Developing partnerships for a sustainable future with Hugh Kelly

Jacqueline Conway  00:00

The organizational peak is a perilous environment. It’s more complex and challenging than anything that’s gone before, and as a consequence, both executive tenure and corporate longevity are decreasing to survive and thrive at the perilous peak, executive leaders need to balance their functional leadership, a focus on execution with enterprise leadership that is ensuring the organization adapts in our new world. That’s what we’ll be exploring in the advanced executive leadership podcast. Welcome. I’m your host. Jacqueline Conway. I’m the Founder and Managing Director of Walden Croft, a consulting practice dedicated to helping executives and executive teams anticipate, navigate and lead at the perilous peak. When I think about how we get out of the climate crisis, I think most about collective action, and how it might be the myriad small decisions that people make to start innovative companies, to choose to work for founders with a vision that’s inspiring and for a cause that leads us to a better place, and how all of those positive actions, if there’s enough of them in scope and scale, may be one route to us making a difference to the dire situation that we now found ourselves in, and that’s why I’m thrilled to be joined today by Hugh Kelly, co founder and CEO of Simply blue group. Hugh shares how his passion for engineering, love of the sea, and commitment to tackling the climate crisis led him to co found a pioneering company in renewable energy, from picking raspberries at age eight to spearheading innovative projects and floating offshore wind and sustainable aviation fuel, whose story embodies entrepreneurship, resilience and the drive to make a difference. And then this episode, we dive into how simply blue navigates the challenges of a high risk industry collaborates globally and remains steadfast in its mission to create a sustainable future. He was also just back from COP 29 and he shares his experience of what that was like, which is a much more positive story than I’d have imagined, given the slating that it’s had in the press. Whether you’re curious about renewable energy leadership in dynamic industries, or strategies for balancing innovation with impact, you won’t want to miss this episode. Let’s get started. First of all, I’ll just say thank you so much for coming and joining us on the podcast. It’s great to have you here, and it would be lovely, Hugh, just to begin by telling the listener a little bit about you and about your background and how up to the point of you being the CEO and co founder of simply blue. Delighted

