Energy summit talks the policy behind power

By Jack Lee     11/19/24 11:26pm

The 16th annual Rice Energy Finance Summit was held at Jones Business School Nov. 15. Speakers from the energy industry discussed topics including renewable energy, the Texas power grid and the future of energy policy under a second Trump administration.

The morning featured a keynote address with Doug Lawler, CEO of Continental Resources, a fossil fuel exploration company specializing in fracking. The afternoon keynote address was given by Michael Skelly, the founder of Grid United, a Houston energy company. Skelly discussed his efforts to connect Texas’ power grid to a larger U.S. power grid.

Most of Texas’ cities are connected to a power grid independent from any other U.S. state. Skelly said the 2021 winter freeze, during which nearly 10 million people were left without power, drew mainstream attention to modernizing the state’s power grid.

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“We knew the grid needed fixing, but not everyone did,” Skelly said. “We had a lot of trouble raising money. After the winter freeze … things began to change.”

Skelly said a power grid integrated with one of the national grids would be more broadly efficient than the current structure.

“We take a lot of inspiration from the connection of the European grids,” Skelly said. “If you look at connections between, say, Norway and Denmark, you get better reliability. You can incorporate more renewables. They’re very cost-efficient — they’ll pay for themselves.”

Following Skelly’s address, a panel took place that featured Paul Goydan, Jeffrey Tillery and Hill Vaden. The panelists discussed their thoughts on the future of various green technologies. 

Tillery, the chief operating officer at Veriten, an energy investment firm, said nuclear energy has generated great interest in recent years, while attention and investment towards hydrogen energy has stalled.

“The hype and excitement around [nuclear] is not keeping pace with its growth,” Tillery said. “Though it will still be a growth market for the coming years … where nuclear has swung in the [positive] direction the most in the past few years, hydrogen has gone the opposite direction.”

Regarding the impact of the artificial intelligence boom on the energy industry, Tillery said the interest in AI data centers might drive investment towards nuclear power, but remained cautious about its existing limitations.

“One of the [positive] things about nuclear [power] is data centers, because data centers are this great point source of demand,” Tillery said. “That doesn’t necessarily speed up the problems that have historically affected nuclear [power].”

Skelly said he found it unlikely the burden of payment for incorporating high-consumption data centers into the grid would lie on the public.

“The way this seems to be headed, the new load will pay for it,” Skelly said. “Public utility commissioners will be like, ‘Last I checked, Jeff Bezos has billions, why should customers pay for this?’ … Maybe artificial intelligence is a public good, but I’m not sure the public is buying it.”

At various points, the panelists were asked about their thoughts on the incoming Trump administration’s impact on energy transition efforts and the Inflation Reduction Act supported by President Joe Biden, which provided significant provisions for clean energy investments. Vaden said he predicted the new administration would not cause a significant change.

“There’s a lot of renewable energy generation going on in states that voted for the new administration,” Vaden, the executive director of financial and capital markets at S&P Global and Rice MBA ’10, said. “I don’t think that’s all going to be unwound. The [Inflation Reduction Act] is a statute. It’s hard to undo. Executive orders will be undone … but big picture, it’s not a big deal.”

In contrast, Goydan, a senior partner and managing director at Boston Consulting Group, said the Trump administration did have options available to them to limit the previous administration’s renewable energy policies.

“[Biden administration energy policy] will be subjected to congressional tweaking,” Goydan said. “The incoming administration does not have to change the laws, but they can destaff departments and nothing gets done for four years.”

Skelly, who unsuccessfully ran for Texas’ 7th congressional district as a Democrat in 2008, said he was uncertain about the future of energy policy under Trump but remained hopeful.

“Big picture, it’s really hard to tell,” Skelly said. “Some of these nominations are a real dare for the Senate … On a bad day, I’d say that would suggest they’ll gut [the Biden administration’s energy policy]. There’s another school of thought, there’s enough Republican support for the [Inflation Reduction Act] that they keep some of the stuff.”

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