Phase II of Renewable Energy in America

National Policy Conference

November 28-29

Cannon Caucus Room, Washington, DC

American Council On Renewable Energy (ACORE)

Good morning everyone and welcome to the sixth Annual ACORE National Policy Conference and the fourth in a series since we named it Phase II back in 2004.  We call it Phase II because at the time we thought we were in a continuum, an unending continuum of developing technologies and commercializing technologies and putting them into use and there was one long slog. And someone had a bright idea and said why don't we divide it into phases and declare that the old phase is done.  The U.S. government ran a program for 30 years in research development and demonstration and by golly has succeeded and we have a wonderful suite of technologies to put into use.  So let's declare Phase I being the R&D phase where mission accomplished and Phase II is the chance, the challenge ahead, which is to put these technologies into use at scale in the U.S. and around the world.  So Phase II actually lasts for 25 years, we are in Phase II to actually cause the scale up to happen and make it really happy, no kidding, that we really make that happen and it is going to be a big challenge for 25 years, so here we are again in Phase.  I hope in the year 2026 that we declare Phase II.  We'll see how that goes.  Our purpose here today is a little unique.  We are not going to look at the outlook on renewable energy in America like we did last year.  This time we are going to look at the outlook in renewable around the world, the global outlook on renewable energy, and then draw implications for what we do here in the U.S., because we know that there are countries around the world that are ahead of us in putting these technologies into use. There are lessons to be learned. There are current practices to listen to and see if we can adopt them here. We also have some leadership here in the U.S., so there is transference back the other way.  We always have led in technology and we probably always will with the investment still going on.  We'll take today for a global outlook on renewable energy and draw the implications for the U.S.  We are honored by the work of the six co-chairs for this conference, our good friends Rodger Ballentine, Hank Havock [ph?], Dan Ricker, Judy Seagull, Pat Wood and from Europe Wolfgang Paulse [ph?].  Thank you all for your excellent work in putting this remarkable program together. Also today, there are special stories to be told.  For example, Dan Ricker comes last night from California on the heels of his wonderful success in putting Google into the renewable energy business.  And if you saw my quote in the "USA Today" yesterday, which I didn't, but it had something to do with there is a good reason for it and you will have to ask Dan to explain that, but I think there is a good reason for it.  We are honored especially by the suite of tremendous, fabulous world leaders who are our speakers today who have assembled here to speak to us and then to talk with us throughout the rest of the day.

M1:  Ladies and gentlemen, take your seat. We'll begin.  This has been the most extraordinary of days.  I expected a sleepy opening and a bang about the middle of the afternoon and then we would settle into the closing.  And what we had was a world wind to open with Andy Karsner and John Geisman [ph?], where once again we all agreed we are not going to accept the status quo, but we're not going to get locked into problem definitions.  We are going to move to solutions.  We are going to look outside the United States for legitimate examples of success that we can adopt here, not to say that is the only place.  There are examples of success in the United States, in many of the states, but there are now examples of success in Europe and in China and in Japan and elsewhere where we can learn from them.  The big message coming through from Europe is the feed in tariff system works and we need to look at that.  And as I pointed out earlier, it actually builds directly on the purple [ph?] law from 1978 that we passed that created the independent power industry to begin with.  There is a successful formula there we need to look at and the Europeans are here offering to help us look at that.  So we are going to come out of here with that.  In the last sessions, we hear from the business community.  We heard from finance and you heard in the beginning with Admiral McGinn from the National Security Perspective, how we must do something, how the business community is clearly ready to act given a reasonable policy environment, and the financial community not only is ready to act, they are here in Washington saying words like, it is the duty of our public officials to take action on these issues.  We're hearing that from the financial community, not from the lobbying community or the environmental community.  We are hearing it from the leaders.  The very top of Wall Street are saying our public leaders must act on these issues.  So we at ACORE are going to help bring that voice forward, about national security, about business ready to act, and about the financial community not only ready to invest capital, they are investing capital, only asking for the stability to continue investing that capital.  Now all this then leads to not just a conference next year, but a most important conference perhaps of all time in our field, the Washington International Renewable Energy conference in March of 2008.  And this is going to be led by our State Department with the close collaboration of the USDA and DOE, and the continuing support of the Departments of Interior and Commerce, the EPA, the White House CEQ intimately involved in this, plus even other agencies like NASA, the XM Bank, OPEC and others.  They're all involved.  It is an official meeting and we'll be hearing from Ambassador Reno Harnish in just a minute about the government's organization of that and from Under Secretary Tom Dorr who has really been an inspiration in getting the other agencies to join up with this.  But before we get into the specifics of the conference, a conference of this magnitude takes support, not just our heartfelt support; you have to pay some big bills.  And we went out and asked the corporate community would you support this and we are here to bring back Katrina Landis to thank her one more time for BP, because I received an email today,  I am not kidding.  I received an email this morning from BP Houston where they confirmed that Bob Malone signed the check authorization on Tuesday.  It is no longer a promise.  It's in process.  So let me bring back Katrina Landis for BP for one more expression of our appreciation. <Applause>.

