Investing in Early-Stage Energy Developers with Christine Larson

In this episode, we sit down with Christine Larson, Head of Strategy & Operations at Modern Energy and interim COO at Industrial Sun, to explore how early-stage developers can thrive in a landscape defined by high complexity, capital intensity, and shifting market signals.

Christine shares how Modern’s model goes beyond funding—providing hands-on operational support like IT and accounting—so founders can focus on what really matters: building and scaling transformative energy projects.

We dive into:

• Why Modern invests in niche, high-complexity infrastructure like green hydrogen and EV fleet charging
• How capital bottlenecks and tariff uncertainty are shaping developer risk
• Why utility coordination and contract innovation are now mission-critical
• How partnerships, not just tech, will drive the future of energy

Christine and James explore how strategic collaboration—between developers, capital partners, and load customers—is key to unlocking the next generation of clean energy infrastructure.

Paces helps developers find and evaluate the sites most suitable for renewable development. Interested in a call with James, CEO @ Paces?

Transcript

00:02.12
James McWalter
Hello, today we're speaking with Christine Larson, Head of Strategy and Operations at Modern Energy. She's also a board member and the interim COO of Industrial Sun. And i'm very excited to talk to her about two big topics, investing in early stage developers, as well as the emerging opportunities for those developers in both the large load and data center space.

00:19.47
James McWalter
Welcome to the podcast, Christine.

00:21.06
Christine
Thanks so much for having me. Happy to be here, James.

00:23.64
James McWalter
Amazing. let's get to start. I'd love to hear you a little bit about yourself and how you ended up eventually at Modern Energy and Industrial Sun.

00:30.67
Christine
Yeah, absolutely. I think everybody in this industry tends to have such an interesting story. And mine comes down to I've always loved problem solving. And so my original background is in civil engineering, always been fascinated by urban design, architecture, the built environment.

00:48.63
Christine
And so that originally led me to the energy space um and saying, how do we understand this thing that surrounds us everywhere, that but that I think most people ah don't know a lot about?

01:01.03
Christine
I don't know lot about how power comes through a home, how we power in the environment that we live in. um And so spent ah all of my career focused in the, I call it infrastructure and energy area. and And on the side of the business, that is, how do we make businesses um more successful?

01:17.39
Christine
So all operations, ah working with big companies, small companies, startups, ah traditional oil and gas energy to now renewables, saying, how do how do we make these um the best businesses that they can be?

01:31.21
James McWalter
yeah Yeah, I'm more recent into the energy sector in like the last three years with Paces. um And you know my previous was across industries like finance and agriculture and and a few other areas. I guess like you know you've been kind of watching this space now for a few years. like How have things shifted recently?

01:47.30
Christine
I think, um look, yeah it's interesting. you talk to people who have been in renewables. There are there are folks who have been in this industry since the 80s, right? And then there are folks who are coming to it now. And I think everybody thinks they're coming to it. You know, at the moment, it's becoming a thing. But I think realizing that industries have very long life cycles um and like where you are in the different moments of that.

02:10.26
Christine
um and And it's, and I think, a really exciting time to be in the renewable space. um And there's a reason you see so many people coming into it. Something I've also been reflecting on a lot recently is the similarities and differences between, call it traditional oil and gas molecule-based energy and the electricity markets.

02:30.51
Christine
And I think there are things that are similar, you know, large infrastructure projects with um cap ah upfront CapEx and long lifetimes have similarities. um And I think as an someone playing in the infrastructure space, there's a lot of lessons to be gleaned from one to the other. And at the same time, I think um There are a lot of differences ah between the business models, between how you think about investing in those different asset classes, in what it takes to succeed, um and kind of the pitfalls.

02:57.85
Christine
And so that's what I've spent a lot of my time kind of reflecting on and having conversations with people in the space recently.

03:04.20
James McWalter
Yeah, I think one of the funny things is three years ago, you know, we had a specific thesis, you know, and we were kind of talking to folks. And now it's like, it seems like such an obvious thing to say, right? It's like, oh, i they're like, i know it's not very original anymore. But you know, this is how we think of about the world. um You know, um and we're kind of you know, fortunate and as I think you were at Modern to like see a little bit kind of further ahead about what was coming.

