Interview with Anne Marie Denman, Excelsior

Catherine: Hi, I’m Catherine McLean, Founder and CEO of Dylan Green. And today I have with me Anne Marie Denman. She’s the co-founder and partner at Excelsior Energy Capital. Thanks so much for joining me today.

Anne: It’s my pleasure. Thanks, Catherine.

Catherine: And you are based in Minnesota, St. Paul?

Anne: Yeah. Just outside of that, Excelsior, Minnesota, we got very creative with our name.

Catherine: It’s funny, I was going to ask you that, actually, where the name came from. So for those who may not know, please tell us a little bit about yourself.

Anne: Listen, as you mentioned, co-founder partner at Excelsior, a lawyer by training, made a less than ideal lawyer in my estimation, much better commercial person, but started off my career as a lawyer at Jones Day in the oil and gas and M&A space, moved to Bracewell with a focus on oil and gas as well, and really came to fall in love with the energy space through oil and gas, surprisingly. And from there, started to see the writing on the walls and the energy transition and moved to Terraform Power, where I am assistant general counsel, and then moved to the commercial side. And from there, that’s where I met my co-founders and partners at Excelsior, which I’m sure we’ll get into the story of that here.

Catherine: So you began your career as a White House law clerk on the Council of Environmental Quality Office of the General Counsel before working at law firms, as you mentioned, Bracewell and Jones Day. How did you make the transition to managing director and assistant GC at Terraform?

Anne: Yeah, so the CEQ role was during my time during law school, whereas in DC. And so that was for, interestingly enough, between the Bush and the Obama administration, and experienced both, which actually was pretty informative of some of the perspectives we’ll talk through today. And then all joking aside, I just, as I was a lawyer, I appreciated the training, I appreciated the perspective that it gave me, but I found my brain wanting to connect dots outside of just the legal realm, and not just, not to belittle the legal realm, I found my brain wanting to look more broadly as to the why, and to understand how things work. And so, as I was experiencing my time, kind of leading the legal team there for acquisitions at Terraform, getting more exposed to the financial aspects and what made the business tick. What were the broader risks, the broader opportunities, and with that, shifted into the managing director role at Terraform, reporting into Chris Mowgli, who was president of North America, who then became my partner here at Excelsior.

Catherine: And what ultimately, so, and you covered it a little bit in your statement just now, but what ultimately motivated you to start Excelsior Energy Capital, specifically?

Anne: So, myself and my three cofounders, so Chris Mowgli, Alex Ellis, Ryan Fegley, we all met and worked together at Terraform Power, which we then sold to Brookfield. And at that point, we were considering staying on and participating in the leadership team at Terraform post-Brookfield ownership, but we had seen this wall of foreign capital in particular trying to access the clean energy, the energy transition space in the United States, and really struggling to take this relatively low cost to capital and participate at any scale in the U.S. because it’s a pretty complicated market, right? You have the tax credits, you have federal and state law, you have local, you have all of these dynamics, you have ISOs, you have utility dynamics, all of these that you would have someone like our Incurring Bachelor of Development Bank of Japan who would be looking at this and working through, thoughtfully, the diligence of an asset and by the time they were ready to move forward, the asset would have been sold already, right? It’s a very fast-moving market here in the United States and I didn’t fully appreciate the complexity of that and what it would mean for someone who’s not living and breathing this every day to be moving at the pace that the market tends to move. And so, with that, we saw this need to connect this fairly fragmented and very large clean energy market in the U.S. with this wall of institutional capital and so we started the fund with the Development Bank of Japan as our anchor investor in 2017.
We kicked it off before they came on board. I give a lot of credit to my other founders who had kids at the time. I was a solo operator at the time but we all sort of jumped and took the sleep of faith together before we had any capital and we really learned the fund business. We didn’t start Excelsior initially clear on what sort of structure was going to be important but as we started working with capital partners like Development Bank of Japan, it became clear that it was really important that we form a fund so that we could have discretion over the capital so that we could move quickly and thoughtfully and efficiently. And as probably better than most, this world moves quickly. Everything is shifting. It is the transition. So, not only is it important to move quickly but to be constantly keeping a pulse on where it’s going to ensure that as you’re thinking about making investments, you’re really looking not just down the road but around the corner. And that’s something that with our fund structure we’re able to, as founders coming from the industry having an operational energy lens, we’re able to process with our team fairly quickly what’s evolving and to be making those decisions on investments being as tapped in as possible to not just the reality of today but where it’s going.

