takes longer to develop a wind farm. It’s challenging. It’s only become more challenging recently here in the United States, but the timeline that we need to develop those are going to extend beyond all the current volatility we have right now, so it’s business as usual.

But solar is an important complement of our future, and it’s also important for the future of the power grid and renewable energy buyers. So we’re fully invested in solar development.

Wes Ashworth (10:00)

I love it. You’re seeing that trend happen more and more. I think that the technology agnostic approach and understanding that it does require all those different solutions to make it work. There’s not one clear cut like, this will solve all your problems. So yeah, that’s super interesting. For those that don’t know, what’s the comparison between if you had to develop like a wind versus solar project in terms of time? I know they’re all a little bit unique and different, but what’s maybe a general comparison people could think about?

Michael Rucker (10:49)

Well, I used to say a wind energy development takes three to five years. Now, I would say five to seven years, although the reality of the ones we’re building right now have been eight years. We have three in reconstruction currently. So it’s just the timeline spread out further and further. Solar likewise has seen similar kinds of elongation of the development timeline, mostly driven by interconnection these days. But still, I think you maybe reasonably could see a solar farm in let’s say four to seven years. It’s going to come in, and it’s hard to say, but two to three years on average, faster than a wind farm. It’s things that you need to do on the front end in terms of proving the resource, doing much more extensive environmental studies, you know, aviation as well as bird studies, for example.

It just takes a long time to complete those, digest them, really plan the project around those results. Solar goes much faster. And also wind is more real estate intensive. You know, our average, let’s say our average wind farm would be about 20,000 acres. Now granted, we’re only using about 3% of that area for infrastructure.

So it’s a massive distributed resource really when it comes down to it. Our average solar farm is about 2,000 acres, so much smaller, but much more intensely developed within that footprint. It’s complete conversion to energy production for the most part. And we could talk about it, but we’ve been engaged in some of the environmental initiatives to have more sustainable siting practices around our first solar farm. We have lambscaping, so we’re using a sheep actually to help us with vegetation control and so on. Lambscaping, yeah, we’re lambscaping.

Wes Ashworth (12:22)

Great term. I like terms where it’s just very, very easy to understand what it is. You’re like, I got that. That’s awesome.

Thinking about some of your other projects, the Gonzaga project in California is fascinating. 148 megawatt wind farm, replacing a much smaller one from 1987 and some of those old wind projects that you were talking about. What were the challenges and successes in repowering the site within a state park as well?

Michael Rucker (12:54)

You know, unfortunately with this podcast only being 45 minutes or so, I can’t go into all the challenges that we met. It’s about as difficult a project development as you could contemplate, I would say. But I can give you a little bit of the profile of the project, expand a little bit on what you said. Cause I think it represents really a nexus of so many different, you know, participants, whether they be private, public, environmental issues, challenges, interconnection challenges, also addressing a market that desperately needs wind energy in its production profile. Also, it being probably one of the first that I know of, we’d have to do some research, actual wind storage hybrid.

Yeah, solar storage hybrids have been common. And one reason was that, before the IRA in order to receive the ITC for the storage, it needed to be paired with solar post ITC. I’m sorry, I should say IRA. Maybe I missed that. So the IRA allowed for standalone ITC, which has given us the ability to have a wind farm paired effectively and efficiently with storage. So it’s unique in that regard. It’s probably the largest wind farm that’s currently permanent in California.

It is, also, although it’s a repower, like you mentioned, there was an existing project there dating from 1987. That was also probably one of the oldest continually operating wind farms in the United States. At the time that we decommissioned it, we purchased it 2017 and operated it since that timeframe, always with the intention of repowering it. But eventually we completely demolished it and we’re not really using any of the infrastructure for the new projects. So effectively for us it’s a greenfield development. But within the same footprint that we had 17 megawatts of generation.

We’re going to be generating 148 megawatts. So that just gives you, that gives you an idea of how far the industry has come since 1987 in terms of its efficiency and scale. It’s remarkable to me. The turbines that we’re going to be installing at that site are 5.9 megawatts. And those would be the largest. As far as I know, we’ll do some detailed research, but I’m sure it’s the case. Those should be the largest turbines ever installed in California, which is also, of course, where the first installations took place in the United States and some of the first in the world actually, if not the world, so it’s kind of groundbreaking in all those aspects. And it is in a state park, which is also, our hosts are the state parks of the state of California who’ve been a fantastic sponsor for the project.

