End of Power Plants. In an exclusive interview with SolarWakeup, Engie’s EVP of Innovation sat down with me and told me that coal, gas and nuclear plants are going away - This is a given. Engie is a global company with $78billion in revenue and Thierry Lepercq is a member of the executive committee that drives strategy for the entire business. In some ways, Engie has executed on the vision David Crane had for NRG and sold all of their coal and gas plants in the US. Engie also invested in several efficiency and storage companies. When a company like Engie says that the end of power plants is near, the pieces start to align with the capital and views from the investment community. Our industry should listen and think of how solar plays in that new future. These are big news - so big we even wrote an article about it.
Engie’s Future. In our discussion about the future, the intersection of mobility and energy. I asked him if power companies would get into transportation the same way that transportation companies have gotten into the energy business. We also discuss how the business future of energy storage plays into the power markets and how regulators should align themselves with the right policies. The full interview will be released on solarwakeup.com this week.
Alabama Politics On Energy. Interesting reporting on Senator Doug Jones’s positions on clean air and clean energy. I get that he’s aligned with our industry when it comes to those policies but not a single vote came to him because of that.
Fixing The Tax Bill. News out of DC appear to be aligning with the conversation we had at SolarWakeup Live! DC. The corporate AMT is out and the rate is going up to 21%. BEAT is still in but John Cornyn is on the record saying they want to figure out a way to fix it. The rate is really the biggest impact to the solar industry. Lower rates means less demand for tax credits and less value for depreciation and interest deductions. On the other hand it increases after tax returns which could drive more foreign money into the market. We will see what capital stack looks like at the 21% rate.
Power Of Gas. Normally, companies have to pay big bucks to have their VPs fly to another country and sell their products to a ministerial audience. In the case of the LNG industry, they send over the EPA administrator who should probably have gone to Germany instead of Morocco. Regardless, it’s strange and abnormal for this to happen but I guess nobody is surprised.
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Yann
Who: Thierry Lepercq, EVP of Research, Development and Innovation at Engie. Member of the executive committee. Engie is a global energy company with $78billion in revenues and 150,000 employees. What: A discussion about the future of energy regarding the use of traditional power plants, transition to renewables and investing in innovative companies around the world. Impact to You: Engie has sold its US portfolio of coal and gas power plants. It closed a 45 year old coal plant in Australia and sees mobility as a massive impact to the energy system. If they view the future to be without central power fueled by fossils, what does that mean to your business and your customers? Thierry may be paid to be a futurist but getting Engie to turn its business strategy into this direction matters to you.
Who: Thierry Lepercq, EVP of Research, Development and Innovation at Engie. Member of the executive committee. Engie is a global energy company with $78billion in revenues and 150,000 employees. What: A discussion about the future of energy regarding the use of traditional power plants, transition to renewables and investing in innovative companies around the world. Impact to You: Engie has sold its US portfolio of coal and gas power plants. It closed a 45 year old coal plant in Australia and sees mobility as a massive impact to the energy system. If they view the future to be without central power fueled by fossils, what does that mean to your business and your customers? Thierry may be paid to be a futurist but getting Engie to turn its business strategy into this direction matters to you.
Sometimes while in deep conversation with a leading energy executives, they say something extraordinary in such a casual way that unless you are paying attention, you might miss it. I had that experience the other day when SolarWakeup had an exclusive conversation with Thierry Lepercq of Engie's Executive Committee and the company’s EVP of Research, Development and Innovation, in which he made a bold prediction: Rotating-machinery electricity production—meaning all fossil-fuel and nuclear plants—are going away. “That’s a given,” he said matter-of-factly, as if this as if it were common knowledge. I can attest, however, that I had never heard anyone say it out loud before—especially from someone leading the future for an energy company with 150,000 employees and over $75billion in 2016 revenues. After all, the Department of Energy and the Federal Energy Regulatory Commission are on a fast-tracked course to bail out failing and dissipative nuclear and coal plants at an enormous cost to taxpayers. But Lepercq remained steadfast in his contention, even pointing to Engie’s decision in February to sell its U.S. assets and its decision to close its 1.6 GW-capacity Hazelwood Power Station in Australia, a brown-coal plant that had operated continuously for more than 45 years. https://youtu.be/qm9M_C-4laU Lepercq added that Engie is not the only company that recognizes this reality. One of its partners, the EDF Group (a French company that operates in the United States with its EDF Renewable Energy subsidiary), declared on Monday that it would add 30 GW of solar capacity in France by 2035. “I’ve had this conversation with their research-and-development head, and we’ve established a joint working group with them to determine how you make a grid with 60% renewables work,” Lepercq said. “And we are in the process of figuring it out.” The more I thought about what Lepercq was saying, the more I thought he might well be right. Even though the most visible manifestations of this idea are taking place in Europe and the current U.S. administration is doing its level best to scuttle plans like them in this country, there are signs the utilities are already seeing the writing on the wall. After all, despite President Trump’s most energetic efforts, a survey of U.S. utilities last year revealed that coal plants representing 15,6 GW of capacity will come offline in the next 12 years, no matter what regulatory dismantling takes place. And the pace of coal-plant retirements is staggering. The survey also reported that enough coal-fired plants to generate 20.5 TWh of energy production annually are coming off the books this year. Will the United States ever completely retire rotating-machinery electricity plants? That’s hard to imagine in the current political climate, but with visionaries like Lepercq and the team at Engie leading the charge around the world—essentially showing us the way forward. [soundcloud id='369523274' height='false']Pruitt Is Lobbying. Of all of the countries that can benefit from natural gas exports from the United States, Pruitt picked the one place that is the Saudi Arabia of solar and wind. Morocco has insane solar and wind resources as one of the few arabic countries without oil reserves. Natural gas is a bridge to nowhere in Morocco and I doubt any power company would invest a dollar in non-solar or wind generation in that Country.
Puerto Rico Report. Interesting how this came about but a group of power folks wrote a 63 page report to the Governors of Puerto Rico and New York on how to rebuild the grid in Puerto Rico post Irma. I interviewed the Congresswoman of Puerto Rico last week and I’ve tried to do business in Puerto Rico. This report is a little more than dressing on the real issue. Everyone knows how to rebuild and it doesn’t cost 18billion. It requires the PREPA balance sheet to be fixed and the private investment will come. Donating solar to a homeowner with a 500 FICO score doesn’t do anything to help that homeowner. PREPA needs to be a creditworthy counterparts, until then nothing sustainable happens. The PREPA advisory council also seems like no more than bureaucracy.
Get Out Of The Way. Governor LePage is annoying and solar folks have had enough. This case is going to the courts and hopefully will get fixed.
Reclaiming Coal. I’ve been involved in a few solar plants on retired coal plants and have been fascinated with the shift it represents. It’s been a tough market to focus on because the ground is tough to connect to but with floatovoltaics, flooded coal mines could present a great second life.
Attack Is Coming. I had not seen Tom Pyle’s name quoted since his involvement with the EPA transition. He’s been actively trolling folks on Twitter and now an oped on The Hill website. This is in relation to tax reform and I stay on the record stating that solar and wind would gladly compete without tax credits if all other energy credits also disappear - I say this with apologies to my tax equity friends. Have no fear because other segments would never let go of their tax benefits and they don’t want to have this argument and are glad to see solar and wind retain their tax credits.
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Yann