Clint Wilder
While in New York late last month for the annual Renewable Energy Finance
Forum-Wall Street (REFF) conference, I had the chance to catch the brilliant
Broadway production of Samuel Beckett's classic Waiting for Godot, starring
Nathan Lane and Bill Irwin. Which seemed appropriate, considering that the
major theme of the conference – and of most clean-tech financing and
investing these days – was Waiting on Washington, and its stimulus dollars
for clean energy and energy efficiency.
What a difference a year makes. At the same conference in June 2008, the
main discussions were about how much clean-energy investing would grow for
the year, whether U.S. federal production and tax credits would be renewed,
and the consensus that even a potential John McCain presidency would be
better for the industry than George W. Bush's had been. We all know what's
happened since. Sarah Palin, "drill baby drill," financial meltdown, Barack
Obama's historic election, and the disappearance of capital from the capital
markets. "Even if [clean energy] loan guarantees come tomorrow, capital
formation is very tough right now," says Neil Auerbach, managing partner of
Hudson Clean Energy Partners. "The development process has come to a halt.
That whole process has to get reignited."
A record 700 people turned out for REFF at its customary and grandiose
Waldorf-Astoria Hotel venue, but in terms of the private sector, it was a
communal exercise in pessimism. Perhaps the most telling moment came when
audience members were asked to predict the total of worldwide third-party
clean-energy investments for all of 2009, compared to New Energy Finance's
figure of $155 billion for last year. The top two choices were $90 billion
(which would be a 42 percent drop) and $110 billion (a 29 percent decline),
with ‘third place' going to a prediction of a mere 16 percent drop, at $130
billion. Not a very bright outlook for the industry that many, myself
included, believe will be the key engine of this century's economic growth.
But the good news, and still in the 'what a difference a year makes'
category, is that we now have a presidential administration and Department
of Energy that believes that, too. Thus, stimulus money and new federal
policies. But how much, how soon, and how effective?
"Stimulus" implies something that will work quickly, but political and
bureaucratic reality is far different. Congress passed the $787 stimulus
package in February; most energy dollars won't go out the door to fund
projects until August and September at best. That's pretty quick for
government speed, but a long time for clean- tech developers and
entrepreneurs used to a faster business pace. Like it or not, however,
that's the waiting game that Wall Street is playing in 2009.
Unlike the fictional Godot who never shows up, Washington is in action. DOE
has some 250 people reviewing stimulus grant and loan applications,
according to Matt Rogers, senior advisor to Secretary of Energy Stephen Chu
for stimulus spending. "We want to fund the best projects, not just the
first projects in the door," he says. And some money is starting to flow,
including $8 billion in loans to Ford, Nissan, and Tesla for electric
vehicle, fuel efficiency, and battery technology development.
The federal government should be an important source of capital for the
clean-tech industry, but it should not be the primary source. And Rogers,
formerly a senior partner at McKinsey, agrees. "We may be giving
mouth-to-mouth resuscitation to the capital markets now," he says, "but
we're targeting projects that the private sector can take over in the long
term. We'll take a broader role over the next 24 months, but the federal
government should not be the long-term solution."
That's good to hear, but at present we have the somewhat surreal dance of
Washington acts while Wall Street waits. Talk about a role reversal. And
Washington acted in a big way just before its Fourth of July recess, when
the House passed the watered-down but still significant and historic
American Clean Energy and Security Act. For the first time, the bill
mandates a carbon cap and a national renewable energy standard - important
steps to help move the clean- tech industry forward.
Now the bill heads for the Senate in the fall, with more debates, probably
more compromises, and especially more time passing. But the reduction of
carbon emissions can't wait, and clean-tech investors shouldn't either. Near
the end of the REFF conference, American Council on Renewable Energy
president Mike Eckhart asked (somewhat incredulously), "Are we really
waiting for the federal government as the gatekeeper to Wall Street?" Let's
hope not. Because as Beckett's characters Vladimir and Estragon know all too
well, the waiting game can get pretty old.
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Wilder is Clean Edge's contributing editor, co-author of The Clean Tech
Revolution, and a blogger about clean-tech issues for the Green section of
The Huffington Post. E-mail him at
wilder@cleanedge.com .
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