Net Impact Session: What is the Smart Grid?

This past weekend, I went with about 25 other UNC Kenan-Flagler MBAs to the Net Impact annual conference, which was up at Cornell in Ithaca, NY.  Over 2000 people attended the conference, which had great speakers such as GE’s CEO Jeffrey Immelt and Grameen Foundation’s head Alex Counts.
My favorite session of the packed two-day conference was entitled, “Innovations in Electricity: The Smarter Grid of Tomorrow, Today”, and had the following three expert panelists:
•     Ted Howes, Global Lead of Energy Domain, IDEO
•     Cameron Brooks, Senior Director, Tendril Networks
•     Michael Jung, Policy Director, Silver Spring Networks

IDEO is a leading product design firm, while the other two companies are emerging firms with demand-response technologies that help make our electric grid “smart.”
Defining the “Smart Grid”
Before jumping in, the panelists defined the smart grid.  To paraphrase, the panelists described the smart grid as “the confluence of information technology into the electric sector.”  It is bringing networking technology, which already exists, think internet and telecom, to all the devices (e.g., microwaves, refrigerators, air conditioners) linked to the electric grid.  Networking technology could help utilities and customers better understand the needs of end-consumers so that electricity use can be lowered when power is not needed, and provided when it is.
Using network technology to create a demand-response system could substantially reduce future energy demand.  By demand-response, the panelists explained that when power use is high across a utility’s user area – typically during the afternoon – lights and other devices could be turned off or reduced in houses, stores or buildings.  Target, among others, already uses a demand-response system to dim lights in their stores during peak times.  According to a recent Dept. of Energy (DOE) report, building out such a system across the U.S. could reduce energy needs by about 30%.
What would a 30% reduction in energy requirementss mean for the U.S.?
With our current energy infrastructure, according to the same DOE study, energy demand/use will increase 30% over the next years, which means we would need to build 188 GWs in new generation (that’s about 188 coal plants!).  Smart grid could eliminate this need by using network technology to better gauge demand, and then respond by providing only the electricity needed by end-users.
The transformation will not be easy, because of regulatory and technical challenges (we haven’t toyed with the grid in 100 years!), but it’s doable.  Reducing the need for the equivalent of 188 coal plants sounds like reason enough to try.

- Michael Chasnow

Class of ‘11

Follow MBA Admissions on Twitter

The MBA Admissions team just launched a Twitter page: http://twitter.com/KFBS_Admissions. Please follow us! We plan to tweet about a variety of topics: admissions events, updates on the admissions season, random thoughts, useful statistics, frequently asked questions, etc. There will be four admissions directors tweeting for the MBA Admissions site: Lisa Beisser (me), Sherry Wallace, Alison Jesse and Shandra Jones.

Let us know what you think!

Renewable Energy and the Wild Wild West

On Tuesday, five UNC Kenan-Flagler MBA candidates traveled to Washington, DC for Novogradac’s annual Renewable Energy Finance Conference.  I’ve wanted to transition into the renewable energy space for quite some time; however, during my experience at business school, I have learned just how important finance is to getting renewable projects off of the ground.  With this in mind, I was excited to get my finger on the pulse of renewable energy finance on Capitol Hill.
The conference was both informative and social.  I learned about the current tax credit options available and made a couple of leads that could turn into internship opportunities this summer.
The general sense of the conference was that the rules of renewable energy finance change frequently, and remain convoluted consistently.  People were not down on the industry (except for the tax equity investment folks who looked downright beaten); however, they agreed that it was overwhelmingly complex.  One quote stood out:  “The renewable energy space is like the Wild Wild West.  It’s fun, but it’s not easy.”
Three primary financial models were covered at the conference.  They include:

•    Inverted lease
•    Lease sale-back
•    Flip Partnership

It is important for anyone interested in renewable energy to understand these models since they provide substantial value to renewable energy projects.  They are complex, but must be understood.  They are a direct result of current policy; therefore, they are immediately relevant.  In short, they are necessary for anyone who wants to enter the renewable space.
Rather than attempt to re-explain them, I recommend reading more about them from the experts here.

