by Stephen Lacey
April 12, 2017

Stephen Lacey: This week, we're talking Westinghouse. One of the most pivotal nuclear players has filed for bankruptcy protection. What does it mean for America's newest reactors that are already behind schedule and over budget? Then Brexit: will the U.K. end its climate commitments now that it's officially leaving the European Union? Finally, a lesson in traffic control: what we can learn about driver behavior from highway crises in Georgia and Los Angeles. In Boston, welcome. I'm joined by Katherine Hamilton and Jigar Shah in Washington, D.C., and New York City respectively. Katherine's a partner with 38 North Solutions. I sense a change in your voice, and that must mean that baseball season's here.

Katherine Hamilton: Baseball season, and I finally made my way through the podcast S-Town so I could have time to prep for this show.

Stephen Lacey: I got both of you on that podcast. You both seem to like it, right?

Katherine Hamilton: Yes, definitely. I mean, I'm from the South, so I'm a big Flannery O'Connor fan, and it's kind of in that vein.

Stephen Lacey: Right. I've been saying that it feels like you're listening to an audiobook, like a Faulkner novel or something, rather than a traditional true-crime podcast. Jigar Shah is the president of Generate Capital. I've sensed a change in his tone too, but that must be because he's got an appointment with his financial planner after this, which is decidedly not as cool as S-Town or baseball.

Jigar Shah: Well, I did make it through S-Town, and I do have a cold, so you're probably hearing that.

Stephen Lacey: You were just so into S-Town you forgot to take care of your health, and you got sick?

Jigar Shah: That's right.

Stephen Lacey: I can think of things that are far, far less cool than all of those things, like Westinghouse's financial problems. Last week, the nuclear giant and electric industry pioneer filed for bankruptcy protection after problems at two nuclear projects in South Carolina and Georgia got way too big to handle. Toshiba, the Japanese parent corporation of Westinghouse, is writing off billions. Officials in Georgia and South Carolina are wondering whether plants there are going to get built, and the Trump administration is monitoring the situation closely, wondering if Westinghouse will get bought by a Chinese investor, and hoping that billions in taxpayer investments don't also get lost.

So Westinghouse has been involved in the design and development of around half of the nuclear reactors around the world. This is a company that was not only an early pioneer in the electricity industry, but a major pioneer in nuclear reactor design, so its challenges are the nuclear industry's challenges. Jigar, what happened to this once-mighty nuclear company?

Jigar Shah: I don't know that there is one thing that happened to this one mighty nuclear company. In general, I would say Westinghouse is more of a name than it is the company that we've all come to know and love, right? It's owned by Japanese Toshiba, and I think that in order to get what largely looks like project finance deals done, with the loan guarantees from the federal government, but also ratepayer guarantees from Georgia and South Carolina, there was a lot of mandates that Toshiba had to agree to, in terms of cost. So when these cost overruns occurred on nuclear plants, they sort of had to eat some of those, and then they were able to rate-base some of those with the ratepayers, and in the end, their cost overruns were just gigantic. It was so large that it may actually take down Toshiba as an entire company.

Stephen Lacey: So Westinghouse currently has debt worth $9.8 billion. Toshiba paid $6 billion, or $5.5 billion for Westinghouse. Cost overruns at the Vogtle Plant in Georgia are, I think, about a billion and a half dollars, and in South Carolina, the Sumner Plant is $3 billion over budget. So it's just a financial calamity any way you look at it. The interesting piece of this story isn't that it's Westinghouse's fault -- well, one could say it's Westinghouse's fault -- but not that it's necessarily their fault in the design of the reactor.

It appears to hinge on this one large contractor, the Shaw Group, that bought up a former engineering group that had experience in nuclear power plant development, but hadn't designed or built a plant in many decades, so essentially it was a shell of its former self. Westinghouse relied on this group, and then this group failed to deliver on most of its promises, which caused this downward spiral very early on in the power plant development process, and now the company is really suffering for it.