They benefit from royalty revenues from that project that will be flowing back into the park funds directly, which is unique. They told us at the outset, there were only two parks in California that actually generate revenue significantly. And that would be San Simeon, Hearst Castle, maybe you’ve there, Payford Mission, and then this wind farm. So they really wanted to see it.

And they were actually our lead agency in terms of our California Energy Quality Act applications in the environmental impact statement. And we also had some participation too from the federal government in terms of right of ways for that project ultimately for the transition line. So, complex project, but you know I’m really happy that it’s delivering what California needs. Clean power San Francisco, the city of San Francisco’s community aggregator is the buyer both for the wind energy and the storage and it’s really their investment in terms of being the off taker for their renewable energy needs that have facilitated and allowed this project to happen. So we’re really excited about it.

Wes Ashworth (16:32)

Yeah, very cool. Another one I talk about is trailblazing in Arkansas. So Scout’s involved in one of Arkansas’s first wind projects. Talk to us about how significant is this milestone? What does it mean for Scout and the state?

Michael Rucker (16:45)

Well, I’ll start with what it means for me personally. Because I worked on a team, actually I was leader of a team back in 2007 that we decided that we’d try to push the frontiers of renewable energy, that was all wind at the time, and into the Southeast and Arkansas would just be within what we would define as the Southeast. We said we will find the windiest location to build a wind farm. We came across that very one and then I ended up coming back. It was abandoned ultimately. Really the technologies at the time weren’t efficient enough to deliver a cost of energy that utilities would be interested in buying.

Also, we haven’t seen integration of all the regional utilities into ISOs. MISO South came long after that time. Right then it was just interconnection into one utility and that gives you one market for energy sales. if you can’t hit a price that makes it competitive with their fossil fuel options at the time, they weren’t really driven to purchase renewables at the time. It’s just really hard to get there. But now we’re providing a product that is cost effective and it’s wind in an area that’s being massively developed for solar. So again, we’re providing that resource mix that makes sense for the ISO and also for the buyers. So I was really happy that we could come 20 years later and finally get that project going.

Yeah, and again, it’s a 6.1 megawatt turbine. So it’ll be the largest turbine that we’ve ever managed to install with our partners GE. It’s going to be manufactured in the United States and it’ll be one of the early orders from a new production line in Schenectady, New York that was put together specifically to supply demand that was driven by the Inflation Reduction Act. So we’re really happy to be part of that. We are on our way.

It’s a challenging construction job, but we face those challenges day to day. So now our job is to get it deployed in the schedule that we planned and within the budget that we planned so we can fulfill everyone’s expectations.

Wes Ashworth (18:32)

Right, absolutely. As more states without traditional wind development begin to explore projects like this, what unique factors, policy, economics, grid constraints, I guess are most important for success in these emerging markets?

Michael Rucker (18:56)

Well, you know, when it comes down to it, it’s all about where you can effectively interconnect to the grid. Those locations where we have pockets of available capacity on the grid are just fewer and fewer these days. Without more investment, it’s just going to be difficult to continue the pace of interconnections that we’re seeing. The massive queues that we have, and in several ISOs, the interconnection queues exceed the total installed capacity on the ISOs. I mean, California and the Midwest are one example, but it’s probably close to all of them these days, perhaps, and almost all of that is renewables. It’s just very obvious that the math isn’t going to work. You can’t have a significant success rate. It just doesn’t work.

So the attrition rates for those interconnections are becoming lower and lower in the sense that you have lower probability of success and higher cost to succeed. So those are the challenges that we see everywhere, not only in emerging market. You know, a lot of the emergent, when it comes to wind in particular, and I think this is where solar is very important too, because solar is easier to site. It receives less opposition.

Also, it’s not so location specific, and we all need to find good locations on the grid, but for a wind farm, you also need to find one that has a competitive wind resource. Also one where you can manage the logistics to actually deliver the huge equipment. You need good road access, lower construction costs. I mean, you have relatively the similar concerns when it comes to solar, but then, know, solar resources relatively consistent over large areas in the United States. So, you know, the question of whether you’re a quarter mile off the ridge isn’t going to be an issue so much for solar. So you have a lot more flexibility in that regard to try to match solar to those ideal grid locations or places where communities want it.

