White House Releases “Skinny” Budget: Extreme Diet for Clean Energy and Innovation

The Trump Administration released today what is known as the “skinny” budget because of the lack of specifics, and, while this is more of a political statement than a political reality, it is clear that any program remotely related to climate or clean energy is recommended for the chopping block. Climate programs like the Global Climate Change Initiative and Green Climate Fund were expected targets, but also eliminated were popular programs like Department of Energy’s flagship ARPA-e initiative; TIGER grants for transportation innovations; the Low Income Home Energy Assistance and Weatherization Assistance Programs that pay for and reduce energy bills for low-income families; and Energy Star whose labels are ubiquitous at appliance retailers. Dozens more are slated for refocus, reduction or elimination.

Members of Congress on both sides of the aisle are saying this is “dead on arrival”, but a concern is that such a high number of programs across all sectors—not just climate and clean energy—are eliminated that it will be impossible to save them all and have the President still sign the final appropriations bills. In fact, the President has a great deal of leverage given that Congressional Republicans are eager to push to his desk both the healthcare repeal and tax reform. Congress, not the President, will pay the price for government inaction and shutdown in the 2018 mid-term elections.

So, what should we do as a community of clean energy and technology advocates and innovators? Since the agencies will be fighting against rather than on behalf of their own programs, it will be the job of Congress and all of us outside the government to stand up for our own federal government. Let’s figure out which programs have strong constituencies that Members of Congress are well-aware of and clearly support. We have to assume many of those will be restored. We find programs that industry has benefitted from and continues to engage in—and put those businesses to work being heard. The challenge will be identifying those programs that fall into the gap—that have clear benefits but not constituencies that can realistically fight for them—leaving them more vulnerable to deep cuts. Those are the programs we should be worrying about and that we will need to be more creative about supporting.

It will be critical to tell success stories, to engage everyone from grassroots to grass-tops and top brass, and to make the case that clean technology is good for the economy and for the transition into well-paying jobs in parts of the country that most need them. The private sector can’t do that alone; the federal government brain trust is crucial to enable research, development, and deployment partnerships that spur innovation and scale technology. Let’s work together to make sure the fiscal haircut does not include decapitation—that in the effort to reduce government spending we do not also diminish U.S. global leadership in clean energy.

Where will our energy come from in 2030, and how green will it be?

Original interview posted by the World Economic Forum.

How can the energy industry adapt to meet the needs of a growing population while also supporting low-carbon growth?

Katherine Hamilton, Director of the Project for Clean Energy and Innovation, and co-chair of the Global Future Council on the Future of Energy, says that this essential transition will not happen without collaboration between large energy companies, entrepreneurs, the finance sector and consumers.

Why should we be thinking about the future of energy?

The energy sector is already changing very rapidly. It is transitioning, we hope, towards greater ability to meet the energy needs of a growing global population with reduced use of carbon, supporting continued economic growth in an environmentally sustainable way.

But that transition will not necessarily happen on its own. We need to get key players in the same room who can bring different experiences and perspectives, and collectively come up with better ideas than any of us could on our own – and then work out how to implement those ideas. Hence the need for this Global Future Council.

Who are the key players that need to be involved?

The incumbents are important, of course – the large energy companies who own and control the infrastructure, especially in industrialized countries. They are often criticized as part of the problem, but they also have to be part of the solution. In addition, we need the innovators – entrepreneurs who are coming up with ideas to disrupt the sector. And we need input from energy consumers, including large corporations and municipalities.

Representatives of the financial sector are important – experts in bonds, risk and insurance. There is plenty of capital out there looking for good projects to finance, but the main constraint for investors is the assurance that those projects will find a market. Creating certainty is one important thing politicians and policymakers can do to help – and it is they who, ultimately, will need the vision to define goals for the energy sector and devise policies to achieve them.

What are the biggest emerging trends in the energy sector?

The decentralization of energy generation is an enormous trend. Innovation is also being democratized; it is no longer just the incumbents who can innovate. Consumers, increasingly, are in the driver’s seat; there is more real-time interaction between energy service providers and consumers – whether that is the operator of a factory with sophisticated demand response or an Indian farmer using a mobile phone to manage crops.

We are continuing to see drastic reductions in the cost of many renewable technologies as well as greater accessibility to energy storage and efficiency.

How far are we from renewables no longer needing subsidies to compete?