Katrina Landis:  So this isn't even a case of the check is in the mail, it's the check is in the email. But we are absolutely thrilled to be sponsoring this event.  We think it is going to be, as I said earlier, a tremendous opportunity for everybody who is interested in renewable energy, and so we hope everyone will join us. Thank you. <Applause>.

Michael Eckhart:   So it is a combined effort.  It is a combined effort of the private sector working with the public sector in partnership. You know, so often in Washington you hear the phrase public-private partnership, but no one has ever seen one.  <Laughter>.  We have one and we have a MOU, memorandum of understanding between the State Department representing government and ACORE representing the private sector with a list of collaborations, listed down there that we have worked out good words and we are working with those words and we treat them seriously and we are trying to live up to every one of them.  It is hard to put on a one-time world conference.  If anything it's hard to put on and every year an event like this, this is a little bit difficult; doing a one off, this is hard, because there is no model. There are no agreements in place from last year. There are no understandings between the people. We're literally creating a high-risk, high opportunity, high gain, big down side, big up side, one time only world event and it scares the heck out of everybody frankly you know.  It is hard.  And you got to come up with the money.  You got to organize it right.  You know and most times you say well give it a shot.  We will optimize and perfect it next.  There is no next year.  It's got to be perfect the first time and everybody feels that.  And the thing I love about working with the government team this time is I feel that they feel the same thing. We are not working with people that aren't trying to get it right.  They are really trying to get this one right and that is what makes it so exciting and that's why we put in long hours on it.  Let me tell you just a little bit about it and then I am going to have my co-chair for this session Judy Seagull come up and talk about a certain aspect of it, but just a little overview.  There will be this official meeting, about 2,000 invited delegates, 1,200 or so government, maybe 800 not government.  It will be up to the government to organize that and they are working on that and Reno and Tom will tell us about that.  Then there will be official side events.  If any of you have been involved in UN type world meetings, you have an official meeting going on and then you have some organizations that feel that the official meeting agenda doesn't address their number one concern and how can they get their information out fairly?  So someone created the idea of side events, which is if a non-profit group or another government needs to get their view out and it is not being held in the main room, they'll have an official side event and Judy Seagull is managing that and we could have as many as 50 we think, side events. She'll tell us about that.  And then ACORE is responsible for delivering what goes on downstairs so to speak, which is an actual trade show including a full business conference and an exhibition in the building at the same time.  What makes it exciting for the ministers to come from around the world is to talk to other ministers. Well yeah I guess there is something to that.  But what seems to have really gotten them excited is the idea there is a trade show going on downstairs and they and their staffs can go down there and be educated.  It is not just talk.  There is real substance of education and knowledge gain.  And that's coming along extremely well.  Jordy Rosell [ph?] is heading up the business conference, which is being put on by all 15 trade associations in renewable energy in the U.S., 12 in the U.S., three international including the European Renewable Energy Council with Oliver Schaefer here this morning and the Chinese Renewable Energy Industry Association with Lee Japang [ph?] who was here this morning. They are collaborating with us to create this event and we have others involved in creating and building this in a world class level.  Bill Lowrey [ph?] sitting right here, raise your hand Bill.  Bill Lowrey [ph?] of Equity International is working with us.  By promoting the trade show not to companies but to nations to create national pavilions and we have just closed a Japan pavilion. We have a German Pavilion. This is where a country will pre-purchase 20 or so booths in the trade show for their companies and then in turn market it and Bill thank you very much for your assistance in that.  We have a lot of our own team involved in this.  I will point out John Mullan, who is very involved in the overall guidance of the thing. There are so many of us here that are involved in creating this event.  It's a full press effort for ACORE to work with the government.  It's hard to do and we are committed to doing it extremely well.  I think there is one more slide.  In the sense of putting this in context, there was born out of the Bonn meeting and I will let Reno and Tom talk about that, but there was a certain format in Bonn that it was countries coming forward with action plans, with a sense of respect for sovereignty, that each country had a plan in renewable energy and other countries would need to listen to that, maybe to learn and to recognize what that country was doing, but also to present their own and then look for voluntary areas of collaboration, not conflict and criticism like there is a world government here.  But these are independent countries presenting in one forum what they are doing and seeking collaboration with other countries that are doing similar things.  What could be healthier?  And it was a remarkable, remarkable meeting.  That led to a second meeting, the Beijing 2005, which was about a half size version of that, but had the same culture.  It had the same culture of independent country action plans with a search for collaboration, seeking to do well, and it was again, remarkable.  From that came the thought, what if the U.S. hosted meeting number three and somehow there was created a series from this, like the Olympics where a country would host every three years a world meeting on renewable energy, an official ministerial meeting, where every three years the countries got together who wanted to work on renewables.  If you don't want to work on renewable, don't come. But if you do come to this meeting, present your plan, look for collaboration, go home better educated and prepared to carry out your plan.  That's the idea of this meeting.  And then the question mark down at the bottom, I am pleased to say that it seems to be that all the forces at work have agreed that there will be a meeting number four, which means the series then will be created.

