Jon Powers: Welcome to Experts Only podcast sponsored by Clean Capital. You can 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.

Welcome back to Experts Only. I’m your host Jon Powers. We have a little bit of a different episode this week, instead of our standard one on one conversation, we’re actually talking with Lisa Jacobson, who’s the President of the Business Council for Sustainable Energy and Ethan Zindler, who heads the Americas for Bloomberg NEF. And we’re going to talk about their annual Sustainable Energy in America Factbook. This is the seventh year they’ve produced it. The Factbook provides amazing up-to-date and accurate market intelligence. It’s been a leading resource for folks in industry and our dialogue is going to talk a little bit about the history of the Factbook and how they started doing it, but talk about some of the trends that we’re seeing.

So bear with us as we’re trying our first multiple guest interview. But I appreciate your interest and look forward to the conversation. Lisa and Ethan, thank you so much for joining us here at Experts Only podcast. It’s great to have you back on the show.

Lisa Jacobson: It is great to be here again. Thank you.

Ethan Zindler: Thanks for having us.

Jon Powers: So, Lisa, I want to start off with the Business Council for Sustainable Energy and it’d be great if you just talk for a second about your role in the market and some of the work the BCSE does.

Lisa Jacobson: Sure. Well, the Business Council for Sustainable Energy, it’s hard to believe we are nearly 30 years strong as a coalition.

Jon Powers: Wow.

Lisa Jacobson: Yes, we represent a very broad set of energy industry players with both North American and global markets. Our core areas of focus from an industry perspective have been supply side and demand side, energy efficiency, the broad portfolio of renewable energy technologies and the natural gas industries. And when the council was formed in the early 1990s this portfolio of efficiency, natural gas, renewable energy, was really emerging as the growth sectors of the US energy economy. And, we’ve seen tremendous growth in all areas and a continued evolving marketplace. And the BCSE’s role is to educate and advocate on policies that will hopefully continue that accelerated market growth.

Jon Powers: Thanks. And Ethan, most folks are familiar with Bloomberg New Energy Finance. If you follow a lot of folks in the industry’s Twitter accounts are constantly putting out the great data that you guys are working on. But you lead the Americas for BNEF. Can you talk a little bit about the role of BNEF and there’s a great episode, an earlier podcast, that you mentioned something I quote all the time, that you’ve been around and seen the industry mature from folks walking around with ponytails, to people in business suits. A lot of the amazing information that’s feeding the industry today comes from the work you all do. So, could you just talk a little about the work?

Ethan Zindler: Thanks. Yeah. Thanks for having me back. So, you have the Bloomberg NEF as we’re now called. We were no longer… We’ve dropped the New Energy Finance with sort of like IBM, or I would say on a good day we’re like IBM. And maybe on a bad day we were kind of like KFC. But it’s three letters.

But Bloomberg NEF, and actually that’s a reflection of the fact that the research we do is not just energy and finance anymore, but we actually are also starting to do some additional research into other areas around sustainability, including around materials and technology that we consider to be part of a larger, so-called, circular economy.

But as you mentioned, our history and our heritage has been that we started off life as a renewable energy research firm, essentially a boutique research firm about 15 years ago. Started in the apartment of our founder, Michael Liebreich. And then eventually we grew and were bought by Bloomberg and now we are known as Bloomberg NEF. And we’re essentially the energy markets research division of Bloomberg doing research very specifically on sort of microeconomic and macroeconomic factors. We don’t do public equities research but we focus on things like what the price of a wind turbine should be or levelized cost of electricity, things like that kind of stuff.

Jon Powers: Yeah. So I want to sort of step back and when most people in their marriage, seven years is an important point in a marriage. When you get your copper gift and, [inaudible 00:04:45] make or break. Well this is the seventh year of the marriage between Bloomberg NEF and BCSE. Can you, Lisa, I’d love you to talk a little about the history. How did this come about? And I do want to talk about the trends you guys have seen, but how did this marriage sort of get started?

Lisa Jacobson: Well, first of all, very happy to be seven years strong and this partnership is going well. And I think one of the themes about a good marriage and a good working relationship is good communication and a very collaborative working relationship. And I think that’s what started this project and why it continues to thrive. And I also think that at the moment in time when we decided to do this work, it was right on the cusp of being able to trace with data a lot of these changes, which we knew were happening, but they weren’t really evident in a multi year fashion.

So I think the BCSE board of directors and Ethan really could see that there was something very significant happening and the project always kind of is ahead of the curve in a number of areas. But it certainly was in terms of trying to knit together all the trends that are happening in US energy markets in a quantitative way, and basically as close to real time as you can get it.

