A solar or wind farm in ERCOT can watch wholesale prices fall below zero, which makes a project hard to finance. Ever.green sells companies 5- to 10-year contracts for a project’s renewable energy certificates (RECs, credits for megawatt-hours of clean power), giving developers revenue they can take to the bank.
A pending greenhouse gas protocol change would phase in hourly matching, counting clean power only in the hour and on the grid where a company uses it. Backers say that cuts double counting. Ever.green Chief Executive Cris Eugster says it would steer buyers away from long-term contracts on dirtier grids. We recorded an interview with him in October.
On this week’s Energy Capital Podcast, Joshua Rhodes talks with Eugster, Ever.green’s co-founder and a former chief operating officer of CPS Energy, about how long-term contracts get clean projects built.
The rest of the conversation:
Solar for schools: REC contracts at $25 to $35 each, against $2 to $3 on the spot market, lower the power bill for 15 Wayne County, W.V., schools enough to free up money for teachers.
How the deals work: Ever.green signs as the developer’s one counterparty and splits a project’s RECs among several companies, so no developer negotiates with five sets of corporate lawyers. “Contracted revenue is like gold,” Eugster says.
Keeping an old wind farm running: how REC revenue supports the repowered Ocotillo wind farm in Big Spring, Texas, while the owners sells power at merchant prices.
Proving the money mattered: Eugster says no one can prove a project wouldn’t have been built anyway, so Ever.green asks developers to attest its contract is material.
Gamers as buyers: how the platform SuperPower pooled player subscriptions behind the 110 MW Three W solar farm in Hill County, and Eugster’s hint that other industries will follow next year.
Who carries price risk: why Eugster says a fixed REC price lets corporate buyers back new projects without taking on the price swings of power purchase agreement.
Plus: the data center race and its emissions, CPS Energy’s 771 MW Save for Tomorrow Energy Plan efficiency program, ERCOT’s batch zero study, Eugster’s path from MIT and McKinsey to Houston City Hall, and nuclear.
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00:00 – Introduction and guest background
01:44 – From MIT and McKinsey to Houston City Hall
05:13 – CPS Energy’s STEP efficiency program
07:22 – From NAES to founding Ever.green
09:21 – Why clean energy needs to move faster
11:06 – Why Texas builds energy faster
12:31 – Turning RECs into project financing
15:28 – Solar for schools and how the deals work
20:32 – Gamers back a Texas solar farm
24:29 – Keeping an old wind farm running
26:26 – The 10 percent test for additionality
29:16 – Hourly matching vs. backing dirtier grids
32:44 – Data centers and the race for power
37:16 – Nuclear and a growing market
People & Organizations
Joshua Rhodes (LinkedIn)
Webber Energy Group (Website – LinkedIn)
Energy Capital (Podcast – LinkedIn – YouTube)
Texas Energy & Power (Website)
Cris Eugster (LinkedIn)
Ever.green (Website – LinkedIn)
Michael Leggett (LinkedIn)
SuperPower (Website)
Company & Industry News
Three W Solar project comes online in Texas
Video gamers give 110-MW Texas solar project a financing boost
REC sales on WV school district’s solar project free up money for two teacher salaries
Clearway Partially Repowers 55 MW Wind Farm in West Texas
Books, Articles & Filings Discussed
Ever.green – Additionality Methodology for High-Impact RECs
Ever.green – Hidden Risks of Hourly Matching
GHG Protocol – Public Consultations on Scope 2 and Electricity Sector Consequential Accounting
ERCOT – PUCT Approves ERCOT’s Batch Zero Process for Connecting Large Electricity Users
CPS Energy – STEP (Sustainable Tomorrow Energy Plan)
Related Podcasts by Energy Capital
Why some large loads insist on paying their way
What batch zero settles and what it leaves open
Wind is keeping West Texas ranches solvent
Beyond the Tax Credit Cliff with Freedom Solar CEO Bret Biggart
Joshua Rhodes: Hey everyone, and welcome to another episode of the Energy Capital Podcast. I’m really excited to have Cris Eugster here, co-founder and CEO of Ever.green, to kinda talk about, you know, what they do in terms of renewable energy credits and setting up some really interesting deals when it comes to getting projects financed. Cris has a double E, is a double E all the way through from his undergrad at Texas A&M University, master’s and PhD at MIT, so be careful what you’re gonna ask him, or that same to myself. Then he spent roughly nine years at McKinsey & Company before most folks in Texas will know him as ending up as the COO of CPS Energy down in San Antonio. After that, he was the president and CEO of NAES Corp before becoming founder and CEO of Ever.green. And Ever.green is a market maker in high impact RECs, renewable energy credits, that enable capital flow to new clean energy projects. Cris Eugster, welcome to the Energy Capital Podcast.
Cris Eugster: Hey, Josh. Great to be here. Thank you.
Joshua Rhodes: Yeah, absolutely. So Cris, so we go way back actually. Like, I remember you from when I was a grad student at UT Austin, and you were at CPS kind of at that time. I actually wanted to start off saying, hey, thanks for taking the time to talk to grad students. ‘Cause like I know your job was busy when you were in San Antonio, but I really appreciate you putting in the time for that. And God, you never know, ‘cause now I’m the one on, interviewing you on a podcast, right? So you just never know how it’s gonna go.
