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Business as Usual: Oriden

Business as Usual

For more than two centuries, the Pittsburgh region has been a leader in energy production and innovation. It continues that leadership in clean/sustainable energy production and technology development with leading companies like Mitsubishi Hitachi Power System's new venture Oriden. We are excited to invite Oriden President and CEO Masahiro “Mas” Ogiso, to Business as Usual to explore why now is the time to invest in solar and other renewable resources. Mas will detail renewables being part of every corporation's agenda to eliminate their carbon footprint and the policies being developed to support them. With the ingenuity, agility and speed of a renewable energy developer startup -- along with the financial strength and experience of a successful powerhouse -- Oriden manages the complicated process of renewable project development and delivery of cost-effective clean energy to the market.





Okay, good afternoon everyone. This is Audrey Russo. Welcome to business as usual, very excited by today's guests. And in a moment I will introduce him I want to give a shout out once again to Huntington bank for all the support that they've provided our community right from the onset of the pandemic, up until this very moment, they were still very active in terms of supporting small businesses, as well as some of our larger institutions. So I want to give a shout out to them for them believing in everything that we do. Today's program, I'm very excited to have Masahiro Ogiso also known as Mas, Oh, and again, so I just got that wrong. He's president and CEO. Oregon, which is a wholly owned subsidiary of Mitsubishi, you probably aren't familiar with their presence here in the region. So we're pretty excited about the conversation that we're going to have today. And so I'm going to jump in we we have a chat, we're hoping that there's questions and we have some exchange. But masa is going to Pac us with information on things that probably many of us aren't as familiar with not only that presence in Pittsburgh, which is the work that they're doing. So welcome, Masahiro, thank you so much for being here. And what would be great is that before we get into the actual content of the work that you do, is to talk about who is Mas, whose Mas in terms of the work that he does, and the journey that you've had right up until this very moment in terms of your role as president at Oregon.

Thank you, Audrey. Thank you for having me on on this program. Very much. Appreciate the opportunity. So A little bit about myself. I've been in the energy industry for most of my career. I started out actually non energy related with Price Waterhouse and, and realized that I wanted to be on the front end of changes that I've seen in the market. So I took a leap of faith and jump jump ships to join GE, and their energy financial services business up in Connecticut. And that's where I, you know, got to understand the energy industry. spent a couple years there, came back there my MBA and ended up joining a local wind developer called ever power wind holdings working for Tim Spencer, and spent the next eight years with them growing the business from one project to 750 megawatts across seven sites. We built a pipeline over two gigawatts and we sold that in 2018. The operating fleet two blocks Brock and we sold the the development platform to energy, a German utility. They have an office here in Pittsburgh now as well. And then, shortly thereafter, we came across an opportunity to join made specsheet to start their renewable energy development arm for them. And myself and six others. We came on board in 2018. And we've been with them grown this business since then.

So what's your presence in Pittsburgh and just in terms of people, how many

people we've grown from seven people to right now we're at 20 people now. We recruited people from forest California. Our head of engineering came from California, California, or system designer came from North Carolina, we just hired another interconnection person in North Carolina as well. So we're adding jobs to um, to our company and and hopefully, we can continue to grow

and so You're here in Pittsburgh, right? So your team is based in Pittsburgh.

That's right. We have an office on the North Shore, we lease a space. It's actually the burns white building the UC heading into town. And now we're the first tenant in this building. We just expanded by another 10 deaths within the floor. So um, no, we're gonna be hopefully pulling out these desks pretty quickly. Soon.

That's great. So that's great. So today, we're gonna jump right in, you're representing Oregon, which I would venture to say is not a household name. Yet in Pittsburgh, even though your presence and and what you're doing soon will be and give us like the history of Oregon and how that fits into the Mitsubishi strategy.

