Renewable Energy Is Easier Than Ever to Build—and Harder to Talk About

Q: Your career in renewable energy development began in the early 1990s. With that long view, what are the innovations that stand out to you?

The technology has changed so much since I entered the field. The electrons coming from wind power have gotten much, much cheaper because wind turbines have gotten much, much more efficient. In most locations in the U.S., wind is now less expensive than legacy sources (e.g., coal) of power generation.

And in the early ’90s, utility-scale solar didn’t exist. We’ve known how to produce electricity from photovoltaic panels for decades, but it only became inexpensive enough to be feasible at a large scale in the last 15 years or so. At this point, solar implementation is growing faster than wind.

Now battery energy storage is on a similar trajectory. It is already inexpensive, and soon it’s going to be everywhere. The issue with electricity has always been that it has to be produced and used instantaneously. You had to match supply and demand. Batteries let you take the inexpensive electrons that come from wind and solar and store them until they’re needed most. That’s exciting. It increases the value of wind and solar.

Q: What else has changed beyond technological innovation?

Developing a utility-scale renewable energy project requires a whole ecosystem of people; that ecosystem didn’t exist when I started. Whether it was lawyers; local, state, or federal officials; consultants for environmental impact studies; or even the utilities that would be the ultimate customers for the power, they just didn’t know how to think about it.

In most cases renewable energy projects are built on leased agricultural land, so we spent a lot of time literally sitting at kitchen tables talking to landowners. Oftentimes, when we were describing what we wanted to do, it was the first time they were hearing about wind power. When we talked with a county commissioner or a state official it was about whether they even had a process for permitting a renewable energy project. There was so much education of all these different constituents.

Today, there is a lot more knowledge out there. The ecosystem of experts and capabilities exists. We still spend a lot of time sitting at kitchen tables talking to landowners. We still do a lot of educating, but often we’re not starting from scratch. We’re talking with farmers and ranchers about the specifics of the development process on their property and in their community, describing timelines, construction, and what it would mean to have a project operating on their farm or ranch. And with public officials, maybe they still don’t have a permitting process or would need to change something to consider an application, but in most cases it’s not a new idea.

There’s one other thing that has changed significantly: energy, broadly speaking, and renewable energy specifically, has become politicized. Renewable energy is oftentimes seen as a liberal thing and not a conservative thing. That didn’t use to be the case. It doesn’t mean that permitting was a piece of cake 25 years ago, but it didn’t get caught up in politics the way it can today. And I think that’s a real shame, not just for renewable energy but for the energy sector and for the country.

We need electricity. We need to figure out how to make more of it, how to make it in as environmentally benign a way as possible, and how to get that electricity to where it’s needed. That doesn’t mean that every energy project should be approved, but a Democratic-versus-Republican framing doesn’t help in making good decisions. Yet, unfortunately, it’s something we deal with today that we weren’t dealing with when we started Orion.

Q: When you sit down at a kitchen table or talk with a community about a project, what do people want to know?

People want to know if it’s going to happen, and if it does, how quickly is it going to happen. We try to be straightforward and upfront with people. This isn’t a process that can be rushed. The project may or may not ever come to fruition. If it does, it’s going to take years.

Overpromising—promising anyone a quick buck or a fast process—is disingenuous and is going to leave people dissatisfied. So we emphasize education. Stakeholders understanding the whole process well is the key thing. What are the upsides and what are the risks? We end up in conversations with landowners and local officials not just once but month after month, in some cases year after year. Projects go better when that happens because everyone understands every part of the project and that there are a bunch of unknowns that take years to resolve and could stop the project at any point.

We spend enough time talking that some of these folks end up knowing more about development than many of the developers who are out there.

Q: What brings landowners on board?

From a landowner point of view, it’s income, and it’s preservation of their land for another generation. It’s a way to diversify the sources of income from agricultural land. Cattle prices or corn prices are going to be high in some years and low in other years, but once a renewable energy project is operating on your property, that’s typically steady income.

With wind energy, somebody might say it’s visually intensive because you can see these turbines for miles. However, for the farmer or the rancher with wind turbines on their land, they’re doing exactly what they were doing before: they’re raising cattle, they’re cutting hay, they’re planting and harvesting corn or beans; they just work around that wind turbine. I think most landowners would say, “Is it annoying to plow around the wind turbine? Yes. Does cashing the check that comes with the turbine get me over the annoyance? Absolutely.”

Someone once asked a Texas rancher, “Do the wind turbines make any noise?” He responded, “They make a little bit of noise. But it’s the quiet sound of money being made.”

The conversations with landowners about solar projects are different because a solar lease agreement is giving that acreage entirely over to solar, but farmers know the land; if the southeast quarter is too wet or dry or rocky or just not as fertile as it used to be, they may be happy to lease it to use for solar panels. Farmers may be happy to let intensively farmed land rest for 20 or 30 years and earn income through solar. Then the land is ready for the next generation or the generation after that to farm it again.

Q: What about agrivoltaics—planting crops between solar arrays? Is that an option with your projects?

To date, agrivoltaics have only been possible with smaller farms raising specialty crops. That hasn’t happened with the large-scale farms in the Midwest and Great Plains where you’ve got hundreds or even thousands of acres in corn or beans.

Q: Why do communities come to support energy projects?

I can give you an example. There wasn’t any wind-power generation in Benton County, Indiana, when we first set foot there in 2003. Today Benton County has over a thousand megawatts of wind power, and there are a lot more wind turbines in adjoining counties.

