Inside America's Only Bank for Nuclear Energy — ft. Jigar Shah | Prof G Markets

Today's number. 13% that's Chick-fil-A's acceptance rate for new franchise each year in other words Chick-fil-A has a lower acceptance rate than Stanford Google and the Secret Service speaking of schooled I got the best of my life in junior high school I love being a teacher that has almost nothing to do with Chick-fil-A I couldn't find a chickfila joke [Music] ad help how are you now it's time for banter between me and and you what's going on I'm very well Scott how's Mexico oh it's wonderful the lights beautiful I love the food here I think I

could live in Mexico I'm not sure everything is like a six-star Resort in Cabo in Mexico but uh I I love Mexico I think it's the best I think Mexico is the best place to vacation in the world it looks looks very beautiful your Background I'm I'm jealous one thing I would love to get your reaction to because we've been getting all these questions from our listeners did you see your shouts out on John Stewart oh where he mocked me yeah social justice issues take a back seat when your son is in the basement vaping

and playing video games and can't find a [Applause] job I feel like that last guy was really venting more about his [Applause] son Let's Get You yeah what's your reaction first I was a little rattled because it's it's like when um Jimmy Fallon made fun of me when I was on CNN this has happened to me before yeah um Jimmy Fallon and his opening dialogue took the clip of me on CNN saying I'd rather give my 15-year-old a pound of wheed and a bottle of Jack than social media he just played it and stared at

the audience and they all laughed that's And that's not good commentary people loved that clip I thought it was a great clip yeah what was the joke just it it sounds ridiculous how ridiculous it sounded uh anyway this a couple years ago I think I think I was right yeah this was at first I was a little rattled because I have a big ego but I was thinking about it one you got to cut comedians a really wide birth I say a lot of indignant provocative things so I'm you know I'm sticking my chin out

There I deserve to be mocked quite frankly what was interesting is a couple of my friends who were in media said you need to record a response and that was and you have sons and I said I I think I think this is a sign of that we're having an impact we it's hard to read the label from inside of the bottle breed zakari was mocked I mean they mocked a bunch of people more impressive than me so it was in good company yeah I thought it was Hilarious and what I don't I don't think

it was insulting at all I think he made a cogent point which is that your analogies are hilariously specific always yeah and that was what he was making fun of you of which is true and not insulting it's hilarious I thought it was great I'm glad glad to sit here took it took it similarly feel better I've got I've got the approval of a 25-year-old who I pay um great you're the best you're the best enough of that Today we're speaking with Shaw director of the loans programs office at the department of energy um I'm

almost positive this is going to be more exciting than that title I I think there's it will nowhere to go but up here whenever we have someone from a very anyone with a really boring title is usually pretty interesting it's like asset classes the most the best returns are in the boring um but anyways here with the news first is pro G Analyst Ed Elson Ed give us the headlines you you Saucy Ms let's do it a record 60 million households tuned in to watch the Jake Paul versus Mike Tyson fight on Netflix and despite

some technical glitches on the live stream the stock Rose 3% on Monday following the match president-elect Trump is seeking to ease restrictions on autonomous vehicles that news sent Tesla's stock up by more than 6 % meanwhile shares of uber and Lyft Dropped more than 5% and finally drug maker stocks fell after Trump nominated RFK Jr as Secretary of Health and Human Services while RFK Jr is widely known as a vaccine skeptic he clarified that he does not intend to eliminate vaccines but aims to enhance transparency around their safety data Scott your thoughts starting with Netflix

Rising after this boxing match between Jake Paul and Mike Tyson well first I think it's important I'm and we have some breaking news here Hulu has will be announcing this afternoon that they're live streaming a fight between me and Jimmy Carter um I mean I'd pay to see that I would pay to see that 100% there's a bro code here and that is if you take 20 million bucks to get into a ring with somebody you have an obligation to the universe to either kick the out of the person or have the kicked out of

you this was ridiculous this wasn't even a fight my 14-year-old summed it up Perfectly it's like Dad you could have done better I just um I was very disappointed in the fight but distinct of the fight itself all right let's move on let's move on it's like Mark Twain said how did he go bankrupt and it was like slowly then suddenly the death of linear TV is was was you know is happening slowly and suddenly and we're in the suddenly phase and the kind of the Moes around linear ad supported TV were essentially news and

sports and When you see Amazon doing live coverage of the election and I thought they did a pretty good job and had fantastic guests I'd like to point out um and you see now the last kind of Bastion or the last wall to be breached was live sports and what do you know the guys with the cheapest Capital started buying Thursday Night Football right Amazon started buying NBA games and now the biggest I think this was arguably the biggest sporting event of the year yeah I behind I think it was behind the Super Bowl right