Catherine: So, 2024 was a banner year for you all. It included a 2.2 gigawatt energy storage agreement with Fluence, a 7.5 gigawatt energy storage agreement with LG, a solar plus storage sub portfolio sale to BlackRock, a 2 gigawatt agreement with Helene, and the launch of Lydian Energy. What work are you most proud of having achieved since you founded the company?

Anne: Great question. I’m tired just thinking of all of that. We have an incredible team. We truly have an incredible team. I think about the launch of Lydian and before that just the launch of the team at Excelsior and what we’ve done. We only have 25 people at Excelsior. Lydian’s a much larger endeavor, but we by design intended to be lean, mean, hopefully not mean in the negative sense, but we have really been able to look at where the market is going and digest that and move quickly where we saw opportunity and need. So as you kind of listed out, a big portion of those activities that you listed out was a real focus on domesticating our supply chain, like most others. Well, so to answer your question, I think in many ways, the people that have been willing to take this leap of faith with us, both at the fund level and now with Lydian Energy, and that’s probably what I’m most proudest of, that these folks have seen something in what we’re doing that they’re willing to tie their fates to us. And as an outshoot of that, what it’s allowed us to do is to really move forward with what we were envisioning from the onset, which is to see where the industry is going, how the world and the macros are shifting and to move and to be on the front end of that.
So again, going back to that list of items that you mentioned from last year, it’s big focus on really de-risking our supply chain, like many others in the industry with the double whammy of COVID plus the start of the Ukraine-Russia War, we saw real pain points in our supply chain. Anyone else doesn’t know, which is the cost of ship modules was more expensive than modules themselves. Certainty of supply chain was just not there. And so even before the clarity that the IRA brought in terms of incentivizing the domestic supply chain, we were seeing the need to really get deeper into the supply chain, to not be a taker, but to really be driving, getting closer to the product and understanding where the supply chains were coming. And so, because we had been thinking and looking at that, we were able to move very quickly when the IRA was passed to lock down domestic content. We’re very proud of the work we’re doing with Fluence for the first domestically produced battery cells coming out of Smyrna, Tennessee. Very proud of the work we’re doing with LG out of their Michigan factory that is producing domestic cells and also with Helion out of modules domestically produced out of Minnesota, that not only allows us to benefit from the domestic content adder, but maybe almost more importantly, it gives us certainty of supply. And it just takes away this existential threat that is very difficult to anticipate, geopolitical concerns. I’d like to think I have some control over it, I don’t.
And so, interest rates and macro factors outside of our control, that’s what keeps me up most and or not keeps me up most. Those are the things that I don’t like risks that we have no control over. So that’s allowed us to get closer to the source of something that in the past, we haven’t had as much direct involvement and control, bring it closer to home and in consequence really shore up certainty that gives us the ability to then create certainty for those buying power from us.

Catherine: But I think it’s interesting too, like you’re also contributing to U.S. jobs, like U.S. for sure, like safe, good, well-paid jobs.

Anne: Oh, listen, the beauty of a lot of the work we do here within the industry is you get to both make money, which is our goal, we’re for profit and that’s our commitment to our investors, and create all of these other values. We’re cleaning up the grid, we’re providing more for the manufacturing by motivating that, but we’re also providing jobs in the local communities where we are deploying these batteries and these modules, and not just creating jobs, but we’re increasing the tax base by paying material taxes, what we’re providing there, which is really lifting up economies. I don’t want to overstate this, but I should say at least participating in a material way in the economies in which we are deploying battery and solar projects.

Catherine: Yeah, so as we’ve discussed, you have over a decade of experience in traditional and renewable energy in mergers and acquisitions, including leading over $5 billion in wind and solar transactions. What are some of the key challenges you face while leading these transactions? You’ve touched on it a bit, probably interest rates.

