Jon Powers:

Welcome to Experts Only Podcast, sponsored by CleanCapital. Learn more at cleancapital.com. I’m your host Jon Powers. Each week, we explore the intersection of energy, innovation, and finance with leaders across the industry. Thank you so much for joining us.

Jon Powers:

Welcome to Experts Only Podcast, sponsored by CleanCapital. You can learn more about CleanCapital’s new partnership with CarVal Investors at cleancapital.com. Today, we’re going to be speaking with Greg Wetstone, the President and Chief Executive Officer of the American Council on Renewable Energy, ACORE. It’s a national nonprofit. It focuses on finance, policy and technologies, ways to accelerate the transition to the renewable energy economy. But Greg’s been a real leader in this sector throughout his career, both in the private sector and in the public sector. Prior to joining ACORE, he served as the Vice President of TerraForm Power, a renewable energy company, and it also had served at American Wind Energy Association on the Hill, in the National Resources Defense Council.

Jon Powers:

In our conversation with Greg today, we’re going to talk about what’s happening in the federal policy space to help drive generation, but what was also happening with commercial customers that’s helping to drive demand for renewable energy in a way that we’ve never seen before. You should definitely check out ACORE’s Renewable Energy Finance Forum Wall Street, which is June 19th to the 20th in New York City. You can find more information at acore.org.

Jon Powers:

Greg, thanks so much for joining us on Experts Only Podcast. Really appreciate the work you’re doing at ACORE.

Greg Wetstone:

Thanks for having me, Jon. Happy to be here.

Jon Powers:

Absolutely. I want to start off talking a little bit about your personal journey. How did you end up in your role as president and CEO of the American Council on Renewable Energy, but also why did you get into renewable energy? You’ve had an extensive background in policy and you’ve seen it from all sides. You’ve seen it from business, you’ve seen it from nonprofit. You’ve spent some time in the Hill. What sort of made you pursue a career in renewable energy, first of all, in renewable energy policy?

Greg Wetstone:

Well, in my wide ranging career, I’ve been very lucky in that I’ve been able to, most of my career, do really jobs that I’ve enjoyed and work in areas I’ve liked. So I was very fortunate for many years, worked for the Henry Waxman in the house, on the Energy and Commerce Committee. I left that committee and went to an environmental organization, natural resources defense council, where I started their legislative shop many years ago. I was there for better part of a decade and then left there really to enter the renewable sector for a position doing government affairs and policy at the American Wind Energy Association. That was fun, and then it was a lot of the same issues I was working on at NRDC on the energy side. I left AWEA after a few years for a private equity funded company, TerraGen Power that did wind solar and geothermal power. That was great. I love the diversity of technologies and I very much enjoyed working in the private sector.

Jon Powers:

How did that private sector experience sort of translate to making you a better leader at ACOR?

Greg Wetstone:

Well, it helped me to understand the reality of … as did my AWEA experience of what it takes to succeed in the business and how tough it can be to get those off taker contracts and kind of the vagaries of us policies on renewables and the challenges associated with those, the difficulty citing and permitting, really provided a chance to see the transaction up close and personal across technologies, which I think is important particularly today when we have a sector that’s pretty balanced right now, overall between wind and solar and some real potential in other areas as well.

Jon Powers:

Yeah, it’s interesting. I feel like we’re living at a time when renewables were an alternative energy. They’re becoming a mainstream energy, and groups like ACORE are helping to really drive that conversation here in Washington. Really, I think we’re at a transformational time to have that dialogue with policy makers that no longer are we sort of this sort of nascent industry. We’re growing. We’re growing leaps and bounds, and this is the effect we’re going to have on folks. For our listeners that may not be as familiar with ACOR, can you talk a little bit about ACOR’s role and a little bit about how you interact with some of the other major trade associations out there, like the Solar Energy Industry Association or SEPA, or you mentioned AWEA where you used to work.

Greg Wetstone:

Yeah, thanks for that. ACORE is an organization that works across renewable technologies, wind, solar, geothermal, hydro, and also works across constituencies in that our membership includes investors, developers, manufacturers, corporate off takers, utilities. So we really cover the range of interest and the breadth of the renewable energy sector. We work very closely with the renewable trades organizations, like CIA and AWEA, and work hard to try to develop and collaboratively promote coordinated strategies on big issues of the day, the grid tax reform, what have you, to really help expand the renewable marketplace and keep our sector growing. We’ve been very lucky that we’ve been able to grow over the last couple of years.

Greg Wetstone:

We’ve seen participation increase from a number of big players across the technologies and big investors, developers, off takers like Amazon and Google. Our sector’s been lucky too, really that we have more or less matured to the point where we can compete on the grid and are able to be successful at a time, obviously, when from a federal policy perspective, we’re no longer getting the kind of help that we used to. In fact, we’re seeing perhaps some pretty active efforts to make it more difficult.

