Clean energy and markets are the solution (not scapegoat) for California’s blackouts

September 4, 2020 by  
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Clean energy and markets are the solution (not scapegoat) for California’s blackouts Bryn Baker Fri, 09/04/2020 – 01:00 On Aug. 14 and 15, the California electric grid operator made the incredibly rare decision to proactively shut off parts of the electricity grid, resulting in limited rolling blackouts affecting businesses and homes throughout the state. Forced outages are a tool of last resort, employed in circumstances of incredible stress to the grid and done to protect against more widespread outages. Record heat for several days across parts of the state strained the power grid so much that it started rationing electricity, for the first time in almost 20 years. Notably, temperatures reached 130 degrees Fahrenheit in Death Valley — the hottest recorded temperature on the planet in more than a century.  While the immediate cause is still being investigated, we do know that California’s grid was experiencing multiple, coincident stressors — high demand, generators not performing when called upon and energy imports not showing up. Rather than thinking of these events as a one-off stroke of bad luck, consider that this soon might be the new normal. And not just in California. Climate change is driving more extreme weather events, including heat waves, everywhere, all while the grid faces increasing demand from electrification of cars, buses, businesses and homes. How should businesses and other large customers be thinking about the increasing strains from climate change with an evolving energy resource mix? Some have suggested clean energy is the scapegoat for the recent blackouts. However, not only was clean energy not the source of the problem , it’s the solution. Clean and renewable energy is core to charting a path forward.  Time to ditch fossil fuels-centric planning In the last 30 years, about one-third of coastal Southern California homes added air conditioners. Higher temperatures put more stress on traditional fossil-fired electric generators, reducing plant efficiency and output, and even caused them to temporarily shut down. In fact, the heat wave last month shuttered a 500 megawatt natural gas unit and a 750 MW gas unit was unexpectedly out of service Aug. 14. Outages of dispatchable fossil generation paired with reduced output from renewables, such as the 1,000 MW reduction in available wind power Aug. 15, resulted in an electric grid unable to meet customer demand. The grid of the future should prioritize flexibility and nimbleness, and greater deployment of resources such as batteries and larger demand response programs. California is actively shifting from a fossil-generation-dependent grid to a system that seeks to eliminate carbon emissions by 2045 — an essential step to combat climate change. Corporate customers, cities and governments are lining up behind ambitious clean energy and climate goals. Technological innovation and rapidly declining costs in renewables, storage and other clean energy resources are enabling California’s evolution to a 21st-century reliable , clean energy grid. The state is a leader in solar power, meeting much of the demand during the sunny hours of the day. However, the grid of the future should prioritize flexibility and nimbleness, and greater deployment of resources such as batteries and larger demand response programs.  Despite the finger-pointing and calls to move back toward natural gas, including from business groups , the recent experience in California shows that the energy transition shouldn’t be abandoned in the name of reliability Rather smart policy, planning and market designs are critical so that utilities and customers can improve reliability through accelerated deployment of these advanced clean resources as fossil generators retire.  Markets and regional cooperation: Bigger is better California’s electric system is operated by an independent nonprofit organization — the California Independent System Operator ( CAISO ) — that uses competition among power producers to identify the lowest-cost generators that can be used to reliably meet demand. While recent events have been compared to events we saw 20 years ago in California, flaws and fraud responsible then in California’s market design have since been corrected. This time around, the experience suggests that fully expanding wholesale electricity markets throughout the West will be a critical tool to reliably and cost-effectively meet demand in the face of climate change and the energy transition. California may be tempted to go faster alone, but it could get there more reliably and affordably with other Western states.  California’s grid imports electricity from out of state generators, and California’s utilities plan in advance for energy imports that are complemented by in-state generators to meet demand on the hottest days. CAISO does not control the number of imports, which were affected by the recent heat wave that extended beyond California. A wider, better coordinated western electricity system could have more nimbly responded to large generators tripping offline and would have cost consumers less by reducing spikes in power costs and the need for backup generators. A wider, better coordinated western electricity system could have more nimbly responded to large generators tripping offline and would have cost consumers less by reducing spikes in power costs and the need for backup generators. Efforts are underway to expand the CAISO market through the Western Energy Imbalance Market (EIM), which allows coordinated real-time operation amongst a number of utilities and already has brought $1 billion in customer benefits, although this is a fraction of the benefits of a full competitive wholesale market. The type of grid event that occurred in August would be best solved by a western regional transmission organization that optimizes electricity generation and demand throughout the West, rationally manages shared operating reserves and plans/promotes interconnected transmission infrastructure. This type of system will be critical to lowering costs to all customers and keeping the lights on, while meeting the clean energy commitments by customers and states. Even CAISO and the California Public Utilities Commission agree that market improvements may well be needed. California’s approach to ensuring enough generation on the system to meet demand on the hottest days is fractured, complex and undergoing revision. As we chart a path forward, we need to embrace creative solutions and use the tools that we know can work. Businesses require reliable, affordable electricity. A growing number of businesses also know that transitioning the grid to clean energy can save money while continuing to provide expected reliability. Embracing innovation and new technology is in California’s DNA; it also could get by with a little help from its friends. By stitching together the West’s electricity system, reliability and a clean energy transition can work in tandem, most affordably for all customers. REBA is organizing related sessions on clean energy markets during VERGE 20. View more information here .  Pull Quote The grid of the future should prioritize flexibility and nimbleness, and greater deployment of resources such as batteries and larger demand response programs. A wider, better coordinated western electricity system could have more nimbly responded to large generators tripping offline and would have cost consumers less by reducing spikes in power costs and the need for backup generators. Topics Energy & Climate Renewable Energy Utilities California Electricity Grid Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off

