Talking Cleantech Finance

At BNP Paribas in Manhattan, cleantech and finance leaders came together to discuss new models for funding the clean energy sector at NECEC’s Cleantech Financial Innovation Summit. The diverse group of attendees included representatives from angel and venture groups, green banks, utilities, energy managers, and a clean energy blockchain specialist. Now in its third year, the event address the barriers of financing clean energy projects and funding cleantech startups.

First on the agenda was an address from keynote speaker Janet Joseph, Senior Vice President at NYSERDA. Janet spoke about the different ways NYSERDA is accelerating the clean energy economy, primarily by providing funds to early stage clean energy business ventures. Through the new Clean Energy Fund, this NYSERDA initiative will invest more than five billion to the clean energy sector. The fund will help New York reach its goal of 50 percent renewable energy by 2030 and spur private investment in the industry. The fund will focus on investment through four focus areas: market development, market research, NY-Sun, and green banks. Janet made clear that initiatives like the Clean Energy Fund, paired with carbon goals, are crucial at the state level as federal initiatives are currently lacking.

Janet’s keynote speech was followed by a panel titled “Pushing the Envelope in Financing Clean Energy.” Speakers included Jason Moore, Director of New York Green Bank; Ravina Advani, Director of PNB Paribas; Frank Curran, Vice President and Co-Founder of the Clean Energy Blockchain Network; and Thomas Blum, Member of the Clean Energy Fund. Ravina stated that institutions like BNP Paribas need defined revenue streams to make investments worthwhile. The notion of defined revenue streams can help some technologies, like solar and wind, which are more mature, while hurting others like energy storage, which is still emerging. Jason Moore added to this viewpoint by discussing the New York State Green Bank’s ability to hold more risk than other institutions and fund technologies that are in need of acceleration. While more risk can be levied on the Green Bank, there must be somewhat of a proven track record before funding can take place. The “burden of proof” does not fall solely on the technology, however, as it also falls upon cash flow streams.

One technology that has yet to establish a proven track record is blockchain. Frank Curran, who is an expert on the technology, hopes to bring the complex platform to the renewable field. While blockchain is still in its infancy, it can hold some promising potential, primarily through partnerships. Curran’s Clean Energy Blockchain Network has partnered with Power Ledger, an Australian based company that makes a virtual currency, allowing for the exchange of energy through a token. With Power Ledger’s business model, the Clean Energy Blockchain Network can be applied to the renewable field. Frank suggested we look locally within electricity to create real change, such as making a community around the transfer of renewable credits. For this idea, Frank seeks to (bit)coin the term “Farm to Table” to make the idea of a community built around renewables more concrete. People love the idea of buying local produce to support the community, so why can’t the same mentality be applied to the renewable sector?

After the panel, a “fireside chat” was held between moderator Alistair Pim, Vice President of Innovation and Partnerships at NECEC; Karen Morgan, CEO of Dynamic Energy Network; and Mark Feasel, Vice President of Electric Utility Segment & Smart Grid at Schneider Electric. Mark and Karen agreed that risk assessment is necessary in a growing field such as renewables, but more specifically, microgrids. Few investors  truly understand the technology, and those that do see an opportunity for scaling. However, understanding microgrids does not mitigate all the risk. Having strong governance and stakeholder management processes can also lead to their rapid. While microgrids have become prevalent at hospitals and universities, new sectors like military, commercial and industrial customers are gaining interest in microgrid technology, as well.. To wrap up the conversation, Mark noted that we are starting to see a fundamental shift in the way microgrids are being financed as they are no longer being seen as a capital expense but rather as an operational expense. While this shift may seem minor, it has a impactful change in how project finances are developed, not only for microgrids but for the renewable energy sector as a whole.