2016 NECEC SPN Cleantech Financial Innovation Summit
Earlier this month, NECEC hosted a unique event that brought together more than 50 business leaders from NECEC’s Strategic Partner Network (Shell, GE, Saint Gobain, Veolia, Schneider Electric, EverSource and National Grid), cleantech start-ups, state energy officials, and investors from major banks, venture capital firms, and angel investment groups. The first-ever Cleantech Financial Innovation Summit at National Grid in Brooklyn, NY was an exclusive full-day event that covered financial innovation in all stages of cleantech and spurred conversations sure to influence investors in clean energy in the future.
The event kicked off with a Fireside chat between John Rhodes, CEO of New York State Energy Research and Development Authority (NYSERDA) and Peter Rothstein, President of NECEC. John asserted that the role of NYSERDA is to animate private markets and to accomplish what is possible but has not yet been done in the clean-tech space. However, to justify incentives and grants, there must be a line of sight to prove a model and achieve some scale. Solar was a good example. The State played its role in the early stages of deployment and then market certainty eventually allowed NYSERDA to scale back incentives for rooftop solar in Long Island and for private finance to step in to fill the gap. Offshore wind is one of the next big challenges. Current practice is to first auction the acreage, and then allow the winner to negotiate an agreement with an off taker. However that leaves no room for competition. NY is now looking to provide a package deal with the site and off take agreement bundled together.
Following the insightful discussion, leaders in the Northeast clean energy financial community dove into a series of panel discussions on financial innovations at the start-up and early venture stage, the pilot & demonstration project stage, and the scale-up and deployment stage.
The all star cast of speakers included:
- Henrik Holland | Venture Principal at Shell Technology Ventures
- Dan Goldman | Managing Director at Clean Energy Venture Group
- Pat Sapinsley | Managing Director of Cleantech Initiatives at Urban Future Lab
- Bill Lese | Managing Partner, Braemar
- Daniel Hullah | Director, Ventures at National Grid
- Lawrence Orsini | Founder at L03 Energy
- Josh Gould | Utility of the Future at ConEdison
- Tibor Toth | Managing Director of Investments, MassCEC
- Bruce Schlein | Director Alternative Energy Finance at Citi
- Nicholas Whitcombe | Managing Director Investment and Portfolio Management, NY State Green Bank
- Gianluca Signorelli | Senior Director NRG Energy
- Reid Capalino | Principal, Aligned Intermediary
- The early stage investor network for clean energy is growing. While it currently covers the full spectrum of risk tolerance, it is still modest. State agencies like NYSERDA and MASSCEC, corporate strategics, and business organizations like NECEC should focus on nurturing early stage start-ups and connect them with investors.
- At the pilot and demonstration project stage, panelists discussed the necessity of partnerships with utilities and how often they are poorly executed. Panelists agreed that utilities need to consider new roles in their organizations such as product management and alliance management in order to manage new opportunities across the silos or such large companies, and that both utilities and clean energy companies should select partners that are capable of scaling innovative clean energy technologies.
- Emerging segments need to prove their creditworthiness to persuade banks to move in and be convinced there are reliable returns.
- Pipelines of similarly classified projects with transparency of information and a mechanism to rate are all essential for segments to scale
- Public and philanthropic funds are typically present to develop a primary market, which creates an opportunity for private capital in a secondary market.
The Summit concluded with the Keynote speech by Dr. Sanjiv Malhotra,Director of the Clean Energy Investment Center, US Department of Energy. Dr. Sanjiv was optimistic to see economies of scale making significant impacts to reduce costs in areas like solar, and that cleantech investment has continued despite falling oil prices, despite factors like an 85% drop in early stage VC funding for cleantech since 2008. He noted how DOE is attempting to address the cleantech financing gap with its new initiative, the Mission Innovation program, which involves a partnership between Federal Government, the Breakthrough Energy Coalition (a coalition of 27 investors such as Bill Gates, Jeff Bezos, Richard Branson, and Vinod Khosla) and 20 other countries, focused on accelerating the move of new ideas in labs to the market.
The Summit engaged participants in a rich dialogue, fostered new relationships, and prompted valuable explorations of partnership models and best practices. It is clear that to reach our climate goals, the ecosystem is going to have to fire on all cylinders, and work together to solve problems as they come up. NECEC will play its part by convening the ecosystem on a regular basis around varying themes. The next events that are relevant for investors are the Cleantech Open Northeast finals on October 18/19 and our NECEC Investor Corporate Connect event on October 24th, both of which will be in Boston.