But just to share the little anecdote of how the project was started. When the BCSE was about to turn 20 years strong, we invited Ethan Zindler, who we had been working with when it was just a New Energy Finance, before it was acquired by Bloomberg, to talk about renewable energy and energy efficiency market data. And we had a very robust conversation and it was clear across the table that, while there were some industries where there was very good data, across the board there were gaps, certainly for the industries that the BCSE represents.

And then there were very few that, as I said, were really putting it together in a smart way that was factually oriented. And this project has been a collaboration. I know I learn every year, I know our members learn and hopefully our key audiences learn, which are policy makers, also media and others that are following the energy and environmental arenas.

Jon Powers: So, Ethan, when you guys started this seven years ago, you really did establish almost a baseline of where folks can start to measure the industry from. And before we get into sort of the 2019 report, what trends have you seen over the last seven years as the data becomes better and more defined and obviously the market has matured. And sustainable energy is no longer an alternative energy. It’s a mainstream energy. So what are the trends that you’ve seen over the last seven years?

Ethan Zindler: So I mean, just to sort of piggy back on some of what Lisa was saying. When we first started doing this, I think the rationale was that there was a dearth of facts or let’s put it this way, there was a dearth of facts put together in a very timely and simple manner that people could relate to. And, I also, I think, always tried to make the argument that if you were looking at information about the clean energy sector, that was, let’s say, any more than 12 months old, it was quite dated.

In fact, you could argue even more than three months old. It was dated, given how much we were seeing photovoltaic prices move around. So, that was sort of one of the initial rationales here, was that, in particularly in the context of Washington where we both are, is to try and make sure that they were the right set of facts on the table, easily accessible for folks to understand so that they could make good policy decisions, whatever those would be, based on what we’d have to say.

And over the seven years, I think we, as BNEF, have really benefited enormously from working with Lisa and her team because we learn new things every year from them and from her members and the coalition. Everything from understanding about biomass build or lack thereof. And, making sure that we get it right on talking about hydro generation versus capacity, things like that, that her team and again, affiliates, are always great about sort of working with us on and helping us also to think about new issues and new technologies that we wouldn’t necessarily have on our radar. So, it’s been very symbiotic in that way.

Jon Powers: Lisa, it’s probably hard to be surprised now as you’ve seen the data and the trends moving in a pretty clear direction in the last few years, but is there anything before the 2019, you guys published the 2019 report, that really surprised you?

Lisa Jacobson: Yes. Actually, one of the things that I talk about most when I’m doing kind of big takeaways for the Factbook, and 2019’s issue in particular, and Ethan will correct me if I oversimplify or I get this wrong. But I mean, the whole activity of the corporate space is making very significant strides, not just for renewables, but this little statistic is… Or big statistic I should say, relates to renewables. But basically, if you look at the deployment and the build across all renewable technologies in 2018 and you match that to the corporate pledges, and the gigawatts of corporate pledges that were assigned in 2018. Now, of course these projects, as you know very well, don’t happen in the same year, but it’s basically represents half of the build.

So the corporate market is putting a very strong forward signal here for the cost and other co-benefits of renewable energy. So that definitely surprised me. I think that is a very significant, again, forward looking benchmark. But what do you think Ethan?

Ethan Zindler: No, I think that… I mean I think that that seems to be a growing space and Jon, you’re probably thinking this too in your world in developing projects, that that seems to be a real source of demand in the amount of pledges that have been made on clean energy under the RE 100, which has been organized and also, there’s increasing number of carbon pledges as well, which are, I think, they’re going to have some effect on that, I think has been very positive and we know that market’s continued to grow.

I would say in terms of one other thing, on the sort of downside of things that surprised us, or at least surprised me a little bit last year, was that even though we are seeing the actual power sector more broadly decarbonized as we move more towards renewables and natural gas, and away from coal, which has continued to decline last year. Actual emissions kind of ticked up last year and that was definitely not… That was a little bit of a surprise and definitely not a happy surprise either. Reflective of the fact that if you want to look at it very optimistically, you could say, “Well it’s because the economy really picked up.” But there were multiple reasons that are kind of hard to parse out, but from an emissions perspective, is definitely not great.

Jon Powers: Oh, it’s a tough story, right? For all the work we’re putting into reduction, that we saw it tick up. I agree. That shocked me. I do want to go back, let’s go back to the corporate PPAs here for a second. I was going to come back to this later, but it is an important part of what we do at Clean Capital for sure. But, I also think there’s an argument to be had that they are also, because of their commitments, because of the demand that they’re creating, they’re also creating a lot of the policy drivers that we’re seeing change happen at the state levels right now. When you’ve got big players like Amazon and Google and others who go into a state like Virginia and refuse to bring their operations until they can contract for renewables.

