Green Giants – Episode 55

Jeff Sullivan (01:15)

I think, like most of us, I found my way into it by taking things apart as a child, right? And then I think, like a lot of us, you take things apart and they never go back together again. And eventually, you can take things apart and put them back together again. And as you get better, sometimes you can take things apart and they work when you put them back together again. And I think that was kind of what got me into it was a deep interest in how things work and why things work.

Wes Ashworth (01:43)

I love that. And then, so how did that initial interest and getting into engineering, how did you eventually get to the renewable energy sector, solar, and electrification? What’s that story?

Jeff Sullivan (01:53)

I think it’s a series of happy accidents. I started off as a material scientist, which I guess I still am. But as part of that, I had to implement a test stand for developing and testing these materials. And this is outside of school and industry. And I showed an aptitude for doing it. And so, then before you know it, you’re in capital equipment. And then, just through a series of happy accidents, I ended up with an opportunity to join the nascent solar energy group at Applied Materials back in 2005.

And it was a very hot time for solar in the United States and the world. And so, it was an obviously really lucky thing to be able to grab onto and to be able to do.

Wes Ashworth (02:41)

Yeah, so let me ask you this, 20 years in it, you’ve obviously enjoyed it, maybe, or you’ve at least stuck with it. What’s kept you in it that long?

Jeff Sullivan (02:44)

Yeah, they call solar coaster, right? Up and down, and it can be fun. It can be terrifying. I think what I really find attractive about it is that it is such mission-driven work. And that’s with all of the green energy, clean energy. It’s way back when, 20 years ago, what I used to say is that I can explain what I’m doing to a five-year-old. And they get why what I’m doing is good and important. And yeah, that’s nice, but that’s also with your colleagues and with your company and with yourself. And that’s a really nice thing to motivate you to get up and to go face the challenges every morning.

Wes Ashworth (03:18)

Absolutely, I love that answer. Thinking about your career a little more, so you’ve navigated everything from GE and Applied Materials to high-growth companies like Covalent and Tygo, Tigo, I alluded to in the intro there. What’s been the common thread, the mission or mindset that’s guided you through those different environments?

Jeff Sullivan (03:46)

Yeah, that’s kind of like asking the question from a totally different axis, right? Or at least for me, the answers from a totally different axis. I think for me, I’ve always been working on the edge, on something new. I don’t think I’ve really ever been involved. I must have, but I don’t think I’ve really ever been involved in sustaining something that was already successful and keeping it going, right? Still R&D, still important, still good. But I think I’ve always been on the trying of bringing something new out that was on the edge of technology or product development. So it was always intrapreneurship, entrepreneurship, new, and then growth. And I think being in like rapid growth environments, and I think those are the things that have kind of tied those experiences together.

Wes Ashworth (04:23)

Sure, absolutely. And zooming out a little bit for a moment, just thinking about the industry as a whole, where do you think we actually are in the renewable energy transition or expansion, whatever you want to call it? And what’s one narrative or assumption that you think the industry gets wrong right now?

Jeff Sullivan (04:46)

When you’re on an exponential growth curve, it always looks like you’re going onto the hockey stick, right? It always looks like the past was smooth and the future is a ramp-up. And it doesn’t matter where you are on that curve. It always looks like that. If you were to ask me, because you did, I think we’re closer to the beginning than the end. If you look and we’re going to come back to this theme a little bit already in the United States and in the world, nearly all new electrical capacity is renewable, whether it’s solar or wind.

And that’s true globally. I just saw a report on somebody posted on LinkedIn in the last week or so, where by 2030, like Iceland is going to be the only place in the world where PV is not the cheapest new source of electricity. But at the same time, we’re just at something like 10 % or something of capacity in the U.S. that is renewable.

So, we’re at the point where almost all new capacity is renewable, but still only a minority of existing capacity is renewable. And that still has to build out, and the technology is still going to grow and improve dramatically while that happens over a generation or two. But the curve’s undeniable, that’s where it’s going. Your second question, what’s often misunderstood?