but other than that number one yeah I thought this was the most most viewed worst program in history uh had some bandwidth issues to me that's that's sort of unforgivable how the they know how many people are going to show up but anyways and they're a tech company and if they can't get this right who can it's almost like the only thing I can imagine would be Boris is if you were micro blogging Platform and you couldn't pull off a presidential announcement and the site crashed that was a problem that a lot of people focused

on was the fact that they had these technical glitches and I heard about it from many people including people who work at this company that it was buffering half the time and you know they couldn't navigate the live function so that was a problem um Netflix's response to that has been actually they didn't expect this many people to watch 60 million households um they said they were sort of Blown Away by the by how popular it was and so that's their excuse I I don't know if that's a a decent excuse but honestly I'm sort

of with the market on this because the stock dropped a little bit on that glitch and then it ripped back up and I think the market is saying okay it's not great that they had that glitch but let's not forget the fact that 60 million people tuned in and this was get This startat Scott the 10th most watched sporting event in history so this was in the same league as I mentioned it's not as big as the Super Bowl but it's certainly in the same league as the Super Bowl as the champions league as the

NBA finals this was definitely a blockbuster event and I'm not sure management expected that well that's it I'm going to do a mixed martial arts match against Clint Eastwood it's time yeah exactly it's time um it does say Something pretty incredible about whoever's in charge of programming at Netflix because when I heard about this a 27-year-old YouTuber versus a 58-year-old retired boxer my reaction was this is stupid and everyone is above this but what Netflix knows better than us that's totally wrong they have their finger on the pulse people want to see this I think

you'd have to give it to Reed Hastings and the other coo who whose name I always forget but is also Very bright this is arguably for the last 10 years it's the most underestimated management team not not that people don't respect them but they are right up there with the you know nelas the the you know the Pai the Zuckerberg in terms of shareholder growth and making just incredibly bold smart decisions these guys are right there and this was one of them I thought it was ridiculous and here at Summit well you know in between

the programming On vertical farming and how to get better sleep and if you should be poly or not everybody stopped and went to the bar and watched and they watched it oh everybody watched it it's also a good point about about the bars and restaurants which I forgot to mention which is like 60 million households tuned in but that doesn't count the I think it was 6,000 bars and restaurants that also got access to this I think for like a a a one-off event so think about All the other thousands hundreds of thousands perhaps millions

of people who are watching it at bars and restaurants such as yourself this was just a a gigantic mega event it's really incredible let's move on to Tesla and this new self-driving regulation that's come out uh from the Trump Administration this is a report that Trump is working or his team is working on a new plan for regulation this is something we actually predicted a couple Weeks ago in our winners and losers episode musk might be able to advise on autonomous driving regulations you know that's one of the biggest hurdles for Tesla and the robo

taxi Mission so if Elon Musk has one foot in the White House and the other at Tesla it could be that he'll be able to Fast Track his vision of the robo taxi Fleet and that is certainly what investors are pricing in right now so that's what's happened and Tesla's now up 6 to 7% on that new Scot reaction you know my view is one of the great things one of the things that America has done really well is we opt for the Maverick over the bureaucrat and that is we tend to be a little

bit more like let our horses run Let It Be The Wild West now when the wild west turns into westw world and the robots start killing everybody meta we're all social media all big Tech we have underregulation but we tend to air on the side of too little regulation versus Too much and I would argue versus Europe that is a big part of the reason that our GDP is exponentially greater than Europe Europe's focused on a little bit on the bureaucratic State and what are the risks what are the dangers what are the downsides as

opposed to the upside so in favor I don't like the fact that this is becoming you know whoever gives the president 150 million bucks gets to dictate regulation or lack thereof around a specific sector but in general It feels like autonomous it feels like some of the regulation around autonomous might be overly constrictive I know that wh Mo and the guys from Google think they really up starting in San Francisco and I also wonder Ed and I'm curious to get your thoughts here how much of this is pure traditional auto manufacturers who are way behind

on autonomous are calling their Congress person and saying we really don't like this we like the way Things are right now oh I'll I'll bet that's true I mean the part I don't like is the same thing that you don't like which is that we're now in a a place where you can just buy regulation in your favor but to your point and this is another piece I agree with you on we do need Federal Regulation on autonomous driving because at the moment we don't have any and all we have right now is this very