Cris Eugster: Yeah. You guys have put an amazing program in place up there at UT with the Webber Group and, you know, all the analytics that y’all have done in the ERCOT market, which is pretty dynamic. You know, it’s always been impressive and what little I can do, I really enjoyed it.
Joshua Rhodes: Well, I appreciate it. It’s always helpful to have, like, kinda real world folks and conversations and things like that. So let’s start maybe a little bit, kind of before CPS, and then we’ll talk a little bit about your time at CPS, give a kinda little Texas, like, kinda bounding for this, and then we’ll move on. So your path into energy is pretty interesting. You studied… You’re a double E. You’re electrical engineering at A&M and MIT, just like I said, studying quantum transport in nanostructures, which we won’t talk about on this podcast, but sounds fun.
Cris Eugster: Josh, I was curious kinda where Moore’s Law takes you. How small can you get? You know, it’s always a divide by two. It’s like, how small can you get? And so that was kind of part of the MIT work. When you get to some of those quantum dimensions you know, how do devices act, and how do you engineer that world? It’s, it was pretty exciting, but that’s behind me now.
Joshua Rhodes: I mean, we’re getting there with, like, you know, silicon being printed on, like, extremely thin wafers for all kinds of technology and now compute and other types of stuff. So, I mean, it’s relevant, that’s for sure. But after that, you spent nine years at McKinsey. How did you find your way into the utility business? Like, what attracted you to challenges in the electricity sector?
Cris Eugster: Yeah. You know, I’ve always been sort of big picture type of person. You know, I like strategy. I like kinda solving things that can make a difference in this world. I’m very mission-driven in kind of how I think about my career. And McKinsey was a really exciting place. I mean, you know, they were kind of tapping out of kind of MBA students, and they wanted to go after PhDs and retool them to be, you know, business consultants. You know, I went from a PhD program, which was a set course to become a professor someplace or work at one of the big kind of labs. But it was a pretty big pivot for me in my career to go into kind of business and management consulting, and McKinsey afforded that opportunity. They were kinda starting to attract PhDs and try to kinda retrain, retool them to make a difference in the business world. So that got me into business. I think kind of a combo of technology and energy. Being in the Houston office connected me to energy. My biggest client at the time was Compaq Computer. I don’t know if you remember those days. At the time, they even had a sort of IBM—
Joshua Rhodes: We had one.
Cris Eugster: Did you? Yeah. So, you know, we did a lot of work with Compaq, helping them to grow, and at some point, the Texas office was the largest technology practice for the firm. This is before Silicon Valley kinda really took off. But being in Houston, I was energy connected, and so, you know, we did energy work. Trading risk management was starting to come on. Enron was kind of in the middle of you know, in the ‘90s in that space. And so I’ve always kind of had that passion for the energy side. And where it really came together for me was, again, a second pivot. You know, I’ve had a lot of pivots in my life was to kinda go work for Bill White, Mayor Bill White in Houston on energy policy. And so there I was kind of the first chief sustainability officer for the city of Houston. And Bill had a, you know, sort of a business-minded approach to solving problems. He had a, you know, big heart for social issues, for the environment, for climate, but he wanted to kinda solve them from a kind of an engineering, a business standpoint, and that really resonated with me. And so, you know, I spent two years there with him, and we did, you know, stood up energy efficiency programs, weatherization. We did one, a deal that where we did a sleeved kind of PPA-type structure to bring all city facilities under kind of a clean energy tariff. And so those were exciting things for me to be kind of in the middle of. And then when his term ended, the CPS Energy kinda job opened up, and that brought me to San Antonio.
Joshua Rhodes: If I’m correct, Bill White’s also now a senior advisor to Ever.green. So I guess we got two full circles coming around there.
Cris Eugster: Yeah. He’s a wonderful guy. He’s an amazing guy. We’re very lucky to have him on the team here.
Joshua Rhodes: That’s awesome. When you arrived at CPS was starting to take, San Antonio was starting to take a different approach to things like energy efficiency and renewable energy. You helped to get programs started like the STEP program, which ultimately exceeded its goal, I think of like reducing peak by 770 some odd megawatts. Looking back, how was that formative in kind of where you’re at today, if that makes sense?
Cris Eugster: Yeah. I mean, I think CPS Energy is pretty amazing utility. It’s, you know, city-owned, but it has an independent board. It has kind of a business mindset in terms of how it runs and operates, but it has a big heart for the community, and it gives back, I think Ed Kelly or one of our board members said it, a million dollars a day back to the city. Wow. I think it’s now, you know, close to $500 million over the course of the year in terms of, you know, back to the city, and so they don’t have to raise property taxes and do things like that. But it is a very well-run utility, and it has scale. It’s third largest power producer in Texas, has roughly 2 million customers, vertically integrated, diverse mix of nuclear, fossil, renewables, wires, transmission, distribution lines. So it really is a big time utility that has a strong connection with the community. You know, it’s not like a quarterly earnings kinda driven model. You could do things for the long run and long term. And so standing up programs like the STEP program where instead of building a power plant for 771 MW, we basically, you know, created an energy efficiency demand response program. So, you know, by the way, what we, you know, we call them sort of negative watts or there was some term for that during the day.