Sure, so um, Oregon is a wholly owned subsidiary of Mitsubishi power. And Mitsubishi power is a wholly owned subsidiary of Mitsubishi Heavy Industries. So when you use Think about Mitsubishi you think of the the car company Mitsubishi Motors. There's Mitsubishi Electric cupping. cranbury Mitsubishi Heavy Industries was kind of bread and butter helped me to be she started, they started the Mitsubishi name in the shipbuilding business. So, it started with the shipbuilding moved into other heavy industries. So, in the United States and throughout the world, Mitsubishi power is known as a gas turbine OEM. So original equipment manufacturer, they make heavy duty gas turbines, they are the number one market share. They also make forklifts they make offshore wind turbines. So, so they're in the business of making things. But you know, as you've you probably know, over the last several years, renewables the cost of renewables have come down so much. When you look at where their customers are spending money. The utilities are spending money on more on renewables. The independent power producers are spending more money on on renewables. for them. They wanted to start a business within the US to really understand the renewable business. And this is their first step into that space. It's their first step, working as developers as well. So it's not just selling equipment now. It's developing projects from the grassroots level, from the site of debt identification, going through the permitting process all the way through to construction and ownership of these assets as well. So for us, we're the we're the eyes and ears to the ground for the for the Japanese Mitsubishi company. Looking at, you know, where the trends are, where the new technology heading to. And that's what and right now we focus on solar and energy storage within the US and our footprint is National at this point. So we started out just looking at Pennsylvania and in New York, within the first few months, but then we've quickly expanded to other geographies. So we have projects in the southeast. We got a project in Georgia, we're talking to a large corporate offtaker unrack. Right now. We got projects in Virginia. We can we go pretty much far west as Montana, Utah, in New Mexico as well.

So you recently completed a project in upstate New York. Can you talk about that? And talk about the value that it provides to that customer? I think you mentioned it was the Sealy system and for donia

sure, um, I think before I get into that project, I mean, the key thing to mention from our business is that we do both behind the meter, which is on site. Okay, so if you're a company that has a, you know, large amounts of land right next to it that you want to do a site on site, or if it's a Large Rooftop. Those are projects that are on site and the energy that's created is used to offset the load or the energy usage that's on site. We also do grid connected, which is larger sites that connect to the, to the grid both at the we can do distribution level as well as the large transmission level as well. So we have projects as big as 250 megawatts right now in our pipeline, but we have a project as small as one to two megawatts. This first project that we entered into construction earlier this year, is a two megawatt total. So it's one and a half megawatt DC and 500 kilowatt energy storage system to provide power to the SUNY Fredonia university system. And the the site is pretty much complete. At this point. We're waiting for the energy storage system to be delivered in October. And the project is expected to come online in November and the goal is to reduce the overall electricity costs. For the university, and that's what we're doing through a 20 year PPA, that's going to be backed by the New York Power ages.

We lose a lot of lottery.

She might have flipped off the call, that'd be terrible. Let's move right in there. Mohsen. Keep going on this because Joe must go on. Hopefully Audrey will rejoin us shortly. As far as that goes.

So yeah, I mean, you know, I can just just continue on. I mean, we have, we have two other universities that, um, that we've, we've been awarded on as well. We haven't been able to announce that just yet. Before we finalize couple of things. But, um, you know, we're expected to bring online roughly 15 megawatts DC online by, you know, March 31 2021. And we've also been awarded on A project with rural electric cooperative, North Carolina as well. And that project expected to come online in 2021. And that's going to be another 15 megawatt DC. That's gonna be grid connected. So very exciting time for our business. Very busy.

So, yes, I got you back. All right.

worried about you there.

I don't know what happened. But thank you everyone really appreciate that. Should mosque Can we talk about the state perspective about Pennsylvania lags significantly behind the rest of the nation in using renewables? Just I think it's point oh, 4% of our grid energy comes from solar, and less than 2% comes from wind. So both of those numbers lags significantly behind the national averages. And that's not even talking about targets.

Yeah, so a lot of times the the, the amount of renewables, that's that's on the grid Red is, is driven by policy historically. And the policy front comes in the form of APS. So we, we call it interchangeably with RPS renewable portfolio standards, APS as alternative energy, voice standards, and that sets the level of renewables that the retail serving entities have to procure. So if you're a utility, you're picturing power from the generators, and you're selling them to your customers, the amount of power that the power that they're consuming, needs to come from renewables. Right. And that percentage in Pennsylvania has been, you know, very low compared to other other states, including neighboring states as well. Within within Pennsylvania, within Pennsylvania's RPS, it's about 8%. renewables is the target but that 8% includes all kinds of other renewable Well, solar carve out that exists today is only point two 5% by 2021. That's a very, very low number, you're talking about less than a percent. That's required to come from solar. And you know what Pennsylvania failed to do in the past is they also fail to close down the borders as well. So when they created this carve out, it was a it was to kickstart the solar market. But when that up happening was you had the other states like Maryland, Virginia, North Carolina projects, dumping their solar credits into Pennsylvania. So what ended up happening was very little jobs created very little investment in solar. So that point 5% by 2021, is probably going to be met. So when you're talking about policy for, for solar and renewables in Pennsylvania, it's a couple of things. One, you have to increase the APS. Now, every every region is different. Every state is different. So I have very much to say. But the tours that and and and I think one of the things that we recognize, and I think should be said is Pennsylvania doesn't have the best solar resource. Right? I think there's no debating that we don't have the best resource. But at the same time, in terms of the percentage of solar that we would want to make up the total generation mix is way too low mingalar. So this solar resource, so then number needs to come up.