03:26.25
James McWalter
um So I guess like, you know, in terms of Modern itself, right? um Right now you guys partner with early state developers. um What is your kind of approach to that? And I think like this kind of lens that you kind of touched upon of different perspectives on capital, I think is really interesting.

03:40.14
James McWalter
Like one thing we're seeing a lot of right now is commercial real estate colliding with infrastructure capital and like, you know, folks are trying to navigate that and like learn new lessons. um But yeah, I guess like ah you know both how you ended up in modern as well as, ah you know i guess, the thesis behind modern.

03:54.81
Christine
Yeah, yeah. And, you know, I ended up at Modern because there was an opportunity to basically build a bigger energy, renewable energy team, right? And wanted to be part of saying, how do we create more companies?

04:07.13
Christine
um And I think that that's always ah being in kind of the startup company space. Lots of people who are really excited and passionate about the energy transition um is is a fun, it makes it a fun place to work and an inspiring place to work.

04:21.00
Christine
um work with a lot of big dreamers. um You know, I think what makes, you talked about like real estate versus infrastructure, I think that is yet another way in which I would say the renewable energy transition has looked similar to previous energy or infrastructure and in some ways different.

04:36.65
Christine
um So Modern is a holding company um and started by two entrepreneurs who had each founded their own renewable energy companies. And a lot of that sits ah A lot of that ah drives the ethos of kind of who we are and where we are. So we're neither private equity nor venture capital.

04:54.64
Christine
We're really looking for deep partnerships with entrepreneurs who want help to build their businesses together to say, We have done this a number of times in the founders own businesses and then in the businesses we've either co-founded or funded with them.

05:12.04
Christine
And it's a really deep partnership. And so one of the ways that that manifests is that modern does not just provide capital, but also provides what we call capabilities. So we typically provide a suite of middle and back office functions to our portfolio companies based on their needs.

05:28.06
Christine
um You know, one of the things i say to founders is nobody started a company because they wanted to be awake at 2 a.m. running payroll or and figuring out being so many founders are the IT department at their starting company.

05:40.56
Christine
um And, you know, from an investor lens, we think also y'all spending time on all of those types of things is distracts from the things you should be spending time on. Right. And that's product development and sales.

05:51.60
Christine
And so we find it to be a mutually beneficial partnership on that side, but it also just deepens um how much we deeply work together with our um platform companies.

06:01.75
James McWalter
I think it's very interesting. So in the kind of venture world, right, where, you know, Paces has historically gotten capital from and and more where my experience lies, you have these, you know, portfolio company services like teams.

06:13.07
James McWalter
um And generally they're, you know, helping you with a little bit of hiring. They're helping you with ah things But usually it's a relatively light touch. And honestly, on the venture side, I think it's ah often very much overstated. you know Generally, when people are like, I've talked to investors, I'm typical VC, and they're telling me about all these teams. And I'm like, can you get me customers? Can you get me new more capital? and You know, teams are great, but in the end, you still have to do that hiring.

06:35.99
James McWalter
It sounds like guys are taking a much more hands on if you're actually literally kind of running payroll. And I guess like, you know, love to kind of learn what are the bits that like, does everyone um take have the same uptake of those additional kind of um like like like elements or is it a mix? And and how do you kind of service those different kind of needs from you your portfolio companies?

06:53.79
Christine
Yeah, no, it's definitely a mix. um And I think every company is different in their needs, both in what their starting stage with modern is and in their growth ambitions. um And, um you know, we also all are learning lessons together along the way.

07:07.87
Christine
um So we, it's, I would call it a custom based on everybody's need set up and also flexible over time. So for example, we've had companies come in I think our, you know, accounting is one of those things that Project accounting, real estate accounting, energy accounting really matters when you're developing assets and then are going to have um ah you know either an asset sale, tax equity come in. like you you can't You can't mess that up, right? It's really important.

07:34.37
Christine
And so having somebody that as you're trying to get the wheels on the bus to start going who can say, I've done this for a number of companies now and I can set you up and get the processes in place. and will run your accounting for a year, two years, whatever the the decision is. And then as your team scales, you'll hire a controller and you'll have your own accounting in-house because that's the life cycle that your company will be on.