-Joel Thomas

Class of ‘11

Careers in Sustainability

On Friday, October 23, a panel of local entrepreneurs and VCs spoke about careers in sustainability.  Cody Nystrom of SJF Ventures served as our moderator, and members of the panel included:

Robert Creighton of Windlift
Luke Fishback of Plotwatt.com
Henry McKoy of Fourth Sector Bancorp
Bret Batchelder of Cherokee Investment Partners
Tina Prevatte, NC Choices
Shawn Slome, Twig

We had an impressive panel to close out the day with several seasoned entrepreneurs that have both founded their own companies and led success at bigger businesses by thinking entrepreneurially.  Some of the highlights of what these innovative folks shared with us is below.
Bret walked us through 4 things he thought every MBA should do:
1)    Take an honest assessment of your skills and ask what your objectives are you trying to ascertain and what building blocks will you need to find success.
2)    Find and understand your passion. It doesn’t have to be the first thing you do out of school but be driving toward it.
3)    Don’t feel bad about taking a job that pays some cash, pay off your loans, and then go entrepreneurial.
4)    Don’t be afraid to take on short term projects in a down economy.
He added that if you come from a diverse career background that can be seen as an major asset in financial institutions  right now because they need the creativity and intellect that can come from someone looking at a problem with a different mindset.
Henry McKoy had equally interesting career advice:

1)    Be a T-shaped person!  Have a solid base of knowledge with a wide range of interests and capabilities in other fields. 2)    Ask yourself what you would want to do (work wise) if money didn’t matter and then do it.
Overall, all the panelists shared a deep interest in how things worked and ways to make things better, which I see as a key to successful entrepreneurship.  Be sure to check out the web sites of the companies that presented, they are all very interesting.
Lee Coker

Class of ‘11

Job Skills in a Carbon Constrained World

Last week the Energy Club here hosted another excellent event.  Kristel Dorion, a graduate of the Executive MBA program, and John Lott, a professor of sustainable enterprise at Kenan-Flagler, conducted a presentation about the always near carbon market.
Kristel’s company, Energetix Climate, produces high quality carbon offsets in Latin America.  She is originally from Guatemala City and is working on both small scale hydro and methane capture projects in both Guatemala and southern Mexico.  She has been trying to combat climate change since the Rio Summit in 1992 and has a wealth of experience working on the juxtaposition between climate and sustainable development issues.
As a person interested in both impact investing and climate change I have always wondered about the shareholder value that carbon offsets create.  I recently did a research project with HIP Investor analyzing different grocery stores commitment to sustainability and how it was proving more profitable than business as usual.  However, the one exception was Whole Foods who offset 100% of their energy use with wind energy offsets.  I asked Kristel about this and she suggested that it was an investment that Whole Foods hopes to cash in on when there is a carbon market in the United States.  She also mentioned that the recent House version of the climate bill (Waxman-Markey) included a provision that said offsets created before 2009 were invalid.  It’s not that I am anti-offset, but from a shareholder perspective I would far prefer an investment in renewable energy infrastructure or efficiency (put some doors on the freezer section already)!
Regardless, Kristel had an amazing amount of resources for us to check out, including: McKinsey’s Climate Change Special Initiative, Point Carbon, Greenhouse Gas Protocol and  Advancing Sustainable Prosperity.
Finally, my favorite point that she made: Carbon should be measured as a financial risk and required for disclosure per Sarbanes-Oxley.  For all you I-bankers out there, I learned the other day that you can now track the amount of Carbon a company puts out through our Bloombergs in the Capital Markets Lab.  I think if you don’t count it (especially for energy intensive industry) your valuation is weak.
Lee Coker