I think people just don’t get how big it is. And as people, like we don’t get it, like we’re not good at really big numbers, like a thousand, I think we all get 10,000. You can kind of imagine, right? Cause it’s like a stadium of people, a million people, a million of something is really hard. 10 million, a hundred million, a billion. And I think people don’t get that renewable energy is at that scale that it’s so big, it’s almost impossible to comprehend. There are so many people working on it globally, not just in the United States. It has so much momentum. It’s going to happen. It’s coming. The momentum is there. It is inevitable. Policy can only slow it down.

Wes Ashworth (06:56)

I love that sentiment, just hearing that overarching, kind of like your thoughts on the industry, where we are in the hockey stick curve, what’s coming, and I agree, I think it is hard for us to get our heads around that, the bigger and bigger it gets.

Jeff Sullivan (07:12)

I honestly don’t think there’s room for doomerism. I just don’t. It’s coming.

Wes Ashworth (07:15)

Right, I agree. Yeah, and you can’t, I don’t think you can stop it. It’s just kind of like, you see what’s in play, it’s just hard to think that it can be stopped. I love that just kind of blanket sort of vision and where it’s headed.

So, you’ve had a front row seat to how innovation moves. And at one place where we’ve seen rapid evolution is transportation, even if you look at the last five, 10 years. But with EVs, it’s not just about tech, it’s about how we frame the problem. And I love, we had some earlier conversations, kind of digging into that. So, you’ve reframed range anxiety as refill anxiety. Can you just unpack that a bit, and why do you think the shift in framing matters for the EV conversation?

Jeff Sullivan (07:58)

Yeah, and you know, I think I asked you a question when we had this conversation that I’m going to ask you again. I’m going to turn this interview around. How often do you leave home with less than 30 miles in the tank of your ICE vehicle of your car?

Wes Ashworth (08:04)

Not too often, but it does happen for sure.

Jeff Sullivan (08:14)

Exactly. And how often when that happen, of course, because it takes time to get down to 30 miles, right? But when that happens, how much are you sweating bullets that you’ve only got 30 miles?

Wes Ashworth (08:26)

I’m not sweating at all. The only thing I’m sweating is like, now I gotta stop. But no anxiety.

Jeff Sullivan (08:31)

Okay, but you see, you just reframed it for me, right? Because you didn’t have range anxiety. You’re not sweating it at all. What’s different about leaving home with 30 miles of gas in the tank versus 30 miles of electrons in the tank? And you answered the question because now you have to stop. It’s about refilling. It’s not about the size of the tank.

It’s about the ubiquity and speed of filling up. And the fact is, when you’re with gas, they’re everywhere. And it takes you, worst case scenario, 10 minutes, because you have to wait or something. And so really, what’s the difference between 250 miles of range on a full Chevy Bolt, or, depending on how you drive, 360 miles of range in a RAV4?

On a daily basis, it’s nothing, right? It’s all about the ubiquity and speed of filling up. And that’s why I think it’s refill anxiety and not range anxiety. It’s an infrastructure problem, not a consumer technology problem.

Wes Ashworth (09:20)

Yeah, I love that. You’re so right. I’d never thought about it, you said it in our original call. You’re right. You’re absolutely 100 % right.

Jeff Sullivan (09:41)

I think I got into a, I can’t believe it, I got into a LinkedIn comments fight with somebody as a friend. I had kind of started to express this opinion. He came back and said, Yeah, well, let me see what you think driving on Interstate 10. And it’s like, but aren’t you just proving my point that it’s about your ability to refill? It’s not about how far you can go between refills. It’s that you can refill and that you can trust that it’s going to be working and fast when you, and available when you get there.

And we’ll come back to this a couple of times, but it’s about getting the question right. It’s about getting the problem right because that leads you to the answer. If the answer is 259 miles is not enough miles, then we get that Ionic 6 that I’m lusting after with 360.

Wes Ashworth (10:30)

Yeah, exactly. Because in reality, how often do you drive that far? It’s rare. You’re mostly driving, you’re 10 miles to work, or that sort of thing.

Jeff Sullivan (10:41)

If you’re in the Bay Area, maybe 30, but right? I think, though, if you frame it as you need to be able to refill when you need to, how you need to, as quickly as you need to, that’s a different set of solutions. And so, I think it’s really critically important how you frame the question and the problem.

