One of the most compelling speakers at our last day of REFF Wall Street was Deutsche Bank’s Global Head of Asset Management, Kevin Parker.
The focus of his talk was the importance for the finance community to respond to resource scarcity amidst a growing world population and the threat of catastrophic climate change. Parker cited capital markets validating renewable energy with scores of billions in investment over the last few quarters, while “clean coal” is only a dream receiving government support because it is years away from commercial viability.
Parker also emphasized the opportunity over the next several months as money moves from the sidelines (safe-haven money market accounts) back into the market. He talked of more than $10 trillion, of which a small fraction flowing into renewable energy financing could revolutionize our global energy system.
Parker believes investors are waiting for some regulatory certainty — in the form of US cap and trade bill passage and a potential federal Renewable Electricity Standard (RES). If the House passes ACES today and it is able to get through the Senate and to the President’s desk this summer, investors will have some certainty to help them get further involved in the renewable energy sector.
First Solar and other solar companies could definitely use more capital to help them continue to simultaneously break efficiency records and lower costs. First Solar announced yesterday that they aim to lower module production costs per watt by a third or more in the next five years, approaching 50 cents per watt in 2014. Such progress would put solar power on equal footing with coal electricity and lower the risks from future fuel scarcity, since there is practically an infinite supply of energy available from the sun.
The hundreds of billions of dollars that flow every year into coal and oil can shift into renewables. Such a flow would mobilize bright minds to improve energy storage and grid management and overcome the challenges from intermittency.
The technology for carbon capture and storage for coal and other fossil fuels has several years before it is ready for prime time on a multi-GW scale — Parker mentioned the date 2020. Meanwhile, renewable energy is ready to provide the US with more than 10 new GW per year in 2010 and beyond. Globally, the number is poised to approach 50 GW per year in 2010.
Parker and other speakers closed REFF-Wall Street on a positive note. The solution to climate change and resource scarcity is available and getting better in the form of efficiency, wind, solar, and other renewable energies. As debt markets and tax equity improve, regulatory frameworks solidify, and stimulus funds become available in the second half of 2009, massive amounts of capital will be deployable for the renewable energy sector. The hurt from our current recession will remain for many months, but lower prices for renewable energy in 2010+ makes it the go-to technology to achieve a stable climate and a prosperous world.
Tags: clean coal, finance, recession, REFF, renewable energy, Solar, Wind