Jon Powers:

Yeah. I want to come back to those policy battles in a second, but first you joined ACORE in January, 2016, so you’re into your second year. You walk in on the tail end of the Obama administration when there’d been obviously a significant amount of support for these policies and these issues. You walk into a really interesting election cycle that has set off sort of a roller coaster of policy fights within … or I guess you’re in your third year, within the industry. So can you talk a little bit about that experience? What a fascinating time to take the lead at ACOR?

Greg Wetstone:

Yes, we live in interesting times. It has been, and I actually think the role that we play at ACORE is that much more important because suddenly we found that we really had to fight for things that really we used to take for granted, getting at least a fair shake in the electricity marketplace, having supported policies, facing the things we were up against in the tax legislation where we saw bills with retroactive changes to tax programs that would’ve undermined the economics, not just of new projects, but even if project’s already operating. So we’ve certainly been tested.

Greg Wetstone:

I think we’ve demonstrated both the ability to have and deploy important bipartisan connections, even in kind of this hyper partisan atmosphere we’re living in, and also the ability to grow and thrive economically, despite that step back. When you look at what’s driving growth in our sector, the decreasing costs, the increasing consumer demand, the ambitious state policies, those elements are continuing to serve us well in the sector.

Jon Powers:

So first of all, the listeners should go to acore.org. You can find the most recent annual report from Greg and his team, plus some white papers on the vision of the grid and different major policy ideas and thought leadership. So I sort of challenge you to do that. But Greg, what’s ACORE’s role in those fights? So we’re in the middle of these policy fights. We’ve got, for instance, the secretary of energy going to FERC to try to help stand up and put life support to coal. How does ACORE play there?

Greg Wetstone:

Well, thanks for that. Just with regard, let me just say that on our website, our reports, none of it is behind a paywall. It’s all out there available, and we have a variety of materials on grid issues, corporate procurement tax reform, the FERC process, the tariffs, a range of issues. So the role we play, Jon, is we work hard to be collaborative, to coordinate with other allies across this sector, but to strategically promote our agenda and do so aggressively when we need to both in terms of the quiet meetings with policy makers, both in the White House and on the Hill, we are very actively engaged in the lead up to the grid study, had some actually very constructive conversations with the White House about what’s really happening on the grid, did a lot of work in opposition to the when it was proposed.

Greg Wetstone:

That was DOE’s effort to encourage FERC actually to propose for FERC to subsidize uneconomical coal and nuclear plants. We formally commented at FERC, met with the commissioners. We’re also part and delighted to be part and actively engaged with a very broad coalition that’s working against the proposals that would really undermine the electricity marketplace and provide subsidies to economical colon nuclear power plants. So we’re working hard. We’re also engaged in some of the important organized electricity markets like PJM, and are working there as well to protect the ability of renewable energy to play the role that we can play in providing a reliable grid and ensuring economical power. The proposals that have been put forward would increase cost to consumers and give them electricity more and more Americans, residential and business wise, are looking at renewable power.

Jon Powers:

Yeah. It’s ironic they put it under the guise of resiliency and national security. You and I both know, ACORE has been a leader on this. When you look at the work the military’s doing, or what national security experts are promoting, its work that focuses on resilience through both clean energy, but also adoption of storage for instance. I know you guys talk in your annual report about policies, sort of at the state and federal level that could help accelerate the adaptive of storage. How much are you seeing storage become a major part of what you guys are working on?

Greg Wetstone:

Yeah. Storage is really critical to the future of the grid and it is a big part of how we achieve. Really what we’re looking for is a more flexible grid. That’s where the future is. More renewable power, more use of ancillary technologies, like demand response, and more energy storage, which is getting cheaper by the day. So we feel confident we can get there. The whole term resilience, it’s kind of a great irony, and DOE’s proposal to FERC. Resilience was cited as the reason for the changes. Yet, the term was never defined. It’s not clear that it’s really anything different by a great deal than reliability, which obviously has been a critical focus on the grid for decades. We’re working hard.

Greg Wetstone:

We believe that renewable power has a great deal to contribute to reliability and resilience if you think that’s an important criteria, but it’s a pretty warped concept that would single out, for example, nuclear power. I have no problem with nuclear because it’s low carbon. So that’s great to be a carbon free generation, but to suggest that it’s resilient when the reality is a loss of cooling water creates a catastrophic incident, as we’ve seen, is a bizarre place. I really question the positioning for nuclear power to be part of a resilience conversation.

Jon Powers:

Just a year ago, I visited Fukushima as part of a group of sort of energy policy folks. It was fascinating to get walked through the failures that happened there and watching sort of the Japanese sort of struggle with how to now just find ways to get back to the base load that they need. Also watching what’s happening today here domestically, nuclear is on the path of coal, not in terms of … The issues are going to be economical. They’re starting to shut down plants because they’re so expensive to run. The resiliency piece is part of it, but they’re just becoming uneconomical.