Jigar Shah: These were really first-of-a-kind contracts that they signed, right? Westinghouse plus Toshiba actually guaranteed that the projects were going to come online by 2016, 2017, right? That had really never been done before. And then, the concrete got poured incorrectly, and then there was a lawsuit between Westinghouse, S&W, and then S&W's parent company, Chicago Bridge & Iron Company. Then to resolve that litigation, Westinghouse ended up buying S&W, or tried to. Like I've said before on the podcast, it comes down to whether we're really prepared anymore in this country to do big things like this.

Katherine Hamilton: Weren't there also some design changes that had to be made as a result of the Nuclear Regulatory Commission requiring some safeguarding from terror attacks, so there were things that were kind of outside influencers in the expense?

Jigar Shah: Yes, there were, but I think that that's sort of one of the reasons why you can't do big deals anymore. This is very common, when it takes you seven years to build something, things change in that seven-year period of time.

Stephen Lacey: Right, and the problems with this contractor, and the initial design and execution of the plant, goes back to your earlier point on whether or not we are prepared to do big things, and there are some who look at this collapse and say, "This is the problem with the nuclear industry generally," but one could make the argument that this is actually an American problem, that we haven't done enough to build these plants, we've had a four-decade hiatus, and we just don't have the engineering expertise or the execution expertise to be able to get these plants done on time and built efficiently, and so this is really a problem with the American construct, not the nuclear industry generally. Now, there is another argument, and that is, nuclear power plants take a long time to build, and what you're doing when you're building a power plant that takes 8, 10, 12 years, maybe even longer to build, is you're betting on what power markets are going to look like in a decade, and as we know, that is a very, very difficult gamble today, given how fast things are changing.

Katherine Hamilton: Yes, and you are also betting on policy staying consistent. One of the policies that just got upended was the fact that we need a low-carbon future, and our government has decided we don't, and that was one of the biggest arguments that the nuclear industry was making to show that they were really trying to do the right thing, and now that's not even there as an argument.

Stephen Lacey: Right. I made that point when we talked about the CPP last time, and that was, the Trump administration both says it wants to promote nuclear power, but now wants to take away the one federal policy that was in place that possibly could have promoted new nuclear power plants. We can't have it both ways.

Katherine Hamilton: There's one thing that the nuclear industry has enjoyed for a very long time that we don't ever talk about, which is the Price-Anderson Act, which is they basically get no-fault insurance that is backed up by the federal government. These companies cannot afford to purchase insurance, and so they've enjoyed that since 1957, and it was just re-upped in 2005 for another 20 years, so that's been out there as a policy benefit that this industry has had for a very long time.

Jigar Shah: That's true, but just to take the other side of that, when you look at the claims against the Price-Anderson Act from the federal government, they've been very, very small, and so it's not like the federal government has had billions and billions of dollars of liabilities that have come from that. I fully grant you that the private sector can't provide that, but I don't think the nuclear industry has been a burden on the federal government's finances.

Katherine Hamilton: Oh, no, not at all. Absolutely, that's true. It's for catastrophic incidents, and we haven't had one of those recently. But what I would say is that they've had that, and that has enabled them to not have to purchase insurance, which they would not be able to get on the street.

Stephen Lacey: Let me ask the question again. Is this a nuclear industry problem, or is this a company-specific problem? There have been dozens and dozens and dozens of bankruptcies in solar, but very few people would point to those and say, "That's a problem with solar." As we have discussed, it's a problem with specific business models, with companies trying to grow too quickly, with companies approaching the market the wrong way. So, Westinghouse's problems were very specific to this contractor and these couple of plants, and therefore, Toshiba's problems have been exacerbated by the high price it paid for Westinghouse. And this does bleed through the nuclear industry, because Westinghouse is responsible for so many problems around the world, but I wouldn't go so far as to say that it's a structural nuclear problem. It seems to hinge on the execution of a couple of plants. What do you guys think?

Jigar Shah: The nuclear industry is a calcified industry that has not had innovation in over 30 years, right? The AP1000, which they're building here, is the same damn thing, with few minor tweaks, that they built in the '70s and '80s. I mean, AREVA, which is the French company that basically builds these nuclear plants, hasn't had any innovation in that time. Neither has Westinghouse, neither has these other groups. You're talking about companies that really haven't pursued innovation in decades, and that is really the reason why nuclear is at such a crossroads. Rod Adams wrote a great article in Forbes on March 27th about how the nuclear industry really does need to finally get rid of these sort of third-generation nuclear reactor designs and move fully to the small modular reactors of the future, because it's obvious to everyone that these plants just cannot be sustained. I mean, this construction cycle, et cetera, just can't be handled in the West.

