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I'm Shail Khan. I invest in early-stage companies and energy impact partners. Welcome to Catalyst. So I've noticed that I keep coming back to this question of what the current rate limiter on AI infrastructure growth is. As I'm sure you've heard if you listen to this podcast, I think the main candidates are demand, in theory. Nobody really picks this right now. Chips, power, and labor. The last one, people mention a lot, but then I've found kind of move right along. Whereas the others, chips and power, get a deep dive worthy of their rate-limiting status. I think that's because labor feels to be maybe the most intractable of them all. To a first order, the AI industry can kind of throw money at the other problems. They can buy chips from AMD instead. They can try to convince TSMC to expand capacity. Or on the power side, they could buy gas turbines to throw behind the meter from GE or Siemens or an air derivative supplier. Or they can sell out Bloom's fuel cells for years and years and years. Not to say those things are easy, but when it comes to labor, it's sort of a trickier problem. To be clear, lots of players in the market are trying to do something, workforce investments of one kind or another. But I think it's just a little bit outside their comfort zone. Anyway, the results, this is that I think workforce, particularly for electricians, is maybe the least appreciated, but certainly one of the most important bottlenecks in this market. And I wanted to dig into how it's actually manifesting and what one might do about it. For this one, I brought on Raymond Hawkins, who's the CCO at Compass Data Centers. That's coming up next. Raymond Hawkins: Demand flexibility is now an essential part of the data center speed to power playbook. But how do data centers actually curtail load? GridBeyond is the end-to-end solution for flexible energy management. GridBeyond's advanced DERMs and VPP platform is tailored to what data centers care about most: maximizing reliability, intelligently meeting curtailment obligations, reducing energy costs, and reducing energy consumption. That's all I have for today. Thank you so much for joining us. I'll see you next time. and managing all your distributed resources in one place. Ready to transform your distributed energy management? Get started at gridbeyond.com. Catalyst is brought to you by Antenna Group, the communications and marketing partner behind the most influential companies in energy, climate, and infrastructure. For three decades, Antenna has helped ambitious companies stand out, build market leadership, and become category-defining brands. From breakthrough startups to global industry leaders, their team brings the expertise, relationships, and skills they need to make a difference in the energy industry. Learn more at antennagroup.com. 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Energy Hub's DERMs platform connects batteries, EVs, thermostats, and commercial and industrial sites into virtual power plants that over 300 utilities dispatch as reliable grid capacity day in, day out. and we need more senior electricians it's both it is not either or um we you could employ more electricians today without a doubt and you can employ more higher-end electricians today just the industry is swallowing up the capacity i mean we just like to see in the utility providers struggling to keep up with our industry from a pace perspective same thing with the electrician for lack of a word industry or market has struggled to keep up the pace of the growth i mean it's it's hyperbolic i mean it's on the news every day so everyone knows all about it but you know to me i think about it just like the utility providers those guys have never heard numbers this big and never heard numbers coming this fast and that same problem is matter if no is it manifest in the generation you know transmission distribution side of the business it's manifest in the who's going to wire this on the other end are there i mean you mentioned at the beginning it's like it's an expensive problem for you you I was having a conversation not too long ago with i'll say an unnamed uh infrastructure person at one of the hyperscalers who said i think in like half joking fashion i think we're going to be paying electricians like two million bucks a year pretty soon are you seeing like bidding wars for talent is that kind of where we're at without a doubt yeah the electrician uh the cost for electricians you know i'm going to give you a you know estimate has tripled in the time i've been in the business tripled and yeah in the last decade yeah so you would think you know if you believe in an efficient market um that with some some period of time the ability to earn triple wages uh effectively becoming an electrician would sort of naturally result in a larger workforce maybe not overnight because it takes time to train but like you know even in the absence of of some of them were the clever and new programs that folks are are pursuing including yourselves you know the market would fix itself you would think um do you see that happening so so i i so i agree i believe in an efficient market i believe that the markets draw talent when there's money to be earned there and and that is happening we see it happening in basically every market where we work where there are people uh creating training programs creating uh fast tracks creating methods and means for people to get up to speed and to supply more capabilities in the marketplace because the demand doesn't i mean and that's the other thing we talk about a a lease that gets signed today we're going to be building that campus for four or five years so you know being able to i mean you could start with someone today and spend two years with them in an apprenticeship and they're still going to be useful on our campus for