Today Rocky Mountain Institute (RMI), brain-child of famed energy thinker Amory Lovins, and Carbon War Room (CWR), the five-year old climate change outfit of Sir Richard Branson, merged to create a new alliance dedicated to the acceleration of a low carbon energy future. RMI was founded in 1982 and has established itself as a preeminent think-and-do-tank focused on energy efficiency, whereas CWR is new to the scene, but has already made a splash partly thanks to the high profiles of founder Sir Richard Branson and CWR’s President, former Costa Rican President José Maria Figueres Olsen.
I spoke with RMI’s* CEO, and now leader of the new alliance, Mr. Jules Kortenhorst about what drove the merger, and what we can expect to see from the new energy powerhouse.
Let’s start with the big news of RMI and CWR merging. As the CEO of RMI, what do you think this brings to RMI in terms of new capabilities and connections to the private sector, and how will this change the direction or focus of RMI?
We believe the alliance is a tremendous opportunity for the two organizations to accelerate their impact of the transformation towards a low carbon energy future. Both RMI and CWR have had their focus on a market-based approach to the transformations. That is not to say that policy is not incredibly important, and that policy cannot and should not play a big role in driving the change, but the good news is that increasingly market-based solutions are both technically feasible and commercially viable.
The fact that those solutions are out there, and have been foreseen and talked about by Amory (Lovins) and RMI for a very long time, and coupled with the push that the CWR is able to get those solutions to scale, led us to feel that the two organizations were highly complementary. RMI, is an insightful, independent, analytically driven, rigorous think tank that has been peering into the energy future for a long time, and Amory’s insights have for a very long time been right on the money; combined with an entrepreneurial, bold, exciting, fast-moving organization, (CWR) that is driving the actual scaling of the business model and implementations that bring these solutions to reality, we felt that this was a very powerful match.
So we are merging the two organizations, it will become one single entity, and with one board of trustees led by José Maria Figueres Olsen, that will span four offices in New York, Washington DC, Boulder and Snowmass (both in Colorado).
What will be the name of the alliance, officially speaking?
So we will keep the two brands, RMI and CWR, side-by-side. RMI has a tremendous brand equity established over a long period of time, and CWR is quite well-known as well partly thanks to the contributions of its founder, Sir Richard Branson. We felt that the two brands are very powerful, and they also represent two very different, complementary market-based change models. So we will keep the two brands, and we will continue to operate under the two brands side-by-side. Sometimes you will see the two next to each other, like on my business card, but sometimes you will see one model of change being implemented by the CWR business unit, and other times it might be RMI, and sometimes the two together.
Your first joint project is the “Ten Island Challenge,” using Caribbean islands as a test-bed for renewable energy and energy efficiency. Can you tell us more about the project, given that while islands can serve as interesting labs for innovation, ultimately they account for very little energy use, so how do the two groups plan on scaling this up?
The theory of change and the change model is based on the innovative approach that the CWR brings to bear and the technical insights and capabilities of RMI. Many people have tried to get these islands off of fossil fuels, particularly very expensive and highly-polluting diesel-powered generation, and although the economics have stacked up not much has really happened yet.
The insight that the CWR started with, which makes sense, is to really put the push for momentum in the laps of the leadership of these islands, which is why it is a Ten Island Challenge. It is the leadership of the islands, the heads of state and ministers of these islands that are signing up to a stakeholder and implementation process that drives the implementation of a low carbon energy system on these islands.
But once you have these players in the race, you need to support them with the right insights, the right plans, the right detailed engineering, and that is where RMI and NREL and U.S. DOE come into the picture. So that is where our teams help these islands put together detailed implementation plans along the same lines as we have been doing for a city like Fort Collins, Colorado. And that then gets to your scaling question.
An island is of course an island with water around it, but an island can also be thought of as an energy community with its own capabilities and that can make its own decisions for its own energy supply and demand, and then you can immediately think of a city like Fort Collins or a small community in Africa, or multiple other settings where the community has the resources and the decision-making capabilities and the infrastructure to decide on their own; to go on an energy transformation journey.