Joshua Rhodes: Negawatts, I think.
Cris Eugster: Yeah. Yeah. Exactly. So, you know, successful. Put dollars in customer pocket for doing the right thing, for making their homes and businesses more efficient, and then us as a utility not having to build a power plant. We’re very aggressive in terms of, you know, standing up clean energy PPAs, and we coupled that with economic development, so bringing OCI Solar into the community and standing up solar manufacturing in addition to kind of providing energy to San Antonio, I think was pretty key. So we did some really big, exciting things, and I think only a construct like a CPS Energy that had scale, revenue, and a connection to the community could we have pulled that off.
Joshua Rhodes: Yeah. That makes sense. You went from CPS to becoming the CEO of NAES, which had, at the time, operated about almost 50 GW of, you know, generating capacity across North America. It’s a pretty big difference going from like, you know, a single utility to, like, managing a fleet. What did that experience teach you in terms of, like, the practical realities of, you know, operating such a fleet of power plants? And—
Cris Eugster: Yeah. You know, they were a big operator, and so as they were kinda thinking about adding a dimension to their business in terms of kind of renewables and clean energy, they’d acquired a company to kind of help move in that direction I think was pretty exciting there. I think my ultimate passion, though, was to be more entrepreneurial, to move faster. And so Seattle, you know, it is almost Silicon Valley 2.0. It’s not as big as— but there’s a lot of tech here. You know, Microsoft is here, Amazon. There’s a lot of Fortune 500s, Costco, REI, Lululemon. There’s a epicenter of kind of innovation and technology and, again, scale here in Seattle. And I connected with Greg Gottesman, who was the founder of Pioneer Square Labs, and he and I talked about kind of an energy play, and Ever.green was kind of the start of that. And very quickly in that mix came Michael Leggett, who was my co-founder. He was a lead designer for Google, for Google Inbox, Gmail. Super brilliant guy, was a Rice guy out of Texas, so we had the Texas connection there as well. He also understood climate, you know, from a standards perspective. I came at it from more from an energy perspective. And so as corporates are trying to kind of do the right thing and how do you account for that? How do you get credit? How do you take real claims and not greenwash things or dubious claims? I think we kind of brought it all together into what is now Ever.green, sort of a high integrity platform that allows corporates to do the right thing, flow capital to n-new projects, and make a difference and feel good about that claim. I’ve been at that now for the last four-plus years.
Joshua Rhodes: Was that the specific problem you were looking to solve is, like, trying to kinda negate some of these greenwashing type schemes or whatever, for lack of a better term there? Is that the particular problem you’re looking to solve when starting Ever.green?
Cris Eugster: I think I was passionate about was how do we move the energy transition faster? This is even before AI and data centers kinda came online. So like—
Joshua Rhodes: Oh, don’t worry, we’ll get there at the end.
Cris Eugster: Get there, yeah. So my big thing is, look, I understand that we have to have an all energy philosophy, all forms of energy have to have a place at the table. But when you build a traditional power plant, a fossil plant we shouldn’t take that lightly. That is a multi-billion dollar commitment. That plant will be around for 40, 60-plus years, and if there is an alternative or there’s a different way of doing it, shouldn’t we think about that? And so I’m a big believer that, you know, clean energy, solar, wind, geothermal, even nuclear, has its place today. The technology’s there. Why can’t we deploy it faster? Let’s make that our front horse in terms of kind of the energy transition. That’s where my passion is. How do we accelerate the energy transition? How do we go from, you know, maybe 25, 30 percent of our energy mix, again, it depends on region, but r— to 60, 70 percent of our energy mix coming from clean energy? Because we have this industrial kind of revolution coming on now with data centers, AI, and I know we’re gonna get more into that. Like, we don’t wanna go back and have smokestacks all over the place because we just wanna build power plants to support this new energy load. So that’s the problem I’m trying to solve. How do we get to a emission-free clean energy grid faster? How do we get there in five years, 10 years versus, you know, 2040, 2050? Got it. Josh, I don’t know what your perspective is. Should we have that urgency or do we have time here? On the energy transition.
Joshua Rhodes: Yeah. No, that’s a great question. I mean, you know, it’s interesting sitting in Texas, right? It’s like, because in Texas, it’s more around kinda the market pull of those things versus, like, a policy push or other types, and it’s kind of one of those, if it ain’t broke, don’t fix it type you know, mentalities here. You know, the benefits here is, like, it’s generally easier to build things, generally easier to build transmission, that now at the federal level, they’re having discussions around this permitting bill, right? And in Texas, like, we’re already, like, you know, build things twice as fast as other regions. A lot of the discussions, all the podcasts and the talking heads and everyone that, you know, is talking about this permitting bill right now is just saying, “This works. Look at Texas. Look at what they’re doing,” right? If you make the clean thing cheaper just then let the market pull it, like, it’s just always gonna be more resilient than, say, a policy that, you know, can change whenever various different policymakers come into being or come into power.
