It’s got to be cap-and-trade, anything else won’t work. That’s, in essence, what John Rowe, CEO of Chicago-based power company Exelon, told attendees of the MIT Energy Conference on Saturday in Boston.
In a side interview with GER following his prepared remarks, Rowe said that he did not believe alternative proposals, including cap-and-dividend could work. He said that initiative, also dubbed “cap-and-trade light” would only be a halfway house to an eventual cap-and-trade system.
Rowe’s remarks are not surprising – they are a clear rebuke by one of the country’s most powerful energy executives against the proposal introduced in the Senate by Senators Maria Cantwell, (D-Wash.) and Susan Collins, (R-Maine) last December as part of the CLEAR act.
Rowe was also skeptical about the endangerment finding, recently issued by Environmental Protection Agency (EPA) Administrator Lisa Jackson. Rowe said the looming regulation of carbon and other green house gases is well meaning but nearly impossible to implement because the technology necessary to control and cut CO2 emissions doesn’t exist.
Rowe has been at the forefront of the cap-and-trade fight, arguing that the trading scheme is the best incentive to get carbon-dependent industries to cut their emissions. His criticism of cap-and-dividend and the EPA’s endangerment finding are a clear line in the sand on how far his industry is willing to go when it comes to the thorny issue of carbon pricing.
In Washington, which holds the key to a cap-and-trade future, things this week got a little more complicated for the clean energy business when Senator Chuck Schumer (D – NY) and three of his colleagues called for the Obama administration to cut stimulus funding for foreign-owned wind farms. Specifically they were asking that the Treasury Department, which administers the very popular cash grant program, refrain from funding a $1.5 billion, 600 megawatt project developed by China’s A-Power Energy Group.
Senator Jeff Bingaman (D- N.M.), who was at the MIT Energy Conference, downplayed Schumer’s latest stance, telling GER that, much like the A-Power project itself, “so far the only thing we have are announcements.” He concedes that the U.S. “had been slow to develop domestic clean energy manufacturing capacity,” which is one reason the popular cash grants have ended supporting, mostly foreign companies.
One company that’s enjoyed the Obama administration green funding is Germany’s E.On. That’s one reason the company does not plan to sell its U.S. renewable energy business, Chicago-based E.On Climate & Renewables, a company spokesman told GER earlier this week as word got out that the German power and gas company wanted to offload its U.S. electric utility business.
In an email, the E.On spokesman wrote:
There are definitively no plans to divest the [U.S.] wind business. Quite the contrary, we are currently very bullish about the future of wind and solar in the U.S. given President Obama’s new energy policy…
Enel Green Power was also on the minds of investors this week as news leaked that its parent company, Enel, the Italian power company, was considering merging its green unit with the renewable energy business of Endesa, its Spanish subsidiary. The plan, according to a press report, would be to then spin-off a portion of the consolidated company to investors. We reported back in August that Enel was considering selling as much as 49 percent of Enel Green Power both to select institutional investors and via an Initial Public Offering (IPO).
We reached out to Enel in Rome which had not replied to our questions by the time we posted.
The impact of good, long-term government policy — something many say the U.S. still lacks – was again felt this week, north of us in Ontario. Bosch Solar, a unit of the Stuttgart-based industrial conglomerate, said it would build a thin-film solar plant with Calgary-based Sustainable Energy Technologies in the Toronto area to produce up to 70 megawatts of thin-film photovoltaic panels.
This is the second major renewable energy investment in as many months for Ontario. In January South Korea’s Samsung announced a $7 billion (€5.19 billion/ £4.68 billion) 2,500 megawatt wind and solar deal. In both cases, driving the investments are the province’s green-energy legislation and progressive feed-in-tariff program.
VC Watch
Prudent Energy, a Chinese developer of energy storage systems, raised approximately $22 million (€16.6 million / £14.51 million) in a third round of financing led by Northern Light Venture Capital. The Series C financing also included new investor Sequoia Capital China, the Chinese investment fund of Silicon Valley fund Sequoia Capital.
Konarka Technologies, a developer of organic solar cells, based in Lowell, Mass. has received a $20 million (€14.69 million / £13.19 million) strategic investment from Japan’s Konica Minolta, a maker of office printers, scanners and other technologies.
Also, according to a recent survey of 200 venture capitalists by tax and advisory firm KPMG, 77 percent of the surveyed venture capitalists said they expected investments supporting renewable energy companies to grow. About 15 percent of the respondents said investments would grow by at least 20 percent.
Rambling
On Friday evening in Boston the MIT Energy Conference organizers held a showcase of often raw but promising clean energy projects, many developed by MIT students. These projects were literally still in the lab. One group of students demonstrated a floating wind turbine that, if scaled, could be quickly deployed in the wind-swept offshore. Another student, who just graduated from MIT and is about to start graduate school at Stanford University, was working on utility-scale geothermal research. A young startup had come to the exhibit hall with a prototype of a solar-powered trash compactor that could be deployed on city streets to replace traditional trashcans.
That beehive of creativity is a positive sign and an indication of the talent the U.S. and other countries can rely on to feed an ever-growing hunger for renewable energy solutions. It also underscores the need for the U.S. to adopt a long-term and sustainable energy policy that will ensure that many of these lab projects become viable, job-creating businesses.