Giulia Siccardo: The Future of US Energy – Innovation and Investment

Episode 28 February 01, 2024 00:47:10
Giulia Siccardo: The Future of US Energy – Innovation and Investment
AYNA INSIGHTS
Giulia Siccardo: The Future of US Energy – Innovation and Investment

Feb 01 2024 | 00:47:10

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Show Notes

Ayna.AI’s CEO Guarav Batra speaks with Giulia Siccardo on the pressing issues of US infrastructure and manufacturing. Giulia is a Director at the US Department of Energy, and she sheds light on the department's strategic shift toward supporting large-scale energy technologies and their impact on the future of US manufacturing. She discusses the pivotal role played by recent legislation, like the Inflation Reduction Act and the Bipartisan Infrastructure Law, in fueling investments into clean energy projects ready for gigafactory scale production. This episode promises to give you an insider's view of how the DOE is responding to the changing economic landscape, helping companies navigate the complexities of large capital projects.

Giulia Siccardo is an experienced professional in the energy, automotive, and sustainability sectors. As the Director of the Department of Energy’s Office of Manufacturing & Energy Supply Chains, she is responsible for awarding government investments to strengthen and secure U.S. manufacturing capacity and workforce development, as well as administer the Defense Production Act for critical energy technologies. Her scope includes batteries, hydrogen, heat pumps, solar, transmission, and zero-emission materials, among other technologies. Siccardo was previously a Partner at McKinsey & Company and leader of McKinsey’s Green Growth service line. Born in California, Siccardo holds a dual B.A. in Economics and Environmental Studies from Dartmouth College and an MBA from Harvard Business School.

 

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Ayna Insights is brought to you by Ayna.AI—a managed service provider that combines domain expertise and transformation capabilities to create alpha—performance superior to market indices—in the industrial and industrial technology sector. The host of this episode, Gaurav Batra, is the President & CEO of Ayna.AI.

 

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Episode Transcript

[00:00:03] Speaker A: Welcome to INa Insights, where prominent leaders and influencers shaping the industrial and industrial technology sector discuss topics that are critical for executives, boards and investors. INA Insights is brought to you by Ina AI, a firm focused on working with industrial companies to make them unrivaled. Segment of one leaders to learn more about Ina AI, please visit our website at ww Ina AI. [00:00:40] Speaker B: Good morning, folks. Welcome to another episode of our Future of Infrastructure podcast series hosted by INi Insights. Today we are honored to have with us Julia Cicado, director of the US Department of Energy, as a special guest. For those who may not know Julia, Julia brings with her an extensive and unique background in the energy, automotive and sustainability sectors. In a current role at the DoE. She is overseeing investments to strengthen us manufacturing and energy supply chains. Critical and hot topic, and we are eager to dive deep into these topics as they impact the future of infrastructure here in the US. So with that, Julia, welcome to our podcast. We are super excited to have you here and are looking forward to talking about DoE, the overall infrastructure landscape as well as your journey as well as you got to this point. [00:01:27] Speaker C: So excited to be here, Korrav, and thank you to you and the team for having me. [00:01:31] Speaker B: Super. So, Julia, maybe we start off with just understanding your current role at the DoE. You are clearly, obviously the director of the Department of Energy. Could you share as a part of the office of manufacturing and Energy supply chains, what your mandate is and what are you trying to achieve over the next five to 1020 years, especially as we talk about strengthening the US manufacturing capacity as well as workforce development? [00:01:55] Speaker C: Yeah, absolutely. Big question. We'll start right off with it. So I might take a half step back and share a little bit how we're organized at the Department of Energy. And I think for a lot of folks like myself, like yourself, coming from the private sector, government agencies can seem a little bit like a black box, and it's not exactly clear how everything works. So I'll share and start with a very important date that we're coming on almost the two year anniversary of, and that is the passage of the Inflation Reduction act and the bipartisan infrastructure law. And at that time, a truly historic amount of capital was directed towards energy and towards american manufacturing in energy, and american investment in energy through those pieces of legislation. And this really marks a historic moment for the department, because our Department of Energy has been investing in energy technically for a long time, but at a very different part of the commercialization journey. Most of those investments were really directed at R and D. And so looking at those earlier stage investments with really famous programs such as Arpae, that were working with projects coming out of university labs, with a couple smart graduate students, a professor handing them the one $2 million needed to decide to incorporate the company and make a go at it. What we were very far away from doing was actually investing with companies at that juncture where they need to scale. And you