Cris Eugster: I agree 100 percent. I say I’m very bullish on Texas. I love Texas. I think the fact that it’s easy to do th— You look at what’s going on with PJM or some of these other markets, like ERCOT. Again, every market has its issues, but it is very efficient. It reduces the friction to bring kinda new capacity online, and I… Let’s let the market decide, but let’s not burden clean energy with additional requirements from a policy perspective. Let’s let it compete out there.
Joshua Rhodes: Yeah. Let it compete on the merits and let it go.
Cris Eugster: Exactly.
Joshua Rhodes: So let’s talk about one of the mechanisms upon which, like, clean energy moves around. Let’s talk about RECs, renewable energy certificates, credits, whatever you wanna say. You know, they’ve been around for decades, but they’ve also received a fair amount of criticism by companies, you know, claiming they’re powered by renewables without necessarily causing more renewable energy to get built. Can you explain how the traditional REC market works, where you think it falls short, and, like, how are Ever.green’s high impact RECs different?
Cris Eugster: I think our innovation is in terms of this kind of broader problem of kind of accelerating the energy transition. So RECs have been around for a long time. They’re a well-understood currency. A REC gets created for every time a megawatt hour of solar or clean energy gets produced, so it’s easy to track. There’s just a lot of goodness around them. I think the problem is RECs have always been an afterthought. So a project gets built, and then you’ve got some RECs on the back end, and you sell them for kinda a couple bucks. And the standard bodies say that’s okay. If you wanna claim that you’re 100 percent renewable, all you have to do is buy some RECs and retire them. You can’t sell them, you can’t double claim them, but if you buy them and retire them, you’re good to go. And our belief is that’s a pretty dubious claim there. So what we have done is we’ve taken that concept of a REC and instead of having it as an afterthought, let’s put it at the front of the whole system. So for our RECs, let’s have RECs help enable the build-out of new capacity. So for our RECs, there are three criteria. One, it has to be a new project, okay? So it can’t be an existing project. Two is it has to be a long-term commitment to that project. This can’t be a one-year spot, you know, purchase. That corporate has to be in that deal for five years, 10 years. And the price that that REC is meaningful to that project, to the economics of that project. So if a developer has a contract from our customer, they can go to the bank, they can get financing, they can increase their debt service ratio, they can improve their, you know, return. But contracted revenue is like gold for developers that are looking to finance projects, and that is what our high impact RECs are. So instead of an afterthought of the whole thing, let’s bring it upfront, let’s make it part of the procurement for a corporate to stand up new capacity. And so, you know, we’ve gotten a lot of traction with this. We’re very differentiated in that. There are a lot of REC brokers out there. It’s a multi-billion dollar market, but you know, we have 50-plus logos, Wells Fargo, Netflix, REI, you know, Starbucks. We have a lot of interest in what we’re doing because they’re real projects. This is not just a contract. You know, we’ll take a group out. We went our Three W project near the Dallas area, we did a ribbon cutting. So we’ll fly out the corporate team to do a ribbon cutting at these projects and see the impact that they are doing with their contract to stand up this capacity.
Joshua Rhodes: And so it sounds like you’re trying to get the REC to drive the project instead of, you know, being passed out in the back seat.
Cris Eugster: Yeah, exactly.
Joshua Rhodes: To summarize that right?
Cris Eugster: That’s exactly right. That’s exactly right. Yeah.
Joshua Rhodes: Great. So let’s get into a couple of these deals ‘cause I actually find them pretty interesting. Let’s get into the economics of an actual deal. So earlier this year, Ever.green announced a project to help bring 15 solar to 15 schools in West Virginia with the projected energy savings of 150 to 200,000, I think, for the district. Can you walk us through the contracts and money flow from the corporate REC buyers to the developer and ultimately to the schools? Like walk through that process and then like what was the gap that you were able to kind of like close there that got this project across the finish line?