Patchwork state byst state system where every state has very Different rules in some cases those rules are vague the question for investors I think they should ask though is How likely is it really that this regulation is going to come to fruition because it needs to get through Congress so that's one thing you probably got all these traditional call companies who are going to be calling up the congressman saying don't let this pass and two as we know about Trump he promises a lot of things all the time and a lot of Them do not

pan out so I think Wall Street might be a little too optimistic as it often is with Tesla that this is all going to go to plan if it does though if we do have Federal Regulation on autonomous driving I think it would ultimately be a pretty good thing for our country so I'm not against this should we move on to RFK his appointment as health secretary and this decline in Market values among all the drug stocks M the farmer stocks Aka the vaccine stocks your reaction Scott RFK as head of Health and Human Services

has me just freaked out Ed and I'm trying to process it on the one hand RFK Jr is outstanding on certain issues he's he talks about he summarizes the food industrial complex and the Unholy alliance between the food industrial complex General Foods McDonald's that want to get you PepsiCo that want you to get you addicted to this sugary shitty food that is terrible For you such that they can then wink wink hand you over to the other part of the acious duopoly and that is the industrial diabetes complex where our Hospital Systems kidney dialysis statins

diabetes medication knee and hip replacement that is literally worth trillions of dollars no exaggeration this is the biggest industry in the United States $113,000 in health care per individual but we live less long but you know what a lot of people are making A ton of money I'm not even going to talk about the insurance industry and this guy gets it this guy's Not Afraid and he goes after it and then he says if you see a new mother the best thing you can do is walk up to her and Whisper to her don't get

her vaccinated what the actual this person shouldn't be allowed in the building much less being being considered for this job so I I find this Incredibly upsetting and RFK is the is literally the definition of duality or contradiction or you know opposing forces colliding into each other because I think he's so good on so many things but this his view on vaccines is totally disqualifying just just some real quick uh information a 2021 study found that exposure to covid-19 vaccine misinformation lowered once intent to get vac even for those who previously said they would Definitely

do so vaccines have saved 154 Million Lives over the past 50 years that's six lives per minute so look and now as we go full kleptocrat everyone assumes that these individuals will carry more power than they have in the past as they start to replace every thoughtful executive in the federal government with just a lacky and they they claim to have no respect for the law or due process and we'll just start issuing mandates from from DC so These stocks are flying up and down um the food stocks the process food stocks again see above

he gets a lot right are down and the vaccine stocks did you see these things they crashed they were off double digits the thing that I think people aren't talking about enough is the fact that he actually has openly said that he is not an antivaxer and he also openly said this year that he wasn't going to take anyone's vaccines away and what he has really asked for or What he is pushing for is to force the drug companies to just share more information about the vaccines and you know I I don't see a real

reason for that personally I trust the experts on the vaccines but given the level of skepticism around vaccines in America today and I I understand he may have contributed to that but this is something that's been around for years and years and years I don't think that more information and more transparency Is a bad thing I think that's honestly I think that's probably a good thing and I just I want to give you because you talked about the the food stocks and and the idea that he is pushing for getting rid of the food industrial

complex which I agree with is something that I really like I just want to give you a really crazy example I saw this weekend of how the media takes these very loose generalized narratives about the people that they don't like and then they run Away with them in a way that is just very strange and distorted so this was in the New York Times this weekend and they were reporting on his appointment to Secretary of heal um and specifically talking about his stance on food so just listen to this I I couldn't believe this when

I read this quote Mr Kennedy singled out Fruit Loops as an example of a product with too many artificial ingredients questioning why the Canada version has fewer than the US Version but he was wrong the ingredient list is roughly the same although Canada has natural colorings made from blueberries and carrots while the us product contains red D40 Yellow 5 and blue one as well as bated hydroxy tuline or BHT a labade chemical that is used for freshness according to the ingredient label end quote and this just made me so angry because as you said what

RFK Jr is criticizing about processed food in America is completely correct I mean this stuff is categorically unhealthy it's making us obese and it's it's killing us by the millions and so why are you the New York Times defending fro Loops for using chemicals in their food and why are you telling me as the reader with this very weird authoritative language he was wrong that RFK Jr is wrong for bringing it up like it's just this wild misunderstanding of what we should actually be talking about and Ultimately I don't think they really realize this it

plays further into his hand because by defending Froot Loops and saying no no no it's okay that they're just using a couple of these chemicals and they're actually for freshness by saying that it makes the New York Times look like the liar trying to defend their friends at Kelloggs and it makes him look like the freedom fighter and that to me is exactly why people like him and what the media Outlets were a lot more focused on was the decline in the vaccine stocks and not the decline in the food stocks the shares in PepsiCo

and Coca-Cola and Dr General Mills and lamb Weston which supplies food to McDonald's and Chick-fil-A they all fell because the markets are predicting that this guy's going to crack down on the food industrial complex and that I think is something that we can all get behind so I I just find him very fascinating the Way the media is dealing with him because they're deciding to basically portray everything he says as totally wack job crazy when in reality some of the things he's saying are pretty plainly Fair one of the first things I registered when I