three or four years while we're building there these things don't go up overnight it's a lot of work for a long period of time and it's a lot of work for a long period of time and it's a lot of work for a long period of time and so that's one of the reasons we've tried to get into the markets where we are and start education programs because while we're going to be here for a while we know we're going to need people at the other end of this let's let's start training in ourselves yeah so tell me more about that what you guys are actually doing and also you know one thing i've learned about this space is that you know it's a complicated model or at least historically it's been sort of a complicated model for how new let's just focus on electricians still get trained and how they pay for their training for example right a lot of them will do it through through federal grants and so on it's not historically the case that like an employer would say i need a ton of new electricians i'll pay for their training or i will sponsor it or something like that so that that's kind of a new phenomenon so you as the ultimate employer or maybe not even the employer right because maybe your gc is the employer you're just the you're just the one who needs them to exist what is the role that you can play in in manifesting them yeah so you know we talked about i mentioned that you know we're building campuses and those are multi-year projects so we've looked in the markets and we've you know started the projects and we said hey um what do we need to get this project finished we need more skilled labor we need more and you'll hear us use the phrase mechanical electrical and it skills and uh in a marketplace and can we help the marketplace provide that skill um the biggest campus we have to date is in just a suburb called red oak and we partnered with a community college there texas state technical college and said hey if we were able to convince our partners alongside us to build a curriculum would you be willing to um you know for lack of better word pilot a program where we train in those three disciplines and so in partnership with texas state's technical college and multiples of our partners um because to your point right the end user customer is the general contractor or the electrical contractor he's the one who needs the employees um our partners so think of schneider electric or siemens people that whose equipment needs to get plugged in by those electricians have all helped us stand up a a school at texas state technical college a program to train people 12 weeks you start off you don't have to know anything about the data center business and you leave on the other end uh a entry level but prepared to go work in the data center business on the construction side uh we are i can't i can't remember if we just completed our second cohort or just started our third but we already have the first cohort through the program and already employed um and employed at dramatically higher wages than the average in the in where we're located so for us it's hey there's a problem and it's not only just hey we need people to help build our buildings but how do we serve the communities we live in it's really a way for us to do two things at the same time uh help the communities where we're trying to build infrastructure as well as solve a problem for the industry i do wonder i guess you know uh you're you're building one massive construction project in a given location it may be i mean if you're northern virginia there's lots of these right but it may be that at this location outside dallas or the one outside jackson mississippi it's not like they're going to be a bunch of data centers popping up in that same region so is the notion you're training people on this specialized set of things they're going to have a few years of employment while you're building out this one big campus and then thereafter they they go travel to wherever the next data center is going to be i think there's really two tracks after after the campus is done first of all it's years so that dallas campus will take about five years to build but to your point it will come to an end and for us i think there's two tracks after that there are long-standing jobs on the campus that having mechanical electrical or it infrastructure skills you can deploy staying in your home market and then the industry certainly has to use your phrase earlier opportunities for journeymen to move to projects all over right there's wyoming projects and there's projects yards in mississippi there are lots of more remote large projects going on the panhandle of texas there's lots of big projects and we certainly expect there'll be people just like we had to do in jackson moving to go work there for four or five years yeah there's obviously in theory two things you can do about a labor shortage for uh for data center construction one is find more people which is what we've been talking about but of course the other is require less people um which has more to do with like the design of the data center and can you prefab some of it and things like that like how much opportunity do you guys see in uh just minimizing the number of labor hours that are totally that are required in total maybe particularly for electricians yeah i can tell you that's one that's uh been part of compass from the very beginning so i'm gonna toot our horn a little bit um we we viewed um building data centers as really a manufacturing process from the very beginning of our business not a stick built construction project but rather an assembly project and and our motivation there um i know you're asking about how do we manage it does it help with the headcount problem our motivation there was really a couple of things speed um if if higher quality and a more diverse workforce if you can you know if we talk about putting a project in