We’re still involved with and have very close relationships in Benton County because we’re still an owner and the operator of the first project, the 130-megawatt Benton County Wind Farm, which began operation in 2008.

Bryan Berry, who was a county commissioner for many years and is a landowner in one of the projects, talks about how having wind energy projects has meant having funding for schools and healthcare as well as allowing the county to drop property tax rates by 60%.

These projects are capital intensive. You never buy fuel for a wind farm or a solar project, but you spend a lot of money putting steel in the ground. So typically they represent a big new source of property taxes coming into a community.

It’s also a source of jobs. A big wind farm or solar installation will employ hundreds of people during construction. Once they’re operating, there are fewer jobs—it will be in the small tens of people—but those are long-term, good-paying, skilled jobs.

And a final thing that’s harder to put any numbers to, but I hear county commissioners and others point to projects as signals to other industry. “Oh, you have a big solar project. You have wind in the county. Well, that’s really interesting to me. This is a place that’s open for business.”

Q: How about utilities? What has them interested in renewable power?

Their customers want renewable power, and it’s inexpensive. Industrial customers, commercial customers, even residential customers ask for energy from renewable power projects. A data center might come into a region and say, “If we are going to build this data center here, we want it to be served by renewable energy.” So that utility is going to try and figure out how to do that.

When I started, utilities saw renewable power as goofy, as risky. They might’ve been willing to purchase the power from a renewable project, but they didn’t want to be the owner. That has changed. Now the sector recognizes that wind farms and solar energy projects just work, are a source of inexpensive power, and are desired by their customers, so we’re seeing many more utilities as owners of renewable power plants these days.

Q: You mentioned data centers. How much does AI and energy demand growth play into what you’re doing?

For decades, electricity demand has been relatively flat. The economy as a whole has become more energy efficient, and new demand only slightly outpaced demand destruction as some energy-intensive uses—manufacturing plants, steel mills, paper mills—fell away.

If these demand projections around data centers and AI are right, it’s great for us. But it remains to be seen how much of the projected demand growth will materialize—I think we’re seeing some overcounting of demand. When a data center developer goes to utilities in the Texas panhandle, New England, Montana, and the Southeast to discuss a project that will result in 1,000 megawatts of new demand, all four utilities dutifully record potential new demand. If that data center is built, it’s not going to be in four different locations.

Again, if the demand materializes, it will be great for us. But we’re not doing anything different today.

Q: We’ve talked through the other stakeholders. What about Orion’s perspective? What is the business model?

We are developers. We find promising locations and spend time and money trying to develop a project in that location. Our goal is to develop what we refer to as a “distinguishable” project—a project positively differentiated from competing projects.

Obtaining all the necessary permissions and permits is a complex process that takes years. Can you get the landowners that you need at a price that’s acceptable for the project? Building anything taller than 200 feet needs Federal Aviation Administration permission. Proximity to an airport, intersecting with a military flight path, potential interference with line-of-sight radar, and a whole host of other things could cause the FAA to deny permission for wind turbines. There are studies to check for threatened and endangered species or cultural resources which might be on site. Then there are permits. Sometimes there’s a local process. In some cases it’s a state process. In some cases there’s a federal process. In some cases it’s all three.

If we don’t get a permit, if we can’t get a key landowner, if despite what we thought the interconnection studies come back and say that the project can’t plug into the grid unless we pay the local utility a billion dollars to do upgrades that will take 10 years to complete, if we’re 99% of the way there but can’t manage that one last go-ahead, the project is dead—99% rounds to zero. Because of that, development capital is the riskiest capital in the power generation sector.

If we successfully assemble the complete set of permits and land agreements, an interconnection agreement, and maybe a contract to sell power, and the project is ready to start construction, we will often sell those development assets to another party to build, own, and operate the project. The principals—the owners of the company, myself included—have been developing renewable power projects for more than 30 years. We’ve made a lot of mistakes and have a lot of scars and a lot of knowledge about the process, so to the extent that we have a competitive advantage, it’s in development. In some cases, as with the Benton County Wind Farm, Orion has managed construction and remained as owner and operator of a project, but generally we stick with what we believe we do better than others.

Q: How did you come to do this work initially?

As an undergraduate engineering major at Yale in the late 1970s, I was interested in what we then called “alternative energy.” Having lived through two oil embargoes and energy shocks, I believed energy and energy policy were important, but it remained a broad, undefined, un-acted-on interest for many years.

I worked in management consulting both before and after Yale SOM. It sharpened my business and analytical skills, though over time I realized I didn’t just want to be making recommendations to clients in industries I didn’t care about; I wanted to be the one making the decisions, in an industry I did care about.

By the time I was married and we were expecting our first child, I realized I didn’t want to be traveling all the time for clients and industries that I didn’t necessarily care about. I could muster a problem-solving interest in how to segment the European abrasives market to help a client company gain a larger share, but that wasn’t satisfying. So I started thinking, if I’m going to work this hard, what would be satisfying?

I came back to the idea of energy and specifically renewable energy. An SOM classmate, Jane Van Voorhis, introduced me to a friend of hers in renewables. That eventually led me to my first job in wind power in 1992. Orion launched in 1998, and I joined in 1999 with the strong encouragement and support of my wife.

Developing renewable energy projects utilized the business skills that I’d developed both academically and in consulting. It put me into the thick of decision making on a daily, weekly, and monthly basis. And it put me in a field I found meaningful and satisfying.