07:55.35
Christine
um A lot of that makes sense. And you see similar things, for example, on people in talent, where if you're starting off, you know you want the templates and the best practices, but eventually it makes sense for you to bring some of those things in more in-house.

08:07.26
Christine
There are other things that people choose to keep um keep with you know modern for longer. IT is one of them, for example. um So you can get a great software security and like ba also basic IT t team um that's basically outsourced but insourced, right? So it's not just the have to spend a bunch of time on call waiting with somebody who doesn't know you from Bob, right? but it's um But it's also not somebody who's full-time dedicated to your staff, which is generally too over-resourced for these types of companies.

08:37.04
James McWalter
Yeah, our CTO at AI at Facebook and all that, he ends up being a little bit maybe too much being our actual IT when when certain things happen. And yeah, we're worth thinking each of best ways to to get him out of when the Wi-Fi router has an issue or whatever it might be.

08:52.81
Christine
Right. And there's a lot of lessons to be learned across, um you know, as much of the companies are different, that can also be similar, right? So we see similar things in um communications and how you talk about um be technical, but not too technical in talking about your product. How do you drive, you know, and marketing materials?

09:10.76
Christine
ah how do you How do you present yourself as an early stage startup in order to sit across the table from large counterparties? So there's a lot of things that also is like knowledge sharing and best practices that I think um gives leverage, even if companies go on and ah you know eventually take these things in themselves.

09:26.26
James McWalter
And I guess like when you do your kind of initial investment, is it usually one to three folks in a room like that level? are the folks sometimes a bit more established? Like what what's like best initial fit for you as you kind of think through ah your strategy?

09:38.10
Christine
Pretty wide range. um yeah We've done everything from what I would say is like kind of co-founding with a set of ah partner founders to um a company might have an initial founding team of eight people, something like that, but and have raised either ah an initial seed round or friends and family money and done their first a year and a half and are now saying like, I found my thing and I really need access to more capital in order to be able to do this faster and more institutionally. So it always tends to be relatively early stage.

10:08.06
Christine
like to come in and say, we want to help you basically build your ah product pipeline of assets, and then we'll take a portfolio of assets to a broader market or to raise a larger round in order to let you bring those through construction and operations.

10:22.96
James McWalter
I guess like what, you know, cause I know we've a bit of a wide spectrum, like what, what are some typical kind of development types that you guys like engage with?

10:29.60
Christine
Yeah, absolutely. Yeah, so we have holdings right now in solar of, I would call it all scales, um ah green hydrogen and electric fleet charging. And so generally you can think of it as um hard infrastructure in the ground, typically high capex requirement upfront.

10:47.12
Christine
um ah Usually things that play with as many things in energy do inter interplay with the regulatory policies and various incentives at state, local and national levels.

10:58.37
Christine
um and And we in particular like things that I would call like high complexity, because we're looking for things that have a bit of a competitive moat, not um vanilla ah renewable energy development.

11:10.79
James McWalter
High complexity in terms of like the ability to develop like these projects in general so that, you know, another developer can't replicate or geographic or and regulatory complexity. Yeah. I guess what's the combination of of complexity?

11:23.40
Christine
Yeah, any of the ah any of the above. um It's basically so that, you know, I'll give an example. and There are great wholesale solar developers out there, but a general general wholesale solar, I'm going to go find the best piece of land um and beat somebody to it and have a position in the queue, not not something we would typically invest in. Whereas, you know, we talked about industrial sun, industrial sun's um thing is basically challenging siting. So they're most, have historically been focused on existing industrial or manufacturing facilities in Texas that have been there, for you know have long standing footprints and a lot of other infrastructure built up around them. So getting access to solar that is on site or near site for them is incredibly challenging. And so you're either looking at

12:08.27
Christine
citing parcels that are you know cobbling together a couple of different puzzle pieces to be able to create a path. um You're looking at longer gen ties, but you you generally have to do something more than just find the like one best...

12:21.92
Christine
you know you Partnering with Paces to find the best place on the grid and the best real estate is um less of the strategy that they go after.

12:25.12
James McWalter
Sure.

