Episode Transcript
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Speaker 1 (00:01):
Welcome to the nationally syndicated Energy Mix Radio show produced
by the Energy Network Media Group. The Energy Mix Radio
Show will give you an inside look at the energy
industry and how it affects you by talking with industry leaders, experts,
and government officials on the Energy Mix Radio Show.
Speaker 2 (00:16):
Hello, and welcome to the nationally syndicated Energy Mix Radio Show.
I'm your guest host Jeff Pollock, Chief Strategy and Sustainability
Officer at the Port of Corpus Christie Authority in Corpus Christi, Texas. Today,
I'm honored to welcome my guest, Alex Hoffer, Assistant vice
president of business Development at Pattern Energy.
Speaker 3 (00:36):
Hey, Jeff gritz Beer.
Speaker 2 (00:38):
Pattern, in its own words, develops, constructs, owns, and operates
high quality wind, solar, transmission, and energy storage projects across
North America. Pattern's global development portfolio includes twenty nine gigawats
of generation accounting including thirty operating facilities, as well as
eleven hundred miles of transmission and operation under development. Over
(01:02):
the last several years, Pattern has also taken a leadership
role in North America in the renewable hydrogen value chain.
Alex has been with Pattern for fifteen years in various
project development, finance, and strategic growth roles. He grew up
in Houston, Texas, and is a graduate of the University
of Texas at Austin, alex Thank you so much for
(01:23):
being here, and again, welcome to the Energy.
Speaker 3 (01:25):
Mix radio show.
Speaker 2 (01:27):
Nice jus, So, let's start at the start. You grew
up in Houston, surrounded by oil and gas professionals, energy dads,
as you described them to me. It's easy to imagine
how that upbringing would have turned you onto a career energy.
But what engendered your interest in renewables in particular?
Speaker 3 (01:46):
Yeah, sure, I mean I was.
Speaker 4 (01:48):
Born and raised in Houston, the energy gapit of the world.
You know, everybody was proud of that growing up. And
it's true many of my friends' dads and some of
their moms worked in energy. It was just like familiar
context and like, you know, the end run thing happened
when I was I think a freshman in high school.
(02:09):
So like for better or worse, energy was just like
synonymous in a way with growing up in Houston. And
I think I'm naturally drawn to like systems thinking. I
think that's something that is an interest in mine and
energy as a subject matter. Just felt familiar with that
background in Houston, and so as somehow coming out of
(02:32):
college and really even going into college, I thought I'd
be good at improving energy systems and building infrastructure and
doing big things that powered the world just seemed cool.
And in college Et and Austin, I took both energy
courses and learned broadly about how we use energy on
Earth as well as some sustainability coursework. And I learned
(02:55):
about like fundamental principles of sustainability versus like depletion or
consumption concepts with really long term kind of thinking. And
like one thread that just kind of came up for
me and I continue to think about, is how like
basically all energy on Earth comes from or came from
(03:16):
the Sun. Like even fossil fuels is effectively dead dinosaurs
and organic matter from millions of years ago that photosynthesized
from the Sun. The dinosaurs aided and the delta composed
in the ground, and it's basically aged solar energy that's
very energy dense in the ground.
Speaker 3 (03:33):
And it's kind.
Speaker 4 (03:35):
Of amazing to me that, you know, while many of
the best technologies we have in our society midic nature,
say like airplanes or the Internet.
Speaker 3 (03:48):
The best way we figured out how to use that
solar energy.
Speaker 4 (03:51):
Is to dig it up these dead dinosaurs and burn
them to make heat, to boil water, to make steam,
to turn a turbin and spin magnets inside each other,
basically turn a generator. And it just seems many degrees
away from like how a plant uses that solar energy
directly photosynthesizing it. And so it just kind of occurred
(04:11):
to me that maybe these systems could work differently, especially
with the advances we have in material science. Now, can
we start to get some degrees closer to the source.
Speaker 3 (04:23):
And using that solar energy directly?
Speaker 4 (04:25):
And so, you know, I think I'd take that view
and the long view of things, And coming out of school,
I just I felt like, Wow, I think this is
where we're going. And I wanted to be a part
of really what felt like a rising tide to me
with renewables, something I could work on over the arc
of my entire career and drive a transition to something
(04:48):
that aligned with my values too. I mean, I had
a lot of formative experiences in nature growing up. I like,
I feel a real affinity for the natural world and
for plants and animals and It just felt like that
was also part of humans coming closer being living in
harmony with nature. And I was lucky to land a
summer internship really after my freshman year of college with
(05:12):
a really small wind energy developer in Houston. It was
two thousand and six. It was like the early days
of wind still in this country, and like I remember
working on we had projects in a few states, but
also working on like an application to lease offshore waters
(05:32):
from the state of Texas from the General Land Office,
because Texas has ten miles of water off the coast,
which is funny people were thinking that was going to
happen in those days. I mean, obviously hasn't happened, and
I think we're probably still pretty far off from that
making sense, mostly given how much land there is in Texas,
you know.
Speaker 3 (05:51):
Really need to go to the water.
Speaker 4 (05:54):
Anyway, that internship was amazing, and that company ended up being.
Speaker 3 (05:59):
Effectively a assessor to Pattern.
Speaker 4 (06:02):
And when I was graduating my senior year, that was
a great recession. It was follow two thousand and eight.
It was my senior year, and Pattern was really.
Speaker 3 (06:12):
Born right after that.
Speaker 4 (06:14):
As I was graduating in two thousand and nine, I
managed to just get like a two in the door
with Pattern basically and came in ready to learn and
help however I could. I started in Houston, where if
grown up, I moved back there. I was a junior developer,
learning the ropes, learning the nuts and bolts of the business.
I worked on some of our early wind and solar
(06:34):
projects across the US and in Canada and in Chile.
And it was after a couple of years that I
starched to a finance role. I moved to San Francisco,
where most of our senior management was at the time,
though these days were effectively co headquartered in San Francisco
and in Houston, with management in both cities, and I
did finance stuff for like a decade. I was running
(06:56):
financial models. I was doing capital raising, debt and exequity.
I was doing M and A at all asset stages,
helping launch our Japanese business which we sold a couple
of years ago, helping manage the public operating yield code
that we have for six years, recapitalize our private development business,
and we eventually, as Pattern, brought all that back together
(07:19):
into a single integrated privately held developer and IPP focused
on North America and that's really what pattern is today.
So I've grown up with the company. These days, I'm
in a strategic development role. So I switched back to
the development side of the house, where I think I
probably always knew i'd end up. It sort of suits
my personality. It's a bigger sandbox to play and the
(07:42):
go create value.
Speaker 3 (07:45):
And be creative. And yet like all.
Speaker 4 (07:48):
These finance skills I had in a career all these
years were super like a superpower, and what I'm trying
to do now sort of.
Speaker 3 (07:54):
Having a model in my head anyway, So I get
to work.
Speaker 4 (08:00):
On some of our more complex and novel projects and
really drive our strategy for growth across the continent and
across technologies. And I feel fortunate to get to grow
up alongside the company and alongside this industry doing something
that I believe in. And yet I've learned a lot
about the realities of how we power our modern society
(08:22):
and that well, I think everybody these days agrees on
the term energy transition. I finally they kind of landed.
It was like, what do we call this, like alternative
energy or sustainable People just call it energy transition now,
But everybody disagrees about how we're going to get there
and how long it's going to take, and what the
sequence is going to be, and there's fair disagreement and
all of that, and I think there's just you know,
(08:44):
it's going to be bumpy at times, and I think
these days I'm as focused on sort of smoothing some
of the bumps in the energy transition as I am
on trying to race to get to the destination as
quickly as possible. On personal note, if I can add,
you know, yeah, absolutely form of baby daughter, which is
a big and wonderful change in our lives. And anyway,
(09:05):
it's just like all all exciting every day for us,
both at home and for me at work too.
Speaker 3 (09:12):
Every day.
Speaker 2 (09:13):
Great, Alex, this is fantastic. I'm so excited about our
conversation today. You bring such a unique and holistic perspective
on I think the energy marketplace and a pragmticism that
in my experience is pretty unique in the realable space.
Before before we move on, that you did say something
that piqued my interest about offshore wind and and that
(09:34):
your first exposure to it was nearly twenty years ago,
and and and even then you were you were a
part of exploring some leases in off shore state waters
from the General Land Office. But you made an offhanded
comment about I don't know whether it's skepticism or or
just some perspective on on you know, what it might
take to get that industry off the ground. What are
(09:56):
your thoughts on that, both in Texas and in the
country overall.