Anne: Yeah, I think the hardest and the most interesting is people. As we think about all of these transactions, and I think taking it more broadly from transactions to really any sort of relationship where whether that’s with our limited partners, with our buyers of power or buying projects, or entering into these supply arrangements, so much of it is about communication, finding partners that you can have clear communication and that look to find really communicate shared goals and or parallel goals. That’s been something that in the last goal you take negotiation classes and you can go online and figure out. What I always struggled with early on in my career was trying to figure out how to create the outcome. What I’ve learned during this 10, 15 years of doing this is the more I can lean into something that is both grounded in reality for me, as well as authentic with how I function, which is fairly direct. I don’t have a good poker face, for better or worse. I’m fairly impatient by design and by birth. With that, leaning into that in terms of being able to be direct with counterparties and partners to say, here is what we need, and here’s what we can and cannot do. That does open you up to some potential that that information is used against you. You have to be thoughtful and careful about that. I think in all of this, what’s been one of the biggest joys of my career and evolving and getting the crow’s feet is really just enjoying what we do now, which is to find and to partner with good people who have complementary skill sense or products or capital to what we’re good at and how to create more value together. That’s been something that, at least for me, has been increasingly the focus of what we do.

Catherine: Speaking of challenges, you were recently featured in the Wall Street Journal pro-private equity article. This is quite a title. Hunger for electricity seen keeping renewable power investment flowing under Trump. Can you please elaborate on why you think investing renewables is the bipartisan issue?

Anne: Going back to the conversation around jobs and about taxes and all of this, the vast majority of where we’re investing, where we’re placing these solar wind and storage projects are in energy communities, which are largely red locations. That was, I think, in part by design with the IRA or whether by design or happenstance, that is what is happening. That’s happening at the manufacturing level, it’s happening at the project level, where this is creating an industry that is allowing for really good paying jobs, material tax increases, where these projects are being located, you’re moving from agricultural tax assessments to power assessments, which is really increasing the tax rate. Maybe this is very obvious, just increasing the national supply of energy. As we think about the takeaway politics, takeaway where we all might disagree, what do we, at least as I think about the things that we all probably agree on, is we want to make sure we’re safe. Us, our kids, we’re safe. National security, and global security, but let’s focus on national security, and let’s focus on energy. I think the Secretary of Energy, Chris Wright, said something like energy is the basis of everything else. I’m misquoting him, but basically everything starts from energy, and so we need energy. As we think about how we ensure for our country a reliable, affordable, resilient, sustainable grid, I think it’s hard press to find anyone that doesn’t agree on that.
As we look at that and say what we’re doing and participating, not just because they’re in red states and so therefore it’s a red and a blue issue, but also because solar and wind are the cheapest form of energy, even without subsidies, and it doesn’t require fuel, so it’s very, very domestic. The solar is literally where we’re located. The wind is literally where we’re located.
We don’t have to go abroad to get that. As we think about that security of energy, keeping the costs low with solar and storage lots, do batteries which allow both more solar and storage to be that lowest priced energy, being able to be shifted to other parts, as well as the value of batteries for evening out the haircut. I think that’s something that very few people would actually disagree upon, and I think there’s been this kind of traditional concern that it’s one or the other.
In fairness, I kind of get it pre-load growth. For a long time, it was just load was flat, and so you’re all kind of vying for different parts of the same demand, whereas now we’re seeing this take off and away. We haven’t seen since, I don’t know when, and everyone can debate whether that load growth is 10x or 4x or whatever that is, but everyone agrees there’s a massive load growth. We really do need all of these pieces to come together to ensure that we don’t increase the cost of electricity in a material way, that we don’t put the security of the grid at risk, and that we don’t slow down the ability for load growth, especially with AI or manufacturing or any of these industries that are really important for national security, that fighting over what kind of energy doesn’t start putting at risk any of these shared goals. In our mind, we need all of it, right? I don’t think we need coal, but we certainly need base load until we get nuclear or other forms. We absolutely need gas, we absolutely need solar, we absolutely need storage, and we need wind. There’s no reason we shouldn’t be pulling these all together in my estimation.

Catherine: So staying on the same topic of politics, a topic close to my heart, DEI, has become a very controversial term recently. You’ve been outspoken about whether or not DEI policies translate to a lowering of pure merit standards. Can you talk a little bit about your perspective on this?

