Keynote by energy industry investor at Midwest Energy Forum examines gap between key drivers and public policy
Two of the three main drivers of clean technology globally are population growth and rising GDP per capita, said Mark Florian, '82, managing director of First Reserve Corporation. "But energy demand will be offset by the third driver, conservation and efficiency, which were not a big focus in the past, given cheap access to energy historically" Florian said.
Florian made his comments during the luncheon keynote at the fourth annual Midwest Energy Forum, sponsored by the Polsky Center for Entrepreneurship, at Gleacher Center on March 3. The daylong event featured panels on transportation innovations, smart grid technology, and clean-tech financing, while 18 entrepreneurial ventures competed for a $100,000 prize in the Clean Energy Challenge, sponsored by the U.S. Department of Energy.
As a result of these drivers of clean tech, in the next 20 to 25 years world demand for electricity could rise 80 to 90 percent, Florian said. One major trend that could accelerate that drive is a shift to electrically powered vehicles, he said. Transportation already accounts for 30 percent of energy consumption in the United States, but most of that energy comes from the direct consumption of fossil fuels in internal combustion engines, Florian said.
The increase in demand will be paired with the retirement of aging infrastructure, he said. In the northeastern United States, 15 percent of the current capacity is expected to come off line in the next 20 years, Florian said. "In conclusion, with the increase in demand and aging infrastructure, we will need trillions of dollars invested over the next 20 years," he said.
Great opportunities exist in renewable energy because so much technology has become scalable in the last five years and because so many promising new technologies are on the horizon, Florian said. But at least four barriers remain, he said, in getting clean tech to the next level:
Renewables can break through these barriers with better policy, a "razor-like focus" on reducing clean energy costs to at least the same levels as conventional technologies, and an expansion of technologies that are scalable, Florian said.
"We were just looking at a wind farm in North America in which bigger turbines could be utilized than a few years ago," he said. "Given a strong wind resource and these larger turbines, companies have been coming to sign up for that energy, because it's cheaper than buying from the local utility."
The biggest pools of capital available to support clean tech will look for low-cost, massive-scale power, Florian said. "If we can shift from a policy-making focus to an economic decision-making focus in terms of our choice to use clean technologies, that's going to create incredible growth in the clean energy business," he said.