Any time you talk about subsidies for renewables, you also have to remember that incumbent players have benefited from built-in subsidies for decades through policy support and monopoly power. Often there is a misconception that energy was a free market before the idea of subsidizing renewables came along. That is not the case, and we need to recognize that when we ask how best to adjust the market for innovation going forward.

What kind of innovations are we seeing in energy, and what might we expect in the coming years?

The sharing economy will be increasingly important in the transport sector. There is potential to improve efficiency and greatly reduce emissions as we move towards more electric and autonomous vehicles.

There is also room to harness data to make the grid and entire energy ecosystem more efficient. The data is available, through advanced meters and mobile applications, for example, but we have yet to fully exploit that data to move energy to where it is needed, smartly and in real time.

I expect to see more “community solar” projects, as collective consumers invest in generating and storing power. There will be more distributed generation using a variety of technologies, such as solar, wind, geothermal, fuel cells, and hydropower. We will see further innovations in multiple uses of energy storage, such re-purposing car batteries to store electricity.

In the coming years we might see some breakthroughs in carbon capture and storage – and, no doubt, there will be innovations and applications nobody has thought of yet.

What needs to be on the agenda for energy stakeholders?

Above all, we must have a solid plan to reduce carbon, To reach that, we have to define what we value – not just improving access to energy, and guaranteeing energy security to meet the needs of economic growth, but doing all of this in a sustainable way and one in which carbon emissions are drastically reduced. Then we need clear and transparent benchmarks against which to measure our progress.

We also need a vision that combines the decentralized and the centralized – embracing more distributed generation, while looking at the larger system and how we can move energy around globally in real time.

Finally, how might the energy sector look by 2030?

I fear that we will be paying for our previous failures to reduce carbon emissions, and being increasingly preoccupied with climate change adaptation. But I also believe that we can have a sector that delivers much higher access to energy than today, with greater use of renewables, incentivizing innovation and creating economic growth while reducing our impact on the planet.

The Annual Meeting of the Global Future Councils took place on 13-14 November in Dubai.

What Do the Results of the 2016 Election Mean For Clean Energy in DC?

Originally posted on 38 North Solutions blog.

The results of this week’s election are certainly a surprise and will impact the focus and direction of policymakers moving forward. As we look ahead, historically, Congress is most active when one party controls the House of Representatives, Senate and White House. We expect 2017 to follow this trend, particularly because Republicans campaigned, in part, on a message of fixing the gridlock that exists in Washington. As a result, the next two years are going to be busy and significant.

The 38 North Solutions team has a proven track record of working with legislators on both sides of the aisle and feels well positioned to help companies and organizations navigate this new period. The weeks and months ahead will clarify where the Trump Administration and Republican Congress will focus their attention, but here are our initial thoughts about what lies ahead:

Lame Duck, 114th Congress
Before the election, the prevailing assumption was that the end of this year (Lame Duck Session) of Congress would be especially busy as members from both parties try to clear the decks of any remaining pieces of legislation before the bipartisan-viewed wildcard of a Trump Administration assumes power. However, the overwhelming nature of Trump’s win, coupled with the fact that Senate and House Republicans performed better than expected, has diminished the appetite amongst Republican members to negotiate with Democrats and President Obama at the end of the year in any significant way. As a result, the opportunity for successful enactment of clean energy provisions like reinsertion of the technologies that were removed from the Investment Tax Credit last year has closed significantly. Funding for the federal government expires on December 9th, so Congress will have to address that before adjourning, but the likelihood that the ITC or any other policy provision gets attached is limited.

Federal Legislation, 115th Congress
With a GOP-controlled House, Senate, and White House, we expect the new President to be able to pass energy legislation that could include PURPA and Federal Power Act reform. We will need to be vigilant to ensure that those provisions are not detrimental to clean energy technologies and applications, while mining opportunities to insert clean energy provisions into non-controversial legislation. There is no realistic scenario for passing a carbon tax, renewable portfolio standard, clean energy standard, or additional clean energy tax credits. In fact, we will need to work hard to shore up support for existing clean energy provisions to ensure that they are not repealed. On the positive side, innovation is key to growing the economy and jobs and we can continue to hammer those messages to energy policy and tax committee leadership. There may also be a path for additional transmission provisions that can increase build-out of infrastructure across the U.S., although we would not expect a large spending provision in any case.

