The Rise Of Clean Power

Ceres, the Boston-based sustainable business and investor coalition, agrees. “States have a significant opportunity to invest in a low-carbon energy future and attract new businesses, investments and jobs.” Indeed, 365 businesses and investment organizations have signed on to a Ceres petition of governors to implement the Clean Power Plan, even before it’s required. (Final complete state plans must be submitted to the EPA no later than September 6, 2018, under the current model, which, as noted, is still awaiting court confirmation and possible dismantling by the Trump administration.)

As part of the state lobbying effort, New York City Comptroller Scott Stringer says, “By providing investors with more stable incentives, the president’s Clean Power Plan represents a once-in-a-generation opportunity to curtail greenhouse gas emissions and accelerate a just transition away from fossil fuels and toward a clean energy economy.”

Former EPA administrators are quick to note the health and environmental benefits—rather than just the financial benefits—that stem from clean power adaptation.

“We have always viewed the EPA first and foremost as a public health agency,” wrote former EPA administrators William Ruckelshaus and William Reilly in a New York Times editorial about the Clean Power Plan. They went on to discuss how the future costs associated with carbon emissions from coal plants would be “far in excess of addressing the challenge now” if the Clean Power Plan is not widely adopted.

Carbon pollution increases cases of lung disease and results in lost days of labor. Obviously this increases health-care costs, and business revenues shrink with lower productivity.

Energy efficiency programs at the state level can save consumers as much as $5 for every $1 invested, according to the World Resources Institute. Wisconsin is proof positive: Its efficiency program is projected to add nearly a billion dollars to its economy and create thousands of new jobs. Other states that have instituted energy efficiency programs are seeing similar results.

The evidence is a big selling tool and is helping to promulgate private sector participation in broad offerings of clean energy schemes.
There are, it should be noted, a slate of obstacles to clean power adaptation, from climate change deniers to fossil fuel lobbyists, aside from the stance of the Trump administration (see sidebar). Land and development cost is another one.

Resight, a Littleton, Colo.-based company that redevelops “impaired” properties, believes it has found a solution to that land development issue—landfills.

Mikk Anderson, Resight’s founder, says, “In our experience, solar works best when land values are least. Properly designed, a solar array on top of a landfill provides the economic value to pay for the long-term landfill maintenance. What is more, many of these sites are already embedded in the urban fabric, which allows access to the existing urban distribution infrastructure.”

This strategy could be a boon for distressed properties and offers multiple tax benefits. Solar and renewable energy receive numerous state and federal rebates and tax credits. When compared with coal, renewable subsidies amount to exponential tax benefits per kilowatt hour of distribution. (Because state incentives vary, an exact comparison cannot be measured, but in some cases it can be more than 500%.)

Because of the tax advantages, sector growth and exceeding demand, it should be no surprise that financiers are amping up deal structures and offerings.

But investors might also be haunted by clean tech’s downward spiral. Riding the back of the green zeitgeist from around 2005 to 2008, clean tech was pumped full of investment dollars until returns dithered and then flopped amid the infamous stock market crash, which sent the sector into a rout.

Sher says he still faces clean tech skepticism with institutional investors. His counter? Clean power is more about infrastructure.
Sure, technology comes into play with renewable sources to maximize loads, minimize storage losses and enable connectivity to the smart grid. But at the end of the day, power plants are an infrastructure play; they’re utilities.

“We’re dealing with real assets,” says Sher.

Green States Energy is another firm that has spotted the significant potential with clean power plants.

GSE is an independent power producer that develops, acquires, owns and operates clean energy generation facilities in the U.S. It’s a fast-growing company, having acquired over the past several years approximately 20 megawatts of capacity to serve a multitude of municipalities. It claims to have a project pipeline of more than 100 megawatts. That’s obviously a massive growth projection.

“Our strategy is to combine best-of-breed technologies and processes into solutions that can be effectively and responsibly deployed in individual locales,” says the company, which has offices in New Jersey, Connecticut, Florida and South Carolina.

Buoyed by a thriving renewable energy market, GSE’s strategy appears compelling—even as two dozen states, with support from the coal industry, are suing to stop the EPA’s Clean Power Plan. Their argument is that a reorganization of the country’s power grid will result in higher electricity costs. But numerous studies show the Clean Power Plan, or a plan like it, will lower homeowners’ utility bills.

Acceptance may be setting in. Forbes, which typically keeps a conservative agenda, even published a recent blog post stating, “The nation would no doubt be better off with the Clean Power Plan. … But, if U.S. EPA and environmental advocates lose and the court does strike down the Clean Power Plan, there is still hope. After all, when it comes to reducing emissions in the power sector, we’re already making meaningful progress toward clean power, Plan or not.”

The Clean Power Plan may be just as much an investment strategy as it is an environmental program—and there is big upside in any case. Clean power plants may be our municipal engines of tomorrow. They are worthy investments.