Cris Eugster: Yeah. Like a school project for us will be different from a larger utility scale project. So before I jump into that, you know, we’ve got a variety of different types of projects. You know, the schools are very special because, you know, they have immediate impact to that community. We’ve also done a number of solar projects in the Carolina where they have a QF rate that they’re getting from the utility, but they’re not getting any kind of credit for the REC, so that’s an opportunity for the REC to kind of step in there. Merchant deals in Texas, where the RECs are kind of available. So a lot of different projects, but at the very end of the day, we are kind of in the middle of these deals, so we are a kinda one-stop shop for both sides. So the developer can— deals with us, so we are basically the counterparty to the developer, and we commit to those RECs for, you know, a 10-year term or whatever the term might be. And then what we do is we then find corporates that can step into that. Sometimes it’s one corporate and we’re back-to-back and it’s pretty simple, but other times there may be three or four different corporates that step into, so we’re fractionalizing participation in that project. And why that’s important is because that developer, it’s hard to work with five different corporate lawyers at Fortune 500 companies. Everyone’s gonna have, you know, their own unique language that they want in their contract, so we try to kind of standardize that process, that contracting piece, and make it easy for both sides to put a deal together. Okay. At the very basic, yeah, that is what we’re trying to simplify, kind of participation in these deals. So a corporate says, “I only need 2,000 MWh, 2,000 RECs,” but the project has 10,000. We’ll take that and we’ll find another corporate that can fill in, you know, the rest of the gap. So we don’t wanna have any kind of friction there for either side to kinda get stuck or get caught up. So contracting we make really easy, and one of our superpowers, so to speak, is we’ve got a Ben Dickson, who’s our chief legal officer. And he used to be at Wilson Sonsini. He’s really good lawyer, and he’s helped us kinda standardize these contracts so we can bring multiple folks into a project, and we make it easy for both sides because we’re kind of a one-stop shop for both sides of it. That’s the piece of it. The second, getting back to your economics, you know, so we are flowing, let’s say, a 10-year term to those schools, so they’re getting X dollars a REC for 10 years. And for schools, it’ll be high. You know, spot market RECs are $2, $3. For our utility RECs, they may be in the 15, you know, dollar-ish. Schools will be 25 to $35, depending on kinda what they need. So, you know, we are flowing a lot of dollars to these schools to basically lower the PPA price that the school pay, pays for that REC. So we lower the utility cost for the school because our RECs are coming in and lowering that cost to the school. So that means that they can hire more teachers or they can, you know, green light a project. So ultimately, our contracted cash flow creates a lower utility rate for those schools and enables them to kinda sign onto these projects.
Joshua Rhodes: Yeah, I think that long-term part is important, I think, ‘cause a lot of times, like for, you know, capital improvements and things like that for schools, like they really need that long-term, you know, type of structure ‘cause, you know, property taxes can go down, you know, the economy can slump. We’ve seen this with like utility scale renewables in Texas, things like that, like, you know, taxes and, you know, other types of projects. I’ve heard, you know, superintendents and things say, you know, it’s like, “Hey, I can take that to the bank now and get like a loan or could do a, issue a bond based on, you know, this guaranteed, you know, income stream,” and it makes it a lot easier to do so. So that’s really interesting.
Cris Eugster: PPAs have been sort of transformative for the clean energy space, like, you know, before the whole concept, and I think Jigar Shah was kind of at the lead of that when he was at SunEdison, you know, putting that concept in place. The problem is PPAs are not easy for lots of companies. If you’re a Microsoft or a Meta, you know, you can understand it, but y— if you’re just a general corporate, taking on that energy price risk is tough. You know, you lock in a PPA at $50 and then all of a sudden ERCOT prices are at minus 20 or minus 100. That REC is now cost 70 bucks or, you know, 100-plus dollars. And even for Microsoft, I think it’s hard to, you know, manage that energy risk. So our belief is corporates are really not the right owner of that energy risk. I don’t think developers are either, and I think there’s kind of an open debate, I think you know, the utility is probably the best to own that risk. But what our product does is it takes that energy risk out of the equation. So yeah, there is a premium for our RECs but it’s a set number, it’s something they can budget against, and they don’t have to deal, they don’t have to have a energy forecasting team in there trying to figure out where ERCOT prices are going.
Joshua Rhodes: Okay. That makes a lot of sense. I wanna get to another project in Texas. One of your most unusual recent transactions was involved SuperPower, which is an aggregated support from a bunch of video gamers for a 110 MW solar project in Hill County, Texas using a VPPA structure. Virtual power purchase agreement structure. So that’s not generally a group that, you know, we associate kind of like in these deals, but I assume this is more than just, you know, building fake wind and solar farms in Minecraft. So in this, you’re talking about like it’s hard to get a bunch of corporate lawyers together to agree in a room. It sounds like now you’ve got like a bunch of folks, ‘cause this is being supported by a bunch of folks, video gamers, right? Can you tell me about this project? It’s really interesting.
Cris Eugster: Yeah. Like you said, Josh, some of these projects go, you know, pretty crazy in terms of kinda how they get what they’re trying to accomplish. So the thing I got excited about this is, you know, the gaming industry is… You don’t even think about that in terms of energy use. Like, some kid, you know, playing Xbox in the basement or in the living room, like it’s just, you know, who’s thinking about those emissions? And I’m sure Microsoft has, you know, folks kind of thinking through those, some of the other big tech firms. But that’s a whole segment that I think is not being, you know, looked at carefully. And so I think SuperPower, they came to us about like, “How do we put a deal together where we can cover the emissions of our gamers?” And, they’ve come up with some pretty sophisticated things. So like if they play, you know how when you play certain things, you get, you know, jewels and credits as you play along? I think they’ve integrated some of the clean energy into that kinda gaming environment. And so they’ve done a lot of that. That’s not part of what we have done, but what we’ve done is once they kind of aggregated, you know, what they’re trying to do from an emissions perspective, we wanted to tie them to a new, you know, yet built project, and that’s what we did with the Three W project. A lot of times we do a REC-only strip because, again, people don’t want price risk, but some of our customers do want a VPPA. We’ve done everything from a kind of full VPPA to things which are much more collared so that you’re not taking price risk, almost like a fixed price VPPA. It’s a concept, but you know, you’re not susceptible to the price swing. So we have played in the VPPA market. So what we did with Superpower was took that whole gaming experience that they were trying to address and brought them into a project that, again, this wasn’t, you know, RECs, you know, buying RECs as an afterthought. This was basically kind of helping finance a new solar farm, 100 MW solar farm near Dallas called Three W. OCI was the developer on it, great company. It was a great story. And Josh, I think part of this is also telling the stories around these things that, yeah, you can do this. Superpower can step up and address the gaming emissions and like, how do we get everyone to do that, you know? It was a very cool… It was pretty complex, but again, we got the deal done.
