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

Defining Energy Independence and Causes of Global Warming

On  Oct. 30th, Brett Carter, the President of Duke Energy – Carolinas, visited UNC Kenan-Flagler for a discussion with MBA candidates around Duke Energy’s role regarding climate change.
Carter was an excellent presenter, and while I disagree with some of his positions, he guided the conversation in an incredibly skilled, productive manner.
Before digging into Duke Energy’s strategies to mitigate climate change, he raised the question, “How do we define energy independence?”  One student proposed that it means the ability for America to generate all of its energy within its own borders.  Another student expanded the definition to mean the freedom to generate energy.  To me, the second definition is a more plausible scenario; however, it sounds more like energy security than energy independence.   With this in mind, perhaps energy independence misses the boat, and we should reframe the discussion around energy security.
Carter also raised the question around climate change, and specifically, humanity’s contribution to climate change.  He polled the group whether or not we thought climate change was part of a natural global heating trend.  No one raised their hands, introducing a little tension into the room.  The awkwardness was eased a bit when one student commented that climate change could be caused in part by humanity and in part by a natural heating trend.  Following this, Carter commented that humanity was most likely contributing to climate change, but it was difficult to decipher exactly how much.
On this final point, I disagree with Carter.  Humans are the primary contributor to climate change, not a natural heating trend.  While we may not know exactly how much, it hurts the world’s ability to curtail global warming when introducing doubt regarding humanity’s impact into the equation.  Just last night, I attended a lecture by a Nobel Prize winning scientist, who depicted the causal relationship between carbon dioxide and climate change with the support of reams of evidence.  Carbon dioxide is the 800 lb greenhouse gas in the atmosphere, and it is clear that humanity is well on track to double, and most likely triple the content of CO2 content in the atmosphere before industrialization.
Duke Energy’s primary driver remains the provision of cheap energy.  And this is exactly what they are supposed to do.  First and foremost, today’s presentation reminded me that changing the world’s  carbon orientation must begin with policy, and that policy must include all countries.
On a related note to this final point:  In a presentation earlier this week, Kristel Dorion of ENERGETIX mentioned a course on systems thinking taught by Drew Jones.  During the course, students are asked to represent different nations and build a protocol for mitigating climate change.  When played out, the scenarios demonstrates that countries categorically underestimate the size and speed of the actions they need to take.  Professor Jones has been recruited by the United Nations to inform international climate policy.  Not only is UNC part of the climate conversation, we are directly impacting it.  Pretty cool stuff.

Joel Thomas

Class of  ‘11

Sustainability Forum

On Friday, October 23, KFBS hosted the 8th Annual Careers in Sustainability Forum.  The forum consisted of a series of panels around numerous types of functional roles in the world of sustainability.  Each panel consisted of roughly six practitioners.  The roles covered by panels included:
•    Renewable Energy
•    Green Building
•    Entrepreneurship and Venture Capital
•    Sustainabiltiy Consulting
•    Corporate Social Responsibility
It was especially encouraging to see that individuals can impact environmental and social bottom lines in a host of different roles.  In other words, it is possible to get the type of job you want, and have it be sustainably focused too.  This is a hopeful proposition for anyone entering the sustainability focused.

Joel Thomas (Class of ‘11)