M1:  Well let me summarize today by saying that it seems like a week ago that Jody Rosell [ph?] stood up here and briefed us on ACORE and the sponsors of our conference.  Does that not seem like a long time ago? Thank you Jody.  And John Geisman opened a conference by saying we are not going to accept the status quo.  We are going to, it just doesn't make sense to do so many of the things we are doing.  It just doesn't make sense.  It just doesn't make sense.  Like grant us the wisdom of your perspective is how he closed his talk and that led, I think and motivated our speakers all day long.  Andy Karsner then in his quiet and unassuming way briefed us for only a few seconds.  I thought it was fabulous.  I have seen his speech six or seven times and that was by far the best.  He said to use the bipartisan board of ACORE to develop bipartisan, nonpartisan strategies.  He said, we have been, not ACORE, but we in the renewable business have been problem identification in spades.  We need solution identification.  And he said, let us stop the argument that these technologies are marginal and always will be, instead focus on the opportunity to build new coalitions that work on solutions, if you recall he said again and again. Vijay [ph?] ________ came up and promised us a clean energy future and a clean energy revolution and he had three megatrends to talk about.  But I though the most pithy thing he said was regarding the electric utility industry that this is innovation in the least innovation industry on earth.  It just sort of captured, you know we are not out there on an open playing field running with the football.  There is defense pushing back and to be doing innovation in the least innovation industry on earth I thought was worthy of his status as a journalist with the economist.  Mecto Roto [ph?], we are so honored that she came here and sat with us all day.  I know you went off to meet with some important people there a little while ago, but here you are.  You have come back and thank you.  We are really honored that you came across to be with us today. And there were so many parts of your speech that I enjoyed, but you did say and I thought this was one of the points, and we didn't talk about it in advance, but you said it. The EU is not the world leader in many renewable every technologies. The EU is the world leaders in many renewable energy technologies.  Let that sink in and be quoted in some newspaper articles.  We've got some catching up to do. The pre-condition for success in renewable energy has been a reliable framework of stable policies.  Isn't that what we have been saying in this country Pat and Hank for the last five years? And now from Europe comes the statement that the precondition, which we don't have, the precondition for success in renewable energy is a reliable framework of stable policies.  Thank you for saying these things and coming here. David Sandalo [ph], the other quality, brilliant analyst and journalist with his book has come out and I just thought the comment he made about from that mayor, Charlie,  I didn't get his last name, that it is hard to get people to believe in something that has never happened before.  Isn't that what we are up against with the American people?  They are busy in their own lives. This has never happened before.  We are trying to tell them we have a better world and we just have not persuaded them yet and I do want to go back into Europe and find out how you did it. Michael Lebright [ph?], thank you Michael for coming and a fantastic friend to ACORE and the whole renewable energy community, giving us the statistics, the facts of the matter, there was $100 billion in total transactions, which includes M&A and so forth last year and there could be $94 billion of new capital coming in, which will probably be 120 in total transactions this year. Basically, we are $100 billion business in what is a $1.2 trillion total energy investment as John Cavalier gave us that statistic to compare against.  Janet Saler [ph?] I though gave a brilliant speech representing both herself and the whole run 21 network that has funded Eric Martinel and World Watch to assemble this whole status report, and you got to read this.  You got to just Google, it is not a part of our life is it?  <Laughter>.  Just Google Global Status Report and up pops and you can get it for free for '06, it is a fabulous read and it gives you all the statistics on what is really going on in the world. It is really an authorative piece.  