Hugh Kelly  03:17

to be here, and it’s been an interesting and long journey getting here. I suppose you look back on your life and you realize that maybe you did a little bit more than you felt as you were going through it. People have referred to me as an entrepreneur. I never felt I deserved that title. I think that’s something that other people confer as they as they look on people. But I suppose the work ethic started very early. I remember my first job. I was eight years old. I was picking raspberries and stripping crab claws for a local restaurant. And my father was an entrepreneur. He ran his own business. He had for many years. I went to college and I did civil engineering because I knew it’d be something I would love, even though I wasn’t sure what direction my career might take after that. And at college, I met a gentleman called Sam Roach perks, who has become a lifelong friend and now a business partner. And in college, we had great fun starting up little businesses. He tells me that our first business was selling my notes, but I don’t remember receiving any of the proceeds from that business, so I’m not sure that was our first one together, but we’ve moved on. I graduated, he graduated. We both went into engineering for just a couple of years, he headed off to the Far East. I came back to Ireland and bought into a family business, a company called associated marketing. And it was a very interesting business model. We helped companies to scale internationally. So we would work with people who had great products, great. Production, and we would add to that our skills in finding partners through which they could scale their businesses internationally, whether those be distributors or agents or other forms of partnership. And I suppose it was a great testing and learning grant from me for my later life in renewables, where the scale of infrastructure projects are such that partnership is a key element and a key ingredient to success in the renewables business and project development. Sam, meanwhile, went off to Hong Kong and did a variety of different things, but did ultimately develop a very successful business and property development, which in the context of simply blue and our project development is a very complementary and appropriate skill set as well in associated marketing. As I look back, I had a fascinating experience over the years. We worked with people in construction products. We worked with people medical devices. At one stage, we were helping people to sell Fairy Doors, literally, children’s toys and pet treats selling the fifth quarter the animal the samples in the office didn’t put down so well with the rest of the team, pig snouts and pigs ears and lambs ears lying around the place. But they led us to meet, you know, and for me, to travel to many different countries and make meet many different types of people, and that opened up other opportunities. I had an interest in a joinery business north of Adelaide in Australia. I was involved in an online casting, web based business out of Melbourne and but ultimately, in 2011 Sam and myself had been looking at a number of different projects to do together. We’d never actually worked together, but we were very keen, and always had been to do something together. And we looked at coffee shops in India. We looked at home bars. But in 2011 Sam came to me with an idea around wave energy, and it appealed to both of us, I love the sea. I’m a sailor. Sam lives beside the sea. We’re both engineers, civil engineers, and we are both acutely aware of the climate crisis and how serious it is. In fact, in 1990 and I’m giving away my age there, in 1990 in my final year in college, my thesis was on global warming and rising sea levels, and at the time, nobody was talking about it. There was very, very little evidence. In fact, there wasn’t enough evidence to carry the argument. So my thesis and my research focused on identifying what if any consensus there was around global warming and rising sea levels, and I documented my consensus views, and it said that by 2050 if temperatures go up by 1.5 degrees, a fifth of Egypt, a quarter of Bangladesh, parts of Southern Ireland, East Coast in the United States, would all be compromised by rising sea levels. And as I’ve watched over the years, since those predictions and the trends that were forecast haven’t varied. And so we both felt that this was a business where we could actually make a difference, and a business that needed people to try to make that difference. And so in 2011 we established simply blue first is simply blue energy, ultimately simply blue group. As we broadened our interests and we started examining wave energy. Now, wave energy is very challenging technology. So in 2016 we decided to add offshore wind, in particular, floating offshore wind to our portfolio, because it was an area as a new entrance that we could still get in bottom fixed offshore wind was well established, and we built and we start a team around us that is absolutely phenomenal. I’ve never worked with people in any other industry, like the renewables industry, where people are doing it because they believe in it, because they realize how urgent this is and how important it is, and a lot of my time as a leader now is trying to manage exhaustion and telling people to stop working so hard and go home, because attendance and commitment is absolutely incredible, and it’s infectious, and It makes working so much easier. One of our commitments to ourselves when we set up the business is we only wanted to work with people we like. We’d had enough of stumbling across opportunities where perhaps that wasn’t the case always, and I have the highest regard for all of those who work with us today. So we embarked on our journey, and we developed our first floating offshore wind project called Erebus in the Celtic Sea off Wales. And on the fourth of March 2020, just as COVID hit, we signed our first joint venture with total energies. That might be considered our first success, but we. Interesting for me, as I look back, actually, our first success was securing a financial advisor who would take on our project and try and market it, and that was a company called Green giraffe who said, We believe in you too, and we are working with green giraffe to this day. They’re one of the boutique financial advisors, specialists in offshore wind and in renewables more generally. And it grew from there. And we established subsequently a JV for Ireland with Shell, and then a JV in Scotland with Orsted. And then when shell left Ireland, EDF stepped into their shoes, and those JVs continue to this day, and we’ve expanded our geographies also to include Canada and Iberia and Greece. It’s this is a high highly challenging business, high risk business. Not every project we start will finish. We’re at the sharp end of project development, the highest risk end. But we’ve developed a portfolio now that is a diversity of projects by scale, by technology, by location and by development status. Some are early stage, some are later stage. And at the same time, we looked at other opportunities. We went into aquaculture. We met a fascinating gentleman called Christophe Harwood, who’s now our Director of Strategy, and he came to us with an idea to transform the Scottish salmon industry. It’s a work not yet completed, as we try to secure consent, but he’s identified a technology that can be brought from Norway that could actually double the output of the salmon industry in Scotland, while removing the problem with lice and removing the problem with waste and dramatically reducing fish mortality to a negligible level, and that is what we call making an impact. Now we face quite a bit of resistance to change in that industry, and change always faces resistance, and some people misunderstand what we’re trying to do, but I’m confident that we’re staying true to our values and the motivations for why we set up simply blue, to take a difference, to make courageous decisions, to do it with integrity, and to try and make a serious, serious impact. And then the third, a third strand of our business has now grown to be a significant pillar, is sustainable aviation fuel, sustainable fuels, and that is another area where we believe we can make an impact. We set up simply blue as a blue economy project developer, the blue being the oceans. But as we looked for more offshore wind opportunities, we realized there was an opportunity also to explore what all of that power could be used for, all of that clean energy. And we discovered an amazing opportunity, a confluence of key criteria for a successful sustaining, sustainable aviation fuels project in Nova Scotia, north of Halifax, where we’ve also enjoyed incredible support from municipal, provincial, national government, from the local communities, who see a fantastic opportunity here to play a part in the in the fight against climate change. There are many challenges facing the renewables industry, but there is no doubt that the fight we’re having is really, really urgent, and people regularly refer to it as a climate emergency. My frustration is that the word emergency seems to have lost its meaning. It can take three to five years to get an offshore wind project permitted. The last coal fired coal fired power station in the UK closed just three weeks ago. Fantastic news, but it was really interesting to reflect that it took three weeks to permit that project when it was built. Now, during the Second World War, the Royal Air Force built 500 airfields, and as far as I know, there were no delays with permitting. It was an emergency. That is what we are in, and that is why what we’re doing is so important. We need to move quickly.

