Environmentalist, entrepreneur, investor — Danny Kennedy is an energy source in human form. So what does the California-based Australian think of the Golden State’s bid to flip to renewables?
Californians might come across as being a little swoony and laidback but truth is the dial on just about everything in the state is set on 10. Cheetos, slasher flicks, roller disco – the place is full-on. And now, so is its policy on energy.
The California 100% Clean Energy Act SB 100, passed in August last year, sets out a timeline to full reliance on clean energy in the electricity system: 60% by 2030, 100% by 2045. It’s a hair-raising commitment – and believers in clean energy around the world will be praying for success.
The target especially means a lot to Danny Kennedy, who as managing director of the California Clean Energy Fund (CalCEF) is sniffing around for the technology that will get the state to the finish line.
But is California dreaming if it thinks it can wholly convert itself to renewable energy? “No, it’s waking up from a nightmare,” Kennedy says, recounting a litany of mismanagement and disaster that started around the turn of this century: Enron’s “gaming and gouging”, rising prices and less reliable service throughout the state, a deadly gas pipeline explosion in San Bruno, homes destroyed in Santa Rosa by fire caused by a faulty subpanel and the “apocalyptic” fires of late 2018. “The electricity grid failed us … and caused those fires,” Kennedy says.
Twenty-odd years of serious failures around the state have induced a slow-dawning awareness of impending catastrophe, he says, where climate impacts that are now “real and accepted” are driving a social movement that’s calling leaders to account. The message for them is clear: “You bastards, we can’t tolerate that and carry on with that.”
To fix the system, go to the cause: clean up electricity and mobility services.
Have no doubt, Kennedy concedes the last 10% will be a tough transition in an economy of 40 million people that straddles mountains and deserts. “But hard is good; hard is what we do; hard is business. To paraphrase Kevin de Leon, who passed the law: That’s what galvanises popular opinion,” he told a session hosted by Energy Lab at the University of Technology Sydney in February.
After all, as de Leon pointed out to early naysayers who said 100% was impossible: “JFK didn’t go 90% of the way to the Moon.”
The law has changed the debate in the state, Kennedy says. Governor Jerry Brown has passed an executive order to decarbonise the rest of the economy, including transport, shipping, industry and buildings. “The good news is the electricity planners wanted [Brown] to say that,” Kennedy says, because the solution involves the “electrification of everything” to make renewables viable and economic.
“There is sort of this consensus now that we’re going to go 100% renewable and electrify everything,” says Kennedy, who cofounded solar company Sungevity, is a former campaign manager for Greenpeace and now leads the New Energy Nexus, which builds incubators and accelerators.
California is the fifth-largest economy in the world – larger the Great Britain – and the state’s energy target has been described by Harvard as the single largest climate change action in the history of the United States. It helped that many of America’s biggest businesses names, some of them headquartered in California, are already transitioning to renewables, including Apple, Facebook, Google and Microsoft. “It’s incredibly powerful to have companies with trillion-dollar valuations on the stock exchange say 100% is not only doable but the best business plan for us going forward,” he says. “That was a huge part of it.”
Hey, ho, let’s go
California has always been out to get what it wants. Take the building code, Kennedy says, which since the 1970s has been on a legislated three-year cycle of self-improvement. As of 2020, any new home built in the state must be zero net energy. “The builders are already doing that,” he says. The 50,000 homes to be rebuilt after the recent fires will all be zero net energy; by 2025 the rule applies to any commercial building, by 2030 any public building. “A decade away, the building stock will produce more electricity than it consumes.”
Over the past decades stringent exhaust emissions standards in the state have set the tone for the rest of the country as lawmakers and carmakers accept that “as goes California, so goes the country”. By 2040, all buses in the state must be electric. “And that’s part of the solution for the grid,” Kennedy says. “Once you’ve got all the bus fleets in the cities and towns sitting idle between the drop off at 9am and pick-up at 3pm, they’re assets in a distributed energy resource system that we know we’ll have with 100% renewables.”
This energy matching is no happy coincidence, he says. Regulators are intentionally aligning mobility solutions to complement electricity solutions as part of California’s master plan. And it’s been happening in the background for a long time. It was forward thinkers in the state who slayed the “vampire effect” of LED lights on every electronic appliance and insisted on energy efficient computer screens. Changes to standards for whitegoods and computers since 2009 have handed Californians $US1.9 billion a year in electricity savings. Of course, these are savings that are exported to the rest of the world as manufacturers reengineer their goods.
Crazy napkin drawings
“All of these policy settings combine to create opportunity spaces for very aggressive entrepreneurs to come in and disrupt,” says Kennedy. “And that’s where I live.”
The California Clean Energy Fund is nosing around for the “crazy napkin sketches” that will be needed to solve the problems that will surely present themselves as California edges beyond 75% clean energy towards the tricky 100% target. In the past 18 months the fund has backed 46 ventures, with investments up to $US600,000.
“We were in Tesla early,” he says. “We also sold, in 2009, which is a real bummer because I wouldn’t have to do as much fundraising now if we hadn’t.”
Yes, there is risk, but you have to think big to turn over dirty incumbent industries. Tesla is disrupting the huge auto industry. The clean energy revolution will just as surely tilt the state economy.
“When people ask me, how do you get a 100% law passed? The answer is you get 38,000 workers come out of the woodwork … we now employ in California more workers in the solar installation segment of the solar industry than in the utility businesses of the state,” he says.
“That virtuous spiral of job creation, value creation and policy setting has just ratcheted up and up and up over time and been very organised.”
Slay the naysayers
California has always exported a spirit of revolution, or just plain good times, so what can we learn in Australia about knocking a few heads together and getting things done?
“Beat up on bastards that resist this program. Afflict them; make their lives miserable. And herald and celebrate people who actually understand history,” Kennedy says. “It’s a very political statement, but it’s time to get that way.”
It helps to have bureaucrats willing to stick their necks out and point to the opportunity hanging in front of legislators. “We heralded those people and we crucified the naysayers,” he says. “We took it out on those who stood in the way of those who were getting it done.” It doesn’t always pay to play nice.
When social movements are joined by start-ups, business and bankers, the wave builds. “Schwarzenegger was hilarious about this stuff,” he says. “He wanted this more than anyone, driving his hydrogen Hummer up the I5 every day just to prove it … even though hydrogen hasn’t happened as much as the EV program has.”
The power of political will Kennedy describes is enough to turn Australians green with envy. Still, there will always be knockers. Kennedy knows how to handle them. “The fact that it’s the law of the land means anyone who comes up to me and says, One hundred percent? That’s not possible! I’m like, It’s not a question! It’s the law! You’re either a lawbreaker or you’re on the program and we’re going to work it out.”