and I have talked about the energy transition and the importance of actually investing in physical manufacturing, not just the digital component around this. And what that means is that takes risk and that takes a lot of capital. And so for the first time, we were really positioned to invest at this juncture. And what that brought together was a spectrum of really early stage investing, this manufacturing stage investing, where my office plays, and then even providing debt financing towards the end of that journey with the loan programs office. And so for the first time in history, the Department of Energy has been positioned to really be able to provide capital and support companies as they scale from nasancy all the way up through being one of the big oems in the global arena. And with that context, I'll share. It's a very exciting time. Within that spectrum, I lead our office of manufacturing and Energy supply chains, and we are focused on deploying clean energy technologies that are really in the here and now, where there is a proven technology, it is past the pilot stage. There are offtake agreements in place, or the vestiges of those, but we really need to scale up and build that first or second gigafactory scale plant. And these are typically projects that are on the scale of maybe a billion dollars, give or take. And so we make some pretty significant investments. On average, 100 million dollar check size will go slightly smaller, we'll go a bit larger, depending on the sector in the space, and provide catalytic project level capital that boosts the IRR of the project and makes that project go forward. And when I say boost the IRR, we are investing without requiring a return. So this is, for all intents and purposes, a very finely directed grant that does have some teeth on it. So there are some requirements, and we do have some recourse to kind of claw that back if there are changes in strategy that are unexpected. But if all goes as intended, this is really an 100 or 200 million dollar boost to a project that really enables private sector capital to get comfortable doing a deal that they may not otherwise, because it's new, because we haven't invested in that space in the US, because it's a highly competitive area and really addresses a gap in manufacturing capacity that we might have in that segment, but also gives that private sector finance community a blueprint to be able to do this kind of project going forward. And we really view ourselves as a catalyst for private sector investment in us energy manufacturing and hope that these projects really go on to replicate far beyond the ones that we're directly investing in. So that's a little bit of where we are, where we're going. Happy to go into more detail, but I'll pause there. [00:06:31] Speaker B: That's amazing, Julian, and thank you so much for actually laying down that context. I personally didn't appreciate how unique this portion effort is in DoE's history. So kudos. Kudos to you and your team there. So, Julia, just, I guess then, as I understand this further, this is more like deploying capital. And clearly the macroeconomic situation is very different from what it was maybe two or three years back, when I guess, all this was envisaged and planned for. So can you speak a little bit about how your office is in particular changing or tweaking your strategy to kind of help companies and projects cope with what's been changing on the macroeconomic scale? [00:07:06] Speaker C: Yeah, so we are very much dealing with big capital projects, and big capital projects have real world problems. Nothing actually turns out exactly as you plan for. And so the approach that we take, and we are a startup within the government, so we're working through all of this as we scale and learning alongside the companies that we're investing in and that are making up our portfolio. But we really think about the phases of growth that the company is going to need to embark on and tranche our capital according to the stages of growth, so that we have actual interim milestones that we agree upon with the company as we start, where we can check in and make sure that things are on track and going in the right direction. And we build in some flexibility around costs that we know are not going to be in complete control. There are pathways and processes where if a change needs to happen to the project scope, we can revise it. We really seek to be flexible, but to still hold the companies in our portfolio to that very high bar that they were selected off of. For every dollar that we decide to invest, we have more than $10 looking for our investment partnership. And so it's really been a very competitive process for all of our programs for us to pick this group. And so we want to make sure that we can enable those changes, but also still meet quite particular criteria that we have that enabled us to select that program. [00:08:46] Speaker B: Incredibly helpful, Julia. So I guess as we think about at least the last two or three years, no conversation is complete without talking about COVID And in particular, as you are focused on supply chain and resilience here in the US, would love to understand what enduring impacts has your office experienced from the pandemic as we talk about resilience. Energy supply chain workforce development. [00:09:09] Speaker C: Yeah, I think this concept of supply chain resilience was always in the under occurrence, but it really came to a fore when we all experienced it as a global population in our everyday lives. And we suddenly realized which products we relied on every day that came from overseas because we suddenly