Interview: Sue Coates, Trident Public Risk Solutions
Interview: Sue Coates, Trident Public Risk Solutions
We are inspired by people who are passionate about insurance, project finance, and technology that solves pressing global challenges. In this interview series, our chief actuary, Sherry Huang, talks with friends of New Energy Risk whose work makes a difference, and whose journeys will inspire you, too.
Sue Coates serves as the President of Trident Public Risk Solutions, member of Paragon Insurance Holdings. During Paragon’s recent ‘Sleep-Out’ event to raise money for homeless shelters for teens, Sue led and joined a large team and supported the cause by example. Ever since New Energy Risk joined the Paragon group, I heard great things about Sue and her leadership. I had the privilege of speaking to her recently to find out about how she got to where she is today, what she thinks of effective leadership, and what she is looking forward to in 2024.
This interview has been lightly edited for length and clarity.
Please tell us a little about how you got to where you are today.
I started my career with a humble beginning as a representative at an independent insurance agency in personal lines. I quickly found I had a knack for understanding insurance contracts and was good at providing customer service. After a few years, a former colleague of mine recruited me to an MGA with a specialization in public entity insurance solutions, which is how I started in this space. This MGA was later acquired by Trident Public Risk Solutions. Over the last 16 years, I worked my way up from an underwriter to a manager, to an underwriting director, and eventually the President. Trident was acquired by Paragon in 2020 and we are now part of the Paragon MGA platform.
What are some unique aspects of providing insurance solutions for public entities?
Public entity is a great class of business that requires highly specialized knowledge to serve. Trident offers a wide range of insurance solutions to municipalities, public water/wastewater treatment utilities, counties, and public schools. As funding for insurance premiums is supported by taxpayers, our accountability standard is steep. We strive to help agents and policyholders manage through an evolving insurance landscape and make sure they have access to appropriate insurance solutions. Many of us at Trident have developed a personal connection and a deep appreciation for public servants. We are committed to the long-term stability of the program.
What is your leadership style?
I am a people-first leader, or you can say a servant leader. My goal is to become a resource at every level for all stakeholders in our business. As a leader, my job is to clear barriers and allow people to expand their intellectual curiosity and fulfill their career aspirations. In my own career, the first transitions to management and leadership were both hard – I had to let go of being the first point of contact and make sure to leave space for people to grow and develop. My clock/horizon is different from my team – I need to look ahead in the future and be attentive to the ‘WHY’ and ‘HOW’ in everything we do. I make sure my leadership team has complementary skills, so we can benefit from different ways of looking at the business.
Would you tell us about your sleep-out experience with Covenant House supported by Paragon?
I am thankful that Paragon sponsored this event for Covenant House, which is an organization that provides support and shelter for youth homelessness. I am grateful that I was able to share this sleep-out with my colleagues and it is definitely a unique and powerful team-building experience. Some of the personal sharing from people who benefited from Covenant House’s support was very moving, and reminded us all to stay humble of what we have and pay it forward.
What are your goals for the company in 2024?
Create more value for our customers, grow the team to continue to enhance our capabilities and provide high quality solutions.
New Energy Risk and Ascend Analytics Support Leading Renewable Energy Infrastructure Fund
New Energy Risk and Ascend Analytics Support Leading Renewable Energy Infrastructure Fund on Merchant Battery Projects in ERCOT with Custom Revenue Insurance Solution
AVON, Conn.--(BUSINESS WIRE)--New Energy Risk (“NER”) and Ascend Analytics, LLC (“Ascend”) have announced the closing of an industry-first energy storage insurance policy providing coverage for the performance of Ascend’s battery storage forecasting and bidding optimization platform. The policy will enable the financing of a portfolio of grid-scale energy storage facilities in Texas’s ERCOT power market. NER is a leading insurance agency specializing in insurance solutions for technology in the energy transition that act as an effective bridge between technology innovators, their customers and lenders, and the insurance markets. Ascend is a leader in energy market valuation and dispatch optimization, whose independent economic assessments have supported over 100 project financings and whose SmartBidder™ platform conducts live dispatch operations across six ISO’s in the United States.
The policy ensures the performance of Ascend’s forecasting and SmartBidder™ technology stack to provide a revenue floor to the project over a multi-year term. Unlike alternative revenue risk transfer solutions, the offering both secures minimum revenues and permits the projects access to upside revenue from lucrative, high-volatility events that are regularly experienced in ERCOT.
Bringing to the market new energy storage capacity is a necessary element of the energy transition, adding flexibility and resilience to the grid to permit the interconnection of more renewable capacity.
“Ascend's storage valuation has supported a majority of batteries operating in competitive power markets. In addition to SmartBidder's proven bid optimization capability, Ascend leads the market in their ability to provide the analytics required to assess and actively manage energy storage market risk,” stated Tom Dickson, CEO at NER. “NER has been able to apply its modeling expertise of highly technical risks to Ascend’s robust framework to implement a precise transfer of risk.” continued Dickson.
“This offering with NER helps developers confidently deploy capital to support merchant storage operations by providing a revenue floor while preserving the upside potential of ERCOT’s more extreme events. The innovative downside risk coverage enabled the storage developer to earn minimum returns, facilitating asset financing and furthering the transition to reliable clean energy in Texas,” stated Gary Dorris, CEO of Ascend Analytics.
About New Energy Risk
New Energy Risk is a provider of innovative technical risk transfer solutions to sustainable industry worldwide and pioneered the development of large-scale technology performance insurance. It was founded in 2010 to provide complex risk assessment and serve as an effective bridge between clean-energy innovators and insurers enabling the commercialization of novel technologies and business cases. Since then, New Energy Risk has helped its customers gain over $3 billion in financing and sales for renewable energy and new technology deployments. To learn more, please visit www.newenergyrisk.com.