Speaker 4 (10:01):
Sure, yeah, well, I mean we've been me personally in
this pattern. We've been active, I would say in the
at first space, but not as active as many others,
you know, as the industry has matured. In fact, like
I think it's fair to say things have slowed down
in the US on offshoret if some policy had winds
or just some realities about costs and supply chains and
(10:21):
things that are hitting. And you know, in some ways,
I think we feel like we did a good job
keeping our powder dry in that space and not chasing
some of the others who were trying to do big,
splashy deals in offshore in the US.
Speaker 3 (10:33):
I mean, it's a technology that makes a lot of
good sense.
Speaker 4 (10:35):
You don't have to look at them the same way
as you do on land, but it just costs war.
And I think in the US we're blessed with a
lot of land, and it just makes it and not
as high energy costs as they have in Europe or
island nations or things like that, and so it makes
it a higher hurdle to make it economically pencil without
a real policy push behind it.
Speaker 3 (10:55):
Yeah.
Speaker 2 (10:56):
Again, really really appreciate your practice and hopefully we'll have
time to to dive back into that. But for the moment,
let's take a quick break and we come back. I'd
like to dive in alex with you into some of
your cornerstone projects, particularly you mentioned some of your international experience.
We'll do that here on the Energy Mix radio show.
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Speaker 2 (12:59):
Find Welcome back to the nationally syndicated Energy Mix radio show.
I'm Jeff Pollock and today we're talking with Alex Hoffer
of Pattern Energy. Okay, Alex, we've talked a bit about
the ways in which your formative years surrounded by energy
professionals in Houston shaped your interests and in particular your
pragmatism about the development side of the energy business. You
(13:22):
mentioned that your career has included some international work as
well as some landmark domestic projects, and you've been on
the ground for major points of inflection Patterns business. What
projects are professional developments are you most proud of? And
I guess, if different, which of those have had the
most notable influence on your career to date?
Speaker 3 (13:43):
Yeah?
Speaker 4 (13:43):
Thanks, and we've got to do a lot. HiT's been fun,
you know, I really if we just roll back in time,
like I started working on a lot of our international
stuff as you mentioned, and Pattern has a big business
in Canada, have wind farms and I think almost all
of the major southern provinces and a long history really
(14:09):
as I think actually the leading renewables owner in Canada
at some points, so I worked on almost all of those.
We had assets in Chile, a wind farm and a
solar farm up in the Anta Kama Desert that I
worked on early in my career as well. Turned out
speaking Spanish can't be useful in your career and I
(14:29):
got like new responsibilities early on because of that, and
I got to travel down there some and that was fun.
And you know, in about twenty fifteen, we launched our
Japanese business, and that was really in partnership with the
local Japanese developer that we had known for many years,
(14:49):
and we did a bunch of solaring wind deals there too,
and really brought with us some of the expertise that
hadn't developed so much in that renewal market yet and
some of the projects enancing concepts that aren't as prevalent
in Japan, and really grew that into a very big
and valuable business modal leading developers and owners in Japan
(15:11):
as well. So it's been exciting to get to work
in different countries, is you know, I enjoyed travel. I
learned a lot about like how to structure corporate and
tax stuff with different countries it was just really valuable
skills to be learning and fun to be working in
different kind of cultures and learning how different people, you know,
value things in different ways, and you kind of have
(15:32):
to get on the ground to really understand the cultures
you're working at. I didn't, you know, even though I
was doing all those things, I was working on deals
across the US too, for sure, which is really the
core of our business in these days. Is the core
of our business alongside Canada, and I think the most
(15:54):
limbmark things that I have to know to I mean,
I was to actually start with. The most recent on
this I don't run is building a project called Sinzeo
Winded Transmission. It's really a landmark deal. We think it's
the biggest renewables projects maybe outside of China, probably excluding
some big hydro deals. But it's three and a half
(16:14):
gigawatts of wind energy, which is like nearly one thousand
big modern wind turbines in New Mexico.
Speaker 3 (16:21):
And then a five hundred.
Speaker 4 (16:22):
And fifty mile HVDC which is high voltage direct current
transmission line that runs from New Mexico westward into Arizona
and from there connects to the existing grid and the
project is really designed to serve not just New Mexico
and Arizona, but really wheeling the power into California as well.
(16:43):
As like eleven billion dollars total project.
Speaker 3 (16:46):
We think it's about the biggest done in the.
Speaker 4 (16:48):
US by a better factor of three, well, and really
amazing scale and really bringing something that's super high value
to market, particularly around California where there's a lot of solar,
I mean, in the Southwest, a ton of solar, and
then that New Mexico wind blows at night, so it's
super valuable complementary asset to bring to those systems. That
(17:09):
project was preceded by one that I worked really closely
on called Western Spirit Wind and Transmission, kind of similar
concept that really laid the groundwork. It's also a thousand
megawattsa in in New Mexico and then one hundred and
fifty miles of transmission within the state, and.
Speaker 3 (17:29):
So basically just we.
Speaker 4 (17:30):
Kind of multiplied everything by three when we did SZEA
rolled it back to it again at way bigger scale.
But Western Spirit was innovative in the way that it
figured out how to use the existing transmission system several
different paths of transmission capacity that were available onlines and
really optimize around how to navigate those different paths and
(17:53):
variable and dynamic ways and fill them up with as
much power as you could. So we really used data
to like figure out how to more smartly use the
existing assets that are in the air and coup more
power through them and realize that if we do that
at big enough scale, we could make the whole thing
work and hang together.
Speaker 3 (18:13):
So we're really proud of those two projects.
Speaker 4 (18:15):
I think, you know, Pattern has this reputation for doing
kind of big and complicated things now is really as
much driven by those two projects as anything, and we
hope that that has helped to break some of the
eyes for others to do similar things and do renewables
at big scale that really makes a difference. I mean
three and a half Gigawat's the wind is like three
(18:35):
and a half two layer class and so we continue
to do big projects like that. One other one I'm
working on it's called Southern Spirit Transmission. It connects the
Texas or cochraor to the southeast. It's a transmission line only,
and it's really interesting in the way it tries to
connect those two markets in a way that they haven't
(18:55):
been connected before and can really.
Speaker 3 (18:58):
Provide a lot of.
Speaker 4 (19:01):
Capacity, value, reliability, and resiliency to the systems at both ends.
Speaker 3 (19:06):
It almost is the same as.
Speaker 4 (19:08):
If you built like a big new three G gas
plant at either end, but one transmission line can serve the.
Speaker 3 (19:15):
Purpose of both. So we're really proud of that project.
Speaker 4 (19:18):
It's another, i would say, industry kind of moving thing
to do it privately, try to connect these two markets
and figure out how to market everything across the line.
It's been a big learning experience for us, and it's
something where we feel like it's getting close now. We've
been working on it for a long time and we're
really excited about the value it can bring to really
all the rate payers at both ends of the line.
(19:40):
The other thing I was just going to add is
a lead into renewable hydrogen, which I know we'll talk
about more later, but I really helped set up our
original strategy on how to approach that market and where
Patterned can play in that market, and how we think
about it really over the long term as developing market
(20:01):
and one that can be an exciting growth vector for us.
Speaker 2 (20:04):
Alex, thank you. That's actually a perfect segue for the
topics that I'm hoping to dive into. Next We're going
to take a quick break, and when we come back,
we'll talk more with Alex about the state of the
domestic renewable marketplace here on the Energy.
Speaker 3 (20:17):
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Speaker 2 (21:22):
Alex. We're recording this podcast at a moment of tremendous
uncertainty about domestic energy policy around anything other than the
fossil fuels. From your perspective, what's the general pulse and
outlook of the renewable space right now? Do you think
that the sheer demand for any and all new electrons,
perhaps combined with new technological efficiencies, is enough to offset
(21:42):
the potential loss of production tax credits. Are we going
to see a fundamental shift in the pace of deployment
of win versus solar And if so, how much of
that shift was already happening before the policy pendulum began
to swing.
Speaker 3 (21:53):
Sure.
Speaker 4 (21:54):
Yeah, I'll get my personal abuse here, which I should say,
all of these are really and you know, for one,
this load growth thing, this demand growth thing is a
really big deal. I mean, we haven't really had material
demand growth for two decades, and electrification is happening across transport,
across the various industry. There's reON shoring of heavy industry
(22:15):
and manufacturing that's driving a lot of demand. Then there's
this massive data center demand massive, you know, on top
of all that, and as you said, that's driving huge
demand for as many electrons as possible. And to us,
that's really the overriding signal. That means that, you know,
we need everything we can get. We need ally above
(22:36):
we very much.
Speaker 3 (22:37):
Still need renewables.
Speaker 4 (22:40):
And you know that demand too, though, is driving reliability challenges.