Wes Ashworth (11:01)

Yeah, we will talk more about that as we go. The other thing I want to touch on here briefly is that grid anxiety is real, too, especially for skeptics. What would you say to those who worry about widespread EV adoption? It’s going to strain or break the grid. We hear this, right? So, talk to us about that a little bit too.

Jeff Sullivan (11:20)

This is a really similar theme to the hockey stick that we talked about with grid going electric. Okay, so in the US, about a quarter of EV sales these days, or about a quarter of light vehicle sales these days, are EVs. Depending on where you are in the United States, coming up on about 10 % of the fleet it’s single digits in the US, about 10 % in California. The grid hasn’t broken yet.

In California, we don’t have the most reliable grid to start with. But let’s capture the magnitude of the problem. Let’s go back to reframing the problem again. So, the average lifespan of a light vehicle in the United States, and I just saw another article on this just this past week, is about 12 years right now. Okay, so you buy a car, and it sits on the road for about 12 years. Now let’s pretend, magically, we wave a magic wand, and 100 % of light vehicle sales from now on are EVs.

That means in about 12 years, all of the existing fleet will be gone, which means in about six years, we’ll be at about half, about 50%, right? And we’re not starting at zero, so it’ll be a little bit more than 50%, but that means it’s six years to get to 50%. But we can’t wave that magic wand, it’s going to actually take another decade or more to get to that point. And so really, we’re talking 10 to 20 years before half the US fleet is electric.

Now we’re talking about what, two-thirds of a generation? It’s a generational problem. It’s not like, my God, next week the power is going to go out. It’s really, we’ve got 10 years, 20 years to solve this problem, which is plenty of time to solve it. We already see the problem coming, right? So, the problems that people are watching don’t happen, right? And if there’s money to be made on this problem, then for sure, capitalism will solve it.

And so we’re talking about how you roll out EV charging infrastructure? How do you support the distribution grid? So then distributed energy resources and distributed gen and all of these things are going to be solutions to this problem, not just better transformers and better wires, which will also happen.

And over 10 or 20 years, it’s sowing fear and doubt. It’s a problem that will get solved because people are focused on it. And again, let’s benchmark the problem. Look at Norway. I actually looked it up to prep for this. Like 98 % of their sales are EVs. And right now, they’re at 30 % of their fleet. They’ve been in like almost 100 % of their sales have been EVs for years now.

But only 30 % of their fleet is EVs because, again, it takes a decade to get all of the old vehicles off the road. Other than in the winter, Norway is not living in darkness, right? Their grid is holding up. And we can talk about the difficulties of updating the grid and regulation in the United States, but I promise you, regulation is also not easy in Europe, right?

There might be a better deregulated utility market or things like that, but environmental regulations and things like that, they also have them, and they’re able to do this. We can do it too.

Wes Ashworth (14:26)

Absolutely, and it’s kind of like, you frame up the problem, smart people are working on this problem as well, and you mentioned certain things they’re fast charging energy storage, and I love just capitalism will help solve the problem as well as I love all of that. We’ve talked a little bit about, obviously, how EV’s are driving those infrastructure needs, which I just mentioned there, the real story, I think, too, lives under the hood.

So, storage, chemistry, and solar. I want to explore where the real innovation is happening. What might be overhyped as well, too? Part of those solutions, you hear storage, battery is talked about more than probably it ever has been in the history of the universe. But battery tech’s evolving really fast. It also feels a bit noisy, as I just said, you’re hearing a lot of it. So, from LFP to sodium ion to solid state, what innovations do you think are overhyped and which ones are quietly game-changing?

Jeff Sullivan (15:19)

Oof, Wes, can I phone a friend on that one? Wow, there’s so much going on, and there is so much progress and so much innovation. I really want to be careful not to speak ill of the multitude of researchers and engineers, scientists, the founders, and the investors who are honestly working to change the world.

And we need more. We need more of it. We need more of them. We need to encourage them more. And so, I kind of don’t want to say these guys are overhyped because maybe they’re not. And they’re working really hard, and maybe it will work out, and we should encourage it. I’ll say this much, and I think everybody that’s involved in these games knows this, and it doesn’t really matter what industry you’re in; materials problems are hard.