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Clean energy and markets are the solution (not scapegoat) for California’s blackouts

It takes a village to succeed in climate tech

June 3, 2020 by  
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It takes a village to succeed in climate tech Ben Soltoff Wed, 06/03/2020 – 02:00 Solving climate change depends, to some extent, on technological innovation. The world’s leading climate authority, the Intergovernmental Panel on Climate Change (IPCC), published a landmark 2018 report highlighting the urgency of limiting warming to 1.5 degrees Celsius. The report outlines four potential pathways for reaching that goal. The pathways are vastly different, but one thing they have in common is a central role for new technologies, all of which fall under the growing category known as climate tech . Relying on emissions-reducing technology isn’t the same as blind techno-optimism . New technology needs to complement existing solutions, deployed immediately. But the IPCC pathways make clear that the route to mitigation goes through innovation. So, what does it take to turn a societal need into a functional reality? Scientific breakthroughs are only part of the challenge. After that, there’s a long road before solutions can be implemented at scale. They require funding through multiple stages of development, facing many financial and operational risks along the way. There’s a parallel here with the response to COVID-19. Even if a working vaccine is developed, it must go through trials to determine efficacy and the logistical challenge of distribution to billions of people. But a key difference is that effective climate solutions are more varied than a single vaccine and usually more complex. At a webinar last week hosted by Yale, Stanford and other groups, Jigar Shah, co-founder of clean energy financier Generate Capital , noted that climate technologies, unlike medical breakthroughs, must compete with systems already in place.   “In the biotech industry, which I think folks herald as a well-functioning market, once companies reach a certain validation of their technology and approach, there’s a payoff there,” he said. “And in [climate tech], there really isn’t one [in the same way], largely because there are a lot of incumbent technologies that provide electricity, energy, water, food, land and materials.”   The period when a new technology is costly to develop but too early-stage to produce commercial revenue is often called the “Valley of Death” because even promising technologies often fail during this period. Success requires the collaboration of a wide set of partners and investors. As an Environmental Innovation Fellow at Yale, I’ve helped compile insights for investors on overcoming the unique barriers faced by nascent climate technology. Fortunately, many investors are already tackling this challenge.   The new wave of climate tech investors In the early 2000s, there was a well-publicized boom then bust in clean energy investing. According to Nancy Pfund, founder and managing director of impact venture capital firm DBL Partners , much of this interest was from “tourists” looking for an alternative to the dot-com failures earlier in the decade. On a GreenBiz webcast last week, she observed that the current interest in climate tech is markedly different. “Today there’s such a high level of focus, commitment and knowledge on the part of both the entrepreneurs and investors,” she said. Pfund said the interest in climate tech is partially due to the compelling economics of renewable energy compared to alternatives. “There’s been a stunning cost reduction over the past decade,” she said. “This brings in mainstream investors who are just making dollars and cents. They’re not even necessarily waving the climate banner. They want to rebalance their portfolio for the future.” During the same webcast, Andrew Beebe, managing director of Obvious Ventures , noted that an additional factor in the rise of climate tech has been the overwhelming public demand for climate action. “There’s been a societal shift as well,” he said. “In entrepreneurs today and investors, I see an urgency like we’ve never seen before. People are not that interested in doing yet another social media company, unless it has a real impact.” In entrepreneurs today and investors, I see an urgency like we’ve never seen before. It’s important to note here that climate tech takes many forms. There are software solutions that can help reduce emissions and that don’t face the Valley of Death I mentioned earlier. But some of the most critical solutions are physical technologies that require a lot of time and capital to succeed. “You can’t spell hardware without the word ‘hard,’ and everyone knows that,” said Priscilla Tyler, senior associate at True Ventures , at the Yale-Stanford webinar. “Hardware is hard, which isn’t to say it’s impossible. And if anything, in my opinion, it begets more impact and more opportunity.” There are promising signals that climate tech is here to stay. Tyler is part of a group of venture capital investors called Series Green , which meets regularly to discuss climate tech opportunities. Additionally, multiple weekly newsletters share the latest deals in climate tech, and in a recent open letter , a long list of investors confirmed that, despite the COVID-19 economic downturn, they remain committed to climate solutions. Going beyond traditional venture capital A notable climate tech deal