And there's a reality that those customers, their demand isn't
always that flexible. They need the power when they need it.
And I think even you'll see companies that had sort
of lofty sustainability goals putting those a little bit on
the sidebur you know, recognizing that right now, like speed
(23:02):
and scale are one and two for them, and green
and sheep are kind of three and four. And I
think we just have to recognize there's a time to
mention to this. They still care. They have something they
care about more right now, which is, you know, getting
to quantum computing the fastest. I don't really know what
that is, but it seems very important to them. And anyway,
(23:23):
but like there's a time to mention where Okay, we're
going to need to build gas plants, like that's just
the reality, and that's fine, and I think you just
play the roll the clock forward and what happens is
you just start to use them less and less. They're
still there to back up renewables, and renewables have to
sort of like win on the merits of providing sheeaper
(23:43):
energy and they'll continue to get built over time. So
we see this as something that affects PACE in some
ways but creates a lot of.
Speaker 3 (23:50):
Opportunity in other ways.
Speaker 4 (23:52):
And frankly, I think in the context of like policy
and just stull atmosphere right now around the energy space,
I see it as a time to be opportunistic. If
others are slowing down or pulling back, we have no
doubt that the energy transition isn't not happening. Like it's
still going to happen. Pace, you can debate, but like
(24:12):
we want to keep loading up our pipeline with assets
that can ripen over time and just position while others
maybe aren't as focused on it for what's going to
happen down the road in the future. I think as
to solar versus winds, like if you look us up historically,
we're more of a wind shop. We have a big
(24:33):
portfolio of operating wind assets. We have a few operating
solar assets. We've had a few others that we sold
over time. But now our development pipeline is more solar
than it is wind, and I think that's across the industry.
You'll see that where frankly, it's just easier to develop
solar and the costs have come down in a big way.
(24:53):
And so that's pattern likes to think we're one of
the best to doing wind, and so we're going to
keep doing that and creating differentiated value in that way.
But solar is happening at a.
Speaker 3 (25:04):
Big scale right now.
Speaker 2 (25:05):
So in thirty seconds or less, what's the story there?
I mean, I'm actually, I'll tell you, I'm a bit
surprised to hear you speak of solar in that way.
What has been either what's been the either technological or
financial differentiator that has allowed solar scale at such a
pace recently? And over what timeframe will we seen that happen?
Speaker 4 (25:27):
I mean, I think the shortest answer is just the
cost of panels that's come down, and that drastically in
the last decade. Efficiency improvements do but cost as much
as anything, and as like global manufacturing capacity for solar
panels has exploded. Cost is way down and we can
put them in more places than they make sense. And
the sunshine's almost everywhere, even in northern latitudes. It shines
(25:48):
in the summer, and those resources can make sense in
a lot of places.
Speaker 2 (25:52):
Okay, now, thanks, you explained that really, really elegantly. All Right,
we're gonna take a quick break and we come back.
We're gonna talk more with Alex about patterns ambition in
the renewable hydrogen value chain here on the Energy Mix
radio show.
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Speaker 5 (26:41):
It's the better in Boots Gala and Sporting Clay fundraiser
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Speaker 6 (26:45):
Fields.
Speaker 5 (26:46):
Joined sky High for Kids in Houston March twenty seventh
and twenty eighth for two unforgettable days of fund and fundraising.
On March twenty seventh, head to the Greater Houston Sporting
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eight join us at the Revere for the Vivie Reception,
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(27:07):
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benefits sky High for Kids mission to end childhood cancer.
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Speaker 2 (27:22):
Welcome back to the nationally syndicated Energy Mix radio show.
I'm Jeff Pollock and today we're talking with Alex Hoffer
a pattern energy Alex, to the extent you can please
tell us about patterns, ambitions and strategy with renewable hydrogen.
And I should add for anyone who may not be familiar,
renewable or green hydrogen is produced by using an electrolyizer
(27:43):
powered by zero carbon renewable electricity to split a water
molecule H two zero into hydrogen and oxygen. So, Alex,
to what extent is pattern seek to be fully integrated
across the hydrogen value chain and in particular, which sectors
and geographies are your primary target for off take sure?
Speaker 7 (28:04):
Yeah.
Speaker 3 (28:04):
Pattern.
Speaker 4 (28:06):
As we assess this market, we started with the position
that we're more than anything. We're an expert at renewables
in North America, and when we looked at how this
industry may scale over time, we see North America as
a globally competitive long term export of renewable fuels given
the strong renewable resources, foals, E, sport, capital markets, all
(28:30):
the reasons that America exports other kinds of energy too,
and so when you put those together, Okay, we're a
North American renewables expert. North American be a big export market.
You know, we see a place for us to play
in this space. And we know that these projects are
going to require complex and novel putting together of electrons
(28:52):
and molecules in a way that hasn't really been done before,
and they're going to have to be done at big scale,
and that's what we like to do. They complicated projects,
and so we think we can also bring our development
shops to there and actually pulling all the pieces together
to make these things go.
Speaker 3 (29:12):
So we want to.
Speaker 4 (29:12):
Play effectively in both the upstream and into the midstream
of renewable fuels, So not just owning the renewables the
wind and solar that are the primary fuel source, but
also the electrolyzers that you mentioned create the hydrogen. Maybe
any secondary chemical processing if we're going to turn it
(29:34):
into ammonia or methanol or something like that, we might
own part of that process too, probably in partnership with
someone who does stat more storably. And maybe we would
own some pipelines. We were a transmission developer, we know
how to develop linear infrastructure. It's a different technology, but
we may own pipelines too to bring whatever the product
is to market. I think we wouldn't likely be as
(29:58):
involved in like ocean cargo or delivery to end customers
the downstream, if you will. But we see yourselves as
trying to, you know, reduce some of the project on
project risk by taking on more of these pieces and
putting them together in a way that's cohesive.
Speaker 2 (30:16):
So can I interrupt you for one, let's say, before
you further. I mean, so it sounds like that interest
in being that vertically integrated is a matter of ambition
because you guys are good at doing complicated things as
opposed to a matter of necessity. I mean, what's the
blend there from your perspective, how much of that integration
(30:37):
across about you know, across the different components of that
complicated project, from hydrogen production through derivative production, export and transmission.
How much of that is Do you think that that
is a necessary recipe for success versus something that you
are uniquely qualified to do. But you could be successful
even if you were a little more focused on a
(30:58):
single niche.
Speaker 4 (31:01):
I think we we see it as a way to
create some additional value, really, I mean we don't. We
just don't really want to be pigion oled as like, Okay,
make the wind farm and you know, don't worry about
what happens to it after that, right, Like, we want
to understand how this small market is developing, understand really
who the end customers are. We may even have the
contracts to sell right the product of the end customer,
(31:23):
even if we're not the ones owning the ship sending
it across the ocean. And so I think as we
think about how to do these things at pig scale,
it's what we learned from doing our big transmission enabled
projects in the Southwest, Like you really have to understand
all the plumbing.
Speaker 3 (31:37):
You know, how the.
Speaker 4 (31:38):
Product gets from production all the way to end consumer
and now the dollars flow from end consumer back to
producer through retail markets and wholesale markets whatever. And when
you understand all that, you can really start to hack
it at scale and say, oh, if we put this
and this together, now we can do something bigue and
interesting and differentiate it. And so I think it's really
we think we have the ability with you know, adding
(32:00):
on some expertise and key areas and the opportunity to
do so.
Speaker 2 (32:04):
Okay, yeah, thanks, And I know you're going to say
something else there in terms of maybe some prognostication about
where that marketplace is heading over all, and sorry to interrupt.
I just think it's really interesting that you guys have
been so ambitious about the you know, the various links
in that value chain.
Speaker 3 (32:20):
Absolutely.
Speaker 4 (32:21):
Yeah, I mean, and I think I was gonna say, well,
one of the way we're approaching this space, I mean,
we're focused on what we know, which is the renewable
side of creating hydrogen, and the way we're approaching it,
like a lot of people are concerned about federal policy
requiring early matching your renewables. That actually works fine for
(32:43):
us generally. I think we want to design it in
a way that is sort of agnostic to it's sort
of future proof if you would. It's going to be
the way that it should be done in the future,
and we're not going to worry about timelines for when
that's going to be required. And we see this as
a market. It has a big feature, particularly for applications
(33:04):
that are the low hanging fruit and that are really
hard to otherwise decarbonize. So it's like fertilizer steel, another
heavy industry shipping fuel in the airplane fuel one day
if they can send the size the hydrogen its to
some other kind of synthetic fuel. But I think from
the renewable hydros inside of things, what's become clear in
(33:25):
the last year or so is that with all that
big demand growth I mentioned earlier for electricity, we really
need all the electrons we can to just be used
on the grid, and especially like renewable electrons are in
high demands, and so these kind of derivative applications like
taking them and splitting water and using molecules kind of
(33:48):
just have to wait in line a little bit. They're
turned because like the primary need is just getting all
these renewables onto the grid and serving all this electric demand.