And then you’ve got the big players in places like Richmond, who may have been hesitant to move in before, want those businesses and as much as the advocates could make the case when you’ve got jobs on the line, it’s helped push some of those policies ahead. I know BCSE, Lisa, does a lot of advocacy work. Are you seeing more of the corporations sort of at the state level playing a role?

Lisa Jacobson: Yes. And actually, the 2019 Factbook has new data to track this. So, we have a chart where we have a map of all states that have some type of window in, some kind of green tariff, all different shapes and forms. And it notes appropriately that some of them work quite well and others may still need some improvements. But that map wouldn’t have existed five, six years ago and it wouldn’t have existed without these large corporate players discussing what they need in terms of their energy management and energy choices and pushing through some very challenging marketplaces.

And I think as I look forward, having 50 different ways to procure clean energy is not going to be the most efficient. So, how do we learn and evolve as time goes by? I’m not suggesting there needs to be one federal way. I think all of these things really do need to have local benefits and so, they might need to be adjusted to work in that environment.

But what we are seeing, I think, is a sea change, especially in states where there’s been more resistance in the past to seeing that this is something they need to address and at least try to meet halfway the corporates or others that are asking for more clean energy. So it’s a little messy right now. It may need a good number of years to sort itself out, but definitely more states are open to it. And the fact that the corporate community in partnership with with other stakeholders are finally being able to make some headway in places that have been challenging is really important.

And I would also say the city. It’s not just at the state level. A lot of times these breakthroughs are happening in large cities, which then can be a driver for things at the state level or they just remain at the city level but it still is a significant population.

Jon Powers: Yeah, I find it interesting when you’ve got… A lot of the big corporations have that capacity to sort of follow all these policy moves. What the Factbook does well and I think what BCSE does well is provide an insight for those that want to better understand that the constantly shifting, right now, policy game at the state level. I mean, you’ve got states like New York where I sit where it has had a massive new piece of climate legislation move forward. You’ve got what’s happening too in Oregon, when literally you’ve got the governor trying to chase down the Senate with police officers to bring them in back to vote. It’s hard to track all the changes that are happening right now in the states. That the Factbook does a good job of helping introduce people to those options.

Ethan Zindler: Yeah I think, I mean we’ll certainly have for, not to get ahead of this and assuming we do this again, because I think we are going to. We’ll have a lot of policy updates, I think, into this next year and more states that we can sort of fill in as having supportive long term RPS. And in fact, the number of states just with 100% clean energy goals is now, covers a decent chunk of the map actually.

Jon Powers: Absolutely. So Ethan, I want to step out of the US for a second. Some of the data in the report show that across the world wind and solar now present the least expensive options for adding new power generation. I mean, I think if you went back even five years, people weren’t sure this was ever going to happen. Can you talk a little bit about this development and what does this mean for business leaders, for investors and for policy makers?

Ethan Zindler: Well, I mean, I hope, at the very least, it stops the conversation around, “Oh, we can’t afford this. Oh, it’s too expensive.” I think, it’s funny in how quickly the conversation can switch. If you look closely at power markets, the real threat isn’t that these technologies are too expensive. It’s that they’re too cheap and that they’re going to drive down wholesale power prices for other existing players.

And so I think that’s the new sort of fear of incumbents. But it is ironic that after, for years, some of those same folks think, “Oh, we can’t afford to do this.” Now we hear complaints about how they’re feeling threatened by these technologies. So, I think things have definitely changed very quickly. And I think when you do, these technologies do have a meaningful impact on market prices once they reach some kind of real level of penetration as we’re certainly seeing in California and Texas and in other places as well.

So it’s a really interesting time because it’s not like renewables or, as I’ve said many times, there’s nothing alternative about this. And now, as you enter the mainstream though, you start to encounter the larger dynamics of the power markets overall and affect them in really interesting ways.

Jon Powers: Can you talk a little bit about too, moving outside of just… I think a lot of folks culturally just assume wind and solar, right? When they talk about renewals. There’s other things like biogas and biomass and wasted energy it’s moving. But the report, it also really highlights an interesting continued growth in the natural gas industry, which is now the number one source of power in the US. What did you guys see in sort of total investment and the growth in that space?

