In this episode, Gil Jenkins and Guy Van Syckle speak with John Hensley, Senior Vice President – Markets and Policy Analysis for the American Clean Power Association (ACP). We dig into how clean energy manufacturing is powering a new chapter of economic prosperity, exploring the industry's rapid growth in facilities, the economic impact on communities, workforce development challenges, supply chain progress, the role of the 45X tax credit, and where the industry is headed by 2030.
In this episode, Gil Jenkins and Guy Van Syckle speak with John Hensley, Senior Vice President – Markets and Policy Analysis for the American Clean Power Association (ACP). We dig into how clean energy manufacturing is powering a new chapter of economic prosperity, exploring the industry's rapid growth in facilities, the economic impact on communities, workforce development challenges, supply chain progress, the role of the 45X tax credit, and where the industry is headed by 2030.
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Episode recorded June 26, 2026.
Gil: I'm Gil Jenkins.
Hilary: I'm Hilary Langer.
Guy: I'm Guy Van Syckle.
Kenny: I'm Kenny Gayles.
Gil: And this is Climate Positive.
Gil Jenkins On this episode of Climate Positive, Guy and I sit down with our friend John Hensley from the American Clean Power Association to talk clean energy manufacturing. It's a $31 billion industry supporting over 216,000 American jobs, and we dig into what's fueling that growth, and what's standing in the way. So without further ado, here's our conversation with John.
Gil Jenkins John, thanks for coming on the show. before we dig into the state of clean energy manufacturing, America builds power report, I want to give our listeners a little context on who you are and what you do at ACP. but why don't you why don't you give us the bio?
John Hensley Hey guy, hey Gil, thanks for having me on. Great to be here. Really looking forward to this conversation and talking about the report. I've been doing this for quite a while now. I sort of hate to admit how long I've been in the industry at this point, but you know, we just came back from Clean Power, which is a big flagship conference. I think this was my 13th event, 13th Clean Power that I've gone to. so been in this space for quite a while, but essentially I lead all of our analytical work for the Trade Association, American Clean Power Association, and by default for the industry, right? So we do everything from trying to understand what's happening in the policy and regulatory environment and converting that to what does it mean for the industry? How is it going to impact deployment? How's it going to impact the job landscape? How is it going to impact the way our industry is affecting the economy. And of course, then we use all that information and good data to tell the story about the impact that the clean energy industry is having, or how, you know, in the case of what we think are bad policy and regulations, how those are going to impact all those great benefits that we as an industry are bringing. But we're also kind of the curator of information about the industry, right? We build the statistics that help to tell the story of what the industry is bringing to the economy, to the country, how we are helping to build out the power sector, who the big players are, where they are building projects, how those projects are delivering clean, affordable, reliable electricity across the country. So we really help to inform a lot of the advocacy and policy work that we're doing so that we can tell a better story and really help people to understand the impact that this industry is having.
Gil Jenkins Well, let's dig right into it. the reason we want to have you on, as I mentioned at the top, and you alluded it's released at the recent annual Clean Power Conference in Houston. This is the State of Clean Energy Manufacturing Report. I believe it's the first time you've done this report. so before we get into all the great nuggets in there, give our listeners sort of the headline numbers. How How big is the clean energy manufacturing industry in the US right now and a tease on where it's headed based on what you put out
John Hensley Yeah, so we're super excited about this report. We used to do this as kind of a a small segment of our annual market report, right? And I think you know, as we'll see in a minute, as this industry, this segment of the industry has become quite large and a really powerful and important part of the broader clean energy landscape, we thought it made sense to break it out and tell that story on its own, right? How do we Tell a better story of how the clean energy manufacturing space is growing and helping to support all those projects that we're building across the country. So we've broken it out and really helped to deliver a much more comprehensive view of this segment of the industry. If I had to walk away with one number, for me it's 825, and that is the number of active manufacturing facilities in the US today that are operating that are supporting the clean energy economy. so these are everything from big facilities that make a lot of the components that you would commonly think of when you think of a a clean energy project. It's wind towers, wind blades, solar modules, battery modules in the cells. It's the enclosures that those things go into, right? It's the big stuff that you think about when you think about those projects. But it's also a bunch of the stuff that's internal there, right? Like A wind turbine, for example, is like 10,000 different components, right? Everything from ball bearings to bolts and nuts and a bunch of steel and everything else, right? So it's all those factories too that are helping to bring all those components together so we can actually build one of those components. But for me it it's really you know dramatic how big this segment of the industry has come. In twenty twenty five alone, we built seventy new. manufacturing facilities, which is it just kind of mind-boggling on its own, right? For a country that has not really been adding new manufacturing in the last couple of decades, right? For this segment of the economy to be bringing online 70 new facilities. And that's not a one-off trend, right? We built 60 new facilities in 2024, 43 in 2023. So we're building a lot of momentum and continue to build out that space.