Launching new materials is very hard, and technologies that are fundamentally based on the properties and performance of materials are tough. And it’s not just batteries, like we can talk about other things, we’re talking about PV, that’s another one that’s in the same game. Even semiconductors are a similar sort of thing.

And these aren’t a year or two kinds of problems to overcome. They’re a decade or two problems to overcome. And if we talk about the successes or the up-and-coming companies, they’ve been at it for a decade. QuantumScape is not a new company, right? So, you can look at Silicon carbide, right? Silicon carbide has been evolving forever. Gallium nitride, forever.

Gallium arsenide looks like it’s always going to be the semiconducting material of the future. Maybe it’s going to get its play with LiDAR technologies. Perovskite may be just starting to come to market on a pilot scale. The jury’s out, right? Will it happen? Who knows? And so, I think you can kind of look at batteries sort of the same way. And actually, I think PV is a useful analogy. Let’s shift that to look at PV.

Crystalline silicon solar is the incumbent technology, but the crystalline silicon solar cells that they make today look nothing like the cells that they made 10 years ago, 20 years ago, or even 30 years ago, right? It’s just unrecognizable the kind of progress that industry has made, right? And so, the problem that a new technology has to make, and now I’ll pick on the solid-state guys, the solid-state battery guys, is that lithium ions do not hold still. So, when you did your business plan, when you set your development targets, you had foresight, you’re smart, you’re hardworking, you know the business, and you pick a target that’s way ahead of where you think you’re going to need to be. But there’s this huge industry that’s cranking away tens of thousands of people. And they’re making hundreds of megawatt hours and gigawatt hours of cells. And they’re just driving down that experience curve and that cost curve. And right, the levelized cost of energy is going down, down, down, down, down, more cycle lifetime, more everything, lower cost, higher capacity.

And the target that you need to beat both in performance and cost is moving and getting harder. And so, for new technologies to come out, it’s exceedingly challenging because the incumbent isn’t holding still. A lot of that incumbent technology and manufacturing improvement it’s not sexy work. It’s hard work.

But it really makes a difference. Those experience curves are real. And it really makes a difference. So, to take a step back, obviously, there are multiple lithium-ion battery technologies, whether it’s LFP, LMFP, NMC, or NMCA. It’s an alphabet soup. Is anybody really going to win? and those are cathode technologies. Then you go to Anode Technologies. It seems clear that higher silicon content in anodes is happening, going to happen, and going to continue to happen. Where’s the end? Hard to say.

Might solid state be there? Maybe. might sodium ion be there? Maybe. Might each of these technologies grow to enough of a scale that they find market niches where they’re best? Like we all thought, solid state was going to be there, and it was going to be energy density and charging speed. But now the lithium ions are doing densities that were the dreamed of densities and at charging speeds that exceed what solid state can do. BYD and CATL have both announced five- and six-minute charging times up to 80%. Maybe it’s going to be like micro battery applications, micro power applications, internet of things, and maybe solid state’s going to own that.

Landed stationary applications versus mobile applications or super heavy-duty applications, maybe different technologies will take these different places, and maybe there’s room for all of them.

Wes Ashworth (20:34)

Yeah. I was kind of hoping you would go that way. think, and I love the thought of it, and you see this in R&D and across the board, different industries, different things that products have evolved and developed. It is all important. It’s all important that it is all developed from a material standpoint. You understand far more than I ever will. But it is one of those where there’s not one clear winner, you know, this one’s overhyped.

It’s more of it’s all important that it develops. And to your point, you don’t know like what specific use cases or applications are gonna really make sense, or you find that niche. So yeah, I love that. That’s a great answer, and glad you went there. You did touch on solar a little bit, and I’ll dig in just a tiny bit more there. So, you know, more mature tech obviously than we look at in some of the other things, but it is still evolving.

How much runway is left for real innovation? Like when you look at it from your background, like what’s happening in materials, form factor, and manufacturing, that has your attention?

