Q & A with Rob Pratt

Rob Pratt, one of the renewable energy industry’s most accomplished veterans, announced he would soon pull up anchor as the Director of the Massachusetts Technology Collaborative’s (MTC) Renewable Energy Trust, a $250 million state fund devoted to developing new renewable energy projects in Massachusetts. Through this most recent chapter in his 30-year career in renewables and energy efficiency, Mr. Pratt oversaw investments of over $160 Million in 500 projects serving the state. In this exclusive Q & A for RenewableEnergyAccess.com, Mr. Pratt offers some of his insight gained toward advancing renewable energy at both the state and national level. He articulates some current hurdles and possible solutions for renewable energy, gauges the industry’s pulse, and charts the course ahead.

Q: While some gains for renewable energy were achieved through the recently passed national Energy Policy Act, many feel that major gains for renewables in the U.S. will continue to be initiated at the state level. Do you see this as a continuing trend and why? A: It has definitely been a growing trend, and state Renewable Portfolio Standards (now 20 in number) and clean energy funds (17 funds in 12 states) have been responsible for a good deal of RE progress in the U.S. However, with the imperatives of climate change, we cannot limit dramatic progress to a few dozen states. The federal government should be leading, not following. A simple example is found in the fact that in 1980, the federal government had boosted its federal funding for renewable energy and energy efficiency (RE/EE) to $2 billion, excluding tax benefits. Now, 25 years later, that RE/EE budget number has fallen to approximately $1 billion, even with the recognition that these technologies are critical for the nation’s energy future. As a result, since the federal government has chosen not to put $3B, $5B or even $10B in non-tax leveraged spending into this key area, it will be important for states like California, New York, Massachusetts, New Jersey, Oregon, Wisconsin, Pennsylvania, Illinois, Connecticut, Minnesota and others to step up and continue to implement and fund promising new programs on their own. Q: Under your tenure as the Director of the Massachusetts Technology Collaborative’s Renewable Energy Trust, what were some of the significant projects or programs accomplished? A: I am proud of the Trust team and the many programs which have been launched over the past three and a half years at MTC in the areas of clean power, green buildings, renewable energy installations, industry support and policy. A few of the specific programs that I might mention would include the Massachusetts Green Power Partnership which has committed more than $70 million towards long term contracts for Renewable Energy Certificates, assisting developers finance clean energy facilities. We have one of the most far reaching Green Building/Green School programs in the country, and I’m hopeful that Massachusetts will build most of its schools using “green” and high performance building standards in the coming years. The Industry Support program features our $15M Massachusetts Green Energy Fund and the SEED technology loan program, helping to make our state’s clean energy cluster a fast growing employment sector in the Commonwealth. The Community Wind Collaborative is working with more than 30 communities in the state to develop and finance wind turbines in our cities and towns. We’ve got solar installations going in all over Massachusetts through the Small Renewable Initiative, and the Large Onsite Renewable Initiative is now providing substantial funding for 10+ kW facilities. The Green Affordable Housing Program is committing $25M to spur the development of green building practices in affordable housing. And the list goes on, with more than $160 million invested in 500 projects serving Massachusetts. Q: Gauging from your experience in Massachusetts, what could be improved at the state policy level to get even more megawatts of renewables plugged in? A: We need to find a way to monetize any state’s Renewable Portfolio Standard, so that developers and their financiers know what the Renewable Energy Certificates (RECs) will be worth in the coming years. We did this on a limited basis with MTC’s Massachusetts Green Power Partnership – providing long term contracts for RECs – but it’s not enough. For example, if New England states would set a minimum floor for RECs, say 2 cents per kWh, I believe that renewable development would increase substantially throughout the region. And if other RPS states around the country could be persuaded to do the same, there would be some dramatic increases in renewable MWs. Q: Do you think a broader New England-wide policy would carry more weight and be more effective in Washington? A: The answer is of course yes, but most of the New England states and their Members of Congress do generally agree on the need to promote renewable energy and energy efficiency policies in