Guy John, I mean, what I think is really compelling too is the stories of how you know factories really impact a community much more broadly than just that facility itself. so I know you kind of talk about the you know one to four multiplier, right? You've got your individual factory job, but then you have all the people in the community that are really supporting that ecosystem, right? are there any kind of favorite stories around that community impact? things that really resonated with you in in going through the research?
John Hensley It's a great question, guy. we we get in some of the the data and the specific stories, but one of the things that we do in the report to kind of really bring that to really paint that picture is we have a couple of vignettes, right? Where we've actually described some of the manufacturing facilities that have actually been built and not just, you know, here's a new plant in X location and it's got X number of jobs and it's added this much to GDP, but to really understand like what is that. manufacturing plant mean to the community? How is it helping to revitalize the economy? How's it helping to create those jobs? How has it impacted people's lives? So maybe let me give one specific example kind of walking through it is one that we have in the report, but I think you know there are there are dozens of examples that you can come across just in our industry of of how these are impacting them. I'm going to go to Pennsylvania on the banks of Ohio River. Just north and west of Pittsburgh. There is an old Bethlehem steel facility that was built in like 1904, right? So this thing has been around for a century or more. It is a plant that in World War II was building a lot of steel vessels for our our war efforts at the time. Unfortunately, after the war, that facility more or less ran on hard times and Basically shuddered and was left unused for a couple of decades, right? And you're kind of right in the heart of the Rust Belt. Obviously, a lot of that big industrialized manufacturing was really important to the region. And this plant was one of dozens that you know were kind of subjected to the same fate: closing down, jobs disappearing, a lot of the economic kind of roots starting to dry up. However, in 2022, we saw. one of our larger members, Next Power, partner with a company called JM Steel to open that facility again. And the purpose and intent was to build torque tubes, which are kind of the structural equipment that helps a solar project tilt and track the sun throughout the day, right? So you you need to be able to move that solar panel from east to west as the as the sun moves throughout the day. And these torque tubes enable that movement to take place. So NextPar and JM Steel reopen this facility and they start building those torque tubes in that location. You're bringing back the jobs, you're re-investing in that community, contributing to the local tax base. All of a sudden people are going out to eat more, you've got more folks coming from out of town, the hotels start to fill up, right? So you start to have this kind of snowball effect on the local economy. And as That story proves to be successful, right? They can start to expand. I think at this point they have multiple manufacturing lands that are now set up in that facility and they're doing something like four gigawatts a year of torque tube production at this point. So it's not just like this was a one-off, we'll come in, we'll build a bunch of torque tubes, and then all of a sudden, you know, the support and the manufacturing activity disappears. It's becoming quite durable, right? The other cool thing, and I I'm sure we'll talk about this later on, is you start to see these we call them indirect and induced effects, but you start to see all these spillover effects, right? all of a sudden that facility is producing a bunch of new torque tubes. So they need more steel, they need more welders, they need more folks to come in and clean the facility or, you know, utilities to keep it up and operating, right? So you start to create jobs that are tangential to the facility, but then also jobs that are just there because people are spending more money and are kind of more active in that economy. And all those things are what you know really help to make the economic impact durable and much more broader in its reach. And that's just one example, right? I think there's probably dozens of examples where we're seeing this this happen.
Guy Sure, yeah. No, with with seventy new facilities and and the breadth of the geographies that those are covering. just really impressive impact. The other thing that, you know, re was really quite wonderful to see was the salaries that the average worker at these facilities is making, right? North of a hundred thousand dollars and you know, well above national averages and what that can do again in terms of infusing that you know. economic stimulus into these communities. We'd be curious, you know, we we're talking about the next power facility. When you're looking at the work across the board that is being done at these sites, what is kind of the nature of that typically and what is you know commanding that additional premium beyond some other industries out there?
