Welcome to my journey. I am pursuing LEED Professional Accreditation (LEED AP) to increase my sustainability knowledge base, to help guide my restoration of an historic opera house and to improve my chances of landing a green collar job after 20 years in high tech – despite an economy on life support and a sea of job seekers. Anyone interested in cleantech, efficiency, sustainability or the environment can benefit from formal LEED certification as it integrates these critical and frequently separate elements into a practical whole, and enables you to think more systematically about each as well. A LEED AP is generally recognized as an expert in the field of sustainable design and could add significant value to a “cleantech” career. And, perhaps that LEED certification may help you get that coveted green collar job.
The CleanTech Revolution – updated and still ready for use: book review & interview with Clint WilderFriday, November 21st, 2008
Over breakfast with Clint Wilder this morning we had a good discussion about the interest and excitement of young and more ’seasoned’ professionals in the CleanTech space. We launched into a discussion of his and Ron Pernick’s book, a great resource for career changers interested in transitioning into the CleanTech space. It is now updated and out in paperback.
Like so many in the CleanTech space he and Ron are “high tech refugees”, and as longtime reporters they speak the language of communicating complicated stuff to the lay person. As a recruiter I’ve seen it to be a great resource for interested candidates as the first real step in the long journey that is learning about Clean Technologies. To be fair what we term as CleanTech is terrifically broad and investors, entrepreneurs and job seekers need to do some real homework before attacking markets.
This week, São Paulo is hosting the International Conference on Biofuels. Organized by the Brazilian government at the Hyatt Hotel, the event wants to encourage an international discussion on ethanol production and application worldwide. So far, the plenary session that called my particular attention was the Plenary Session III on “Biofuels and Sustainability” moderated by Marina Silva, the former Brazilian Minister of Environment. Some of the participants brought up a very provocative subject – the “Black Agenda”.
For Maria Foster, Director for Gas and Energy at Petrobras, the “Black Agenda” is an international lobby against international certification of Brazilian ethanol. In her opinion, this group is blocking worldwide commercialization of Brazilian ethanol because of oil companies’ concerns regarding the potential of ethanol on a global scale.
New photovoltaic projects have grown at a phenomenal rate in Spain in the last several years, reaching around 1500MW of new installations in the last 12 months (from 250MW built over the past 5 years) and accounting for an enormous amount of global PV panel demand. However, the land of eternal sunshine seems to have gone dark these last few months with almost no publicity on new project development.
A quick scan of Greentech media and Greenbiz.com still shows a substantial number of new projects in the California area while Spain-based energias-renovables.com is showing almost no dealflow for new installations. What gives?
I recently reconnected with an old friend from high school; over lunch today we discussed the pessimism of yesterday’s International Energy Agency report. We both saw the human race as a deft and resourceful bunch, and agreed that humans, like cockroaches, would manage to survive most of the impacts of climate change. What that world might look like should we survive could be a far cry from what we know now. I think that the mature approach is to do what we can to make the transition to sustainable energy and transportation solutions before our backs are against the wall.
Gordon Brown’s trip to the Middle East was a clear example that non oil exporting states are still very much affected by OPEC’s decisions. While OPEC nations continue to brazenly collude consumers have passed the tipping point and have made concerted efforts to cut OPEC’s impact out of the equation. Consumers have seen the impact on their economy and environment. Politicians have now realized that we will vote for them if they highlight their green credentials, and we know that by supporting locally sourced energy we are developing local employment and business opportunities.
The reality is that it will be hard to finance projects that are purely based on predictions for increasing prices. What green investments need are the foresight of people and entities that believe that their technology will yield considerable margins even under low oil prices – in the future if not immediately. These investors are out there; BP (formerly British Petroleum and now “Beyond Petroleum”) and Chevron have already shown a push towards becoming broader energy companies by investing in solar, geothermal and biofuel concerns. Companies like Monsanto beginning to play in the BioFuels game. Cynics might tout that this is good for marketing, and it is – but these companies understand investment in research and development. They have an appetite for risk, exploration is not cheap, and investing in exploration of different technologies as opposed to new oil wells has a similar cash flow profile.