Anne: Sure. Yeah, so when we started drafting our DEI policy at Excelsior, we didn’t have one for a while. I was sort of like, I’m a gay woman, doesn’t that count for our DEI policy? I know that that’s maybe, but in some ways we were a small team and we said, hey, this is important to us and it just is. But then as we started to grow and as we started having portfolio companies, it became clear we needed to draft it. I kind of took the lead in doing this, and as I started looking at DEI policies from everyone and their mother, I honestly was a little bit turned off by it all, because these policies, one felt like a lot of them felt like it was rinse and repeat or more platitudes. So it really had us starting to think, why do we actually care about it? There are a lot of things that we individually care about, but as a business, why do we care about it? And so we did a lot of self-reflection before we drafted a policy to say, does this really, of all the things as a company we can or should be putting our effort and what does this do for our stated business goals? And so as we thought about that, it became really clear that how we functioned, just as a partnership myself and my three founders and as a team, the goal was to create an environment where we had a bunch of smart people that came from different perspectives, different areas of expertise, different ways of thinking about things because of different just different upbringings in different environments. Yeah, that allowed us to be looking at risks and opportunities in different ways. And we sort of had developed this habit of everyone trying to bring their whole brain and experience to the table and sort of were pretty direct with each other about like, that doesn’t make sense to me, that makes sense to me. And just, we had to kind of do that, right? Especially myself and my three co-founders. And so what we found was that, what it allowed for was for us to actually ensure that we didn’t have this sort of vacuum or feedback loop of thinking, because when my partner who co-leads the investment team, Ryan, we have very different initial approaches to most things. And because of that, I think it’s one of the greatest strengths is that we actually don’t see the world the same way at first glance on most things. And what it requires is that because there’s a basis of respect, we sort of trust the other’s thinking and perspective and say, I don’t understand that at all. That makes no sense to me. And so we like to sit down and think through it and understand the perspective. What that’s allowed us to do is to ensure that we really are looking around the corner, that we’re not just saying, oh, you think like me, great, let’s do that, right? It is this group think that happens? And frankly, this happens when you have people of shared perspective or upbringing experiences, whether it’s all women, all men, gay people, all straight people, right? You have this. And part of the controversy, I think, around DEI has been that we’re in a business environment where it has been traditionally men driven leadership. But I think it’s a really, really human drive to surround yourself with people that you relate to, that you want to get a beer with, that you want it right.

Catherine: And so I do see a lot of it.

Anne: Yeah. And I would say it’s not bad. I think that’s super normal, right? And I think what, as we were developing the DEI policy is saying like, let’s not say like, that’s bad, but let’s be conscious of saying that if we just hire people like ourselves, we’re going to develop a investment team and invest in a team that just is seeing the world from one slice. And it’s not going to give us the opportunity to really bang up our ideas, to make sure we’re seeing different ways of what are the risks here? How do we look at the world? And that is, and so we developed a DEI policy that was structured around what we experienced in reality. And so when I mentioned being outspoken about DEI, I actually, I think there’s something healthy about trying to take away the fat of it. Like the same thing with green washing, ESG, I don’t mind if it’s healthy we kind of all know it when we see it, when it doesn’t feel authentic, when it feels like it’s dressing. So I think like this backtracking of a lot of companies on this, to me, it just indicates they never actually believed in it. And for me, it’s not about whether you’re a good person or a bad person and good people believe in DEI and bad people don’t. It’s like, let’s have a discussion and a debate around whether diversity of experience actually creates a good business, a better business outcome or a better whatever outcome, whatever industry or space you’re in, whether you’re in politics or business. And so I like, that’s just sort of the way, but I worry that we’re sort of throwing the baby out with the bathwater because I sort of respect the sort of knee-jerk reaction of like, this is not authentic, these DEI policies or ESG that sort of were like rinse and repeat and never from a, from a business or a whatever industry perspective, whatever sort of environment perspective, never kind of came from an authentic conviction that they had value and get rid of the fad. And then listen, I’m in the business of making money, right? That’s what we’re doing. That’s what we’ve committed to our investors.
DEI and our DEI policy that talks about this, that it creates a space for all of those perspectives to come in and a space that, that ensures that not only are those perspectives desired, but also that when you hear a perspective that’s not like yours, that should actually alert to like, maybe I’m not seeing something versus they’re wrong, I’m right. And there’s something to learn here. Anyway, I could talk about this for decades, but that’s sort of the lens by which I kind of have been looking at DEI with all of this back and forth.