Joshua Rhodes: It kind of reminds me of like microloans or other types of things like that, like kind of distributed finance or, I don’t know, maybe I’m using the wrong, the wrong terms here, but like, do you think that that model can scale? Do you think this is a one-off project, or do you think like that there’s a potential for this pick up other aggregations of folks?
Cris Eugster: I think it definitely has a potential to scale. I think cohorts coming together to make something happen is interesting. This was kind of the gaming industry. You know, we’ve got some announcements that we’re gonna be making here next year where other groups have come together around an industry to make something happen. And kinda micro fan— you know, the distributed financing aspect of it is, comes up because when cohorts come together, they’re usually smaller in terms of their appetite to be part of the deal. And so you’ve got to deal with smaller volume and aggregate it to have kind of scale and impact. So two things. One is, I think we’re gonna see more cohorts of kinda like-minded kind of companies or companies that wanna partner together to make a difference from a mission standpoint. And then you’ve gotta be able to fractionalize that, and that kinda gets you into the micro distributed financing world, which I think we play in.
Joshua Rhodes: Yeah, absolutely. I also wanna talk about, ‘cause it’s also pretty interesting, I think it’s the Ocotillo Wind Farm is a refer— or a repower, a refurbishment. Where you brought together, I think, about 14 corporate buyers to support refurbishing an existing project near Big Spring. So what’s different in doing a repower versus a new build there? How does that play in either the financing flow or kind of like, you know, the carbon flow or whatever? Like, how is that different?
Cris Eugster: I think that’s another one that was pretty exciting for us because, you know, there has been a lot of wind especially that was kind of built in the early 2000s, and, you know, wind yeah, has a sort of a 15-year life. These are turbines. These are rotating kind of, you know, pieces of equipment. And so at some point they are end of life, and we’re gonna see the same thing with solar. And so what do you do? Do you just kind of tear them down and put them in a landfill? Like, that doesn’t feel right. And so with Clearway, we had conversations about how do we extend the life of some of these wind farms? And I think the repower is a nice fit for us because what happens is there’s uncertainty when you repower a wind farm, ‘cause there’s not a lot going on there. It’s getting more so. But it’s hard to put a PPA on that because, you know, a PPA is dependent on performance, right? And so a repowered wind farm, will it last seven years? Will it last 10 years? Will it go— What will the efficiency and the capacity factors be? How will the performance of that wind farm happen? And so what we did is we brought in our REC strip to basically help bring contracted cash flow to that project, and they were going merchant with the power that was generated. So as you can imagine, merchant, it’s hard to kinda operate a resource in a merchant environment ‘cause, you know, prices are all over the place. How do you support O&M and, you know, basic things like that? So our REC contract, which again is coming in at meaningful prices, is making a difference to provide a buffer to continue to operate that wind farm over a long period of time. You know, hopefully 10 years or longer, if we can.
Joshua Rhodes: Yeah. Totally. And like, maybe getting on a little bit of a different similar part of that, a key part of your business model appears to be, you know, demonstrating additionality, right? That the REC revenue generally helps a project financially value, and I think you look for at least a 10 percent improvement in certain project financial metrics. But counterfactuals are hard, so, like, what are y’all doing to prove that that project wouldn’t have gotten built anyways? Like, how do you think about additionality in a world where it’s hard to like, you know, build a counterfactual like that?
Cris Eugster: Yeah. I think it’s kind of a very interesting word, and I think there’s a lot of subjectivity around that. I think when we first started, when Michael and I first started about, and our thinking was, “Let’s aggregate corporate demand,” you know, “Let’s go out to a field and lock up that field, put up solar panels, and that will be the solar system for that, you know, set of corporates.” I think we quickly found, like, the developer world is not easy. There’s a lot of stuff besides kind of an offtake that’s gonna make a project happen. Will that landowner really kind of sign up with you? You know, what kind of mineral rights? Do you have surface rights? You know, it gets very complicated, and projects are not easy to do and not easy to happen. So I think what we learned is there’s not any one single thing that will cause a project to happen. Like, you know, we could have a great PPA or a great REC contract, but if interest rates kinda get too high and that project’s no longer economical, or the landowner has an issue, or there’s some permitting issues, or interconnection agreements kinda get stuck, like, there’s many things that can derail a project. So I think what we look for is that we are a meaningful part of a project, that we’re a material part, and that’s kinda where we got to the 10 percent factor. You know, the SEC 10 percent is an interesting part where you start to disclose kind of ownership, and so we anchored on that 10 percent as a way to say, “Hey, we feel good that we are a meaningful part of this cash flow.” But Josh, Michael and I went we had a lot of back and forth counterfactual. Would this have happened, not happened? Like it’s theoretical and it’s intellectual in some ways, but the real world is much more complicated, and it takes almost a group, you know, mentality to get a clean energy project online. It’s not an individual sport. It’s a team sport, right? You can’t just be a running back and, you know, now you’re winning all the time. You need the whole team in place.