John Hensley Yeah. There's always a a you know, multiple factors blending into that, right? So on the on the one hand, demand is a little bit of it, right? Like we are in this moment where a lot of demand for new electricity, a lot of demand for underlying projects that these facilities are supporting. and as you have things like the data center and AI race taken off, which are also putting a lot of upward pressure on you know, workmanship, right? You start to have a little bit of an escalation in some of these wage premiums. So that that's a little bit of of what's going on here. But also when you when you sort of step back and think about the ways in which American manufacturing can be cost competitive across the global landscape, right? It really is in those higher skill set, more mechanized or industrialized manufacturing activities that really require someone with a higher skill set, a higher productivity or or throughput capability. and you see that reflected in the premium that that we're paying for for some of these jobs. In addition, they're just like tech pretty technically advanced activities as well, right? Like I was mentioned earlier, a wind turbine has like 10,000 components in it, right? And in the cell facility, you're bringing many of those 10,000 components together in this super sophisticated piece of equipment that has to be very precise. and so you you know, you want someone who has those deep skill sets to ensure that you're actually getting kind of the the quality that you need out of these facilities. and then you know, if you think of like the cell manufacturing space for either solar or batteries. Again, you know, basically like a semiconductor manufacturing facility is needed to kind of pull that stuff together. Very advanced. You need, you know, folks who have higher skill levels in order to bring that online. So it's it's also kind of a perfect fit for a lot of the workforce that we have in the US as well.
Guy Right, right. No, that makes ton of sense. And then one other question there just on kind of the geographic concentration of these facilities, right? You mentioned the facility in Pennsylvania. The report has a bunch of great maps on kind of where different ones are popping up across the country. You do see some concentration in, you know, kind of the southeast and the Midwest, Ohio, Michigan, some in Texas as well. Curious kind of what's driving concentration in different states. Is that a state policy dynamic? Is that existing, you know, facilities being repurposed or yeah, what are you seeing on that front?
John Hensley I mean, simply all of the above, right? I think all of those factors kind of play into this. look, we are a fifty state manufacturing industry. We've got facilities across all 50 states now. As you mentioned, like we do see these trends where we see heavy concentration, particularly in the southeast and the Midwest. You know, what I would think of as legacy kind of rust belt parts of the country. I it's a I think the factors vary by geography, right? So in the Midwest, a lot of the activity is either coincident with other industries that are supportive, right? So in the battery space, I think we've seen a lot of build out within the Midwest. Some of that is due to the EV expansion that we've seen going on and and you know the desire to build battery module and cell manufacturing close to a lot of our vehicle manufacturing capabilities, right? So that co-location effect is quite high. But also, you know, there are a plethora of these either vacant or underutilized manufacturing facilities that, you know, we can come into and retrofit and and start up that manufacturing activity in in maybe a bit more of a cost effective way than than building a brand new facility. The Southeast is an interesting place. back when I was with the American Wind Energy Association, the predecessor to ACP, we used to talk a lot about how, you know, Southeast isn't a great place for wind, right? You just don't have very high wind speeds. The the actual resource itself is not that great. But the Southeast has historically been a major contributor to the supply chain for the wind industry. So, You know, there are like a hundred and twenty different manufacturing facilities supporting the wind space in the southeast. And we used to always tell that story because we didn't have a great story around the projects that were being built in the southeast. But there's an ability to bring in other parts of the country that maybe don't have that good resource through the supply chain of manufacturing activity. It the Southeast has kind of emerged as the probably the modern version of the Rust Belt, right? We've seen a lot of the manufacturing activity in this country migrate to that part of the of the US. So some of it is just a natural outgrowth of that. That's where we've historically been investing over the last couple of decades. It makes sense to go ahead and and build some of these facilities in that region. certainly tax advantages, right? A lot of those states have incentives in place that are designed to recruit the manufacturing activity to those spaces, lower tax rates, et cetera. there is a little bit of proximity to the underlying activity too that that drives some of these decisions. So again, I'll go back to the wind space. Colorado is really a hub for wind manufacturing. You've got Vestis with two facilities there. CS Wynn has a tower manufacturing facility. They're right kind of plop in the middle of wind territory. You've send projects quickly to the east of kind of Illinois down through the plain states, or they can go west to hit up some of those good resources in New Mexico or Wyoming, et cetera, right? So you're kind of right in the middle of of wind country. Whereas the Southeast is emerging as a dominant player in the battery and solar space. So, you know, we're also seeing a lot of battery and solar manufacturing activity crop up in that part of the country. So, you know, again Long story short is that there are million and one factors that go into the decision making for where to drop one of these facilities. but you know, a couple of these trends are definitely having an outsized impact.