Katherine Hamilton: I mean, the solar industry is so disaggregated, and there are so many ways that you can pivot if you're a solar company, and so many different parts of the value chain you can be on. You know, these are just a few very large companies that, as Jigar said, are really the incumbents, and for them to change something -- it's really hard to pivot those guys.

Stephen Lacey: Well, clearly, the world has changed for nuclear, according to Shellenberger's new group, that is Michael Shellenberger, who's a nuclear advocate. They put together this nuclear tracker, and they show that the world is going to lose twice as much nuclear as it gains by 2030, so this trend is absolutely going to continue, and Westinghouse is a big indicator of the financial troubles and construction problems in the nuclear industry.

Jigar Shah: And talking about Westinghouse and the nuclear industry, our next topic, with Brexit, is full of nuclear intrigue.

Stephen Lacey: Ok, let's get to Brexit. Brexit is now beginning. Britain is officially working to unwind and redefine its relationship with the European Union, a historical change to post-World War II political alliances. It also brings a potential change to a more recent alliance, the region-wide emissions and renewable energy targets agreed upon by EU member countries in 2008. That year, the EU created the 20-20-20 target, which calls for getting 20 percent primary energy from renewables, 20 percent improvement in efficiency, and a 20 percent emissions cut by 2020. It later created this ridiculously ambitious target of an 80 percent to 95 percent emissions cut by 2050.

So as Britain tries to renegotiate with the EU, there's a debate about whether it should scrap those region-wide targets, because Britain is, after all, behind on those targets. But this new poll shows majority support among Conservatives for retaining its targets, and other European environmental protections. This is an interesting trend here. Katherine, it kind of mirrors what we see in the US, a move by some to back away from national commitments, but broad support for those commitments within the conservative base.

Katherine Hamilton: You have to look at what Parliament is doing and putting out as well, so I reached out to a woman who's in my cohort at the World Economic Forum, who is Baroness Brown of Cambridge. She's a member of the House of Lords; she's also on the EU Select Committee. They've produced two reports. The House of Lords did an EU Committee report on Brexit, environment, and climate change impacts, and then there was also a Committee on Climate Change, which is an independent body on which she sits, but it advises the U.K. on climate policy, and they've also looked at what's going to happen with Brexit on climate goals.

And what Baroness Brown said is that the U.K.'s CO2 targets are in U.K. legislation -- they're not in EU legislation for the U.K. -- that they signed onto Paris as part of the EU, but also as the U.K. separately, so that won't impact them. They are also part of this EU emission trading scheme which they may or may not stay part of, but even if they don't stay part of the trading scheme, they would still retain their U.K. CO2 targets, and they would just have to change the way they account for them. And then finally, she said that the renewable target numbers -- like what you were saying, the 20 percent renewable, 20 percent energy efficiency -- are not defined in the U.K. legislation, so they may redefine those so that they allow for, for example, more nuclear energy, or whatever the mix may be. But she feels like the U.K. is on pretty good footing on their targets. Now, they definitely want to beef up in legislation in Parliament to make sure that they continue on that pathway, but she felt pretty good about what they already have in legislation.

Stephen Lacey: That's interesting, because in conversations I've had, and in media reports, I'm hearing that currency risks and political risk are delaying projects; the U.K. government has cut back feed-in tariffs, it's cut back its energy efficiency programs, eliminated them altogether, cut out the Department of Energy and Climate Change. So the signals are really bad, and I'm actually kind of surprised to hear a more bullish take.