Jeff Sullivan (21:34)

Form factor, wow, I’m so glad to see these enormous heavy modules now. The backstory is with applied materials when we had a thin film silicon product, which is how I first got into solar. To be cost competitive with the other CapEx manufacturers in that space for thin film silicon, we had to make enormous pieces of glass, 2.2 by 2.6 meters.

It was easy to show that the balance of plant costs went down because you had fewer attachment points and things like that on this enormous piece of glass. But at that time, everybody was doing 60-centimeter by 120-centimeter modules. That was kind of standard. And we were way outside, way outside that sort of form factor. And it was a huge battle. And now you see that, with the first solar modules and now you’re even seeing crystalline modules for utility scale applications. They’re huge. Just absolutely enormous. So, it’s really nice to see, know, 20 years later, that that’s taking off.

It’s all done, like the levelized cost of electricity, and even the cost per watt is so low today. I mean, it’s an order of magnitude of where we were 20 years ago. To look at it, to track it, to follow it, to talk to it, it’s a miracle. I feel like they’ve squeezed every gram of steel.

I’ve been reading, I’ve heard, the trend is going to be going to steel frames instead of aluminum frames because cost per unit stiffness, and then going with frameless because why have a frame at all? It only costs money. It’s just mind-numbing every little bit of efficiency. on a percent, like on an absolute cent’s basis, maybe now we’re fighting over tenths of a cent and hundreds of a cent where before it was, you’re fighting over dimes and quarters, but on a percent basis, it’s still significant efficiency gains. If you put it on a log scale, as opposed to looking at it on a linear scale, it’s still fighting for significant gains at scale.

The other big thing is efficiency. If you can improve the efficiency, the Watts per square meter, you always win. Everything else gets better. And so, I don’t know what the next thing in R&D is, but you always see the product announcements, they’re always coming out. The panel efficiencies, panel efficiencies today are above what record cell efficiencies were 20 years ago.

And with perovskite two-junction devices, two junction, four terminal devices. As long as the levelized cost of electricity keeps going down and there’s no reason at all to think that it won’t. Where are we? I mean, ultimately, there are thermodynamic limits. I believe in those, but you know what? When you get to a 40 % module, a 45 % module, that’s crazy when you’re talking 400 watts per square meter.

Wes Ashworth (24:28)

Yeah, unbelievable. Especially as you said, it’s kind of like the short amount of time, right? You look at a 20-year timeframe, it’s just staggering, like the development that’s happened and how much better everything’s gotten.

Jeff Sullivan (24:29)

I’ve said it a couple of times, experience curves, right? It’s the improvement in cost or improvement in performance per doubling of installed output. And so, you see this with batteries, you see this with PV, you saw this with transistors. My favorite from a long time ago, the chief technology officer at Applied Materials, a gentleman named Mark Pinto, to name drop.

He had pointed out boiler chickens. Follow an experience curve that the inputs to bring a chicken from egg to something you can cook have followed an experience curve from like the Middle Ages. And so, this drive to just get into making things and practice making things, everything gets better.

Wes Ashworth (25:15)

Absolutely. Cool analogy. Didn’t think chickens were coming into play, but hey, I love it.

Jeff Sullivan (25:28)

20 years later, I’m still carrying the chicken story with me.

Wes Ashworth (25:31)

There you go. It’s stuck. So, tech breakthroughs are only impactful as our ability to scale them. And so, I want to transition a little bit to thinking about supply chains, manufacturing strategy, and policy. The US still pays nearly double, maybe it’s more, for solar compared to other countries. And from your perspective, what’s driving that cost delta, and what levers can we actually pull to fix it?

Jeff Sullivan (25:52)

It’s policy. It’s trade policy. And what levers, I was going to be flippant and say the voting lever, but it’s actually not exactly true.

The PV industry in the United States has, depending on your perspective, benefited or suffered due to tendencies. And that is true of this administration, which actually might not be protectionist, and the last administration. But the end result is policies that have raised prices for Americans. The end.

And at the end of the day, the only way to solve it is with the voting lever, it’s to vote for politicians who will vote for policies that will put the US on equal footing with the rest of the world on a competitive basis. And we paid more during the last administration because there was a desire to protect US companies that may or may not still be in existence. And this administration has different policy goals, but the end result is that we pay more.