Washington. The greater need is for the red and blue states to find common ground. As was recently discussed at the ACORE Policy Conference in Washington in October, the increasing emphasis on biofuels may be one area of agreement which could help to build coalitions in red and blue states, including farmers and the agricultural sector, the automotive industry, environmentalists and renewable energy advocates. Another issue where common ground can be found is in national security, particularly on the need to reduce oil imports. Q: MTC has certainly been active in encouraging and seeding wind and solar ventures. In the future what other kinds of renewable energy technologies would you like to see the Trust become involved in? A. We have been very active in investing in the state’s solar companies, such as Evergreen Solar and Konarka Technologies, and we will continue to invest in the solar and PV area. On the clean energy front, Massachusetts has an exciting fuel cell cluster and we anticipate making more investments, beyond what we’ve already done in Nuvera, Acumentrics and Lilliputian Systems. We also anticipate making investments in wind and biomass companies and various technology developments, to help the state’s clean energy companies grow and prosper. Q: MTC has worked with Cape Wind on its 420 MW offshore wind project through its “honest broker” program, bringing opponents and proponents together in a series of fact-finding forums around Cape Cod. In your opinion, what will the impact on wind power in New England and the U.S. as a whole if this offshore installation is successful? A: Cape Wind is ideally situated to help Massachusetts meet its natural gas peaks in the winter, since we depend on this fuel to meet both our heating and electricity needs. Not surprisingly, the winds are generally highest during the coldest winter months, providing a hedge against price spikes. This was demonstrated in January 2004, when the state experienced a cold snap and a critical natural gas shortage resulted. We know from the Cape Wind monitoring station in the middle of Nantucket Sound that the wind farm would have been generating 380-420 MWs of power throughout much of this cold snap had the plant been in operation, thereby reducing the cost of electricity to Massachusetts ratepayers and increasing the reliability of the electrical system. So, if Cape Wind is successfully installed, wind’s benefit as a significant, reliable and dependable electricity source will begin to change people’s minds in a positive way on wind, not just in Massachusetts, but around the country. Q: Even though wind power is price competitive with traditional power production, land-based wind projects in your state of Massachusetts and elsewhere in the U.S. can at times be contentious. Why is that and what needs to be done to broaden community local community acceptance? A: Whether here in Massachusetts or elsewhere in the U.S., the greatest community resistance to wind power is experienced when individuals know the least about wind generation. Opponents are able to raise objections that are often glaringly wrong, but if they repeat those objections frequently enough they may be accepted. In most cases, once communities experience wind farms first hand, the opposition decreases. For example, opposition to the wind farm in Searsburg, Vermont decreased markedly once the project had been operating for a year or two. Massachusetts has two wind farms scheduled for construction soon, the 15 MW Berkshire Wind and the 30 MW Hoosac projects. Once these wind farms go into operation we anticipate that support will grow for this clean, renewable source of electricity. This is one of the reasons for MTC’S Community Wind Collaborative as well. We hope that when one or two large 1.5 MW wind turbines are installed in a number of cities and towns around Massachusetts, a growing acceptance of wind by the general public will result. Q: Renewable energy advocates have come a long way in crafting their message in terms of jobs, energy security, and reducing the trends associated with global warming. Has this messaging been effective and what else can be done to communicate this message to the American public? A: The Trust is a member of the Clean Energy States Alliance (CESA), the organization of the 17 state funds from around the country. CESA members jointly funded a very professional effort with a well known New York firm featuring focus groups and other sophisticated techniques. That project, which came up with the “Clean Energy: It’s real, it’s here, it’s working, let’s make more” campaign, has been successfully marketed by SmartPower and others, with excellent results. However, let’s face it, we’re neophytes compared to our energy “competitors.” So yes, we’ve had some limited success, but we’ve only just begun to craft increasingly effective messages that resonate on important issues such as national security, jobs, climate change, and reliable energy that is truly capable of meeting U.S. needs. Q: You became Chairman of the American Council on Renewable Energy in 2003. What would you say are ACORE’s greatest accomplishments to date, and where can the organization make greater progress? A: ACORE has become very successful as a “convening” organization, building its membership and bringing key players and constituencies together in increasingly successful policy, trade show and finance forums. First, the annual Power-Gen Renewable Energy trade show in Las Vegas in March is growing by about 50% per year, including all of the RE technologies – wind, biomass, hydro, solar, geothermal, hydrogen, wave and tidal – so this is a high quality, one-stop-shop show for participants to attend. Second, the Renewable Energy Finance Forum – Wall Street, sponsored with Euromoney and held at the Waldorf Astoria in NYC, has become a “finance must,” with a great program, significant networking opportunities, and 600 attendees. Third, the Renewable Energy in America: Policies for Phase II forum, sponsored with the Congressional Renewable Energy and Energy Efficiency Caucuses on Capitol Hill draws a large and thoughtful group of key policy players, helping the Congress and the Administration think about new clean energy policy directions. In the coming years, I expect ACORE’s working groups to grow substantially, such as our Utility Committee, the CEO Council and our regional groups of companies, finance firms, professional services, government and non-profit organizations. Working with trade groups such as AWEA, SEIA, NHA, GEA, SEPA, biomass associations and others, we hope to be increasingly successful in promoting the renewable energy message and bringing our technologies into the mainstream. Q: You’ve always been passionate about climate change, as well as entrepreneurial ventures. How are you going to meld these two in the future? A: Over the past several years I have become increasingly aware of the growing climate change danger that is affecting our planet, our children and the Earth’s biodiversity. In the words of my friend Paul Tsongas, we are facing a generational responsibility issue, and to date, our generation has come up wanting. Thus, we must not just detail the science of the situation; we must take concrete steps in areas that we know will help to make a difference. I have worked in the areas of renewable energy and energy efficiency for more than 30 years, and I know that RE and EE are a big part of the climate solution. At the same time, I feel strongly that the private sector is going to have to play a major role in those solutions. So I am attracted to entrepreneurial ventures that make a difference and do well by doing good. For example, Energia Global (now Enel Latin America), the company that I founded in 1991, showed that renewable energy facilities could be profitably developed in Latin America. We became one of the largest RE development companies in Central America, developing hydro and wind projects. I believe that there are many new and existing businesses that can make a difference, by reducing energy usage, increasing clean energy production, working on transportation and private sector solutions of all types. And to the degree that we succeed at these ventures, the planet’s health improves. So for me, the private sector is attractive, but at the same time, I recognize the importance of the policy arena and applaud the important contributions made there as well. Indeed, as much as I am drawn to the private sector, I am still personally considering interesting possibilities in the area of policy and advocacy. Rob Pratt will be departing the MTC effective on December 31, 2005 Robert L. Pratt is the current Director of the Massachusetts Technology Collaborative’s (MTC) Renewable Energy Trust, the $250 million fund that was created to stimulate the supply of and demand for green power as part of the state’s landmark law deregulating the electric utility industry in 1997. He also serves as Chairman of the Board of the American Council on Renewable Energy (ACORE), a non-profit organization based in Washington, D.C. focused on bringing renewable energy into the economic mainstream in the U.S. Mr. Pratt was formerly the Chairman, Chief Executive Officer and founder of Energia Global International, Ltd. (EGI), one of the leading renewable energy companies in Central America. During Mr. Pratt’s tenure as CEO, Energia Global grew from a startup in 1991 to a company with over $240 million in hydroelectric and wind project assets and revenues of approximately $40 million in 2001 when it was acquired by Enel, Italy’s largest electrical utility company He founded the International Institute for Energy Conservation (IIEC) in 1984, serving as its Chairman from 1984-1994, and continues to serve on the Board today. He received an MPA degree from the John F. Kennedy School of Government at Harvard University, a JD degree from Georgetown University Law Center and a BA degree from Wesleyan University.
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