jackson mississippi um almost all of the people that are going to show up in jackson and do the work are going to be men for lack of a just the dynamic at home someone's got to you know manage the stability of the household take kids to school and whatnot and so generally it's a more the traveling journeyman worker is generally a man and so by doing off-site manufacturing putting together large components of data centers off-site it allows for a safer more diverse and more reliable product right safer for the the employees more diverse because giving somebody hey you can be here from eight to five you don't have to live in a different city you can be home in the evening with your family it allows us to employ more women in the business and it makes the business much safer to operate right instead of doing complete stick build in the field being able to test and commission and assemble off-site and just roll it in on a truck my boss gets really mad when i say this and snap it together like legos he does not like the lego analogy but it really works for me um that is much safer it's much more reliable it's fewer hours it's far less risk to the people on site um so for us our motivation was to make the sites safer and faster but what it has led to is a requirement for less skilled labor less skilled labor at the job site there's skilled labor now but it's now spread around manufacturing facilities with our partners for data centers connecting to the grid quickly means two things building distributed energy and having a plan for demand flexibility grid beyond helps with both grid beyond stern's and vpp platform unlocks the potential of distributed assets and disciplines dispatches flexibility into the right market at the right time. And this is more than software. GridBeyond supports developers every step of the way, from modeling your highest ROI energy mix to orchestrating the full set of assets around a data center. The track record speaks for itself. GridBeyond manages over 1,400 sites and more than 3.7 gigawatts of load across Europe, the UK, and the US. Learn more at gridbeyond.com or click the link in the show notes. If you work in energy or climate, you already know the company's Antenna Group has helped build. For three decades, they've been the communications and marketing partner behind the industry's breakout companies, category creators, and market leaders. Today, their team is working across the most consequential areas of the energy economy, from data centers and grid modernization to nuclear, geothermal, storage, critical materials, and next-generation technologies. Antenna helps ambitious companies become the names everyone in the market knows, trusts, and wants to work for. 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What are the LEGO building blocks? Yeah, yeah. Good question. So, almost everything in the electrical world and almost everything in the mechanical world are prefab for us now. So, think of all the way out from where the utility comes onto the campus, and I've got a transfer switch, or I've got a transformer that I'm stepping down. We'll have all of that pre-assembled on a skid so that you don't have to have somebody wire between the transfer switch and wire between that and the, you know, a transformer. We'll have the entire power center, you know, everything in there that distributes electricity into the building all show up in one unit. We have our entire, today, both liquid or hybrid cooling, so both liquid and air, shows up in a single package unit. So, these things, you're not having to put together any of it on site. All of our buildings are tilt-up, you know, pre-fabricated so that the panels show up, and we literally just crane them and set them in place. So, no one's having to make any of the walls, no one's having to pour any forms or build any forms or pour any concrete. They all show up on a truck, again, literally just like Legos. Slab A goes in slot A, slab B goes in slot B, and they get lifted off a truck and slid into place. So, almost the roof is the same way. We have pre-fabricated double T's that support the span. Literally, the whole building gets, almost the whole building, it's about 85 percent of the building, gets snapped into place, showing up on the flatbed of a truck. That's, it's remarkable that despite all of that, it's still a five-year construction project, and also, you still need all of these laborers, you're still having a short, like, you've done so much to modularize it and pre-fab it, and yet, there's still so much more that needs to be done. Yeah, and the five years, on the example in Dallas, that's because it's 10 buildings, right? So, it takes us about nine months to build a single building, and then, you know, you go, well, wait a minute, Raymond, that doesn't have to be five years. What's the scale of a building? Sorry, what's like in megawatts? Yeah, 40 megawatts, a little over 200,000 square feet. Help people understand that. Think of your Sam's Club. Your Sam's Club's probably somewhere between 30 and 40, maybe big ones are 15,000 square feet. So, think five to six of your Sam Clubs under one roof, and lots of electricity. And you said 40 megawatts a piece, something like that. 40 megawatts is what we build today. Okay, so if you're building five of those, that's a 200 megawatt data center, or if you're building nine of them, I guess you said, that would be a, yeah. Yeah, the one in Dallas is 10, so it's 400 megawatts. We have lots of fives and lots of tens around the U.S., so lots of 200s and 400s. And in the world of data centers today, you know, I remember, you know, been in this business 13 years. I remember, we talked about kilowatts. It is completely normal to talk about gigawatt campuses today. Right. What's the rate limiter on the building, or not the rate limiter, what stops you from having a, you know, gigawatt building? So, for