12:29.73
Christine
And so then that means that things like new loads in Texas, Whether, you know, for green hydrogen or data centers now where you're seeing similar but different challenges um as those industries seek to be in certain areas that matter for their business.

12:44.66
Christine
Even if we're citing citing new load, um you know, that challenging citing continues to be to be complex. And again, doing it at utility scale, so 100 megawatts plus all the way up to a gigawatt.

12:57.17
James McWalter
you know I think when folks are like, yeah there's kind of this a spectrum of strategy, right? So some folks are like, we are financing the the type of more traditional solar, and we we know utility scale solar, and you know we've got some great financial models for all those kind of things.

13:10.91
James McWalter
um And so you know on the margin, like they probably have like very, very deep understanding. of that type of project and it can outcompete to other forms of capital. For Yi, because you have like these multiple like entities of both the generation and load side, I'd imagine you know you're trying to like compound the insights from these different areas in order to like build out a thesis around one specific vertical.

13:29.70
James McWalter
I guess like, you know, are you looking for other areas to like that will also kind of compound? So like, you know, green hydrogen, as you build like your thesis there, does that lead to, hey, actually, there's this other adjacent like piece of infrastructure that we don't have a part of our portfolio, but is becoming stronger or weaker on the basis of our yeah thesis and and going deeper on one of these other areas?

13:50.00
Christine
Yeah, it's interesting because I do know some investment firms that tend to do that. And I think it is an interesting strategy. Ours has been more, um call it isolated between companies than that, than a holistic across the, ah you know, across the holdings.

14:05.03
Christine
um And I think some of that is, again, the focus on individual entrepreneurs and partnership, right? And so it's less important to us what the business model or industry is and how it fits in with the portfolio um because we generally think of them as standalone even though there's lots of for example knowledge sharing across them um but and more important what's the specific niche thing that this business is going after um and so yeah the like weirder the business model I would say the the more we get interested

14:37.49
James McWalter
And then, yeah, and you have to clear the exact numbers, but do you have like a particular like range of risk return profile then? Because, you know, I imagine you have your own, you know, set of set of investors, LPs, et cetera. And so when you're trying to like evaluate these different businesses, right, do you still have to like fit within a particular risk return profile or do you have like a higher degree of variance?

14:56.31
Christine
ah No, you do. and And it won't surprise anyone that when you're investing in earlier stage businesses, you're taking more risk. So you're looking for things with with higher returns, which also leads to the nichier, the business model, the better, right? Because you can't typically access that with just a vanilla, um you know, wholesale power XYZ. I'm going to go do the same thing other people are doing.

15:15.91
James McWalter
absolutely um I guess, you know, what are some of the kind of common challenges you're seeing facing folks who are like the you the developers? You know, I think there's obviously like a set of kind of long standing challenges. I think there's no more new challenges. This is this is being recorded, ah you know, the week after Liberation Day and and then some of the funky things that are happening and in the public markets.

15:35.44
James McWalter
um But I guess, yeah, how what are what are some of the common challenges that come up as you're both talking to potential developers invest in as as your existing portfolio?

15:42.78
Christine
yeah um i Yeah, I was wondering how long it was going to take us to say the T word.

15:46.99
James McWalter
yeah

15:47.51
Christine
i guess I'll start with that one. I think, um look, right now tariffs are uncertain for everyone. And I think and and I would say uniquely now compared to a few years ago, they're not just affecting the renewable energy industry. Right.

16:01.88
Christine
i think like we've had tariff uncertainty and renewables um for several years at this point. Right. And live through various waves of that. And um you know, the entire economy is being hit with this uncertainty now. I think the challenge for ah renewable energy companies and a lot of infrastructure companies is that, again, when you're making a 30 year ah capital decision, how do you make that with so much uncertainty? um So i think that's particularly hard right now. And you're seeing a lot of more than I've ever seen, you know, leaders of companies, CEOs just kind of sitting and saying, I don't know what to do right now. And I'm

16:37.85
Christine
I think that's honestly, the you know, that's the hardest times of leadership is saying that there is no clear path and you have to keep putting one foot in front of the other. So that'll be an interesting thing um to watch. And obviously something that we're working with our companies on of how to what risks to take, what smart risks to take and how not just to sit still for the next um several months while we all figure things out.

