Jim Thomson with Deloitte

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17th August 2022 • The Industrial Talk Podcast Network • The Industrial Talk Podcast with Scott MacKenzie

On this week's Industrial Talk we're onsite at Distributech 22 and talking to Jim Thomson, Vice Chair - US Power, Utilities and Renewables at Deloitte about "De-Carbonization, NetZero Efforts and need for a Smarter Grid". Get the answers to your "De-Carbonization" questions along with Jim's unique insight on the “How” on this Industrial Talk interview! Finally, get your exclusive free access to the Industrial Academy and a series on “Why You Need To Podcast” for Greater Success in 2022. All links designed for keeping you current in this rapidly changing Industrial Market. Learn! Grow! Enjoy!

JIM THOMSON'S CONTACT INFORMATION:

Personal LinkedIn: https://www.linkedin.com/in/jim-thomson-77796b5/ Company LinkedIn: https://www.linkedin.com/company/deloitte/ Company Website: https://www2.deloitte.com/us/en.html

PODCAST VIDEO:

https://youtu.be/UEyFFjMIHKQ

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PODCAST TRANSCRIPT:

SUMMARY KEYWORDS utilities, industry, solutions, industrial, collaborate, decarbonization, power, world, jim, people, Deloitte, utility companies, conference, customers, moving, talking, drive, rates, integrators, pragmatic 00:00 Hey industrial Talk is brought to you by CAP Logistics. You want to minimize downtime. Absolutely. increase reliability, you bet ensure operational profitability. Yes you do. That means you need 24/7 365 insights into your supply chain, look no further CAP Logistics, go to caplogistics.com or just call them. They're great people 800-227-2471 Also, AiDash, AiDash is on a mission to create a greener, cleaner, safer planet from space. AiDash helps core industries become more resilient, efficient, and sustainable through the power of satellites and AI. Go out to AiDash.com Find out more 00:55 Welcome to the industrial talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hardhat, grab your work boots, and let's 01:13 carry on once again, welcome to industrial talk the number one industrial related podcast in the universe. It is backed up by data, Jim, so you don't don't even try to. Yeah, data is driving now. And it is a platform that celebrates industry professionals all around the world. Because you're bold, you're brave, you dare greatly. You're solving problems, you're innovating and you are making the world a better place. It is an ever expanding. I'm trying to get all the words there. 01:39 And you're not even reading this. No, I'm 01:40 not well off the top of my head ever expanding industrial ecosystem of problem solvers. How about that one? That's fancy. All right, Deloitte is in the house. Jim is his name Jim Thomson. And we're going to be talking about of course, decarbonization, as well as many other things. So let's get a car wreck. And I like it. Well, you know, I stayed at a Holiday Inn. So I feel like I can be a DJ too. 02:08 Gonna get a conference? Yeah, it's good. Scott, I think the coolest thing after two years of looking at two dimensional people through zoom and all the other technologies, it's just amazing to be back here. I mean, this conference is always a highlight for the industry every year. And it's been tough the last couple years. So it's just wonderful to have this many 1000s of people together again. 02:26 But you know, what's the interesting part? It didn't slow down the innovation? Not at all, everything's continue to move along? We just didn't have the, you know, shaking of the hands. Yeah, that's and it 02:35 has been incredible. Even just looking at the last two years, everything around the decarbonization journey and new technologies, new solutions, government funding and grants that are going to help continue to kickstart things. It's, it's a cool time to be involved in the power space for 02:47 sure. You know, I always think about this utilities will drive the the adoption speed, you know, there tend to be very pragmatic, because they still have to say, I gotta deliver power, it's got to be reliable. It's got it, it's got to have all the components that I'm, I've been living in for the past 7090 years, right, for sure. But what I see out here is our solutions that are just helping achieve, still maintaining reliability, still maintaining all of the things that are driving utilities, but doing it more efficiently, which is pretty doggone cool. 03:26 Yeah, agreed. And I think Scott, it's, it's interesting, because it's probably one of the only industries where they can't pick their target demographic. And so to have a very small, narrow niche, right, you have to be supporting 100% of the customers in your territory. So the solutions they have to come up with need to be flexible, to look at every residential customer class out there to look at large scale industrials to look at small, medium businesses. And so it's amazing to look at all of the breadth of solutions that have to target those different those different demographics. So 03:56 the question I would have is, where do I start? You know, I'm, I still have my obligation over here. But then I have people and companies say this is a decarbonization, this would be driven by Washington, DC, but you got to do that. But you also got to do this. And