weren't able to get them. And the same thing really happened in the automotive and the energy sectors in a big way. I think were all still somewhat reeling from the semiconductor shortages in automotive. And the real wedge that that put into the OEM's ability is to start to forward plan and think through how much inventory to put on hold. And I think a lot of the movement that we're still seeing in the space is clouded by those signals still needing to somewhat dissipate. But I think what that really drove for companies was a big consideration around actually deciding whether they should have more local and therefore more resilient supply chains. And I think about 40% of companies across different industries actually chose to go on a full strategic review of their supplier basis and think through how to structure those in a way where they were closer to the end market, and therefore more able to weather these kinds of shocks, whether caused by a pandemic or any other exogenous event. And I think if you look at a lot of the strategy that we are investing behind, you really see principles of that at the fore. We are very much thinking about where are products coming from. My office really has three building blocks. We're investing in manufacturing capacity, we're investing in workforce, the people that power that manufacturing capacity. And we're driving research. And that research is really pinpointed at supply chain vulnerabilities, at the choke points, understanding them at a truly granular level. We lack electrolyte production in the US, and the battery space. Is the problem the manufacturing capacity or the fact that we don't have the right labor trained to actually design that product work in those factories? These are the kinds of questions that we obsess over to try and then direct our investment strategies towards these gaps. And we look at the gaps and know, okay, on the one hand, we may not be manufacturing or running that activity in the US, but on the other hand, who is doing it and is that a trade partner of ours? Is it not a trade partner? And how does that cause us to prioritize this segment above another? When we put forward our investments, you'll see we always put forward our announcements with areas of interest. We'll list out, we call them AOI areas of interest. We'll list out 810, twelve different areas that are, for us, top priority. These are really where we can communicate a little bit our investment strategy with the market, what we're interested in. And a lot of this understanding and kind of obsession with resilience absolutely has root in what we all experienced during the pandemic. [00:12:24] Speaker B: Incredibly helpful. So, Julie, you spoke about a little bit of your investment strategy. I think you talked about how you wanted to make sure that you are supporting every stage of the scale up of a particular project or an enterprise in the energy space. But energy is like replete with efforts on batteries, hydrogen, solar transmission, zero emission materials. It's just so diverse. How do you prioritize and strategize investments in your portfolio? How do you think about the construct of that? [00:12:52] Speaker C: Absolutely. So it's certainly a bit of art and a bit of science across all of those very important energy products, but we start on a very basic level and understand supply and demand. Where are we seeing shortages now? Where people are waiting a long time to be able to procure their energy product, and also based on the nature of supply chains and the growth rates that we're seeing. And we have a little bit of a wider view at the department because we get to see quite a lot in terms of upcoming projects and proposals. Where do we see potential shortages, potential imbalances between supply and demand emerging. And we can layer into that a kind of global trade view. So we really can have this unique vantage point from which to then understand where are the energy technologies, from wind turbines to solar panels to heat pumps to electrolyzers, where those gaps are really most prominent. And we don't just stop there. We dig in, and it's an agency full of phds. We dig in and we understand, okay, at the subsegment level of these supply chains, what are the drivers of those imbalances? What is really causing this potential gap? And then we build out an investment strategy where we're looking for companies that can help us address those imbalances. And once we have this investment strategy, we'll go out, we'll communicate it through our areas of interest, and then the investment process is a little bit different than in the private sector. I think up until this point, you could say, okay, this is a good investment shop with a great research team. They'd run everything the same way. This is where it kind of diverges. As a public entity, we have in mind our investment strategy and in mind the kind of companies that we're looking for. But we are required to kind of put out a public call saying we're investing and we have a certain amount of capital earmarked for this area. And we then get inbound and we review the proposals that we receive. These are called concept papers in government speak, which is, as I shared at the beginning, a vestige of this kind of academic origin of our investments at the department. But this concept paper is really a short pitch, gives us a sense, what's the project about? It's a few pages long. Lets us see if this is the type of thing that we are keen on or not, and we give back some feedback at that point. And then we ask for the full project proposal. Full project plan, the full application. And at that point, we review