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Interview Transcript NRG Systems - Jan and David Blittersdorf  NRG Systems of Hinesburg, Vt., designed such efficiency into their buildings that electrical consumption is just a quarter of that of similar-sized conventional buildings. We spoke with founders Jan and David Blittersdorf. Q: There has been a lot of interest in your headquarters building in Hinesburg, Vt. Are you getting tired of all that interest, that desire to see what you are doing? Jan Blittersdorf: I don't know if we're getting tired of it. We have done a lot of it. It has been a remarkable surprise, at least to me, how much interest has been in this building. I didn't realize that was going to happen. I truly did not see that demand coming. We did this for our own sake. It was our chance to walk the talk and do what we've been promoting for decades in the renewable energy industry and actually participate in it.. It seemed like a good idea, and it's turning out to be a good hedge against rising energy prices and a good business move to do this for the future. Those were really the reasons that we did it. The demands from people came pretty quickly, after we opened. The phones started ringing, people starting requesting tours, and we literally had to sit down and say, "We better think about this. This is not our business to do this, but it does seem like a pretty important thing to do, when people are knocking down the doors, saying can we come in and see what you've done." And so we had a management team meeting to decide whether or not we'd make it part of our business model, and said, "Yeah, let's give it a try." So we set up a tour structure, and trained some tour guides. And I'd say we've put at least 2,000 people through the building in two years, if not more than that. A lot of them are college kids. They're environmental groups, they're elderly groups, they're trades people — a whole range of people. The public has asked to come in. Q: What could possibly be attracting thousands of college age students to trek out here and tour the facility? JB: What they're telling us is it's the example that they're wanting to see. They're impressed with the fact that we produce our own power here on site. They're impressed with the energy efficiency, the materials we've used, and they're looking for examples. People are telling us they want to learn how to bring it back home, or into their own facilities, and to see how it can be done. So that seems to be the attraction. Whether or not it's manufacturing, I'm not sure if that's the important piece, so much as the building piece of it and the new way of doing business and living. Q: This building is one of only four or five of its kind. JB: There are other buildings that are LEED gold certified, but in the industrial category. At the time, we were one of four. There might be one or two more by now, but at the time we were one of four. Q: In the whole world? So, you didn't have the luxury of precedents. JB: It was a learning process. David Blittersdorf: Yeah, that's a good question. There wasn't a lot of examples of manufacturing companies doing that, but we had our dream. We had our goals, and we have a different sort of look, probably, at the future world than a lot of folks, basically because we believe the world to be a finite world. We're limited on resources going forward. So, the old models don't always work Most manufacturers don't put a lot of money into their infrastructure, their buildings, beside their buildings for the process, so they don't worry about how efficient they are. Their whole thing is making sure the building will function for their process. We looked at it and said the building had to function for a lot of the pieces of the business, which are the sale folks, the marketing folks, the admin, the engineers. Everyone is going to be living in this building, besides just the manufacturing folks. And so we wanted to do a totally integrated building and look at it very holistically from the biggest picture. Q: Holistically — what does that mean? DB: I think there's two pieces. We sort of have the physical functional part, and then the emotional, or the aesthetic and other parts of the business, which is more towards employees. You know, how do they feel about the building? And the functional part is how does it perform energy wise and functionally. And so we bring it together. You bring it into a whole system and say what works for both because you can design a very energy efficient building — it may be a square box, it may be super insulated, it may have no light in it, and it would not work for people. So you have to bring it out and say, "Okay, how do you do both? How do you make something that's really nice, very comfortable to be in, but have your other goals addressed, too?" But the other piece that's big is productivity of people is higher in nicer environments. And so we're trying to make the nicest environment that they can work in because that productivity has huge bottom line impacts to the business. So if you can, what, at almost 60 people, if you avoid two hires per year, those dollars are saved, and it helps your profitability. But you can also use those dollars to make a better buildings. Q: An efficient box – you're saying that designing the buildings to work for people has in fact financially worked for you? JB: No question. Our turnover's almost zero. Q: How about absenteeism? JB: Minimal. People enjoy coming here. They have what they need when they get here. It's a comfortable environment. They just feel better about working here. We always joke about the day we moved in, and one of our employees said, "I don't care if I left my wallet at the old buildings, I'm not going back." There's just been a remarkable sort of lifting of spirits of people that lasts. Q: You can do well by doing good is a reality then? JB: I want to go back to your original question of the motivation of why we did this, and the fact that there's not a whole lot of examples in the world. One of the biggest picture pieces of this is we're in the renewable energy industry and some sort of fossil fuel crisis is good for business for us. We used to joke about it. David used to say, drive fast, use gas, because it brings on more sales to the renewable energy industry. But the flip side of that coin is an energy crisis out there is going to also effect our business. If we can't run it, because our supply chain is effected or our power supply is effected as a result. Prices are way up, then its gong to be hard for us to meet that increased demand that's going to come our way as a result of these problems. So we had a long conversation about what is our next facility going to look like. Do we want to build another inefficient tin box, or do we want to do something a little bit different? And that's where this idea came from — that we better prepare ourselves