Investment Banks Are Making Huge Investments in Renewables, But There Are Counter-Currents As Well
David Crane, chief executive of NRG Energy Inc., smiles during a Bloomberg Television interview at the Goldman Sachs North American Energy Summit in New York, U.S., on Wednesday, June 11, 2014.†Crane discussed the outlook for renewable energy and the importance of sustainable power development for businesses.†Photographer: Chris Goodney/Bloomberg via Getty Images
A reader notes:
NRG Energy Inc’s CEO David Crane, a former investment banker who led (the independent power producer) for 12 years, has been removed by his board and investors (including Goldman Sachs) for the reasons given in his statement to the WSJ: ”Investors made clear they would rather have had profits from the power-generation business returned to them through dividends and stock buybacks and not poured into clean-energy enterprises.”
Like you, David Crane is a fine, decent man, an excellent executive and a visionary CEO. Only two months ago he had the full support of his board, including three major banks. Today he has learned the lesson between what banks say, and what they really think!
Yes, I saw that, and thanks for the kind words. Readers should see this.
There is no doubt that the energy industry suffers from eccentricities that exist nowhere else in the business arena. Given the way we regulate our utilities, e.g., there is no incentive for innovation, which gives rise to this startling sad result: the energy sector invests less than 1% in R&D, a small fraction of that of other industrial groups. One can only imagine what would happen if there were essentially no innovation in IT, consumer electronics, or medical technology.
The migration away from fossil fuels in the direction of renewable energy is not without its fits and starts. So much needs to be done to get us solidly on this right track, principally:
• Changing the way we regulate our utilities, and, more importantly
• Internalizing the externalities of burning fossil fuels
Re: the latter, our society operates as if there were no social costs to burning hydrocarbons, even as our planet warms, our oceans lose their capacity to support life, etc. This is causing a catastrophe of unimaginable proportions.