Joshua Rhodes: You build a project, and then we figure out hydraulic fracturing. It… The world changes, like, there’s big, massive changes. You do the best you can with what you got kind of at that time.
Cris Eugster: But it is important that our customers feel like, you know, they are making a difference here. So our developers will go through a scorecard. They’re attesting that this contract is material to them. So we don’t take this thing lightly because it’s not an easy thing to do, so we put a lot of work in it. You know, we put white papers out there. We’ve been very transparent on our methodology. So it is complicated, it is a team sport, but we wanna be a meaningful part of that team with our offtake.
Joshua Rhodes: Yeah, no, and I think that’s a great transition and the, my next question was about, you know, measuring clean energy progress is like Ever.green tries to, you know, measure the actual environmental and community impacts of its projects rather than just counting megawatt hours. Like, how do you think about, you know, putting a megawatt hour of solar onto, say, a relatively coal-heavy region versus, you know, one that, you know, might al-already have a bunch of renewables? Should corporate clean energy county focus more on those regions that avoid more emissions? Is that what some of your clients are also pulling for?
Cris Eugster: We could do a whole podcast on that and probably wouldn’t bring Michael Leggett in here. I mean, it’s really important, Josh, because the standard bodies are trying to raise the bar on RECs, or just procurement in general, and so that is a good thing. I think there’s a huge debate on are we going 24/7 local, or are we going more around sort of additiona— emission, you know, having more of a consequential impact? I think we’re more in that latter bucket because while we think 24/7 and local is ultimately kind of where we wanna be, where you’re matching your energy production to your load, it could be a constraining factor here in the near term here. Because what it does, in our view, is it will emphasize spot market RECs. You know, now you just need to tag a REC with a time stamp and a location. You know, if you procure that to your load, you’re good to go. Well, what about the long-term contract? What about grids that are very dirty? So is this gonna incent a company in California where the grid is pretty clean to basically have to procure local 24/7 spot RECs to match their load versus standing up a project in Wyoming or Georgia where the grid is much less clean. So I think our belief is we wanna tag things, you know, time stamp, location stamp for transparency, but don’t make that a requirement. Because if that’s a requirement, it’s gonna hinder companies to get into long-term contracts in region that are outside of their footprint. And I think you and I know climate change is a global problem. Like, we wanna stand up clean energy in dirty grids, not clean grids.
Joshua Rhodes: Yeah, you get more bang for your buck doing that, as it were, in the clima— the climate doesn’t care, like, you know, where the CO2 is emitted or it doesn’t care about intensity, it cares about tons.
Cris Eugster: Yes.
Joshua Rhodes: Crafting this question was actually kind of interesting ‘cause it reminded me of the ancient days before AI when the things that the big technology companies were fighting over was this 24/7 versus this additionality fight. Like, and I think it was like Google was on one side and Meta was on the other side. There were other folks that were in there. I haven’t heard much of this lately. You know, now it’s just a race to build data centers as fast as possible. I guess it sounds like you’re trying to in— To keep that debate going and kind of inject some discipline into that argument, and is that what I’m reading?
Cris Eugster: We would like to have the debate cl— ‘cause uncertainty is always bad for the market. So if there’s uncertainty, customers are gonna sort of be slow to act. There are standard bodies that are actively trying to kind of set the new standard. Standards haven’t been looked at for the last, you know, dozen plus years. And so the Greenhouse Gas Protocol standard, the SBTi, Science Based Technology Initiative, SBTi standards, so these are voluntary standards, so, you know, but corporates do weigh them in heavily. And so both those standard bodies are kind of having this debate of is this more 24/7 or is it consequential? And so they’ve gotten feedback, but this is being driven by those two standard bodies on where they’re gonna set that standard. And, you know, we thought we’d have clarity here in ‘26. I think it’s getting pushed out to ‘27, but that’s what’s driving it, how these groups are gonna land in terms of what is the next standard for voluntary clean energy procurement.
Joshua Rhodes: I promised we’d talk about data centers ‘cause you can’t have a conversation for more than five minutes about energy without talking about data centers. Energy is AI is energy apparently. So we’re seeing extraordinary growth in electricity demands, you know, particularly from data centers, AI. Many of the companies that are building these have also have ambitious clean energy commitments, but you know, now they’re contributing to like a massive increase in electricity demand. And see, if you were designing a clean energy procurement strategy for a company that’s trying to build a gigawatt of data center in West Texas, what would you actually ask of that company to do to make the grid cleaner?