Wes Ashworth (27:03)

Yeah, absolutely. And I think through that, so a kind of shift, a little bit more too. So, we’ve seen a growing shift towards tighter, more resilient supply chains and clean tech. What is behind that trend? How does that intersect with innovation?

Jeff Sullivan (27:16)

So, there’s policy, there’s global trade, there’s geopolitics, and there’s trends in global growth. One thing I had mentioned once is that I don’t think there’s a lot of room for doomerism in these topics in today’s world, and I really don’t. One of the greatest miracles that we as humans have pulled off in the last generation is that abject poverty is almost gone in this world. It’s still there, but instead of it being billions of people, it’s measured in millions of people. And going back to those big numbers things.

Being a human being today, on average, the median human being lives a much better life than 30 years ago. And you see that also with supply chains and trade. So, where is the lowest-cost labor in the world today? And where are there decent logistics so that you can extract the product of that labor? Just because it’s cheap to make something doesn’t mean it’s cheap to get it out. And so right now, that’s Southeast Asia.

It’s not China anymore, right? A generation ago, I was part of the wave of young leaders who got to move the supply chains into China. And now, even in second-tier cities, labor rates are similar to near-shore locations and not that much less than some locations in the United States. And that’s honestly, it’s a good thing because it means that those people’s lives are so much better, and now other people’s lives are getting better, but it also means that there is a shift towards looking for highly labor-intensive manufacturing that you need to do it somewhere else.

As the lot of humanity improves, we need to find other places. And there’s a temptation to say that that’s exploitive, but over time, those labor rates will go up too. And over time, those people with those jobs will buy things that will spur domestic demand in those places. And those economies are also growing, which is all a good thing. And some geopolitical concerns have also encouraged supply chains to move. Now I think we’re in a new period of geopolitical and domestic instability as it relates to supply chains. And the instability is very much a very different problem.

Wes Ashworth (29:31)

Without a doubt. And you touched on this; I’ll just dig into it a little bit further. So full domestic manufacturing it’s a popular policy goal. From your perspective, is that realistic? And you shared some of that just there. Or are there smarter global strategies the way forward when it comes to balancing costs, resilience, and speed? I guess we’ll start with the first. Is it realistic?

Jeff Sullivan (29:49)

I think, Wes, it’s really easy for us to pigeonhole ourselves into answering the question and thinking strategically and answering that question. But I don’t want to lose the thought. I’d like to come back to thinking and taking a step back about whether that is even the problem we want to solve. So, is it possible? No.

There are 330 million Americans. We’re a small fraction of the world, right? There are 8 billion humans. The supply chains that are needed to build switches or PlayStations or Xboxes or iPhones, the number of iPhones that get made a year.

If you say, we want to only supply Americans. Well, that’s inefficient. What about everybody else in the world who needs an iPhone? Why wouldn’t you co-locate all that manufacturing? So, then you say, well, could you do it in the United States? It’s like, no, we can’t make the screens. We can’t make the cases. We can’t make the screws. We can’t make the PCBs. I have a contact who just did an outsourced manufacturing travel blog through Vietnam.

And went to a plastic injection molding shop. This is just one shop. 10,000 tons of plastic a month. Think about that, right? Like, if a semi-truck is 40 tons, doing some quick math, 250 trucks a month filled with plastic, going in and going out, eight a day, right? It’s like, wow. And that’s just one shop in one country. And so, the size of these supply chains it’s massive.

And so no, we don’t have the infrastructure, we don’t have the resources, we don’t have the people, we don’t have the skills, and it takes years, if not decades, to recreate it. And our iPhones will be quite old by the time we get to replace them. So, we’ll go back to that average age of the fleet category. So, I want to step back.

Should that even be the goal? Why do we want that to be the goal? What is sacred and special about manufacturing as opposed to design, as opposed to architecture, as opposed to art, as opposed to policy or masonry? There’s some fascination about manufacturing, and people don’t want those jobs. And so, if I were to think back, like for solar, what do we try to do? We try to minimize the volatilized cost of electricity, right? The all-in cost per kilowatt hour or megawatt hour. What should be the goal with our human resources?