us, we've chosen the form factor we have because we have some beliefs about, you know, how you impact the environment, how you impact microclimates around the building. So, we've done a lot of study. Lots of CFD happens inside the building, hey, computational flow dynamics, how am I going to move the energy around? How am I going to move the heat up? How high do I move the ceiling? Do I have to spend any money letting the heat move around the room? There's lots of study of what's going on inside the building. We've done a good bit of study on what goes on outside the building, right? When you have all of this equipment, not only exhausting, but also sucking air in and pushing warm air out, you can produce microclimates. So, for us, we've chosen the 40 megawatt form factor to allow us to spread the building. So, we've chosen the 40 megawatt form factor to allow us to spread the buildings out and not impact the performance of the equipment. Can you do it in larger form factors? You can, absolutely. Do I think that we'll move our form factor up? Not anytime soon. We felt like we figured out a sweet spot between the equipment we buy, the readily available nature of the equipment we buy, managing the building that size, but certainly people that do purpose built buildings that are very specific engineering can build larger form factors. It's just not in our roadmap at this time. I think we should spend a minute on the community stuff. I mean, it's tied to the, you know, you mentioned that that is one of the reasons to invest in workforce that's local and so on. But it's also obviously become, it's flared up as like a really big issue now. What is your perspective on what best practices should be for a data center developer entering a community to position yourself to be able to actually build the thing and not get the kind of backlash that we're seeing right now? Yeah, sure. I got a lot of feedback on that. I think it's a good question. I think it's a good one. I've got lots of thoughts on this one. So I might ask you to tap the guardrails and keep me on message here. But I'd say the biggest one for us is our industry grew up being secretive. Not secretive because we had anything to hide from anybody. But think about the first two significant customers for large scale data centers. It was the financial institutions and it was the government. And they were secretive about where that large compute footprint sat purely from a security perspective. There was nothing to hide from the community. But they were secretive about where you didn't want anyone to know where JP Morgan's bank processing big computer sat. So nondescript building on the edge of town that nobody knew who it was. So our industry grew up with this secrecy only because it was part of a security plan for very crucial assets, whether financial or government. That's the history of the business. And we'd never been asked really to be transparent about where we built. So this notion that somehow the industry was hiding anything, it was part of the security fabric. And it was part of the security fabric. of the early customers. Now that there are data centers going in lots of places and there's lots of questions, the industry needs to push the envelope to say, hey, I need to embrace the communities that I'm in and I need to let people know what I'm doing because, and I'm going to give a weird analogy, right? People were not crazy about trains when they started. People thought that if you traveled 30 miles an hour, it would cause your heart to stop. And people said, hey, I don't want trains in my backyard. Edison had to give away the light bulb. No one wanted to buy it. And we can't imagine that today, right? But people had to be, you know, he had to give a light bulb to someone to get them to use it. And I'm not, I'm not comparing us necessarily to trains or light bulbs as far as transforming, but digital infrastructure is here. It's not going away. All of us want our cell phones. And what I think, you know, in the world of Compass, we think about a class A developer. What's a class A developer look like? He embraces the place where he's going. He embraces his community and says, hey, I want to be a good citizen in the community. I happen to be a corporation. I happen to be a business. I happen to run a building, but no different than being a port or a harbor or a train or any other info, a dam, a water treatment facility. I'm going to be part of the infrastructure. I don't want to be a good community citizen in that infrastructure. Being transparent about where you go, embracing your community, offering to help in your community, being a good corporate citizen from a support, you know, and, you know, paying for the things that you're going to use, right? To us, that's all part of being a class A developer. We use that term internally to say, hey, how would you, you know, in the commercial space, people think of class A office space, and it means something. And we think the same thing about the data center space. What's a class A data center developer? They're open with their community. They're helping their community. They're a good corporate citizen in the community, helping not just from a infrastructure standpoint, but helping from an education, training, jobs, all of those things. That makes sense to me. I think speaking of education, I guess the other sense that I have is that there are some specific concerns that communities have about data centers, and then there's some amorphous ones that are not really localized, but are a thing. Like this Specific concerns that you hear about are things like water consumption, impact on electricity bills, things like that. And then there's some amorphous ones that are like, this is bad for my community, and I don't totally understand why I think it's bad for my community, but it's bad. And I feel like there's a big