NRG Energy is investing in nuclear power, solar energy (photovoltaic and utility-scale solar thermal) and electric cars. It’s powering the Empire State Building. It’s even helping to finance off-the-grid solar power in Haiti.
“Washington is not filled with people who are going to lead,” Crane says. So it’s up to business to show the way.
I interviewed David Crane at the State of Green Business 2011 forum in Chicago. He’s always a pleasure to talk to because he’s brimming with ideas and tells it like it is. Based in Princeton, N.J., NRG is a $9 billion a year independent power producer that operates coal, nuclear, natural gas, wind and solar plants.
Here are some highlights from our conversation:
On nuclear power: “Nuclear is the ultimate green solution, if what we are solving for is climate change,” Crane said. NRG wants to build a new 2,700 MW nuclear faciity in Bay City, Texas, next to an existing plant. It would supply enough energy to power 2 million Texas homes. The project requires federal loan guarantees and progress through the regulatory system has been slow.
Despite strong support for nuclear from President Obama, Energy Secy Chu and Republicans in Congress, the U.S. is likely to build no more than two new nuclear power plants in this decade, “which is not exactly a nuclear renaissance,” Crane said.
On the temptation created by low natural gas prices: “The greatest question of the day is how to deal with natural gas,” Crane says. “Right now, left to its own devices, the only thing the power industry would build on an economic basis is natural gas plants It wouldn’t build wind. It wouldn’t build solar. It wouldn’t build nuclear. It wouldn’t build coal.”
Natural gas plants are, at best, a short-term solution. Natural gas is “obviously from an environmental perspective much cleaner than coal, but it’s an imperative that we get carbon emissions down by 80% by the year 2050,” he said. Natural gas won’t do that, he said. “The power generation system, I think, basically needs to go to zero. You can’t just cut it in half. And natural gas cuts it in half.”
Why solar has a brighter future than wind: Although NRG has an offshore wind subsidiary called Bluewater Wind, Crane is more enthusiastic about solar. The wind industry has been slow to bring down costs, and it has done so mostly by building bigger and bigger turbines.
Said Crane: “We are not that bullish on wind, compared to solar. We’re fanatically bullish on solar.”
“What we love about solar,” he explained, “is that the sun is more reliable than the wind. The sun tends to be coincident with peak demand for our product, electricity.”
NRG’s biggest single investments for now, he indicated, are solar thermal projects like the 392 MW Ivanpah facility being built by Brightsource Energy in the Mojave Desert that will be the world’s largest when completed. “This is where most of NRG’s money is going right now,” he said. The company has also formed a venture investment fund with GE and Conoco Phillips which will look at solar technology.
Crane is also excited by the potential of rooftop solar panels because they compete not with coal or natural gas plants but with the retail price of electricity, since they deliver power directly to customers. Solar panels are a form of self-expression for green consumers, he suggested.
“ People who are living a sustainable lifestyle want other people to know that they are living a sustainable lifestyle,” he said. “A solar panel is a billboard.”
Why electric cars as disruptive technology: Working closely with Nissan and other partners, NRG is building an electric car charging system around Houston. [See Climate Leaders: Chevy, NRG Energy and the Eagles.] For $80 a month, customers of an NRG subsidiary called eVgo can get a home charging system and as much electricity as their car can consume. Charging stations will be located at Walgreen’s, Best Buy and HEB supermarkets.
Crane, who owns a Tesla and is buying a Nissan Leaf, says the target market for the cars are the 60 million Americans who own two or more cars. They’ll recognize that the cost of owning an electric car, over time, is less than the cost of driving a conventional one.
On NRG in Haiti: In cooperation with the Clinton Global Initiative, NRG donated $1 million to deliver solar power to schools, health clinics and other public buildings in Haiti, where only 12% of the population is connected to the grid. It’s also helping power a fish farm.
“With a fairly small solar array, we can increase their production from 200,000 pounds of fish a year to 1 million pounds of fish,” Crane told me. “Haiti itself consumes 17 million pounds of fish a year and, surprising for an island, they only produce five million of their own. This tiny solar array can make a big difference. That’s the type of thing that gets me up in the morning.”
We wrapped up by talking about how to change the public conversation around climate and energy. Three years ago, Crane joined business execs like GE’s Jeff Immelt and Duke’s Jim Rogers and top environmental leaders to call for regulation of CO2 emissions. The leading presidential candidates–Obama, Hillary Clinton, McCain–all supported cap-and-trade.
Since then, he said: “We haven’t gone forward. We haven’t stood still. We’ve basically drowned.”
It’s now up to business to show Americans that clean energy is not a high-cost proposition, but a smart way forward.
“What we need to spend the next several years doing is changing this image of green away from being something that’s expensive, it’s constrained, it’s sincere but it’s unhappy, it’s doom.”
Instead, green needs to come across as better and smarter than conventional energy. “Electric vehicles are fun, happy, optimistic, forward looking,” he said. Solar PV is a clean and appealing technology. Like mobile phones, both could spread faster than the pundits expect.
“The game changers are electric vehicles and solar panels,” Crane said. Let’s hope so.