I think to maximize our economic value. I think there’s also quality of life and other considerations you want to put on it, but as a country, do we want to lower the economic value of our human capital stock, or do we want to elevate it? I think we want to elevate it. That enriches us. It gives us the opportunity to take vacations and go to the symphony and ski and whatever.

I don’t know whatever your thing is. Play guitar. And wealth allows us to do that. And so, I think we want our people doing the things that add the most value. And I’d question if that is tightening a screw toaster oven. And perhaps designing the toaster oven or building the marketing strategy for the toaster oven is maybe the better good for policy goal for the United States.

In other countries and other places in their economic development cycles, it makes sense to have other goals, right? I’d throw the question back and say, yeah, great, but should that even be our goal? Is that the problem we’re actually trying to solve?

Wes Ashworth (33:32)

Good food for thought there for sure. I love it. Just completely breaking it down, making people think differently. It’s great. And these are the things that the questions we need to ask, and how we need to think about it, and getting back to that. Is it the right question, being that the problem we need to solve?

Jeff Sullivan (33:34)

How many coal miners want their children to be coal miners? How many farmers want their children to be farmers?

Wes Ashworth (33:50)

Yeah, you want better, right? Always.

Jeff Sullivan (33:55)

Which is not to denigrate those jobs, right? They’re needed and they’re important jobs, but they’re hard jobs. Which is also why people don’t want the manufacturing jobs, because you sit there and work.

Wes Ashworth (34:07)

I know, that’s funny, and obviously my work in recruiting, people rarely ever go to the labor part of the conversation to go like, where are all these people gonna come from? Because, as you said, if you did all that, there aren’t enough people.

Jeff Sullivan (34:22)

I did a summer job in a meatpacking plant when I was in college. I get it.

Wes Ashworth (34:28)

Talk about tough work. That’s where it is. All right. We’ll shift a little bit as we get closer to time, just some future trends I wanted to touch on. Just kind of playing a long game, looking ahead, looking around what’s around the corner. So, from your perspective, you know, looking in the next five to ten years. What do you think are the most? Unappreciated or maybe exciting trends, if we put positive spins on them, an energy that isn’t getting enough attention today?

Jeff Sullivan (34:52)

Predictions are difficult, especially about the future. I think that’s Yogi Berra, right? There’s going to be more. Okay, now I can do my Kylo Ren, right? It’s more, more. There’s going to be more renewable generation. There’s going to be more storage. There’s going to be a lot more demand for electricity.

Will our current regulated utility model in the United States be sustainable in that environment? Is it going to make sense? Already, transmission and distribution are often split. Distribution and gen are sometimes split. Will they be more split? How is the distribution grid going to accommodate distributed generation?

We see distributed generation not just on the transmission grid, on the distribution grid, and storage solutions on the transmission grid. Today, in some utilities, storage gets limited like it’s a generation driver that could overload the grid, as opposed to being a resource that can stabilize the grid or provide extra capacity and smooth out peak utilization versus average utilization. And utilities are incentivized to look at it that way.

So, will this all change? Boy, five to 10 years doesn’t seem like a lot of time for utilities, but maybe. I think those are the things that we need to see happen to make these happen. But there’s a ton of vested interests that benefit from maintaining the status quo, and how that plays out.

A tightly concentrated vested interests tend to be able to lobby and campaign, and organize better than much less intense, much more spread out, but maybe even greater interests.

Wes Ashworth (36:37)

Absolutely, I won’t dig into that too much because we don’t have time to, but that’s a good meaty topic there. Throughout the conversation you have you’ve touched on a lot of big picture themes, innovation, some infrastructure strategy type of stuff, I do want to close it a little, just a philosophy, a few reflections that that’ll stick with you, but let’s start. So, if the US wants to say competitive and clean tech, what specific moves do you think need to happen in industrial policy to get us there?

Jeff Sullivan (37:01)

So first, carrots, not sticks.

Wes Ashworth (37:04)

And how do you see that play out in real? Like, what’s the carrot, and what’s the stick right now?