16:59.78
Christine
um ah You know, the other pieces, and it's why modern was started, and but it continues to be, I think, a challenge in this industry, is the access to capital. So I mentioned earlier that, um you know, I think one of the challenges is I don't know that we found the perfect investing model for this industry.

17:16.73
Christine
We have venture, which you kind of, for, you know, asset development specifically, you end up having to cobble together a number of different smaller stakes because no one wants to take the big risk.

17:29.23
Christine
um on what is ultimately capital intensive to build out a pipeline of large infrastructure projects. um You have, call it strategic in-house incubation, right? So all the big power players of the world just begin to develop their earlier stage pipeline. And we've seen that, um,

17:46.50
Christine
go through cyclicality where they either do or do not invest in early stage. um And then you have the traditional and private equity the world. And typically they are not willing to get involved until you have a ah pipeline of projects with clear commercial offtake.

18:02.30
Christine
And so how do you solve that chicken and the egg problem of needing to have capital to get an offtake contract, but also no one giving you capital until you get there?

18:13.07
Christine
And so that's why modern was created and there are some other players like that in this space. And I think there will be more and more. um And i'm I'm personally excited to see that space mature more because I think it'll be driving industry forward. Someone I was at in an event the other day where a panelist was talking about how they see ah having developers in the nuclear SMR space as a very ah positive proof point for the future development of that space.

18:40.31
Christine
um And that development and that like stage of companies to be a developer ah is what pushes forward innovation and change in these industries. And we were talking about mining and we were talking about nuclear.

18:53.05
Christine
And like historically, for example, those have been industries that have a few large, massive players. and And when you start to see developers who are willing to take that early stage risk,

19:04.25
Christine
That's where you'll start to see both business model and technology innovation. um And so I think there just needs to be more players, more capital providers in that space who are willing to say, i don't play in venture. I don't play in private equity. i play in the, you know, and however your funding model is funded, but you're willing to play in that in that building stage at the beginning.

19:24.12
James McWalter
I think there's like this fascinating, like current example as i was ah also at a conference recently where, you know, a recent IPO, a big AI company, right? um They have funded many billions of dollars in venture capital.

19:38.15
James McWalter
They're IPO-ing, now they're getting public capital. um Their struggle is they're competing with hyperscalers who can get investment grade, you know, capital um to fund any of these projects. You know, if they're working with a colo and then they're doing the lease, once they sign the MOU,

19:52.97
James McWalter
as an off-taker, all of a sudden this somewhat high-risk site and project is all of a sudden investment grade, right?

19:56.27
Christine
Tangable.

20:01.58
James McWalter
And and better probably than you know the the grade of countries like where I'm from, like Ireland, right? you know it's It's incredible. um Whereas this, you know and there's a person on the panelist on a panel who is like very much like companies like this are really going struggle because they don't have the track record, they don't have you know the various counterparty the know the counterparty risks that they're having relative to competitors means it's just really difficult. You go from very expensive venture capital, and then you don't have the same access to the debt markets.

20:26.44
James McWalter
And so yeah I think like that's happening on you know that that's on the many, many billions of dollars scale. But I think you know one of the other things we're starting to see, and I know you know some of the time that you're now spending with companies uh industrial sonda i think you're you're directly exposed to that is this kind of like missing middle of like you know folks are taking site land positions right you have folks full flowing into things like for data centers etc um and then there's kind of nearly expectation that there's going to be an off taker hey if you just you know i've done all this work i'll build the solar i just need something from google right and like it all could happen it's like google doesn't need you guys right so you gotta

21:01.66
James McWalter
put your kind of, yeah there has to be enough skin in the game, right? From both the developer as well as the developer's capital partners to get it to a level of de-risking necessary for actually to get that off taker. And so, you know, I think like we're seeing this like constantly now in a way that it wasn't even true a year and a half ago, even with more traditional projects than I think the modern focus is on. So yeah, I'd love to get and kind of get your take of, you know, because I think the capital markets piece is just like completely but blown up in the last six months as folks are trying to figure out how to like fit these pieces together.