Greg Wetstone:

I think that’s exactly right. It probably didn’t feel very resilient to you when you were there either.

Jon Powers:

No, it’s unbelievably scary to watch.

Greg Wetstone:

Well, but economics is at the heart of it and we’re very lucky that, at this point in time, the renewable sector has sort of crossed that threshold so that we are the most economical option. That’s why we see advocates for coal and for nuclear power looking for market interventions to provide a leg up. The irony is the coal facilities have been … when there have been events like the polar vortex, coal piles froze. When hurricane Harvey had used, they flooded. So it’s not at all clear that there’s anything about those technologies that is more inherently resilient than wind or solar power.

Jon Powers:

Right. So let’s go back to the economic piece of this for a second and federal tax credits for both wind solar. They were renewed, which is fantastic. They also though have a phase out in place. Can you talk a little bit about the policy side of that phase out? Is it ACORE’s thought that this gives us enough policy stability for the industry over time, or how do we look at what the upcoming fights in 2020, and maybe even 2022 look like?

Greg Wetstone:

Well, that’s the right period of focus on, absolutely. Between now and 2020, I think that the economic improvements in the technology, which has gotten much cheaper, as you’re probably aware, wind power is 67%, two thirds cheaper today than it was in 2009. With solar power, that number is an astounding 85%.

Jon Powers:

Wow.

Greg Wetstone:

So you don’t see those kind of improvements from-

Jon Powers:

Same time, since 2009?

Greg Wetstone:

Since 2009.

Jon Powers:

Wow.

Greg Wetstone:

So you don’t really see that happening in any other technology. And in fact, it’s a little bit like buying a three year arm adjustable mortgage versus a 30 year mortgage. If you want a fossil fired power plant, you have to project the future cost of that fuel, but you don’t know that a volatile marketplace has been the history. Certainly with renewable power, there is no fuel cost. It’s all capital cost. You amortize it, you know what it is. Year over year, that cost is going down as the technology improves. So we’re in a much better position, but come 2021 or so, what happens is all the tax credits for wind and solar power phase out. Those that exist for all the competing forms of electricity generation, including fossil fired electricity, continue and are part of permanent law.

Greg Wetstone:

At that point, we need a new regime. There’s been a lot of talk about a technology, neutral credit, replace everything else out there in the way, things like resource depletion allowances, and tangible drilling costs that apply to fossil fuel. Get rid of all that. Everybody gets a technology neutral tax provision and there should be one. It needs to one way or another take care of the externality that is involved in carbon emissions. So I don’t know whether that’s carbon pricing or carbon tax or technology neutral credit, or even some sort of cap and trade, but there has to be some effort to deal with what I would argue is the largest externality in the history of externalities. We’ve got to deal with this in order to provide at least a level playing field for renewable energy post 2020.

Jon Powers:

For the listeners that aren’t familiar, when the tax credit was extended, it was extended along with approval to export gas.

Greg Wetstone:

Right.

Jon Powers:

So there was a political, literally at midnight, negotiation at the final part of a major budget bill that put these pieces together. So, a lot of what’s going to happen in 2020 and 2022 are going to depend on what the politics look like here in Washington to get those type of things moving forward. But what we’re seeing, I think, which is exciting, is a real movement within the conservative space where younger conservatives are coming around on clean energy and even climate change. Conservative Energy Network just put out a poll they did, I think last week or the week before. Nearly 70% of conservative millennials stated that they would oppose a candidate who opposed clean energy, which I thought was fascinating.

Greg Wetstone:

Wow.

Jon Powers:

Yeah, there’s a really interesting effort by that group to conservative energy network, also folks in the evangelical community and others to start to really push for these. So how do we continue to build that bipartisan support on these issues and make the case on both economics and jobs?

Greg Wetstone:

That’s the right question. That support is clearly there. Let me highlight another recent poll that put out, I think it was earlier this week. The level of support, bipartisan support for expanding wind energy was 85%. For solar energy, was 89%.

Jon Powers:

Wow.

Greg Wetstone:

If you spend any time around polls, you don’t see those kind of numbers. So the support is clearly there. We have bipartisan support in the Senate, which is really why we were able to make headway on the tax measure. We’ve been caught in this kind of ideological crossfire. There’s no reason why there should be anything partisan about renewable energy. It’s cheaper, consumers want it, businesses want it, and it doesn’t contribute to pollution or threaten the planet or use scarce water for that matter. So there’s, I think, a lot of momentum out there. We’re seeing that. We’re bringing economic opportunity now to a long list of red states that have big renewable resources, where there isn’t a lot of other economic opportunity and you see big wind development or solar development, the Dakotas, Kansas, Nebraska to site just a few. Obviously Iowa’s had a renewable Renaissance where it’s not just the wind development there, but manufacturing is in a big way there.