Lisa Jacobson: Well, I mean, natural gas is a rather incredible story. And if you look at the amount of gas that the US is producing, that’s been surging in record years that we’ve been seeing for production and for consumption of gas in the last several years. And actually we’re just about to put out a report tomorrow talking about how we think Permian gas from the Permian, again, that there’s an enormous amount of it additional capacity to come next year and about half the generation that was added last year, about half of the 40 gigawatts last year was with gas and, was one of the biggest years for build for gas since about 2004 or so.

So look, this shows no sign of abating. And in terms of cheap gas prices down in the $2 to $3 range, really for quite some time. It will be interesting to see if other countries can sort of achieve their own natural gas. A miracle, obviously, getting this gas to other places has costs and it’s necessarily clear that everybody else is going to see that kind of evolution. In terms of our long term forecast, which we actually put out last week, we’re quite bullish about gas’ role in the US power sector longer term, much less bullish about its role in the power sectors of other countries around the world.

Jon Powers: Thank you Ethan. Lisa, the Factbook is just that, it’s a lot of phenomenal fact and data. Being in Washington DC, where oftentimes facts don’t always matter, you guys are walking into conversations with a lot of evidence and a lot of meat behind your arguments. When you talk about the growth of the clean energy jobs and energy efficiency jobs are over 3 million people now. The growth of the investment, the growth impact that it’s having. What do you find as the arguments that are most effective when you’re trying to make the case in Washington?

Lisa Jacobson: Well, I think you need to have the facts because at a big picture, macro level, there are still questions of is this affordable? Is this reliable? Can I deploy when it needs to be? And I think you have to lay out the broad macro picture, but what really matters to policy makers is the local connection. And just having one or two employers come in and put a face that’s real for a community, that’s what’s going to open up more opportunities.

Now, even if you can open up an individual’s mind to thinking about this as being a valuable economic attributor or energy contributor in their community, it doesn’t mean they’re going to have the same point of view on what mechanisms we should use going forward. But I have seen in the last couple of years very dramatic changes in the way people approach this information. And again, if you can pair it with a local business that’s going to be extremely compelling.

Ethan Zindler: I would just add that the good news for us here in the facts provision business is that the demand for our product never goes down. We launched this seven years ago and I think Lisa and I both felt like there was a lot of sort of misinformation out there, lack of information, I would argue sometimes even disinformation. And then, here we are in the Trump era and a new term called alternative facts has arisen thanks to Kellyanne Conway. The demand for real life facts has never been higher, thanks to events in the last couple of years.

Lisa Jacobson: Yeah. And if I can just give you an example of that this year. So the BCSE, in large part because of the Factbook project that we did with Bloomberg, was invited to speak, be a witness, at the first hearing of the full Senate Energy and Natural Resources Committee dealing with climate change and the power sector. And the reason why the council was invited and Ranking Member Manchin asked for the URL like three times is because we had facts to offer.

And so we were with a very distinguished panel, but we had the facts and that’s what they were looking for. They wanted to start the conversation anew based on facts. And Ethan too, and Bloomberg NEF, have been also having a lot of conversations, have been testifying in Congress a great deal this year because we have new Congress with many new members and they’re all trying to understand. And they see energy and resilience and the economic conditions we’re in as extremely important areas of focus in new ways. So obviously the environmental aspects and climate change have had a great deal more attention on the agenda, which is so welcome and it’s been very bipartisan.

But I think the whole energy agenda, it’s no longer… It’s acceptable to just assume you’re going lift a switch and there’s going to be something there. We need to understand and make sure that we cultivate the energy assets we have and that they’re performing in different ways. So it requires more policymaker attention.

Jon Powers: I just want to challenge our listeners to go to bcse.org. You can get the Factbook. It’s highlighted right on the homepage. But the thing that, I think, I love what you guys do with it Lisa, is that you break it out into a lot of info docs. You break it out into brochures. It’s a lot of great, digestible information for those people who don’t have the patience to read an entire report.

And if you’re listening and see this, share this with your local advocacy organizations so they know that it’s there and they know how to access it. And I know that Lisa’s team are also willing to sort of dive into the states and provide information that really can help us push the policies we need to see implemented forward.

So I ask this of both you. I’m going to start off with Ethan. When we come back here next year for your bronze anniversary of the report, the Factbook, what do you expect to see in the trends?

Ethan Zindler: Interesting question. I mean I think that there’s definitely some scrambling going on or let’s say, I would say scrambling is too strong a term, but accelerated activity, as we come up on the sort of unofficial but more important end of the tax credits for Whitman Solar. And I think that that’s kind of… You’re probably seeing a fair amount of hurrying up activity. So I think that that’s definitely something we’ll probably highlight a bit.