Companies interested in advancing clean energy policy must not view yesterday’s election as an imperative to disengage in advocating before Congress. Rather, moving forward, we know that the Trump Administration has every intention of passing an aggressive legislative agenda next year. It is therefore critical that we continue to make the strongest case possible for policies that will continue to support an innovative energy economy.

Environmental Protection Agency
The Obama Administration’s landmark achievement regulating carbon dioxide emissions from power plants, known as the Clean Power Plan (CPP), is now in serious jeopardy. Because the CPP is a federal regulation, the Trump Administration can undertake steps to undo the policy without seeking congressional approval and we expect taking such action to be a priority. The good news is that the CPP has helped states to think strategically about how to move to a cleaner energy generation mix and investment in those technologies has shifted to support that movement. We believe that utility and corporate investment in clean energy will continue to grow. In addition, regulatory processes on clean energy in states will continue to move forward.

Department of Energy
Funding for specific programs within the agency may shift to more fossil and nuclear research and development funding and less renewables and energy efficiency funding. Less clear is how the Office of Electricity Delivery and Energy Reliability would be impacted, although Trump’s energy agenda includes grid modernization. It is hard to envision the Quadrennial Energy Review process continuing since this was a project led by Secretary Moniz.

Federal Energy Regulatory Commission
FERC is generally not considered political and the two vacancies are slotted for Republicans. We know at least one of those potential appointees and think that other credible nominees would likely come from regulatory and public policy arena. We will need to continue cultivating those relationships to ensure that wholesale markets for innovation will continue to be considered.

While yesterday’s result may not have been what we expected, it is the reality we face moving forward. We would be happy to set-up a time to meet to discuss specifically what the Trump Administration’s ascension may mean for your business and how we can work together to ensure that your interests are being adequately addressed in Washington.

The Future of Electricity: Clean and Bright

What happens when you bring together nearly two dozen energy leaders from across the globe into a room for several days of uninterrupted discussion on the Future of Electricity? Throw in jet lag for anyone not from United Arab Emirates, add a cocktail of fossil fuel interests along with renewable energy advocates, shake well in nearly 100 degree F heat, and one could not imagine consensus coalescing around almost anything. Surprisingly, perhaps, this group, convened by the World Economic Forum, agreed on a set of trends that indicate change is nigh in the electricity sector:

  • The world is increasingly electrified.
  • Renewable energy has the greatest capacity growth.
  • Clean energy enables growing universal access to electricity.
  • Energy security increases as a result of more indigenous clean electrification.
  • Distributed energy resource deployment is significantly increased.
  • Energy storage provides critical grid services.
  • Consumer engagement and choice shape future electric growth.
  • The price of electricity may increase briefly, then decrease, over time.
  • Regulation supports and accommodates these changes.

This transformation will not happen organically, however. The group also identified requirements to realize this transformation in our electric system:

  • Politic targets must be clear, transparent, and consistent.
  • Regulation should anticipate trends and create a climate for investment.
  • Power markets and platforms must be open for all participants.
  • Financing mechanisms should be clear and risk factors understood.
  • Business and monetization models must evolve.
  • Consumers must be allowed to participate.
  • Special provisions should be made for universal access.

It was affirming as a participant in this process to hear from others about the same policy hurdles I deal with every day in Congress, state legislatures, and regulatory bodies. My firm‘s public policy work, while mostly centered in the U.S., can be informed by policies that have been tried elsewhere with varying degrees of success. That the Global Agenda Council on the Future of Electricity could arrive at these principles and requirements should give us all a cogent road map to this transition. Read the full report here.

Omnibus Package: Sausage with Delicious Clean Energy Provisions

Post published on 38 North Solutions website here.

The omnibus deal—PATH (Protecting Americans from Tax Hikes Act of 2015)–was sausage-making at its most intense, but the product should be palatable for most parties in clean energy. Extensions for renewables and efficiency tax credits were key sweeteners to lifting the oil export ban. In addition, clean energy R&D funding, reauthorization and increased funding for the Land and Water Conservation Fund, and climate change funds (Clean Technology and Strategic Climate Funds of Bank for Reconstruction & Development and Global Environment Facility) were included in the deal. While the solar and wind credits are phase-downs, the trajectory should provide much-needed certainty to renewable energy investors, developers, and consumers and will serve as a bridge to implementation of the Clean Power Plan, the longer-term market driver for clean energy in the U.S.

