Go Green For Selfish Reasons: To Improve Your Standard of Living.
by Natalie Pace.
Interview with Michael Liebreich, the founder and chief executive of Bloomberg New Energy Finance.
This is the 2nd part of my interview with Michael Liebreich, CEO, Bloomberg New Energy Finance, from our May 30, 2012 meet-and-greet at The Ritz London. Click to read "Is Clean Energy Doomed if President Obama is not Re-Elected?" from the August 2012 NataliePace.com ezine.
As the CEO of Bloomberg New Energy Finance, Michael Liebreich leads a team that has accumulated the most comprehensive, reliable data in the rapidly evolving markets of clean energy and carbon emissions. He's prolific in white papers and Tweets, the current affordability of solar panels, who has the lead in wind, smart grid, battery technology and solar efficiency, which countries have the human capital to insulate your home and office best, clean energy pricing worldwide, and much more. He can strike up a lively debate on any stage, with his provocative plans on how to fire the grid with sustainable energy and sever our reliance on unfriendly regimes.
Michael Liebreich is the kind of guy that you want to be around just to improve your vocabulary. However, you'd better have a tape recorder handy to catch all the quotable wisdom that flies out of his mouth faster than most people can think. Even Greenies will have their assumed wisdom challenged with his cutting-edge expertise.
Liebreich is pro-capital markets and pro-green -- which often pits him against business leaders on both sides of the debate. Whether you are a solar energy manufacturer pandering for subsidies or an oil executive hoping to keep the staggering costs of defense and oil imports out of the energy debate, you're bound to be offended by Liebreich's bold outbursts of truth-telling. However, if all of us took the bruising to our egos, and let Liebreich's wisdom settle in as we heal, a cleaner, greener grid and more robust economy could well become our reality. Yes, he's that informed and that visionary.
I am relieved that he's in charge of leading the global energy debate. And, after reading these interviews, perhaps you will be, too.
Natalie Pace: Do you believe people will be driving electric cars in the future? Or is this just a waste of taxpayer money?
I am absolutely pro-electric because I've driven them. Even if it's just the Mitsubishi miEV or the VW eGolf, acceleration is really, really good. There is no engine noise. You don't have to go to a gas station.
So, why aren't more people driving them? China and the U.S. were supposed to be in a race to adopt EVs, but we're not hearing much of that these days.
At the end of the day, China is a developing country and new technologies tend to take off in wealthy countries. The country with the greatest penetration of electric vehicle purchasing in the world is -- you'll never guess -- Norway. 2.6% of new cars bought in Norway in the first few months of this year were electric. Far ahead of the U.S. or anybody. Norway is environmentally conscious, with high gasoline prices and very cheap electricity because of all of their hydro. And so, it has caught on. 2.6% is the little curve that grows geometrically over time. That's the curve to bet on.
In last month's interview, we talked about cheap solar. Commuters could be saving on their electric bill and their gas bill if they were charging up EVs with their solar panels. Why isn't the word getting out about this?
The way that the companies are marketing EVs and solar panels, I don't think is particularly smart. You've got to drive long distances for the economics to make sense because the batteries are so expensive. Because of the range, you're looking for people who are commuting. So, you're looking for long-distance, urban commuters, who don't want to go to gas stations. And I think that's what we're going to see next, a few segments take off, around long distance commuting and fleet vehicles, and a few other things.
So, what would your ad for EVs sound like?
I would market to women, with long commutes, who get home late at night, living in the Southwest where it's sunny, who are defense and security conscious. My point is that if you combine solar in the Southwest, where costs have come down to the point where it's competitive, with an electric vehicle and market it as, "Help America never be reliant on foreign oil from horrible regimes, and by the way save money, too." If someone goes out and markets it like that to the right segment, you could see a couple hundred thousands of these things selling in the next year.
Tesla Motors has been getting rave reviews for the S sedan. Do you think Tesla might be the company to hit the big time in EVs first?
The Mitsubishi miEV, the Leaf, the Volt, the VW Blue, that's the battlefield, and also all of the scooters, particularly in Asia. I love Tesla for changing the perception of electric cars. However, I think that the role of Tesla in the transformation is probably going to be the catalyst, rather than the end product. I'm going to feel more comfortable driving around in a VW electric Golf or Renault, or a GM Volt than a new build because there are a lot of issues in the car industry, whether it is safety, systems engineering, etc., or whether it's around marketing, getting to scale, having a distribution system and a service system and so on.
Tesla bought a Toyota factory and has joint ventures with Toyota and Mercedes Benz. The cars are gorgeous… and fast -- game-changing products. That counts for something, doesn't it?
It's entirely possible that sitting in California, one can solve all of those problems because the car industry has become so stultified and so ossified in its practices. VM and Mitsubishi and Toyota -- those are smart, well-run companies. Ford and GM have a checkered history, but there is a depth of capability there that is hard to write off. I'm finding it hard to believe that there will ultimately be 10 great car companies in the world in 20 years, with five of them Chinese, plus GM, Tesla and Ford. Tesla has joint ventures with a few car companies, so part of its intellectual engineering property will live on.