you got to do that. And I know the utilities, you're saying, like, what, what, what money? Well, I get this rate case here. And that's 04:17 the key thing. So when you look at now that we almost need a compact between regulators, utilities, the federal government and customers, right, and everybody has to be part of this because you cannot do it, if the regulators aren't going to be supportive and they are supportive of doing this. But on the other side of the coin, they obviously have to look at how do they support the needs of resident residential customers in their service territory, keeping rates low so on one hand, you need to invest a lot of capital. On the other hand, usually utilities get that relief relief through rate structures. Yeah. So does that mean rates go up? Hope not because we're trying to keep rates down. Right. So it's so it's it's a fascinating equation right now in our industry. 04:53 It's way above my paygrade because I'm telling you right now you that the market become becomes Really chirpy in a negative way? Once somebody say, is that my power bill, what? That and that my power went out and it just keeps on going, you're pulling on that string and and with that the risk is, if I'm screaming about the fact that you're not doing the job, then the utilities will do what they do. And they'll say, Okay, I hear you, I hear you, we're not going to proceed forward, which impacts a lot of other 05:23 the progress. Yep. 100%. And I think it's, um, you know, when you look at everything going on in, we're all familiar, whether you call it global climate changes, or future of energy, or decarbonization, or ESG, all of those related topics and buzzwords that weren't in our vernacular a few years ago, but they're all in all of our vernacular today. And you look at what all of the good societal good that comes from the broad definition of ESG, and everything, but all of this stuff is, is everybody is wanting to move very, very quickly. But you need to do it in a purposeful, rigorous manner, and not go too far. You don't want to take the two steps forward, and then realize next year, oh, my gosh, we did that too fast. Now we have to go back four steps to start doing it a different way. It's so this, it's so much dynamic change in our industry that again, it's a fascinating time, but a lot of challenges, but tons of opportunities 06:12 you're spot on. And you're absolutely right, there still needs to be that pragmatic approach. Because you don't want to go backwards. Right? You don't want to go backwards. And that the balance that I see is, there's a lot of solutions out here. And in like I said, I can get confused easily. Where do I go in I eat utilities different, you know, this is a priority. That's not but then you go to the next utility, though, that's a priority. And this is not. So it's almost cafeteria style solutions for each utility. And where they're at. Yeah, 06:44 which introduces obviously, from a solution vendor of which we have hundreds and hundreds here on this wonderful floor at the conferences here. But all of these solutions need to be still have some degree of standardization, because if you end up with Yes, the same vendor having 20 different versions of software for 20 different utilities, because of how they need to manipulate and manage the grid in their territory, then you're left in a case where the long term, getting out of standard and having the long term customized solutions. It's just not it's not long term viable to efficiently manage what utilities are doing keeping the lights on with all these systems. Right? So we're we're seeing more and more standardization, we're seeing more and more use of working with industry groups like epi and others that are bringing a true focus to to collaborate and have utilities collaborate on at least the maybe the 80 to 90% of the solution, and then just have some, I'd say configurations maybe locally for them. But other than that, we need that standard approach. Boy. 07:41 Boy, can I agree with you more? No, I can't. Because that is your I was telling somebody I said we need trusted standards. And it's it's sure there's frothiness out there of excitement and great and craquelin of this that and the other thing is solutions. But to your point, standardizing allows us to scale it better to have greater focus on what is truly needed. And yeah, delight does a great job at that sort of trying to create that clear vision. 08:11 Yeah, and we definitely try and we want to be part of it as the most of the large integrators on the planet today. Right. And we all want to collaborate as much as we can to bring the right change for the world. Right. It sounds, you know, it's a little bit of a kumbaya, but it's true, I mean, that what we're facing on the planet is unlike anything, and if you look, you know, what's going to be? What's it going to be like in 2035 2040 2050, we need the time for changes now, right? There's no choice in doing this. But we do have to make sure we do it again, in a very responsible, pragmatic manner, to make sure that things continue forward. And we don't go off the tracks left or right. And I think I love that, and our industry is about this power industry and the utility industry is is unique again, because there's for the most part, not a lot of competition in local geographies, for