Jacqueline Conway  14:03

You’ve talked a bit about what simply blue, the areas that simply blue is in, but what is the nature of your work in those areas?

Hugh Kelly  14:13

So simply Blue’s role is to initiate projects. We find the right locations, we find the right opportunity, and our aim is to de risk projects to the point at which larger companies, like boiling gas or utilities will join us on the journey to bring those projects to fruition. And that means bringing them, initially to a point we call fit final investment decision, and then through construction and into operation.

Jacqueline Conway  14:42

And in some ways, you as an organization, the impact that you’re having is much greater than your size. I mean, you’re still a relatively small organization, particularly against the kind of totals or EDFs of the world you’re you’re able. To do this in a in a much more lean and nimble fashion.

Hugh Kelly  15:03

Yes, simply blue is a relatively small business. We have about 65 employees, and as a small business, key to our any strategy that we develop has to be nimbleness. It has to be speed. That is the competitive advantage that we have over those with much bigger balance sheets, with longer track records and big brands, speed is critical to our success and the ability to respond and to pivot, as we did from wave to wind, as we did in introducing new strands to our business that are still consistent with our core values and our core vision and mission, and as we’ve had to do in more recent times, because offshore wind has gone through a torrid period where governments have pulled back from their commitments. Oil and gas that was always perhaps a somewhat reluctant participant in the industry, has seen the opportunity to maybe defer or delay their investment and commitment to that sector. So we’ve again had to adapt our business. We’ve had to employ that advantage of speed, to move from an expansionary mode to much more when focused on delivery, to move from a business that could form partnerships quickly and form new joint ventures and establish new projects to one that has become a learning organization that leverages our experience and allows us to focus in on the best opportunities available.

Jacqueline Conway  16:33

You’ve been on in this process, you’ve been evolving your your product portfolio, if you like, what’s that been like in terms of the way that the business has evolved and leadership has had to evolve with that.

