San Jose's Cleantech Officer on Renewables, Recession and the Stimulus

While San Francisco's mayor Gavin Newsom gets plenty of attention -- often national -- for his renewable energy initiatives, an equally large city just to the south, San Jose, has been outspoken in its own quiet way. What that means is that it often aims its message at businesses, rather than voters and consumers. The city has long been a force in computing, and many semiconductor makers call it home; in the future, it hopes to be similarly important as a base for renewable energy companies. In the process, it's developing policies that are likely to influence how other cities across the nation act in the future.

Collin O'Mara, the city's clean technology officer, spoke with me recently about the San Jose's stance on renewables and the stimulus package. And, since the last time we'd talked was before the recession took full force, I also asked him about how the city's policies have changed in light of it. (Side note: Since our initials are the same, I'll be BNET, and Collin can be CM.)

BNET: How has the recession hit San Jose? Are you still looking at renewable energy the same way?
CM: The biggest change is how the financial conditions of the companies we're working with has shifted radically. Companies getting that first pilot plant up and running are now really struggling. It has changed our thinking a little more in terms of the kinds of companies we focus on. We're focusing more on the incubator [San Jose's Environmental Business Cluster], giving more services and space, so there aren't the negative consequences if they don't survive.

BNET: What about the stimulus? What's the most exciting part for cities? CM: Where we get excited is the energy money that was set aside, $50 to $80 billion depending how you count. How do we partner with companies to do the first smart grid and utility projects here? How can we direct money to local companies for sales or local development?

From the stimulus, we want to make sure the stimulus will promote American innovation and production. We don't want to just send money off to buy stuff, but we want local production. We don't want to end our dependence on Saudi oil to replace it with Chinese solar panels and Japanese electric cars. So we're really focusing on manufacturing at a state and Federal level, trying to get companies access to capital.

We'll put in local preferences and as long as it's in the price range of someone external, it gives us the freedom to pick. We don't want to violate any trade agreements. But we set a precedent last year with a 15% incentive for a California-based fuel cell. It's not taking away incentives, it's adding a little more.
BNET: California is currently aiming to have 20% renewable energy by 2010, and some are now calling for 33% by 2020. What will change if you get that mandate?
CM: Nobody's on pace right now to hit the 20% by 2010. What we want to see is more of those procurement contracts being put in place. The companies can use that for long-term revenue streams to stay afloat. A lot of them have some kind of phased payment structure. If you look at contracts with Optisolar or Greenvolts, that initial cash flow helped Greenvolts expand a lot after the PG&E commitment.

BNET: So if you're not going to hit 20% by 2010, how can you expect to reach the next target? CM: The work Southern California Edison is doing with rooftops is making sense. We haven't been nearly creative enough in the Bay Area on the deployment side. We keep pushing the utilities -- don't think of this as siting gas plants 50 years ago. Even though there are advantages to siting a solar plant in the middle of the Mojave Desert, you lose so much in transmission. A 35 megawatt solar farm on a landfill might produce as much power as 100MW in Merced trying to get here. We're trying to push the thinking of the utilities. But it'll take everything. I'm extremely excited about Bloom Energy [a fuel cell company] and their distributed solutions.

The real question is, what's the punitive side of not reaching the RPS?

BNET: San Francisco, San Jose and most other cities in the region are increasingly acting as a group. How is that helpful?
CM: We're having a greater influence on national agenda. We're working with the transition team, now the White House, and saying, these things are what we're trying to promote with the Department of Energy. It helps if we're all on the same page.

It also makes sense to have a local standard for the electric car infrastructure, green building standards, workforce training and some other issues.

BNET: Cities often lead the way in creative solutions. Which ones do you admire? CM: There's Leipzig and Berlin in Germany, and some cities in Spain. Domestically, we have Austin, Portland and Seattle. The latter two have incentives for tech deployment. Then San Francisco.

We're all kind of trailblazing. We feel like we're on the leading edge of helping companies to grow. It's not so much on the technology side, it's on the behavior change side. Portland and the public transit system, for example, have resulted in a huge decrease of driving, which helps people spend on the community.