So what what's the number needs to come up to?

Well, I think the the DPW did a study I think was last year, maybe the year before the look that we you know, what would be the benefits of the state if they increased it to four to 8%. Right just for solar and or even if you increase it up to 10%. The benefit is obviously jobs. When you're looking at increased APS percentages for solar, you're going to create the demand for power. projects to be built in in Pennsylvania. And those projects are going to require other other jobs, not just installers, right, and electricians, but also you're talking about other industries like legal side and a financial service side, engineering firms, manufacturing firms. So there's going to be a benefit that's going to carry across other industries as well. I'm in the second thing is the, when you look at renewable energy in places like Pennsylvania, one kilowatt hour of electricity that's created from renewable energy is gonna have a much, much more value than if you were to create that same kilowatt hour electricity in places like California. And answer why is that mean? The key thing is that when you look at what that kilowatt hour of electricity is replacing, in California, it's likely replacing a highly efficient gas plant. Here, you're Replacing a peeker coal plant. So when you talk about air quality, right, the air pollution, having a renewable energy project here has much, much more value because of the negative externalities. And that's something that I think the market struggles to put value on. In and I think that the there's there's a lot of people working at the in Harrisburg. It's a bipartisan effort to promote renewables within the state. They understand that renewables are going to create jobs. I think that's that sentiment that's shared for most part. There's a bill in in Harrisburg right now, Hb 531, which is to promote community solar, and community solar allows, you know, household residences to have a piece of that solar facility that's in their community. So instead of putting on your rooftop, it allows you to sign up for A solar project that allows you to to experience the savings that solar would provide. I think I'm a big supporter community solar, I think the reason for that is smaller projects tend to require local labor force. You know, a lot of times, this is where I butted heads with this whole industry, you know, sometimes people are just incentivized to get as much capacity online as possible. But, you know, a lot of times larger jobs may require larger, you know, larger amounts of construction workers. But, you know, those are temporary jobs. And a lot of times you're gonna have migrant workers coming in from other states. So in terms of total jobs that's created. It's not going to be as much so I think there's lots of good efforts going on. And, you know, I commend Governor Wolf for for, you know, entering into Reggie as well. I think that's a it's going to be a big plus to reach Because what Reggie does is create a cap and trade program for carbon. And it brings in a significant amount of proceeds to the state. And the state can redeploy that capital into energy efficiency programs to clean and renewable energy projects. So I think I think the right mindset is there, in terms of investing in the region for clean energy.

So you have a couple of comments and statements. Jonathan, you want to go to them before my, my,

your internet goes south on you again? Absolutely. So a couple quick questions here. Um, this actually from this was I was thinking about this myself. I mean, Germany's using solar pretty successfully. I'm assuming PA, could we have some comments here from like Ellie Gordon saying she's, I think Pittsburgh gets 80% of the use of the usable sunlight for solar as Miami does. So there's no reason not to use renewables at max capacity here. Is that true?

Well, I think I think the costs have come down to the point where solar does make sense and solar is able to provide a Low cost of energy. Even in Pennsylvania, we have several sites in Pennsylvania, that, that we feel competitive to the market. It's rather competitive. Um, the key thing though is, is who's going to procure that power? You know, and there's, there's entities, like, nice example, you know, University of Pennsylvania and Penn State University, that they are very much committed to procuring locally. And I commend them for that. Because the thing is, like I said, having a project here in this region has its benefits, right? A lot of its external you know, negative extra nouns that you can't just pinpoint to um, but you know, there are others though that decide hey, we have our you know, sustainability goals, but we're gonna go by Greenie Rex from Texas. You know, so it might meet their own personal goals of terms of buying credits were new energy credits, but What does it do to Pennsylvania? It really didn't do anything. Right. Um, so that commitment to buying local, I think it's important for entities that are out there that are thinking about reducing their carbon footprint.

tell you I got a great question here moss. I'm excited to see what you say on this one from Dave de mais he says this is a complex one. At what point in the future Do you expect that renewable energy could overwhelm economically, the fossil fuel industry in terms of infrastructure and sustainability as sources to cover the most perceivable power needs?

