Steyer, NRG's Crane share visions for energy industry's future

CHICAGO -- Two of the energy industry's most visible agents of change delivered messages here yesterday on policies and business models they believe are needed to reshape how energy is generated and how it's used.

Billionaire climate activist Tom Steyer and NRG Inc.'s David Crane delivered separate keynote speeches as part of the Clean Energy Challenge, a competition among early-stage companies and student teams from around the Midwest who were pitching business models for a share of $500,000 in prizes.

Crane, the outspoken CEO of the nation's largest independent power generator, covered a broad range of topics during a lunchtime question-and-answer session. And many of his answers revolved a central theme -- his belief that today's electric power business won't be recognizable in five, 10 or 20 years, and that distributed generation will gradually supplant the current centralized power system.

"The fact that distributed solar is going to take over the built environment in the United States, it's a completely foregone conclusion that that's going to happen," he said, echoing the message he delivered in a well-publicized letter to NRG shareholders (EnergyWire, March 31).

Crane was asked about a range of topics, from electric cars to microgrids to the company's plans for coal-fired power plants that NRG just acquired in Illinois to nuclear power.


"Nuclear power is probably the biggest asset we have in the fight against climate change," Crane said, noting his decision to pull the plug on a Texas project just weeks after the Fukushima Daiichi disaster in Japan. "But I'm a business guy and I'm a pragmatist, and there's no future for nuclear in the United States. There's certainly no future for new nuclear."

Crane, considered one of the power industry's most vocal executives on the subject of climate change, told the audience that it would be a mistake to pull the plug too quickly on the nation's aging coal fleet -- a point driven home by January's polar vortex and the threat it posed to reliability of the electric system in the Northeast.

NRG has discussed switching some of its older coal plants in the East to run on natural gas, he said, but the company was thankful to have those plants available. Few people, he said, have fully realized "how close the system came to collapsing in January because everyone wants to go to natural gas and there wasn't enough natural gas in the system."

"The purpose of having old coal plants, to be frank, is keeping the lights on for the next three, five, 10 years," he said.

Crane said public debate over climate change and energy should be rooted in science and based on the same set of facts. But often, in politics, it is not, he said.

"I'm not anti-utilities, I'm not anti-nuclear, I'm not anti-coal," he said. "I'm just anti-bullshit."

Crane's speech largely piggybacked on the earlier keynote address by Steyer, who called energy the "challenge of a generation" for Americans.

Leveling the energy field

Steyer compared today's energy business to the telecommunications industry ruled by Ma Bell 30 years ago, and said a technological revolution in energy is waiting to happen if appropriate policy changes are put in place that allow the clean energy economy to flourish.

"Until the rules are really right, we may do well, but we'll be fighting with one hand behind our back," he said.

Policy is an area that has been Steyer's focus after leaving Farallon Capital Management, the San Francisco hedge fund he started. Since then, he's had a role in founding several groups working to shape policy at the federal and state level, including the Risky Business project and Advanced Energy Economy to be a voice for the clean energy industry in the policy debate.

Steyer said there needs to be full cost accounting for energy and its costs to health and the environment to help "level the playing field" between energy sources, and only then will clean energy be able to win head-to-head against fossil fuels.

"When you make a ton of money off a subsidy, you will fight really hard to keep it," he said. "That is what's happening today."

The Clean Energy Challenge was the fourth such annual event organized by the Clean Energy Trust, a nonprofit dedicated to accelerating the development of clean energy businesses in the Midwest. Previous challenge finalists have filed more than 40 patents and attracted $40 million in outside funding.

Seven student teams and 10 early-stage companies were finalists in the competition and, in a format that vaguely resembled the reality television show "Shark Tank," each group had about 15 minutes to pitch its business plan to venture capitalists, investors, and energy industry executives and leaders assembled in the audience.

Judges included executives from NRG, JPMorgan Chase, Chicago-based venture capital firm True North Venture Partners and Commonwealth Edison.

Twitter: @jefftomich | Email: jtomich@eenews.net

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