to be able to continue operating in a reasonable cost effective way. And that was the original idea. What David did, is he came up with sort of a power budget for the architects, and said we want this building to consume only this amount of energy, and that drove a lot of the design decisions, what you need to do to stay within that power budget. Q: Now, what is it you do exactly? DB: What we make here at NRG is make a number of sensors, instruments, towers and software to measure the wind. We need to measure the wind, because the industry needs to find out where the wind is, and how much there is because that's the fuel. It's just like trying to prospect for oil. You got to find out where it might be and figure out how much oil might be in the ground. So, we're the folks out there, helping the worldwide wind industry find out how much wind they have so that they can go and build wind farms, put in the wind turbines and generate power. If you don't have enough wind, you don't have enough fuel and it won't be economical. So what our customers are doing is trying to find the windiest sites in the world first and then, over time, you get the windiest ones developed with wind farms. Then you find the less windy sites, and a progression of time. It's pretty tricky to find the windiest sites, but our equipment is used to do that. The other piece is, these sensors are used to control the wind turbines after they're put up into wind farms. So these go on wind machines themselves and control them, point them into the wind, and shut them down. So there's two parts of the business, finding the wind and then actually helping the operations of the wind turbines. Q: When you decided to make this building, what was the message you were hoping you were going to get through, and has it achieved that? DB: I didn't have a message for the outside world. The implied message is that you need to build buildings differently then we have in the past. And I think we have gotten that across. That it is possible to build a building that can generate 80% of its electricity here on site, have it be comfortable, have it work. The example has been shown. For me that's the message. We didn't go into this for a marketing reason. We went into it for our own selfish reason. We wanted to protect ourselves from future oil price increases. The problem with global warming and CO2 means you're going to probably have increased energy prices and taxes against carbon and so on. So, we went into it pretty naively saying we just want something good for us and our employees, and we're going to be one step ahead of our competition by doing the right thing now. And then inadvertently, everyone is coming back and saying, "Oh, you're doing this great thing," and now its getting out there. Some other people may do a little bit of green washing and say, "Oh, we're just going to do this for marketing reasons," but we do it for internal reasons. Q: You just finished the buildings and business is so good you're now expanding. JB: This was supposed to be a 10-year plan. We intended to have NRG be able to function here for at least 10 years. It's not like we're out of space. We can add a second shift. We can, you know, do other things. But we've grown faster than we thought we were going to, and we're already feeling tight in certain areas. Our growth has averaged over 30% per year the entire time we've been in business. This year we're at a 42% growth rate. And so, yeah, these are the reasons why we're expanding. Plus David started a new venture, so that new company needs a home as well. Q: Can I ask what the new venture is about? DB: I'm starting a company called Earth Turbines to make small turbines for home use. It's been my dream for 25 years. Basically, back in 1982 when NRG was started, we were broke, so we had to do something that you could start with no money, so that's where NRG started. A few pennies on the desk, and we said, "Okay. what can we do for the industry?" Because the industry was just starting in 1981- 82 with the first wind farms. So it was an easy entrance fee. Basically zero. You could get into the business, and there was a need for wind measurement equipment back then, so that's how we got in. But my dream always has been to build small wind turbines. In college, I built two small wind turbines and worked for a company for a year designing small wind turbines. So that dream has always been there, and there were ideas in my head for 25 years of how to do it right. So that's what I'm launching now. Q: What the best part of what you do? JB: For me, it's just the excitement, the passion for renewable energy and watching it come of age. When we started in this business, people would ask what we do, and when we told them, they'd shake their head and say, "What's wind power…or can you make money at that…is that for real?" Occasionally you still get those questions, but not very often. People understand that wind energy is real and a main stream industry at this point. That's been a real exciting thing for me, to watch that transformation happen. We get resumes from people that say, "I don't care what I do, I just want to work in the renewable energy industry. Do you have a place for me?" Those kinds of resumes never came in even 10 years ago. So, just that sort of public mind shift, that renewable energy is real and growing. I read a book about coal not too long ago and about this problem we have, of how do you encourage young people into industry. The author of this book said, "Why would young people want to go into a dying industry like, you know, coal mining or other things that they just don't see any real growth or real excitement?" The renewables is just the opposite. Why wouldn't kids want to get into something like what we do. The future is so bright for it. It's just exciting to be part of that and watch it happen. DB: After founding NRG back in the early ‘80s, a lot of the drive came from the Arab oil embargo of 1973. I became interested in wind power. So, for me, after all these years to see wind actually taking off, after a long delay… It should have happened probably 30 years ago, but we're now starting down that road. Some people say, "Well the business is maturing, should you sell your company now because you're done?" No, this is just the beginning. We're very happy that it is just the beginning after all this effort because the groundwork's been laid, and we're really happy to see it now is maturing, becoming a mainstream business, a mainstream energy source. Q: You must have big huge wind turbines on the ridge of the mountains, can we not achieve some of the same ends by having 1 million wind turbines? What's your opinion on small-scale? DB: What your asking is, is there either or as far as our energy sources, can you just do small wind vs. large wind? Can you do solar vs. large wind, or nuclear or whatever? The big picture in terms of the energy