education challenge, right? You have to convince everybody that their rates are not going to go up, that the water consumption is not going to be an issue, that the noise won't be an issue, whatever it is. The specific things. And then you also just got to figure out a way to give this generalized sense of this is actually good for us and not bad for us. And I wonder how you approach the education, community education stuff. So I think you nailed three of the big ones. So we get asked about water. I talked about being transparent, secrecy. You mentioned infrastructure, the cost of electrical infrastructure. The other one is, you know, do you? Do I need this? Is this generally this bad for me? What's that big building over there that looks weird? Do I need this in my community? Let's go through them real quick. Water. So I'm going to quick compass commercial. We've been waterless cooling since the day we started. You know, the industry with GPUs has forced, you know, a higher, you know, a more dynamic heat rejection model. So liquid cooling comes into play. We just do it with closed loops. So we're not a constant user of. Utility water in the, in the marketplace. We think that's important. Um, frankly, most of the industry is going that way, but it's completely fair for people to ask the water question. There's things you need to talk with your developer, talk with the data center in your space and make sure that the water they're using is not coming out of your utility and it's closed loop in that regard. I think you largely handle the water conversation, um, paying for the electrical infrastructure for us. Um, we've taken it on ourselves to pay for the infrastructure that delivers power to. To us, right? Those generation that's owned by, you know, generally the utility, then there's transmission and distribution, um, and then the substations to get your site powered. Um, we've taken the position from our very beginning that we pay for anything downstream to get to us, um, and, and put that on our bill so that it doesn't impact rate payers. Not, and then we take that one step further. We also want to be a resource to the marketplace. Um, I saw a video you did about your, um, electric car sitting in your house. And how much, uh, storage was in that facility in the car. Uh, I think you compared it to, um, uh, wall units from Tesla. Same thing, right? I built a data center. I got tons of generation on site. Me and my customer paid for that generation. Not only do we want to pay to get the electricity to our campus, but in, in the worst times, we want to be a resource to the grid. We want to be able to generate, uh, or, you know, or turn off our need for grid power and generate it ourselves. So we try to collaborate in the markets and say, Hey, how can I be? How can I be a resource for the grid in your most strained times, whether it's snowmageddon in Texas or whether it's summer July in, in Phoenix, uh, we want to be able to say to the, to the, as a class a developer, we want to be able to say to the, to the utility provider, as well as the customers around, Hey, not only are we going to pay it our own way, we also want to be able to help the grid in the, in the toughest times. So that's water, that's electricity. And then the, Hey, I'm just not sure data centers are good for me. Um, it's really a big education, right? You know, I, this is not my phrase. Uh, I read it on an article yesterday, the analog American, the American that doesn't realize they're, they're reading about data centers on their phone and they're tweeting about it on their phone and saying, I don't want it. And all of that happened in a data center somewhere. Yeah. Um, all, all of the things that you're reading and all of the things you're tweeting and saying you disagree with all took place in a building somewhere called a data center and, and not, not to be ugly about it, but just to say, Hey, realize we're not going backwards. We're not going to get away from a digitally. Connected world. And how do we partner with that digital infrastructure in such a way? How do we partner with our communities in such a way that doesn't scare people? Hey, this is a good thing for you. Um, it's a good thing for, for the, for the business. It's good thing for your community. And can we do it in a way that makes everybody feel comfortable and safe? Raymond, this was, uh, a lot of fun. And I, I, I will say, I really appreciate the way that you frame this, uh, both from the labor perspective and the community perspective. I think, uh, I think there's a lot, it's going to be, it's a. It's a tough road for data center developers right now, just, and, uh, from both the practical perspective of getting enough people and then from the, you know, perspective of getting enough buy-in and, and licensed to operate. So there's a lot of learning to be done there. So I appreciate you thinking hard about it. Yeah, absolutely. It's, it's important for us, important for us as a business, but certainly important for us. I mean, we could take it all the way to, you know, um, national security, right? I think, um, having a robust digital infrastructure, I think makes us a better country, a safer country, and it's, I think. You can't under, you can't overstate how important it is. Yeah. All right, Raymond, thank you for your time. It's been great. Thank you so much. Raymond Hawkins is the chief customer officer at Compass Data Centers. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. This episode is produced by Max Savage-Levinson. Mixing and theme song by Sean Marquand. Anne Bailey edits the video version of the show. Stephen Lacey is our executive editor. All of our episodes are now on YouTube. Subscribe to Latitude Media for episodes of this podcast and Open Circuit. You can find the audio version of the show anywhere you get your podcasts. I'm Shail Khan, and this is Catalyst.