Thoughts from the 2012 Renewable Energy Finance Forum

It was great to be in San Francisco for another extremely successful meeting of the Renewable Energy Finance Forum, an occasion that gave me the opportunity to chat with Dennis McGinn (holding the book in the photo to the left).  Dennis is president of ACORE, the American Council on Renewable Energy, the organization putting on the show; he’s doing a great job in forwarding the cause of a sustainable approach to the generation and consumption of energy.

Here are a few ideas that have came to me in the course of the two-day event:

1) The mayor of Palo Alto told us that his city is doing a great job in terms of achieving its RPS (renewable portfolio standard). Not to minimize the accomplishment, but I should say that I hope so. If one of the most progressive and affluent communities in the U.S. can’t get this done, I’m not sure who can. Their rate-payers are sufficiently enlightened (and wealthy) that they’re willing and able to pay a slight premium for clean energy, and that’s really all it takes, where the cost of solar and wind have come down to very near the point of grid-parity.

2) I’m glad to see that CSP (concentrated solar power) is still alive. I had a good talk with a VP at Abengoa, the Spain-headquartered solar thermal giant. Very smart guy, but not smart enough to know how to deal with a young guy who joined our conversation and suggested that Abengoa adopt his concept of using supercritical CO2 as a working fluid. If one of you chemistry/physics geniuses could comment on the pros and cons of this approach, I’d appreciate it.

3) Though there are a few technical people here, as the name of the show implies, most of them are bankers, lawyers, insurance folks, and other business people who, a few years ago, had never heard of renewable energy. As a result, the concept that we have a duty to move fast and hard in clean energy to combat climate change does not receive unanimous approval.  I’ve run into several people who see renewables as a business with no more bearing on “doing the right thing” than selling hot dogs or greeting cards.  I find that a bit strange.  Yes, this is a business, but the world’s a better place because it’s here.  I would think anyone involved would take a certain delight in that.

4) Apparently, there is some controversy about allowing the electric utilities to make money on their investments in energy efficiency. It certainly seems like the right thing to me. We need to create incentive for the utilities to sell less energy, not more.

5) I spoke with Dave Belote, a gentleman with an extremely powerful presense who had enjoyed a long and distinguished military career. He was the commander of Nellis Air Force Base (sitting on 14,000 acres and employing over 12,000) before trading in his uniform for a suit, and working at senior levels in the Department of Defense. After his excellent talk on the U.S. military as a customer for renewable energy in which he referred to the fact that certain Congress-people are dead-set against this, I asked him what he thought laid behind this. He said, “There are few people in government who fairly and honestly look at the world in terms of what’s best for the people. Almost all look through the lens of the interests of the people who got them elected.” Needless to say, that’s a tragedy.

6) The cost of an installed watt of PV is much higher in the U.S. than it is in Germany, as the Germans have made PV deals quite routine. In the U.S. huge legal fees are common, as each deal is minted uniquely.  Apparently, American lawyers like things the way they are.  One of the presenters went out a limb with this statement, made, as it was, in a room filled with dozens of lawyers — at a conference sponsored by their firms, some of the largest on Earth:

The real problem with the solar market is that lawyers go out of their way to write documents that are deliberately ambiguous, just so they’ll have the opportunity to argue about them and bill more hours.  We don’t have business negotiations any more; we bicker over legal language that shouldn’t have existed in the first place.

Ouch.  And here I thought I had a knack for insulting certain groups of people; this guy made me look like an amateur.

7) At Friday morning’s “networking breakfast,” we passed the microphone around each table, enabling each of the hundred-or-so participants to stand and talk for a minute or two about his/her background, purpose for attending, etc. Of course, I took the opportunity to promote 2GreenEnergy as a forum for identifying good ideas and taking them forward, uniting entrepreneurs with investors.  I also told the audience what I huge supporter I am of ACORE’s myth-busting website: EnergyFactCheck.Org.

8) I was reminded how common, nearly universal, stage fright is. There were no real meltdowns at the breakfast, but I noticed that the guy who spoke after me was trembling so violently that a moment after he had passed the microphone, he reached for a raspberry from his plate, tried to place it into his mouth, and nearly put it up his nose.

Again, good conference.  I’m not a finance guy per se, but I always feel right at home at the show, and I certainly learn a great deal.