the for the utility companies themselves, not retail energy providers, but for the utility companies. So you are able to bring together at this conference, all these utility companies sitting in sessions together, and coming up with ideas together working together mutual assistance programs, which are such a big part of our utility ecosystem. All of those are possible because of the collaboration in the industry. And that's why a conference like this as unlike other conferences, it's truly a collaborative event. And networking is just wonderful to 09:19 I love it. Because I think that everybody understands what happened with the, the pandemic and the the, the problems and all that but I think that it pushed people to collaborate more. I don't have all the answers. And I love the fact that you're talking about standardization, and doing what is right. And good. I just that is a conversation. Now. One of the challenges that I see and I think I want you to touch upon it, because a lot of these utilities are being driven and they have to it's going to happen, let's just laid out, you participate. You got to figure out how to play in it, but it's going to happen and that is around decarbonization. What do we do? How do we progress and how do we achieve what we You need to achieve 10:00 Yeah. And I'd say Scott, it's interesting because the decarbonization journey and renewable integration that's not new for our industry right utility companies have been doing that for a couple decades. Yep. And have had plans to do that. This is a you know, use the analogy shot in the arm I guess I different meaning these days with with shots in the arm, but definitely. But, um, but it's definitely a time where we're able to look at now, how do we make sure we're coming together and again, working together for a better world long term. And I think that the solutions here around the conference, and I walked around and talked to solution providers and and other integrators for that matter, and everything everyone has now at a common journey that they're on. And everyone is focused on this. And the industry has, again, been doing this for decades gets a little bit of a bad rap, as we know, because people think, well, it's it's coal production. But no, it's that is some of it. That's the reality what it's been. But that's there's already a systemic progress plan in place to get off that, it's just that we're looking at now pulling the that end data in and planting that flag, maybe somewhere between 2035 2050 depending you know, what utility it is and what you might have, in terms of geography ways you can help that will be unique, and you might have hydro opportunities, but not all utilities have that. So they're gonna be more in, in solar and wind, with wind and areas like that. So it's again, it's a it's an exciting journey, but it's a lot of work to be done. And oh, by the way, it's not cheap. Right. So at the end of the day, that's that's a whole other conversation. Yeah. At the end of the day, you know, this is somebody's paying for this. See? And what's interesting, 11:29 we start talking about evey. Okay, cool. That's cool. Yep. And then I all I can think of these heavy trucks, these boom trucks that go to, you know, respond. And I said, how do you how do you electrify that truck? 11:40 But and you do, though, so fleet electrification, for even all the way up to class eight, vehicles, semis, and everything that's real. And that's happening, and it's moving. Obviously, the supply chain challenges these days, make it make it a little bit tougher for some of the components that are required some of the heavy metals that are in other parts of the world, the horrific stuff going on. In Ukraine, I mean, we sourced a lot of a lot of raw materials from there, obviously, components for renewables. So it's a it's definitely a challenging time. But the industry is pushing forward, man, every everyone's in this together. And it's, it's cool to see that our industry, everyone always comes together. Again, when you think of responding to storms, and the way that utilities have their folks drive across the country and just help get the power back on. This is, this is our industry. And so working together to solve a global situation, such as looking at climate change, and everything and going all in on it. That's not new for utility companies, utility companies have always done that is what makes the industry so so great to work in. 12:32 So a past life, I used to negotiate all the power purchase agreements, right? We were talking about that. And that's been going on for years. And even and even pushing the envelope when we made mistakes by trust me, we made mistakes. There's and they still exist today. But but but it's it's I'm a big fan of just moving forward. If you have to fail, you fail quickly, and then you adjust and you move forward, and you just keep on moving forward, because that's the only way. And a lot of these companies. The challenge I always see is how do you Deloitte, you and others are, are there's a velocity with this innovation, there's a velocity with this movement. But I'm still sort of old school, and I'm going to sort of take my time. And so like, there's like this timing issue. Like you're blazing the trail out here, but I'm where I'm at right here. 13:24 Yep. Yep....