moved to the UK was that I mean right away everything goes bad it's like what the going on here the fruit is rotten in two days the orange juice goes bad and then I realize oh it's actual food it's not because It's food and despite You know despite the massive advances in treating cancer you know the environmental factors which are clearly there's something up here you know people are getting I met a woman last night who it started a company called as play or something and it's it's not what you think it is ass something

it's not what you think it is I doubt it's called ass something like hot ass or ass something anyways But she was diagnosed with colorl cancer in her 30s and she got and she's full remission recovery but she got fascinated and the number of people being diagnosed with colon cancer under the age of 50 has gone up dramatically it used to be it didn't need to get a colonoscopy until you're were 50 now they're saying start getting them much earlier that has I mean logically and I'm speculating here logically that's probably something Environmental so again

it's like well if we can make money selling you even if it gives you colon cancer and then we can make money off the colon cancer let's not address it let's let's let it run and there's a lot of good people on the other side at universities and medical professionals trying to figure out a way and also pharmaceutical companies to fix it but it really is it's not Healthcare it's sickcare and if you were to try and give kids great food From an early stage and help them develop a taste for good food yes did

you eat good food growing up what was your diet like growing up yeah I I I ate pretty good food I mean I ate a fair amount of junk but you know what are you going to do but I think now we know we all agree we should be eating organic food at a lower price and making it affordable for people yeah so let me describe my childhood we had in the morning I had Lucky Charms Um and Tang because the astronauts drank it so it must be good for you what is Tang you don't

remember Tang I don't know what it is oh Jesus Christ that's it I'm throwing myself out of the window into the Baja Peninsula you don't know Tang I feel 100 years old it was this drink it was this powder and you know it's got to be just awful for you and they sent they would give it to the astronauts and the astronauts and they they like the astronauts so i' like I Want to be an ason I'm going to drink Tang with the success of the recent Apollo space flights man has been brought another step

closer to the Moon aboard these Mand Apollo flights three astronauts and with them tang tang the energy breakfast drink so Tang Lucky Charms and then if it was really desperate my mom didn't have any time my mom was out of the house before I even got up I would take a poptart and Pop-Tarts no joke have a shelf life of Like 70 years and can survive a nuclear Holocaust I mean I'm not going to talk about the fact that my mom smoked and drank while she was pregnant but my childhood was basically Lucky Charms Pop-Tarts

and 2 hours a day of ID dream a genie the fact that I am not that healthy and a sexist is entirely can be blamed on American culture in the in the 70s anyways I I ate like such and now the only reason I eat well to be blunt is because I'm rich to eat well is So expensive people assume oh it's less expensive to eat at home know it not if you're going to eat well at home oh my gosh it's crazy it's crazy expensive so like everything else in our country our food supply

and our medical industrial complex is the best in the world you can get amazing food if you're in the top 10% you can get amazing health care if you're in the top 10% the whole our whole economy the most prosperous economy in the world is being optimized For the top desile and the bottom 90% are there just to optimize for the top 10% whether it's keeping minimum wage low whether it's cutting services it's just all you know and the thing is that's unhealthy about it is we don't move against this even the bottom 90% because

Americans are so you know so optimistic people are like wow when I get rich I'll show guys like me you know it's it's this weird phenomena where everyone assumes their kid and their Future is in the top 10% and I can prove to every one of us the 90% of us will not be in the top 10% we'll be right back after the break for our clean energy conversation with jiger sha if you're enjoying the show so far and you haven't subscribed be sure to give Prof G markets a follow wherever you get your podcasts

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for non-compliance or $10,000 and jail time if you knowingly misfile now the goal of All of this is to help produce money laundering but it definitely creates extra work for you for most businesses the deadline to complete it is January first and while you could go to the government website and read all 23,000 words to figure it out you could also let pilot.com file it for you for free pilot.com is the largest small business and startup accounting firm in the US and their super smart team of accounting and finance experts are always looking For ways

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out with a quick summary of who you are so just for a listen so is first and foremost an entrepreneur he founded this successful solar energy company which he eventually sold he later wrote a book about climate Tech he started this nonprofit on Business Solutions to climate change and now he has this position as director of the loans Program office at the department of energy which sounds pretty bureaucratic and a little bit unsexy until you realize that is in charge of allocating more than 400 billion in loans to clean energy projects in America so the

way that I think of jiger is that he's kind of the most influential climate VC that you don't know about he's not buying stakes in startups but he is definitely steering the direction of this clean energy Transition that has been building up in America for decades so we're very happy to have you here I'm going to start with this question to you um where are we in the clean energy transition are we sort of in the mid middle are we getting to the end or are we just getting started I mean we're pretty far along