I think from from a national standpoint, I mean, we're already there. Every year, you know, we have access to certain reports from tier one consultants. Every year their forecasts of fossil fuels goes down. retirements are increasing at a much faster speed. So every revision that takes place, the retirement numbers keep going up in terms of the new additions of thermal Have continues to come down on the flip side of renewable forecast continues to go up. And as the energy storage costs have come down, when you're looking at some of the areas out in the West, for example, where there's lots of penetration by the renewables, energy storage starts to make sense as a peeker resource as well. Now, are we there yet? In Pennsylvania in terms of energy storage as a peak resource? No, I think we need to have a lot more higher penetration of renewables in this region to start to explore that. But the costs have been coming down on on renewables, especially solar and wind over the last, you know, 20 years. Now, for the last, what, 10 years or so, you look at utility scale solar, it's come down by like 70 70% percent, and things like 70% has come down by right now you're looking at system costs for utility scale that's under $1 a watt, um, residential, you've seen it come down from probably around six, seven bucks. 10 years ago, down club probably closer to three now. That's over 50% deduction. And the costs are going to continue to come down. And we're looking at even module prices right now, in module prices right now, you're talking probably somewhere in the 30 cent range. you fast forward three years from now, you're probably talking somewhere in the mid 20 range. So the costs are going to continue to come down on on solar and on energy storage. You know, you're looking at a world mix just a couple years ago, you're probably looking at over 1000 bucks a kilowatt hour now, you're probably down around two 300 bucks a kilowatt hour. So they've experienced themselves, you know, a 70 80% reduction in their costs. So, to answer your question, yes, we'll get there.

That sounds it's it's so interesting. Our own Brian Kennedy, our own electric vehicle guru here wants to Do you see the demand for electricity to grow? in future years as demand for electric vehicles starts to grow

the electric vehicle industry as they grow, there's certainly going to be a growth in electricity demand. Um, you know, when you think about the magnitude of that, in recently, I just read an IHS report, I think their forecast was, you know, roughly 50% of the cars on the road by 2040 is going to be electric vehicles. And that's going to create a tremendous demand for electricity. Um, and I think that's why, you know, some some consulting firms like them, they do view gas as playing a significant role in the future. Still, in addition to renewables because of the increased demand, um, but without electric vehicles, or demand is pretty stagnant and in most of the country. With the COVID. We've actually had reduction in electricity demand in this region and for most part of the country. But I think like you said, that's a it's a big, big item that we're bullish on as well. And as the cost of electricity continues to go down, we're gonna see that that market take off.

Very cool stuff. So the questions keep pouring in here. It's pretty crazy. You're definitely hitting some, some points here from AWS, which is just fantastic. Our next question actually, from LA Gordon arreglar of the show wants to know, what can we do to help expand renewables here in Pittsburgh as a renter using like things like Green Mountain, any community solar programs or other initiatives that you might be able to recommend?

Yeah, there's, you know, Pennsylvania is a is a, you know, you have your retail choice. So you can choose which provider that you want to provide you with lectricity for most of the most of the residences here at the incumbent utilities, Duquesne light,

but you can choose if you want more renewables.

You can choose that through Retail choice. So you can go online and change providers. If you want more renewables, you can do that. Um, if you want, you know, Duquesne, like provide renewables, you know that you can you can make that point across as well. Absolutely that that you want them to procure more renewables, and have that be part of a larger part of the next

make your voice be heard. So a question from Mark Freeman here. This is a really cool one here masa listen to this one here. As natural gas combined cycle power plants continue to make world records in recent years, they're now approaching 65% and perhaps may one day reach 70% Do you have any thoughts on how the investment opportunities for MH AI, GE, Siemens, etc, will be prioritized given the exciting breakthroughs in solar and other renewables in the US and abroad?