And so I think it's fair to say that the
pacing of like people's excitement about this industry has slowed
down a little bit, but we absolutely still see it.
Speaker 3 (34:07):
As a big thing in the future.
Speaker 4 (34:08):
We have really long horizons and we're still pursuing projects
that we think are going to be slowly competitive and
just pacing them at the pace that makes sense. And
it's frankly a little helpful to be doing that with
less competition right now unless others focused on it.
Speaker 5 (34:23):
Yeah, I know.
Speaker 2 (34:23):
Again I have to say, I really appreciate your privatism,
and you make a great point, which is that the
just the mounting demand for the sheared demand for electrons
in and of itself, you know, sort of rejiggers the
hierarchy of where those electrons are going to be directed.
But really appreciate that you guys are are are just
hanging tough and acknowledged that hydrogen is the pathway and
(34:46):
probably the only pathway in some cases, to decombonization for
certain hard debate sectors. And I think it's you know,
it's a really healthy perspective. Okay, we're going to take
a quick break and we come back. We're going to
wrap things up with Alex's take on the role of
renewable generation gale in addressing the concurrent imperatives of growth,
energy security, and decarbonization here on the Energy Mix Radio show.
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Speaker 2 (36:12):
Welcome back to the nationally syndicated Energy Mix radio show.
I'm your guest host Jeff Pollock, and today we're talking
with Alex Hoffer, a pattern energy. Alex. One of the
things that has most impressed me in past conversations with
you and today is absolutely no exception, is your balance
perspective on the role of renewables in the global energy mix.
So what does a fully realized version of the domestic
(36:33):
renewables marketplace look like? When might we get there? And
what are the critical enablers along the way?
Speaker 4 (36:39):
Yeah, thanks, Jeff, I, like I referenced earlier, I mean,
I think it's fair to say like it certainly feels
like the age of gas out there right now. Everybody
knows that we need to get more dispatchable capacity onto
the grid to meet this growing demand. And gases, the
bridge fuel gases, the cleaner alternative certainly to cole and
gas is something we have a lot of in this country.
Speaker 3 (37:01):
We're blessed with and.
Speaker 4 (37:02):
So yeah, utilities are excited about putting new gas plants
into rate base. I think the corporate world is being
realistic about the kind of resources they're going to use
in the near term to meet the needs that they
have without this growing demand and setting some of their
sustainability goals on a longer horizon. And it's clear we're
(37:23):
going to build a bunch of new gas plants and
that's gonna be good. But even those new gas plants
are going to have some of their own challenges I
think coming online. Notably, there's a pre clear backlog in
the order books to even like buy new gas turbans
right now from ge or other ems. We're saying, oh,
you can't get one until twenty thirty, even if you
wanted to build it tomorrow. So there's just I think
(37:45):
it maybe been a slowdown and manufacturing capacity on things
like that that needs to catch back up again. And
you know, frankly, all these new gas plants, it's going
to be a lot of demand for gas and it's
going to compete somewhat with all the new LNG terminals
may come online on the Gulf Coast, and together that's
going to be a lot of new demand for gas,
(38:06):
which I think we can meet, but then you also
need a bunch of new pipelines, and so it's really
just it's not as easy.
Speaker 3 (38:11):
It's just saying, ah, let's do gas, and here it is. So,
you know, I think that.
Speaker 4 (38:20):
A bunch of those will get bills. Many of them
will actually be probably simple cycle gas plants is to
post a combined cycle, which you're better suited to really
like peaking and running less frequently and not providing baseload power.
So it actually kind of compliments perfectly continued growth and renewables.
So we're going to be pursuing all of the resources
we can in the next half decade or whatever to
(38:41):
really bring all this capacity online. And I think they're
actually going to compliment each other quite nicely even after.
Speaker 3 (38:47):
They're all built. Like I said earlier, like.
Speaker 4 (38:49):
We'll just keep building more renewables as they make sense
to as we have great connections and the energy is
cheap and the technology keeps getting better, and we'll use
the gas plants to back them up. And I think
that is, like to your question, at least the medium
term state of where we're going. You know, we have
still a bunch of gas capacity in the system, you
(39:10):
get to higher levels of renewable energy, so that can
get up to high levels, but when it gets cloudy
for a week, the gas plants are there and you
use them for that. I think it's important I'll shift
a little here not to forget about like energy storage
in this discussion too. Lithium batteries are really getting quite inexpensive,
(39:32):
I think, driven mostly by electric vehicle demand. Like it's
actually pretty decent chrunk of batteries and every electric vehicle,
and costs are anticipated to continue declining in the coming decade.
It's really kind of like I mentioned solar panels did
in the last decade. I mean, the projections are that
litium ian batteries are going to keep getting cheaper in
the decade to come, and so they really in many
(39:56):
regions are a real competitor to like peaker gas plants,
because while they may have shorter duration, you can run
them in sequence. You can run them for a few
hours and then another another set for another few hours.
And you know, I think there's probably breakthroughs on the
horizon too. We're not super close to the leading edge
of technology on that stuff, but I know a lot
(40:17):
of companies are trying to crack the next big thing
and even medium duration and longer duration storage, and obviously
storage is also a perfect compliment to what renewables are
trying to do. So whatever the other resources we're building
to provide capacity to the system really ends up lending
itself well, renewables continuing to provide cheap energy as a compliment.
Speaker 3 (40:40):
To that and as pattern.
Speaker 4 (40:43):
The other thing we have to emphasize is transmission too,
and the way we view it. I mean, we've underinvested
in transmission lines in this country for half a century,
and it's true that they are very hard to build.
If you want to build farmer miles of transmission, you have.
Speaker 3 (40:59):
Four miles people that don't want to look at it.
Speaker 4 (41:01):
They're really not very excited about it, and you have
to figure out how to allocate the costs, you know,
to all the stakeholders that can benefit from that transmission.
And there's a lot of debate about how to do
that correctly, but they're so valuable if you can get
them done, and particularly interregional lines can provide so many
fundamental benefits systems like I was talking about earlier, like
(41:24):
providing capacity at both ends with one line, and the
way we see the need for transmission, it's really not
just about the connecting renewables to load centers and moving
as moving resources over really long distances. It's really about
broad reliability and resilience. And I think like an example
(41:47):
of that, there's a lot of discussion in Texas right
now within URCOT about building a new overlay of super
high voltage lines within the state, really crossing the entire state.
And the reason to do that has nothing to do
with renewables. It has to do mostly serving oiling as
demand in the permia. Yeah, and also making sure the
lights stay on when there's a winter storm because they
can move all the resources around the state and anyway.
(42:09):
I think that's where we're in this transmission business. We
see to value, we see the need is so clear.
Speaker 3 (42:14):
We know it's really.
Speaker 4 (42:14):
Hard, it's tough sletting, but you know we're up for it.
We have long patient horizons when it comes to this stuff.
But I do hope we're going to start to build
more faster as a nation because the benefits of condicting
more things this allows us to get where we need
to go and meeting all the growing electric demands. Really
without having to build as much other kinds of steel
(42:35):
in the ground.
Speaker 3 (42:35):
Yeah.
Speaker 2 (42:36):
Look, you make a great point here. I mean, the
demand for more transmission is independent of the source of
those electrons. I mean that is an absolute that we know,
regardless of what the electron mix is, that transmission is
a necessity and is also a part of the solution
helps us sort of address some of that, if it's
done efficiently, address some of the of what would otherwise
(42:58):
be demand for new generation. You know, it's interesting if
I heard you correctly, and I think, you know, maybe
I'll offer this party thought. It sounds like a fully
enlightened state for the renewable industry in this country is
one in which we find gas backing up renewables instead
of the other way around, which is sort of what
the traditional paradigm has been, I think, and I think
(43:19):
I think that's again, you know, a really practical way
of viewing this. Right, It's not it still is a
mix of generation and it's it's still an era of
and but the proportions change over time. And I really
appreciate the way that you described that. All right, well,
we're all out of time for today's show. Alex. Thank
you so much for joining us today. I'm your guest host,
(43:42):
Jeff Pollock, and thank you for joining us here on
the Energy Mix Radio Show.
Speaker 1 (43:46):
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Welcome to the nationally syndicated Energy Mix Radio show produced
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Show will give you an inside look at the energy
industry and how it affects you by talking with industry leaders, experts,
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Speaker 2 (00:16):
Hello, and welcome to the nationally syndicated Energy Mix Radio Show.