Hugh Kelly  16:49

But I mean simply blue started initially, of course, with just two people, myself and Sam, and we grew gradually. We were a small company, a tiny company, trying to attract the best. So in our culture, from the outset was the concept of joint ownership, and indeed, all of our team to this day have share options in the company. Bureaucracy begins to introduce itself as you scale and as you join with other companies. They have rules. They have requirements that are very important, but to add to the structure that we need to put in place, and it was part of the growing pains of any company as it goes from small to medium to a little bit larger than medium, as we had to scale up the central functions in our business, around legal, around commercial, around finance. I suppose the challenge when you do that is to try and maintain the same culture, and we’ve done that by keeping the fun. I would like to think that simply blue remains a fun place to work. I was at COP last week, and while I was there, everybody else had signed up to the Pacer app, and every office was trying to out compete the other to see who could walk and get to cop before he did. And there’ll be a very significant ward of a dusty wooden trophy at Christmas to the office that wins. We call it the challenge because when we got it made, first challenge was misspelled on the front of it, and it’s become a symbol of fun. We also bring our team together once a year for an event we call Ardmore, which is a small village in the south of Ireland where Sam comes from, and that is a mixture of working and fun. And it grew out of the fact that, as a company, we grew up during COVID. So from day one, we always try to employ the best people, and we paid little regard to where they were located. And that was easy when everybody was working remotely, but you have to put in systems and and processes and and make that extra effort to bond and bind a team when they’re all remote, or when many are remote, we have, at one stage, we used to joke with more offices than people. I technically that was never quite true, but it felt like it, because we were dispersed across the globe. I think we had picked 18 languages been spoken in a company of under 100 people.

Jacqueline Conway  19:25

So let’s turn our attention, because you’ve talked about being at COP. So cop just finished last week. It was in Azerbaijan this time. What was your experience of that? Tell me what that was like.

Hugh Kelly  19:38

Last week, I went to my first cop ever. It was in Baku Azerbaijan, and I had been warned that cop is a very different type of vent, and the warning was well made. I spent my first day orientating myself and wondering, had I entered a bubble that was disconnected with reality. As I encountered, primarily NGOs and a certain number of government and organizations and associations, but with the help of many friends in KPMG who had invited me to go to cop to speak on one of their panel, my case in particular was was a great mentor on how to get around cop I started, and with each day, got more and more out of it. How it’s structured is there are big panel sessions where governments speak, and most of us can’t get into those. We can watch them on TV. But there is a delegates Hall, a delegates pavilion with over 200 stands with representatives from different countries, different associations, and in the main not companies. And on each of those stands, there’s between 15 and 30 seats, and every one of those stands runs talks each and every day for an hour at a time. So that’s 1000s, literally 1000s, of talks. And for the first few days, I spent my time arriving at a stand to discover I just missed a talk I would have loved to have listened into. So you’ve got to network. You’ve got to talk to people. People pass on guidance. You’ve got to watch your LinkedIn, you’ve got to scan your QR codes. You’ve got to build up your itinerary and make sure that you’re there in time to hear that talk that you wanted. And those talks are small and intimate. People are very open, and you ask a question. Afterwards, somebody else asks a question, you end up talking to the people beside you, rather than people giving the talk. And you start to network and make connections across the globe, meeting incredible and like minded people who are all trying to achieve the same, and without hesitation, offer their assistance to contact you again after cop to share how they overcame certain barriers and challenges, in case it’s of help to your industry sector. And that level of engagement, commitment, integrity and genuine is what I came away from cop with, and I realized it is a unique meeting of minds, and one I would love to attend again. Well,

Jacqueline Conway  22:09

that’s so interesting that your own personal experience of it has been so positive, which in some ways is in quite kind of stark relief to the media who have said, you know that the agreement will, I mean, there’s lots of kind of gaps in the agreement because the agreements weren’t made. There was, there was a big argument about whether Petro states should be allowed to host or attend cops about the finance deal. So your, your experience seems quite different from, you know, I mean, I obviously wasn’t there. I’ve read about it in the UK press. They were much more disparaging about what actually came out from it from a agreement point of view,