Class of ‘11

Inside UNC Kenan-Flagler’s Leadership Day

Throughout the first year of the MBA Program, my classmates and I get a chance to participate in leadership activities and receive academic credit as a result.  A total of 12 points are required for academic credit and can be attained from a large menu of activities offered through Kenan-Flagler’s Leadership Initiative.  The first points towards the Leadership credit are gained during First Year Orientation by completing the Pre-MBA Assessment and Workshop.
Regular classes were canceled on Friday, November 6th so that First Year MBAs could participate in Leadership Day.  The morning kicked-off with “Lessons of Experience” talks from successful Kenan-Flagler alums.  The speakers included Fred McCoy, Vice Chairman, Synecor and former President, Guidant Cardiac Rhythm Management; Keith Pigues, SVP & CMO, Ply Gem; and Mick Hawk, President, Bonton, who was just honored by Kenan-Flagler with a Global Leadership Award, which honors an alumnus, alumna or friend of the school whose global participation and initiative advance the school’s education, research and public service mission.  I attended the talk by Mick Hawk, who is currently President of Bonton, a major Czech media company with holdings including Bontonfilm, a.s., which is a movie-distributing company, and Bonton Home Entertainment.  Mick’s talk was very inspirational (especially to students like me who are particularly interested in the media and entertainment industry) and a lot of fun.  He shared incredible stories about joining Bonton in Prague when he spoke no Czech and when the company only had 3 employees.  The person who recruited Mick to Bonton in Prague was a UNC Kenan-Flagler professor, and Mick has been there ever since!
The afternoon of Leadership Day was spent in small teams working on a Diagnosing & Leading Change Simulation.  The online simulation provided us with an interactive way to think about how to implement change, something all successful leaders must be able to achieve.  We all received reading material a week before Leadership Day in order to prepare for the online simulation.  The materials included readings on theories regarding managing organizational change as well as a “Player’s Guide” for the simulation.  The “Player’s Guide” included a case study on GlobalTech, a fictitious company which provided us with a snapshot of a company at a critical time in a particular industry.  The case study also included interviews with key executives at GlobalTech who all had differing opinions of the company’s strategy going forward and different attitudes regarding potential change in the organization.  It was our group’s job to build and implement a change plan for GlobalTech by utilizing a series of tactics to bring about change within the organization.  After implementing each tactic, each Kenan-Flagler team was able to see how that particular tactic influenced the receptiveness of each GlobalTech’s employee to change initiatives.  My team was particularly nervous when we required the GlobalTech employees to attend a team building exercise.  When we hit “submit,” the online simulation played a video showing GlobalTech employees running out of their corporate headquarters.  We were sure that we had made a terrible mistake and that the employees were fleeing the building in protest.  We were happy to see, however, that the employees were soon throwing Frisbees and playing games with each other (the simulation’s way of illustrating team-building activities, I presume).
I was really impressed with Leadership Day and thoroughly enjoyed myself.  Mindy Storrie, Director of Leadership Development and Peter Romanella, Associate Director of Leadership Development are hard at work on the early stages of planning the Spring Leadership Day.  In fact, they asked participants of the Fall Leadership Day for feedback on what worked best, and to solicit ideas of what they might do differently in the future.  This is a real testament to the involvement students have in our curriculum and activities at Kenan-Flagler.
Nick Bradham

Class of ‘11

From Head Knowledge to Heart Knowledge

One of Kenan-Flagler’s greatest attributes is the opportunity available to students outside of the classroom to apply lessons learned through projects and homework assignments. This year, Kenan-Flagler has added a new program: Non Profit Board Fellows. The six month stint allows 1st and 2nd years the chance to work with a non profit organization in the area with the end goal of providing key insight and problem solving skills that will contribute to the overall mission.

On October 31st, over twenty Kenan-Flagler students came together for a daylong seminar, which included non profit board meeting simulations and solution-based analytical skills training. By the end of the afternoon, each of us felt more prepared to tackle problems specific to a 501C3 and bring a fresh perspective to a dedicated organization. The application process included a written essay portion and an interview round in front of the project leaders and Associate Dean. Within a few short days, 8 local non-profits were assigned two MBAs for the duration of the academic year.

On November 6, Jacob Wheeler, a 1st year student pursuing a concentration in Finance, and I attended our first preliminary meeting with the Make-a-Wish Foundation of Eastern NC. Neither Jacob nor I knew what to expect leading up to the meeting, but our trip back to Chapel Hill was full of idea generation and anticipation of the months to come. We are charged with increasing the market presence of the organization and developing a quantitative metric to measure the results of marketing efforts.

