Bloomberg New Energy Finance 2012 Summit Results Book

A special publication documenting the 2012 Bloomberg New Energy Finance Summit, which took place in New York from 19 to 21 March.

FOREWORD BY MICHAEL LIEBREICH, CHIEF EXECUTIVE

BNEF’s fifth annual Summit, the third since becoming Bloomberg New Energy Finance, unfolded over three days in New York in late March. Helped by its timing during the US presidential election cycle, and its location, the event generated intense debate on the “Great Transition” that now faces the world’s energy system.

The quality of the contributions from a hundred thought leaders and nearly 500 honoured guests and delegates made this one of the most memorable Summits so far. The venue, the Metropolitan Pavilion, in a trendy part of town bordering on Chelsea and the West Village, helped to create a vibrant atmosphere. The extraordinarily warm temperatures outside ensured that no one could ignore the climate controversy and the political strife that seems to have enveloped it in the US like a cloud of toxic gas.

The deliberately provocative subtitle we gave to the Summit this year was ‘The Path to a Post-Subsidy World’. For as long as any of us can remember the way things work is that clean energy industry touts its potential and demands subsidies, while its opponents belittle its prospects and undermine the case for support. We wanted to point out that there is a different way. For a start, the economic and political cycle means that calls for subsidies are increasingly falling on deaf ears. More importantly, we are entering an era when the easy dialectic of clean–expensive–subsidised energy versus dirty–cheap–competitive energy is becoming obsolete.

The clean energy sector needs to embrace the change, not resist it. Talk about a post–subsidy world as something to be desired, not feared. Demand fair treatment, by all means, but not special treatment. In the words which Dan Doctoroff used to kick off the Summit, become “boring”. One of the key messages of the 2012 Summit – and one that I tried to highlight in my keynote – was that this will mean learning new skills and creating new partnerships.

The sector’s progress over the past few years has been impressive by any measure, but it will not make the breakthrough to the heart of the world’s energy system using the same tools that took it from the outer margins to where it is today. Most critically, the clean energy sector has to become much cleverer about how it navigates the world of politics.

The danger is all too clear right now, after eight years in which total investment in clean energy has topped $1 trillion. In the US, it is looking more and more like the Production Tax Credit for wind will expire at the end of 2012, as a result of Congressional stalemate; the result could be a 90% collapse in wind capacity additions next year. In Europe, the pressures of austerity have accelerated the scaling back of support for renewables. The big risk is that all this is happening just a few years before the industry’s rapidly improving economics make further growth self–sustaining.

One of the most important issues discussed at this year’s Summit was the extent to which shale gas is – or is not – a silver bullet for the US’ energy problems. The idea that the US faces 100 years of cheap gas is a dangerous one. It can either have gas for 100 years. Or it can have cheap gas. Or it can dramatically increase its use of gas in the energy mix. But it cannot have all three. The danger is that the shift to clean energy faces (another) lost decade as the US public hypnotises itself into thinking there is an easy solution to the nation’s energy needs.

Leading organisations such as the US Navy and Verizon have realised this. They know that wind, solar, bioenergy, geothermal and energy–smart technologies will remain a core part of any solution. So have investors like Warren Buffett. Householders and small businesses in their millions will too, as rooftop solar prices fall to the point where returns become compelling even without subsidies. So the mid–term prospects for the industry look extremely attractive despite all of the short–term challenges.

There was much that was eye–opening in the Summit plenary debates and in the break–out sessions, which covered a range of topics from efficiency to cities, wind turbines to water, Europe to Capitol Hill and Latin America. We were also delighted to host teams from the UN Secretary General’s Sustainable Energy for All initiative and from the OECD throughout the event. There was not an aspect of the climate–carbon–energy–water–power–resource–environment nexus which was not discussed at some point in the proceedings.

I believe Bloomberg New Energy Finance Summit 2012 was one of those events which took its participants on a journey. I know that my own understanding of this turbulent, fascinating industry was very different by the time the event wrapped up – after speaking to so many people and listening in on so many discussions.

I hope that this Summit Results Book faithfully records some of the high points of those three days in March. Otherwise, for those that missed it, please check out the presentations on http://www.bnefsummit.com and the video clips on http://www.bloomberg.com/bnefsummit. It only remains for me to offer a big thank you to all who participated, and to our sponsors and partners. We will be sending out a ‘save the date’ for next year, and I look forward to welcoming you to the sixth Bloomberg New Energy Finance Summit in March 2013!

Please download the full report for more detailed coverage on the 2012 Bloomberg New Energy Finance Summit.

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