I'm your guest host Jeff Pollock, Chief Strategy and Sustainability
Officer at the Port of Corpus Christie Authority in Corpus Christi, Texas. Today,
I'm honored to welcome my guest, Alex Hoffer, Assistant vice
president of business Development at Pattern Energy.
Speaker 3 (00:36):
Hey, Jeff gritz Beer.
Speaker 2 (00:38):
Pattern, in its own words, develops, constructs, owns, and operates
high quality wind, solar, transmission, and energy storage projects across
North America. Pattern's global development portfolio includes twenty nine gigawats
of generation accounting including thirty operating facilities, as well as
eleven hundred miles of transmission and operation under development. Over
(01:02):
the last several years, Pattern has also taken a leadership
role in North America in the renewable hydrogen value chain.
Alex has been with Pattern for fifteen years in various
project development, finance, and strategic growth roles. He grew up
in Houston, Texas, and is a graduate of the University
of Texas at Austin, alex Thank you so much for
(01:23):
being here, and again, welcome to the Energy.
Speaker 3 (01:25):
Mix radio show.
Speaker 2 (01:27):
Nice jus, So, let's start at the start. You grew
up in Houston, surrounded by oil and gas professionals, energy dads,
as you described them to me. It's easy to imagine
how that upbringing would have turned you onto a career energy.
But what engendered your interest in renewables in particular?
Speaker 3 (01:46):
Yeah, sure, I mean I was.
Speaker 4 (01:48):
Born and raised in Houston, the energy gapit of the world.
You know, everybody was proud of that growing up. And
it's true many of my friends' dads and some of
their moms worked in energy. It was just like familiar
context and like, you know, the end run thing happened
when I was I think a freshman in high school.
(02:09):
So like for better or worse, energy was just like
synonymous in a way with growing up in Houston. And
I think I'm naturally drawn to like systems thinking. I
think that's something that is an interest in mine and
energy as a subject matter. Just felt familiar with that
background in Houston, and so as somehow coming out of
(02:32):
college and really even going into college, I thought I'd
be good at improving energy systems and building infrastructure and
doing big things that powered the world just seemed cool.
And in college Et and Austin, I took both energy
courses and learned broadly about how we use energy on
Earth as well as some sustainability coursework. And I learned
(02:55):
about like fundamental principles of sustainability versus like depletion or
consumption concepts with really long term kind of thinking. And
like one thread that just kind of came up for
me and I continue to think about, is how like
basically all energy on Earth comes from or came from
(03:16):
the Sun. Like even fossil fuels is effectively dead dinosaurs
and organic matter from millions of years ago that photosynthesized
from the Sun. The dinosaurs aided and the delta composed
in the ground, and it's basically aged solar energy that's
very energy dense in the ground.
Speaker 3 (03:33):
And it's kind.
Speaker 4 (03:35):
Of amazing to me that, you know, while many of
the best technologies we have in our society midic nature,
say like airplanes or the Internet.
Speaker 3 (03:48):
The best way we figured out how to use that
solar energy.
Speaker 4 (03:51):
Is to dig it up these dead dinosaurs and burn
them to make heat, to boil water, to make steam,
to turn a turbin and spin magnets inside each other,
basically turn a generator. And it just seems many degrees
away from like how a plant uses that solar energy
directly photosynthesizing it. And so it just kind of occurred
(04:11):
to me that maybe these systems could work differently, especially
with the advances we have in material science. Now, can
we start to get some degrees closer to the source.
Speaker 3 (04:23):
And using that solar energy directly?
Speaker 4 (04:25):
And so, you know, I think I'd take that view
and the long view of things, And coming out of school,
I just I felt like, Wow, I think this is
where we're going. And I wanted to be a part
of really what felt like a rising tide to me
with renewables, something I could work on over the arc
of my entire career and drive a transition to something
(04:48):
that aligned with my values too. I mean, I had
a lot of formative experiences in nature growing up. I like,
I feel a real affinity for the natural world and
for plants and animals and It just felt like that
was also part of humans coming closer being living in
harmony with nature. And I was lucky to land a
summer internship really after my freshman year of college with
(05:12):
a really small wind energy developer in Houston. It was
two thousand and six. It was like the early days
of wind still in this country, and like I remember
working on we had projects in a few states, but
also working on like an application to lease offshore waters
(05:32):
from the state of Texas from the General Land Office,
because Texas has ten miles of water off the coast,
which is funny people were thinking that was going to
happen in those days. I mean, obviously hasn't happened, and
I think we're probably still pretty far off from that
making sense, mostly given how much land there is in Texas,
you know.
Speaker 3 (05:51):
Really need to go to the water.
Speaker 4 (05:54):
Anyway, that internship was amazing, and that company ended up being.
Speaker 3 (05:59):
Effectively a assessor to Pattern.
Speaker 4 (06:02):
And when I was graduating my senior year, that was
a great recession. It was follow two thousand and eight.
It was my senior year, and Pattern was really.
Speaker 3 (06:12):
Born right after that.
Speaker 4 (06:14):
As I was graduating in two thousand and nine, I
managed to just get like a two in the door
with Pattern basically and came in ready to learn and
help however I could. I started in Houston, where if
grown up, I moved back there. I was a junior developer,
learning the ropes, learning the nuts and bolts of the business.
I worked on some of our early wind and solar
(06:34):
projects across the US and in Canada and in Chile.
And it was after a couple of years that I
starched to a finance role. I moved to San Francisco,
where most of our senior management was at the time,
though these days were effectively co headquartered in San Francisco
and in Houston, with management in both cities, and I
did finance stuff for like a decade. I was running
(06:56):
financial models. I was doing capital raising, debt and exequity.
I was doing M and A at all asset stages,
helping launch our Japanese business which we sold a couple
of years ago, helping manage the public operating yield code
that we have for six years, recapitalize our private development business,
and we eventually, as Pattern, brought all that back together
(07:19):
into a single integrated privately held developer and IPP focused
on North America and that's really what pattern is today.
So I've grown up with the company. These days, I'm
in a strategic development role. So I switched back to
the development side of the house, where I think I
probably always knew i'd end up. It sort of suits
my personality. It's a bigger sandbox to play and the
(07:42):
go create value.
Speaker 3 (07:45):
And be creative. And yet like all.
Speaker 4 (07:48):
These finance skills I had in a career all these
years were super like a superpower, and what I'm trying
to do now sort of.
Speaker 3 (07:54):
Having a model in my head anyway, So I get
to work.
Speaker 4 (08:00):
On some of our more complex and novel projects and
really drive our strategy for growth across the continent and
across technologies. And I feel fortunate to get to grow
up alongside the company and alongside this industry doing something
that I believe in. And yet I've learned a lot
about the realities of how we power our modern society
(08:22):
and that well, I think everybody these days agrees on
the term energy transition. I finally they kind of landed.
It was like, what do we call this, like alternative
energy or sustainable People just call it energy transition now,
But everybody disagrees about how we're going to get there
and how long it's going to take, and what the
sequence is going to be, and there's fair disagreement and
all of that, and I think there's just you know,
(08:44):
it's going to be bumpy at times, and I think
these days I'm as focused on sort of smoothing some
of the bumps in the energy transition as I am
on trying to race to get to the destination as
quickly as possible. On personal note, if I can add,
you know, yeah, absolutely form of baby daughter, which is
a big and wonderful change in our lives. And anyway,
(09:05):
it's just like all all exciting every day for us,
both at home and for me at work too.
Speaker 3 (09:12):
Every day.
Speaker 2 (09:13):
Great, Alex, this is fantastic. I'm so excited about our
conversation today. You bring such a unique and holistic perspective
on I think the energy marketplace and a pragmticism that
in my experience is pretty unique in the realable space.
Before before we move on, that you did say something
that piqued my interest about offshore wind and and that
(09:34):
your first exposure to it was nearly twenty years ago,
and and and even then you were you were a
part of exploring some leases in off shore state waters
from the General Land Office. But you made an offhanded
comment about I don't know whether it's skepticism or or
just some perspective on on you know, what it might
take to get that industry off the ground. What are
(09:56):
your thoughts on that, both in Texas and in the
country overall.
Speaker 4 (10:01):
Sure, yeah, well, I mean we've been me personally in
this pattern. We've been active, I would say in the
at first space, but not as active as many others,
you know, as the industry has matured. In fact, like
I think it's fair to say things have slowed down
in the US on offshoret if some policy had winds
or just some realities about costs and supply chains and
(10:21):
things that are hitting. And you know, in some ways,
I think we feel like we did a good job
keeping our powder dry in that space and not chasing
some of the others who were trying to do big,
splashy deals in offshore in the US.
