ACP Recap, Chinese Cybersecurity Threat

Allen, Phil, and Joel cover the low turnout at American Clean Power
in Phoenix, the US House's budget bill affecting renewable energy
incentives, security concerns over Chinese equipment, and a patent
infringement lawsuit filed by 3S Lift. Sign up now for Uptime Tech
News, our weekly email update on all things wind technology. This
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a part of the Clean Energy Revolution. Visit build turbines.com
today. Now, here's your host. Allen Hall, Joel Saxum, Phil Totaro,
and Rosemary Barnes.  Allen Hall: Welcome to the Uptime
Wind Energy Podcast. I'm Allen Hall, and I'm joined today by Phil
Totaro and Joel Saxum. Rosemary Barnes is over in Sweden, and
Rosemary's gonna miss out on a very active week in renewable
energy, at least in the United States. we should probably start
with American clean power, which as we are recording, just finished
the day. It was in Phoenix, Arizona. Things I've seen online, Joel,
were that they were expecting around 10,000 people to attend that
event, but watching LinkedIn, and I did not attend it this year,
unfortunately, or fortunately, is my daughter's graduation.
So [00:01:00] I wanted to be there. I. But it looked like
the hallways were pretty empty, which was a little shocking. 
Joel Saxum: Yeah. So Allen, I wanna preface what you said
there by, changing, a CP was in Phoenix too. A CP was in 106
degrees Phoenix today. it was a little bit toasty walking around in
the suit jacket, but, of course, everybody, had theirs on. but no,
you're, a hundred percent correct. I was there all week, of course,
weather guard brand there, talking lightning with everybody and,
strike tape. And we had the uptime wind energy banner. We talked to
a ton of podcast fans, which was really cool. so the hallways were,
Tuesday morning was great. Tuesday afternoon, Wednesday, Thursday.
It just got slimmer and slimmer. and, there was some kind of
logistical things there too. This trade show was oddly on two
different floors that were separated by four escalator sets. I
think like it was a, maze to get up to the other thing. Yeah, it
was, pretty wild, in that respect. [00:02:00] And you saw some
of the same players that you always see at these trade shows,
right? But there was quite a few new ones walking around, doing a
little, tour day, exhibit, exhibition floor. A lot of different new
companies, that I wasn't used to seeing, in the solar space. some
software, some, a lot of little AI software things that you've been
hearing about as well. battery storage, quite a few battery storage
companies and that battery storage supply chain starting to spread
out. You had some battery safety companies and stuff like that,
which was great to see. I know I talked to some of our insurance
friends and they were bouncing around talking with all the battery
storage people and the solar people and that kind of stuff. but
yeah, it wasn't very heavy, heavily wind as it has been in the past
we're, which we're, usually used to. another factor. to walk the
show floor was $1,600. [00:03:00] So that's, that, deters
quite a people. And when, we had talked before we go to the show,
of course we wanna connect with our clients, connect with
colleagues, connect with old friends, and you start sending out
these emails and there wasn't a whole lot of asset owners and
operators coming as they, as we usually see, and it showed on the
show floor. I didn't talk to that many asset owners and asset
operators as we usually do. I'm talking probably. A quarter of the
traffic that we're used to from those people.  Allen
Hall: I Is that just because the, operators are trying to pull
back on the travel budgets or was it more about just the state of
the industry at the minute or were, because of the time of year and
where it was the people that wanna travel to Phoenix, what. What
was the feeling there?  Joel Saxum: I think it was a bit
of all the above. OOMS, the ac, other a CP event, the operations
and maintenance, which is, where a lot of our, focus is on the
commercial side. That was a good event. That was a well attended
event, Nashville this year. A [00:04:00] lot, quite a few
asset owners and operators there. So I think that, they used their
budget on that one a little bit more this year than this. of course
you're in Phoenix, which is an odd place. it's. Button up against
Memorial Weekend, which is graduations, right Allen? so, it's a,
it's not an awesome time of the year to be putting something like
this on, in my opinion at least. Phil Totaro: At least we're
going to do it in Houston next year, when it's gonna be in June and
even hotter.  Joel Saxum: Yeah, it's first week of June
next year for a CP in Yeah, in Houston. But in Houston, if you
think about it this way too, there's quite a few wind companies
there. There's ISPs there. There is operators there. Dallas isn't
far down the road that's got a bunch of ISPs and operators. Same
thing with Austin, R-W-E-E-D-P-R-E-D-F, or stead. There's a bunch
of players over in that area, so I, would expect that one next year
to be more well attended because travel budgets, you can hop into
car and drive [00:05:00] over there. Allen Hall: you
were in Phoenix. The US house passed a budget bill. that was,
Approved this morning as we're recording, that would effectively
end the clean energy production, tax credits, and the quote unquote
boom in the United States that were spurred on by the IRA bill. And
the, for the most part, there's, still a lot of discussion about
this, so none of this is hard fact yet, and it has to go to the
Senate. So there's gonna be changes made and some bartering back
and forth. but some key things here, the production tax credit gets
shortened if you don't have projects started, roughly 60 days after
the enactment of this bill. You're not gonna account for anything.
So you gotta hurry up and start digging. it, it eliminates a, big
piece, which is the tax transfer. So when you get these. Production
tax credits, you could sell them and [00:06:00] all the
tax credits could be transferred and you could re get that cash
upfront. the bill changes all that. So you would have to get a tax
equity partner upfront, which generally is a bank, and that can be
hard to go do in today's world. So it's making it much harder for
renewable projects to be developed if this bill were to be signed
by the president, which. Who knows where it's gonna be a couple of
weeks from now. Now, Phil, how big is the tax transferability piece
of that? Because the discussion in the renewable crowd is that's
probably the most important piece. Phil Totaro: It, it is,
setting aside the fact that this is gonna obviously have a big
impact on. Greenfield project development, the, complete removal of
any tax transferability, for PTC credits is a bit problematic in
that not [00:07:00]everybody was taking advantage of it
because it was a relatively new thing and enacted through the,
inflation reduction Act in the first place. So it's only been in
place for three years at this point. Now, on the flip side of it.
For anybody involved in operations and maintenance. This is
probably a good thing. but again, setting aside the repowering
question for now, and I'm again, as we record, there's no final
language to this bill and this law. it hasn't been signed in into
law yet, so there's, all we can do is speculate on it. And assuming
that they're gonna change the, immediate, as Allen said this, 60
day, window to start digging for your project, assuming they're
going to kill that bit of it, which is likely, because that's just
too fast of a ramp down. what it's good for, what this bill is
potentially good for, despite the fact that
we [00:08:00] might be losing a production tax credit and
investment tax credits. It will spur more companies to try and
accelerate their plans for repowering and or life extension. 
Allen Hall: I wanna pause here. Take a quick break 'cause I
want to come back. I wanna talk about how much power production the
US needs to add every year and what the breakdown is and what it's
likely to be and why changing these. Production tax credits and all
the existing IRA bill matters in the growth of the power network in
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health today. All right, we're back and I have been doing a, good
bit of research prior to this. IRA bill change that's likely to
happen to see what. The power requirements are for the United
States and what generally has been the growth because remember
during a recent conversation with Rosemary, we were talking about
the growth of AI and how is that gonna affect the amount of power
usage and Rosemary's opinion was, is that gonna affect it that
much? I'm still not sure about that based on the research I'm
doing, but just to give you some numbers here, the US needs to add
about 33 gigawatts of production every single year over the next 10
years. just to stay even with the growth of technology and
electricity usage plus, as older facilities get turned off, you
gotta bring new ones on, right? that creates a,