that happened last week was the $250 million investment in Apeel Sciences . The California-based company has developed an edible coating for fruits and vegetables that can help to preserve some of the 40 percent of food that normally gets thrown away. Investors in this round included Singapore’s sovereign wealth fund and celebrities such as Oprah Winfrey and Katy Perry. A company such as Apeel doesn’t start out raising hundreds of millions of dollars from large institutional investors and celebrities. At the early stages, many new technologies depend on government grants and philanthropy. Apeel got started with a $100,000 grant from the Gates Foundation in 2012. Apeel coats fruits and vegetables with an edible layer that can is designed to extend shelf life by two to three times. Media Source Courtesy of Media Authorship Apeel Sciences Close Authorship Prime Coalition is an organization that helps foundations deploy philanthropic capital to climate solutions through flexible funding structures that allow for long periods of technology development and multi-faceted risk. It calls these funding sources “catalytic capital,” because they can help unlock other forms of finance further down the line.  In addition to helping others deploy catalytic capital, Prime also makes its own catalytic deals directly through an investment arm called Prime Impact Fund. “We’re looking to support companies that have specific things to be de-risked before they will be attractive to follow on funders, and then we can be the source of that de-risking capital,” said Johanna Wolfson, principal at Prime Impact Fund, at last week’s Yale-Stanford webinar. By collaborating with one another, investors such as Prime can help technologies move through the stages of innovation, until they’re ready for more traditional investment structures. Catalytic capital invested today could help create the next Apeel Sciences several years from now. At each stage, investors serve not only as sources of money but also strategic partners for the startups themselves. This is particularly true for corporate investors, who may have substantial industry knowledge to share and more flexible expectations than traditional investors. There’s a lot more sophistication on part of corporate investors now than there was 10 years ago. “There’s a lot more sophistication on part of corporate investors now than there was 10 years ago,” said Pfund. “Then, you saw the agenda of the corporation being pushed around the board table more than you do today, and that’s never a good idea.” If their interests are aligned, corporations and startups can create mutually beneficial relationships, where each offers the other something that it couldn’t have obtained on its own. “These corporate investors see so many different technologies, and they believe their own products are better than the startup products, so how do you actually get their support?” said Andrew Chung, founder and managing partner of 1955 Capital , on last week’s GreenBiz webcast. “Well, you need to have a widget or product they haven’t seen before or can’t build themselves.” Non-financial support also can be catalytic Investors such as DBL Partners often connect the startups in their portfolio to corporates and other partners. These connections can be hugely valuable for startups, especially in emerging industries where networks are largely informal. While investors’ main role is to provide capital, they also provide many forms of non-financial support, which can be essential to advancing innovation. In addition to connections, they also can help startups to navigate dynamic policy environments at the state and federal level. “Policy plays a pivotal role,” said Pfund. “We don’t invest in policy, we invest in people, but we know that our companies are going to have to address the changing policy landscape.” We don’t invest in policy, we invest in people, but we know that our companies are going to have to address the changing policy landscape. DBL Partners helps to shape the policy landscape by convening roundtable meetings, advocating for legislation and reaching out to regulators in order to help create a more favorable environment for innovation. This sort of engagement is relatively low-cost in the short term, but it can have massive benefits in the long term, especially as new technologies begin to scale up. Shah pointed out that the challenges facing climate tech don’t end once solutions reach commercialization. Nascent technologies still need to be deployed at a large scale to have impact. “A lot of us focus on going from zero to millions,” he said, “but then, in fact, millions to billions is still nascent.” Reaching the necessary scale requires a careful alignment of technological development, market creation, political support and investment across a wide spectrum of capital. “All of these things work together in tandem to really unlock nascent technologies,” Shah said. This story was updated June 4 to correct Apeel’s funding information. Pull Quote In entrepreneurs today and investors, I see an urgency like we’ve never seen before. There’s a lot more sophistication on part of corporate investors now than there was 10 years ago. We don’t invest in policy, we invest in people, but we know that our companies are going to have to address the changing policy landscape. Topics Innovation Climate Tech Featured in featured block (1 article with image touted on the front page or elsewhere) On Duration 0 Sponsored Article Off

