Creating Climate Wealth ~ A Dispatch From SXSWECO

climate_wealthMost of us usually don’t use wealth and climate change in the same sentence. Jigar Shah and the Carbon War Room’s Ann Davlin were at SXSWECO yesterday to convince us things are changing. Their session,”Creating Climate Wealth,” showcased how individuals and businesses can capitalize on the climate chaos.

Davlin, who worked with Al Gore and at The Pentagon, started the discussion by reminding the audience that our society, even business, has had climate opportunities teed up before.

“This really isn’t all uncharted territory,” said Davlin. “A lot of today’s climate wealth environment was established by the success of the Carter administration.”

Most of us can associate the administration with solar panels on the White House, but Davlin highlighted the other policy and infrastructure decisions which helped set up many of the standards still used today.

“Everything from energy efficiency and vehicle emissions to power purchase agreements (PPAs) and the adoption of the Renewable Portfolio Standard (RPS), has some connectivity to the efforts of lawmakers decades ago,” said Davlin.

“All the pieces are coming together, and we’re at a point where we can move forward. Carter won bi-partisan support for favorable policies and it lead to job creation and clean energy momentum.”

Davlin cited the residential PACE market, aimed at funding energy improvements, as another engine of growth and carbon reduction. She urged the group to think about the balance between an economic and ecologic argument.

“The capital is there, it’s more about how do we go in and approach a particular investor segment,” said Davlin. “We need to think about describing the impact in either financial terms or climate terms,” she added.

Shah opened up with a dig at our obsession with technology, questioning the value of the next new app.

“We have this weird fascination about technology,” said Shah. “The reality is that new technology is not fascinating in our industry.”

Instead, it’s about “infrastructure.” Shah noted that even with a seemingly unending technology cycle, energy costs for the average American family have increased about $4000 per year per family.

“Nobody tells they’re mom that I work in infrastructure,” he joked. But it’s easier to understand the notion of infrastructure when he describes it in the context of how the solar industry built out its own processes and practices. He mentioned how early power purchase agreements (PPAs) drove demand and led to more stable and innovative financing models that have continued to spur along the solar industry.

The conversation also addressed the opportunities in the electric vehicle (EV) industry and more broadly, the transportation industry.

“So what’s the climate wealth strategy for getting people in EVs,” asked Shah.

He mentioned recent data from Triple AAA that shows U.S car owners spend about $900 per month to own a vehicle. Besides more predictable maintenance costs for EVs, Shah thinks transportation companies and manufacturers will continue to move towards a cost per mile model.

“What you’ll see is an increase in “cost-per-mile” entrepreneurs as more time transfers to that model,” he said. “Then the question is what do you do with all the wasted space, like unused parking spots and emptier garages.”

The parking spot problem is in the industry’s headlights, sometimes referred to as one of the last mile problems in transportation. He was asked about what cities can do address it and some of the other planning challenges.

“Basically, 1000 entrepreneurs need to be knocking on doors and getting contracts, and then those need to get financed” he said.

Once autonomous vehicles are factored in, things get more interesting. Both panelists said the insurance industry is already adapting to that, preparing for the increasing loads of data from vehicle-based systems. They imagined a scenario that’s not so different from what healthcare providers might glean from health trackers to adjust our premiums.

Davlin also mentioned how microgrids, small-scale stations that can operate independently, are getting pushback from municipalities. Drawing from her pitches to Wall Street and private equity firms, Davlin reinforced how assumptions can’t be made that stakeholders understand the bigger picture. She described some scenarios where energy efficiency funding had to be reframed around a more resilient and risk-based approach.

Shah was then asked about the value proposition for solar, and how it plays into more climate opportunities.

“Solar is now an $80 billion a year industry with rooftop systems being added about every three to four minutes,” said Shah. “The industry needs to take responsibility for creating the next model for utilities.”

The panelists were also asked what city officials could do to spark more business-driven climate strategies.

Shah singled out transportation and waste management as two of the biggest pieces looming for cities. To magnify the cost reduction opportunity, he said the the average U.S. city transports its waste roughly 350 miles for disposal.

He also used the recent food waste ban in Massachusetts to show how waste reduction can create growth. Because of that policy, says Shah, 1200 anaerobic digesters will be built over the next five years, which will create jobs and reduce transportation costs..

Waste water management is also a part of the portfolio, especially with many treatment facilities across the U.S. nearing capacity. Things like pre-treatment, desalination, and other filtering applications are spurring the water management sector.

“A lot of these solutions have two year payback periods,” said Shah. “At that point, you’re basically forcing people to save money.”

As the session closed, a Nike representative in the audience asked the panelists to share specifics on the top things corporations could do to impact these climate wealth strategies. Davlin cited what Nike itself was doing as a member of the Sustainable Leather Working Group.