right when you think about the amount of money that's being uh driven towards climate Solutions um the oil and gas sector uh globally does about a billion Dollars a day the solar industry Alone Now does $2 billion a day uh globally right and so then when you add wind and clean hydrogen and all the other sectors um we're going way past it so I think we're you know close to liftoff so when I think about how clean energy is funded at the moment it feels like there are two main incentives the first is just climate

change you know we need to bring down the temperature of the planet and the second that I've been seeing a lot More of is that we need just more energy and I feel like AI has been a big part of that because of the amount of energy that AI requires I'd just like to get your perspective how do you balance those two incentives which do you think is more pressing more important What would you say is driving strategy at the doe so I'd say the question slightly differently right I mean to me when you're a

developer the way you make money is by meeting load growth in AI Right you don't make money by solving climate change and so you're generally making money by solving a problem for somebody and the reason people are choosing clean energy is not because it's clean it's because it's fast so you have the ability to to install solar and battery storage in Texas way faster than building new natural gas facilities and that's why they're all going in batteries and solar right and the natural gas facilities are probably two Years behind just on the energy needs themselves

how much power are we creating right now and and how much more power do you think we're we're going to need yeah so we we generally have about a th000 gaws of power generation around uh the country right a little bit more today than we had before because uh there's more solar and wind um and we're going to need to double that um probably by you know the 2040 time frame and maybe triple it by 2050 it really Depends on how much uh Ai and you know some of those other things we need but also

just to put things in perspective the president's uh goals around the bipartisan infrastructure law chips and science Etc are really dwarfing AI load growth in terms of new uh loads in the United States whether it's electric vehicles uh heat pumps new manufacturing facilities we have 900 new manufacturing facilities under construction here in the United States right now and so um so The load growth is actually quite broad-based could you explain what load growth is quickly so when you think about uh you know manufacturing uh wire harnesses in Georgetown Texas through cellink or manufacturing thermal blankets

with a aspirin aerogels in Georgia uh these facilities need 1 megawatt 3 megaw 5 megaw of power to power robots or or automation lines or other things to Manu to to be able to manufacture things right same thing is True with electric vehicles your average house probably uses 2 Kow of load on a regular basis your hair dryer is 2 kilow alone and your electric vehicle is 7 to 9 kilow and so it's a lot more than what your average you know home is using right now and that's load growth uh thanks for your time

can you stack rank the pluses and minuses uh wind solar and nuclear well let me start by saying when the grid has gone down the last four years it's because natural Gas power plants failed to Supply Power when we needed them right they froze up during winter storm Yuri they had real challenges during the the crisis during the Christmas of 2022 and so nobody wants a 70% natural gas grid and nobody wants a 70% solar plus battery storage grid um and so the real key is diversification right when you think about solar it was perfect

for summer peaking loads that are air conditioning driven because a lot of that uh is when Solar is you know very easy to get a hold of I think as you get more and more solar you only have 25% production in terms of capacity Factor so 25% of the hours of the year it's producing solar power and the rest of the time it's not with wind power you're probably closer to 40% of the year you're getting wind power production and it goes up and down depending on when it's windy where solar power is probably more

predictable with nuclear Power you have the opposite problem it produces power 92% of the time in the United States so you often get power that you don't need in the spring and the fall it's still producing power when no one's using air conditioning and heating so that's why we built all the Pumped Hydro facilities in the United States was to take all that extra nuclear power so I would suggest that it's really more of a balance that we need than more nuclear or more solar my Sense is all of a sudden is nuclear has come

back in Vogue that I don't know if it's the Macho feel of it or you what people see as the you know the most reliable best bank for your buck kind of power supply is your sense that nuclear has is making a pretty strong comeback I realize I'm putting words in your mouth but feel free to disagree with me I would say that the amount of competence in the solar and wind industry is so High that they are likely to die Dominate and add 90% of everything that gets added to the grid over the next

5 years and so the nuclear energy industry has such a hard time getting off of the Launchpad that they need the most help and so I have spent the better part of the last four years figuring out exactly what was holding nuclear back figuring out exactly who has the solutions to those problems and figuring out exactly how we can accelerate those folks to Actually getting a hundred billion doll worth of new projects announced and we're not quite there yet but the president announced a pretty bold goal last week what was holding nuclear back there's nobody

to develop nuclear plants right so the nuclear industry right now is set up with a bunch of people who own nuclear power plants but none of them want to construct new nuclear power plants and then when you talk to the people who design nuclear power plants They're sort of like Architects you buy their designs for your new home but you don't actually hire them to build the new home so then you go to the the constructors you have Beal you've got a couple of other folks but they're not willing to give you a fixed price