And she pointed out that in 2006 we are going to see 31 gigawatts of new renewable electricity added, bringing us up to 237, so that thermometer is going up. Lisa Fang, I __ for coming all the way from China just for this conference and he came here because he has such a strong relationship with us and he wants to bring a better relationship to the U.S. and take one back with him with China and really work together these two countries on renewable energy.  Maybe they're arguing on climate, but let's work together on renewable energy and he is thinking those thoughts.  And he closed actually by wishing us, I don't know if you caught it with his English, wonderful English for being Chinese, but he closed by wishing that the U.S., Europe and china will all be leaders in renewable energy.  Isn't that a sweet thought.  <Applause>. Did somebody clap on that? Thank you.  Antonia Fluger [ph?] from the IDA, somebody else said that was, I forgot who it was, somebody else said that was the best presentation they had ever seen from the IEA and I agree, because it was the first one that had some hope that renewable energy was going to go some place because they have been fighting, well I don't need to say it. <Laughter>.  Scary it was their official forecast that world energy demand could increase by 55 percent by 2030 under the status quo, but we have said the status quo is unacceptable.  All right.  You are getting the message. But that renewable energy could become in the IEA's forecast 40 percent of electric supply by 2030.  I think even the institutional barriers are falling when the IEA is willing to see it like we see it, and I realize it was Oliver who said that right.  And also from the IEA to conclude that the feed in tariff has become not only the most effective policy to move renewables forward but the most cost effective, which is actually what Madame Moto [ph?] also said, the most effective and the most cost effective now coming from the IEA. That's going to influence a lot of countries for them to be saying that.  Hank you gave a lot of really important things, but I got to tell you the one thing that is going to stick in people's mind is that plane that got 80 feet further than last year, which really characterizes some of the inside the ball park politics in Congress these days, satisfaction incrementally moving a few feet forward is acceptable.  It is not acceptable, even in Congress. We shouldn't make it acceptable.  Denny McGinn has always been our leader along with Gil Homburg [ph?] and Jim Wolsey in the National Security arena.  But he's lived it as a retired Deputy Chief of Naval Operations and Aviator and by the way he never tells people the reason he became such a famous naval officer is he was a test pilot flying some of the most exotic aircraft on earth and distinguished himself there and then ran aircraft carriers and fleets and all things. So here is a man who speaks not only from the heart but from knowledge, from running the military.  And the cost of oil imports now make up a third of our trade deficit, the solution begins by recognizing that we have a problem.  I mean yeah, we always talk, talk, talk, but you are saying hey, recognize we have a problem then you act. You gave us your wish list for the energy Bill, tough CAFÉ, remove the subsidies, policy stability.   I just thought it was a very balanced and astute presentation.  Katrina Landis, not only are they sponsoring the Wyrick [ph?] meeting, but they are all over this thing. I mean that company is really doing renewable energy some good and I am glad we had them back again this year and she takes the job on Monday to head up their alternative energy.  We got to get them to change that phrase thought.  I thought oil, gas and coal were alternatives to renewables. <Applause>.  Thank you.  And she said that BP supports the national RPS.  In this political environment to walk into Washington, DC in the ___________ caucus room and say your corporation supports the national RPS against the U.S. Chamber of Commerce,  __ Institute and all of our good friends in business is courageous and I thank her for doing that. <Applause>.  And she said the concern about the future leads to demands for change today.  I don't know who coins these beautiful words you know in the BP marketing department, but they do __.  Maybe she came up with it herself. But concern about the future leads to demands for change today, and that goes back to the heart of how to persuade the American people.  They obviously don't have a concern about the future, because they are not demanding action today.  