“Nike is actually dictating how the life of an animal is managed, everything from how it is fed, to how it is slaughtered,” said Davlin.
“What that means is more job creation, and a more visible and sustainable supply chain, ” she added,

Shah jumped in on the supply chain piece, saying the “greening of supply chains” is the toughest challenge for multinational corporations.

“You have to change the contracts and configure them to reward your best suppliers,” he said.  Part of the challenge is that adjustments to supplier agreements can impact short-term profits. But Shah urged companies to look past contracts and get more creative to drive growth, saying a company’s strategic partners can be rewarded in many ways.

“There’s still constraints to being driven through the Chief Sustainability Officer (CSO). But you have to make some financial commitments before any long-term strategy can really materialize,”said Shah

“The question becomes, how do we it home runs?” he told the group.climate_wealth

 

 

Chevy Volt Still Tops EV Sales

The Chevy Volt is still outselling other EVs, even Tesla’s Model S. It’ll be interesting to see how battery technology accelerates and how it impacts pricing.

Climate Progress had a snippet on that recently.

“investment pundits think that Tesla Motors is on the verge of achieving something big: A battery cheap enough to make electric vehicles cost-competitive with conventional cars..Motley Fool is reporting that the company is on the right track towards developing a battery that costs only $100 per kilowatt-hour — a cost widely believed to be the threshold where electric vehicles can finally be cost-competitive.”

And besides the obvious price difference, Nissan doesn’t have limits on distribution, something Tesla’s fighting in several states.

Give it a few years and we’ll be laughing even harder at the Lexus ad below.

Tesla Test In Norway

The Tesla Model S had a range of 205 miles in one of the coldest environments on Earth. Range anxiety is slowly fading.

via Market Clues: Why Tesla Will Crush The Competition.

I Caught Up With An Austin Startup Providing Real-Time Transit Options

ride_scout_ride_results

Urbanites and UT students have a new way to get around asRideScout™ announced its formal launch in Austin this week. CEO Joseph Kopser and his team have built a real-time, mobile aggregator and comparison engine for ground transportation options. And with ties to the sharing economy and transit’s rising importance, they appear to be in a good spot.

Two big hooks provide the lure for the app. Its “best ride” ranking is an easy way to see pricing and estimated times. But the kicker is the breadth of options you get. Buses, transit, subways, taxis, limos, shuttles, car-sharing, and even pedicabs are included. The iPhone app has been out a month or so, and an Android version should be ready this Fall.

It’s been a quick ascent. Just last spring, RideScout was still embryonic before placing second at the HATCH Pitch Competition at last year’s SXSW. From there, Kopser and some of his West Point alums raised $350k  and started building in late July.

ridescout_ride_results_2Now it’s in a bit of a perfect storm. Cities are faced with infrastructure challenges everywhere, as traffic increases, roads are in need of repair, and urban populations continue to rise. The low-hanging fruit for many metros is to optimize what already exists. When buses or rail cars aren’t filled, those are idle resources that are funded with taxpayer dollars. That’s one of the pieces that’s caught the City of Austin’s attention.

“RideScout will push highly motivated citizens to alternative modes of transportation, helping to fill underutilized public transit capacity to keep more cars off the roads,“ said Todd Hemingson, Vice President of Strategic Planning and Development for Capital Metro.

Hemingson and other city planners have no doubt seen the light, or at least the data.
Here’s an excerpt from NextCity that pulled figures from the American Society of Civil Engineers‘ recent report. 

“Public transit ridership increased by 34 percent between 1995 and 2011, according to the American Public Transit Association, and the ASCE report states that access to transit across the country has grown by nearly 10 percent.

That’s the big upside. But here’s the other part.

“Although transit investment has also increased, “deficient and deteriorating” regional transit systems cost the national economy $90 billion in 2010.”

Until those crumbling pieces can be fixed, cities will need more innovation from the RideScouts of the world. A whole ecosystem needs to be nurtured around infrastructure. Part of it’s behavior, but as we’ve seen with other trends, unlocking data with the right technology can open up all sorts of possibilities. As Austin City Councilman Chris Riley puts it, “the default answer for transportation in Austin doesn’t have to be a personal car.”

Last week’s SXSW Interactive was a good test for the young company. Kopser struck deals with  AirBnB and some of the car-sharing companies in town and was able to refine some ideas they’ve been building on.

Gensler_installation


However those pan out, it was clear the transportation needle moved significantly. For the first time, for better or for worse, transit-oriented discussions were everywhere. Regulatory tussles, rideshare launches, and more kept things moving.

However those pan out, it was clear the transportation needle moved significantly. For the first time, for better or for worse, transit-oriented discussions were everywhere. Regulatory tussles, rideshare launches, and more kept things moving.

