Joel Kurtzman, Senior Fellow, Milken Institute; Executive Director, SAVE
The problem with green energy is not on the technology or even the technology financing side, but rather in the incentives for adoption, according to this panel. Particularly, speaker pointed to the continually changing U.S. regulatory landscape as one of the main sticking points for late-stage green technology adoption. As Boris Klebensberger of SolarWorld AG put it, every two years, utilities have to reassess which technologies are most financially viable given the new regulatory structure. "In Germany, we would say there's a new pig in town."
Klebensberger said that feed-in tariffs have driven Germany's success in the renewable energy market (Germany has 50 percent of the world market for solar power). The country first tried an American-style incentive system, in which households would receive tax credits for buying solar systems, but adoption growth under this approach was minimal. When Germany moved to the feed-in tariff — rewarding households for the energy they produce rather than what they spend on producing it — they saw adoption skyrocket.
Lee Bailey of US Renewables Group agreed that the question facing America is whether to turn to another financial system or continue "monkeying around with these two-year fixes." He suggested that it was not a lack of will or technology, but a lack of capital in the system.
Joseph Pettus pointed to Safeway's method of attaining clean, renewable energy by taking itself off the grid and producing the energy itself. Although they've been able to achieve great savings by this method, they still have to pay a $30 million per year penalty for not being on the grid. But in spite of these penalties, Pettus said Safeway is "15 years ahead of AB32 and we're making money doing it."
Moderator Joel Kurtzman of the Milken Institute chimed in that in the energy market, there are 135 regulators — some private, some municipal, some statewide or national — on top of this policy penalty of exiting the system. This makes it costly and time-consuming to navigate the regulatory system, potentially depressing uptake of renewable technologies.
G. Chris Andersen of GC Andersen Partners expressed concern about transmission, distribution and storage, which affect the price and deliverability of clean energy. He maintained that the industry will probably have to turn to unique financial structures, such as REIT financing, which could cut the cost of capital by a third.
Amory Lovins of the Rocky Mountain Institute emphasized that grid development must be done thoughtfully, with an eye to the most efficient distribution of different types of energy to different parts of the country. Lovins also maintained that worries surrounding the difficulty of integrating solar and wind energy into the grid are largely overblown; he insisted that it is cheaper than integrating new thermal plants, which is what we are currently doing. Klebensberger agreed, citing a study that says solar and wind energies are usually added to peak electricity usage, so storage is not as big of a problem as some may believe.
Global Conference 2013
Former Prime Minister Tony Blair, philanthropist Bill Gates and Strive Masiyiwa of Econet Wireless discuss advancing prosperity in Africa.