all of that in quite some detail, invite the top companies to come for a management interview, usually in DC, but sometimes virtually, depending on schedules, and then move forward with a pool of companies that we would like to make a plan to actually initiate an investment. It's during this time that we work with the companies to set out those milestones to really have a clear plan on what capital will be needed. When is construction actually going to start? When are we going to need to do our site review to make sure that all of the environmental permits are in place? When are we going to start to ramp up construction? When do we start moving on to operations? And we prepare a plan where we're investing alongside and we're meeting those milestones. And the projects that we select, we are selecting them for their commercial strengths, for their abilities to meet these supply chain gaps, to meet these gaps in the energy economy. But we're holding a higher bar than the private sector will in that we are really looking holistically at how these projects are positioned to contribute to the economy for the long run. So if a project is taking a forward stance and looking at what their labor plans are going to be for the next decades, and actually is taking steps to invest in local community colleges and vocational programs, to train up that workforce so that it can come and participate in that local project, that's a huge and exciting asset for us, because this is a company that is really thinking ahead to that longer term stakeholder capitalism view around what economic permanence really is. And so a lot of the milestones that we review and check in on are not just okay, how are you progressing on your fel deadlines? But know, are you actually moving forward on those community benefits programs? And. [00:17:46] Speaker B: It got it. Julia, maybe a last question, given your current role at DOE, and then we move into maybe the infrastructure space a little bit as well. Now, being in your seat for, I'm guessing more than a year now, what are your lessons learned? Working with a range of enterprises, I'm assuming a range of startups who are dealing with energy and manufacturing, supply chain resilience. What are the lessons you've learned and what folks might benefit from your perspective as to what they could be doing differently as they interact with the DoE? [00:18:15] Speaker C: Yeah, I think there are new lessons every single day, so I will caveat with that. But I think one profitability needs to stay in focus. And we have very expansive objectives with the companies that we choose and the investments that we make. And each of these companies, we think that they're positioned to change the world, but we need to keep that focus on profitability first and foremost. And so I would say that continues to be important here, and folks who interact with us should keep it in mind. Second, I think building on what we were discussing before, the fact that labor can truly be a partner, I think that is sometimes when folks are jumping into profitability as a short termist view of profitability, but actually thinking strategically about what investments you're making, not just in protecting your ip or in securing your supply chains, but also thinking about the people component. We're in a moment of transition, and the jobs that people have been doing and been training for may not be the jobs that are on the rise in the coming decade. So really being smart and having a plan around that I think will set companies apart. And then finally, I would think about the fact that both startups and large corporations really have an important role to play and have distinct advantages that they can bring in to this transition. On the large corporate side, the ability to draw from one's own balance sheet in growing a new business that has a slightly different risk profile, different growth profile, different pace of scaling, I think can be a highly significant advantage in this space. And on the startup side, when managed well, I think the ability to be agile, the ability to spot important pivot points where a particular technology can be relevant for more than one market segment, and to be able to, in an agile manner, make those steps, I think also positions a lot of these companies to stand. You know, it is a dynamic space. I think there's know no one path to, you know, we're inspired by know learning from the companies that we work with every day. [00:20:40] Speaker B: Incredibly helpful. I think those pointers would be very helpful to keep in mind as folks come out and reach out and see how they could work with the Doe together. So maybe, Julia, we can now move a little bit to your perspectives on the infrastructure landscape as a whole. So your involvement with the sector has been more than a decade long, in particular focusing on low carbon systems and how to scale them up. You founded Frontier, which is the billion dollar plus advanced market commitment, where you aim to catalyze the high permanence carbon oxide removals. How do you see such initiatives shaping the demand and development of clean energy technology in the space? [00:21:15] Speaker C: Yeah, so in my office now at the DoE, most of what we focus on is really at the high end of a spectrum that we use a lot. At the Doe, it's called technology readiness level. So it's a scale that goes from one through nine. And basically, as you're approaching nine, you are a fully mature technology, a company that is delivering a product into a fully mature landscape. What is important to remember is that there are some very pivotal energy technologies that are