As SXSW ended, there were other indications they might be onto something. In SX flair, urban design firm Gensler challenged people to come up with ideas to improve the city. It solicited feedback using a physical installation (photo above) with the hashtag #designatx. What were the top things mentioned? Mass transit, traffic, and congestion issues,  things the firm described as “practical and things that could be implemented.”

“Austin has the perfect launch city mix: terrible traffic congestion and rapid population growth of technology savvy residents looking for alternatives to car ownership,” said Kopser.

Can’t argue with that.

First posted at AustinStartup.

Recapping CleanTX Foundation’s Solar and EV Event

You might call it big data meets the grid. Panelists from Austin Energy, Meridian Solar, ERCOT, and Pecan Street Inc., came together recently at the CleanTX Forum to pitch the value of cleaner and connected communities. With Austin’s Mueller community as the centerpiece, the discussions focused on the impact of electric vehicles and rooftop solar.
This time, however, the discussion was more than just visionary. This session had real data — from real people.

“Photovoltaic (PV) and electric vehicles (EVs) together drive significant swings in the grid, and we really don’t know what that behavior looks like, we don’t have a laboratory,” opened ATI Co-Director Mitch Jacobsen. “But we do, it’s Mueller.”

DSC_0010

The Mueller community has grown from a novelty to a key hub for companies to better understand just how the smartgrid might unfold. Everything from dishwashers and electric cars are being monitored to track usage, something that’s invaluable to researchers and other groups trying to glean intelligence from the data.

“At Pecan Street the approach is to get to the data first, then look at the solution,” explained Brewster McCracken, Pecan Street’s director. By having one of the world’s largest concentrations of electric vehicles and more than 400 smart homes, the clean energy non-profit’s perspective is almost unique.

That’s helped Pecan Street bulk up quickly. Just last week, GM announced it would supply its OnStar technology and early access to 100 Chevy Volts in order to better understand the impact of EVs on driving habits and the grid.

 

ATI Director Isaac Barchas gave a brief overview of the electric vehicle (EV) market before shifting to solar’s growth. He dismissed the idea that cities might need loads of new infrastructure as early adopters plug in their clean cars.

“The conversation isn’t all that relevant about rationalizing EVs when all you need is a power cord,” he said.

That might be oversimplifying things a bit, but change can happen fast when you have that type of scale. Not everyone has a gas pump, but power outlets are there. The biggest hurdle, as Barchas mentioned, is the price of pure electrics. With most fully equipped models coming in at close to $40,000, they’re tough to justify for most people. The interesting thing is they could be worth more, especially when you figure in the cost of the battery.

“We don’t know what the aftermarket is for EVs, you’re driving around in a Fort Knox,” he said. But like solar, those costs are coming down too. Advancements in the cooling process and the move to more lightweight materials are two areas where engineering is getting a lift.

More Connections, More Data

 

Chris Holcomb, Pecan Street’s data scientist, says the group is working with UT researchers to identify areas where efficiency can be improved to ease the strain on the grid. He presented a behind-the-scenes look at how his team is building out its own internet of things, albeit one with a human element.

Holcomb’s team wants to be able to tell Mueller residents when to use all those smart devices. And as you’d imagine, Austin Energy and ERCOT have a vested interest in pushing more of that kind of intelligence into as many homes as possible.
Turning on the dryer and plugging in your EV at peak times, especially in Summer, is something that not only strains power loads, but isn’t sustainable. That’s the sort of scenario that Pecan Street wants to pound into the psyche of smart grid doubters everywhere. But not in a rolling blackout kind of way, something more grounded in the day-to-day.

 

“Our goal is to figure out what are the things people want to get done, basically, what can we learn from electricity data,” said McCracken.

One of the things they’re learning about is the domino effect of EV ownership in neighborhoods. Holcomb showed how transmission nodes become clustered around the density of a neighborhood, especially as a new EV plugs into the grid. They’re not yet to the point of predicting EV sales in certain zip codes, but not surprisingly, the data shows upticks in adoption when your neighbor plugs in her new Volt.

ERCOT’s Michael Leggat, senior human factors engineer, is also digging into the data. He mentioned an upcoming pilot project with a 3rd-party aggregator that will measure everything from driver behaviors to real-time grid conditions. With things like scheduling algorithms and GPS technology, he described the level of data integration we’re moving towards, as he held up a shiny Nexus 7.

“With Google Maps hooked into your EV app, you could have the capability to be intelligently routed to your next destination, all based on the capacity of your car’s battery,” said Leggat.

As impressive as that sounds, there’s plenty of work to be done commercializing key parts of the smart grid. Austin will load up on that as soon as this Fall, when the Pike Powers Lab opens in Mueller. By giving UT students and local research teams access to its data and infrastructure, the center aims to accelerate commercialization, research and education.

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