I would say that the continued growth of electric vehicles and another record year probably for EVs. What I don’t have a prediction on, and I’m very curious to see, is what we’re going to look like on electricity consumption and emissions. Because I think, first of all, what’s going on exactly with the US economy is very much in question at the moment.

And then second, I know that weather has been very hot in some parts of the country, but as Lisa and I were saying before we joined the podcast, it’s been a very lovely June here in Washington and I would say totally cool in some places on the East Coast. So what that’s meant exactly for emissions, I don’t know. We don’t frankly track it month to month.

So I think that’s a big sort of question mark. And last year’s number on emissions, like I said, that was my surprise. So I hope to be surprised in a pleasant way with them going down this year.

Jon Powers: Yeah, absolutely. I think we all hope it goes down. How about you, Lisa?

Lisa Jacobson: Oh, actually, that was what I was going to say. I think that was the biggest concern with the data that came out in 2019 was and trying to unpack it and one year is very hard to really make any conclusions. I commend BNEF for really being first out of the gate to make an attempt at looking at what was going on in buildings, in terms of heating and cooling and kind of high heating days, high cooling days, which when you need more power or energy to warm your home in the winter when there’s extreme cold days. Or when need more air conditioning when it’s very, very warm.

And thinking about that in the context of what we were seeing in the emissions trends, in addition to kind of what does it mean if our industrial activity increases. And does that mean that we no longer are decoupled our productivity with admissions. So we have very long term. You go back 25 years, we have a very strong trend on energy productivity, but there was a deviation last year and these are… I think, good news compound’s good news, right?

We also work in the international context with the climate change negotiations globally and we want to show that the US is making progress. That will continue to create momentum in other countries that look to the US politically, but also just from the economic choices we’re making. If we’re choosing more clean energy, they’re thinking, “Well you know what? I probably should too.” So there’s just this dynamic set of impacts that are not necessarily always quantitative, but they can feed off of data trends.

So I’ve, not only is it disturbing just towards meeting our climate goals, but I think there’s just a feedback mechanism if we are not on track to continue to make significant emissions reductions nationally, that’s a big concern. And then obviously, we need to understand why.

Jon Powers: Right.

Ethan Zindler: If I could add one other thing. I mean, I would say that on a positive note to what we were talking about earlier, and I don’t know exactly how one would specifically quantify this, but this is, I would say, is probably shaping up to be the best year ever in terms of state level policy making in support of clean energy. I mean we’re halfway through and those 100 pound goals that we’ve been seeing and the efforts. Last year’s election, there was a great deal of publicity around the Democrats taking control of the US House of Representatives.

But, I think arguably the far more meaningful change was the changes that we saw at the state legislative level and the governorships because those are really manifesting themselves in a great deal of change. And so, yeah, I don’t know how you measure it specifically, but by the time this year is over, sounds like we’ll have half a dozen states or more with 100% clean energy goals and a lot of states… And who knows what’s going to happen in Virginia in the elections this fall. So a lot of things moving in the right direction on that front for sure.

Jon Powers: Yeah, I’m going to actually arguing that we’re at a sort of unique climate moment where the national perception is there and the local folks that are witnessing it firsthand are really starting to act and, hopefully we can get Washington caught back up here in the future. I do want to ask, I usually have a pretty standard final question but I’m going to tweak it this time, Ethan because the World Cup’s going on. I know you’ve covered a couple of them as a reporter. Any estimates? Who’s going to pull it off this year?

Ethan Zindler: Well I did see that the US just made it through, presumably by the time this runs, that’ll be old news but they just beat [inaudible 00:29:45] two to one. That’s good. It sounds like they cut some breaks maybe in that match. And so I don’t know. Hard to predict. It’s certainly been very entertaining so far. And I guess I will say go USA.

Jon Powers: There you go. Okay-

Lisa Jacobson: I’ll let go with that. Go USA.

Jon Powers: Outstanding. Well thank you Lisa, and thank you Ethan. Thank you so much for putting this report out first and foremost. And then of course, thank you for joining us today.

Lisa Jacobson: Yeah, thanks for the opportunity, John. It’s a pleasure. And Ethan, thank you so much for doing this together.

Ethan Zindler: Same here. Back at you.

Jon Powers: We’ll have you back on to celebrate the next anniversary. And I’d like to thank our producers, Carly Baton and Courtney Flynn for their hard work. And as always, challenge people to go to cleancapital.com to provide insights and ideas on future podcasts. We just had our 50th podcasts published this week while we’re recording this, so we’re making some good progress. Look forward to continuing the conversation.

Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes or wherever you get your podcasts. 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.