By Elona Malterre   

           New energy infrastructure offers investors “the single biggest economic opportunity” of this century, says a prominent U.S. expert in energy policy and finance.
           “This is the single biggest economic opportunity of 21st century. Thirty-eight trillion dollars will be invested in energy infrastructure . . . whatever energy infrastructure you think we’ll end up with,” Dan Reicher said in a February 2013 talk at the University of Calgary in the Institute for Sustainable Energy, Environment and Economy Distinguished Speakers Series.
           Those investments will be made based on a triangle formed by three factors:  technology, policy and finance – with an emphasis on the availability of capital, said Reicher, executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University.
           Reicher, who has more than 25 years’ experience in energy and environmental policy, finance, and technology, has served three U.S. presidents in various senior roles.
           He told his Calgary audience that it is important for people – particularly those involved in academia and engineering – to understand the relationships among technology, policy and finance.
          “Frankly in universities as we train students, we’ve got to make sure that folks in engineering actually understand that energy technologies, as they move out into the real world, are going to be measured by policy and finance,” Reicher said.   
          Governments and policy makers also must ask themselves if there’s going to be sufficient capital for large-scale deployment of new energy systems, he added.
          Policy makers “have to understand that there’s only so much you can do with policy. It (investment in energy infrastructure) is ultimately going to get dictated by the availability of capital.”
          Reicher said he believes we live in a very exciting world, because of the inventions and innovations in new energy systems that are coming.
          “So many important things can be invented from the technology perspective, but also from the policy and financing perspective when it comes to energy and how we use it better, how we make it cleaner, how we make our energy systems more secure – and frankly how people make money in the process,” he said.
          One of the best ways for people to see a return on investment in future energy planning is to focus on increasing energy efficiency, Reicher said.
           “We’ve got to start with efficiency. That’s the low-hanging fruit. I like to say low-hanging fruit grows back.”
          While society has developed a lot of energy-efficient technologies, “we’re obviously inventing new ones to further reduce energy use in in our homes, our businesses and in industry,” he added.
          When it comes to procuring energy, “‘all we want is cold beer and hot showers,’” Reicher said, quoting Amory Lovins, U.S. physicist, environmental scientist, writer and chairman/chief scientist of the Rocky Mountain Institute.
          Most people don’t think about how we get the energy we need, Reicher said. “We want what energy provides, and if we can do with less (energy), all the better.”
          In terms of getting a return on investments in energy efficiency, the low-cost opportunities include better insulation, improving fuel economy, and more efficient lighting, air conditioning and water heating, he said.
          “That’s the cheap stuff and if ever there was a place to put capital and get a quick return, those are the big opportunities.”
          Reicher pointed to the example of “the boring old refrigerator which in the early 1970s used about 2,000 kilowatt-hours a year (of electricity).
          “You cannot buy a refrigerator in the United States today by law that uses more than about 400 kilowatt hours a year. (Yet today’s refrigerators) are bigger and they’re frost free and they do all these amazing things.”
          The energy efficiency of fridges improved greatly when the U.S. federal government implemented a set of standards on the appliance, Reicher said, noting that he oversaw those standards while serving as assistant secretary of energy under then-President Bill Clinton. 
          “We made a great breakthrough when we were issuing those (standards),” Reicher said.
He recalled that the federal government announced the new standards at a news conference, shortly after Clinton gave his State of the Union address. It was a time the nation was transitioning from the 20th century to the 21st century, and Clinton talked about building a bridge to the 21st century.
          “I had to make an announcement a few weeks later, and (I) said we were building a fridge to the 21st century,” Reicher said, eliciting laughter from his audience.
          On a more serious note, he said that most people have no idea about how much energy they use and until they realize how much energy they use at every moment, there’s little chance of giving them opportunities to conserve energy.
          “‘If you cannot measure, you cannot improve it,’” said Reicher, quoting the famous scientific adage from Lord Kelvin, the 19th century Scottish engineer, mathematician, and physicist. “Measure, measure, measure.”
          Reicher related how he worked for Google for four years as director of climate and energy issues, working on new technologies and financing techniques and innovative policies.
          Google developed the “Google PowerMeter,” software intended for use with smart meters to provide people real-time information about their energy usage in their homes. “It sits on the kitchen counter and it tells you how much electricity the home is using.”
          Reicher recalled that one morning his nine-year-old son, Graham, put some bread in the toaster and watched as the energy meter jumped to 1,100 watts from 400 watts.
           He explained to his son how electricity was converted into heat and how the toaster used a lot of power for a short period of time.
          Graham “ran around the house plugging things in, then ran back to the kitchen (to check the meter), and in about half an hour he knew more about energy use in the home than 99 per cent of Americans. That’s the kind of information that we could really use.”
          Google announced in 2011 that they were discontinuing its PowerMeter development.
          However, “a lot of venture-backed companies are in this business now. There’s a really healthy race going on to put you in a position in your home and business to know at any time how much energy you’re using and therefore effect energy decision making,” Reicher said.
         After his talk, when an audience member asked Reicher what the biggest challenge was to traditional utility companies, he responded that “(energy) efficiency opportunity is the single biggest missed opportunity in the U.S. energy system right now.”
          Another audience member asked what industry a 30-year-old entrepreneur should get into today.
          Reicher said that he would ensure he had some background in the three aspects of the triangle he mentioned in his talk: technology, finance and policy.
          In terms of where he’d invest, he responded that he’d place his bets on “this whole intersection between information technology and energy technology. Not just simple things like the meter on the kitchen counter . . . (but putting) smarts into energy systems overall.”
          Such smart technology can help manage the energy “demand response,” he said. For example, when it’s a hot day in the U.S. and demand is high for air conditioning, that demand response can be better managed by temporarily turning down the furnace heat in facilities such as aluminum smelters.
          Reicher, in addition to serving as Clinton’s assistant secretary of energy for energy efficiency and renewable energy and U.S. Department of Energy chief of staff, was a member of President Barack Obama’s transition team and co-chair of his energy and environment team, as well as a staff member on President Jimmy Carter’s commission that investigated the Three Mile Island nuclear reactor accident. EnviroLine