And whether or not that is a municipal utility or a small village that has no power yet, or is a university campus that its own energy provisioning, all of those in some way resemble an island. So we believe that what we learn on the islands we can later on scale to other energy communities be it in the U.S. or beyond.
Bahamas just signed onto the Ten Island Challenge, what are the implications for the country? What can citizens there expect to see in terms of on-the-ground changes in the next 5-10 years?
We think and hope in terms of three-to-five years, not five-to-ten. It is known how RMI thinks about these energy transformations. We start with energy efficiency, so what we can do to make the infrastructure of the island more efficient. Often the hospitals, schools, and the resort hotels are big components of the demand, so let’s start out there by looking how you can implement energy efficiency in those larger buildings; then street lighting based on LED lights and possibly integrated solar as another component of bringing energy demand down.
In all of these islands you quickly find that there is significant opportunity for integrating solar and wind into the grid, so that’s then the next piece of the puzzle. Once you have made demand smaller and more flexible, then the question is: how can you transition to renewables? So in the case of the Bahamas, we hope to come out with a Request for Proposal for 20MW of solar to be installed across a number of the islands of the Bahamas over the course of the next 12 months.
Finally, in our minds it is important that all of this is embedded in a stakeholder process that helps the local communities understand what the transition is, why we are helping to make it, and how we are making it.
As the UN climate change talks just wrapped up in Lima, the world's attention turns to the Paris meetings (COP-21) next year, which many say is the make-or-break moment for international climate negotiations. What is the perspective of RMI-CWR on these talks, and how will it work to ensure the negotiations are supported?
RMI and CWR’s main lever is to help lead and accelerate the market-led transformation towards a clean energy future. The vector of change that we are particularly engaged with is that of business driving the change. Having said that, making that change is of course a lot easier if the complementary policies are being put in place by governments and that is where the Paris negotiations are an important second vector of change.
And when it comes to market-led change versus government-led change, one of the things RMI has been doing is laying out a vision that sketches out for stakeholders including business and government, what can that future look like? Very importantly, I would point out, that Reinventing Fire, which came out a couple of years ago, does a great job in sketching what that transformation could look like in the U.S., an economy that would be 2.5x larger than it is currently, and that saves trillions of dollars by deploying massive energy efficiency and transforming the lowered demand that results onto a renewables platform, thereby reducing emissions by 80-90 percent.
That sort of an outlook is exactly the sort of transformation plan that is being called for in the run-up to Paris. All the countries are being asked to submit in the first half of next year their domestically informed low-carbon transformation plan. Our Reinventing Fire work in the U.S., and now also in China, can help inform how countries can make that transformation happen.
I think many are familiar with CWR’s ability to bring CEOs and big companies to the table; is this the most exciting prospect of the merger? If not, what is in your words?
Certainly the ability of the CWR to bring actors from the private sector, particularly entrepreneurial players, is very exciting. But it’s not the only reason why CWR is so complementary to RMI. CWR also has a philosophy of identifying the barriers that on occasion prevents us from scaling the solutions that we know are out there and make sense.
We can lay out a very compelling vision, and we have done that in the past. And we know what a low carbon energy future could like, but there are still barriers, be it information gaps or transaction losses, or other reasons for why the scaling doesn’t happen fast enough. And that is the skillset of the CWR, and that is why it is quite complementary in coming up with the vision, the ideas, piloting and demonstrating ideas and showing that they can work, thinking through the economics of them, and the CWR thereafter taking away the barriers so that we can scale these solutions on a global basis.
RMI does bring solutions to reality on a pilot basis, as you may know from our retrofit of the Empire State Building, and other examples where we’ve actually created the pilot, but the pilot alone is not yet enough to ensure large-scale adoption. And that is where the skills of the CWR will be beneficial.
Thank you for your time.
*Full disclosure: I was a fellow at RMI back in 2009 for three months.