You tend to have more opposition generically to wind, definitely. And that’s especially the case, like you mentioned, in places where you have emerging markets for these kinds of technologies where they haven’t seen them. For wind, in most places we work, in the Midwest and Texas, that whole central wind corridor of the United States, the farmers, the landowners, the local county governments, the hospital districts, they all have come to realize this is a great thing for them, the economy.

For landowners in particular, for farmers, it helps them keep family farms together. It creates royalty revenue that’s like passing generational wealth on board. So they get to continue their lifestyles and continue what they normally do and receive great benefits from it. In some of these emerging markets, and we ran into this and we’ll still run into this in Arkansas as an example, there’s never been a wind development. People don’t really understand what the impacts long-term will be on the community, what it’s like to live within sight of turbines.

So things that we take for granted in a lot of places where we work, we can’t take for granted in a place like that. So it takes a lot more education, a lot more cooperation, and just make sure that people’s concerns are met and we’re being as honest, truthful as we can in terms of presenting facts to people. And at the end of the day, in most cases, you know, the facts result in a successfully cited project where you have the combination of economic growth, community support, all the things that people like about wind energy, and then beyond the community itself, the benefits of renewables regionally and globally even in terms of, you know, zero emissions power.

Wes Ashworth (22:06)

Yeah, I love it. Yeah, the benefits are there, right? A lot of times it’s just around education and, you know, working with those individuals and just proving the case a little bit too. I think the more of these projects that happen, where you can reference this project in Arkansas and go, hey, here’s the win, here’s what happened, here’s the win for everybody. And in some of those emerging markets, we’ll learn from that and hopefully be more open to it as well.

We touched on this a little bit, so Scout’s hybrid wind and solar project in Indiana represents a new chapter in renewables. What lessons have you learned about combining those technologies in one location? We touched on this earlier, but to get in that a little bit more.

Michael Rucker (22:52)

Actually, we’ll tie this also back to your last question a little bit, because that’s a great example too. So when we first came to Jay County, Indiana, I think we went through maybe, it ranks up there, one of the top two or three hardest siting experiences that I’ve ever gone through in our development. It was very difficult. We actually turned around a no vote into a yes vote, which rarely happens, and it took a lot of work, and I think we’ve fulfilled our promises with the operating wind farm. And in fact, when we came about to permit the solar portion of the project, we basically just cruised through the process, I think we had established a level of trust.

We’ve shown that we would actually deliver on what we promised. People lived with the technology, saw the turbines in that case, realized it wasn’t as big of a deal as they might’ve thought. Definitely saw the benefits to their local county and schools. So they appreciated that. So later when we came back to site the solar, it was a relatively easy job. And I love to see that. You know, our experience in Jay County, who’ve been great hosts for all of these projects, has just been fantastic in that regard. In terms of integrating wind and solar at that location, some of the benefits are is that we’re actually sharing an interconnect and also what we call a gen-tie, a generation inner tie.

It’s really a transmission line that’s really just part of the project as opposed to one that transmission line deliver power between two locations. We’re just going from this particular project into the grid. So we developed that and paid for it effectively with the wind farm. Now that we add solar to it, it gives us an opportunity to use more of that capacity. So we use it more efficiently. Also, since the generation is largely offset, just like it would be on the larger grid, also is at this location. So the line utilization is improved significantly. So that really helps with the economics, ultimately for both projects, but certainly for the solar project, turned off its interconnection.

You know, the real estate issues are very similar. We just provide higher value to those landowners than, you know, what they would see just continuing to grow crops on that particular piece of land. So that’s relatively easy for us. You know, there’s some concerns in terms of ice throws, so when turbines are iced and they start up, they do throw pieces of ice away. We have a very regulated startup procedure in that case.

It’s relatively low risk, but also something you just have to plan for, make sure there are clearances from the turbines to the solar farm. But that would apply to any structure near a wind farm as well, not just solar panels. We also see some operational benefits because we already have site staff there. Now we’ll be expanding that somewhat to manage the solar farm.

