Greig Cameron
Deputy Business Editor
AS someone who has been an adviser to three US presidents, an executive at
Google and is now a professor at an elite university, Dan Reicher comes
with enough credentials to impress even those used to moving in the most
rarefied of circles.
FULL OF ENERGY: Dan Reicher says Scotland is progressing well with policy,
technology and finance.
So it says quite a lot about the hunger for knowledge he possesses that a
forthcoming trip to Scotland is being looked on as a learning experience.
The qualified lawyer has spent much of his three-decade career in and
around renewable energy policy and low-carbon economics.
Speaking from his Stanford Law School office in the Palo Alto area of
California, the 57-year-old admits to having only a limited understanding
of how that industry is developing here in Scotland.
But he has been poring over documents and reports recently to get himself
better acquainted ahead of speaking engagements at events in Edinburgh and
Glasgow later this month.
Mr Reicher believes the successful deployment of energy systems relies on
three sides of a triangle which he describes as policy, technology and finance.
He said: “It strikes me that Scotland is in fact making progress on all
three points on the triangle, particularly focused on some of the larger
clean energy opportunities, some of which are quite compelling.
“The offshore wind resource is vast and both the national and private
sector commitment to developing it is very large.
“I think it is a smart area for Scotland to be pursuing and it also seems
to me the marine technologies [are] looking promising and there are some
biomass opportunities.”
Large-scale manufacturing for renewable energy technologies has yet to
arrive in Scotland.
However, Mr Reicher cautions against thinking supply-chain opportunities
have already been lost to European neighbours, such as Denmark and Germany.
He said: “Offshore wind is still a relatively young technology and the
competition is still sorting itself out.
“There are lots of examples of even more mature pieces of the energy
industry, where the competitive landscape is still not settling, so I think
in no way should Scotland count itself out.”
Mr Reicher highlights the expertise oil and gas companies have in building
large infrastructure in all sorts of ocean conditions.
And he suspects that could eventually open up further types of offshore
energy technology. He said: “One of the things that strikes me as I look
through the situation in Scotland is that a fairly strong oil and gas
sector could bring a lot to offshore wind and I see that as a real
advantage through increasing interest and expertise in going offshore and
going [into] deep [water] for example.
“That is a natural bridge to offshore wind and potentially quite a
compelling bridge to floating offshore wind, rather than fixed ones. If you
have to put a floating offshore facility in 1000 metres of water, then the
oil companies could bring expertise.
“I know Statoil has got quite interested in the floating offshore wind
world. We are beginning to see some interest from US oil and gas companies
and I’m hopeful that, in time, we will see more of that expertise brought
to offshore wind, marine and tidal projects.”
As well as that, Mr Reicher offers further encouragement to the Scottish
low carbon economy by suggesting a commitment to developing resources
domestically can often position a country well on the international stage.
He said: “There are reasons China has turned to developing its own domestic
solar resource, one of which is developing a domestic resource gives you
strength all through the value chain.
“The more you deploy it in your own country then the more likely you are to
be a leader in the overall technology value chain.”
While debates about whether fracking should be allowed in the UK are
continuing, Mr Reicher points out the lower-cost natural gas secured
through the technique in the US has helped to balance out the intermittent
nature of many renewable technologies.
He said: “From a low-carbon standpoint in the US, the increasing
availability of lower-cost natural gas has meant that we have been able to
reduce carbon emissions reasonably significantly.
“You have to develop the natural gas resource in an environmentally
sensitive way and that is one of the issues we are working on here in the US.”
The recent fall-off in clean technology venture investing in the US is one
area Mr Reicher is keeping a close eye on.
However, he makes a clear distinction between early stage high-risk capital
to develop technology and the typically vast sums needed to roll out big
energy projects.
He said: “Cleantech venture investment has dropped off quite a bit in the
US and the success rate has been less than predicted.
“I live and work here in Silicon Valley and there are a number of venture
firms investing in clean tech. For now, a number of the bigger ones have
pulled back completely.
“We’ll see whether that specific kind of investment comes back or whether
people have to look to other places. Perhaps from big companies,
endowments, pension funds or the charitable arms of big organisations.”
Mr Reicher believes part of the problem in this arena is related to
investors who are used to other technologies which typically take less time
to come to market.
He said: “Cleantech has much longer development time frames and generally
requires much larger amounts of capital.
“I saw this very much evident at Google, where it was amazing to me how
quickly information technologies were invented and deployed. With the
deployment of advanced energy technologies we often measure them in decades
and multiple billions of dollars.” According to Mr Reicher, there is a
greater understanding from US venture firms of looking at global
opportunities, which is leading to a steady stream of European energy
businesses pitching their ideas.
He highlights energy storage and smart grid technologies as two areas in
which he believes there will be interesting developments in the coming years.
He said: “There is some very important and attractive aspects to being able
to better store electricity. We are not very advanced anywhere in the world
at that as batteries have a long way to go, pump hydro is not providing the
kind of capacity we need at the cost we need it to be.
“It is quite a hot race among storage companies and it has this compelling
intersection with the world of the electric vehicle.
“The rise of plug-in automobiles has caused a much more intensive focus on
batteries than we had seen previously. If we were to get to the point where
there were a larger number of plug in vehicles on the road, there are all
sorts of interesting opportunities to provide storage for renewable
generated electricity in those vehicle.”
Mr Reicher points out that in California, the wind tends to blow more at
night than during the day, when the electricity is typically less needed.
He said: “If you had a plug-in vehicle fleet which numbered in the
millions, you can imagine a situation where in a sense you filled those
cars up at night with cheaper electricity.
“Then through a smart grid, you can imagine a situation where those
vehicles might in fact be able to provide electricity from their batteries
back [to the grid] the next day, for example while plugged in at work.”
When asked what things an entrepreneur could bring to the low-carbon
technology sector, Mr Reicher said: “It is a combination of expertise,
timing and a bit of a good luck. All of that has got to be with an eye
towards those three fundamental pieces of the sustainable technology
[triangle]. Too often, we see folks with really smart technical ideas that
have trouble navigating the worlds of policy and finance.”
As someone who was an early adopter of solar panels and smart grids while
working in Washington DC in the 1990s, Mr Reicher isn’t afraid to utilise
the technology he is talking about.
He is confident the industry continues to move forward at pace meaning the
days when his early photovoltaic system was destroyed under several feet of
snow are long gone.
Yet he is keen to point out that progress made in renewable energy must
come alongside cutting energy use at home, work and travel. He added:
“Energy efficiency is not only low hanging fruit, it is low hanging fruit
that grows back as we are always improving the technologies.”
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