The Mountain West Can Lead the Way on Energy Innovation

Originally published at the Breakthrough Institute

The United States Mountain West has long been a hotbed of experimentation and innovation, due in no small part to a decades-long partnership between government, universities, and private enterprise. Throughout the 20th century, the federal government invested in dams, transportation infrastructure, and military installations that facilitated economic expansion and the emergence of new private industries.

And according to a new report released today by the Brookings Institution Metropolitan Policy Program, the Mountain West has a pivotal role to play in securing our nation's clean energy future.

In the report, "Centers of Invention: Leveraging the Mountain West Innovation Complex for Energy System Transformation," Brookings' Mark Muro and Sarah Rahman detail the unique role that the Mountain West region (Arizona, Colorado, Idaho, Nevada, New Mexico and Utah) can play in driving innovation to make clean energy cheap and ubiquitous. Building off of their 2009 proposal for energy discovery innovation institutes (E-DIIs), the new report also proposes the creation of four to six new "federally funded, commercialization-oriented, and broadly collaborative energy research and innovation centers," intended to align existing regional assets to accelerate technology commercialization.

This latest Brookings' publication adds to a clear and growing consensus among leading policy organizations that new research and commercialization paradigms are needed to overcome the disjointed and overly stove-piped nature of today's national energy innovation system. Last year, the Breakthrough Institute and Third Way proposed the creation of a National Institutes of Energy--an institution with similar goals.

There are numerous bottlenecks that slow or prevent the successful commercialization of advanced, next-generation technologies, according to the report. These challenges include the price gap between new clean energy technologies and incumbent, low-cost competitors; limited private sector capital; spillover risks from research that cause firms to focus on short-term, low-risk research and product development; and a general disconnect between publicly funded research and technology commercialization in the private marketplace.

Combine that with the federal government's anemic support for energy research and development (R&D)--about $3 billion annually and an order of magnitude less than what the government invests in health and defense-related research--and you have a recipe for a stagnant energy sector ill-equipped to meet the nation's climate and clean energy goals.

Fortunately, notes the report, the Mountain West region already offers many existing assets that can help advance the nation's clean energy priorities. These assets include world-leading federal energy research facilities, such as the National Renewable Energy Laboratory (NREL) in Colorado and the Los Alamos National Laboratory (LANL) in New Mexico; leading universities conducting path-breaking research on biomass and biofuels (University of Idaho), nuclear (UNLV), and solar (University of Arizona), among others; and abundant supplies of sustainable energy resources. For example, every Mountain West state ranks within the top ten nationally for solar power potential and all have high-temperature geothermal resources. Three states--Colorado, New Mexico, and Idaho--rank among the top 15 nationally in wind power potential.

To leverage these regional strengths, Brookings recommends creating a network of energy innovation centers, funded at levels similar to the national labs today, intended to facilitate partnerships among leading universities, labs, and industry to conduct translational R&D capable of both addressing national energy priorities and stimulating regional and national economic growth. The centers would leverage existing regional advantages by pursuing research and commercialization activities organized around themes that are largely determined by the private market. For example, southern Nevada and Arizona, already national leaders in solar energy innovation and production, could coordinate with universities and leading private solar developers to host a solar energy innovation center to conduct research on the entire solar energy supply chain.

The new report clearly indicates the innovation potential of the country's regional assets. Last June, Brookings released a similar report highlighting the strong energy innovation resources of the United States' Great Lakes region. Together, these findings show, unequivocally, that nascent clusters of clean energy innovation and production are forming throughout the country, and that with the right type of integrated public-private partnership, these clusters can transform America's energy system and its economy.

In the wake of the United States failed cap and trade experiment, it is time for Congress to get behind this bold new research effort and finally make progress on our climate and energy challenges.

Read more!

WEBINAR: Beyond the Meter: Next Generation Smartgrid

Live Webcast Sept. 8, 1 PM ET / 10 AM PT

Discussing the challenges and opportunities associated with a new energy grid and the data that comes with it.