Jeff Sullivan (37:05)

The Inflation Reduction Act is a carrot; a tariff is a stick. We need more companies. We need policies to encourage company formation. Whether that’s encouraging debt, loans, venture capital, real estate development, whatever it is. We need policies that encourage more companies. We need more ideas. We need more tries.

We need more entrepreneurs and founders, or non-traditional entrepreneurs and founders, to be in a place where they can try, which means lowering the cost of failure, societally lowering the cost of failure. We need more failures. I’m going to say something very provocative. We need more Solyndras.

When we look at the successes of today, you look at the big five Chinese PV manufacturers, look at CATL or BYD in battery, BYD in automotive, and EVs. They’re the successes. We’re blinded by survivor bias. We don’t see the hundreds, maybe thousands, China’s a big country, of failures that led to these five successes that we talk about, and we tend to worship the leaders of these successes, right? But we don’t recognize that they also hit the lottery multiple times, and everybody was working hard, everybody was good, everybody was talented, but for whatever reason, these people made it through.

And I think we tend to want to punish the failures and put the successes on a pedestal too much. And I think we need to encourage more. And I think that’s how we get there. And the policies that allow us to do that are the ones that are going to help us succeed and compete as a country.

Wes Ashworth (38:43)

So good, such a good thought there. And you’re right. I mean, the successes don’t come without the failures, right? And they’re both necessary. They’re both required. So, I love that. That was probably my favorite portion of this conversation so far. Something you said earlier, we talked about a couple, is that a problem well-defined is a problem half solved. And I love that sentiment. I wanted to put that in here. Any other major issues in clean energy we’re still mis-defining besides the ones we’ve chatted about? And how would you reframe those for what the actual problem is?

Jeff Sullivan (39:23)

Okay, so first let’s give credit to the fortune cookie with that saying in my life, okay? So, a problem well defined as a problem half solved came to me on a fortune cookie. And yeah, it was a Chinese restaurant in Needles on a trip to and from, I think, the Grand Canyon.

Wes Ashworth (39:26)

That’s incredible, yeah.

Jeff Sullivan (39:45)

I think we hit on a lot of big things. I think we do need to encourage competition. I think we need to resist the trend to protect, to limit competition. And I think from that perspective, I think I’m a capitalist. I think this idea of trying to close ourselves off from the world and pick domestic winners is inherently anti-capitalistic. I think we need to trust ourselves to be able to compete. I think we need to work to attract and train people so that we can compete.

I think one of the miracles of our history is that we are who we want to be part of us, who wants to be us. There’s this idea of inside the house and out of the house. Are you part of our house, or are you out of our house? But part of that is having the power to decide where the walls of your house are. And I think we need to fight that temptation to make our house small. And while at the same time, we need to invest in the capital of the people who are within our house. And I think doing that will enable us to compete. And I absolutely believe in that. And I think there’s a tendency to think we’re not good enough and that we have to do these things to protect ourselves.

Wes Ashworth (41:00)

Yeah, that’s good stuff there. I’ll ask you one last question, just in closing, and it’s going to be really open. Any last sort of parting words of wisdom, advice, things you didn’t get to talk about that you wanted to talk about? I’ll give you the floor for a minute and whatever else you want to share with the audience.

Jeff Sullivan (41:17)

I don’t think so. I think this was good, and I think we had a lot of opportunity for deep thoughts, and I appreciate the questions, Wes, and the thoughts that went into them. It was fun trying to kick these things around with you.

Wes Ashworth (41:18)

Yeah, no, this is good. And my hope is and I think this will happen. Any listeners, it’s going to give you some things to chew on and start asking some questions and reframing some things, and thinking about things a different way. And I just, I love that so much. So, with that, we’ll wrap up today’s episode, but Jeff truly really does appreciate your time and your perspective, especially when you break down complex issues and reframe the challenges facing the industry.

Those are exactly the kinds of conversations that do help move the clean energy transition forward with clarity and purpose, and I think help us get closer to our goals. To our listeners, as always, thanks for tuning into Green Giants. If you found this episode valuable, which I’m sure you did, be sure to share it with your network, get it out there. Subscribe for more conversations with the leaders driving the future of energy. And with that, we will catch you next time.