Gil Jenkins I wanna come back, John, to the workforce component a bit. And I think the report does a nice job with vignettes of identifying specific factories, but it also does a nice job highlighting what a few ACP member companies are doing representative of the industry in terms of building that future manufacturing workforce that's needed by partnering with local colleges and trade schools. could you talk about I think there's the LG Investis example and what what they're doing and others in terms of address the gaps that just come with this kind of growth, to develop that expertise and i anything you want to say about that,
John Hensley Yeah, it's interesting, Gil. When when I talk to a lot of our members and and folks in the in the industry, obviously a lot of the things that we're seeing on the policy and regulatory front are keeping people up at night, right? But the the other big piece that I think keeps a lot of these companies up at night is is actually finding an adequate workforce to support the industry, adequate in in terms of just like number of people who have the skill sets or how do we start developing that next generation of workforce that will build out those skill sets. And I it it it comes at a bit of a challenging time as well, right? Because a lot of these jobs are in high demand, particularly in the data center and AI space, right? Like there's a lot of overlap in the skill set. Electrician is kind of the most popular example that everybody comes up with, right? We I think going into the AI revolution or transition, whatever you want to call it, there was already a a gap in the number of electricians that were available to support the economy. And now you've basically supercharged that, right? but it, you know
Gil Jenkins Right. I heard some stat, it was like we need five hundred thousand just electricians by twenty thirty. and in part two hundred thousand in that fifty to seventy band are retiring. So, like even if we weren't experiencing this growth from AI data centers and manufacturing and power generation projects, largely in renewables, you know, we'd have a tall hurdle. But Please continue. Yeah. I mean it's
John Hensley Yeah, yeah, yeah. And and like we've been under investing or or disincentivizing some of that action, right? Not not to get into the whole like should you go to college or not conversation, but we have been encouraging people to go to college over the past 20, 30 years, right? So they've pursued those degrees rather than
Gil Jenkins A great trade. Yeah.
John Hensley yeah, going going to trade schools, right? Now a lot of that momentum is starting to shift and a lot of that is because the market signals are are Telling folks like, hey, you should become an electrician, you should become a plum, like you should enter the trades and and there's a lot of great opportunities for you there. So the the market is helping, right? Like those signals are being sent. At the same time, there there's stuff that is very specific to the industry, right? Like a wind technician is a wind technician, right? And and all the stuff that's in that nacelle is pretty specific to that piece of equipment. Sure, there are you know, electrical skills or or some mechanical skills that are certainly transferable, but you also really want to understand the guts of a wind turbine if you're gonna be main and maintaining it for for a facility. So we've seen companies like Vestis you know partner with local colleges and trade schools to really help develop those skills. and and to make, you know, a lot of it is about the education too. It's it's making those communities aware that this is a career that pays well that develop those that develops a set of very transferable skills and that can provide you with a very rewarding career, right? To encourage people to go to those colleges, go to those trade schools and start to develop that skill set. So there's a lot more to do here, right? I don't think we've we're we're just sort of scratching the surface on this issue at the moment. And we're gonna need to continue to to put a lot of time and effort to into both educating and to to make sure that we do have these programs and and pathways that can help make sure that that workforce actually develops and is there to support the industry. And it, you know, look at any of the the forecasted outlooks for this industry, right? This is an industry that the next five to ten years is going to double or triple in size, right? So the the need is not going away anytime soon.
Gil Jenkins Okay, staying on challenges and opportunities, the report finds that The US can now produce enough solar and battery storage modules to meet all domestic demand annually. maybe I don't know, 50 gigawatts. But there are some upstream supply chain gaps despite the tremendous progress, I would say what in the last almost two to three years on the other parts of solar and battery module manufacturing. Can you talk a little bit about what's behind those numbers and a the good news in terms of what it does to reduce our exposure to supply chain breaks, which will happen in the times we live in. maybe where we need to go from here to address some of those choke points.