The modernization of electrical grids presents an opportunity to improve the efficient use of energy through analytics of energy consumption data. Uses of this data can go well beyond efficiency and flexible pricing programs. Energy consumption data is a potential goldmine of knowledge about consumers. And this means that utilities, energy service providers, consumers, policy and regulatory representatives and vendors have interests in access, use, and storage of this data.

The question of who owns consumer data has been resoundingly answered, but many questions remain unresolved. Some of the most intriguing questions center on the types of companies that are most likely to find value in consumer energy data, and the types of products and services that can leverage this data. This webinar will tackle these questions and more, as we take a look at challenges and opportunities for consumers and businesses to create value from energy data.

Register today!

Featuring:

Christine Hertzog is a consultant and author focused on navigating the electricity ecosystem of emerging technologies and markets. She is the author of the Smart Grid Dictionary, which explains terminology used by utilities, regulators, manufacturers, and more. Christine has two decades of experience helping companies deliver competitive and cost-effective solutions, and frequently speaks and writes about the challenges and opportunities that Smart Grid solutions bring to the evolving electricity supply chain.

Paul Camuti is President of Siemens Corporate Research, where he is responsible for the Information & Automation Technologies Global Technology Field cluster and is an avid spokesperson for technologies that fall under this domain. Before joining SCR, Mr. Camuti headed the Chemical & Pharmaceutical Industry business for Siemens Energy & Automation, Inc. Paul is a member of the advisory board at the University of California-Berkeley’s College of Engineering, the advisory council of the Department of Energy’s National Renewable Energy Laboratory, and the Siemens Foundation board.

Wes Sylvester is Business Development Manager for Smart Grid at Cisco. Previously, he served as Director, Distribution Solutions and Smart Grid at Siemens Energy, Inc. Wes has been a representative on both GridWise™ and EPRI’s IntelligridSM, where he serves as chair of the Intelligrid Technology Transfer Committee. He is also member of IEEE PES.

Marc Gunther is a writer, speaker and consultant, who focuses on business and the environment. He worked for 12 years as a senior writer at FORTUNE magazine, where he is now a contributing editor. His most recent book, “Faith and Fortune: How Compassionate Capitalism is Transforming American Business,” was published by Crown in 2004.

Click here to register for the free theEnergyCollective.com webinar today.

Read more!

WattHead's Fifth Birthday!

Time sure flies! I nearly forgot to note the passage of WattHead.org's fifth birthday as a blog!

Inaugurated August 11, 2005, WattHead now enters its sixth year featuring energy news, original analysis, and opinionated commentary on the critical transition to a clean and prosperous energy future.

The blog has evolved from my personal site to a group format featuring writing from some of the web's smartest thinkers, including a cadre of the brightest young energy writers.

Special thanks is due to our readers, to the many contributors who have joined the WattHead team over the years, to the team at theEnergyCollective.com who have partnered with WattHead.org to syndicate and feature content from this site over at the wonderful Energy Collective community, and to our advertisers, who help generate some extra beer money to keep this blogger coming back for more, year after year.

Here's to five more years!

-Jesse Jenkins, founder and chief editor, www.WattHead.org

Read more!

White House Report: Stimulus Driving Clean Energy Innovation, Manufacturing, Markets – But What Comes Next?

With global competition mounting and Recovery Act momentum poised to fade, can the Obama Administration secure a lasting clean energy legacy?

By Jesse Jenkins and Devon Swezey

The American Recovery and Reinvestment Act has funded breakthrough innovation and new growth industries that are driving down the cost of clean energy and building the foundation for competitive 21st century U.S. industries, according to a new White House report released today on the impacts of the U.S. stimulus bill.

The report, “The Recovery Act: Transforming the American Economy Through Innovation,” is notable for highlighting the multifaceted and relatively comprehensive clean economy strategy now underway with stimulus investments, and for the Administration’s welcome focus on making clean energy cheap.

