NRG CEO Pushes Three Technologies as Key to Clean Tech Growth

Even though NRG Energy was a major vocal proponent of a spectacular federal climate change legislation loss, CEO David Crane says three innovative technologies are on the cusp of transforming clean energy in the short-to-medium term: Smart meter technology, plug-in electric vehicles and distributed solar generation.

According to Crane, who spoke at this year’s Clean Tech Forum conference, those three technologies will help shift the balance of power from traditional energy companies to consumers who want to become more aware of their energy usage and make personal choices about their energy consumption. However, the clean energy sector needs to find new and creative ways to market clean energy to consumers, said Crane.

At NRG, he said the company has set its sights on one of the most popular American institutions: The National Football League.

“By the beginning of the next football season, you will see large and innovative arrays of solar power on or around the NFL stadiums in New England, New York, Philadelphia and Washington, D.C.,” said Crane during a speech at the conference.

Crane says energy companies have traditionally solved for three goals: Safety, reliability and affordability. During the past decade, however, sustainability has surged into contention with the big three, he said. And with sustainability comes the notion of fundamentally altering the relationship between consumers and energy companies through the use of technology.

“The leaders of the conventional energy industry do not get this,” said Crane. The traditional leaders believe the business model that began during the Henry Ford era – converting fossil fuels to electricity – will persist despite the “rising demand for individual choice,” from which he says no sector of the economy will remain immune

At NRG, distributed solar, smart meter technology and electric vehicle popularization are at the heart of the company’s business strategy, according to the 10-K the company filed in February. And the company’s advances in those areas are driven by select acquisitions, joint ventures and investments, including a joint venture with General Electric and ConocoPhillips to invest in venture-stage growth and growth-stage next generation energy technology companies. As of the end of last year, NRG had invested $14 million in several growth companies through the venture, Energy Technology Ventures, as part of a plan to invest up to $100 million over the next four years.

“Everything we’re doing at NRG is preparing for the day when these three [technologies] can be deployed together,” said Crane.

However, there are challenges at each turn.

Smart meter technology has been hampered by consumer apathy and “downright hostility” in some places such as the bay area, said Crane. Part of the problem is that deployments have been mishandled, and another problem is that there are only limited benefits to be provided to consumers.

“All smart meters do currently is allow consumers to receive more and better information about their home energy usage,” said Crane. And, “home energy usage is something that almost no American consumer wants to have more information about.”

However, when smart meter technology is used in conjunction with a solar ray on the roof of a home, and an electric car in the garage, “the economics of smart meter technology and the capabilities become compelling to the average consumer,” said Crane.

When it comes to electric vehicles there are two challenges, said Crane, the first of which is bringing down the sticker price on electric vehicles. And, secondly, solving “the chicken and egg issue” of consumer acceptance and the range of the vehicles.

He says NRG has focused intently on the second part of the issue with electric vehicles. In the Houston and Dallas-Forth Worth area, NRG is building out what he says is the first privately-funded-electric-vehicle-charging network, which the company has named EVgo.

EVgo’s business model is subscription-based, in which customers can buy unlimited miles for a monthly charge, similar to the way people buy minutes on a cell phone. (According to EVgo’s website, plan prices vary, but prices are in the neighborhood of $49, $79 and $89 a month.)

Crane said it was still early days in terms of electric vehicle acceptance in Texas, but said that 80% of the people who had purchased electric vehicles had signed up for EVgo.

In the area of distributed solar generation, NRG has invested in large solar projects, said Crane, committing over $1 billion of NRG equity into utility-scale solar projects. The $1 billion in equity has translated into $6.5 billion of solar projects that are currently either under construction or in various phases of operation. Almost all the projects are in or near California.

“It’s distributed solar which we believe is going to be most disruptive to the hub-and-spoke power system, which has dominated this country for the last 100 years,” said Crane. “The solar industry has vividly demonstrated over the last three years that solar power as a nanotechnology – the cost and performance of it – is clearly subject to some version of Moore’s law. Prices of modules have dropped like a stone.”

Crane says the clean energy sector – including NRG – will be able to offer solar power at a competitive retail price to “roughly half” of the 50 states in the U.S.




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