We are a little more, our company is more involved in the operations of solar directly than we are with wind. Oftentimes we rely on the manufacturers to provide long-term service agreements for wind farms, which are more complex to operate. We also here at our headquarters have 24-hour monitoring for all of our projects. And among day ahead scheduling of output in the day ahead and managing the real-time markets, also, you know, managing frequency requirements from the ISOs. Just monitoring production and the status of substations. You know, they’re also tracking storms in great detail and this applies both for wind and solar so We’re watching every storm that moves through our project sites. We’re tracking lightning where it lands on the site whether it hits a turbine in particular, we can actually track that down to a few feet and we do that in real time.

We also use that to operate more safely to make sure there’s no personnel exposed when those storms come through, that they’re evacuated well in advance of a squall or thunderstorm that might actually come into range. The same applies for solar in terms of high wind events and when you actually stole the solar panels to put them in an attitude that less exposes them to high wind or to hail in particular.

So for us, you know, monies that we’ve already invested to put together that safety and operations and performance management program really carries over immediately to solar. And in fact, if you were just to build a solar farm alone out there, it wouldn’t probably be cost effective to have all these support features actually. So, you know, the more assets we get, the more diversity of assets we get, the more we get, we get more return on our investment and hopefully we’re better operators along the way.

Wes Ashworth (27:09)

Yeah, that’s cool. It makes all the sense in the world, but it’s cool to kind of hear how it all comes together. One of the other things, you touched on it briefly there, but you’ve emphasized the economics of renewable energy over purely environmental arguments. And I think we’re seeing that trend across the board, which is phenomenal. I think that’s what needs to happen, obviously, to get to where we need to go. How do you make the case for renewables, economic benefits in communities that Scout serves?

Michael Rucker (27:37)

Yeah, usually with any proposed development, we can do a pro forma basically, because obviously we have a good handle on the economics from a prospective phase, I would say, because it changes over time. We monitor that throughout the whole development. So we’re looking at what we continue to learn about the resource, the cost to interconnect, the cost to construct a project. Also, we’re watching the markets for energy, any kind of incentives that might be available, all of that to have an idea of what the cash flows for the project would be, obviously what our revenues and return on investment would be for our investors, but also we get an idea of what the royalties will be for our landowners and also the tax benefits that you would see for communities.

So we can actually bring prospectors to a community and say, look, we’re anticipating that over this project there might be 16 to 17 million dollars of revenue to the county over 20 years. That’s just, you know, relatively smallish wind or solar farm actually would generate that. Those are impressive numbers, when you look at it. A lot of these counties, you know, look at that and say, my goodness, you know, you’ll become one of our largest taxpayers after this project. We’re proud, frankly, we’re proud to be one of the largest taxpayers in these.

You know, they host the projects, they should reap the benefits from them as well. So when you lay out those numbers and then you start tying it back to what programs those support, whether it’s schools, fire departments, hospital districts, the county itself, local employment, sometimes associated with these agreements that we have with counties. Sometimes we look for tax abatements, which are pretty common for capital investments of that size. Even if we get a reduction in tax, we’re going to be able to show that we’re going to provide those tax revenues plus employment over time that makes sense for them. So those are probably in today with most people in most communities, that’s what matters to them. So that’s what we try to use to basically sell our development concepts. And that’s even before we get to anything around climate, carbon reductions.

In terms of the energy buyers though, that’s been a remarkable change during the course of my career. It’s hard for me to put my finger on it, but maybe I would say, and you know, the mid teens, maybe 2013 to 2015 roughly in that time, maybe 2016 itself, in that, there was a time in that period where the efficiency of wind and solar and the cost of energy that was being delivered really flipped and became the least expensive option for energy on the grid. I’m probably mis-shooting on that, you know, roughly in that time frame. It’s hard to say. We didn’t just wake up in the morning and this is the day when we’re main source on the grid. It depends on location and market, of course, but that’s pretty much the same everywhere now. And when you come to that point, it became, immediately just triggered immense growth, particularly for solar, which was starting from fewer installations at that time.

And also the corporate buyers in particular who had sustainability goals, who wanted to see and support zero carbon targets in 2030 through 2050, it becomes a much easier decision to do that and make those investments when it flows positively to your bottom line. So that was a game changer on the demand side, definitely.