House and Senate leaders—McConnell (supported by Chairman Hatch of Senate Finance), Reid, Ryan, and Pelosi—were key to ensuring that this deal could pass their caucuses, and the White House provided additional feedback throughout the process to ensure the President would sign the resulting package. Because of vociferous opposition to lifting the 40-year oil export ban, the environmental community for the most part had to sit this fight out. The renewable energy industries, in particular solar whose credit did not expire until the end of 2016, had to carry much of the water on the renewable energy extenders. New allies were made, especially in the Republican Caucus, that allowed for greater bipartisan support than has been seen in a number of years.

Now, the renewable energy industries can turn their focus to state and local policies, siting and permitting issues, and compliance strategies for the Clean Power Plan.

Transformation through Leadership: Clean Energy Education and Empowerment (C3E) Symposium

Originally published in Scientific American, November 11, 2015.

They came in all ages—college, graduate school, early career, mid-career, mature career, semi-retired—many ethnicities and backgrounds, but mostly one gender. These were women gathering at MIT in Cambridge, MA, for the fourth annual Clean Energy Education and Empowerment (C3E) Symposium.

Caroline McGregor of the U.S. Department of Energy, which started this program in conjunction with the MIT Energy Initiative (better know as MITei—pronounced “mighty”), describes this initiative as the “recruitment, retention and advancement of women” working in clean energy. When Carla Peterman, a Commissioner at the California Public Utilities Commission, took the stage to receive her Government Leadership Award at last week’s Symposium, she remarked, “Women collaborate without even trying.” This symposium certainly felt that way.

Some years the theme for the C3E Symposium has been less clear; this year it crystallized: transformation. Women are leading the transformation of innovation, of climate solutions, of our world. Each and every woman at this conference is dedicated to transforming systems and lives through engagement and work in clean energy.

The importance of engaging women at all levels in the energy sector was emphasized by MITei’s Martha Broad, and Bob Armstrong with the latter saying that “…we need all hands on deck” to solve climate change.

In addition to group discussions of career advancement and speed networking, several panels took on difficult and complex challenges, such as the energy and water nexus or the transformation to a low carbon future. With 40% of water withdrawals in the U.S. going to thermal electric generation, the panelists discussed the need to arrive at creative solutions for managing the earth’s water sustainably. Challenges in developing countries around access to clean water and energy were highlighted, with discussions on innovative water desalination technologies and distributed solar technologies and delivery systems. One of the major differences seen with the panel discussions at C3E is that all of the speakers and moderators were women—something that is truly unique in the male-dominated energy sector.

Throughout the two days, several key themes inherent in transformation emerged.

It is okay to fail.

“Every girl should have the ability to build, fail, then build again—and in an unstructured environment”, said Grace Overlander, of Tesla Motors, who won the Business Leadership award for her work launching a dozen product lines in the automotive industry. This was a recurring refrain with speakers who assured the attendees that bad experiences are okay and that each career move can be a learning opportunity, spurring one to demand more from the next step. “Don’t stop because of one failure,” urged Leslie Labruto of the Clinton Foundation.

Women have the power to make change.

When a seasoned and accomplished professional was asked what advice she had, she said if she had to do it again, she would be Anya Cherneff, CEO of Empower Generation, who was awarded the International Leadership Award and has launched 15 businesses with 200 sales reps for solar lighting in remote communities in Nepal. “I have just started to recognize the power I have to make change,” reiterated Lisa Cagnolatti of Southern California Edison. Barbara Kates-Garnick of Tufts University was more practical in her approach. “Diversity is a business decision that benefits everybody,” she said. Her panel, which delved into the need for more granular tracking of women in clean energy, especially in STEM (Science, Technology, Engineering and Math), concluded that there is not enough data about women. “This lack of information makes women invisible,” continued Kates-Garnick. “What is not counted does not count.”

Every age can engage.