21:29.48
Christine
Yeah, and I think one of the things I'll say as ah solar developer, I feel even worse ah exposed to it because, for example, there's a lot of data center players who are come to us are interested in adding solar, but we're then one step even further down the chain. And so, you know, it is a really challenging problem because then we're taking the risk on the data center developer who's then taking a risk on their offtaker.

21:53.90
Christine
um And so we've been thinking a lot about, I think capital markets might be one innovation, but I think there's a lot of contract innovation to be done. um Right. So we've thinking about like, how do you, um whether it's like different partnership structures where it's like more joint venture or more co-ownership, like how do you have both more, if you have more if you have downside, how do you share an upside?

22:01.71
James McWalter
Yep.

22:15.34
Christine
um How do you post, you know, do limited security type postings to say, like, there is a floor to my um to what I will lose on this. Right. And so, like, how do you think about those kind of risk return within the commercial partnership structures?

22:30.13
Christine
And then I think that enables the investors to get a lot more comfortable. Right. Because you're saying, well, there's a risk.

22:35.43
James McWalter
Yeah.

22:36.48
Christine
there's a big upside and here's my floor on the downside. um Or there's big upside, you know, there's even bigger upside even with with some downside. And that's what i you know, I've seen honestly less appreciation for in the data center and power space.

22:53.59
Christine
And I think some of it is what's slowing down some of these. There's been like, I know y'all did your white paper with scale. and And there's a lot of really interesting answers to say, how do we solve this power problem?

23:04.23
Christine
um But I think to me that that some of the thing we're missing is that it's not a technology or a a question. it's a It's a relationship and commercial contract question. It's how do you make, how do you balance the risk between the two parties um or more than two parties to make it so that something actually hangs together here?

23:22.52
James McWalter
Yeah, we we actually have a podcast coming out where ah folks on our side who could write our white paper doing dueling white papers with Tyler Norris and the Duke paper around like flexible load. and think that's coming out in the next two weeks. And like what i think was really interesting and one of the insights from that conversation, which resonates, is part of the problem is even within these entities, within the hyperscalers themselves.

23:40.88
James McWalter
Like you talk to somebody who is like pro the clean energy use case at a hyperscaler and they're like, yeah, we'll do some flexible load, we'll do all this kind of thing. Then you talk to like the folks who are literally like iterating on these deals and they're like, hey, I've got 50 options ahead of me.

23:53.43
James McWalter
I'm just going to pick the one that still allows me to retain five nines redundancy. you know and and like And they're pushing back hard against some of these things, which makes sense on the net. But for that individual developer making that individual decision on you know on behalf of the hyperscaler, there's like a lot of like kind of constraint happening.

24:08.58
James McWalter
um And so, yeah, I think I absolutely agree on the contract and relationships piece. also think that there is work to be done within these large hyperscaler entities to like kind of a little bit get their house in order about like, is this really an urgent thing that you need?

24:21.65
James McWalter
Because like certain parts of the entity is is pushing back on other parts of the entity in ways that is like giving us lot of confusing signal to the rest of the market.

24:29.16
Christine
Yeah, I agree. I think that, that ah you know, um you always get asked, like, how much data center capacity, how fast, you know, can I, is, is if I started data center development, you know, with solar attached, will somebody buy it for me? I was, again, on another event the other day, they said, ah you talking to data center developers, will you buy power at any cost? And they said, no, not at any cost.

24:50.11
Christine
um that And some of it is hyperscaler, that's another issue. We talk about data centers as if they are a monolith, right? And there really is ah quite a range of use cases and a range of different customers, right?

24:57.42
James McWalter
Yep.

25:00.55
Christine
So hyperscaler is more interested in power now at higher cost, but ah cloud still definitely not interested in that. And even, you know, future inference use cases like less interested in power at any cost.

25:14.31
Christine
um And so I think it is also a yeah, it's a know your customer and know what they want. um But yeah, i agree. There's a lot of mixed signals where we say everybody wants renewable energy. Everybody wants it right now.

25:26.26
Christine
and then And then we're at least not seeing on the ground as much interest in that. it's the same things you said, where it's like, if you have a portfolio of projects, it's human of us, right? You're going to pick the easier one unless you have other reasons not to.

