When it comes to addressing climate change, the linchpin of any strategy has to be energy. And while we've talked about energy efficiency as one of the key steps needed to make big changes, at some point -- hopefully soon -- we will have to address the kinds of energy we use.
During the first morning of the State of Green Business Forum Chicago, David Crane, the CEO of NRG Energy, spoke with GreenBiz.com senior writer Marc Gunther about the current state of renewables as well as what the near future holds.
The energy company is working in a number of areas of green energy, including its purchase last year of Green Mountain Energy, its work on electric vehicle infrastructure in Houston, and investing in solar, wind and nuclear energy.
One of the biggest challenges the company faces is in overcoming misperceptions about green energy.
"The most important thing for us right now is, if you're selling green energy, for most people out there, if you mention green energy, the first word that the uninformed come up with is 'expensive,'" Crane said. He added that his company won the bid to provide power to the newly renovated Empire State Building, not because their power was green, but because their green power was the best option for the building.
Beyond the benefits of building retrofits -- covered extensively on GreenBiz, most recently here with Leslie Guevarra's overview of the ESB project -- there are enormous and looming questions about what kind of energy the country and the world provides.
Crane said that probably the biggest question of the moment is how to deal with natural gas. Calling it "the fossil fuel that environmentalists love to love," Crane described it as a needed solution, but a far from perfect one. Because natural gas emits fewer greenhouse gases than coal, and is incredibly cheap at the moment, it's being touted as a replacement for coal.
But, Crane said, "building a natural gas plant is not doing enough. The only way to hit our interim goals (of reducing GHGs by 2020) is to switch from coal to gas, but that's going to hurt our long-term goal of [reducing GHGs by 80 percent by 2050].
Without additional incentives from state and federal governments, the only thing energy companies will do, Crane said, is build more natural gas plants because the costs are so low. But that's still just a trim on the emissions from electricity generation, when what we need is a full stop.
Getting to zero will require major investments in renewable energies. Crane said that NRG is "not that bullish on wind compared to solar, although we are fanatically bullish on solar."
Wind is struggling, Crane explained, to get its costs-per-unit down by getting bigger and bigger, but solar benefits from a number of factors.
"What we love about solar is the sun is more reliable than the wind; sun seems to coincide with peak demand," Crane Said. "And as we look at what entrepreneurs are doing, we see more potential for solar to reach the all-important grid parity, even in a low-gas-price market."
The two game changers for the market are electric vehicles and solar panels. This is partly due to the mindset of people who want to live a sustainable lifestyle: They want others to know that they're living a sustainable lifestyle.
It's the Prius effect on steroids with solar panels and electric vehicles; people want to be proud of their green investments and really highlight them.
There are still significant educational hurdles that need to be overcome, especially with electric vehicles. Getting drivers to accept the 40- or 100-mile ranges of vehicle batteries is simple on paper, but in practice is a huge challenge. "Not every car needs to be able to drive across the country," Crane said.
Through its work in Houston, NRG hopes to be able to tell drivers that they will never be further than five miles from a charging station. And NRG has created an eVgo program that will give residential customers unlimited electricity for $80 a month, and give them free access to the charging stations around town.
"We believe the electric vehicle -- this time around, unlike in the 1990s -- is a disruptive technology," Crane said. But, "it's critically important that the first people who buy EVs have a good experience with them. At this state of its infancy, the plug-in EV world doesn't need any stories in the media saying, 'I bought one of these and there's nowhere we can use it.'"