John Hensley The great thing is, I think this data and that the stat that you pulled out is a clear indication that the policies and the actions that we're taking are working, right? Not only are we building the facilities, but they're starting to address those different segments of the supply chain. So to unpack it a bit more, you know, and and maybe let's take a solar facility, right? Many, many steps in in bringing a solar facility online. Modules is kind of the last. stage in that process. You bring all the cells together, you wire everything up, you put it in a panel, you put some glass around it, and you you fabricate it into kind of a contained piece of equipment, right? but there are multiple steps further upstream from there. You've got to actually create those cells. You've got to form the ingots and then slice the ingots so that you can ultimately create the cells. And then you've got to dig the polysilicone out of ground and refine it and make it into something that you can then melt down and purify into that ingot right. So a pretty complex manufacturing process. And I I don't think it's it's surprising to see that you know we're tackling the end of that supply chain and starting to move up, which is exactly what you want to see, right? You want to tackle the low-hanging fruit, the area where you have the the most opportunity for competitive advantage. and then you want to go work on those more challenging beds and and start to bring them online. And so in the battery in the solar space, we've done that. We now have more manufacturing capacity to meet the the demand is essentially in the market. Now that doesn't mean that every module that is deployed in the US is going to be a domestically manufacturing module. It just means we have the capacity to serve that full market if we wanted to, and if buyers wanted to only source domestically. And and great accomplishment, right? And the fact that it was achieved in such a short time frame is remarkable. but what I find more encouraging is that we're not stopping there, right? We are working further up that supply chain. So cells aren't there yet. We basically have one cell manufacturing facility online, but by the end of this year we expect a couple more, and by twenty twenty eight, we expect to be about seventy to eighty percent of the way towards meeting that domestic supply. And then we're not stopping there either, right? We're moving into the wafer and ingot space. We're thinking about how do we better incentivize polysilicon production and how do we incentivize the activity around refining that polysilicon into the solar grade quality that we need in order to make all of those components. So w we're seeing the evolution that you'd hope to see as you try to build out a domestic manufacturing. space. batteries is following the same trend. Wind is in a very different place because we basically started this process 10 or 15 years ago, right? So a lot of the big wind component manufacturing was brought to this country in kind of the 2006 through 10 timeframe. And but there we saw these same exact trends, right? The nacelle manufacturing was kind of the first to come to the market. Then we saw Blades follow, we saw towers follow, and then we saw those companies Festus, GE, Siemens, NordX bring along a lot of their supply chain and establish a lot of that activity in the US. So it, you know, I I don't have a figure on how many of those ten thousand components we can make here in the US, but it is a surprisingly large share of those widgets that can be manufactured here in the US now. so it's you know, it's it's been cool to see that evolution and it's exactly what we want to see.
Gil Jenkins And I gotta shout you guys out for those of our listeners that are visual learners like myself on on page 11, 12, and 13 of the report that we'll put in the show notes, you break down in a graphic like here are all the major materials and components in the solar supply chain. Here is everything in the battery storage supply chain and wind supply chain. I think I just want to flag that particular resource and thank you. I mean, someone's been working in this space, sometimes I also need the refresher. Right. It's wait, the ingot. Okay. Right.
John Hensley I get confused all the time, right? Like it's it's helpful for me. It's helpful for me. I know it's yeah.
Gil Jenkins Okay. So that I mean, I'm not saying that's the best thing in this almost seventy-five page report, but shout out to the graphics team over there for producing that.
John Hensley And it's you know what part of what we wanted to accomplish with that too is just a not only understand what that flow looks like, right? And and what are the big stages, but also to understand the complexity. You know, I think a lot of times people, especially when we think about bringing a supply chain, it's like, can't you just go out and build the facility? Well it's it's not that simple, right? Yeah. Exactly.
Gil Jenkins Yeah, it's just a bunch of glass, man. That's what they say. Right.
John Hensley so we're you know, we're trying to disabuse some of that. That misinformation and and really make sure that our readers understand how complex these supply chains are. And you know, it helps you have a better appreciation when we do add a new cell manufacturing facility or a new enclosure facility to understand where that sits in the broader ecosystem and how important that particular element is to a solar module or a battery storage facility.
Guy Other item that I'd that I'd love to flag in there too is the flow charts looking at where the existing components are sourced. you know, geographies around the world. And as you all are doing that type of research and and really the industry at large is you know, evaluating its supply chain, be curious kind of what you've seen in terms of incorporating learnings from what's going on in China and how they've built these kind of local hubs that are you know interconnected really impressive ecosystems that are supporting the component supply. But then also, you know, in the context of traditionally solar manufacturing has been a pretty brutal business, right? In terms of kind of compressing margins and kind of the regular turnover of having to replace supply lines and that type of thing every couple of years. wondering sort of what folks that are standing up these plants are thinking about in terms of just kind of the path to more sustainable, stable business model, you know, kind of how policy, you know, I think we're most of our listeners are are familiar with the 45 X manufacturing credit, but how do we get to kind of the the long term stability of of these facilities in the market?