Is the U.S. in the lead of clean energy?
The U.S. is a huge player. In wind, you have G.E., which is one of the world's top manufacturers, with an extraordinarily strong intellectual property portfolio. In solar, you've First Solar, the leader in thin film. It's still an interesting and promising technology area, even though silicon has had a few good years of cost reductions. And by the way, particularly in solar, you've got the next generation, ultra-high efficiency cells. You've got Bright Source, which is a leading solar thermal player. If you look at bio energy, absolutely the U.S. has got a large piece of the leading next generation bio fuels players. In geothermal, the U.S. has got a number of players. Smart grid, you've got many of the big ones, the G.E.s and the Johnson Controls, but also the entrepreneurial ones, funded out of California. If you look at grid scale storage, the U.S. has got a large proportion of the next generation players. And even some of the further out technologies around nuclear fusion and so on.
Is this lead directly attributable to President Obama's clean energy agenda and the Department of Energy?
It is a myth that this is an agenda that has been grafted on. Even looking at fracking -- hydraulic fracturing and the shale gas boom -- those technologies were supported for a long time, for decades, by Department of Energy research grants. There is actually a long history of supporting newer, cleaner energy technologies in the U.S. very successfully, and the U.S. has a very, very strong position, as a result.
Is it possible, then, that clean energy will still be a darling of D.O.E. funding, even if President Obama is not re-elected?
The concern I'd have is not that the U.S. will lose its leadership to Germany and China and Japan, suddenly and overnight, with the wrong election outcome. That's all nonsense. What would happen is that it is very hard to maintain your leadership without strong domestic markets. If you want to be a smart grid exporter, then you have to have a smart grid somewhere at scale, deeply working through the issues and the security software. It's hard to imagine a stronger company than the U.S. software players in security. That's another growth area, but you can't do it without a domestic market. The U.S. will continue to be a leader. The question is: to what extent.
Probably the biggest concern in the U.S. these days is deficit reduction and getting people back to work. How does clean energy help either of those two top agenda items?
Wealth, influence and military power are going to fall to the countries that are the most resource efficient -- in labor resources and also natural resources. That's the way to maintain America's greatness. We will live better and be more secure by being less dependent on these constrained and increasingly expensive resources, one of which is energy. If you do that, then every job is a green job. That's how to have a vibrant eco-economy with low unemployment. A vibrant green economy is when you build that resource efficiency into everything, such that you're husbanding the resources, rather than sending them over to Saudi Arabia, and investing in your schools and technology development and retooling your infrastructure. There are much better things that you can do with your money.
If we give up the lead in clean energy, due to our budget deficit or an election outcome, could we end up having to buy these products in a few years from other countries?
The U.S. could spend the next 50 years, instead of buying oil, buying solar intellectual property, not just the kit, but also the licenses in solar, and wind and smart grid and so on. That is what to play for.
Education is part of the solution, isn't it? Consumers are in the dark about this technology, but aren't a lot of mechanics and tradesmen as well?
I just bought a building in London and I'd like to do a green retrofit, which would be personally and professionally satisfying and fun to work on. One of the issues is the British builders don't have the skills of their German and Swiss counterparts in terms of understanding insulation -- wall, cavity, floor and external insulation -- double and triple glazed windows, home energy management systems, etc. When you mention this to British builders, they get a worried look. They won't be saying, "Well, that's no problem because I've got someone who has been to this course or that course and can help me design it." The level of skills just isn't there, and that's a big issue. We need to get the trade unions and the apprentice movement, and The President can play a big role in communicating broadly that these are good skills to build.
So, the jobs of the future require higher education?
In Switzerland, there are two professions now. There is a mechanic and a vehicle electronics expert. These are two different career paths. The systems in the vehicle are so complex. So, there is the guy who can still replace the cylinder head, but that is different from the person who can understand why your GPS is no longer communicating with your onboard phone system. There is a lot of heavy lifting around skills, and this is also needed in the U.S. These technologies are gong to be pervasive.
Why isn't clean energy and sustainable living more a part of daily life in the developed world yet?
There are a bunch of agendas. It taps into people's feelings of security. We have a certain lifestyle. I want to maintain my lifestyle. I want to go on holiday. I want to put my kids through college. I want to turn the TV on anytime. I want a big screen TV. I want to drive. I want my car. And the moment you start to say anything that is interpreted as taking away any of that… My view is that we should be maintaining those and building those lifestyles, and in some cases restoring them because we've actually had a loss of disposable incomes. We should be restoring those and extending the benefits of those lifestyles to billions more people. But we have to do it a way which is consistent with the natural resources of the planet.
What's the Bottom Line here?
There are only so much of various different resources. The atmosphere's ability to absorb greenhouse gases is one concern, but there are many others. And we have to do this in a way that isn't geopolitically insane, in terms of the dependencies that we're building on regimes that don't necessarily have our best interests at heart. All of this can be done. I'm a technocrat. I believe we can do all of that.
About Michael Liebreich
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