Sure, um, our business is um, you know, our bread and butter from our parent company standpoint is gas turbines and for them They they're seeing, they're seeing opportunities in the market with respect to hydrogen. So our guest turbans today can run off from hydrogen at roughly 30%. And they just closed their first deal out in the West with la DWP. And that facility is expected to run off from hydrogen 30% and to transition to 100% hydrogen eventually. So for them, they want to leverage the technology efficiencies, and the in the gains that they've made with their, with their product over the years. And in those gas plants. We just made an announcement our parent company did for a gas plant in New York and also in Ohio as well. Um, and they are very efficient facilities. And I think the key thing right now is that to understand that these are flexible products as well, you know, as we see potential growth in hydrogen within the United States and the globe, these assets may be able to run off from high hydrogen and at that point, it becomes more of an energy storage system, right? Because you're taking excess renewables or you're taking the renewables. Now, when the cost is low, no, I'm essentially creating hydrogen with it. And then you're going to turn that in dispatchable power later on, but, um, you know, marks exactly right that, you know, the gas market, the gas turbines have experienced high efficiencies, and they continue to get better. And they can work from a grid standpoint and in line with the other renewables that are coming online.

makes a ton of sense. We've got another question here from Ed O'Neill. This is a good basic one. Maybe we could start wrapping things up on there. We're getting close to our half an hour here. Um, wants to know, please suggest the best way to message to the public the jobs and benefits for pa for your industry, short and sweet. This helps everyone promote the regional benefits of this. Give us our chart

about jobs. Sure. Um, Renewable Energy. If you when you think about it itself, it's a project, right? It's a facility that needs to get built. So at the end of the day, there's the developers. There's the designers, the engineering firms. There's the actual installers. There's the electricians, right, these are all required to build a project, right. And that's just just a small fraction of what it takes for a project development. So when there is a demand for those projects, it's going to require jobs. It's going to require those positions to be filled. right for us when we launched in 2018, at a point where the unemployment rate was the lowest, um, in a long, long time, when we were trying to recruit people we had to recruit from outside of the state because it was impossible to hire and pop in the state because everybody had jobs. Um, When you're looking at places, you know times like today, when you're looking at, you know, high unemployment rates, and this is the time to invest in this region, in this industry to create these jobs, and to support the the the transition for some of these employers for for some of these employees into this sector, and these are skilled jobs that pay very well. So I think it's a, you know, it's one of those things that we can't stress enough that that this is a jobs, jobs story. I

think it's also an it's an investment story, too. It's an investment in the future, which very often, you know, we miss the importance of investment as we wrap up. Masaya Amy Britton asks a good question about House Bill 1970. And Senate Bill 929. Those are, you know, providing customers who might not able have access to solar energy. What are your thoughts on that legislation

If I'm honest, I'm supportive of that. Um, you know, I think a lot of times when legislation gets introduced with respect to m lm, my customers, I think the key thing is making sure that the policymakers are in step with the financing community. Right? Because at the end of the day, these projects need to get financed, need to get owned by an investor, and what investors are comfortable with. A lot of times with these investments, the investors are interested in renewables, not just for the sustainability aspects of it, but it provides stable cash flows. Right. So the credit quality of the off takers, people who are purchasing power is important. So I'm making sure that the policy makers are in step with the financing committee to design that policy. So it works for everybody. I think that's important, because a lot of times when, when the policy is created, when they Or not in step with the financing community. That's where you have a disconnect. And even though the policies their projects may not get built,

so moss, if people want to know more about Oregon, is there a website?

Yeah, we have a website WWW dot o ri d n And you can also reach out to me as well. So Norden Pardo calm.

Excellent. I can't thank you enough. Thank you, everyone, for joining tomorrow. We actually have tomorrow, Thursday, and we have Paul mango, who's actually at the US Department of Health and Human Services, leading project work speed, and we're very excited to hear about that. I think that affects all of us. mosque, keep up the great work. Thank you for expanding thank you for your vision. Thank you for pushing the issues around public policy and Everyone else we'll see you. Same time tomorrow. I want to thank Jonathan kersting. And for whatever reason today, my technology was totally unstable usually happen. And Jonathan kersting oversees all things marketing and media for the tech Council, and he's been with the tech Council for 23 years about that. So I want to thank everyone. Thanks again, Masahiro. Really appreciate your time with us. This topic really matters.

Thank you, everyone.

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