In this edition of #Solar100, CEO and founder of kWh Analytics Richard Matsui speaks with Clean Energy For Biden co-chair, ArcLight Clean Transition director, and senior director of energy strategy at Microsoft, Audrey Lee.
Audrey Lee is known for her significant public and private sector impact on the clean energy and sustainability industry. Like Marie Curie, Audrey has channeled her scientific background into developing practical and actionable solutions for the industry’s toughest challenges. Her career highlights include co-founding Clean Energy For Biden and serving as a senior executive for notable industry brands, like Sunrun, Proterra (via ArcLight), and now, Microsoft’s energy team.
In this Solar100, Audrey Lee weighs in on her experience mobilizing nationwide support for Clean Energy For Biden, identifying target companies for ESG-focused Special Purpose Acquisition Companies (SPACs), and her advice for building a career in energy and sustainability.
INSPIRATION FOR WORKING IN THE ENERGY INDUSTRY
Richard Matsui: Starting from the beginning — I saw that you started off in physics and then went on to receive your doctorate in electrical engineering. What inspired you to get started in energy in particular?
Audrey Lee: In grad school, I wanted to do something in sustainability. At that time, there was only one professor in my department working on solar cells, and it was hard to find something to do in that space. So, I started talking to people in the public policy school at Princeton and really got into energy policy.
What attracted me to energy is that it’s just so critical to society and the economy; it’s a basic piece of infrastructure. There is a great opportunity within the energy industry to take basic infrastructure and be able to put in new technology to make it more sustainable, and I think that’s a basic requirement for the electricity grid: you want it to be both sustainable and reliable. Also, you want customers to have a choice in the kind of energy that they’re getting.
Matsui: Building on that sense of dualism and thinking about your career, I noticed you’ve held roles in both the public and private sector. How do you think one sector informs the other and vice versa?
Lee: Because energy is such a regulated industry, I don’t think you can disentangle the public and the private sector. And for our industry to grow, I think we need more exchange between the two.
CLEAN ENERGY FOR BIDEN
Matsui: You’re currently a co-chair for Clean Energy For Biden. Can you give a brief overview of the organization and what you’re trying to achieve?
Lee: Honestly, we were a bunch of people in the clean energy industry that wanted to see Biden elected, really just a loose network of business leaders and advocates. Our goal was to advance policies, technologies, and investment to address climate change.
We had three simple goals: one was fundraising, two was to get out the vote, and three was policy. We started around April with just a handful of us, when it became apparent that Biden would be the Democratic nominee. Since then, we’ve grown to 15,000 members.
Matsui: That’s incredible! At least ten times more than I would have guessed.
Lee: Yeah! It’s a testament to how much the clean energy industry has grown. It’s been really awesome to see the response.
What makes Clean Energy For Biden unique is how grassroots it is and how we’ve gotten so many volunteers involved. We’ve had hundreds of volunteers helping us organize.
In total, we raised more than $3.2 million and had more than 100 fundraisers. We also have 30 state and affinity teams across the country. Because the policies from different states and different regions can be so different, and what clean energy means in different states can be different as well, we wanted to make sure we had that regional representation in our teams. How the teams organized and talked to voters was really important.
Then, we made an announcement at our Inaugural Ball that we’re transitioning to Clean Energy For America. So, now we’re hiring a CEO while trying to keep that grassroots and matrixed national and regional team structure.
Matsui: I come from a background in diplomacy, and one of the things you learn in diplomacy is that there’s a fundamental tension in coalition building. To some extent, you want the biggest tent possible. But it’s also true that the bigger the tent, the harder it is to actually get stuff done. So with that line of thinking — what are the priorities that this group would want the Biden administration to execute?
Lee: That’s a very good question, and I’m going to encourage you and many others to join and help us figure it out! We want to keep that grassroots nature of the organization and work with our volunteers to decide how we can continue to be impactful – choosing which elections to engage in, advocating for clean energy policy, and educating the public about clean energy. We also plan to raise funding to support resources for these grassroots teams.
Matsui: To your point, it’s surprising to hear that this grew from ten people in a room to 15,000. Any experiences there that surprised you, given the diversity of people and regions participating in Clean Energy for Biden?
Lee: Actually, it was only six people on a Zoom call at the end of March 2020.
Yes, I think you can look at what we did for the Georgia Senate Race. After the election in November, we provided support for the runoff and the messaging there was directed to that audience. We already had an existing Georgia team that was organized to elect Biden, and we were sensitive to what would be successful there to elect the two Democratic candidates for Senate.
For instance, when you phone bank in the south, it’s better to call someone “sir” or “miss” and be very polite and call them by their last name. Usually in the scripts, you don’t use genders; you say their first name. You say, “Hello, Jane.” But in the south, it should be “Hello, Mrs. Smith.” So, it was the little things like that that we learned from the Georgia team.
Matsui: A good friend from college was recently elected in Georgia, and I’ve been surprised to learn that when it comes to clean energy, that my home state of Hawaii and Georgia actually share a lot in common. Everyone wants good jobs and clean air.
SPECIAL PURPOSE ACQUISITION COMPANIES (SPACs)
Matsui: In addition to being a part of Clean Energy for Biden, you’re a board member on ArcLight’s SPAC. SPACs are making big waves in our industry. Based on your experience at ArcLight, what type of company makes for a good target for a SPAC nowadays?
Lee: ArcLight Clean Transition went public in September of last year, and when we came out, our goal was to identify and take public a leading clean energy or sustainability company. We had raised $278 million and we were looking for a company around the $750 million to $2.5 billion valuation range.
