The Crazy Idea
I first met Bernard in May of 2015. He cold called me based on a reference from one of my fellow Directors at the Clean Energy Association of BC. I can still remember meeting him at Sciué Coffee Shop on West Pender St. for what I thought would be a quick coffee, where I would share some of my 25 years of renewable energy experience with a guy looking to learn about the business. His first words were “I have this crazy idea”, five minutes later I was hooked.
I have spent my entire career in business following one simple tenant – do the right thing. This overarching belief has continuously led me back to the renewable energy industry. Harvesting the sun, the wind and the rain to generate electricity, instead of burning non-renewable fossil fuels, just makes sense on so many different levels.
From a long term societal perspective, reducing our impact on the planet just has to be the right thing to do.
Two of the biggest challenges our natural world is facing today are climate change and plastic.
I don’t have the skill set to do much about plastic other than reducing my own personal consumption, but I do feel strongly that I can make a big impact on climate change by helping reduce carbon emissions. Even the climate naysayers have to admit that harnessing the sun and the wind has to be better than burning fossil fuels.Outside of work, when I am not coaching either youth soccer or field hockey, I like to spend my time harnessing either pedal power, gravitational forces, or wind power to move at speed. The picture below is a great illustration of me harnessing the wind that is caused by land absorbing solar radiation more quickly than water, aka a “sea breeze”.
Why is RE Royalties Doing the Right Thing?
Our idea is very simple: we provide capital to renewable energy project owner/operators in exchange for a long-term percentage of their revenues. This allows them to either develop, build, or acquire more projects. So the equation is simple, the more money we provide, the more renewable energy the world gets.
The reason that we are needed as a product is that despite everything I learned about The Theory of Perfect Capital Markets from Professor Heinkel at the Sauder School of Business, the reality is that capital markets are inefficient. This is especially the case for the small to mid-cap companies who are too small to get any love from Bay Street or Wall Street. The inefficiency is that these smaller players are still profitable business ventures with great ideas and with great projects, but they don’t generate enough fees to make them interesting to the big banks. That is where we come in.
The other reality that is pretty interesting is the size of the global renewables market and the pace that the cost to generate electricity using renewable resources has decreased over the past ten years. First, the size of the market – according to Bloomberg New Energy Finance, almost USD $280 billion dollars were invested globally in renewables in 2017 – that is a big market! Second, the cost – ten years ago, windfarms and solar parks were almost like science experiments, heavily subsidized and relatively expensive. Now wind and solar technology is a commodity with prices declining exponentially. Again, according to Bloomberg, solar energy generation costs have dropped 72% since 2009 and 15% since 2016. Offshore wind costs have decreased 44% since 2012 and over 80% since 1980. Alberta and Mexico both closed recent open bids to purchase electricity and both competitions were won by renewables with prices less than $0.04 per kWh, far below the cost to generate electricity by burning either coal or natural gas.
What Can You Do to Help?
We have been in business for slightly over two years. Although we have closed 11 different royalty financings, we have barely scratched the surface of the interest in our product. To help us fuel our growth, we are in the process of going public. Take a look at us on Frontfundr or our website and let us know what you think! We can help put your money to work driving more global renewable energy while generating attractive returns for your investment portfolio.
At the end of the day our story is simple:· There is a massive global market for renewable energy generation· The cost of generating electricity using renewables is dropping precipitously· The cost of buying electricity from the local utility for all manners of customer is increasing faster than the rate of inflation in most jurisdictions· RE Royalties offers a financing product that is very attractive to small to mid-sized project owner/operators that can’t get any love from traditional financing sources· Every dollar we invest helps take more carbon out of the atmosphere.
- Peter Leighton, COO and Co-founder of RE Royalties