they're saying ah we're going to charge you cost plus I hope that that works for you and so it's hard because people are like well what if it goes double the budget that you projected well you're Going to have to pay it well who actually pays it and so figuring out exactly how we build 10 reactors because one reactor clearly um doesn't solve the problem and with 10 reactors you can spread the risk across 10 reactors build the supply chain do all those things is hard because it's at least $35 billion to build 10 small

reactors and it's over a hundred billion do to build 10 large reactors so we've been circling the problem between the existing owners the Hyperscale data centers that want to pay a premium for 24x7 power that they've listed on their website which they still haven't uh walked away from the utility companies who want to finish nuclear power plant but don't want to actually actually uh sign up to the cost over on risk on behalf of their rate payers right and then all of the supply chain folks and so getting all of them in the room having

a productive conversation has taken this taken us the better part Of three and a half years one thing I didn't hear you mention were you know previous nuclear disasters like Chernobyl and Three Mile Island and stuff like that and our hypothesis or our theory has been that those events and sort of the Hollywood fear of nuclear has been a large part of why we've seen a a big pullback from nuclear as a power source I'd just like to get your take on that is that right do you think yeah the data doesn't support it So

when you look at the 1970s we had a lot of inflation and as a result nuclear power which is a lot of capital uh got expensive and so people were already starting to pull back from nuclear before 3 m Island occurred and then you know when you think about what happened with uh the Renaissance in 2008 the Vogal nuclear plant got started but everyone else pulled back not because of Fukushima but just because there was no load growth I mean we had Passed these regulations to switch to LED lights and so we were actually getting

a reduction in sales every single year and people were saying well without load growth why would we build new nuclear right and so today the reason you're seeing a Renaissance is because data centers are uniquely disruptive to the grid you cannot add 1,000 megawatt of load in one location without pairing it with something like nuclear power and so that's why you've Got a Renaissance today your department seems pretty thoughtful in trying to find sources of energy that are economically viable but also recognize the emissions and externalities that sounds to me like something the Trump Administration

would hate so the rhetoric of the Trump Administration from 2016 and then of course the success of the Biden Administration in 2020 has been to do what we've all been talking about right which is that we need to Onshore and reshore back in this country and now we are succeeding more than that I'd say you know as somebody who's been an entrepreneur for decades um American innovators and entrepreneurs always thought that when they were ready to commercialize their technology they had to go to Asia or had to go to Europe today they are now believing

and their investors more importantly are believing they can do adhere the loan programs office functioning is essential for them To actually take that step and so my senses is that this program has more support than any other program for no other reason then it doesn't really matter where you're innovating whether it's nuclear power blue ammonia right using carbon sequestration and storage uh you know sustainable Aviation fuels it doesn't really matter what sector you care about without having access to Bank debt right you really can't build these billion dollar projects and the Banks don't want to

provide money for first of kind deployments and so that you're left with the loan programs office and so while there might be a pause when the new Administration comes in for a few months my sense is is that there's so many entrepreneurs and innovators who want access to be able to do big things in this country that it's just something that you're not going to be able to stop I was surprised to hear you say that you don't think you're Going to be affected permanently by this new Administration specifically because one I think Trump has

just a sort of anti clean energy bent to him but two he said he wants to repeal the inflation reduction act and from my understanding you were a huge beneficiary of the inflation reduction act um so I'd like to hear more from you on what why you are feeling so optimistic going into this next four years I think it goes to your first Question right which is what is your driver if your driver is climate I totally understand right but if your driver is figuring out how to commercialize American Innovations right we're tired of inventing

everything here in the United States and then shipping all those patents over to Asia or Europe to be commercialized we want to now take the technologies that we invent here many of which happen to save carbon emissions but they're actually truly Superior Products and we want to commercialize them here those people are not often driven by climate they're really driven by the fact that they've got Kick-Ass technology that they want to commercialize here and employ people here right and you've got a lot of folks who are tired of saying that like their best job if

they don't graduate from college is working at the local Panera which I I love I love Panera but I'm just saying they want to actually work With their hands they want to manufacture things they want to construct things right and so I think when you look at what President Biden has put in place we're probably 500,000 people down right now in the National Building Trades right if you like go get trained in the National Building Trades at 16 years old you could be making six digit salaries within six years I mean it's a pretty amazing

thing right now if you're if you don't want to go to College you can get you know six figures just by wanting to be good at your craft that is something that we lost for 40 years and a lot of people want that back whether or not they voted for the D's or the RS yeah I feel like one push back um that you might receive from Republicans or from this Administration is that it's a lot of power that you have in that department I mean from my understanding your loan Authority after the IRA went