Speaker 3 (10:33):
I mean, it's a technology that makes a lot of
good sense.
Speaker 4 (10:35):
You don't have to look at them the same way
as you do on land, but it just costs war.
And I think in the US we're blessed with a
lot of land, and it just makes it and not
as high energy costs as they have in Europe or
island nations or things like that, and so it makes
it a higher hurdle to make it economically pencil without
a real policy push behind it.
Speaker 3 (10:55):
Yeah.
Speaker 2 (10:56):
Again, really really appreciate your practice and hopefully we'll have
time to to dive back into that. But for the moment,
let's take a quick break and we come back. I'd
like to dive in alex with you into some of
your cornerstone projects, particularly you mentioned some of your international experience.
We'll do that here on the Energy Mix radio show.
Speaker 5 (11:15):
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Speaker 2 (12:59):
Find Welcome back to the nationally syndicated Energy Mix radio show.
I'm Jeff Pollock and today we're talking with Alex Hoffer
of Pattern Energy. Okay, Alex, we've talked a bit about
the ways in which your formative years surrounded by energy
professionals in Houston shaped your interests and in particular your
pragmatism about the development side of the energy business. You
(13:22):
mentioned that your career has included some international work as
well as some landmark domestic projects, and you've been on
the ground for major points of inflection Patterns business. What
projects are professional developments are you most proud of? And
I guess, if different, which of those have had the
most notable influence on your career to date?
Speaker 3 (13:43):
Yeah?
Speaker 4 (13:43):
Thanks, and we've got to do a lot. HiT's been fun,
you know, I really if we just roll back in time,
like I started working on a lot of our international
stuff as you mentioned, and Pattern has a big business
in Canada, have wind farms and I think almost all
of the major southern provinces and a long history really
(14:09):
as I think actually the leading renewables owner in Canada
at some points, so I worked on almost all of those.
We had assets in Chile, a wind farm and a
solar farm up in the Anta Kama Desert that I
worked on early in my career as well. Turned out
speaking Spanish can't be useful in your career and I
(14:29):
got like new responsibilities early on because of that, and
I got to travel down there some and that was fun.
And you know, in about twenty fifteen, we launched our
Japanese business, and that was really in partnership with the
local Japanese developer that we had known for many years,
(14:49):
and we did a bunch of solaring wind deals there too,
and really brought with us some of the expertise that
hadn't developed so much in that renewal market yet and
some of the projects enancing concepts that aren't as prevalent
in Japan, and really grew that into a very big
and valuable business modal leading developers and owners in Japan
(15:11):
as well. So it's been exciting to get to work
in different countries, is you know, I enjoyed travel. I
learned a lot about like how to structure corporate and
tax stuff with different countries it was just really valuable
skills to be learning and fun to be working in
different kind of cultures and learning how different people, you know,
value things in different ways, and you kind of have
(15:32):
to get on the ground to really understand the cultures
you're working at. I didn't, you know, even though I
was doing all those things, I was working on deals
across the US too, for sure, which is really the
core of our business in these days. Is the core
of our business alongside Canada, and I think the most
(15:54):
limbmark things that I have to know to I mean,
I was to actually start with. The most recent on
this I don't run is building a project called Sinzeo
Winded Transmission. It's really a landmark deal. We think it's
the biggest renewables projects maybe outside of China, probably excluding
some big hydro deals. But it's three and a half
(16:14):
gigawatts of wind energy, which is like nearly one thousand
big modern wind turbines in New Mexico.
Speaker 3 (16:21):
And then a five hundred.
Speaker 4 (16:22):
And fifty mile HVDC which is high voltage direct current
transmission line that runs from New Mexico westward into Arizona
and from there connects to the existing grid and the
project is really designed to serve not just New Mexico
and Arizona, but really wheeling the power into California as well.
(16:43):
As like eleven billion dollars total project.
Speaker 3 (16:46):
We think it's about the biggest done in the.
Speaker 4 (16:48):
US by a better factor of three, well, and really
amazing scale and really bringing something that's super high value
to market, particularly around California where there's a lot of solar,
I mean, in the Southwest, a ton of solar, and
then that New Mexico wind blows at night, so it's
super valuable complementary asset to bring to those systems. That
(17:09):
project was preceded by one that I worked really closely
on called Western Spirit Wind and Transmission, kind of similar
concept that really laid the groundwork. It's also a thousand
megawattsa in in New Mexico and then one hundred and
fifty miles of transmission within the state, and.
Speaker 3 (17:29):
So basically just we.
Speaker 4 (17:30):
Kind of multiplied everything by three when we did SZEA
rolled it back to it again at way bigger scale.
But Western Spirit was innovative in the way that it
figured out how to use the existing transmission system several
different paths of transmission capacity that were available onlines and
really optimize around how to navigate those different paths and
(17:53):
variable and dynamic ways and fill them up with as
much power as you could. So we really used data
to like figure out how to more smartly use the
existing assets that are in the air and coup more
power through them and realize that if we do that
at big enough scale, we could make the whole thing
work and hang together.
Speaker 3 (18:13):
So we're really proud of those two projects.
Speaker 4 (18:15):
I think, you know, Pattern has this reputation for doing
kind of big and complicated things now is really as
much driven by those two projects as anything, and we
hope that that has helped to break some of the
eyes for others to do similar things and do renewables
at big scale that really makes a difference. I mean
three and a half Gigawat's the wind is like three
(18:35):
and a half two layer class and so we continue
to do big projects like that. One other one I'm
working on it's called Southern Spirit Transmission. It connects the
Texas or cochraor to the southeast. It's a transmission line only,
and it's really interesting in the way it tries to
connect those two markets in a way that they haven't
(18:55):
been connected before and can really.
Speaker 3 (18:58):
Provide a lot of.
Speaker 4 (19:01):
Capacity, value, reliability, and resiliency to the systems at both ends.
Speaker 3 (19:06):
It almost is the same as.
Speaker 4 (19:08):
If you built like a big new three G gas
plant at either end, but one transmission line can serve the.
Speaker 3 (19:15):
Purpose of both. So we're really proud of that project.
Speaker 4 (19:18):
It's another, i would say, industry kind of moving thing
to do it privately, try to connect these two markets
and figure out how to market everything across the line.
It's been a big learning experience for us, and it's
something where we feel like it's getting close now. We've
been working on it for a long time and we're
really excited about the value it can bring to really
all the rate payers at both ends of the line.
(19:40):
The other thing I was just going to add is
a lead into renewable hydrogen, which I know we'll talk
about more later, but I really helped set up our
original strategy on how to approach that market and where
Patterned can play in that market, and how we think
about it really over the long term as developing market
(20:01):
and one that can be an exciting growth vector for us.
Speaker 2 (20:04):
Alex, thank you. That's actually a perfect segue for the
topics that I'm hoping to dive into. Next We're going
to take a quick break, and when we come back,
we'll talk more with Alex about the state of the
domestic renewable marketplace here on the Energy.
Speaker 3 (20:17):
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Speaker 2 (21:22):
Alex. We're recording this podcast at a moment of tremendous
uncertainty about domestic energy policy around anything other than the
fossil fuels. From your perspective, what's the general pulse and
outlook of the renewable space right now? Do you think
that the sheer demand for any and all new electrons,
perhaps combined with new technological efficiencies, is enough to offset
(21:42):
the potential loss of production tax credits. Are we going
to see a fundamental shift in the pace of deployment
of win versus solar And if so, how much of
that shift was already happening before the policy pendulum began
to swing.
Speaker 3 (21:53):
Sure.
Speaker 4 (21:54):
Yeah, I'll get my personal abuse here, which I should say,
all of these are really and you know, for one,
this load growth thing, this demand growth thing is a
really big deal. I mean, we haven't really had material
demand growth for two decades, and electrification is happening across transport,
across the various industry. There's reON shoring of heavy industry
(22:15):
and manufacturing that's driving a lot of demand. Then there's
this massive data center demand massive, you know, on top
of all that, and as you said, that's driving huge
demand for as many electrons as possible. And to us,
that's really the overriding signal. That means that, you know,
we need everything we can get. We need ally above
(22:36):
we very much.
Speaker 3 (22:37):
Still need renewables.
Speaker 4 (22:40):
And you know that demand too, though, is driving reliability challenges.
And there's a reality that those customers, their demand isn't
always that flexible. They need the power when they need it.