To most, this project might seem ambiguous or even unimportant. However, what most of us fail to recognize is the overall value and necessity of the aforementioned strategic planning. Every business in operation requires a careful evaluation of marketing efforts. But the efficiency of that evaluation is rooted in the ability to track success and measure progress. Ironically, we have heard similar statements repeated or restated in different terms throughout our more qualitative Mod II. However, with Non Profit Board Fellows, we have been given the rare opportunity to channel those ideas into a real life problem-solving scenario with enormous significance. Armed with knowledge and skills from the classroom, the first set of Board Fellows look forward to learning from and contributing to the passionate teams working for life-changing causes.

Parker S.Wilson
Class of  ‘11

Urban Land Institute Update

Wow, this is a great event. I’m a naturally optimistic guy and can pretty much find the good in anything, but I’m really impressed with this conference. Here are a few statistics on my last two days at the Urban Land Institute expo in San Francisco:

8 – Great sessions I’ve attended

1 – Bummer sessions I’ve attended

3 – Absolutely delicious tacos I ate at a little Mexican place on Wednesday (cilantro is way under appreciated!)

14 – business cards received/relationships started

22 – pages of notes

6 – homeless guys sleeping on the sidewalks

1 – botanical gardens visited while playing hooky from a session

Before I came to school I had aspirations of downtown redevelopment with an emphasis on some kind of green building / sustainable development or whatever. I didn’t really have a great understanding of what all that meant, but had a feeling and some big ideas. At school we’ll be starting our real estate classes during Mod III so I haven’t had much exposure to the industry other than the brown bag lunch seminars that the real estate club has put on. But, we’ve got a great Net Impact chapter driving the school’s sustainability goals and some of the second year students that I’ve talked with have worked in downtown development. Now I come here and realize that downtown infill and sustainable development truly are a part of the national conversation about real estate! Just about every panel discussion or lecture that I attend discusses these factors even if the topic of the discussion isn’t explicitly either one.

This tells me two things: 1) there is a lot of great stuff going on in this country in the areas where I’m interested and 2) Kenan-Flagler really gets it. In addition to the real estate club, we’ve got the Center for Real Estate Development and the Center for Sustainable Enterprise at the Kenan Institute. My colleagues are fired up about taking care of the earth via the built environment and the school is helping to expose me to the issues, skills and people I need to be successful.

One of the most interesting sessions I attended was this morning. It was an Advisory Service Project Analysis on the Old Spanish Trail in Houston. This wasn’t really a marquee event for people to attend, but it was by far the most educational for me. The program worked like this: Paul Charles, the executive director for the Neighborhood Recovery Community Development Corporation (how’s that for a name) has five different potential projects on which he wants some feedback. His community development group is trying to lead the regeneration of a 4 mile stretch of road in Houston. To provide him some great perspective, ULI puts together a forum with seven other real estate professionals. Paul explains the situation, asks some questions and gets some advice. What was most helpful for me was twofold. First, it was interesting to see a deep dive discussion on a downtown redevelopment project highlighting some of the progress they’ve made (it’s taken 2 years already) and some of the challenges they’ve run into (for example, there are a handful of motels that rent rooms by the hour). Secondly, I got the inside look at how developers analyze/scrutinize a project. They are curious about obvious things like traffic counts, speed limits, nearby employers and such, but the other stuff that I learned that wasn’t obvious was even more illuminating. They wanted to know what kind of board of directors the development group had, how much and where their funding came from, if the corridor acts as a divider or uniter of the different neighborhoods. It’s interesting stuff that drives me to think more comprehensively about all the players involved in a project and all the impacts that it has on the community.

It’s been a tremendous two days and we’ve got another half day left to go.

Jeremy Bergwerff

2011

PS One of the photos is of a group of us eating lunch the first day. I don’t even remember the name of the restaurant, but it was great. The other photo is Bill Emmott, former editor and chief of The Economist, speaking on Wednesday night about the state of the world economy. He had an interesting take on things coming from a British perspective. It’s good for us to hear things about how the US is just one piece of the puzzle when I think it’s so easy to stay ethnocentrically focused and think we’re the only piece of the puzzle.