John Hensley And so I'll go back to supply and demand, right? Like th those are are key drivers in the decision making for many of these companies. so on on the demand side, you know, barring some of the the policy and regulatory challenges that we're seeing for the wind and solar projects specifically to get built, right? Like I I have not experienced a more kind of market fundamentals supportive environment than what we're currently in. You know, we the stat that I use all the time is that by 2030, we need to add another thousand terawatt hours of supply of electricity to the grid. Now, a thousand terawatt hours to anybody on the street probably doesn't mean that much, but it's basically a size of the four a fourth of the grid, right? So this is, you know, we need to expand the grid
Guy Wild.
John Hensley itself by a quarter. And the grid is humongous. Right. It it is like the single largest mechanized system in the world. Right. So the the scale is just incredible. so we've we've got demand with us, right? There's plenty of demand, a lot of it coming from those data centers and and artificial intelligence companies, but it's not just there, right? We our own industry is creating demand through advanced manufacturing activity. We're not the only industry adding advanced manufacturing semiconductors. It's another kind of hotspot. in the market. Industrial activity, right? is also kind of following a similar trend to manufacturing. We still see a lot of electrification activities. 10 years ago nobody knew what a heat pump is. Now maybe 25% of people know what a heat pump is, but it's quickly gaining popularity as a a great technology for heating and cooling buildings across the country, all run on electricity in in most cases. EVs. Obviously continuing to sell everywhere. So the demand side of the equation is continuing to grow. That is giving some confidence on the supply side. But we also want you know some incentives to be in place over there. So 45X, which is the advanced manufacturing production tax credit, has been one of the main drivers. It provides those companies that do set up a manufacturing facility for a certain set of components. You know, basically a tax credit for every unit of those components that they are producing and selling to the marketplace. So they're getting a little bit of price support there, primarily to remain competitive with the broader economies. We're trying to get this segment of the industry up and off the ground. we think that program probably needs to continue for longer than what's currently on the books, right? We'd we'd like
Gil Jenkins And what is it, John? Is it is it end of twenty nine? I mean
John Hensley In a 29 is when it expires for most tech. wind is a bit earlier because of changes that we saw in OEEDA. Wind ends at the end of 27. Yes.
Gil Jenkins Yeah, they're twenty seven, right? Yeah. Yeah.
John Hensley So we'd we'd obviously like wind to be returned to parity with the other technologies. and then we'd like to see all the technologies extended out into the 2030s. some of it because a lot of the disruptions that we've seen, right? It's been harder to move projects forward and it's kind of disrupted some of that demand certainty or kind of demand stability that that we'd hope to see. but also because like if you think about it, IRA was passed in 2022. Most of these facilities didn't really start to come online until 24, 25. 25 to 29 is not a huge runway to like really establish a robust interconnected manufacturing and supply chain, right? So extending those out in the future can just make that whole hub a lot more durable. so part of it is is on the policy front, but then you know, part of it needs to be owned by the companies as well, right? They need to be staying a pace with. the direction of the technology, they need to be innovating, they need to be investing in R D and other activities to to keep them competitive in the marketplace. And you know, I think we're we're seeing that in a lot of cases and and hope to see it continue.
Gil Jenkins One quick follow-up on 45X, you know, there's an opportunity to look at where what the grid needs now, what the power sector needs now. it's specifically I don't believe some of the transformer or other switch gear. Could you talk about like the supply gaps and if you know, if we were if we're talking about forty five X in the future and what we could do to really continue to power clean energy manufacturing, there's a strikes me there's a real need on some of these things like transformers, which has been identified as a pressure point.
John Hensley Yeah, I yeah, I mean forty five X is a whole package is great. I think there are some opportunities to improve it, including adding additional components to the eligible list. Basically, you know, how can we incentivize some additional manufacturing activity here in the US? A couple of things really jumped to mind for me. And some of it has been laid bare by the the demand surge that we're seeing, right? So Transformers very much fits that bucket. Not a ton of transformer manufacturing activity in the US. They are in hot demand. The lead times on Transformers is extremely long, right? So there are a lot of, I think, strategic and geopolitical reasons to be investing in in Transformers, but also just there is not enough supply globally to meet not only the growing demand of the US, but we're also seeing a lot of the same trends happen across the entire world. So Transformers is a big one, switch gears. is another big area. Basically a lot of the grid connecting technology, right? We we're building all these power plants. We want to be able to transform the electricity to the right voltage and and make sure all the disconnects and and switching across those power lines is happening right. We need a lot of big, expensive, hard to make equipment make to make that happen. So adding those two components in would be great. The other category stuff that we talk about a lot on the grid side is basically grid enhancing technologies. So things like superconductors, monitoring equipment, line rating monitoring, that kind of stuff that can take a lot of the technology that that or or the capacity that's already deployed and better utilize it. and then You know, we've also been thinking a lot about the offshore space as well. Obviously, it's run into its own challenges in terms of being able to deploy the technology, but as you know, hopefully we see some of that pressure come off in future years and that industry starts to kind of move again, it'd be nice to see a lot of that manufacturing supply chain activity move to the US, kind of continue some of the trends that we saw from a few years ago. And so adding a couple other components specific to the offshore space would be helpful to really kick off that that trend again.
