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by Craig ShieldsPosted on Posted in Renewables - Business

It doesn’t sound like a piece of cake to be a CEO of a power utility. Sure, as we have discussed elsewhere, there are ways to lock in and hide profits, while staving off the world’s insistence that we migrate to renewables. But there are a great number of issues that make life extremely complicated for these folks.

Demand is declining, as technologies for energy efficiency and smart grid begin to reduce the overall consumption of kilowatt-hours.

Even the small incursion of renewables (especially solar) means reduction of on-peak (highest-rate) billing

Utilities will soon be in competition with the oil companies, as people begin to plug in their cars.

Most of the states have done a fairly decent job at legislating Renewable Portfolio Standards (RPSs) that force utilities to cut Power Purchase Agreements (PPAs) with solar and wind developers.

Overall: times must be fairly interesting at the utilities.

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by Craig ShieldsPosted on Posted in Renewables - Business

In the Renewable Energy Finance Forum session in which presenters from Citibank, Credit Suisse, Deutsche Bank, and JP Morgan, offered their observations on the industry, several pointed to the strategies that multinational oil companies (BP, ExxonMobil, Chevron, etc.) have vis-à-vis renewables. From the content of these talks, it became obvious that such participation is divisive – even within their own ranks — for a number of reasons.

While clean energy may be the way of the future, if you’re an oil company, it’s certainly the enemy of the present. Even the most aggressive repositioning of the oil companies as “energy companies” (BP as “beyond petroleum,” Chevron as “part of the solution” etc.) is such obvious PR fluff that it leaves most people with a very bad taste in their mouths about these entities’ sincerity and their status as corporate citizens.

On another line, from the standpoint of internal capital allocation, the return on asset stats associated with oil exploration beats the pants off the development of renewables. Thus prudent and responsible managers, who themselves are managed according to the short-term profits they drive, have only disincentive to push investments in renewables.

At the end of the day, we see a great ebb and flow, as internal arguments play themselves out.

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by Craig ShieldsPosted on Posted in Renewables - Politics

I was talking with a friend the other day who asked me about the political affiliation of conservationists.  After all, Theodore Roosevelt, the father of modern conservationalism, served as president as a Republican, and there is no doubt that even today, one can find many conservative republicans who work very hard to preserve our great gifts of nature.

Having said that, I believe that most of the more active conservationist organizations tend to endorse democrats and more progressive independents.  Here are the Sierra Club’s endorsements: http://www.sierraclub.org/politics/endorsements/.  And more radical groups like GreenPeace are obviously even less likely to endorse political conservatives. 

As it turns out, my friend is one of those rare birds who embraces the best tenets of both sides of the political fence.  I congratulated him on his ability to look at different, opposing ideas openly and thoroughly.  “Not everyone can do that,” I praised, reminding him also what Aristotle taught us:  It is the mark of an educated mind to be able to entertain a thought without accepting it.

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by Craig ShieldsPosted on Posted in Renewables - Business

At the Renewable Energy Finance Forum you’ll hear largely about the wins, where developers have taken the most mature clean energy technologies, addressed the many financial risk factors, and presented a can’t-lose package to a bank or other funding entity. That means that you’ll hear about solar (photovoltaics) and wind FAR more often than still-nascent technologies like geothermal, hydro, concentrating solar power, etc.

That’s understandable, since if people don’t make money bringing clean energy along, it’s not going to happen. And no one wants to take unnecessary risks, especially in this climate.

The point of “grid parity,” i.e., the point that an incremental megawatt of solar is the exact same cost as an incremental megawatt of gas or coal, is projected to occur somewhere between early 2014 and late 2018. This is based on the fact that although natural gas prices are low and are expected to remain so, the cost of PV is falling steadily.

When this happens, of course, one should expect an explosion of solar development. Even the utilities in the South (great progressive social thinkers that they are) who have routinely said, “Suh, if clean energy means mah costs go up one penny pah kilowatt-hour, we’re not intahrested,” will be buying and selling clean without a problem.

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by Craig ShieldsPosted on Posted in Renewables - Politics

PhotobucketI love some of the metaphors I hear in my travels.  And here’s an apt one, presented this morning by Mike Eckhard, president of ACORE (American Council on Renewable Energy, who hosts the Renewable Energy Finance Forums):

Proposition 23 is like a nuclear holocaust: an event that, fortunately, is unlikely – but if it happens, we’re all dead.