About Ascend Analytics
Ascend Analytics, an innovative leader at the forefront of the energy transition, offers advanced software and consulting services that capture the evolving and real-time dynamics of energy markets. The company provides its customers with optimized and comprehensive decision analysis that covers everything from long-term planning to real-time operations in the electric power supply industry. For more information on Ascend, please visit www.ascendanalytics.com.
Contacts
Media
Gregory FCA for New Energy Risk
Kara Lester
[email protected]
Ascend
Leela Gill
[email protected]
The US Treasury Releases Guidance on SAF Emissions Rates, but How Many Questions Does it Answer?
By Krista Sutton – Principal Process Engineer
Last week, the Treasury released their long-anticipated guidance [1] on emissions rate calculations for the 40B sustainable aviation fuel (SAF) tax credit established by the Inflation Reduction Act (IRA), which is likely to serve as a model for the 45Z clean fuel tax credits with regards to SAF (although such guidance has not been issued, or equivalency explicitly indicated). Let’s dive in…
What is at stake?
Under Section 40B, the IRA established a tax credit value of $1.25 per gallon of SAF, meaning aviation fuel with an emissions rate at least 50% lower than fossil jet fuel. The act includes an adder of 1¢ per additional percentage-point reduction beyond 50%, up to a maximum of $1.75 per gallon. Section 40B makes tax credits available through the end of 2024.
Under Section 45Z, also newly created by the IRA and which makes tax credit available from 2025 through 2027, credit value is calculated as an emissions factor multiplied by an applicable amount, which for SAF is $1.75 per gallon. The emissions factor is calculated as follows, meaning that tax credit value accrues from a baseline emissions rate of 50 kgCO2e per MMBTU.
The SAF emissions are calculated through a lifecycle analysis (LCA) methodology – a topic of much debate. At the heart of the issue is whether corn-based ethanol-to-jet production and soybean oil-to-jet production will qualify for the tax credit. The guidance around LCA methodology will ultimately determine how competitive 13.8 billion gallons a year of US ethanol production [2] would be with respect to other feedstocks for the production of SAF.
Why is there an argument?
A debate has been raging since the passage of the IRA over which lifecycle analysis modeling methodologies should be accepted to estimate SAF emissions. Sections 40B and 45Z specifically call out the International Civil Aviation Organization (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) methodology:
“the most recent Carbon Offsetting and Reduction Scheme for International Aviation which has been adopted by the International Civil Aviation Organization with the agreement of the United States, or…”
but leaves room for debate in the following paragraph:
“any similar methodology which satisfies the criteria under section 211(o)(1)(H) of the Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as in effect on the date of enactment of this section.”
On one side of the debate, the biofuels industry and airlines have argued for the inclusion of the ANL-GREET (Argonne National Labs (ANL) Greenhouse Gas, Regulated Emissions, and Energy Use in Transportation) model which is used as the basis for lifecycle analysis for all the other low carbon fuels eligible for the 45Z tax credits. These stakeholders cite its more frequent update cycle and more recent datasets containing the most up-to-date advances in the industry. [3]
On the other side, environmental groups have argued that the GREET model is not as stringent in accounting for emissions resulting from indirect land use change (ILUC) as the ICAO CORSIA methodology, and that the use of the ANL-GREET model would grossly undercount emissions from a land use transition to grow crops for SAF production. [4]
What is the difference between the models?
Estimates for direct emissions from these models are actually quite similar, as a version of GREET was used to derive the default LCA factors by the ICAO. However, there are key differences related to the modeling of input assumptions for indirect emissions between the ANL-GREET and ICAO CORSIA methods; specifically:
- How the two models develop the ILUC factors;
- The allowed land-use basis;
- The data referenced for each type of land use conversion; and,
- Whether they give credit for sustainable farming practices via soil organic carbon (SOC) modeling.
These assumptions can make a large difference in the final emissions numbers according to the International Council of Clean Transportation:
“ILUC modeling cited in some configurations of the default GREET model estimates land-use emissions for corn ethanol and soy that are only 25% – 33% of the total emissions estimated through public regulatory assessments by the U.S. Environmental Protection Agency and the California Air Resources Board” [5]
So, what did the guidance say?
A likely less contentious part of the guidance establishes a safe harbor for fuels that qualify for D4, D5, D3, or D7 Renewable Identification Numbers (RINs) under the incumbent renewable fuels standard (RFS) administered by the EPA. Fuels meeting D4 or D5 certification will be automatically considered to have a 50% emissions reduction and fuels meeting D3 or D7 certification will be considered to have a 60% emission reduction for the purposes of 40B credits.
On the modeling side, the guidance, at least on the surface, has handed a win to the airlines and biofuels industries, and particularly ethanol producers that are transitioning to SAF production, by authorizing a GREET-based model as an acceptable alternative for determining the life cycle GHG emissions of SAF. In reality, they have kicked the can down the road as the guidance references a new GREET model being developed to meet the criteria of 40B that is planned to be released on March 1st, 2024. The updated model could incorporate more stringent indirect land-use change factors. This would effectively authorize the use of the GREET model (what the industry wants) and implement stricter ILUC factors (what environmental groups want). For now, it leaves the door open for a wider pool of crop-based SAF to qualify for 40B credits so we can be sure that the debate will continue, and we will see which way the pendulum swings on March 1st, 2024.
Sources:
[1] https://home.treasury.gov/news/press-releases/jy1998
[4] https://theicct.org/wp-content/uploads/2023/09/ID-16-Briefing-letter-v3.pdf
[5] https://theicct.org/long-shadow-model-inputs-could-dilute-ambition-of-saf-grand-challenge-nov23/