Katherine Hamilton: Yes, she really does feel strongly that the U.K. has been a really major influence on how the EU has conducted its policy, and that that relationship is going to change -- you know, they'll have to find other ways to influence the EU -- but she was more concerned about EU legislation than she was about U.K., and feels like they're going to be on a good path. Now, someone else I talked to there said that there were two things that were worrisome for them. One was that the Euratom, which is a nuclear treaty, if the U.K. is withdrawing from that treaty, that will impact nuclear power. It will reduce competition, and remember, we've talked about this Hinkley Point C project; that could have more problems as a result of that. And also, that is the body for safety regulation and sharing all that information about nukes, so that could be an issue. And the other piece that I heard people worried about were really the research collaboration. There's this H2020 EU Framework Program for Research and Innovation that allows for grants and a lot of sharing of R&D funding, but also R&D intelligence, and there are people that are worried about that too.

Jigar Shah: One of the biggest proponents of Brexit was Michael Liebreich at Bloomberg New Energy Finance.

Stephen Lacey: Oh, I didn't realize he was a proponent.

Jigar Shah: Oh, not just a proponent, like a vocal proponent who fought people publicly on Twitter about it.

Stephen Lacey: Jeez, I'm so plugged into energy Twitter, I'm surprised I missed all that.

Jigar Shah: I think Michael is trying to get an elected office in London one day. But, you know, his point is basically similar to others around coal. The U.K. has actually done really a remarkable job of shutting down a lot of their coal plants, in stark contrast to Germany, who has shut down their nuclear plants instead of shutting down their coal plants, and even though he's not for the Hinkley project because he thinks it's a lot of money that could have been spent more wisely, he really thinks the U.K. is already on track to decarbonizing faster than the rest of the EU, particularly Germany, at a much more affordable price, and so that it's good for the U.K. to separate itself.

My own point of view is really more about how important it is to bring everyone along. Even in the United States, if California fully decarbonizes, but the rest of the country doesn't follow it, than that doesn't mean that the United States decarbonized. And so I worry that it's a very sort of insular way of thinking, to just have your state -- in this case, the U.K. -- decarbonize without helping the rest of the continent decarbonize as well.

Katherine Hamilton: It's about burden-sharing, really.

Stephen Lacey: The big question that needs to be answered during these negotiations is whether the U.K. will stay in -- or be allowed to stay in -- intraday power trading, and this is a really crucial trading scheme set up among EU member countries, and even countries that are not within the EU, but are closely trading with the bloc, like Norway, for example. And that question still needs to be answered. Is the U.K. going to be involved in intraday power trading? Because if they are not, it certainly makes it harder for them to smooth out variability on the grid with increased renewables.

Jigar Shah: This is the same technical question we're asking in California, right, because California believes that they may have to curtail some of their solar next year if they don't expand the pool to include Oregon and some of the other neighboring states.

Stephen Lacey: Right, that broader western grid.

Jigar Shah: My sense is that the technical answer will probably win the day for the U.K. there, as opposed to the political piece.

Stephen Lacey: Going back to my original setup point, I was really struck at the survey that just came out of Conservative voters who said they wanted to keep in place EU quotas on efficiency, on renewable energy, on climate, on fishing, on standards on beaches and in bodies of water. 60 percent of Conservative voters said that they accepted the scientific consensus on human-caused climate change. So, regardless of what happens to policies in the short term, clearly there's still pretty broad political support for this. However it looks long-term, whether or not there's increased collaboration with the EU, or the U.K. just sets out on its own, clearly people still want this to happen, even though there's not clarity on how exactly it will happen.

Jigar Shah: Yes, it makes sense. I think the U.K. is not as energy-efficient as Germany and some of the other players, so I wouldn't be surprised that people actually want it to be more energy-efficient. I still worry that having the U.K.'s voice from the outside is not the same as having it from the inside, and so I do think that, net-net, this is going to mean that some of the smartest and brightest folks out of the U.K. won't be as integrally part of the decarbonization effort of Europe, which will be a net loss.

Stephen Lacey: Let's go back to Georgia. So, Atlanta is eighth on the list of cities with the worst traffic in the world. When a portion of Interstate 85 caught fire and collapsed last week, the media and local officials expected mayhem on the highways, but it has not materialized yet. The same thing happened in 2011 in Los Angeles, when a major bridge was torn down, and everyone expected Armageddon -- in fact, it was called "Carmageddon" -- but it didn't happen. Turns out people respond to signals about driving. When told not to drive or to avoid a particular area, people didn't drive, and they avoided that area. So can we learn anything about these experiences, as more cities look to cut down on driving for environmental and health reasons? Jigar, what do you think? You flagged this story for us.

