Emission Reductions, Renewable Energy, and Energy Efficiency – The Triple Convergence

International energy expert, Peter Fusaro, spoke to Smith School students.

Peter C. Fusaro, one of the world's leading experts on energy and environmental markets, spoke at the Smith School of Business on December 5, 2006. Fusaro is the founder of Global Change Associates and the CEO of Energy & Environment Capital Management, LLC. He is also a frequent consultant to governments and the author of What Went Wrong at Enron. Fusaro spoke on the latest trends in energy and environmental markets, including recent policy and technological developments. Fusaro’s talk was organized by the Smith chapter of Net Impact and by the Smith MBA Finance Association.

Fusaro stressed that instead of federal legislation it was corporations that were driving the greening of corporate America. Corporate America is motivated by both a business opportunity to reduce costs as well as an opportunity to reduce its carbon footprint. He gave the example of Wal-Mart instructing its trucks to not idle any more.

Fusaro described 2006 as the year of renewable energy. Along with successful IPOs by ethanol companies, he cited other examples such as the shortage of photovoltaic, wind and geothermal equipment. Fusaro also described how the alternative energy sector is now attracting venture capital in a fashion not very different from the dot.com days of the late 1990s.

Green hedge funds are another recent development. Although hedge funds are rather secretive, Fusaro said he knew of at least a dozen green hedge funds. Trading in renewable energy credits also offers a world of opportunities. Fusaro reminded the audience that amidst this excitement about renewable energy it must not be forgotten that energy efficiency remains a low hanging fruit. These projects are less risky and the payback periods are faster, whereas the contribution towards mitigating climate change is significant.

Fusaro then described one of his theories called the “Triple Convergence.” The three key drivers are: emissions reduction, renewable energy generation, and energy efficiency or what he called “Negawatts.” The coming together of these three key drivers will shape the green business for many years to come and also will drive innovation.

Mindful that the audience consisted primarily of MBA students, Fusaro described the various career opportunities in the green area to his audience. These include investment banking, venture capital, hedge funds, structured finance, trading desks, electric utilities, oil and gas companies, OTC brokers, and consulting firms.

Second-year MBA student Karl Olson was among those who attended. Looking visibly pleased after the event, Olson said, “I really enjoyed hearing Fusaro speak. He's on the cutting edge of the emerging carbon and environmental markets. Having access to such thought leaders adds tremendously to the business school experience.”

Net Impact: http://www.rhsmith.umd.edu/organizations/net-impact/

▓ Sachin Agarwal, MBA Candidate 2007, Smith Media Group