Event: REFF Wall Street 2009
Without Fixing Current Approach to Incentives, Renewable Energy Industry Will Grind to a Halt
Hosted by The American Council on Renewable Energy (ACORE) and
Euromoney Energy Events, REFF-Wall Street is the leading national
conference of over 600 top executives, developers, investors and
lenders in the renewable energy industry. The main theme of this yearâEUR(TM)s
event is the effect of the financial crisis and economic recession on
renewable energy companies and projects, and the steps that need to be
taken to ensure that the sector has the financing, incentives and
support to thrive.
The press conference explored the status of stimulus funding and
speakers offered recommendations on how to move funds quickly into the
market. The core issue is that government stimulus funds allocated by
Congress at the AdministrationâEUR(TM)s behest are poised to provide a
tremendous boost to the renewable energy sector in 2010, yet the
current slow down in execution has had a detrimental effect during
2009. Getting funds flowing in the second half of 2009 is critically
important to keeping the current renewable energy industries going. A
few factors play into this:
âEUR¢ Lenders, particularly in the US, are holding back waiting to see
what the parameters of government grants and loan guarantees will be
before they move forward with projects. During the 2004-2008 boom
period, as much as 90% of senior debt for U.S. renewable energy
projects came from foreign banks. Many of those foreign lenders have
reduced their participation due to banking issues at home, and there is
an urgent need for U.S. lenders to enter the renewable energy market
and fill the void.
âEUR¢ The proposed Federal RES now pending in Congress has been scaled
back to such an extent that it will have little or no beneficial
effect. Unless the RES provisions are strengthened substantially, the
market will continue to be driven by State RPS programs, thereby
missing a tremendous opportunity to establish a meaningful national
commitment to renewables as others such as Europe, China and India have
already done around the world.
âEUR¢ Uncertainty with the Federal RES and proposed Cap and Trade
Legislation are creating paralysis with lenders and investors as they
are waiting to understand the landscape before making major investment
âEURoeWe are currently running the risk that Washington is becoming the new
Wall Street. If Washington becomes the gatekeeper on financing of
renewable energy companies and projects, the renewable energy industry
will be severely limited; and we will have no chance of reaching our
energy and climate goals - such as President ObamaâEUR(TM)s call for a
doubling of alternative energy production in three years,âEUR said Michael
Eckhart, President of ACORE.
âEURoeWe ask President Obama to set firm deadlines for program guidelines
and decisions, and urge him to ask the Office of Management and Budget
to act as a facilitator and not a bottleneck on the process. We must
find ways of using the governmentâEUR(TM)s capacity to provide incentives, and
Wall StreetâEUR(TM)s capacity to go to scale,âEUR Eckhart continued.
The speakers called for a set of actions to be taken to create a
smoother transfer of funds into the renewable energy sector and a true
partnership between the private sector and government:
âEUR¢ The administration should strive to create a more effective
vehicle for implementing Renewable Energy Incentives. One
recommendation is the creation of a new program called the Clean Energy
Development Administration (CEDA) or another variation called the Green
Bank. This would be a true public/private partnership in a similar
fashion to the existing Small Business Investment Corp (SBIC) program;
or alternatively a domestic version of the Oversees Private Investment
Corporation that absorbs non-commercial risks, in the case of renewable
energy being early stage technology risks.
âEUR¢ Private sector lenders and investors need to pro-actively engage
federal policy makers to develop innovative public/private investment
vehicles that will efficiently and effectively deploy capital while
avoiding extra layers of government approval.
âEUR¢ From both a climate change and an economic perspective, the
Federal RES needs to have a goal of 25% renewables by 2025 plus more
short-term incentives to get the scale-up happening on schedule.
âEUR¢ The renewable energy industry urgently wants to see greater and
bolder action in the Federal government on the financing and build-out
of a national electric transmission grid, with the goal of
revolutionizing the electricity grid in the same manner that the
Internet has revolutionized communications.
The speakers included Michael Eckhart, President of ACORE; Dan Reicher,
Director, Climate Change & Energy Initiatives, Google Inc.; John
Geesman, Co-Chair of the Board of Directors for ACORE; Nobuo Tanaka,
Executive Director, International Energy Agency (IEA); Neil Auerbach,
Managing Partner, Hudson Clean Energy Partners; and John Cavalier,
Managing Partner, Hudson Clean Energy Partners.