Talking Engineering (3) with David Jones
Episode 3 of Talking Engineering: An Interview with David Jones, July 2020
David graduated in Mechanical Engineering from UCL in 1985, and over the course of his career, he has spent more than 30 years in the power and renewables sector. From 2001 to 2004, he led Shell’s wind energy business, transforming it from experimental scale to commercial scale. Subsequently, he created Allianz Capital Partners’ renewables investment platform and built it into a leading financial investor in the sector, with over €4bn invested by 2017.
David is a Chartered Engineer, a Fellow of the Institution of Mechanical Engineers and a Member of the Chartered Management Institute. His current endeavours include the role of Operating Partner at Asterion Industrial Partners and membership of the External Advisory Board of Shell New Energies. He is also a director at vertical farming company Fischer Farms and on the board of Gloucestershire Wildlife Trust.
JH: David, you studied Mechanical Engineering at University College London – what appealed to you about mechanical engineering over other engineering disciplines?
DJ: At school I wanted to design Formula 1 cars and this led me towards mechanical engineering. However, at university, I realised that I was never going to have the technical skills to realise this ambition and my goal shifted towards managing business outcomes for technical and commercial success.
JH: How did your career develop from there?
DJ: At the end of university is the harsh reality of needing to find a job! I was keen to become a Chartered Engineer and looked for graduate training schemes which provided a solid a basis to achieve this. I joined the Central Electricity Generating Board, the government-owned entity which managed all conventional and nuclear power plants and the national transmission system, privatised in 1990 to develop into the collection of UK power companies we know today. This provided a two-year in-depth training in all aspects of power generation and transmission which provided the deep foundation knowledge for everything I’ve done since.
My first real jobs in the CEGB were in the areas of construction project management and project planning and, with the privatisation, I moved to business planning at National Power in the areas of construction and then optimisation of the operational portfolio. This role led to a three-year stint in Portugal, acquiring and setting up the operation of a power plant which was National Power’s first international venture and the first project-financed independent power project in continental Europe. This ground-breaking project taught me (and a whole raft of other investors, lawyers and bankers) how to structure a power plant project for the new de-regulated world and many people, myself included, have built their careers on the back of the knowledge gained during this project.
Following National Power, I spent relatively short periods working on European business development for US independents Sithe Energies and El Paso, developing new investment opportunities in the power and gas sectors. In 2000 I was approached by Shell who were looking to build a wind power business and had struggled to find the right person in the wind sector who would fit into the Shell corporate culture. I recall speaking at a wind conference soon after joining – I was the only person wearing a suit, so could appreciate Shell’s cultural challenge. The wind sector has changed beyond recognition in the 20 years since and is now a completely mainstream industry dominated by large industrial and financial investors. Shell gave me the opportunity to build and run a business as opposed to building and running projects which is what I had been doing previously, and it was on this track record that Allianz approached me in 2004 to set up a team to invest institutional capital into European wind power.
The original plan was to invest €300-500m over 3 to 5 years, but by the time I stepped down in 2017 we had invested over €4 billion in wind and solar assets in both Europe and the US. For a long time I had planned a less intensive “portfolio career” from the age of 50 (I was actually nearly 54 when I achieved it) and I am pleased now to be able to bring my knowledge and experience to a fairly diverse set of interesting ventures, without actually being responsible for the day to day management and delivery of quarterly financial targets!
JH: And what lessons have you learnt over the course of your career?
DJ: I probably have enough material to write a book – indeed this has crossed my mind. However, with the audience in mind, I will just put forward two. The first one would be to choose a career and sector that actually interests you. We spend a large portion of our lives working and it’s a lot more enjoyable if you’re interested in what you’re doing. The second is not to plan your career too specifically. Just start in your chosen sector, work hard, achieve things and opportunities will present themselves. Some of them will be good, others not, analyse them and be ready to take a risk if you like the opportunity. They won’t all work out well but, when they don’t, pick yourself up, dust yourself down and keep going!
JH: From 2001 to 2004, you led Shell’s wind business. How urgent is the need to invest more in renewables, and what is the significance of large oil and gas corporations such as Shell and BP starting to do this more and more?
DJ: While Coronavirus may be the World’s biggest short-term challenge, climate change remains its biggest long-term challenge and the Energy Transition from carbon-producing sources to renewable sources is the key to addressing this. I am not a climate scientist but by far the weight of scientific opinion is that the situation is urgent and needs to be brought under control before a tipping point is reached, resulting in large parts of the World becoming uninhabitable for humans as well as many other species. The significance of the oil majors committing to the Energy Transition is huge. They now fully recognise the risk of “business as usual” and are pivoting towards a sustainable future. Their global reach and capital expenditure capabilities, particularly when leveraged with global institutional investors’ capabilities, represent the best chance to achieve the necessary changes within a reasonable timescale. But transforming the global energy system is not a quick job – it will take many decades – so is a challenge worth joining for people considering career options now.
JH: What drew you to wind energy in particular?
DJ: When I started in renewables in 2001, wind was simply the technology which had production costs closest to conventional generation and allowed investments to be made which delivered an acceptable return to investors, given the risks involved. Wind remains attractive today, but solar and other renewables are now investable and have become major clean energy contributors.
JH: From the perspective of the work you do, how important is the role of engineers in the world today?
DJ: Power production, whether conventional or renewable, is a business based on technology and, with renewables, there has been and remains a continuous drive to make it cheaper. That means continuous improvement of the technology in terms of scale, efficiency and capital cost to bring down the cost of electricity produced. It’s engineers that achieve this, so their role is vital to delivering the Energy Transition and tackling climate change. More generally, we seem to have shifted from an era dominated by finance to an era dominated by technology – this can only be good for engineers!
JH: What engineering problem would you like to see solved in your lifetime?
DJ: The one which has long seemed distant but now seems much closer is effective and economic large-scale electricity storage. This is the key to the Energy Transition as it allows variable and uncontrollable renewables supply (no power from wind turbines when there’s no wind, no power from solar at night) to be matched to the demand needs of consumers. For the energy supply system to be 100% renewables generation, the scale of electricity storage needs to be huge. Battery technology is improving at an incredible pace and with it the storage costs are falling rapidly but there’s still a long way to go before we can realistically see a 100% sustainable global energy system. That’s the goal I’d like to see realised and, in my opinion, it’s worth dedicating your career to.
A note from the writer: After the interview, I was very fortunate that David had some time to further discuss some of the points he had touched on in his answers. In particular, we talked about the urgency of transitioning to renewables, as well as the challenges faced when rolling out new technologies. We also discussed the prospect of hydrogen fuel cells being a realistic option in the short-term. Finally, I asked him what advice he would give to young people thinking of studying engineering, or going into the renewables sector, to which David gave the pertinent response of ‘just do it’! I hope you enjoyed this interview and if you would like to read more discussions with engineers, you can find the rest of the series here.
– Jasper Hersov
About the author