isCleaner Clean Leader Interview Series: Tom Rand

This is a guest post from isCleaner and part of their Clean Leader Interview Series. isCleaner is Your Source for Canadian Clean Energy News & Information.

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“… the market does not find the most efficient solution; it finds the most easily financed solution. It’s the bankers that decide what infrastructure gets installed; not the venture capitalists, not the inventors, nor even the government…the green bond plugs that market gap.” -Tom Rand on the current market failure.

isCleaner had the distinct privilege of interviewing one of Canada’s most passionate individuals in the clean tech sector. His invariable enthusiasm for combatting climate change is both influential and infectious. Through his private venture fund, new book and position at MaRS, Tom has been busy making a meaningful impact on individuals and leading MaRS – Canada’s clean tech cluster – to 4^th in worldwide rankings. Using his social and financial capital, Tom Rand is a Clean Leader.

Of Rand, a fellow clean tech proponent and friend writes:

Tom Rand is, first and foremost, a man of philosophy and so it should come as no surprise that he has devoted himself entirely to cleantech. After all, what bigger question is there today than ‘how are we going to get ourselves out of this mess’? Tom takes a different approach than many in the cleantech world — he is not a fan of incrementalism and he believes the technologies we need to save the planet have all been invented. What he calls for is bold investment on a massive scale in existing technologies which, he asserts, together and even individually in some cases, can provide all the world’s energy needs many times over. He is a true believer in the cause, and one with a publishing contract, a role at the country’s top cleantech centre and his own investment fund. All this makes Tom quite a force to be reckoned with.

-Ryan Little, Principal of Rocksteady Investments

We hope that you will enjoy our first in this series of Clean Leaders interviews and that you will find Tom’s enthusiasm as compelling as we did.

And now, the interview…

isCleaner: What is your name and affiliation, title and location?

Tom: Tom Rand, Clean Tech Practice Lead Advisor, MaRS Discovery District (Toronto, ON)

isCleaner: Could you describe your background and how you decided to get involved with MaRS?

Tom: Before I got to MaRS, I founded then sold a software company, started VCi Green Funds, worked on public policy relating to green bonds, built North America’s ‘greenest’ hotel – Planet Traveler – and wrote a book called Kick the Fossil Fuel Habit – 10 Clean Technologies to Save Our World.

I got into MaRS, because I wanted to get more deeply involved in clean tech- in particular, helping startups grow and get successful. Since starting the practice only a year ago, we’ve already been ranked 4th in the world in clean tech clusters. We have over 100 clients now, 2 dozen of which have real potential.

isCleaner: The path you have chosen likely involves higher risk, and at times more challenges than a “normal job/role”. What drives you to do what you do?

Tom: Climate change scares the bejesus out of me. I’m a climate change geek in the sense that I am fully aware of what the science tells us. The problem is that it’s taken 70 years to build the fossil fuel infrastructure and we have a couple of decades to replace it.

If you want a worst case scenario (for inaction), we’re talking about the end of civilization. Will that happen? Probably not, but it is very late in terms of pulling back from the edge. We are playing with fire. It is time for all hands on deck.

isCleaner: What is your company/organization/affiliation currently doing about cleaner energy solutions to ensure it is moving towards a future that is cleaner? Please provide Measures & Targets if possible.

Tom: I have an active venture fund that invests in the clean tech sector, mostly in early stage. Having some capital and being an entrepreneur, this was the fastest and most effective way to get involved. We’ve built what we claim is North America’s greenest hotel. It is a testing lab of sorts to see what technology would work to deliver substantive carbon savings in the real estate sector. We’ve lowered carbon by 75% from business as usual. We’re making money doing that. That’s one of the key messages that I get out there is that you can lower carbon by three-quarters in the building and make money doing it! It’s very low-lying fruit.

From my funds perspective, the hotel was one way of getting engaged in that sector and basically finding out what works. I did have a strategic investment that flowed from there. I invested in a geothermal company called, Clean Energy Development, sat on their board, and we actually sold that company to Alter NRG in the fall last year. It became the basis of the first exit for my clean tech green fund.

isCleaner: Describe a recent success with a challenging clean initiative (large or small). What did you do and why? Why do you think it worked?

Tom: One of the challenges we had was with the hotel. There was no way we were going to be able to make it North America’s greenest hotel without geothermal heating and cooling. Without it, the most we were going to reduce that building footprint was by maybe 30%, which to me, is not a green hotel. It’s really not all that interesting. I set my target at a three-quarter reduction, really, essentially, doing what the science is calling for, so it wasn’t arbitrary. The challenge was that there was nowhere to put the pipes because the building is in a dense, downtown urban core and the building takes up the entire footprint of the property. So after thinking about it for a while, I suddenly realized there was a public laneway that runs beside the building that’s owned by the City (of Toronto). I thought if I can approach the City and have them give me the permission to bury the pipes under the laneway, first of all not only will I be able to reach my target and make my building geothermal but it would also unlock the potential of the city to act that way, in a more general manner. And so when we approached the City, we didn’t approach them as a one-off, we made our lives a little harder and said you can view this as the first of many applications to bury pipes in public spaces. The surprise to me was the response of the City. It was extremely positive. We had political direction from the top to find ways the City could act on climate change. They set up a task force to look into opening up parks and laneways for geothermal. Now that it is a general policy of the City to allow this to happen. That was a clear barrier that we overcame. We blazed that trail.

isCleaner: What are you, personally, currently doing to be cleaner in terms of energy usage, and why are you doing these things?