That was the question posed to me by a smart man yesterday. It is a valid point given the lack of commitment to all the energy independence rhetoric during the early 1970’s. America’s initiatives to reduce its dependency on foreign oil made great sense, yet as the price of oil plunged so went the country’s resolve to develop electric vehicles and alternative fuel sources. Call me overly optimistic, but this time around I feel we might be able to maintain our “eye on the prize” and continue to invest in renewable energy because of environmental and geo-political pressures and despite economic pressure and uncertainty.
With gas prices looming around $5/gallon the United States saw a drop in distances driven. There was renewed pressure to resuscitate the efforts surrounding the electric car; and politicians on both sides of the aisle pushed for alternatives because it made financial, environmental and geopolitical sense. Yet, history may well be destined to repeat itself. The price of oil has fallen hard for a number of reasons, including the general economic uncertainty, and automobile drivers have almost obsequiously demonstrated the elasticity of demand and begun to drive again.
A couple weeks ago I asked Mike Lichtenfeld, a deal associate with MMA Renewable Ventures what the impact was on the Project Finance business was after the first bailout package wasn’t approved. Here is a synopsis of his written response:
“Credit contraction, if sustained, will hurt the clean energy sector as much as any other industry – our projects, our manufacturing capacity, our corporate development and expansion all depend on access to debt capital. That much is clear. In addition, we know that the bailout debacle has stalled negotiations on an energy bill that would include extension of critical tax incentives for clean energy. However, even under a scenario in which the credit markets open and tax incentives are extended, the financial distress experienced market-wide to date has probably changed the landscape of tax equity investors for the worse, not only by reducing the numbers of players through outright institutional failure, but also by drastically reducing the tax equity appetite among those players still standing.
Financial institutions large and small that have been active in renewable energy from a tax advantaged equity position have recently underperformed or experienced losses in the economic maelstrom. The outlook for the US economy – even under a bailout scenario – is at best a mild and short-term recession, so a constricted tax equity universe could continue for 12-18 months or more….
Today is the first day I´m blogging for Cleantechies and in fact, the first day I´ve ever blogged on my own so anybody reading this with a highly developed sense of blogger-etiquette please be patient while I learn which fork to use.
I´ve been living in Barcelona for 5 years now and for the last 2 and a half years after graduating from IESE Business School, I have been working with a renewable energy firm based in Barcelona called Blue Green Capital. We are solar developers working in Spain, France, Israel and other feed-in tariff markets. While we may not drive a pick-up truck and wear aviator sunglasses, we often have muddy shoes and drink a lot of beer, both of which are useful social lubricants in our line of business.
So after completing and exiting our first two projects in Spain with a US trade investor and a Spanish engineering firm, we´ve been dedicating most of our resources to building up a solar portfolio. The feed-in tariff system in Spain has been enormously lucrative in the last 2 years, hovering around €0,40 to €0,44/kWh. Many promoters and players, ourselves included, took advantage of the juicy subsidy to close on projects whose IRRs were 12% or more. But as could be expected, the Spanish government got nervous at underwriting solar projects at such a high cost, and radically revised the subsidy system downward; attaching a performance bond of €500/kW for all new ground-mounted systems in addition to pushing the feed-in tariff to a more-manageable €,32.
Project finance within renewables – solar in particular – has made great progress over the past few years with the introduction of the solar PPA, and with financiers developing longer term operating data from which to base their financial models. Educated guesses are more educated and less of a guess, and big money has entered the space as the financial model has become more credible.
Enter the 2008 financial crisis. Surely, the world’s worst financial crisis (and tightest credit market) since the Great Depression will impact renewable energy project development, which is an inherently capital-intensive industry. The question is, who will it affect, and how badly? I think it’s too early to know for sure, but without a doubt, investors will likely demand higher returns for both debt and tax equity (a special form of equity designed to maximize use of tax credits) due to a general scarcity of capital. However, I don’t think funding will dry up, as solar projects boast a very different risk-return profile than do other investments given that government subsidies constitute a large slice of the project’s value and project cash flows aren’t particularly risky.