from 40 billion doar to $400 billion and I could imagine that a criticism or a concern is that someone would say well why aren't we just letting the private markets fund these Innovation projects why are we leaving it to government to step in and accelerate clean energy what would your responsibility of that there are no criticisms that are like that if you go to Apollo right now and say to them you have a hundred billion platform for climate name one loan that the loan programs office did that you would Rather do instead they're like none

we could never take those risks right if you go to tpg if you go to KKR if you go to the private credit markets every one of these Banks is saying we would love to get an investment banking fee to help raise the Equity to match your loan but we would never in a million years want to do that first of A- kind project that you did I don't think I've ever heard of somebody saying you know we would have done that loan but for the fact That you competed with us I don't think that

ever happens because these are such risky Investments that may or may not pay off well they're not risky from our perspective because we have 10,000 engineer scientists and experts who work on the doe platform but they're certainly risky from JP Morgan's perspective because they don't have those experts on their platform right and and generally speaking those banks with basil 3 they securitize their debt They don't want to hold it longterm on their balance sheet could you imagine how much tier one Capital they'd have to put against it if they had a 20-year loan on their

balance sheet so they don't want to do that you speaks of some of the uh economic impacts of some of these projects in terms of sort of the Main Street economy economy like what what this will do to communities and to workforces when you've gone in there and funded some of these project projects Yeah I think when you think about what we've done there's direct impacts right so think about the $465 million loan that we gave to Tesla and then there's indirect impacts right I mean who would have thought that the electric vehicle industry would

be anything had we not given the loan to Tesla right at the time at which they needed it and so and the same thing's true with the first 500 megawatt solar Farms that we funded in 2010 2011 at the time at which those Were completed the only buyer of those loans were Mid-American which is a Burkshire hathway company everyone knows that they make a lot of money so that wasn't they didn't get like they didn't uh you know overpay for those assets by 2015 uh the solar industry was so frustrated by the banks that they

created their own yield codes which are like Real Estate Investment Trust in 2015 and it wasn't until 2019 the Bank of America said yeah you're right these Assets are acceptable so when we provide these loans yes we have hundreds of thousands of direct jobs from construction and from um operations into these plants but more importantly we're setting up a flywheel that then will lead six seven 8 nine years later to the private sector being fully embracing of those Technologies many of which they are highly skeptical on today but you know the science from the 10,000

engineer scientists and experts on the Doe platform have already validated that it's worked that there's not there is no will it work or won't it work risk it's more that you know 15 of you know the bankers friends at the Country Club haven't done a deal yet do you have sort of a a code or a personal philosophy on which [Music] situations uh demand government intervention in terms of funding like you mentioned subsidies to Tesla um I I feel like we're now at a point or at least there there are questions over whether T Tesla

really needs subsidies because it's it's so successful and now it appears that you know some of those tax credits are going to be repealed like do you have a a personal philosophy on like where when should government provide subsidies when should it provide tax incentives and when should it not when you think about infrastructure the The frame that most people have is a dotom bubble of n of the late 90s right so they think Venture Capital they think you know people taking advantage of an IPO in infrastructure you never get $100 ta return right like

every once in a while with a consumer product like Tesla you might but in infrastructure that's not how the game gets played right so what you want is every time there is new technology better technology you want it to be commercialized why because it Keeps the folks who are doing the old stuff um on their toes right and saying like you don't get a monopoly just because you're already in business and these new folks aren't in business right but more importantly you get more efficiency out of the resources that we have right all of this

stuff takes critical minerals it takes copper it takes steel it takes other things these new technologies use those resources way more efficiently than the old folks so For me if somebody actually meets a threshold of innovation and more importantly I'm only providing them debt so they still have to raise Equity if they can't successfully raise Equity they don't get my debt right and so if they can meet the formula who am I to pick winners and losers as as far as I'm concerned if you're Innovative and you meet the standards that we've set I want

to give all of them loans right because whether it's carbon sequestration or Whether it's like you know solar and wind or whether it's nuclear to me Steel in the ground is red white and blue stay with us we're back with property markets I hear you use the word entrepreneurship a lot you're entrepreneur you understand I wasn't even aware of this program but if you were a 25-year-old super interested in energy recognize that there's an economic opportunity here what would what are what are some examples of some Great businesses you would be thinking about getting involved

in in an early stage or even starting yourself right now yeah there are so many so when you think about um the clean cement and clean steel industry a lot of those folks are PhD students coming out of MIT that are saying we have figured out a way to dramatically reduce the carbon you know footprint of cement and they're 28 years old right with a newly minted PhD and then they go through four five Six rounds of capital raising right to be able to prove their thesis and do something at small scale and then when