Wes Ashworth (30:40)

I guess one thing, you know, people that want to do it just because it’s the right thing to do and it’s a little more expensive, you know, some people will kind of like take that and go with it. A lot of people won’t, you know, and so having the economics behind it where it makes sense, like I said, positively affects your bottom line. and by the way, you’re doing good for the world and environment and sustainability and everything else. But it needs to work regardless of people’s personal view. And that’s the exciting part with the industry now is kind of going, right, the economics do make sense and it’s only up from here. So it’s pretty cool to watch.

Michael Rucker (31:30)

And that’s why I have long-term faith in these technologies, these markets, our continued growth. And like I mentioned before, in terms of whether it’s climate change negotiations or development, they’re going to be high highs, low lows. It’s going to be a rough road in between, but in the end, we’re going to get there.

Wes Ashworth (31:34)

Yeah, without a doubt. I want to hit a few more topics here as we get deeper into this, but you talked about the demand and that’s something we’ve talked about several times on the podcast, the demand for renewable energy from corporations is on the rise. The energy demand is on the rise to begin with, but then a lot of corporations looking for this demand in renewable energy. How has Scout worked to meet this demand? What other trends are you seeing out there?

Michael Rucker (32:13)

Well, the trend itself is remarkable and worth kind of recognizing. When I started in this industry, broadly in power, let’s say, not just renewables, but in the mid 1990s, demand was flat in the United States for electricity. And in fact, it’s been more or less flat for two to three decades since that time. That’s been kind of the industry that I’ve lived in where we just don’t see a lot of growth. Obviously, huge capital investments just to keep fleets running to provide power on that scale for America and the world.

We just didn’t see a lot of growth. That’s flipped. Now we’re actually seeing projected growth like we’ve never even conceived of, largely driven by data centers would be the largest single component, but broadly also just by general electrification in the economy. So in that environment, in a high growth environment, it’s really changed the formula in terms of what we’re building for. It used to be the renewable energy basically was a fuel switching exercise in the early years driven by renewable portfolio standards for example there were incentives to start to convert the fleet from Coal in particular which had the greatest reductions in that period of time fossil fuels generally Into renewables and that was more policy driven in that period of time. Now, we’re seeing those investments because it makes economic sense, the most effective energy source on the grid, like a most efficient energy source on the grid. like I mentioned. but also it’s the fastest to deploy which is something to remember as well.

Once we have an interconnection we can turn around a late stage wind or solar project in no time whatsoever when you compare it to fossil fuel alternatives, right? So also the cues are filled with renewable energy projects that are in development currently. So they already have a lot of time and investment put into them in terms of making them feasible. If you want to meet that demand growth, but let’s say in the near to medium term, let’s say at least in the next decade, renewable energy is going to be your best bet.

You know, I’m still, when I started out in the industry, of course we were majority fossil fuel. And when I worked at GE, I actually worked on natural gas and even steam turbine generation plants, right? Because that’s what you need to provide the essential service that people need for electricity. You know, so I respect those technologies in terms of their ability to deliver the power that we need and meet this demand. But I also know that even if you have an all of the above approach to this, I’d include nuclear on that too, but even longer timeline, you really should be pursuing every avenue you can to meet the demand. We need that.

So it’s somewhat myopic just to think that you could strip away the renewable part of the generation growth mix, just turn around and focus immediately back onto fossil fuels. Not only do the markets not want that, but it’s not the best solution, and certainly not the fastest solution.

Wes Ashworth (35:02)

Yeah, correct. For a lot of reasons that you just hit on there, which is incredible. You know, these data centers, it’s big tech giants that are backing them and they have their own ESG goals and things like that they’re trying to hit, but also they’re businesses that care about profit and kind of like, it’s the affordable option, cheapest way option to put new power on the grid and fastest, as you said, to turn that around. I mean, it makes all the sense in the world.

Michael Rucker (35:29)

I was talking to a supplier just last week actually, just asking about how the gas turbine business was going, which is a booming business right now too, trying to meet demand certainly. But if you try to buy a heavy duty frame unit, a heavy duty gas turbine, now you put it in order today, you’re not going to see it until 2030 or beyond. So, and you know, that kind of development too, like I like to think even if we had our sites and markets in mind right now, it’d take us two years to figure out what to order. So really talking almost mid next century, next decade before, you know, we can successfully deploy those. So really all of the above, we should be installing everything we can to meet this demand.