Jigar Shah: I've been following it for a very long time. Basically, the way traffic works is that it's. on a macro basis, it's the number of people who believe that they can time-efficiently use the roads to get to where their destination is, and then the other piece, from a micro perspective, it's if drivers can switch lanes, then you don't get gridlock, right? So if you can keep 1.5 to 2 seconds of distance between you and the car ahead of you, then you find that the traffic moves actually quite smoothly.

Stephen Lacey: I don't know of anyone who knows exactly what 1.5 seconds of distance looks like.

Jigar Shah: It's a pretty large distance.

Stephen Lacey: Yes, it is.

Jigar Shah: It's something on the order of, like, four to five cars of distance. So that folks can feel like they can cut in front of you and then cut out, right, but people don't want that to happen. And the reason I care about this so much is not because of the fascinating experiment which is being played out on the citizens of Atlanta right now, but it's more because I think that we are wasting gargantuan amounts of money on building new roads for traffic mitigation. It's amazing how often local townships, states, and the federal government say that we need to expand a road because more people are moving in, and therefore, we need to expand a road, and it's so expensive to do so. I think it's so much cheaper, and I think what these studies are showing, is that it's so much cheaper to do things that just change the psyche of the driver around car-sharing, or HOV lanes, or figuring out mass transit in ways that are far more productive.

Katherine Hamilton: I reached out to Allie Kelly, who's the executive director of something called The Ray, and The Ray is named after Ray Anderson, who was considered the greenest CEO in America. He took a billion-dollar carpeting company and made it sustainable, and so they've got the 16 miles of I-85 between Atlanta and Montgomery, Alabama, and they're experimenting with what is the highway of the future, and how do autonomous vehicles impact that? How do we have cars communicate with each other? How can we change the dimensions of roads and bridges so, Jigar, like you say, we don't have to build such big ones? How do we make them safer? And then, how do you free up all that right of way and green space to do other things with it? That could be like building solar, it could be doing all kinds of interesting things with that space that you'll be able to free up the right of way with. So they're using the 16-mile stretch to really test, what are these technologies? And I know they're doing these in other towns too, but it's pretty interesting that it's happening right on I-85.

Stephen Lacey: But people want bigger roads, wider bridges, and it's a politically tricky thing to do to say, "No, sorry, we're going to be smarter about our infrastructure," which, to many drivers means, "You're going to limit our opportunities." Now, the argument against that is that people have more opportunities than ever, where there's more teleworking opportunities, we have more car-sharing, we have more HOV lanes, cities are more walkable and accessible, public transportation in some regions has improved. You know, there are a whole host of options that we didn't have 20 or 30 years ago. However, when some people hear "smart transportation planning," what they hear is "you're limiting their options," and this just feels, still, very politically sticky, even though we have more options than ever.

Jigar Shah: Oh, of course it's politically sticky, but I think that you've got to look at this in the totality of infrastructure, right? So, you know, if you look at, the American Society of Civil Engineers report card, which they put out every year, and always give us a D+ -- I don't know why they don't just give us an F, but whatever -- and they're saying we're like, you know, two trillion, or five trillion, or eight trillion, depending on the numbers that they're quoting, behind on infrastructure.

That same thing is true for the electricity grid, right? I mean, part of my argument for the electricity grid has always been that what we're offering on the smart grid, and the grid edge, and distributed generation is 90 percent cheaper than just building out new central generation power plants, and new transmission lines and distribution lines, and all sorts of other stuff like we did in the 1970s. And the same argument applies here, that we are absolutely out of money to replace what we built during the Eisenhower administration. Concrete, labor, everything's more expensive. We have to find more cost-effective ways of moving people around, and we have those technologies, and they now need to start being deployed.

Stephen Lacey: I think we need, instead of, an A through F, we need a Trump rating for infrastructure, so, like, the worst infrastructure is "Sad!" and the best is, like, "bigly," or "very, very good," something like that. Maybe that's a way we can mix it up.

