Panel, Fireside Chat
Closing the Clean Energy Investment Gap
- Investment Gap Magnitude: The panel discusses a required investment gap ranging from a $15 trillion incremental cost over the $30 trillion needed to maintain fossil infrastructure (John Woolard) to a total $44 trillion gap (Greg Dalton/Andrew Chung).
- Current Deployment Status: Approximately $1 trillion in renewable or zero-carbon investment has already been deployed globally.
- Solar Cost Trends: Solar costs have declined by roughly 10% CAGR in the distributed sector; new capacity in the U.S. last year accounted for 30% of total new build, with some plants bidding as low as $0.03/kWh without subsidies.
- Nuclear Energy Debate: A disagreement exists regarding the definition of "clean energy," with Lynn Jurich noting a lack of concrete data linking wind proliferation to reduced asthma rates in China, while Andrew Chung confirms China is aggressively pursuing nuclear alongside renewables.
- Centralized vs. Distributed Grid: The consensus rejects an "either/or" binary, favoring a hybrid model where distributed generation (rooftop solar + storage) complements a modernized, bi-directional centralized grid rather than replacing it.
- Nevada Policy Reversal: The "centralization empire" successfully blocked Nevada's net metering for five years, creating regulatory uncertainty that the panel warns could lead to stranded costs for utilities building redundant infrastructure.
- Financial Innovation Barriers: John Woolard and Lynn Jurich identify a lack of consistent regulatory frameworks and the "bait-and-switch" nature of state Public Utility Commissions (PUCs) as primary deterrents to private capital, outweighing the lack of capital itself.
- Policy Recommendations: Andy Karsner urges the Obama administration (and future leadership) to utilize executive power to expand REIT eligibility, support the MLP Parity Act, and ensure PACE financing is not disabled by federal agencies protecting Fannie Mae/Freddie Mac.
- Global Capital Strategy: Andrew Chung argues that the U.S. cleantech sector's over-reliance on domestic markets has limited its success; he proposes creating investment structures that leverage U.S./European technology innovation with the "survival-driven" capital demands and government pressure found in China, India, and Southeast Asia.
- Sovereign Wealth Funds: The panel identifies Middle Eastern sovereign wealth funds (including Saudi Arabia's $2 trillion fund) and Asian state funds as critical, underutilized capital sources that require cultural bridging and relationship management to access.
- Green Bonds Status: Lynn Jurich and Andy Karsner note that the $37 billion green bond market in 2014 has flattened, citing a "virtuous hodgepodge" of inconsistent definitions as a barrier to scaling; they call for a standardized "moral currency" for natural capital.
- SunEdison Bankruptcy Context: The panel minimizes the significance of the SunEdison bankruptcy, contrasting it with the $50 billion in bankrupt coal capacity and 120 bankrupt oil/gas firms, suggesting it has only marginally increased credit scrutiny.
- Innovation vs. Scaling: Andy Karsner argues that scaling existing technologies is the more acute need, while Andrew Chung and Lynn Jurich counter that early-stage R&D and "moonshot" technologies (fusion, advanced storage) are currently underfunded and essential for long-term decarbonization targets.
- Energy Efficiency Impact: John Woolard highlights energy efficiency as having delivered more impact than renewables to date, citing California's "load order" preference and Germany's high-price-driven efficiency push, though he warns against relying on it as the sole solution without accompanying generation.
- Storage Dynamics: The panel frames storage not as a maximization problem but a "minimization" problem, where strategic placement is required to fill grid gaps rather than replacing the need for generation or transmission infrastructure.
- Consumer Empowerment: Lynn Jurich reports that over one million U.S. homes have solar installed, exceeding electric vehicle adoption rates, driven by consumer desire for bill savings ($20–30% reduction) despite regulatory hurdles regarding feed-in rates.
- Future Funding Sources: Andrew Chung notes that 1955 Capital raised $200 million in three months, primarily from Asian investors, to launch a strategy connecting Western technology with Eastern deployment needs; he suggests billionaire family offices and groups like the Breakthrough Coalition are necessary for high-risk, long-cycle innovations like fusion.