25:40.85
James McWalter
What we're seeing is there's a one holdout hyperscaler who's not going to do a ton of gas. Everybody else is doing a ton of gas. And so again, we're, you know, I think similar to you, our perspective is to have as clean and, you know, has a high a mix of renewables as possible in these projects. not Not just because they're good, but you also can like deploy pretty fast, but obviously there are redundancies and like other kind of constraints that, that needs to be baked in.

26:01.63
James McWalter
Um, yeah I think one of the ah the things that is also you know kind of looped into this is right is like the relationship utilities.

26:10.15
Christine
Thank you.

26:10.22
James McWalter
you know So what's starting to happen is you have nearly to these kind of regional like area you know these regional kind of like reactions. right And so, you know us included, but like can anyone get Encore on the phone right now? right like it's It's completely... you know There could be even data center developers and folks who are you some of the big public well-known names are struggling to actually get folks in the account management teams on the load side in Encore and some of the other, you know, Dominion's been like this for a while, um actually on the phone because there's such an inundation.

26:38.75
James McWalter
I think one of the things like we're starting to try to think out think through with our developer partners is like, what is the kind of like preceding relationship step as markets start to heat up for this type of load growth?

26:49.98
James McWalter
where instead of like the developer, just yeah know every single developer making 50 phone calls a day into the utility, is there a way that folks like Paces, even folks on like Modern, I think, and like um other entities can like be a kind of initial kind of screening or kind of like reduce that overall thing? Because the utility is just like, hey, we're getting all these products. We don't know how many are real. It's double and triple counting when the colo and the you know and the landowner and the hyperscale are all going...

27:15.36
James McWalter
You know, talking about the same 400 megawatts. um So i guess like, how do you kind of think and how does you historically, but with modern as well as the kind of work you've been doing with industrial sun intersect with both the utility and these other kind of stakeholders?

27:27.33
Christine
Yeah, um I think that all of that is getting more challenging. I mean, we talk about it on the, I think one of the things, you know, again, coming back to the how much demand is there really, like, I understand why the utilities are confused, right? um yeah We look at the generation interconnection queue, and we would not expect all of that to get built. But at least have now several years of data to say,

27:53.37
Christine
how much will and, um you know, what portion do they think that will drop off and where and why. um And I think now you're seeing that on the load side in a way that they never have before.

28:04.76
Christine
And we already knew our interconnection process was kind of broken across the U.S. um on the gen side and it needed to go faster. And now we're saying, okay, and can you guys break it? Can you fix it on the on the load side as well?

28:17.77
Christine
um And so, you look, I think it's a big, broken record, but yeah I think you can come back to like innovative partnerships outside of the utility, right? So things like, um ah you know, Intersect and Google coming together with a capital partner to say, we're going to build this campus right and it's going to be we're going in into the we're bringing the whole thing to the utility and we're going in as a united front, rather than each individual party then trying to sell it to each other, I think that's the. Sarah Holtzman, It works better from the at least the power developer standpoint right because then we can do the type of unique contracting and put sharing of risk and sharing of reward.

28:57.23
Christine
um And I think it will enable us all to get through the process faster. um And so those partnerships, I think, where you say we have power, capital, and, ah you know, compute all at the table together, united, um are going to be the ones that are most successful and fastest.

29:15.95
James McWalter
Yeah, and one of the things we also just seeing on a regional level is, you know, I've been at a couple of events that region specific, you know, in a particular city, not DFW, but a particular city in in the American Southwest or across Texas, et cetera.

29:28.59
James McWalter
And they're like, this is actually the best place to build data centers. Why are we not getting the same attention as, you know, some of these other places? You know, we should we should add some tax incentives. And I'm like, yeah. not Nobody cares about your tax incentives.

29:40.32
James McWalter
I'm like, can you figure out a way to work with utility to actually like get things are approved fast? yeah if you're vertically integrated, you know, there's also opportunities there, but like, you know, the the kind of ah conventional way of doing economic development and all those kinds of things are just breaking down.

29:55.01
James McWalter
And like the message I'm always just saying to people is like, It's all about speed and LCOE, right? Like it still needs to be within range. Like it does not speed at all costs, right?