Guy And love to hear really the breadth of you know, and the diversity of of this manufacturing base. It's it's it's been just so impressed with C and appreciate you highlighting all of it for the industry. One area that I'd be curious, right, we're seeing the importance of battery storage as it relates to defense applications and you know, how critical it's been to our drone fleet and you know, showing up in so many other aspects of of how we think about defense. How are you seeing that kind of interest and demand for storage kind of flowing back to to impact support for some of these manufacturing facilities or any other kind of like, you know, defense procurement contracts or DOD grants or things like that that are also kind of flowing back to benefit the clean energy industry.
John Hensley Yeah, I mean the the cool thing about storage and and storage is you know right kind of having its moment. It it is viewed very positively from a bipartisan standpoint. I I think every day we're learning or discovering new applications of the technology, new spaces where it can be helpful, new spaces where it can be super cost competitive, not only at the grid, but for a lot of these off-grid defense. energy security type purposes. and so it it's it's cool to see kind of the exploration of a lot of those applications and and where the technology can continue to benefit all segments of the economy and kind of our defense apparatus. As part of that, right, there's this kind of like natural backflow as DOD and others look at the technology, think about how it can be implemented, think about how it can solve these kind of really challenging problems that they have, either from a a mobility standpoint or a remoteness standpoint or a backup standpoint or whatever the case might be, and you know, recycle those learnings back to the broader industry and the broader economy and and see that start to show up in a at a bit more of a commonplace. And then there's sort of the whole kind of cybersecurity element of this all as well, right? Like these power plants have a bit more brains in them compared to your conventional facility. And so it's really driving a lot of good thought and evolution for how we secure those facilities, how we you know, maintain kind of robust procedures and protections around access to. that equipment and the brains of of these machines, which it is great for the whole industry and great for the kind of the overall security of the grid itself.
Guy Absolutely. Yeah. The the interconnectedness of how we think about smart power electronics and what that means for additional capabilities, resilience, security, the grid, right? Just absolutely critical going forward. as we're talking about kind of brains and kind of transitioning that into this concept of embodied AI and some of the advanced robotics that seem just to be accelerating so, so fast. Where are you seeing that kind of come up in conversations around manufacturing? what is that offering in terms of like reduced costs, additional competitiveness against, you know, Chinese manufacturing or any other kind of platforms and what's what's exciting you there?
John Hensley Yeah. So it I I think it's probably a little bit too early to to come to a conclusion on this, but I you know, my sense is that Companies up and down the supply chain in the US are are trying to figure out ways to leverage that technology and improve their throughput, improve their cost management, improve the actual assembly of the components that that they're pulling together. So, you know, in many ways, these manufacturing facilities are like you and I, right? We're trying to better understand this technology, better understand how it can improve our own. productivity, how we may integrate it into our daily workflows, et cetera. And we're seeing a lot of that kind of experimentation take shape. obviously robotics in the manufacturing space has undergone a a pretty significant revolution over the last 10, 15 years. And you know, we're we're seeing the ability to leverage a lot of those learnings into a lot of these new facilities that are being set up. I I think The speed at which kind of the newness of these facilities is helpful, right? It's not like you're trying to take a 20-year-old plant and make it competitive with the today landscape and the today environment.
Guy Right. Right.
John Hensley You've got facilities that are only two or three years old, so they're they're fairly state of the art, quite advanced. So they they also have a a better ability to respond to and incorporate. AI or some of these other kind of advanced robotics into their workflows.
Gil Jenkins All right, John. I'm gonna ask you to crystal ball, you know, as the analyst in chief at ACP. I I you probably get asked this on like every single topic, but you did it in this report. So I'm gonna play it back to you. By twenty thirty, ACP is projecting nine hundred and fifty facilities and a fifty-five billion GDP contribution. There are a lot of things that have to go right to hit those numbers. but is there one thing that really has to go right in your view?
