One of the nation’s experts on private-sector investment in clean energy-and a leader in the state’s "green bank" development-Richard Kauffman urges area business and community leaders to band together in support of clean energy, breaking down market barriers to energy efficiency and strengthening the region’s economy.
"This is the challenge and the opportunity," Kauffman said this week. "What was clear today is the enormous entrepreneurial capability that’s here (in Rochester), and so it’s manifested not only in terms of the companies that are being set up but across the range of things that they’re working on."
"There is a very innovative connection between universities and the private sector and also in terms of High Tech Rochester and the way that you can bring a process to entrepreneurship to increase the chances of success," he added.
Kauffman, chairman of energy and finance for Gov. Andrew Cuomo’s administration, gave the keynote speech Tuesday at the Center for Environmental Initiatives’ 39th Annual Community Salute to the Environment, held at Rochester Institute of Technology. The CEI board invited Kauffman to get a better understanding of New York’s direction in clean energy initiatives.
"What’s really striking here and elsewhere in New York is that this is not about politics. This is about … economic development, it’s about the environment and it’s about the excitement that there’s more value that can be brought to our energy system than we have today," Kauffman said.
With his appointment as chairman in January, Kauffman’s main priority has been to establish the state’s first green bank. The aim is to advance clean energy development by offering loans and grants to break down financial barriers that have deterred private investment.
Kauffman was previously CEO of Good Energies Inc.; a partner of Goldman Sachs Group Inc., where he was chairman of the Global Financing Group; and vice chairman of Morgan Stanley’s institutional securities business. He also serves as chairman of the New York State Energy Research and Development Authority.
NYSERDA, the New York Power Authority and the Department of Public Service have joined forces to further the state’s leadership in clean energy.
Rochester was the second stop on a statewide tour by Kauffman and his Albany team to observe clean energy developments. The opportunity to highlight the region’s successes and express concerns was important for Rochester.
"We are very excited to bring people from Albany and other parts of the country just to see the capability our region has and to see the strengths that our region has in this area-and make sure that we take advantage of all this capability and leverage we have to help businesses to help the community," said Nabil Nasr, RIT’s associate provost and director of the Golisano Institute for Sustainability.
"We see ourselves also as an entity to help articulate what we see broadly as a need for the business community in the area."
Plans for N.Y.
In 2014, the Center for Environmental Initiatives will mark its 40th anniversary as it works for waste minimization, clean water, sustainable energy, clean air and transportation alternatives. The organization’s event this week offered a forum for discussion and updates on New York’s status in environmental development.
One challenge is to connect all of New York to achieve statewide clean energy success.
"When you look at how we consume energy as a society, the differential between what would be needed upstate and what would be needed downstate is really very little," said John Williams, director of energy analysis for NYSERDA. "I think that if you go anywhere across the state, there is a desire to try to identify and implement what those clean energy options are.
"The challenge is: How do we achieve a scale and have the market trying to create those opportunities or at least allow consumers to realize what the opportunities are?"
New York ranked third-best on the American Council for an Energy-Efficient Economy’s 2013 scorecard. One goal of the state is to reduce energy consumption 15 percent by 2015, the report states.
New York’s energy efficiency programs date back to 1996. Despite the high ranking, state officials believe there is much to be done.
"We’ve got opportunities, but we’re also still ahead of the pack," said Colleen Gerwitz, director of the Office of Energy Efficiency and the Environment in the state Department of Public Service. "Even with that external ranking perspective, there’s a lot of funding that goes into supporting energy efficiency."
Market barriers for the private sector pose problems for clean energy, however. Officials believe communication between the public and private sectors and academic institutions will promote progress.
"I think (what) we’re all wrestling with is that there’s tremendous potential in terms of markets, enormous potential in terms of technology and we actually pay pretty high electricity prices in the state, and so, boy, there’s got to be some way to migrate where we are to where we need to be," Kauffman said.
With the conversation begun in Rochester and around the state, connecting the dots will take time.
"I think there is great value in making sure that our voices are heard, that our ideas are articulated in a way that would help us market the community better (and) bring the right resources (here)," Nasr said. "We need to continue to do that … to make sure our ideas are elevated to the right people."
With the aging energy system of the United States, implementing change will be a process.
"People complain about the grid, but it’s probably one of the most complex things in the United States that we’ve ever built," Kauffman said.
"Trying to link all this entrepreneurial activity to markets which are very large and where the path to market is a real challenge for a small company to be able to go up against meaningful barriers, this is kind of easier said than done," he said. "What we’re trying to do at the state level is to remove market barriers, to remove market disincentives or regulatory disincentives."
The process will continue to evolve.
"In terms of timelines, big energy systems often take a long time. They cost a lot of money; there’s going to be multiple paths," said Robert Lurie, senior vice president of the office of strategic planning for the Power Authority. "There’s some aging energy infrastructure in the state, some big transmission lines, generating systems, but simultaneously … there are things that we can do that are shorter-term to try to make these connections with the private market while those other big-ticket things are being done."
The government has the power to convene, to legislate and to act as a purchaser of goods and services, along with regulatory and administrative authority, all of which will serve to encourage private-sector investment, state officials said.
"The government can help bridge this valley of death that some companies have," Kauffman said. "Part of the objective is just to begin this conversation, because we want to use the full range of tools that government has, so we need companies to start thinking about those tools as well."
Spending time in different parts of the state has helped state officials understand how to move forward.
"There really is no better way to get a sense of what’s going on except to get there and talk to people and hear what the concerns are, try to begin to figure out what the solutions would be," NYSERDA’s Williams said. "And then it’s a matter of just trying to put it all in place and advance and figure out how to you start to realize some of those solutions."
The tour will continue to connect New York communities on clean energy awareness.
"For all the technology we have that connects us, … this is a complex system," Kauffman said. "You really can’t understand it without actually wearing out some shoe leather."
11/22/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email [email protected].