Catherine: I just find that, I find it really, really interesting. And I think that the way you’ve explained it is very, is very interesting. I mean, because the way I’ve always thought about as a diversity of thought, right? It’s a diversity of experience. But also just having people that are able to contribute to a conversation that may be a blind spot for another person. Because there’s so many, there’s so much studies on how companies are just more profitable than what more diverse they are. So it’s like, we just, like you said, if we just sort of strip it away and get down to like, why it’s important.

Anne: So why? You know, that’s where I think sometimes we do ourselves a disservice. When, when we see there’s a value, but don’t articulate the why. And then everyone and then sort of there’s this like pressure to get on the bandwagon or you’re viewed as not progressive or not a good person or whatever. And, I would encourage companies not to just say great, like, oh, man, you should put a DEI policy back on, but the “why,” right? These things don’t last the test of time, if they’re not grounded in reality and grounded in conviction. It’s just a fad. And it’s just, in my mind, it actually doesn’t serve our purpose.

Catherine: Yeah. As a leader in the renewable energy industry, how do you approach fostering diversity and inclusion within your teams?

Anne Marie: Yeah. And so I think there are a few things. One, I think just from a gender perspective, maybe not gender, but from a breaking apart sort of traditional roles and responsibilities as a human. There is female, man, parent, other obligations. I think for us, we really try to create this concept of flexibility and accountability, which in my mind, from allowing both more women to participate and stay, as well as to encourage men to participate in home life or parent life, or whatever is important to them life, in a similar fashion that women have been afforded the opportunity to do. And I say that in that, and you guys can take this out, because I’m formulating my thoughts here in real time, but that by creating flexibility, it allows people to value the time that’s important to them while getting rid of this concept of hours creates an outcome. And I’m not suggesting we go to a four-day week, and we work incredibly hard, lots of hours. But for me, I try to drop off my son at 9:15 in the morning, and I show up to work at 10. And I leave every day at five when I’m not traveling in order to be there to relieve my nanny. My wife travels quite a lot as well. And now I usually am working at five, and I’m usually working at 10 p.m. But that kind of flexibility, and I’m just giving from my own experience, but within Excelsior, we try to create that flexibility to allow the team to really craft their schedule in a way that allows them to be responsive to their other needs at home or elsewhere.

Catherine: So it sounds like you treat them like adults.

Anne Marie: Imagine! But the hard thing is that we have a small team, so it’s a little bit easier for us because there’s a deep, deep trust built among the team, and accountability is easy to track because we have clear KPIs and you hit them or you don’t, right? And so we don’t really care if you’re working at 5 a.m. or you’re working at 2 p.m. as long as we’re accomplishing our goals.
I do think for bigger organizations, it can be a little bit more complicated. But I think that flexibility with accountability, at least for us, has created this space for any of those who are parents in particular, traditionally been a role born by women, but more increasingly seeing men bear that as well, which is incredible in my mind, that it creates an environment to allow for that while being like, allow them to be incredibly successful at what they’re doing here and not translating FaceTime or specific hours to success. I think the other thing is we tend to be a very, very direct team. Like, we don’t pull punches when we have different views on investments or perspectives, but that is underlying a deep respect for each other. And that is the premise. And so as we talk about diversity and inclusion, this space by where, as ideas come in, that there’s one, a sort of fundamental desire or a willingness to think that a alternative view must be stupid or wrong, but that to try to withhold that reaction or that conclusion and creating space to have that conversation. And then the fact that we might view things differently at the onset, it’s just part of the process to get to a better shared outcome. And so I think that allows for that environment, and we don’t do it perfectly, right? But that environment allows for an encouragement of bringing in ideas and even showing at the top, again, my co-leader of investments, we visibly in front of the team have different perspectives, and we kind of work through it so that there’s not this view that there’s one godlike character that is always right, or this person’s always right. We really try to encourage everyone to bring their whole brains and self to their jobs and to have an environment that is needed in order to accomplish our goals here at Excelsior.