Tom: I bike everywhere I go, except to hockey practice. When I use it, I have the most efficient car you can get, a 2005 VW diesel. I’m actually in danger of my car battery dying because it sits in the parking spot for so long. I also have a cottage, and I make sure I can get to my cottage by train. I refuse to use air conditioning (in favour of an old-fashioned fan), I’m (mostly) a vegetarian, and I try to be aware of low-energy options when there is an option available. When there isn’t an option available, I’m no saint. When I gave a talk in England, I flew there. I’m perfectly aware of the hypocrisy of doing it, but at the end of the day, there isn’t another way to get there.

isCleaner: What is limiting you or your organization (in terms of knowledge, tools, resources, etc.) from doing what you think is the “cleaner action” rather than the normal action?

Tom: The biggest barrier is that people aren’t given a choice right now. I don’t think that we the public are given enough choice in terms of energy use. It’s given to us and we just take it, and that’s an infrastructure problem. For example, I can’t choose to buy electricity from an enhanced geo-thermal power plant. There are none in North America. I can’t choose to run my car on biodiesel unless I make it myself in the basement.

This is infrastructure built by multinational companies, and those corporations haven’t yet decided to be energy companies rather than oil companies or coal companies. The question is: How do we get the oil companies to become energy companies?

isCleaner: What connections could isCleaner assist with that could “fast forward” you and your organization to become cleaner?

Tom: In Canada, fitting in with the MaRS mandate, it would be the ability to identify angels, wealthy individuals willing to make investments in the clean tech sector. MaRS often helps young, promising companies get very early seed stage money, and the first million or two is the hardest.

isCleaner: What person or what organization do you admire/take your clean energy inspiration from?

Tom: Person: Vinod Khosla is the founder of Sun Microsystems. He runs Khosla Ventures down in Silicon Valley, and it’s one of the biggest clean tech venture funds. Vinod is a billionaire and a very, very smart guy. He’s about an impressive guy as you can have in this fight in terms of him taking social and financial capital risk. He is probably the one that takes the biggest risks on technology plays in clean energy. He’s the one that is publicly the most vocal about the kinds of changes we need to make, and he pulls no punches. He even said, if you want to reduce carbon, don’t drive a Prius, paint your roof white. He’s very blunt in his assessments of what needs to happen. And in terms of him really, deeply trying to understand the sector, he doesn’t just fall in love with technology because it’s really cool, or that you can make a bunch of money on it, he’s interested in real change.

Organizations: I admire the Clean Tech Group. I admire MaRS. There are lots of NGOs doing a lot of good work. TransAlta made a pretty serious move into wind a while ago, and I think they were genuine about their willingness to try it out. The guys from Google are investing into enhanced geothermal. They made a venture investment into Potter Drilling, which is a new way of drilling holes for geothermal. They are quite forward-thinking, but I think they could do without the corporate jet.

isCleaner: Are there any other comments you would like to make?

Tom: I became an Action Canada Fellow, a leadership program in Canada that got me engaged in the world of policy. I worked on green bonds as a Fellow, which resulted in a proposal to the federal government and provincial governments to issue green bonds to provide low-cost debt to the renewable energy sector.

There’s about a 15-year gap before commercial debt will be made available at decent rates for renewable energy infrastructure. So, you’ve got a long time lag before something has been technically de-risked from an engineering perspective before the investment banker’s perspective. The market failure is: the market does not find the most efficient solution; it finds the most easily financed solution. It’s the bankers that decide what infrastructure gets installed; not the venture capitalists, not the inventors, nor even the government. We don’t have that time to wait. The idea is that the green bond plugs that market gap. That is an on-going process. I am still pursuing that policy like a bulldog.

isCleaner: Where is the best investment opportunity in clean energy today?

Tom: Morgan Solar. I think they’ll be highly disruptive in solar this year. They have the best chance of being a really big, global success. I think those companies that can solve highly efficient and ubiquitous storage would be an interesting breakout play.

isCleaner: What kind of “cleaner” are you?

What Lighting:  a) Candle b) Incandescent c) CFL d) LED e) other

What Heating: a) Natural Gas b) Solar Thermal c) Geo Exchange d) District Energy e) other

What Transport: a) Public b) Bike c) Electric Car d) Hybrid e) Gas/Diesel f) other

Waste Management: a) ZeroWaste b) Compost c) Recycling Ctr d) Municipal pickup e) other: Syngas

isCleaner: We appreciate your time, Tom, and look forward to the opening of your hotel and more on green bonds. Good luck and thank you for being a Clean Leader!