Greg Wetstone:

Colorado, the same thing, a tremendous amount of development, tremendous amount of manufacturing, both wind and solar. So we are seeing his sector, which is one of the biggest economic drivers we have in the country, continue to grow. If I could throw a couple of statistics at you, just on a level of economic growth, we’re looking at on the order of 40 billion a year over the past five years, the renewable and investment, new investment, the largest source of new private sector infrastructure investment for each of the past seven years, according to BlackRock. The two largest, fastest growing job categories in the country are wind turbine technician and solar power installer. So we’re creating jobs, driving growth, driving investment, helping local communities, and that all brings with it some political clout. So there’s kind of an ideological opposition, I really don’t think it’s sustainable.

Jon Powers:

So Greg, there’s so much on the policy side and the political side we can talk about. I’d love to dive into the state level piece, because that’s really where the fight’s going to be sharp for the next few years. ACORE continues a lead. That will be another episode you and I do.

Greg Wetstone:

Happy to.

Jon Powers:

Also at some point, I want to do a conversation around the international side and what’s happening in places like China. I did my master’s thesis on Chinese energy security, so I’m sort of fascinated by the continued growth there. But one thing I want to do want to focus on just here towards the end, we’ve talked a lot about the generation and the supply side, but the demand side here continues to grow quarter by quarter with companies like Google and Apple, companies like Amazon, who I know some of them are members of ACORE. What’s driving those corporations to do what they’re doing in this space?

Greg Wetstone:

The corporations are looking both at what their consumers want and they know that these consumer facing companies are facing demand for clean power. They want to know that when people are using Amazon or Google, that they’re not contributing to the climate problem. That’s a big part of it, but they’re also seeing big economic gains. These companies, particularly companies like Amazon and Google have really leaned into the issue there. These are very active members within ACORE. Amazon is actually on our board and executive committee, and they participate in these policy engagements in a major way. They’re fighting to make sure they have the option when they build the data center or a warehouse to use locally generated renewable power. They won’t go there and that’s a point they’ll emphasize to local leaders, and we’re seeing. They’re helping to spread the word to make it easier for other companies to step in.

Greg Wetstone:

Obviously big guys like Walmart have been doing it a long time, but there are companies like Mars Candies, and Unilever, and a bunch of others that are working hard to see that their products and the supply chain they use are renewable powered. We’re really at just the very early stages of this effort. Already, it’s had a major impact. If you follow the numbers, more than three gigawatts of power was bought by companies, not through utilities, but directly from renewable power providers. Then there’s another four gigawatts of power that was created by residential players, residences and companies. With power, they’re generating from solar on their own rooftops and elsewhere.

Jon Powers:

Such an exciting time for the industry. Greg, if you are talking to a member right now, how do they go and sign up to be part of ACORE?

Greg Wetstone:

Well, you can find out about our membership on our website at acore.org. We welcome participants from all sides of the renewable transaction and we host big conferences. We have our big finance conference coming up June 19 and 20 in New York City, renewable energy finance forum Wall Street, REF Wall Street. So I hope to see you there, John. And for your audience, please check it out in our website and come join us.

Jon Powers:

Yeah. Thanks Greg. Let me ask one final question I ask all of the folks in this show. So, if you can go back to yourself coming out of college or high school, can sit down and have a coffee or a beer, what advice would you give yourself?

Greg Wetstone:

That’s a long list.

Jon Powers:

Yeah.

Greg Wetstone:

I think I might have focused sooner on this sector. I like the private sector engagement and I was very policy focused early on and I’ve kind of stayed with that, but I liked the business connection. I liked being able to be part of building something as a solution, as opposed to earlier in my career, it was the rules to make sure that the things that were being built, weren’t creating big problems. Now, I like being able to build things that help solve the problems.

Jon Powers:

Well, we need those rules to help build them.

Greg Wetstone:

Exactly.

Jon Powers:

Thank you so much for all the work you’re doing and the leadership. ACORE is really hitting its stride right now. It’s an exciting time for the industry. Thank you so much for being on the show.

Greg Wetstone:

Thank you, Jon. It’s a pleasure, and I’ll look forward to next time.

Jon Powers:

Absolutely. Thank you to Greg for joining us today. You can learn more about ACORE at acore.org, and you can find more episodes of experts only at cleancapital.com. I’d like to thank our producers, Emily Connor and Lauren for their help. Look forward to getting your thoughts on other folks we should be interviewing. Please feel free to reach out. And as always, I look forward to continuing the conversation.

Jon Powers:

Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes or wherever you get your podcast. If you like what you hear, be sure to subscribe and leave us a five star review. We look forward to continuing our conversation on energy, innovation and finance with you.