Yet while the White House report highlights the considerable clean energy momentum established by the Recovery Act, it also inadvertently raises the specter of an impending clean tech funding cliff which risks sending U.S. clean energy industries into deep freeze as stimulus funds begin to expire over the coming months.

To achieve the White House’s long-term objectives – driving down the costs of emerging clean energy technologies such as solar power and advanced batteries and building globally competitive American clean energy industries – will require a long-term, comprehensive clean economy strategy and sustained investments in innovation, advanced manufacturing, and competitive market deployment.

The White House report correctly frames the overriding goal of clean energy investment around making clean energy cheap in real, unsubsidized terms. For solar energy, according to the report, the near-term goal is for solar electricity to be competitive with retail electricity rates, with a long-term goal to compete with central fossil fuel power plants. As the Breakthrough Institute has consistently argued, taking clean energy alternatives to scale and building globally competitive clean energy industries will ultimately depend on such improvements in cost and performance.

Cost reductions and performance improvements in solar technology, advanced batteries, and electric-drive vehicles will be driven by a confluence of factors, according to the report, including direct public support for energy innovation, manufacturing and deployment, and by strengthening the linkages across all three areas.

The White House report notes that the Recovery Act is accelerating solar energy innovation by providing funding for greater solar energy deployment, manufacturing and scale-up, and catalyzing needed technological breakthroughs to create novel and more efficient technologies. All told, these measures may help reduce to cost of solar power by 50% in coming years, according to White House estimates, while building domestic manufacturing capacity and investing in next-generation solar breakthroughs that could form the basis of entire new U.S. industries.

Similarly, stimulus investments have helped transform the United States from a bit player in international advanced battery markets to a global competitor with an estimated 20 percent of worldwide manufacturing capacity online by 2012, all while potentially driving down the cost of electric vehicle batteries by up to 70%. The key to success, the White House says, has been “investments across the innovation chain – from retooling current auto factories to new manufacturing and commercial deployment to research and development of electric drives and batteries.”

This multifaceted focus on innovation, manufacturing, and markets, bears a striking resemblance to the comprehensive clean economy strategy the Breakthrough Institute has spent much of the past two years advocating through an ongoing series of reports, policy recommendations, Congressional testimony, and writings.

It is notable, however, how distinct such a strategy is from the dominant cap and trade debate that has consumed essentially the entire Congressional calendar since passage of the Recovery Act in February 2009. The nearly complete focus of the subsequent Congressional energy and climate debate on the primacy of carbon pricing may have ultimately prevented meaningful debate on how to optimize and extend the critical, comprehensive clean energy investments begun under to stimulus and enact a long-term investment strategy to strengthen clean energy competitiveness.

Indeed, while the stimulus was supposed to be a “down payment” on a new clean energy economy, the Congressional cap and trade bills—which would have invested little in clean energy technology—left the country likely to default on long-term clean energy promises.

Meanwhile, our economic competitors are not making the same mistakes we are, and are continuing to publicly invest in their domestic energy innovation systems in a bid to capture the increasing economic rewards inherent to the burgeoning clean energy industry.

China is set to unveil a massive $740 billion, 10-year package of direct investments to secure their economic leadership in emerging clean energy industries. China already dominates global market share for electric batters, wind turbines, and solar panels, and is rapidly boosting its capacity to innovate and produce next-generation clean energy technologies. Japan, South Korea, Germany, Spain, Denmark and a host of other international competitors are also fast at work building domestic clean energy industries with a multifaceted focus on innovation, manufacturing, and markets.

Facing such intense global competition, and with Recovery Act funds poised to expire soon, sending U.S. clean energy markets off a clean tech funding cliff, the U.S. is in dire need of a long-term clean energy investment strategy to regain economic and technological leadership in this new growth sector.

The substantial and successful impact of the public investments in the U.S. stimulus bill point to a way forward, but unless rapidly followed by a long-term, sustained investment strategy, the Obama Administration’s clean energy legacy may wind up tarnished by the continued erosion of U.S. clean energy competitiveness.