And I think even you'll see companies that had sort
of lofty sustainability goals putting those a little bit on
the sidebur you know, recognizing that right now, like speed
(23:02):
and scale are one and two for them, and green
and sheep are kind of three and four. And I
think we just have to recognize there's a time to
mention to this. They still care. They have something they
care about more right now, which is, you know, getting
to quantum computing the fastest. I don't really know what
that is, but it seems very important to them. And anyway,
(23:23):
but like there's a time to mention where Okay, we're
going to need to build gas plants, like that's just
the reality, and that's fine, and I think you just
play the roll the clock forward and what happens is
you just start to use them less and less. They're
still there to back up renewables, and renewables have to
sort of like win on the merits of providing sheeaper
(23:43):
energy and they'll continue to get built over time. So
we see this as something that affects PACE in some
ways but creates a lot of.
Speaker 3 (23:50):
Opportunity in other ways.
Speaker 4 (23:52):
And frankly, I think in the context of like policy
and just stull atmosphere right now around the energy space,
I see it as a time to be opportunistic. If
others are slowing down or pulling back, we have no
doubt that the energy transition isn't not happening. Like it's
still going to happen. Pace, you can debate, but like
(24:12):
we want to keep loading up our pipeline with assets
that can ripen over time and just position while others
maybe aren't as focused on it for what's going to
happen down the road in the future. I think as
to solar versus winds, like if you look us up historically,
we're more of a wind shop. We have a big
(24:33):
portfolio of operating wind assets. We have a few operating
solar assets. We've had a few others that we sold
over time. But now our development pipeline is more solar
than it is wind, and I think that's across the industry.
You'll see that where frankly, it's just easier to develop
solar and the costs have come down in a big way.
(24:53):
And so that's pattern likes to think we're one of
the best to doing wind, and so we're going to
keep doing that and creating differentiated value in that way.
But solar is happening at a.
Speaker 3 (25:04):
Big scale right now.
Speaker 2 (25:05):
So in thirty seconds or less, what's the story there?
I mean, I'm actually, I'll tell you, I'm a bit
surprised to hear you speak of solar in that way.
What has been either what's been the either technological or
financial differentiator that has allowed solar scale at such a
pace recently? And over what timeframe will we seen that happen?
Speaker 4 (25:27):
I mean, I think the shortest answer is just the
cost of panels that's come down, and that drastically in
the last decade. Efficiency improvements do but cost as much
as anything, and as like global manufacturing capacity for solar
panels has exploded. Cost is way down and we can
put them in more places than they make sense. And
the sunshine's almost everywhere, even in northern latitudes. It shines
(25:48):
in the summer, and those resources can make sense in
a lot of places.
Speaker 2 (25:52):
Okay, now, thanks, you explained that really, really elegantly. All Right,
we're gonna take a quick break and we come back.
We're gonna talk more with Alex about patterns ambition in
the renewable hydrogen value chain here on the Energy Mix
radio show.
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Speaker 2 (27:22):
Welcome back to the nationally syndicated Energy Mix radio show.
I'm Jeff Pollock and today we're talking with Alex Hoffer
a pattern energy Alex, to the extent you can please
tell us about patterns, ambitions and strategy with renewable hydrogen.
And I should add for anyone who may not be familiar,
renewable or green hydrogen is produced by using an electrolyizer
(27:43):
powered by zero carbon renewable electricity to split a water
molecule H two zero into hydrogen and oxygen. So, Alex,
to what extent is pattern seek to be fully integrated
across the hydrogen value chain and in particular, which sectors
and geographies are your primary target for off take sure?
Speaker 7 (28:04):
Yeah.
Speaker 3 (28:04):
Pattern.
Speaker 4 (28:06):
As we assess this market, we started with the position
that we're more than anything. We're an expert at renewables
in North America, and when we looked at how this
industry may scale over time, we see North America as
a globally competitive long term export of renewable fuels given
the strong renewable resources, foals, E, sport, capital markets, all
(28:30):
the reasons that America exports other kinds of energy too,
and so when you put those together, Okay, we're a
North American renewables expert. North American be a big export market.
You know, we see a place for us to play
in this space. And we know that these projects are
going to require complex and novel putting together of electrons
(28:52):
and molecules in a way that hasn't really been done before,
and they're going to have to be done at big scale,
and that's what we like to do. They complicated projects,
and so we think we can also bring our development
shops to there and actually pulling all the pieces together
to make these things go.
Speaker 3 (29:12):
So we want to.
Speaker 4 (29:12):
Play effectively in both the upstream and into the midstream
of renewable fuels, So not just owning the renewables the
wind and solar that are the primary fuel source, but
also the electrolyzers that you mentioned create the hydrogen. Maybe
any secondary chemical processing if we're going to turn it
(29:34):
into ammonia or methanol or something like that, we might
own part of that process too, probably in partnership with
someone who does stat more storably. And maybe we would
own some pipelines. We were a transmission developer, we know
how to develop linear infrastructure. It's a different technology, but
we may own pipelines too to bring whatever the product
is to market. I think we wouldn't likely be as
(29:58):
involved in like ocean cargo or delivery to end customers
the downstream, if you will. But we see yourselves as
trying to, you know, reduce some of the project on
project risk by taking on more of these pieces and
putting them together in a way that's cohesive.
Speaker 2 (30:16):
So can I interrupt you for one, let's say, before
you further. I mean, so it sounds like that interest
in being that vertically integrated is a matter of ambition
because you guys are good at doing complicated things as
opposed to a matter of necessity. I mean, what's the
blend there from your perspective, how much of that integration
(30:37):
across about you know, across the different components of that
complicated project, from hydrogen production through derivative production, export and transmission.
How much of that is Do you think that that
is a necessary recipe for success versus something that you
are uniquely qualified to do. But you could be successful
even if you were a little more focused on a
(30:58):
single niche.
Speaker 4 (31:01):
I think we we see it as a way to
create some additional value, really, I mean we don't. We
just don't really want to be pigion oled as like, Okay,
make the wind farm and you know, don't worry about
what happens to it after that, right, Like, we want
to understand how this small market is developing, understand really
who the end customers are. We may even have the
contracts to sell right the product of the end customer,
(31:23):
even if we're not the ones owning the ship sending
it across the ocean. And so I think as we
think about how to do these things at pig scale,
it's what we learned from doing our big transmission enabled
projects in the Southwest, Like you really have to understand
all the plumbing.
Speaker 3 (31:37):
You know, how the.
Speaker 4 (31:38):
Product gets from production all the way to end consumer
and now the dollars flow from end consumer back to
producer through retail markets and wholesale markets whatever. And when
you understand all that, you can really start to hack
it at scale and say, oh, if we put this
and this together, now we can do something bigue and
interesting and differentiate it. And so I think it's really
we think we have the ability with you know, adding
(32:00):
on some expertise and key areas and the opportunity to
do so.
Speaker 2 (32:04):
Okay, yeah, thanks, And I know you're going to say
something else there in terms of maybe some prognostication about
where that marketplace is heading over all, and sorry to interrupt.
I just think it's really interesting that you guys have
been so ambitious about the you know, the various links
in that value chain.
Speaker 3 (32:20):
Absolutely.
Speaker 4 (32:21):
Yeah, I mean, and I think I was gonna say, well,
one of the way we're approaching this space, I mean,
we're focused on what we know, which is the renewable
side of creating hydrogen, and the way we're approaching it,
like a lot of people are concerned about federal policy
requiring early matching your renewables. That actually works fine for
(32:43):
us generally. I think we want to design it in
a way that is sort of agnostic to it's sort
of future proof if you would. It's going to be
the way that it should be done in the future,
and we're not going to worry about timelines for when
that's going to be required. And we see this as
a market. It has a big feature, particularly for applications
(33:04):
that are the low hanging fruit and that are really
hard to otherwise decarbonize. So it's like fertilizer steel, another
heavy industry shipping fuel in the airplane fuel one day
if they can send the size the hydrogen its to
some other kind of synthetic fuel. But I think from
the renewable hydros inside of things, what's become clear in
(33:25):
the last year or so is that with all that
big demand growth I mentioned earlier for electricity, we really
need all the electrons we can to just be used
on the grid, and especially like renewable electrons are in
high demands, and so these kind of derivative applications like
taking them and splitting water and using molecules kind of
(33:48):
just have to wait in line a little bit. They're
turned because like the primary need is just getting all
these renewables onto the grid and serving all this electric demand.
And so I think it's fair to say that the
pacing of like people's excitement about this industry has slowed
down a little bit, but we absolutely still see it.
Speaker 3 (34:07):
As a big thing in the future.
Speaker 4 (34:08):
We have really long horizons and we're still pursuing projects
that we think are going to be slowly competitive and
just pacing them at the pace that makes sense. And
it's frankly a little helpful to be doing that with
less competition right now unless others focused on it.
Speaker 5 (34:23):
Yeah, I know.