not yet in that space, and even some that are, if you are looking at the ones that are really engaging in ESG practices, driving a price premium relative to the industry standard, or simply not yet having both sides of that market. And so for these technologies, not just a supply side push, which is most of what my office is doing, investing in derisking the ability to scale up manufacturing capacity, there's something more that's needed. In the case of these other technologies, they may need a demand side push as well. And so before coming to the Department of Energy, I was engaged in launching frontier, as you mentioned, Gorav. And really, the idea there is that in the carbon dioxide removals market today, there exists some friction. It's kind of unclear what the quality is, how much these things should cost. We know that removing carbon dioxide sounds like a great idea, but it seems expensive. How can we buy down that cost curve? There's all of these questions floating out there, and one potential solution is to aggregate some of those demand signals and actually coordinate a forward purchase plan to be able to give suppliers certainty that there will be a market to meet them if they're able to produce at certain levels. And I think this concept is one that is very powerful. It's one that we are going to see in multiple places, across clean energy, from the industrial sector to the core energy sector. And it was, I think, very illuminating to be involved in that. Coming over to doe, our signature demand side initiative, which we actually just launched about ten days ago, is one around hydrogen. And we're doing things a little bit differently. And I think I'm enthusiastic to see how this plays out. But it's a similar scale of program. It's about a billion dollars to catalyze demand side action around hydrogen. It complements a $7 billion set of investments that we've committed to making as a department around hydrogen hubs across the US. So really focused around bringing together hydrogen generation, transportation, storage and customers. And this demand side initiative, I think one thing that is very wise about it, and I'm excited to see how this plays, is that we've actually selected a three party consortium that will design this demand side program before companies are actually invited in it. And I think it can be very important to actually take the time up front to invest in how something is going to work, what the objectives are, and make sure that all parties are on the same page, so that when companies sign on, it can really scale. So the consortium around the hydrogen hubs and demand side initiative integrates both a hydrogen economy expert think tank group, a markets group, as well as a group that drives more of a regulatory perspective. And together those groups are going to be very well positioned to design the right mechanism, price point and so on contribution levels, so that companies can kind of come on with speed and with clarity. So that is going to unfold over the next six to nine months in terms of a design stage. And I think we're very excited to bring that concept to other technologies. Like if you think about in the industrial decarbonization world, green cement, green steel segments, where really aggregating that demand signal is important. And it's a concept I think there's a lot of enthusiasm around applying in the energy space. But this concept got its roots many years ago at the beginning of vaccine development. And I think there the story was that as we were trying to provide enough incentive to companies to develop a vaccine, we needed to give them forward certainty and forward commitment. And so it's worked in the past. It's enabled us to make significant scientific progress, and we're really excited as a department to be an agency that can, in a neutral manner, provide some seed capital to these types of efforts, bring together the right types of players who can design it and structure it well, and create that ecosystem for then the private sector to really drive forward with it. [00:26:25] Speaker B: And that's incredible to hear. I think, Julia, this is, I think, a great example of, one of the things I wanted to ask you, which is, how does the government investment play a role in setting up ecosystems? Right, because most things require a village to stand up, and this is literally a great example of that. So any further thoughts on how you've seen, as you've kind of played this role at DoE, how government investment can play a role in setting up both the corporate as well as the social ecosystems in the context of energy and manufacturing? [00:26:55] Speaker C: Yeah, I mean, our whole focus is really thinking about how we can catalyze and we can set up the right incentives that then industry can run with and just create those signals. So I think around the social ecosystem, we are, of course, very much guided by what is a concept that was really pioneered in the Biden administration around these community benefits plans. And what are the community benefits plans? The idea is really that a company should be thinking more than just how is the project going to drive returns to shareholders? How is this project positioned to create value within the context of the whole community? And so we put out this idea, and it's up to the companies to kind of come back to us and share how they would propose to implement such a thing. And so I think it's an important example of how we can create some of that incentive, but still let the company lead. And I think we see, I can just share an example to bring this to life, but we actually kind of think through prioritizing