San Francisco Trek

I’m part of the Real Estate club at UNC Kenan-Flagler, and one of the things that the club spearheads throughout the year are trips to various industry events around the country. There was a career trek to New York over the fall break between Mod I and Mod II and now there are 25 of us heading to San Francisco for the Urban Land Institute’s fall land expo. I’m pretty excited about this. It’s a four-day event, but the first day is really just meetings for the committee members. Wednesday through Friday are several lectures and workshops that we’ll be attending while staffing a booth to promote Kenan-Flagler’s real estate program.
In addition to several academics and real estate professionals, we’ll have the opportunity to hear from Adrian Fenty, Mayor of Washington DC; Gavin Newsom, Mayor of San Francisco and Bill Emmott, former editor-in-chief of The Economist, will be giving the keynote address. There are two main types of sessions during the conference: Real Estate Academy educational talks and Market Trend discussions. Most of what I’ll be going to are the educational workshops since I’m still new at this. But I’ll be hitting a couple of the market trend talks as well. In fact, one of Kenan-Flagler’s own, James Johnson, director of the Urban Investment Strategies Center will be discussing “The Demographics of the Next Decade: Pent Up Demand is Building – How will the world be different after the downturn?”
I’m really interested in attending the expo for two main reasons. Primarily, the education I’ll be getting from attending these lectures and hearing about the industry from it’s movers and shakers. Secondarily, I’m looking forward to meeting more people in the industry. I’m considering going back to Michigan after I’m done with school, so I want to continue to develop my network with that geographic focus but still with a broad view. To do so I scoured the attendee list for the conference and made contact with a handful of people I was interested in meeting and made some contacts. I know it’s just informal meetings, but honestly, I had been a little anxious since I have felt like every interaction with someone outside of business school had to be official “networking” and like I was unofficially looking for a job. But, if you’ll recall my post from a week ago, Roy Cowell gave us some excellent perspective and that really took the pressure off.
I won’t be arriving until close to 11pm local time tonight and then I have to be at the Kenan-Flagler table tomorrow right away at 8am, so it will be a short night. But really, after cramming in all the homework that I had to do in advance of this trip; I think tonight will be the most sleep I’ll have gotten in a week.
Jeremy Bergwerff

Class of ‘11

A Community Legacy

As a student at Kenan-Flagler you are part of one of eight legacies. The legacies are groups named after faculty who had a significant impact on the school. You could be a part of Zeithaml, Berhman, Fulton, Dearborn, Levin, Evans, Rizzo or Tillman. Besides taking your core classes with your legacy you also participate in the Legacy Cup. The mission of Legacy Cup is to strengthen the sense of community and tradition among MBA students during their two years at UNC Kenan-Flagler by participating in friendly competition and community service events held throughout the year.
This past month the Legacy Cup events were Bowling and Community Service Day. Early on Saturday morning (also a National Day to Help Others) members of all legacies met in the café for breakfast and then split up and went to help out ten different organizations including Union Independent School, A Helping Hand, Habitat for Humanity and the North Carolina Therapeutic Riding Center. You earned points for your legacy by joining in the event and got to feel great about helping out at the same time. I spent my morning at the Union Independent School with kindergarteners, first and second graders. We played games, drew pictures and talked to them about why it is important to help others.
On Sunday evening we all took a break from studying and met up at the AMF Durham Bowling Lanes to compete for the top score. I’m a terrible bowler so I stood on the sidelines and cheered my legacy bowling team on. It was a great time and a wonderful way to end the weekend. As I watched my team take first place I looked around and saw so many things that I believe make Kenan-Flagler what it is. Even though we were competing for the top score all the students were laughing and enjoying each other’s company. We had a lot of work at home to finish up later in the evening but the students came out to support their legacy. The sense of community that we value at Kenan-Flagler was very prevalent that evening.
Teamwork, community, integrity, excellence and leadership are the core values that the Kenan-Flagler community lives by. And they are not just words on a plaque. All you have to do is walk the business school halls or hang out with the students as they try to win the Legacy Cup and you will see each and every one of those values in action.

Janet Bowler

Class of ‘11