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How financial institutions can overcome barriers to climate alignment

April 29, 2020 by  
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Within the last two years, financial institutions representing $17.2 trillion have committed to align their portfolio emissions with the goals of the Paris Agreement. But there’s still more to be done.

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How financial institutions can overcome barriers to climate alignment

The big swing we need to mainstream sustainability

September 23, 2019 by  
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Concentrating on culture, and the “who” of sustainable change, not just the “what,” should be a bigger part of your portfolio.

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The big swing we need to mainstream sustainability

How marketers and advertisers can prioritize climate change

September 23, 2019 by  
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Brands have the power to make an impact.

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How marketers and advertisers can prioritize climate change

Achieving scalability in energy management

November 15, 2012 by  
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How can one find an energy strategy that can be applied to a diverse group of buildings? AT&T and Rocky Mountain institute's Portfolio Challenge are teaming up to show buildng owners that applying energy retrofits at scale can save money and make an impact.

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Achieving scalability in energy management

Forestry is the answer! Really? Again?

November 15, 2012 by  
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Can trees really help meet a state's climate-change goals, even one as green as Oregon? Researchers may be barking up the wrong tree.

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Forestry is the answer! Really? Again?

Using D.C. power to save energy — and end the war on currents

November 15, 2012 by  
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With the large number of DC powered devices in buildings, and with DC generation now utilized in many newer structures, we need to maximize its use — and stop conversion waste.

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Using D.C. power to save energy — and end the war on currents

Learning from Apple’s supply chain management mistakes

April 12, 2012 by  
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The clamor for companies to confront their supply chain vulnerabilities is growing. A new report advises investors to assess their portfolio exposure — and discusses the challenges of doing so.

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Learning from Apple’s supply chain management mistakes

Can clothing companies make sustainability trendy?

April 12, 2012 by  
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The Danish Fashion Institute and BSR are trying to cultivate a taste for green among fashionistas, bargainistas and the industry that serves them.

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