CEO Outlook: The Future of the Clean Energy Transition

Photo by Geran de Klerk on Unsplash

How has your role at American Efficient evolved since becoming CEO?

I joined America Efficient about 18 months ago to lead the origination team, which is the group responsible for working with all of our partners’ energy efficiency projects and products across the country — from manufacturers to distributors to retailers. After about a year or so, Modern Energy’s founders, Mark Laabs and Ben Abram, asked me to take on the CEO role at American Efficient, which means of course the origination function, but also overseeing the other core functions markets, R&D, policy and the like. The great news is that we have exceptional leaders in each of those functions. So I view my role as less to lead and more to lend a helping hand, coach and to help bring the pieces together as we grow.

Why do you think the clean energy sector is so exciting right now — generally, and also during this moment of recovery for the economy?

I can answer this a couple of ways. I think it’s important to me personally, because I made a decision about 15 years ago that I wanted to marry my passion around the environment with my vocation, and didn’t feel like there was a need to keep those things separate as they had been in the previous years of my career. I was fortunate enough to fall into a couple of situations that made that possible and allowed me to really become more of an expert in the industry while also moving along in my career, if you will.

But I think the biggest reason it’s so important and so exciting right now is because it is obviously undeniable that climate change is something we have to deal with. So the question becomes, “How do we mitigate climate change and live with the situation that we’re in?”

At American Efficient, I believe we can have an outsized impact on addressing this challenge.

The way in which energy efficiency is able to reduce the need for fossil fuel-based generation in our country is notable. As a company of only 20 people we’re able to make a meaningful impact in this space. I’ve never been in a position in my career where we’ve had that sort of amplification effect. And I think that if there’s one objective that Modern Energy, and American Efficient as a part of Modern Energy, is trying to accomplish, it’s to have that outsize effect on this enormous issue.

Calculating American Efficient’s ongoing impact

In terms of the sector overall, the thing that I’m most excited about is that in every movement — whether it’s policy in general or politics or people’s diets or any change that happens of significance — there’s this tipping point that invariably happens just before a big change. We are now at that point where building renewable energy generation is cheaper than building fossil fuel-based resources. No subsidies, no gifts, no government intervention, no nothing; just new energy capacity is cheaper using clean resources. We’re going to see that with transportation next. And that’s why I get really hopeful about the possibility of addressing this problem in a meaningful way.

What do you think is the time frame for the clean energy transition playing out and what do you anticipate is next on the horizon?

Yeah, it’s a great question. And one that I think has no perfect answer.

The more energy efficiency projects that get implemented the faster you can retire coal plants, which are the dirtiest of all energy sources — so that’s just quick and fast and right in front of us with what we’re working on. But as renewable and distributed resources come online in a more meaningful way, and as those coal retirements happen, as natural gas starts to phase out as a bridge technology, and as EVs and electrification of transportation start to hit, how fast and in what order becomes the big question. I believe this is all lining up to happen over the next 10 years.

A lot of people say 2040–2050 is when this will ll happen. I would argue 2035-ish is really what we should be shooting for. And I’ve seen some people start to refer to that, which is exciting. I don’t think we have the luxury of setting goals that won’t occur until 2050.

There are several corporations, especially in the tech sector, that are looking to be not only carbon neutral but carbon negative in the next several years. How does energy efficiency play a role in that?

That’s a great question. I absolutely think accelerating energy efficiency can have a huge and local impact in the carbon neutral and carbon negative goals of corporations. I also believe energy efficiency can be matched kilowatt hour for kilowatt hour to meet any specific daily carbon spikes that a corporation might want to mitigate. We are beginning to work with some of these large, progressive companies to co-develop local solutions in this space.

Energy efficiency really should play as a supply-side resource alongside any other generating resource. It’s essential to treat any energy efficiency that really is “certifiable” as you would a power plant, because anything we can reduce means it doesn’t need to be produced.

But if more markets were competitive, like in the states that have a true regional grid planning and operations, it would result in lower rates, especially for big industrial customers. You would also have a natural, quicker migration to renewable energy over dirtier sources that would likely be retired because the economics would make them upside down. And so we believe it makes a ton of sense to have energy efficiency in the supply-side part of that equation — not the only, — but as a significant part of the equation. And we think if you look into the crystal ball 5–10 years from now, energy efficiency will be able to play a role in that ecosystem throughout the United States and hopefully some other parts of the world.

Until then, I think there are ways that we might be able to partner with forward thinking corporations, a lot of big tech players and so forth that really want to procure 100% renewable energy for all of their operations, and just can’t viably do that right now, because, for example, their data centers or manufacturing plants just can’t get enough solar or wind. But eventually they will; when can they get 100% renewable is really the question not if they can do that. And in that case, we believe energy efficiency can be a really nice bridge technology, where you get a big manufacturing environment or a big set of data centers, and instead of buying renewable energy credits for wind farms in Texas, or Oklahoma — which are not a bad thing, they’re great — but instead of buying those that are 2,000 miles away, you can partner with energy efficiency projects local to your needs. So you match energy efficiency, and the reductions associated with that community, with your load hour for hour just the way you would a resource and that’s what you bridge.

American Efficient is an entity within Modern Energy, the holding company. Can you discuss the relationship of the two companies?

It is an evolving model to some degree. American Efficient and Modern Energy started out as one but Modern has since evolved into a holding company structure to best accommodate the addition of more clean energy ventures.

We benefit in two primary ways from this structure. The first benefit is shared services. There are many services that are necessary for a company of our size — from HR and legal to communications — but there would be tons of overhead if we had to do that all ourselves. I can easily see 50% of my time being taken up by those functions and figuring out how to manage them. Thankfully Modern does that for us. So we benefit tremendously from this shared services layer as it really frees us to focus on the core functions that we know we’re good at. And the second piece where we benefit from this structure is capital raising. It’s a shared approach between American Efficient and Modern.

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We partner with clean energy business leaders to deliver sustainable, reliable, affordable energy to all. Learn more at www.modern.energy.

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Modern Energy

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We partner with clean energy business leaders to deliver sustainable, reliable, affordable energy to all. Learn more at www.modern.energy.

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