Hugh Kelly  23:04

my focus at COP was more micro than macro. I guess many were there, and certainly the media was listening to what the government said to each other, and the NDCs are vital. The agreement of those targets by nation states is critical to progressing the fight against climate change. At the macro level, my focus was more on how I was what I was hoping to get out of cop was more at the business level and to observe and to take the temperature, because one can fall into despondency very easily, but we can’t afford to this is not a task we can put off. So I found the networking incredibly valuable. I found the fact that nobody was talking about America and what happened in the recent elections fascinating. There was an attitude that, fine, they’re going to go their own way. But we are not going to stop, and the rest of the world is going to push on and hope that they, you know, if there is a pullback from renewables, as is anticipated under the Trump administration, that we hope they will come back and join us. But we’re not going to stop. We’re going to keep going. There were seminars on the great wind reset, how to crack offshore wind and how to accelerate its development. There was a meeting I attended with Chris Stark, who’s the head of mission control for the UK Government, and a former minister, Chris skidwell, who talked about their determination to address things like the obstacles in permitting and how to kick start and drive forward the delivery of clean power by 2030 that has been set as a target for Mission Control by the new UK Government. There were talks on insurance, because I see insurance as a key enabler of renewable. And the delivery of projects of our scale. Who’s going to ensure our projects? These are massive projects with wind turbines the size of the Eiffel Tower sitting on platforms that weigh between three and a half and 5000 tons, miles and miles out to sea. And the assurance industry has an incredible role to play in de risking and keeping the working cost of capital down so that they can be delivered. And at COP, I heard stories from that industry that I’d never heard before at a seminar run by a group called Howden. They talked about how and they gave one very small example, but it resonated to me as a consumer, also that in the UK, now in London, you can ensure your electric car battery separately from your car so that you don’t need to worry about buying a second hand electric car anymore, because you can ensure the battery coming up with creative solutions to help the adoption of environmentally friendly measures by citizens, because only citizens will drive governments, and only governments will drive industry, because industry needs to compete with other industry, and it’ll only do it in a level playing field, and its government’s role to set a level playing field, and its citizens role to challenge government to do that.

Jacqueline Conway  26:12

It’s so interesting to hear you talk about things in such an enlivening way, and it’s interesting that word you used about despondency, because it is very for those of us who obviously, we have clients in the renewable sector. We do a lot of work in that area, but as a normal citizen, it is easy for me to feel despondency. I know that the professionals, colleagues and and others that I that I spend time with, do feel some of that despondency. So it’s really enlivening to hear you talk about it in a way that is much more optimistic. I guess

Hugh Kelly  26:59

it’s kind of you to say that I speak optimistically. I believe we can’t afford to speak any other way. It’s determinately. Is perhaps. I don’t know if that’s an English word, but it’s with determination that I try to speak because, as I said, I’ve been studying on and off the impacts of climate change and potential impacts of climate change, since I was a student, and this is simply too serious a topic to not take on. And there are some talks about AI at COP now I don’t know a lot about AI. I’ve used chat GBT a few times, and I’m sure that in due course, I’ll become as familiar with it as everybody else, and it will become ubiquitous. But what I did one night when I was in COP I went back to my hotel and I typed in a question into chat GBT as the quickest way of researching an answer. And the question was, what were the challenges faced in the late 1800s to introduce electrification to domestically, into homes in Britain? And it spat out a fascinating answer. And if you removed the question and then tried to guess what the question was, it could be, what are the challenges facing the roll out of renewable energy today? Wow, the same vested interests when they wanted to get rid of gas lighting, the oil and gas industry were up in arms. They didn’t want electrification. People were dying from electrocution and from fires, but the citizens had decided they wanted the convenience of being able to flick a switch, and all of the other benefits of electrification, and they hit problems along the way. There was the divide between urban and rural, and until rural electrification was introduced properly, it divided society initially more than it probably brought it together, but the problems were overcome. So if we’re facing exactly the same problems today. There is precedent that they can be overcome. It just needs sufficient commitment.

Jacqueline Conway  29:08

And do we have that commitment?