We are very excited about our transaction with Proterra, a leader in commercial vehicle electrification. Under the agreed deal, the company was valued at $1.6 billion enterprise value and we raised an additional $415 million, meaning that Proterra will have $825 million in cash to continue to invest in the business.
What’s really exciting about Proterra is that it’s not just about electric buses. They have Proterra Transit, as well as Proterra Powered, which provides power train and battery packs for vehicles, and also Proterra Energy, which provides charging infrastructure management. And so, if you look at their public documents, you can see that a lot of the growth opportunity is not just in electric buses, but also these other areas.
Matsui: Right. But there’s such a wide range of companies getting support from SPACs right now. Can you expand upon the criteria that people in your shoes are using other than valuation? Shayle Kann from EIP says that there has been 40 SPAC mergers in climate tech announced so far.
Lee: I can’t speak for other SPACs, but we looked for strong revenue growth, a large near-term order backlog that gave us financial performance visibility, and a clear plan for profitable growth. Additionally, we assessed how the target would use the proceeds to accelerate their growth. I recommend looking at the Proterra/ArcLight investor deck to see how Proterra answered these questions.
Another, probably obvious, thing to note is that SPACs turn private companies into public ones. So, part of our role is looking for companies that public investors can understand and want to invest in. From that perspective, electric vehicles are not too esoteric.
Matsui: Following that line of thinking, my impression is that the ESG SPACs have first chosen to invest in electric vehicle (EV) space. I suppose EVs are easy for a retail investor to understand — thanks to Telsa — but I would have thought that solar would be equally easy. Do you have any thoughts as to why SPAC investment in solar appears to be a step behind? What does that say about what SPACs tend to be looking for?
Lee: The SPAC phenomenon has come upon us so quickly that everyone is trying to learn about them and understand whether it’s the right fit for their company and for what the company wants to do to grow. So, I think part of it is letting the whole SPAC formula catch up.
Matsui: I can understand that. What structural changes do you think the SPAC trend will cause in our industry?
Lee: I personally see it related to the momentum that we are gaining in terms of addressing climate change. I think there’s real hope that we will be more ambitious in passing climate change policy and developing more clean energy, and that excitement is related to the excitement in investing in clean energy.
I’m also seeing investors rethink their approach. Firms generally have an approach for investing in oil and gas or even utility-scale renewables. But, they now need to think about how our electricity grid and transportation is going to evolve and how distributed energy and all these other types of resources will interact. This adds complexity for investors, because it’s not like investing in a centralized power plant. This means we need to develop new investment mechanisms for these new types of technologies, because we see this clean energy transition coming.
If you take a firm like ArcLight, which has traditionally invested in gas or large-scale utility and wind assets, they have an infrastructure fund to do that. And in this case, by using a SPAC, the firm had the ability to invest in software, services, and technology in the energy space that their traditional infrastructure fund can’t invest in.
MOVING FORWARD: ADVICE FOR YOUNG PROFESSIONALS & INDUSTRY OUTLOOK ON DEI
Matsui: What lessons learned from your career can you share with young professionals looking to work in clean energy?
Lee: Honestly, I found it challenging to join the private sector from the public sector, because I didn’t have any product or business development experience in my resume. People didn’t really know what to do with the skills that I had in public policy and government. Luckily, Susan Kennedy also had a background in government and recognized how transferrable my skills could be. And that was a great opportunity to be able to prove myself, to be able to make that shift.
I also think being at a start-up was great, because I was able to wear many hats. I was the first employee at AMS, and I learned so much. Being at a smaller company was a great way to prove myself. Then Sunrun
My advice is to pursue what you’re curious about. I want to learn new things and learn new skills. I think what I found challenging in graduate school is that I didn’t get a lot of exposure to what’s possible — what you see around you is academia. And so, I had to push myself to talk to people. I would cold call people, get informational interviews, and try to understand how the world outside academia works. I probably interviewed a hundred people. So for those earlier in their career, don’t be shy! People love to give unsolicited advice.
Having my doctorate was a nice credential on my resume as well. I remember I was at a dinner meeting in Texas with about 80 people and people at my table said, “You look 18…You have Ph.D.!? Okay maybe you’re 22… You have two children!?… Okay maybe you’re 25.” I was 39.
Matsui: I personally run into a similar problem, and honestly, I don’t have a great solution to it. Do you have any recommendations about how to approach those situations?
Lee: I try to launch into the discussion immediately. I like to get in front of the whiteboard and start solving some problems together. It can be annoying in the first five minutes when you’re exchanging pleasantries and people think that I’m an assistant, but then I can get into the subject and quickly disbar that.
Especially in the energy industry where you have people with decades of experience, it becomes a question about how can you learn from people with that experience, while also bringing in new ideas and new models. Having diversity helps with that.
Matsui: Certainly. Do you see any group modeling the kind of behavior that you think the industry should be adopting in terms of DEI?
Lee: I think you can take my experience being on the board of ArcLight Clean, which is a public company in a way, although not a standard public company. Generally, the standard mold for a board of directors is to look for someone with decades of experience — an ex-CEO or CFO — and instead, I’ve been given this great opportunity to join the board and provide my perspective as someone with a greater understanding of the customer, the technology, and policy and the implications of that. In that sense, I think board diversity will continue to be really important.
Going back to our discussion about my early career and how I wanted to work on sustainability and I didn’t know how, reminds me of what’s great about our industry: we come from all sorts of backgrounds and it’s important to continue to add more diversity.
The conversation has been edited and condensed for clarity.