There is the problem, about the mayor who says we can't persuade people to change something they haven't seen before. We haven't generated the true gut level concern in the American people that would cause them to demand that change. So through these speeches, I mean we are kind of figuring out the problem by listening to these speeches and the insights in the room. John Cavalier, you think he would come here and talk about financial statistics after financial statistics. But what the head finance guy on Wall street and in our space came in and said is that the body politic has a duty to put political differences aside on the issues of climate and energy independence and do it now. It sounds a lot like Andy Karsner if you ask me, all right. The financial community is angry enough that they are coming in there and starting to talk loud at the political bodies saying you need to address this.  So you can bet your, yeah you can bet we are going to make, John has agreed to be chair of our finance committee section and we are going to bring him back with others with him to talk to Congress and demand this kind of action and I think they will listen to him.  He said the smart money is betting that the U.S. will adopt real policy change in the areas of energy and climate.  That's interesting. The smart money is betting it is going to happen. That is the first confidence builder I have heard in a long time frankly.  Then we moved on to talk about the Wyrick [ph?] meeting and Reno Harnish thank you and I said when we talked after your speech I thought that was extremely interesting to start with foreign policy is getting set and then how foreign energy policy is being set and then within that context how the Wyrick [ph?] meeting is being planned, which was extremely instructive to hear that.  And then we heard from Tom Dorr and Tom I understated his budget by nine fold, but I hope he'll forgive me.  Really I think you got the sense of the transformation he's brining to USDA and mobilizing really frankly huge volumes of capital in the Ag sector, the UDSA has control of.  He says you know, it is a good perspective.  You know when we are debating international things. He says it's not a race against the other countries.  It's a race against our own potential.  I mean there's elephants right there.  It's not a race against other countries. We would agree with that. But to capture the thought that it is a race against our own potential, that if we are waiting we are disappointing ourselves by not achieving our potential.  He said the silver lining is that the renewable energy will become ever more cost effective over time versus fossil fuels. We are on the right side of the trend. We are on the right side of this trend. The trend isn't going against us. The trend is going for us. But that is not to say that time is on our side, because the problems have to be addressed now and today. And then Mohammad ____________, I thank you for coming and honoring us with an overview of renewable energy and the idea that renewable energy can achieve 40, 50, 60 percent by 2025 and it is not just me and you saying it.  There are a lot of carefully studied people out there saying it now, that this is really achievable and I think that's why we are here.  I thought your chart with so many countries where 40, 50, 60 percent can be achieved really was the cap stone of this conference, to realize that in Phase II the global outlook on renewable energy is this could be big if we do the right thing.  And back to Tom Dorr's words, it is a race against our own potential. So with that I want to thank the co-chairs of the conference, Roger Ballentine, Hank, Wolfgang, thank you for coming and working with us all the way since last August.  You came over and we had our work sessions to plan this conference,  Judy Seagull thank you for all the international and Pat Wood thank you for joining our Board of Directors and co-chairing this conference and Dan Rickert [ph?], always bringing something special, never the same every year, very exciting, thank you co-chairman John Geisman for your leadership, one more time for my staff, the interns and the volunteers that made this conference possible. <Applause>.   So with that, I leave you with Tom Dorr's words, that it is a race against our own potential and let that be our watch word for the year until we join here again next year for the Phase II conference. So now I invite you to join all of use for a very nice reception at the Capitol Hill Club, which is catty corner behind this building to the northeast.  Please join us for some drinks up there and some nice food. Thank you for joining us today. <Applause>.