they decide that they actually need to make cement at the scale that the state of California wants to buy it or Microsoft wants to buy it right where they've recently made a commitment to Sublime um it's a billion dollars it's always a billion dollars at the time which Boston metals or Aspen aerogels in um in Georgia or cell Link in Georgetown Texus who makes wire harnesses that makes wiring for electric vehicles 90% lighter than normal wire right these are all a billion dollars and so it's one of those things where it's a you know four

rounds of capital but then at some point when you actually want to be at relevant scale you need a lot of money and then the question becomes do you want to raise that money as 100 % Equity from the private markets or do you need debt to reduce your weight at average cost of Capital and in almost every case whether it's for instance Next Generation conductors for transmission lines we have materials now that can carry the two to three times as much power along the same exact right of way of which 30% of all of

our transmission lines are approaching the end of life and need to be rewired anyway so we could get two to three times as much power through those wires if we do next generation a conductors the the list of deals where American innovation is ready to serve is very long but we got to commercialize those Technologies are there any other industries that you think could benefit from a department like this like a loans program office for anything else yeah look at housing right everybody talks about housing today our biggest problem with housing is that we still

make housing like our grandparents did if you go to Germany or Sweden or other places all of those houses are modular Construction right you make them in a factory and you build them in 3 days on site we have that industry now in the United States because of the uh Adu Market the auxiliary dwelling unit Market in California there's 12 startup companies who do that and many of them are now building their first of A- kind factories where they can pump out 100,000 units a year just like Sears robu did with the Sears Craftsman home

after World War II we are at a point Right now where you could make homes consistently and reliably with much higher uh quality for $200,000 a unit out of these factories my sense is we could do it if it's a net zero home but there should be some other part of the of the federal system that should that should help those guys um produce those Modular Homes at scale just as we wrap up here you you're obviously a very successful guy had a lot of options and you decided to go to Work um in government

give us your best pitch for why someone a young talented person with a lot of options should should serve or go go to work in uh DC or for government agency I think one of the biggest challenges of my career has been that the United States has been terrible at public private Partnerships right I mean just terrible we're amazing at Innovation but then when it comes to manufacturing solar panels all Chinese solar panels to be clear all of that Technology was invented here the United States right chl's you know lfp technology was invented by John

good enough at UT Austin right all of this technology that we say that other people are good at was all invented here right and I'm tired of the fact that that happens because the US government doesn't know how to do a public private partnership I think President Biden decided to double down on figuring that out and he attracted people like me and Obviously the Secretary of Energy and others to say I want you to do the hard thing right and when you look at the liftoff reports that we put out that's 2,000 companies that gave

us their best ideas and proprietary secrets to create a back base across 10 different sectors where we're saying what do you have to believe to believe that it's actually profitable to do things here and as a result we've crowded in hundreds of billions of dollars right and so I will Go back to the private sector I'm sure after I'm done serving here but you know I think that what we leave behind now is a group of people who actually now not only believe in the public private partnership because we've talked about it for years but

they now have been taught on how how to do it right and I think that unless you bring people in that have Scar Tissue like I do who know how like we get hurt when you don't have a good partner in the federal government You don't really know how to empathize with the folks that you're working with to figure out how to best be a good partner and I I'm really proud of the fact that the federal government's a better partner today than it ever has been having worked in the private sector your entire career

before what surprised you about working in the government and especially in holding such an important job in the government that there is no government inefficiency right not in the Work that we're doing right you would have thought that there was all this government inefficiency the problem with the government is not inefficiency the problem with the government is risk-taking right for a long time they were told if you you know do amazing things we'll give you a $500 bonus and if you do bad things then you're going to get fired like if that's the if that's

the bit ask spread you don't want to do anything right and so having come In and given all these people air cover and said hey you are some of the most talented people I've ever worked with and truly the people I work with the loan programs office many of whom came from the private sector but also many that were already here are truly the most gifted people I've ever worked with in my entire career they just needed permission to do the work 90 plus% of them want to stay into the next admin Administration right they

love the work They're doing and so I think demonizing you know government is something we need to do less of and you know figuring out how we best support entrepreneurs and innovators in our great country is something we' have to do a lot more of jger Shaw is the director of The Loan program office at the department of energy he was previously the co-founder and president of generate Capital where he focused on helping entrepreneurs accelerate decarbonization Solutions Through lowcost infrastructures of service financing he also founded Sun Edison a company that pioneered pay as you say

solar financing and served as the founding CEO of the carbon War Room a global nonprofit helping entrepreneurs address climate change was also featured in times list of the hund most influential people in 2024 really enjoyed this conversation and very much appreciate your service and good work thank you very much Jer thank you thank You for watching this version of propy markets check out our pod feed for office hours on Wednesday and we'll be back with a fresh take on markets every Monday [Music]