Katherine Hamilton: I like that. And I actually don't think people want bigger roads; I think they want roads that they can move faster on. Like, I don't care, when I'm driving on the New Jersey Turnpike, how many lanes there are, but I do care when it doesn't move.

Jigar Shah: I think that's exactly right, and I think that we have engineers and researchers that are really smart about how to make that happen. Some of those are very, very politically charged ideas, things like the changing tolls on these toll roads depending on traffic. All the way to really figuring out how to get companies to sponsor buses for their employees, like Google and Facebook and a lot of other folks are doing. I mean, the Bay Area is filled with these solutions. My uncle in Houston has been using such a solution there for like 20 years. And then of course, when we have self-driving vehicles, I think that can be even more intelligent. But I feel very strongly that the amount of innovation that we've experienced in electricity is available for transportation; they're just not as open-minded to it.

Stephen Lacey: But let's get to the heart of these lessons in Atlanta and in Los Angeles, and that is that we don't necessarily even need all this technical innovation or infrastructure innovation. Market signals -- or communication signals, I should say -- actually cause people to change behavior, so when local officials came out and said, "Avoid these areas, it's going to be hell," and the press reported on potential problems, and they put signs up on billboards and so forth, people responded, and they stayed away. And then, when they found out -- for example, in Los Angeles in 2012, during the second weekend of construction of that bridge -- that traffic wasn't as bad as everyone said it was going to be, more people came out onto the roads. But the most basic communication clearly causes people to change their behavior in a fairly big way, and I think we often assume that traffic is just sort of this static thing, it's unchanging, particularly during the work day, people's patterns of behavior just don't change that much, and even with basic communication efforts, you can change that behavior.

Jigar Shah: But I don't think that's a permanent solution.

Stephen Lacey: No, I don't think so either. No.

Jigar Shah: When Gray Davis was the governor of California and told everybody to shift their laundry to nighttime to help preserve the California grid, that worked for something on the order of two years, and then people went back to their old habits. And so I don't think people make these types of permanent switches, which is why we need to integrate the kind of technology we're talking about. Separately, everyone does check traffic before they go out, right? That's what Google Maps and Waze really is, it predicts how long it's going to take you to get to your destination, based on current traffic conditions that Google is monitoring with billions of data points. And it does not seem to really shift traffic in a really big way; I don't think traffic times, in terms of waiting, has gone down because of that.

Stephen Lacey: So these public-relations efforts are like the equivalent of Jimmy Carter saying, "Put on another sweater," or "Turn down your thermostat."

Jigar Shah: Exactly. A Christmas sweater, in this case. An ugly Christmas sweater. I really do think we have to have real city planning, and I think you see that with Harriet Tregoning and the work she did in Washington, D.C., and then there's others in New York City that have realized that public space is actually more important than roads, and they've permanently shut down parts of the roadways to make them into public spaces for cafes and others, and have found that there's been no net negative impacts on traffic, but there has been huge positive impacts on air pollution and asthma rates, and that kind of stuff. Atlanta was Ground Zero on this study during the Atlanta Olympics, because they basically shut down all the highways during the Atlanta Olympics, and they found that emergency room visits for asthma went down by 90-plus percent.

Katherine Hamilton: Right now in D.C., the Metro is almost non-functional, and it's in an effort to make it better, so I know it will get better, but they're doing all this work on it, so we constantly get pushes, you know, "Whatever you do, don't take the Red Line," or "don't take the Orange Line." So there's a lot of bus-riding, a lot of Lyft and Uber use, and, of course, traffic.

Stephen Lacey: Public transportation, it's an unforgiving space. Anyway, let's tell our listeners something they don't know. Katherine, what's your story this week?

Katherine Hamilton: So I know we've been following the administration, and this sort of lack of science, lack of climate work. Well, interestingly, this week, both the House and the Senate -- and the House on a voice vote -- passed a bill that Lamar Smith, he's a Republican from Texas, chairman of the House Science Committee, that basically doesn't believe in climate change or science, and questions Science magazine. He said that this bill they passed would "make our weather industry great again," and this bill, HR 353, directs the National Oceanic and Atmospheric Association to increase funding for weather research, considering all sorts of new data, and prioritizing earlier warnings for severe weather. So this is supposedly a huge step toward increasing our resistance to, and resilience to severe weather, which is sort of ironic, considering they're rolling back all of our regulations, but hey, if we can get to them by saying it's all a weather thing, and he's okay with that, I'm okay with that.

