Professional Documents
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The Power of Nancy Floyd
The Power of Nancy Floyd
explains. real price instead of a SIJ: In 2001, 25 states had deregulated their
Under Floyd’s direction, NEC Energy Corp.
constructed $30 million worth of wind turbines
blended price — electric utilities. What effect has re-regulation in
many of these states had?
in California’s Altamont Pass in the 1980s. people will start to care Floyd: I think that actually having competi-
“Talk about cowboy days…” Floyd muses. tion, just the threat, caused them to wake up. But
“We created the business model.” about energy at that point. re-regulation hasn’t really slowed the traction that
NEC eventually formed the basis for FPL
Energy, which generated 40 percent of U.S.
Right now energy is too new technologies are getting. There are certainly
long sales cycles. Many of them have just gotten
wind power in 2004. cheap for people to really funded in the last few years and it takes five, six,
But Floyd left the wind business when maybe seven years for us to see it in the main-
inconsistent federal tax credits stifled the care about saving it. stream market.
industry. Her second experience with a Today the market drivers are so much stronger.
deregulating market, this time in the Deregulation has been left in the dust. Include
telecommunications industry, turned Floyd the fact that we have an aging infrastructure in
on to the power of innovation brought by this country and elsewhere; that there’s increasing
competition and market demand. What Floyd demand for oil and natural gas that now, on a
says interested her most was the role technology daily basis, is beginning to outstrip supply; very
plays in transforming the landscape. significant global warming concerns, terrorism
More important was her realization that and national security concerns. As well as, do we
this awareness was not being developed in the continue to have the architecture of big central
traditional telecom companies. “These were power plants or have more distributed
seemingly disruptive technologies funded by architecture with clean small generation? All of
venture capitalists,” she says. these are really driving the opportunities now.
Nth Power grew out of this realization. And it’s gotten investors … really interested.
Floyd says she believes the time is right for We are at an inflection point. From 1990 to
exponential growth in energy technology. 1998, $300 million in venture capital was invested
“We have never in the history of this country in energy technology. From 1999 to 2004, $4.5
been in the spot we are now related to energy,” billion of venture capital was invested in it. This is
she says. “I’m not going to say its that we’re one of the largest industries in the world,
running out of oil in 20 years. It’s around global absolutely hungry for change and innovation.
warming and not being able to produce enough
oil to meet demands.” SIJ: There seems to be a lot of interest now
Floyd recently took time to talk with in focusing on how power is supplied to
Sustainable Industries Journal about her perspec- consumers. Why is there so much attention on
tives on this moment in history. this particular aspect of energy?
Floyd: There is more pressure on utilities to message] for fun, why are we sending meter There’s a technology to dim lights in office
provide highly reliable power. Automated readers out? It’s unbelievable. buildings very slowly over a minute or minute
manufacturing costs us a lot of money now if the and a half, by up to 30 and 40 percent, and it’s
power goes out. What’s driving investments in SIJ: It sounds like a lot of the new almost imperceptible. ... The real driver was
advanced metering is the ability to use the system technologies take responsibility for managing workplace productivity — when you have lighting
efficiently. energy use away from consumers. Do you think appropriate for the task, people are more
If you have advanced metering, utilities can that’s true? productive. … People don’t have to even care
send real-time price signals. Right now we pay a Floyd: So far, we have found that energy about energy efficiency.
blended rate for energy. It includes the cheapest efficiency alone is a very weak market driver.
cost of energy because you’re using the lowest People don’t care enough and don’t pay enough to SIJ: In an article about H2Gen, a company
cost resources, and as demand increases you have conserve. When you start paying a real price in Nth Power’s portfolio that makes small-scale
to turn on the plants that are the most expensive instead of a blended price — people will start to hydrogen generators, CEO Barney Rush said he
to run and we end up paying the blended rate for care about saving energy at that point. Right now wants to “avoid the best being the enemy of the
that. You can measure people’s usage in five energy is too cheap for people to really care about good.” Does that thinking relate to your
minute — or less — increments. Then you can saving it. investments?
begin to charge for what people use. Floyd: Sure. In the case of H2Gen ... maybe
Real-time pricing sends price signals so people SIJ: Doesn’t that mean asking consumers to we’ll start with applications that have nothing to
save energy when it’s most expensive. We’re give up quite a bit of control over their do with fuel cell cars. As venture investors, we
optimizing the generation that’s out there. So electricity use? need to make money for our investors, and when
balancing the system, getting the most out of the Floyd: It wouldn’t be giving up control at all. we make an investment we need to think that
system is the rationale for advanced metering. It’s really not even noticeable. We have a company there’s an immediate market. There are a lot of
working with PacifiCorp, and what they do is go companies that use hydrogen and have it shipped
SIJ: If it’s so important, when do you think in and install this little device on air conditioners. in — refineries, pharmaceutical companies. And
real-time pricing is going to happen? They cycle people’s air conditioners on and off, H2Gen wants to sell into those immediate mar-
Floyd: It’s starting to happen around the just a couple of minutes. The compressor is off kets as a way to generate some volume, which
country. California is going to be mandated to do and in the couple of minutes where they turn it brings prices down.
real-time pricing starting next year, rolled out over off and back on … the temperature in your house I’m looking for initiatives that aren’t
a number of years. It’s a very big deal. Think might rise 1 degree. regulatory-driven, that are market-driven. That’s
about it: When my teenage boys IM [instant You’re not even going to notice a change. when you know you’ve got a real industry. G
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