30:01.74
Christine
m

30:03.57
James McWalter
um But whenever people tell me, oh, we're the best like place in the country. Why are no data centers coming here? I'm like, because you've told me yourself that like, you're not going to be able to serve them load for like four years. So like, what are you even talking about? yeah

30:16.30
Christine
Yeah, and you know, and at the same time, I would say, again, hyperscaler versus cloud or hyperscaler versus inference, because like, yeah, I think if you're not, if you don't already have path to power in two years, maybe don't play the hyperscaler game, maybe three, maybe three, but like,

30:31.80
James McWalter
Right. Yep. yeah

30:33.88
Christine
If you're outside of that window, you don't already have a magical asset that you can deploy um or an ability to to break the speed barriers because of what you're able to do in partnerships you already have. um It's a different game.

30:46.54
Christine
You know, in cloud, tax incentives do still matter, right? They matter a lot because a lot of that um is, you know, all the Fortune 100 companies of America who are public and very exposed to those types of things. So you can make deals like that. And Again, like we say cloud now, but cloud now will be inference.

31:05.09
Christine
And so I think there's a lot of, we need to start looking farther ahead. um Like there is a, ah like absolute race right now for the thing that's right in front of us and start thinking again, these assets are going to last for 20, 30 years.

31:20.73
Christine
um They are going to take time to get built. I mean, even even natural gas now is going to take time to get built um with the lead times that they have. So like start thinking to where the puck is going, not where it is right now.

31:32.41
James McWalter
I guess with that in mind how are you thinking for for yourself at Modern and and like the kind of projects you're working on, like what the next few years look like for you?

31:40.54
Christine
Yeah, that's a great question. um I think um one of our core principles is probably like unwritten, but I think in practice is follow your customer. And so, um again, it's what are our existing customer relationships?

31:55.52
Christine
How do we expand them um within their footprint? So how do we say what are your goals given purpose? macro environment given, for example, data centers and how they're moving and that strategic planning, but like all all of our customer companies are planning on a five to 10 year horizon, right? So um how do we align with them on ah that path, even if that path is, for example, in some industries slower than what we might have anticipated, right?

32:23.77
Christine
But and it's that I get shocked from people all the time, but there is still interest in green hydrogen. If you have the right product and the right commercial partnership and the companies that need it in the right places, um there is appetite for it. And so focus on those places where you have a strong value proposition. Same thing, electric vehicles, increasingly hard, right, um for fleets.

32:46.54
Christine
But focus on the places that you do have the companies that whether because of their internal goals or local regulatory issues, that there is an incentive to do it and build those relationships.

32:58.06
James McWalter
I think yeah I definitely agree on Green Hydrogen. There's still lot of opportunity. I do think there's like nearly little startup in a box, which was converting Green Hydrogen startups to like data center, like targeted startups over the last like six to 12 months as like folks have kind of basically rebranded and and kind of gone at that.

33:12.84
James McWalter
But a lot of the reason, right? It's like they've been working on large scale projects for a while to service a load. And now this is like a higher best use from ah from a, you know, potential cost and value perspective. um So fully aligned on that.

33:24.55
James McWalter
I guess like, good.

33:24.54
Christine
Yeah, and that's why I think the answer on data centers is not any one thing, right? It totally depends on what their alternatives are. And so like, if you have a great green hydrogen project that was, you know, at a certain cost profile and located in a good area, like it's a good use case, but will green hydrogen generally win data centers? Like maybe not.

33:42.31
Christine
So.

33:42.93
James McWalter
Fully aligned. um This is a great question. Before you kind finish up, is there anything I should have asked you about but did not?

33:50.35
Christine
No, you know, I think what ah what We're always looking to have, whether at Modern or Industrial Sun, looking to have conversations with people in the space, because, again, I think that we all need to figure out how to um innovate our way into moving the the industry and, for example, the power challenge forward. And like I said, I think those partnerships that happen um before you're even entering into the project are where a lot of value lies, both for us and and for greening the economy.

34:22.99
James McWalter
fully aligned on that. um but We'll include links to Modern and in the show notes. Thank you, k Christine.

34:28.86
Christine
Yeah. Thank you so much, James. Pleasure to be here.