It’s paid for by a couple of oil companies in Texas, and has little support from anyone outside the oil industry – but it’s worded such that, if it passes, it will set clean energy back several decades.  I urge California voters to kill it, lest it kill us.

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by Craig ShieldsPosted on Posted in Renewables - Business

It’s always interesting to get out and interact with different groups who have specific perspectives on the energy industry.  And, to that end, I’ve commited to a certain travel schedule that will take me — either as a speaker or as a participant — to a decent number of conferences over the next 12 months. 

I enjoyed my trip to Boston earlier in the week, in which I listened to talks and spoke with the engineers at the IEEE Energy Innovation show (though they use the word “innovation” in a far different way than you or I; many of the presentations were so dry that some of their own people visibly had trouble staying awake).

But, even though I like working through the technology of renewables, I find the business practicalities far more interesting.  At the end of the day, the precise photovoltaic wave form produced by a breakthrough voltage regulator doesn’t matter if large PV projects can’t get financed and remain dormant at the proposal stage. 

By contrast, the Renewable Energy Finance Forum is a conference with dozens of different big ideas on which I’d like to present in a short series of posts. 

The first such “big idea” is that we talked extensively about subsidies for renewables:  the future of the Section 1603 cash grant, fixing the broken program of loan guarantees, and especially, carbon legislation.  For instance, many of the presentations included (parenthetically) the idea that we need a pollution tax.  The concept was an unaccented, glossed-over bullet on many of today’s presentations. (more…)

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by Craig ShieldsPosted on Posted in Renewables - Business

I’m up at the Renewable Energy Finance Forum in San Francisco today and tomorrow, with hardly a moment to breathe between the most interesting presentations I’ve seen in quite a while.  To be honest, this subject matter is really hard for me; I’m more comfortable talking about photon energies and thermodynamics, but I really do try to make the effort to learn to speak the language of tax equity and internal rate of return. 

Just wanted to remind anyone in the Bay Area who might be able to come to the SF Ritz Carlton and say hi to hit “contact” if you’d like to meet me.

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by Craig ShieldsPosted on Posted in Fossil Fuels

I sometimes glance back through my old posts here, to try to see 2GreenEnergy as I would if I were doing so through the eyes of the typical reader who had come across us Googling “renewable energy” or some such. Reading my own stuff, I might say, “Man, that guy sure is angry. He seems to disapprove of 100 times more people and organizations than he likes. Who is he? The Simon Cowell of the energy industry?”

I often think of the editors on another popular site on clean energy who told me when we first talked, “We advocate for renewables. And we advocate against nothing.” The implication, of course, is that a business website cannot afford to make enemies. I understand that; I feel some of that pressure myself.  But if the core purpose really is moving the world to clean energy as soon as possible (i.e., before it’s too late), I see a central problem with this innocuous approach. (more…)

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by Craig ShieldsPosted on Posted in Renewables - Business

Have you ever had the experience of getting to the end of a long day, looking back to breakfast, and thinking that it seemed like a week ago?  That was today for me.  The IEEE Energy Innovation meeting in Boston, a drive to Albany to meet with Canefields (paper from sugar cane waste), and a flight to San Francisco for meetings to that start early tomorrow morning . 

This morning in Boston seems like another lifetime.

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by Craig ShieldsPosted on Posted in Renewables - Science

As I mentioned, I’m back in Boston for a couple days, attending the IEEE Energy Innovations show, and meeting a few industry colleagues who happen to be in the this part of the world.  In a nutshell, the show itself has less relevance to our world than I hoped it might.  The breakout sessions are extremely technical – as I suppose I would have predicted.  But the main sessions are also a bit strange.  Here’s an example:

Victor Reis, Senior Advisor, Office of the Undersecretary of Energy for Science, spoke for 30 minutes this morning on the future of energy.  His principal message (actually his only message) was how appealing small modular nuclear reactors are: how safe, scalable, and relatively inexpensive.  He explained at great length how the DoE itself could be the first customer—going into elaborate detail about how they had been the first customer of massively parallel computing many decades ago—leaving the audience scratching its head to ferret out a meaning.  When he ended his talk half an hour later, in which he had projected the future of energy in the US out 40 – 45 years, we all realized in collective horror that he had done so without ever mentioning renewable energy once!  Not a world about solar, wind, geothermal – nothing.  Just a steady drone on SMRs.

After a smattering of polite applause, I asked another presenter how this was possible, and he just smiled, as if to say, “If you can’t figure out that this guy has an ax to grind, I’m afraid I can’t help you.”

Bizarre times.

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