Ultimately, the electrification of the economy is the most effective way to facilitate future transition and change, right? Once we are electrified, we can change the generation mix, make it lower carbon, and it’s a lot different than trying to address, let’s say, transportation, which has hundreds of millions of dollars, hundreds of millions of point source emitters in terms of incurring. Combustion engines for example, that’s infrastructure that has a certain capital stock turnover over time. You just don’t replace them over and no one’s gonna give up their car tomorrow, you know, it still runs perfectly and you look at buildings and stuff and you’re looking at 40, 50, 60, 100 year infrastructure.

So once we electrify that infrastructure that gives us the wherewithal if we want that we can put down the pedal and accelerate decarbonization in the future. So that’s an important step for all of us. So I’m really happy to see electrification of the economy. I want to make sure that our industry worldwide meets that demand. And I think if you let it be, we’re going to find the most efficient way to do that. And you’re going to see that it’s going to be mostly renewable energy. I mean, last year there were $2 trillion in global renewable energy investments in one year outstripping all other sources combined.

And, you know, I’ve heard some arguments recently that you need fossil fuels to, you know, increase the standard of living for people around the world, particularly in developing countries. And, you know, I wouldn’t argue against that. It has historically for us too in the industrialized economies. But, you know, if you look at what people are investing in worldwide in these developing economies, it’s renewables because the economics make sense.

Wes Ashworth (37:48)

And it’s cool to kind of see it almost leapfrog, you know, from like from really third world state and really having a lack of power, you know, to, jumping right to a renewable resource is super cool to see. Cause as you said, the economics makes sense, you know, and it’s the best solution a lot of times. So it’s really cool to see that.

Michael Rucker (38:11)

We’re definitely seeing that worldwide. China is a good example in itself. That’s the largest renewable investor in the world in terms of debt.

Wes Ashworth (38:14)

Thinking a little bit about the future of Scout Clean Energy. So with a 19 gigawatt pipeline backing from Brookfield Renewable, what’s next for Scout? How do you see the company evolving in the next five years?

Michael Rucker (38:32)

Well, it’s great to have Brookfield on board as our sponsor. They acquired us in December of 2022 from Quinnbrook Infrastructure Partners, who I have to thank too for the investments they made over about six years to build out the company from the concept on the chairlift to transitioning it to the size it is today. So I do appreciate all of our investors and want to be successful. Brookfield took us to a different level. You know, the Brookfield Global Transition Fund was the largest transition fund raised in the world, roughly $15 billion. I think they’re going to break their own record with the BGTF2, which is in process right now in terms of being closed. So I definitely appreciate the investors for what they’ve given us so far. Now it’s really up to us to kind of execute and deliver on that business plan.

Now that we have the capital available, we can draw on the expertise of a global organization, global operator like Brookfield, we kind of have everything we need in order to be successful. Now granted, we see some, there are always issues with markets and issues with interconnection. We’ve gone through a few of them, but you know, I think we’re really well positioned to be successful ultimately to do that. One thing that is very important, this is one of the most capital intensive industries on the planet. The electric grid overall, maybe is the biggest capital investment we’ve made worldwide, so it requires a lot of capital. And that’s why I brought on investors like Quinnbrook and now Brookfield very early on in the history of this company, knowing that to be an operator, you really need to be able to efficiently deploy capital at a huge scale.

Brookfield with their governance, operation capabilities. They’re in a position to provide that capital for good projects. So it’s up for us to deliver them. Yeah, so we have a five-year business plan and we’re going to keep pushing it, moving it forward, tweaking it here and there to meet changes in the markets. But that’s what we’re focused on right now. I have blinders on beyond anything else.

Wes Ashworth (40:09)

Love it. Yeah, no doubt you’ll get there. So thinking about rapid growth that Scout has had, I’m always interested to learn about this. So growing from really a, you know, yourself one person operation to 200 to 200 plus employees, what have been the biggest lessons in leading through that, that rapid expansion environment?

Michael Rucker (40:39)

Well, you know, the human resources issues, maybe for anyone coming into a CEO role, probably it turned out that it’s really an HR role when it comes down to it. Yeah, particularly in a growing organization, right? So particularly, you know, with the excitement in the earlier days around when the IRA was just passed, there was a lot of investment in development companies, a lot of new private capital entering the U.S. market, which is all good. I’m happy to see that. And the IRA was a huge motivator for that. But it became very hard to attract and retain good employees because really when it gets down to it, particularly development, it’s a people business. There’s a lot of capital flowing around, but not a whole lot of people relative to the amount of capital.