Catherine: Well, I mean, just what you said about not doing it perfectly is just, you know, to me, like building a company, it’s like a living, breathing thing, right? It’s going to evolve and change organically, and just giving people the space to be able to express themselves and feel like they’re respected. I mean, I just was talking to somebody today, and because of her title, she’s not allowed to talk to another person, because only if you have a certain title could you then contact that person. I’m like, oh my goodness. This is why I work with myself. You know, these kinds of companies, there’s plenty of them, and it just shows you like having somewhere like, you know, I’m more familiar probably with Lydian than Excelsior, but you start to get reputation quite quickly for being certain people want to work, and it then becomes a lot easier to attract the all-stars.

Anne Marie: That’s right. Yeah, that’s been, I was going to say, it’s something about once you have a more diverse set of people, it’s sort of self-fulfilling. So the first is the hardest, right? Or the starting of it is the hardest. But this is where I think with any company is this question of don’t do something you actually don’t have conviction around, just because to check a box, have the hard conversations, and does this actually create a better outcome for my company, for my business, and don’t state that goal unless you have conviction around. Because if there’s not conviction, it’s not, people are going to feel it, and it just, it also I think does a disservice to the whole thing, because then it’s just window dressing, and I don’t know, I don’t want to get hired because I’m a woman.

Catherine: Yeah, no, I totally agree with you. So the final question I have is, what advice you would give to women aspiring into leadership positions in our sector?

Anne Marie: This is going to sound a bit cliche, but it’s true for me, which is to try to be as authentic as possible. I think it’s really tempting to try to become someone, and listen, we all evolve and grow, and that’s part of it. I think part of the benefit of having the growing wrinkles is that you should just settle into your skin, into your existence. I have found that where I am most effective is in settling most into myself and being able to communicate from a place of authenticity and conviction, whether that’s talking to investors, or talking to trying to buy a project, or talking to whomever, our team. And everyone has different styles, everyone has different approaches, and to sort of lean into who you are, versus, and it doesn’t mean we shouldn’t push ourselves, doesn’t mean to not be uncomfortable, but to lean into that within your natural personality, your natural gifts and talents. That’s the best I have.

Catherine: Yeah, and I mean, that’s the thing, it’s sort of a blessing and a curse. It’s like, I look back at my younger self and I’m like, oh, she was so skinny. And I think mentally, I’m so happy, like I’m so much happier. It’s a shame that you can’t have both, but leaning into your authentic self. But leaning into your authentic self is just so right, because I do feel like the older I get as a woman, I feel less apologetic, like I feel like I can be more of who I am as a woman. And so it’s trying to get younger women to feel that. I do think it comes with time, a lot of this, an experience.

Anne Marie: Yeah. And where we both have our own companies, there’s a luxury that comes with that, because there’s not the concern of, is my paycheck going away? We have other concerns as to why our paycheck is going away, but it’s not someone else having a different view on us. And also, just as you get more power and whatever that means, it is easier to be your authentic self because you have less exposure. I mean, at some points you have more because there’s more to lose. So I appreciate that. I also think that going back to advice to younger women is if the environment which you’re in is not allowing you to lean into who you are at core, then it might not be the right place. And so, because I do think there are places that will not safely allow you to be who you are, to say, I need to leave at five to go pick up my kids, or I want to bring my wife to this event. There are places where that is not safe, or welcomed or accepted. And so if it’s not, maybe that means that might not be a place to flourish.

Catherine: Yeah, I think that’s right. And I think also one of our superpowers, and we have many, is our gut instinct. You know, I think a lot of times we know that you try and sort of still make it work. You know, that it’s probably not where you can be.

Anne Marie: Yeah, you feel it in your shoulders, you feel it in your arms when something isn’t quite settling.

Catherine: Yeah. Well, thank you so much for talking to me, Anne Marie. It was really great getting to know you. And I just really appreciate everything that you’re doing in our industry. Just a role model for a lot of people. So thank you.

Anne Marie: I appreciate the time with you. Thank you.