our selections and our investment decisions on projects that really bubble up to the top on this dimension, in addition to commercial viability and technical prowess and so on. So, one example, six K, which is an advanced materials company in Tennessee, we were very excited to fund one of their projects with a $50 million investment. And they're producing cathode active materials, which are a core precursor to the positive part of the battery, and are able to produce, with their technology, a factory that's flexible to run both NMC as well as LFP. So NMC being a chemistry that is right now generally better positioned to drive energy density and range, as well as LFP, which is a more affordable and increasingly well performing chemistry. So, given we're one in this period of flexibility across technologies, they're able to provide a transitioning technology that can enable their community and manufacturing center to continue to be relevant. They also are able to do this at lower cost relative to much of what's imported from overseas and also with lower carbon emissions. So they're running a greener factory, creating a product that has less embedded emissions in it and is price competitive, and they're employing locally within their facility. 40% of jobs are going directly to the most disadvantaged communities in their region. So these are some of the things that we start to stack up, and then we get really excited about companies that are really positioning themselves to be the change, both globally as well as locally. And that is a recipe for long run success. [00:29:55] Speaker B: Awesome. That's incredibly helpful. Julia. I think you talk about the nascentness of these technologies and how they may shift in the future and how you're helping companies manage that. I think no conversation about technology is complete without talking about AI, engineerative AI and what's happening in that field and how pervasive it's getting. Any thoughts from your perspective of how you think that might help as you build your vision on energy and manufacturing in the DOE? [00:30:22] Speaker C: Yeah, I think no conversation is going without some mention of AI in the Department of Energy as well. Biden Harris team put out an executive order and actually required every agency to stand up a task force and think through what they were going to do about how we actually improve our operations with AI, how we stay at the front of the curve on the topic and actually in the department. We've already been thinking about it for some time. We've been partnering with industry through our national labs and through some of our initiatives around the energy earthshots and our research center around those earthshots, to do things like create, with our combination of industry data and our AIML models, new designs for offshore wind turbines, how the nacelle should be structured. For example, during the pandemic, one of our labs was working really closely with industry to think through how we could redesign the manufacturing process for n 95 masks to be more energy efficient, and got to a point where we could save 20% emissions. And so I think there's a lot of really exciting research in this space that we're driving. I think if I kind of transfer over and think through about our office operations, we capture and sit on a substantial amount of data. Anytime that we're going forward to the private sector with a call for investments, we're receiving a great deal of information that sanitized and aggregated can give us really important insights for how we can better support industry. We can see what types of job categories are going to be in highest demand, and how quickly is demand in those sectors growing and in which pockets of the US? What might we be able to surmise based on the scale and energy intensity of a typical factory? What the T D needs might know for us to get electrons of the right quality and right renewable profile to the pockets where manufacturing centers are really emerging. So something beyond that that I'm excited for us to do is to use AI through our office and even harness some of those tools to be able to provide better insights to our portfolio and better insights to our investment making team. [00:32:50] Speaker B: Very helpful, Julian. I think in concept with AI, we are also seeing the emergence of ESG. ESG obviously now is becoming more and more, I think, integral to most corporate strategies folks are drafting these days. I think would be great to hear from you. From a Doe perspective, how does ESD come into your decision making, your operations? And I'm assuming the benefits are probably a lot very synergistic as to what you're driving through the office, but any challenges you see as you can incorporate that in your operating model. [00:33:17] Speaker C: Yeah, so I think the community benefits plan is really our agency's answer to how we integrate ESG. And it's really focusing on the company and letting the company design and drive. What is their plan for investing in the social fabric of the community in which they're trying to build roots? Because all of our projects are about creating new manufacturing capacity, expanding existing manufacturing capacity, revitalizing it. And so all of that means new investments, new types of operations in a particular community. I think it really all comes back to that mechanism. At the same time, it's not easy, right? So for the company to know exactly what is going to work. And so what we really encourage is that local engagement and doing that early and often, and we create forums and events where that can be facilitated. One of the engagements