Is it even possible…?

For those of you who don’t know Jigar Shah, he is one of the most forward-thinking, well-informed energy thinkers in the world. Maybe in the universe. So I’m going out on a very short and very sturdy limb here by saying that he is probably right.

I was in Chicago last week for the Impact Capitalism Summit. Exploiting the concentrated firepower in town for the conference, Dana Lanza from Confluence Philanthropy and Debra Schwartz from The MacArthur Foundation invited about 20 climate finance leaders– entrepreneurs, DOE representatives, foundation executives, asset managers and wealth advisors – to a 3-hour roundtable on unlocking climate finance capital.

I was lucky enough to have been invited, as I always seem to learn more from these gatherings than I contribute. And this morning was no exception. Great insight from some really thoughtful, powerful, connected people (due to the fact that the meeting was held under Chatham House Rule, I am not able to share any names… but trust me, this was a remarkable group.), and a humbling experience to be in the room.

But perhaps even more interesting was what followed: an email exchange between Jigar ShahAmy Francetic and your humble scrivener sparked by the Quadrennial Energy Review. Amy suggested that the announcement could offer a strong tailwind to businesses like Jigar’s newest enterprise, Generate Capital (full disclosure: both I and CAPROCK clients have invested in the business).

While Jigar broadly agreed, he offered a fascinating caveat: a hope that we could simply skip the 20th-century thinking that permeated the QER. He offered the hope that we would no longer be bound by the “replace old stuff with new stuff” thinking that underpins most conversations about our electricity complex, skipping straight to a distributed power model.

A provocative vision, to say the least. And deeply threatening to entrenched interests such as PUC’s, utilities, and other owners of capital-intensive electricity assets. (here’s a longer blog on this subject)

But it got me thinking. If we can skip this phase of re-imagining what the future electricity complex might look like, and leapfrog directly to the next generation – in the same way that many developing economies skipped building a 20th-century telecommunications infrastructure and leapfrogged directly to mobile telecoms – we’d potentially save hundreds of billions of dollars… money that could be re-directed to more effective, efficient solutions for what we all agree is a creaking, underfunded, sub-optimized energy distribution model.

So I posed the question to Jigar whether, ignoring for the moment today’s political reality and capital constraints, the technology even exists to bring his hope to reality. His answer (with his permission, and with my comments in italics):

?” Complex question. Given the existing infrastructure today in the USA, we have the technology today to meet the incremental infrastructure needs with advanced technology. (3 billion people – potential global market given similar infrastructure access as currently exists in the USA)???

In places like India, we also have the technology to give people access to electricity for the first time (1 billion people – again, potential global market using current technology available in the USA but not requiring existing infrastructure)?

For folks that are connected to the grid today with insufficient power generation to keep up with their demand, climate-friendly solutions are not quite there yet (3 billion people – from an impact investing perspective, perhaps the most interesting opportunity?)?

Jigar?”

For those of you who don’t know Jigar, he is one of the most forward-thinking, well-informed energy thinkers in the world. Maybe in the universe. So I’m going out on a very short and very sturdy limb here by saying that he is probably right. Further, I find his reductionist framework to vibrate with common sense and wisdom. By sharing it, I hope that it helps us all think about how we might deploy capital to facilitate the transition from a push-oriented, hydro-carbon based electricity complex to a smart-grid based, bi-directional electrical flow, renewable and alternative energy oriented, distributed electricity complex.

And I, for one, am damn excited to be playing a tiny part in the implementation of Jigar’s vision.