Jigar Shah: Well, and I think this is exactly what we're going to keep seeing, is Congress thwarting the President, who tried to cut that budget by 50 percent, right, and instead putting in these types of funding mechanisms, because they actually need the data.

Katherine Hamilton: Yes, and because we are having storms.

Jigar Shah: Agreed.

Stephen Lacey: What's your insight this week, Jigar?

Jigar Shah: So, as many of you guys know, I think at the last Grid Edge World Forum, we talked about fuel cells with Eric Wesoff. We have been funding Plug Power's deployment of fuel cells for Wal-Mart. Yesterday, they announced an up to $600 million deal to replace all of Amazon's lead-acid batteries for their forklifts into fuel cells. And, you know, the more I study this market, the more I realize just how much everyone hates lead-acid batteries for warehouses. I just didn't know this, that like 1/16th of a warehouse's square footage is set aside for batteries and charging infrastructure for forklifts, and watering batteries. I mean, everyone just hates lead-acid batteries, so you're seeing a huge push to convert these roughly one million forklifts into either lithium-ion phosphate-powered batteries or to fuel cells.

Stephen Lacey: Do you think that they'll make a full acquisition, Amazon?

Jigar Shah: I doubt it. I think Amazon got a bunch of free stock from Plug as part of this deal, to sweeten the deal, but I can't imagine that Amazon actually wants to get into the fuel cell manufacturing business.

Stephen Lacey: You know, I heard this great phrase from Wilson Rickerson, who's a long-time consultant and expert in this field. I think he led Meister Consultants, and he has a consulting firm called Rickerson Strategies, and we were talking about some government resiliency programs that had been couched in climate terms under the Obama administration that are now being framed differently, and he called it "stashing the climate jewels," and I loved that term. And it's something that we're seeing more and more. Katherine, this goes back to your point about the bill that would improve weather monitoring. Many of those programs are inherently going to help our understanding of the evolution of climate as well, and you just don't talk about climate change, and somehow you can come up with money for programs that still satisfy the mission to do something about climate change or monitor the problem.

And this brings me to a conversation I had yesterday with Christine Harada, who is the former Chief Sustainability Officer at the GSA, and she left in January. She seemed really bullish about what GSA was going to be able to do to execute its ESPC contrasts and sign more PPAs for renewable energy, because the Department of Defense is so firmly behind these procurement efforts, and because the GSA, although it's no longer talking about climate change -- under the Obama administration, they always framed this stuff in terms of greenhouse gas productions and the broader climate goals of the government -- but these contracts are saving taxpayers money today, and the government's no longer paying a high premium for renewable energy. And so she seemed really confident that things weren't going to change under the Trump administration, that they would continue to execute on their goals. And also, a good sign was, under that executive order for the CPP, she and many others expected them to actually roll back many of GSA's targets, and those did not get touched as part of the executive order. So another bright spot amidst a darkening sky over Washington, D.C.

That's the end of the show, folks. Thanks for joining us. We are everywhere in podcast land: iTunes, SoundCloud, Stitcher, NPR One, any app you choose.

Reach out to us any way you can. We love to hear from you, of course. [email protected] is our email address. Our Twitter handle is @TheEnergyGang. You'll see all of our individual Twitter handles linked on that page. We've got a bunch of live shows coming up in May and June. Go to greentechmedia.com/events for more on those. Jigar does still owe me a few cocktails, so if you come to those events, you can meet us at a cocktail reception, and see him get a free cocktail and hand it over to me.

Katherine Hamilton: He probably owes me something too.

Stephen Lacey: You've got serious debts to pay.

Katherine Hamilton: That's my guess.

Jigar Shah: I pay my debts in federal government time.

Stephen Lacey: Well, you certainly pay your debts in time to this podcast, and that we appreciate, but I'm still waiting for those cocktails. With Katherine Hamilton and Jigar Shah, I'm Stephen Lacey, and this is The Energy Gang, a production of greentechmedia.com. We'll catch you next time.