that we ran at the end of last year, our director of energy, justice and equity organized a visit to the river parishes in Louisiana, which has been a heavily industrialized area for decades, actually referred to as Cancer Alley, where people live in fence line communities and their children play in the plume of a toxic power plant that is emitting pollutants right into a playground, and seeing that firsthand, and bringing industry executives there to see it firsthand, to talk to the community and then shape what that plan is. That plan is so much more real than if two people meet on a zoom and throw some ideas onto a PowerPoint slide. And so that is the level of engagement that we really encourage and try and help facilitate getting out there, talking to people, hearing their stories, and that is really eye opening. We really believe in investing in quality jobs and making sure that there is a path to making a great wage in these new energy jobs. And so that is a high bar that we've set. We are, in a couple of months, going to be making some big announcements in the automotive sector, where we are driving some direct investments in large scale auto oems and their upstream suppliers, who are transitioning production from ice into new electric vehicle types, whether fuel cell, fully battery, electric, hybrid, or so on, across different formats, all numbers of wheels, all uses. And the focus there has been we're looking for great projects, but we also want to see how you're going to retrain and compensate your workforce so that these individuals can participate in the new factory and make a great wage and have all the skills to be able to be a long term employee there. This is another example of where we're working with industry and kind of incenting industry, not prescribing the solution. The solution is probably not for everybody. If you hire a union labor, that's it. It's easy. Check the box, you're done. What is needed for each facility will look and feel different, and we're committed to working with the company and understanding exactly what great looks like for that particular context. And then the last thing I'll just share is we have a goal where 40% of the investments that we make should be flowing back to and creating value for energy justice communities. And like I said, agency of thousands of phds. We have mapped the US at the census track level across 36 different kinds of economic and socioeconomic indicators, and flagged the communities that really bubble up as communities where energy justice is at risk, where jobs are at risk, where pollution is affecting young and vulnerable populations, and really elevated those communities in our focus. So that's also something that we think about and work with the companies to do. How can they, through the latitude that they have, actually uplift and create opportunity in these areas that need it most? [00:37:33] Speaker B: This is superb. Julian, thank you so much for sharing your perspectives on the DoE. Your current role, helping us appreciate how critical and how unique it is in such a critical time for us, and as well as your thoughts on the infrastructure landscape in general, I think we can continue this conversation further. It's fascinating, but I do want to bring us to probably another fascinating part of the discussion, which is your own personal journey. So, Julia, I know your career is in many ways very unique and rare. You played roles both as an operator, as an advisor in the private sector, and now you recently transitioned to the public sector, having been partnered at McKinsey right before that. So could you just tell us a little bit about your own personal career arc, like, what made you decide and do this wide variety of roles, and in particular, coming to the Doe now, having been in the private sector for so long, what motivated that and what has your experience been? So. [00:38:25] Speaker C: Know, I think a lot of good things that end up happening, I think are unexpected and unplanned, and I would put this transition absolutely in that category. I think at the moment when I received the call about this opportunity, I was kind of at the peak happiness of my career as a partner at McKinsey. Was working with clients who I deeply admired on topics that were hugely exciting and important. We were making great progress. I felt like I was truly working with good friends, my colleagues. There were folks I would enjoy spending time with in and outside of the office. And I think because of all of those things, it was in a good rhythm. And the workload was even for consulting standards at a manageable level. And so I truly was not looking to rock the boat in any way, shape, or form. And I think it often so happens that that's when something comes knocking at the door. And so that was this opportunity. And I think at first it wasn't really easy to think about changing what was a very stable place that I was in. But I started to kind of really think through and appreciate this opportunity and realized that this was a moment, and that that moment is not one that comes along all the time in this role. I shared a little bit about it to kind of further underpin the kind of time sensitive nature of it. We are on schedule to deploy almost $20 billion with a b of capital in the year 2024 alone. And that is an amount coming from the private sector that we don't come across. The big investors are raising very successful $2 billion funds, maybe four or five, and those funds are not spending their capital in one year. So huge scale on which to really drive the problems that I was passionate about around scaling up new innovation, around