Speaker 2 (34:23):
Again I have to say, I really appreciate your privatism,
and you make a great point, which is that the
just the mounting demand for the sheared demand for electrons
in and of itself, you know, sort of rejiggers the
hierarchy of where those electrons are going to be directed.
But really appreciate that you guys are are are just
hanging tough and acknowledged that hydrogen is the pathway and
(34:46):
probably the only pathway in some cases, to decombonization for
certain hard debate sectors. And I think it's you know,
it's a really healthy perspective. Okay, we're going to take
a quick break and we come back. We're going to
wrap things up with Alex's take on the role of
renewable generation gale in addressing the concurrent imperatives of growth,
energy security, and decarbonization here on the Energy Mix Radio show.
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Speaker 2 (36:12):
Welcome back to the nationally syndicated Energy Mix radio show.
I'm your guest host Jeff Pollock, and today we're talking
with Alex Hoffer, a pattern energy. Alex. One of the
things that has most impressed me in past conversations with
you and today is absolutely no exception, is your balance
perspective on the role of renewables in the global energy mix.
So what does a fully realized version of the domestic
(36:33):
renewables marketplace look like? When might we get there? And
what are the critical enablers along the way?
Speaker 4 (36:39):
Yeah, thanks, Jeff, I, like I referenced earlier, I mean,
I think it's fair to say like it certainly feels
like the age of gas out there right now. Everybody
knows that we need to get more dispatchable capacity onto
the grid to meet this growing demand. And gases, the
bridge fuel gases, the cleaner alternative certainly to cole and
gas is something we have a lot of in this country.
Speaker 3 (37:01):
We're blessed with and.
Speaker 4 (37:02):
So yeah, utilities are excited about putting new gas plants
into rate base. I think the corporate world is being
realistic about the kind of resources they're going to use
in the near term to meet the needs that they
have without this growing demand and setting some of their
sustainability goals on a longer horizon. And it's clear we're
(37:23):
going to build a bunch of new gas plants and
that's gonna be good. But even those new gas plants
are going to have some of their own challenges I
think coming online. Notably, there's a pre clear backlog in
the order books to even like buy new gas turbans
right now from ge or other ems. We're saying, oh,
you can't get one until twenty thirty, even if you
wanted to build it tomorrow. So there's just I think
(37:45):
it maybe been a slowdown and manufacturing capacity on things
like that that needs to catch back up again. And
you know, frankly, all these new gas plants, it's going
to be a lot of demand for gas and it's
going to compete somewhat with all the new LNG terminals
may come online on the Gulf Coast, and together that's
going to be a lot of new demand for gas,
(38:06):
which I think we can meet, but then you also
need a bunch of new pipelines, and so it's really
just it's not as easy.
Speaker 3 (38:11):
It's just saying, ah, let's do gas, and here it is. So,
you know, I think that.
Speaker 4 (38:20):
A bunch of those will get bills. Many of them
will actually be probably simple cycle gas plants is to
post a combined cycle, which you're better suited to really
like peaking and running less frequently and not providing baseload power.
So it actually kind of compliments perfectly continued growth and renewables.
So we're going to be pursuing all of the resources
we can in the next half decade or whatever to
(38:41):
really bring all this capacity online. And I think they're
actually going to compliment each other quite nicely even after.
Speaker 3 (38:47):
They're all built. Like I said earlier, like.
Speaker 4 (38:49):
We'll just keep building more renewables as they make sense
to as we have great connections and the energy is
cheap and the technology keeps getting better, and we'll use
the gas plants to back them up. And I think
that is, like to your question, at least the medium
term state of where we're going. You know, we have
still a bunch of gas capacity in the system, you
(39:10):
get to higher levels of renewable energy, so that can
get up to high levels, but when it gets cloudy
for a week, the gas plants are there and you
use them for that. I think it's important I'll shift
a little here not to forget about like energy storage
in this discussion too. Lithium batteries are really getting quite inexpensive,
(39:32):
I think, driven mostly by electric vehicle demand. Like it's
actually pretty decent chrunk of batteries and every electric vehicle,
and costs are anticipated to continue declining in the coming decade.
It's really kind of like I mentioned solar panels did
in the last decade. I mean, the projections are that
litium ian batteries are going to keep getting cheaper in
the decade to come, and so they really in many
(39:56):
regions are a real competitor to like peaker gas plants,
because while they may have shorter duration, you can run
them in sequence. You can run them for a few
hours and then another another set for another few hours.
And you know, I think there's probably breakthroughs on the
horizon too. We're not super close to the leading edge
of technology on that stuff, but I know a lot
(40:17):
of companies are trying to crack the next big thing
and even medium duration and longer duration storage, and obviously
storage is also a perfect compliment to what renewables are
trying to do. So whatever the other resources we're building
to provide capacity to the system really ends up lending
itself well, renewables continuing to provide cheap energy as a compliment.
Speaker 3 (40:40):
To that and as pattern.
Speaker 4 (40:43):
The other thing we have to emphasize is transmission too,
and the way we view it. I mean, we've underinvested
in transmission lines in this country for half a century,
and it's true that they are very hard to build.
If you want to build farmer miles of transmission, you have.
Speaker 3 (40:59):
Four miles people that don't want to look at it.
Speaker 4 (41:01):
They're really not very excited about it, and you have
to figure out how to allocate the costs, you know,
to all the stakeholders that can benefit from that transmission.
And there's a lot of debate about how to do
that correctly, but they're so valuable if you can get
them done, and particularly interregional lines can provide so many
fundamental benefits systems like I was talking about earlier, like
(41:24):
providing capacity at both ends with one line, and the
way we see the need for transmission, it's really not
just about the connecting renewables to load centers and moving
as moving resources over really long distances. It's really about
broad reliability and resilience. And I think like an example
(41:47):
of that, there's a lot of discussion in Texas right
now within URCOT about building a new overlay of super
high voltage lines within the state, really crossing the entire state.
And the reason to do that has nothing to do
with renewables. It has to do mostly serving oiling as
demand in the permia. Yeah, and also making sure the
lights stay on when there's a winter storm because they
can move all the resources around the state and anyway.
(42:09):
I think that's where we're in this transmission business. We
see to value, we see the need is so clear.
Speaker 3 (42:14):
We know it's really.
Speaker 4 (42:14):
Hard, it's tough sletting, but you know we're up for it.
We have long patient horizons when it comes to this stuff.
But I do hope we're going to start to build
more faster as a nation because the benefits of condicting
more things this allows us to get where we need
to go and meeting all the growing electric demands. Really
without having to build as much other kinds of steel
(42:35):
in the ground.
Speaker 3 (42:35):
Yeah.
Speaker 2 (42:36):
Look, you make a great point here. I mean, the
demand for more transmission is independent of the source of
those electrons. I mean that is an absolute that we know,
regardless of what the electron mix is, that transmission is
a necessity and is also a part of the solution
helps us sort of address some of that, if it's
done efficiently, address some of the of what would otherwise
(42:58):
be demand for new generation. You know, it's interesting if
I heard you correctly, and I think, you know, maybe
I'll offer this party thought. It sounds like a fully
enlightened state for the renewable industry in this country is
one in which we find gas backing up renewables instead
of the other way around, which is sort of what
the traditional paradigm has been, I think, and I think
(43:19):
I think that's again, you know, a really practical way
of viewing this. Right, It's not it still is a
mix of generation and it's it's still an era of
and but the proportions change over time. And I really
appreciate the way that you described that. All right, well,
we're all out of time for today's show. Alex. Thank
you so much for joining us today. I'm your guest host,
(43:42):
Jeff Pollock, and thank you for joining us here on
the Energy Mix Radio Show.
Speaker 1 (43:46):
The Energy Mix Radio Show is where we explore topics
that affect us all in the oil and gas industry.
Every week, our host will interview the movers and shakers
in this fast paced industry. You'll hear from industry experts,
elected officials, and many more on the Energy Mix Radio Show.
Speaker 7 (44:04):
At the Port of Corpus Christy, we maintain a clear
pathway for waterway commerce so that our customers can deliver
goods and energy products to the communities who depend on.
Speaker 3 (44:14):
Them around the world.
Speaker 7 (44:17):
We work diligently to build and enhance critical maritime infrastructure
and manage traffic twenty four hours a day, three hundred
and sixty five days a year. Thank you, Coastal Bend
Region for entrusting us with your most precious asset.
Speaker 1 (44:33):
Shale Oil and Gas Business Magazine provides services like print
advertising and digital marketing. Our digital advertising services include website, email, radio, video,
and social media. Shale also provides specialized web services from
website management to search engine optimization and social media management.
Visit our website shalemag dot com. Once again, that's Shale
(44:55):
sahal emagmag dot com to learn more. Shale is your
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