C3E Ambassadors are hand-picked female leaders who have reached maturity in their fields and who spend time together deciding who will win the prestigious awards. These women have internalized the need to “build the bench” of young women who will take their places and create even more leadership positions for women in clean energy. The award winners are mid-career women who have made extraordinary gains in various aspects of clean energy. These awards can mean an enormous amount to their careers and next steps toward leadership. Then there are graduate students who present posters of their projects, among which Symposium attendees choose one winner. Last year’s poster winner, Caroline Golin, has in the year since her award launched her own company, GreenLink, and gone on to obtain numerous contracts to perform solar analysis in the Southeast and throughout the nation. A group of younger women, undergraduates in STEM programs, have the chance to present three-minute “lightning” presentations of their research. Many more women attend as invitees of each of these groups of professionals, sowing the seeds of leadership and enthusiasm to make an impact in clean energy. With live webcast, the hope is to reach many more women who are unable to attend in person.

It is up to us to find transformative solutions.

Rebecca Pearl-Martinez, Head of the Renewable Equity Project, Center for International Environment and Resource Policy (CIERP), Fletcher School at Tufts University, observed that “gender diversity could be the next carbon wedge, propelling both clean energy technologies and economic growth.” Others remarked that we can empower women to power the world. People want more than just a solar light—want entire electricity lifestyle. Erica Mackey, the Founder and CEO of Off-Grid Electric, who was awarded the Entrepreneurial Leadership Award, for her ground breaking work to deliver state-of-the-art solar products in sub-Saharan Africa, stated that “they are focused on making solar affordable to everyone—household by household.” Melanie Kenderdine, the founder of the MITiE and now a close advisor to DOE Secretary Ernie Moniz and head of the Office of Energy Policy and Systems Analysis, delivered a keynote address with a tutorial on where our energy resource mix is now, what policies are needed, and how we need to get more serious about funding solutions to climate change. Others agreed that sustained policies help technologies make transformation possible. While there are hopeful signs of this transformation, the opportunity for change is immediate but implementation can feel painfully slow.

Next year will celebrate the fifth anniversary of the C3E Symposium and the leadership awards. Now the task will be to ensure that all women—not just those who are lucky enough to attend the conference—are empowered to lead the clean energy transformation. Kenderdine observed that as she ages, she feels that it is ever more important to help younger women coming along. This C3E Ambassador couldn’t agree more.

Winding Down to Rev Back Up

As I sit at my kitchen counter listening to the needles drop off our fading Christmas tree like sleet landing on window panes, I wonder when Congress stopped absorbing water and began accepting the inability to thrive. It all still looks presentable, but with little productive outcome. So what’s a clean energy advocate to do? Perhaps stop lobbying Congress altogether and focus instead on business-to-agency and business-to-business interactions?

Perhaps there are enough laws and we need to focus instead on implementing what we already have on the books. In a way, that exercise makes us dig deep into our statutes to find out what we can get done without change. Take the EPA, for example. The agency will essentially be writing our climate legislation and calling upon clean energy innovation for solutions to our most pressing environmental issue. And the Federal Energy Regulatory Commission, my personal favorite. The FERC, along with other regulatory agencies like the Securities and Exchange Commission and Federal Communications Commission, can open up markets by interpreting statute and promulgating rules that allow new technology participation. The Small Business Administration can assist burgeoning industries in navigating and interpreting existing policy. Even the Internal Revenue Service can make rulings based on statute that open the doors of tax policy for clean technologies.

Because DC is the home to hundreds of trade associations, ensuring that entrepreneurs are connected to the most appropriate and helpful trade groups can be enormously beneficial. Introducing foundling endeavors to larger companies and executives who can serve as mentors and guides along the way to development and, eventually, IPO. Forming coalitions of start-ups that can create their own nucleus of power with the philosophy that rising tides help all boats.

Thing is, we still need Congress to step in from time to time. We need laws clarified and updated. We need provisions extended and renewed to prevent new industries from collapsing. We need foundational policy for new enterprises that never existed previously and have no guidelines for operation. We need affirmation that our publicly elected officials who represent constituents desperate for jobs and economic growth, are engaged and learning and paying attention to what is going on in front of their eyes and in their hometowns. We do need Congress to act on clean energy. Not for everything that happens, but in really important ways that can help our national competitiveness through local growth.

So I will continue to work with Congress–explaining complex technologies in terms that a layperson can understand; introducing them to their own voters who are also clean energy entrepreneurs; demonstrating that federal programs can have positive and direct consequences on our economy and environment; and convincing them that taking a stand on clean energy is more of a patriotic value than a political statement.

In 2014, then, you may see me walking the halls of the GSA or the Pentagon, Rayburn or Dirksen. Happy New Year!