automotive, around energy, and bringing new technologies to bear. And so ultimately decided this was a jump that I'd be remiss not to take. I did the test of, would I regret this if I was 80 years old and hadn't done it? And I came to a resounding yes. So decided to make the jump. And I think I had been at McKinsey for coming on twelve years before changing at this point. And it had been a while since I'd had a first day of work and had to relearn a new organization. And the DOE is a massive one. We've got tens of thousands of people all over the US and around the world who are working in all sorts of facets from nuclear. We're running all of the nuclear weapons research at the DOE. We're doing energy investing, like what I'm driving, what Kelly Cummins and jigger and other colleagues are driving, and so there's a wide variability. But it's been a really wonderful adventure and I'm excited to be in this place and very much looking forward to bringing more private sector engagement into the DOE. And so that is something I very much look to do and have been enthusiastic in doing so far and demystifying what we're about, bringing input ideas in and growing a whole lot of new programs that should be part of this industrial policy for many years to come. [00:42:17] Speaker B: No, I like the way you phrase it, which is you went towards something, rather it ran away from something. So it's amazing to see you take this opportunity up, and hopefully it inspires some of our listeners as well to think about roles they could play on the public sector as well. So, Julie, another piece on your career, which I find very inspiring, is you've been a champion of advancing women in energy, automotive and sustainability sectors literally throughout your career. Could you speak about what impact you see from diversity and inclusion in terms of innovation and pushing for progress in these fields? [00:42:50] Speaker C: Absolutely. So I am so proud to work at an organization that actually looks like America. And I think I've been proud to work at organizations in the past that have taken Dei very seriously. But the Doe absolutely takes the cake on that. And it's been very important to me to channel that into our office. We were breaking the 100 employee mark on my team and we're growing very fast. But continuing to keep Dei in focus is very important to me. We are actually 56% female on my team, and that metric carries through not just from the lower ranks, but all the way up through to our front office leadership team. And we are 30% plus diverse ethnicities, which is even better than the makeup of the average Us group. And we're continuing to work on this, but I think we see it every day. Actually understanding the lived experience that one has and therefore how they might approach a problem brings us to a much better solution than if everyone is coming from a uniform perspective. And I really credit Secretary Granholm for driving focus on Dei from the top. I remember it surprised me in my first few weeks and then it suddenly felt normal. And I'll tell you, I had a series of meetings in New York last week and it shocked me to see so many white men on the other side of the boardroom just in uniform slates. And that's the world that I come from. But I wasn't used to it anymore. And I think it's been a huge positive for our office. We're going to continue to stay focused on it as we grow. And yeah, very much very proud of where we are and of all the women on our leadership team and their contributions. [00:44:48] Speaker B: That's incredibly inspiring. Julia. So I guess as we come to conclude this discussion, I know we could go further and further in so many different layers of this discussion. Any just concluding thoughts for our listeners as they think about energy and manufacturing supply chain here in the. [00:45:05] Speaker C: I mean, I think the one thing I'd leave folks with is that there was probably no better year in history than 2024 to be investing in building an energy product in the United States. There are so many incentives that are available. My office alone is putting out $20 billion of capital. Much of this, most of this is capital that does not need to be repaid. So I would encourage folks to reach out and engage with the DOE. You can engage with our team at Energy Gov Mescmesc. And I would really encourage folks to think about working with the DOE. This type of DOE is very different than one might think of working with government and the associations of slowness and red tape. We've deployed almost $30 billion of capital so far, and all of that has been on schedule and on time, and it is boosting projects as we speak. We have our first manufacturing capacity coming online later this year. So get curious, engage. Leave your assumptions at the door for a moment. And I think this could be a big boon to many projects and to us. Innovation in the industrial sector. [00:46:23] Speaker B: Thank you. So, I mean, I think your passion, energy, enthusiasm for the cause is incredibly easy to see, and I hope that inspires many of us to engage with your team, in particular here at the DOE, and see how jointly we can go to a better future, both for energy and manufacturing. I know you're very busy, so I appreciate you taking the time, Julia. And again, once again, thank you so much from our side. [00:46:45] Speaker C: My pleasure. Gaurav. Thank you. [00:46:52] Speaker A: Thanks for listening to Ina insights. Please visit Ina AI for more podcasts, publications, and events on developments shaping the industrial and industrial technology sector.

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