Cris Eugster: Yeah, I mean, such a great question. I mean, it really is. You know, the big tech, they’ve been the leader in terms of kind of, you know, thinking about sort of the clean energy transition and, you know, these massive PPAs and, you know, what they’ve done. I worry a little bit that now there’s just such a race and the velocity that is needed in the AI data center that it doesn’t matter so much about emissions as much. It’s just they need physical power, and whatever it takes to get physical power, that’s what they’re gonna be looking at. The other thing, Josh, is like, you know, I’ve been a utility guy, and like utilities, the growth has been flat. You know, maybe 2 percent, you got energy efficiency dampening it, and you guys have done great work in this world. Now you’re seeing 2x load, you know, potential load, you know, 5x lo— you know, things that utilities can’t even wrap their minds around. And so where is this power gonna come from? How are rates not gonna go up? How are resources not gonna be used, whether it’s water or environment? I think are super big questions, and you’re trying to solve these questions in a environment where there’s just a race to build more and faster. If you’re slow, you’re gonna lose a seat at the table. And so I would hope that there would be an interest, whether it’s a requirement or just self-interest, to basically build these data centers in a way that minimizes impacts to our environment and our communities. And Michael Webber and I have talked about this. There’s so much money that they should be able to do this the right way. You know? And I’d love to get your take on it. The challenge is the velocity and the competitiveness and the race, that makes it really hard to kind of be thoughtful in how do you do this thing the right way.
Joshua Rhodes: Yeah, no, for sure. I mean, I think that bleeds into like, you know, even community pushback and things on data centers. A lot of it is just this velocity, right? Like I model the electricity grid all the time, and I often make the joke, I’ll model it out as far into the future as you believe the price of natural gas will be. And historically, it’s like 2 percent load growth, and supply chains were built around, you know, supporting 2 percent load growth, at least at ERCOT. Other places a little bit flatter. But yeah, I mean, this is like, you know, 5x the grid in five years. It took us 100 years to get to 91 GW, and you wanna get to 500 GW in five years. Like just ain’t gonna happen, right? You just can’t get that much steel in the ground. Even if we, you know, cloned you a few times, we’re still not gonna get that much steel in the ground. I think it is some of that velocity, right? This whole Batch Zero process is trying to inject some discipline into that. Some of the pauses and the audits and things like that are trying to like, you know, inject sanity into that space, and so hopefully we can know what’s real so that we can actually build the infrastructure around, and the policy around, you know, what is real versus, like, these numbers that nobody believes. But we don’t know what the right number is. And you said earlier, it’s like, you know, business would rather have bad policy than uncertain policy, right? It’s just like at least know where your goalposts are. Even if they’re 200 yards that way, you’ll figure out how to kick the ball through it. But like, you know, if they’re just moving all the time, that’s a tougher one.
Cris Eugster: Yeah. I feel like if we could solve the velocity problem, I think we could figure out the power issue. I think if we don’t solve the velocity issue… And like you said, you know, there are some pretty good movements, and again, led by Texas on some of the Batch Zero and, you know, the slowing things down a bit to get things right. I think if we had more time, the technology’s there to do this thing the right way. And even some of the simple stuff like, “Let’s just do a combined cycle behind the meter.” Like, these data center, they’re gonna value the chips, not the combined cycles. If those chips are saying, “I gotta back off power,” like, you know, in a microsecond, that turbine’s gonna have it— Like, there are fundamental issues on even straightforward designs that I don’t think people have fully thought through, again, because of velocity. They’re just trying to get stuff done.
Joshua Rhodes: I think a lot of like conceptual behind the meter projects have run into the physical limitations of steel and the ability to move, right? It’s just like software’s one thing, steel’s another, right? In terms of being able to move, and it’s like, you know, getting those… If you want five nines of reliability, a single power plant’s not gonna give you that. I don’t care how new it is or how good it is, like, you’re not getting that. That’s why we have a grid, right? It’s like to share that risk around, give you that space. You know, it’s probably a lot easier to do this in a growth environment than like a declining environment, right? Like trying out new structures and projects, it sounds like y’all are doing, like it’s probably easier to try that out in a sector that’s growing versus one that’s stagnating, wouldn’t you say?
Cris Eugster: Yeah, 100 percent. You know, you see some of the, you know, these PPAs from the nuclear side. Like nuclear’s always been a very interesting kind of zero emission resource, but how do you put capital that perceives it as risky? How do you get the regulations to be more efficient? I think because this is a growth environment, I think nuclear’s back in play, which I think is exciting.
Joshua Rhodes: Yeah. No, I mean, I feel like, I think almost anything’s in play right now that is able to make a megawatt hour of electricity, is a really interesting space.
Cris Eugster: I think being in a growth environment is really good, and I think we can be thoughtful and we can do a lot of good things, try a lot of good things. I think the challenge is if we’re running too fast and lose our kind of foresight and strategy and perspective, I think that’s where we get into trouble.
Joshua Rhodes: Yeah. Absolutely. Well, Cris Eugster, thank you for coming on the Energy Capital Podcast.
Cris Eugster: Thanks, Josh, for having me. Enjoyed it as always. Awesome. Thanks.

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