Renewable Energies: Policies, Projects and Challenges for Regions Commission on Sustainable Development NRG4SD Side Event States in the Lead: Clean Energy Investment & Deployment at the State Level in the U.S. United Nations, New York City May 5, 2006 Allison Schumacher, Project Director Clean Energy Group

2 Historic Transition in Clean Energy Led by States : State Level Revolution on Energy  Renewable Portfolio Standards (RPS)  Energy Efficiency Funding  State Funds  Climate Negotiations  Democratized Decision-Making  State Economic Development Policy  National Stalemate  Energy Independence 28 + DC 16 State Funds + DC, 20 RPS + DC Fuel Cells and Hydrogen, and Carbon Trading

3 Historical Role of States Areas of competence: federal (redistributive) vs. state (developmental) Erie Canal to stem cells States: historical locus for technology innovation Clean energy resurgence consistent with American historical trends

4 States As Preferred Locus Clean energy is development Immature markets Bottom-up learning New business models Private investor leverage Market makers Not merely federal models “It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments with risk to the rest of the country.” -Justice Louis Dembitz Brandeis

5 Clean Energy States Alliance (CESA) CESA = 14 states (18 funds) cooperating on joint projects Nearly $4 billion to invest in next 10 years Nonpartisan, experimental, collaborative network –Information exchange & analysis –Partnership development –Joint projects: PV, Wind, Fuel Cells, Security, others CESA expanding to include new states and those that want to develop new public funds (Alaska, New Mexico, Vermont)

6 Clean Energy States Alliance

7 Individual State Fund Investing Activities Technology Creation Consumer Incentives Business DevelopmentCommercialization R&DSeed Start-upVenture RoundsMezzanineLT DebtPublic R&D Grants Support Grants Company Investments Market Support Venture Investing Demo Support Project Loans PPA Support Rebates & Grants Aggregation Consumer Loans Consumer Education REC Support StandardsTraining Production Incentives

8 State Fund Strategic Models Project Development Model: –Incentives & grants to directly subsidize project installation (California, New Jersey) Investment Model: –Loans & equity investment in companies & projects (Connecticut) Industry Development Model: –Business development grants, marketing support, technical assistance & education to build industry infrastructure (Wisconsin) Research & Development Model: –California & New York, in part; Minnesota Combination of Approaches (Massachusetts)

9 Case Studies on Innovative Clean Energy Finance CESA-LBL case studies: New UNEP/BASE/CEG report: –Public Finance Mechanisms to Catalyze Sustainable Energy Sector Growth (2005)

10 International Finance and Technology Collaboration International sub-national network International collaboration on: –Climate stabilization and technology agreements –Transatlantic Investment Initiative –Pensions and institutional investment –Exchange on innovative public financing

11 Contact Information Allison Schumacher Clean Energy Group (802)