problem is really huge. And what I mean by that is our finite fossil fuels that we're using are basically millions of years of solar energy stored, and we're going to use those up in 200 years. So, looking at the history of the world, in 200 years we're going to use up millions of years of solar energy. To replace those fossil fuels with renewables is basically impossible, so what that means is you have to have every renewable source you can get. The small wind, the solar on your rooftops, the large wind, the hydropower, the geothermal, all those things must happen, plus conservation and efficiency. What we mean by conservation and efficiency is, if the world is going to have 9 billion people, up from 6.4 billion to 9 billion, we do not have enough energy. We must conserve, and we must cut back energy use. The United States, our population uses so much energy per person. If the whole world was using our energy uses, we'd need 6 earths. Right now, it's impossible. So looking ahead we must decrease usage by probably about 5 times, to be 1/5, and then we can have renewable. Every renewable has to be in place, to sustain the world, our civilization. That's a very pessimistic or dire situation. But the reason I talk about it is, because you can't do the "either-or's" — conservation, efficiency, all renewables have to happen in a big way. Conservation means going to mass transit from an auto-centric world. China cannot go to a car for every person like the United States or Canada has. It will not work. We don't have enough energy. Basically, we are living on a savings account called fossil fuels. And the savings account is being depleted. Peak oil — we're half way done on the oil, which is 40% of the world's energy. So when you look at it that way, you quickly go to the biggest picture, and say, "What do we have to do?" You go to all these things, and you conserve, but our policies and stuff are not in line yet. And with global warming pushing that, we can't use the coal we have, because we are going to destroy the planet through global warming. So we have to do all these things, and at the same time say, "We're not going to use this one finite fossil fuel that we have left, which is coal. We can't do it." Q: We're curious to hear you talk about the design process. Who gets around the table with this building? JB: The design process. Well, the first step was to choose the right team. First time around, we interviewed several architects, knew that we wanted to find one who understood green building. There's a lot of architects out there who want to say that they do, or who would like to, and are jumping on the bandwagon, but we chose our architect, Bill Maclay, based on the fact that he had 20 years experience actually creating energy efficient buildings, and that was very important to us to have that expertise built in. Starting with that, he assembled a team, brought in an energy consultant, brought in mechanical engineers, brought in the people that he chose to work with. Then the design was a joint process of his ideas, our ideas, talking to employees. We actually asked everybody what they would want in the next phase of their working. So, it was a gathering of the right people. Q: What kind of things emerged? DB: I think some of the lessons in the first building, we had to balance. So, Jan sort of was on the architectural side and I was on the energy side. We have the best of both worlds being combined. We both have these common goals. The first building was the first building we ever built, but going forward, now we know how this process works, we know the lingo. The second time some of the team members changed. Q: Kudos on the strength of you personal relationship. Q: Anything you would like to say to our viewers JB: I guess what I would like to say to people is they need to take a long-term view when they're looking at either renovating a building or building a building or starting a project like this. I have a frustration with capital budgets vs. operating budgets. Very often people will cut the corners when they're building something because they think it's too expensive. They're not looking forward enough to see how their monthly living expenses, or in the case of a non-profit, how their operating expenses are going to be decreased by maybe the little extra that they put in on the front end. And I think we need to change our thinking about capital and operating budgets. I think going forward in this finite resource world, it's absolutely worth it to put in the extra. It only took us 8-10 % more, somewhere in there, on a cost basis to build this building vs. a conventional building. That's a very easy trade-off to make in today's world, to know that your hedging a bunch of costs down the road and reducing your consumption of resources. DB: One thing that has changed in our world, that most people probably don't realize yet, is that long-term energy prices bottomed out in the year 2000 and they're heading up, up up, up. That's a trend that's a 100 plus year-old trend in modern economic history. Year after year, the economists would tell you energy prices are going to go down, commodity prices will go down in the future, and we all got used to that. That's been our business model, that's been the model that homeowners have used — just wait until next year, things will be cheaper. That has changed and most people don't realize how big a change has happened. Going forward, you have to start looking at that fact that you probably will have increasing energy prices. They'll be bumpy. You'll have some dips, but on the average you'll see prices go up and up and up, and so anything you can do today is more cost-effective than waiting. So the message is, you know, put in insulation in your house, change your driving habits, get a more fuel-efficient car, use mass transit. These things are all going to help you in the future and make you life easier to deal with. You will have more resources available if you do these things. JB: You know, I would just like to follow-up on that, too. David and I worked with a non-profit in the last couple of years, who was renovating a very large Victorian house in downtown Montpelier. The discussion we had with them, you're opening up the building, you're renovating it now, so do the things you have to do — replace the old steam heating system with an energy efficient boiler, put in the insulation, do the things that you have to, good air quality, whatever you can do while the building's opened up anyway to make this building functional for the next 100 years. It's been around for 100 years. It's beautiful; the architecture's incredible, and I have a worry that some of these beautiful old homes are going to become dinosaurs. So isn't it wise today to renovate them in such a way that they can stay around for another 100 years? Return to top |
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