And, you know, these are pretty specifically skilled positions too. You can’t really, like I mentioned, when I went to school, industry didn’t exist. How many places where you can go and just come out of school and be completely trained and ready to go in this industry? given how competitive it was to get candidates in the company from outside. And they’re just a limited pool of experienced people that everyone was trying to hire. We spent a lot of time promising, really motivated, excited employees who we’ve been training internally. And not only is that a necessary strategy to kind of meet the demands of today, it’s also more fun than anything you might have.

Yeah, because that kind of energy in any company is just a great thing to have, particularly when you’re growing.

Wes Ashworth (42:07)

Especially just eyes wide open, you know, like they have all of the creative juices going and, and, full of those ideas. I find like some of the best ideas come from those individuals. Maybe they don’t know how to like, make it actually happen, but it’s like, that’s what we’re here for. Bring me the idea. Let’s figure it out and bring you in to be a part of it. So yeah, I love that. Without a doubt. Yeah. Yeah.

Michael Rucker (42:23)

Yeah, there are challenges around it too, just of training, mentorship, leadership. I mean, like most of us, I got my driver’s license when I was 16 and almost all the accidents I went through probably happened within two or three years. So, you know, it takes a little bit of time to really understand what you’re doing, but you know, once people have gotten a few project opportunities behind them, they became, you know, they become good producers. Productive parts of the company, then you’re in a golden place where you have folks who have been trained within the company and represent its culture, which is really important for us. I’m personally very mission-driven in terms of what we do here. We try to reflect that in the company itself. I think that’s what ultimately motivates us when times get tough, which they do in development.

Wes Ashworth (43:04)

Yeah, I say it a lot, like your why has to be very strong, you know, especially in this industry where it’s never gonna really go according to plan always gonna be bumps along the way. But if you really are, you know, sort of passion driven and purpose driven, you stick it out and figure it out, you know, create a solution, find a solution. Couple real quick, just just last parting question. So if you had to share one key thing you’re optimistic about for the future of renewable energy, what would it be?

Michael Rucker (43:43)

I’m optimistic that we are going to continue to see growth globally, certainly in the United States as well, that is going to defy any efforts to kind of tamp it down and quell it. It’s just the essentials are there. Renewable energy is the most cost-effective energy source on the grid.

It creates significant value for local stakeholders, landowners, participants. Definitely. It’s providing obviously what we need to meet unprecedented demand for energy. And it’s also doing that in the fastest, most efficient way to be deployed. So I put maybe the last one, although most important for me, maybe less important for a lot of people in the market. We’re doing it at the same time, delivering energy with zero carbon emission.

Remember, it’s not only about carbon, it’s also about local and regional pollution effects too, because of fossil fuel developments. It probably has more of a local impact than the carbon emissions, at least in the near term for people, certainly. So, for all those reasons, we’re going to see continued growth in these industries. And I’m really excited about that. And that keeps me optimistic, keeps me coming to work every day.

Wes Ashworth (44:34)

And you mentioned being mission driven. So final question. What’s the legacy you hope to leave behind in the renewable energy industry? How do you want Scout to be remembered in the years to come?

Michael Rucker (45:01)

Well, I’d like to see Scout being remembered as a company that was mission driven, or is, depends on how far in the future, I guess we look back, nothing lasts forever. And that we made a significant positive change for people in the communities we work in and for our customers. And ultimately we’re going to deliver investment returns along the way too, obviously.

Like I mentioned, a big part of this for me has been mobilizing private capital and that’s what we do.

Wes Ashworth (45:29)

Love it. And with that, we’ll wrap up the conversation with Michael Rucker, founder and CEO of Scout Clean Energy. Michael, thanks so much for sharing your insights on the future of wind, solar energy storage, and giving us a look inside Scout’s incredible journey. To our listeners, as always, thanks for tuning into Green Giants, Titans of Renewable Energy. If you enjoyed this episode, be sure to subscribe, share it with your network, and stay tuned for more conversations with the leaders driving the clean energy revolution. And with that, we’ll see you next time.