How to fix energy profligacy tbli 6-17-13

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TBLI CONFERENCE™ is the prime annual global networking and learning event on Environment, Social, Governance (ESG) and Impact Investing.

TBLI CONFERENCE USA New York 2013
Monday and Tuesday, June 17-18, 2013

Speakers:
Paul Rose
Vice President of the Royal Geographical Society
Richard L. Kauffman
Chairman for Energy Policy and Finance for the State of New York - Governor of New York's Office and Cabinet - United States of America
Martin Rapaport is chairman of the Rapaport Group and founder of the Rapaport Diamond Report

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How to fix energy profligacy tbli 6-17-13

  1. 1. PROPRIETARYANDCONFIDENTIALPROPRIETARYANDCONFIDENTIAL [TITLE] PROPRIETARYANDCONFIDENTIAL 444 Madison Avenue, New York, NY 10022 212.486.3400 www.newworldcapital.net © Copyright 2013 by NewWorld Capital Group, LLC. All rights reserved. NewWorld Capital Group, LLC Growth Equity for a Rapidly-Growing Sector PROPRIETARYANDCONFIDENTIAL NewWorld Capital Group, LLC America’s Energy Profligacy… How to Fix It PROPRIETARYANDCONFIDENTIAL Growth Capital for a Rapidly-Growing Sector
  2. 2. PROPRIETARYANDCONFIDENTIAL NEWWORLD CAPITAL GROUP Reducing U.S. Energy Profligacy No silver bullets, no silver buckshot – only brass BBs 2 U.S. energy efficiency supply curve – 2020
  3. 3. PROPRIETARYANDCONFIDENTIAL NEWWORLD CAPITAL GROUP Needed: Four Initiatives for Energy Efficiency 1. An appropriate, upward ratcheting price on carbon (plus enforcing the Clean Air Act of 1970) to internalize the Great Externality 2. Rationalizing U.S. government policies—e.g., repeal hydrocarbon subsidies; create “fade out” renewable energy subsidies; create equal “playing field” expectations for long-dated investments; allow equal access to MLP structures 3. Regulation and incentives to force energy efficiency on the irrational consumer – e.g., – Enact stronger building codes for renovation and new builds – Create “top runner” appliance standards; outlaw incandescent bulbs – Limit standby power to 1 Watt – Provide “de-coupling” utility incentives to pursue energy efficiency – Provide financing support for energy retrofits 4. Government funding for deployment of new energy technologies (getting to efficient scale vs. legacy energy businesses) -- more important than government support of energy R&D 3
  4. 4. PROPRIETARYANDCONFIDENTIAL NEWWORLD CAPITAL GROUP Needed: Rational Basis for Decision-Making • Overcome the bias toward First Cost vs. Lifecycle Cost • Lease financing at scale (such as is developing for residential solar) 4
  5. 5. PROPRIETARYANDCONFIDENTIAL NEWWORLD CAPITAL GROUP Needed: More Private Investment • More than $6.5bn of venture and private-equity capital invested in energy efficiency since 2007 – but the industry is still woefully undercapitalized – $40mm VC investment in Q412 (lowest since Q310) – Market is missing middle- and lower-middle market players • Investors invested in 10+ EE companies include: KPCB, GE, Foundation Capital, Intel Capital, Braemar, New Enterprise Associates, Rockport • Must show success to draw further private investment 5 Source: BNEF, EnergyRealities.org; Clean Energy Pipeline, VB/Research VC and PE Investment (Excluding Buyouts) in Energy Efficiency
  6. 6. PROPRIETARYANDCONFIDENTIAL NEWWORLD CAPITAL GROUP Needed: Technologies At Scale 1. LED lighting 2. Solar PV 3. Grid-scale storage 4. Compressorless air conditioning and electro- chromatic windows 5. Digital-power conversion (to less expensive and lighter transformer switches) 6. Water treatment technologies 7. Waste recovery (e.g., e-waste, waste-to-fertilizer) 8. Biofuels and electrofuels (e.g., biodiesel, hydrogen) 6 Source: McKinsey & Co.
  7. 7. PROPRIETARYANDCONFIDENTIAL NEWWORLD CAPITAL GROUP Some Hope: Projected Efficiency Changes 7
  8. 8. PROPRIETARYANDCONFIDENTIAL NEWWORLD CAPITAL GROUPNEWWORLD CAPITAL GROUP This presentation may contain information, text and images created and/or prepared by individuals or institutions other than NewWorld Capital Group, LLC ("NewWorld") that may be protected by copyright. In most instances, the sources of information, text and images are indicated in captions. NewWorld considers this presentation to be educational and has not sought permission to use these sources of information, texts and images. These documents are to remain confidential and proprietary for the informal educational purposes of the audience. Users must seek permission from the copyright owner(s) to reproduce, distribute, or otherwise use this material. Please contact Danielle Joseph (danielle.joseph@newworldcapital.net) if you need assistance in identifying or locating the copyright owners. While the authors have made every effort to provide accurate information in this presentation, NewWorld specifically disclaims all legal liability with respect to the accuracy, completeness, or usefulness of any information contained in the presentation. The statistics and estimates are presented for illustrative purposes only. The authors and associated institutions shall assume no liability for any damages, including direct, indirect, consequential, compensatory, special, punitive, or incidental damages arising from or relating to the use of this information or the information and materials provided by or linked from this presentation. The information contained within this presentation does not constitute investment advice. PROPRIETARYANDCONFIDENTIAL 8 Disclaimer

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