John Hensley I if if I had my wish list, the what I think would be the single most impactful is for the current administration to get out of the way, more or less, right? there we've got all the demand signals. The great thing about renewables is that we've already done the light work. We've been sitting in the interconnection queues, we've been going through the planning process, we've been bringing these projects right to the edge of being able to be built. And so all that needs to happen is that you know the government needs to stop throwing up roadblocks that make it challenging for those projects to move forward and realize that the the aims and the goals are shared. We want to deliver electricity. We want to advance a more capable, resilient, secure grid. We want to help to reduce costs for customers for their electricity. We want to support the data center demand and the AI infrastructure that's coming together. And we want to do all that in kind of the most cost-effective way. And the more that we slow renewable projects from being for the more we take options off the table. And when options come off the table, we either make it more expensive for everybody to realize those goals, or we make those goals unachievable, right? We have to start saying no to new data centers, to new command, to grid security, resiliency, right? We start have to accepting more risks in that space. And you know the good news is we don't have to do those things. We just have to build these projects and and we'll be able to achieve all those goals in a cost-effective way. and and we'll we'll realize this manufacturing activity as well, right? if if we give those companies better certainty around the volume of projects that are going to come, they will continue to invest in these domestic manufacturing plants.
Gil Jenkins From your lips. I love it.
John Hensley I think
Gil Jenkins we do a thing with all our guests. at the end we call it our hot seat. It's sort of a lightning round. These are mostly fill in the blank questions. There are no wrong answers. You can choose to skip if you if nothing comes to mind or I've asked something too spicy. But are you ready to take the hot seat?
John Hensley Yeah, let's was I'm in it.
Gil Jenkins Okay. the first fill in the blank question is my golden rule for energy markets is
John Hensley Most economics should win.
Gil Jenkins Okay, the most beautiful thing I've ever seen on a spreadsheet is
John Hensley Monte Carlo simulation.
Gil Jenkins A Monte Carlo simulation? Okay, we're gonna have to got it. I'll have to look that up after this.
John Hensley Ha ha ha.
Gil Jenkins What's a data point in this report or the many other wonderful data points you produce in your day to day with an incredible team that you have tried to bring up at a cocktail party or a I don't know, barbecue in Maine, you're up in Maine, like just just to see how esoteric and you know, how it would land. Is there one that you've used recently
John Hensley Yeah, there there's a great one that I actually just discovered right before we went to Clean Power Town in Houston. And that is the fact that Urcot, which is the grid for most of that state, is now producing more of its electricity from non fossil resources than it is from basically oil and gas and coal. And that's
Gil Jenkins Whoa.
John Hensley the first time in the history of that market. Incredible.
Gil Jenkins What's what's something that excites you about our ability to address you know climate through all this work in a time where there isn't always great news about that trajectory? What keeps you optimistic
John Hensley Yeah. It
Gil Jenkins there?
John Hensley That a lot of the challenges that we're seeing in the US don't exist in the rest of the world. The the rest of the world has they're where we were four years ago, right? Like clean energy is a proven tech that works and that is low cost and that achieves a lot of the goals that we as a society want to achieve. and they are full steam ahead on that. you know, consider the fact that China last year built something like a hundred gigawatts of wind power. A hundred gigawatts, right? They're building like our entire fleet in a year. and then you know, that's just China. The rest of the world is also kind of going in wholesale on these technologies. And it's fantastic, right? The the US has already decarbonized quite a bit. So to see this trend take place in those less decarbonized markets is awesome.
Gil Jenkins That's a good note to end on. John, thank you, my friend. Appreciate you. I appreciate the work that ACP does on the analytics to help us better tell our story, help us help others understand the unique role we play in this economy and the important role. particularly during an era of power demand that none of us have seen in our lifetimes thank you for producing this excellent report and future reports.
John Hensley Of course, Gil, Guy, thanks for having me. And if any of your
Guy Thank you, John.
John Hensley listeners have questions about any of the work that we do or want to see more of that work, please reach out.
Gil: If you enjoyed this week's podcast, please leave us a rating and review on Apple and Spotify. It really helps us reach more listeners. You can also let us know what you thought via Twitter at Climateposipod, or email us at climatepositive@hasi.com. I'm Gil Jenkins and this is Climate Positive.