Hugh Kelly  29:10

Do we have that commitment? The young people I talk to have that commitment? Do governments have that commitment? It depends on the young people, and it depends on all of us as citizens going out there and taking a longer term view. I do think there is a significant challenge in asking people to take a longer term view. People are more worried about what’s going to happen tomorrow and will they have dinner on the table? Will they be able to put petrol in their car? So I believe the key to unlocking that is working out how to reward people for the right behaviors today that will deliver the right outcomes tomorrow. And I think more creative thinking is required around that yes,

Jacqueline Conway  29:51

yes, and so you can find those incentives for the short term, but it does require some people. To be thinking much longer term. And I was struck by one of the things that you and simply blue see around a focus on future generations, create a sustainable future, and then importantly, and be a good ancestor. And this is this, this piece around being able to look beyond what’s immediately in front of us. We can’t expect everyone, particularly those people who are struggling to put food on the table or heat their homes or do any of these things, to have that longer term perspective. But leaders are in a privileged position where they are able to do that. And how do you do that? How do you go about that? In simply blue, how do you how do you do that? Because there’s, there’s thinking about, well, we want things to be better, and we know that we need to try and arrest the climate climate crisis as quickly as possible. But how you get there is actually much more nuanced. And the opportunities and challenges, and you’ve alluded to some of them already, in this conversation, is really where the sort of rubber hits the road, as it were. So how do you how do you think about the future in simply blue? How you working with it?

Hugh Kelly  31:21

Well, we’ve talked about how we need to reward behaviors, the right behaviors today to produce the right outcomes long term. And that is not we cannot place all that responsibility at the door of individuals, most individuals, many individuals, are not in a position to do that, and so we need to look to governments to take a long term perspective in the same way they would if they’re planning roads and motorways and rails for the future, they need to plan the same way in terms of renewables and so at simply blue, the contribution that we are trying to make to be good ancestors is to focus our business and our efforts on developing projects that will contribute to making that difference, and focusing our efforts on talking to policy makers and government and civil service and thought leaders in everything that we do to try and bring them Along also and where we have knowledge, share it, and where they can teach us, learn from nobody has a monopoly on knowledge. So we need to work together to come up with the ultimate solutions, but we would spend a lot of time, a lot of energy on stakeholder engagement, securing for our own projects a social license to operate, as we call it. I mean our offshore projects impinge on the livelihoods of fishermen, on shipping, on leisure users, on the marine environment and multitude of stakeholders are impacted, but also on talking very much with legislators and government to try and ensure that we can execute our projects and that the right frameworks are put in place to allow businesses like ours to deliver on our promises. We’re willing to play our part. We can’t do it alone. I would come back though to wanting to be good ancestors, unfortunately, and this is where the urgency and emergency comes in. We used to talk about our grandchildren, the more recent weather events and more recent hurricanes and flooding and other events that have occurred and the science that’s coming out all the time shows that we don’t need to worry about our grandchildren. We need to worry about our children, and in fact, we need to worry about some of the people, many of the people who work at simply blue, who are little younger than I am, but not that much younger. And we just need to be, and it’s simply blue we see our responsibility to be part of that conversation and not give up.

Jacqueline Conway  34:06

Well, that’s that’s a really nice, probably a really nice place to finish, Hugh, because I have found today’s conversation really uplifting because of the optimism, I think that I am reflecting that I can probably go into a bit of a doom loop about quite a lot of this and and so today’s conversation has allowed me the opportunity to see things from from a different perspective. And I think that the people who listen to the podcast, many in the renewable sector will find it enormously interesting and uplifting. If you found this podcast useful, then I think you’ll find value in my newsletter the perilous. Peak. It’s a digest for executives leading in a disrupted world. When you subscribe, you’ll discover why it’s a must read for so many leaders who already receive it, and it’s there that you’ll gain access to some of our latest thinking resources and tools that we are continually creating for you. Head over to Walden Croft newsletter to sign up. When you do, you’ll receive a complimentary copy of my CEO research report and how to respond to the challenges that executives are now facing. You.