Opportunities Arising From Decarbonizing and Deregulating the Economy

The need for greater resilience to impacts of climate change, the development of cheaper distributed energy resources, and deregulation are all  creating opportunities for global firms working in the U.S energy market.

That’s according to a CleanTechIQ webinar, “Opportunities Arising From Decarbonizing and Deregulating the Economy in the U.S.,” held on November 8.

However, challenges persist for foreign companies looking to work on projects in the U.S. The biggest is finding the right partner (42%), followed by navigating U.S. legal issues (33%), according to an audience poll taken during the webinar.

Although federal policies remain in flux, state-level policies pushing greater de-carbonization and market forces are key drivers of new business opportunities, according to panelist Dan Spitzer, a partner at law firm Hodgson Russ.

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Companies across the globe are increasingly focusing on disclosing carbon emissions data and investing in solutions that help them become more sustainable, says panelist Arnaud Brohé, CEO of sustainability consultant CO2logic.

Meanwhile, as electric grids continue to age, they require significant upgrades to become more resilient in the face of growing climate-related events. And the officials in charge of city infrastructure increasingly realize they need to deal with climate change impact such as rising sea levels.

The utility industry is now looking to the markets to solve these issues. In fact, market forces are driving a new revolution towards distributed energy resources in the U.S., says Spitzer.

Examples of international firms that have successfully entered the U.S. clean energy market include solar racking firms, energy storage developers and IoT-focused software firms, he says.

New York and California are the state leaders when it comes to pushing decarbonization and opening up big opportunities for cleantech firms to work with utilities and private businesses, according to Spitzer. California in particular has seen major solar deployment over the past few years. It is now the highest solar power generating state in the nation and has a goal of generating 50% of its power from renewables by 2030.

However, high levels of solar on the electric grid at specific times of the day can cause problems. This, Spitzer says, is creating created major opportunities for energy efficiency and energy storage firms to work with utilities to help mitigate the variability of solar energy.

As more solar power comes on line, energy storage and efficiency measures are necessary to mitigate the variability of the renewable energy that needs to be integrated into the electrical grid. This can cause serious power management issues, according to an NREL study (PDF.)

In fact, a California law passed in 2013 requires the state’s three investor-owned utilities to procure energy storage. The state also issued a new mandate in May requiring utilities to procure behind-the-meter, or customer-sited, energy storage.

Microgrids present the greatest opportunities for both hardware and software providers that offer greater communication and control between distributed energy resources and the electrical grid, says Spitzer. California is becoming a hot spot for the development of microgrids, he says.

New York State’s Reforming the Energy Vision (REV) is also creating opportunities for global firms wishing to enter the U.S. market. The program is an important element of the state’s goal to reduce carbon emissions by 40% from 1990 levels and to generate 50% of its total electricity consumption from renewables.

Through the REV program, the state has signaled that it will focus on market-based solutions and new business models that is opening up opportunities to private firms, according to Spitzer.  The program is integrating significant levels of customer and third-party owned distributed renewable energy resources into an upgraded grid, says Spitzer.

The program is spurring the state’s utilities to move from simply generating electricity to becoming “distributed system platform providers” that coordinate consumer activity and reduce the need for expensive investment in the distribution grid system.

Spitzer cites ConEd’s Brooklyn Queens Demand Management demonstration project as illustrative of this concept. One example is a public-private partnership that brought in microgrids, energy storage and demand response management programs into a public housing facility in Brooklyn, New York. The project is the first lithium-ion battery approved for behind-the-meter use in a multi-family residential building in New York City. By implementing distributed energy resources, they are spending $200 million dollars on such projects rather than having to invest $1 billion in new transmission infrastructure, says Spitzer.

Since a city’s building stock emits the most amount of carbon, governments are increasingly looking at building efficiency to reduce energy needs.  New York City’s commercial facilities are creating big opportunities for the Internet of things (IoT) and software development firms that can manage energy use, as building managers are increasingly are making their data available to third parties.

This trend is sparking the deployment of new LED lighting systems, which are becoming networked platforms and communication systems, and important smart city opportunities exist in urban mobility such as parking sensors and EV charging systems that can be connected through the through the same network infrastructure, according to Spitzer.

Furthermore, “passive building” standards, which are popular in Europe, are increasingly coming to U.S. cities, which is pushing real estate developers to partner with innovative energy efficiency firms in their projects to create ultra-low energy buildings.

He cites Santa Monica, California, which approved an ordinance requiring new single-family homes built in the city to be net-zero energy earlier this year.

Belgian restaurant chain Le Pain Quotidien is a good example of the growing focus on sustainability by private businesses, says CO2Logic’s Brohé. In 2016, the chain announced all of its locations in the U.S would be carbon neutral in the U.S. by the end of the year; all of its stores worldwide would be carbon neutral by 2020.

CO2logic was instrumental in helping Le Pain Quotidien calculate its greenhouse gas emissions and implementing sustainability programs as it rapidly expanded in the U.S., Brohé says.

According to Brohé, installing LED lighting in their restaurants provided big emissions savings, cutting its carbon footprint by over 20%, as well as generating cost savings (LEDs have the ability to cut energy consumption by 85% versus traditional bulbs and last for five years.) The company reinvested those savings in more efficient kitchen appliances and installing solar energy, further reducing its carbon emissions.

Green mobility policies are another key area of focus for companies becoming more sustainable, says Brohé. This includes providing “eco-driving” lessons and incentives for employees to move closer to work and using videoconferencing in order to cut down their travel. Companies including Nike have implemented these types of initiatives, he says.

He believes the major expected growth in the adoption of electric vehicles will drive more businesses to install EV charging systems in their parking lots.

Behind-the-meter energy storage systems, which can reduce energy costs and make businesses more resilient in the face of severe weather events, is another technology that U.S. businesses are increasingly looking to adopt, says Brohé.

These sustainable technologies that businesses are increasingly adopting – LEDs, energy storage, rooftop solar and cleaner transportation – have the ability to cut global emissions by 80%, he says.

However, challenges to adoption remain.

Currently, LEDs and solar PV are gaining the most traction by businesses, he says.  This is driven by major cost reductions of these technologies and “no money down” financing models that allow more companies to adopt these technologies in a cost effective way.

He sees a growing need for innovative business models to overcome the cost hurdles to increase adoption of energy storage and EV charging stations, although there is increasing demand by businesses for these technologies.

And, although they are relatively proven, sustainable technologies are still new and businesses want to make sure they deliver the benefits as promised before they adopt them, Brohé says. He actively works to convince U.S. project developers, companies and cities of their benefits by taking them to Europe, where they are more widely adopted, to see them operating first hand.


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