Jesse Jenkins is Director of Energy and Climate Policy and Devon Swezey is Project Director at the Breakthrough Institute. Both are co-authors of “Rising Tigers, Sleeping Giant” a comprehensive report on global clean tech competitiveness, and “Strengthening Clean Energy Competitiveness,” a set of Congressional policy recommendations.

Read more!

Can the Military Lead the Clean Energy Charge?

Aggressive new efforts are underway to end the U.S. military’s reliance on oil by catalyzing clean energy technology innovation and adoption. That is exactly the right approach to enhance the strategic and tactical capabilities of the armed forces, buttress national security, and help repower the economy, according to a recent report published by an elite group of more than a dozen retired generals and flag officers hailing from all branches of the U.S. military.

“Continued over-reliance on fossil fuels will increase the risks to America’s future economic prosperity and will thereby diminish the military’s ability to meet the security challenges of the rapidly changing global strategic environment,” according to “Powering America’s Economy: Energy Innovation at the Crossroads of National Security Challenges,” a July report published by the CNA Military Advisory Board.

---

To read the rest of this column, and an exclusive in-depth interview with Vice Admiral Lee F. Gunn (Retired), a decorated 35-year Navy veteran now working as the President of the CNA Institute of Public Policy Research head to theEnergyCollective.com here.

---

Read more!

Mixed signals from the White House on clean energy investment

By Alex Trembath, originally published at Energetics.

President Obama has been touring the nation, touting his administration's efforts to expand federal investment in clean tech manufacturing. At each stop, clean energy jobs are the major topic of discussion, with international economic competition and environmental goals somewhere on the edges of his stump speech.

At ZBB Energy in Wisconsin, a battery and renewables storage producer, Obama heralded the $1.3 million in federal stimulus dollars invested in the company while calling for 800,000 new clean energy jobs by 2012. On a fundraising trek for Governor Ted Strickland through Toldeo, Ohio, the President applauded local renewables manufacturing, saying, "There is a whole series of huge potential manufacturing industries in which we end up being world leaders and, as a bonus, end up creating a more energy-efficient economy that is also good for the environment." And, at a DCCC fundraiser in Hollywood, the President recounted the imperative of reducing carbon emissions "because we want those clean energy jobs built here in the United States, not in China, not in Germany."

In the meantime, however, critics are taking note of disturbing signals from the White House on clean energy investment. Jesse Jenkins of WattHead and the Breakthrough Institute pointed out yesterday that "a number of (as yet unfulfilled) energy and environmental policy pledges have been removed from the WhiteHouse.gov page in recent weeks." Among the dropped pledges is the President's commitment to invest $150 billion over ten years in clean tech R&D. This follows months of inaction from the President on a comprehensive climate and energy bill, the American Power Act. What remains of that bill is now floundering in Congress without the inclusion of any cap on carbon emissions, environmentalists' dream policy goal for creating a clean energy economy that was thoroughly demolished during the summer.

As Andrew Revkin points out, the recently missing $150 billion in clean tech R&D may be the result of the failure of cap-and-trade to pass the Senate, leaving the White House's assumed funding source for the investment dead in the water. But the source shouldn't matter as much as the policy goal itself; expert energy organizations from the IEA to the AEIC and dozens of Nobel Laureates have called for significant increases in energy technology R&D, on the order of $15-30 billion annually to keep pace with the required rate of decarbonization and to compete with other nations on similar paths.

We can only hope that such mixed signals on energy policy do not become standard operating procedure for the Obama White House. The President's recent (and encouraging) repeated calls for clean tech manufacturing investment may be signs of his attempt to make amends for relative idleness on the climate bill. And perhaps some leeway may be given in anticipation of the November midterm elections, which by many accounts will be some degree of devastating to the President's party. But, fingers-crossed, by the new year the President needs to have developed a powerful and sustained message for decarbonization and clean tech, and the time for broken promises and mixed signals will be over.

As part of a non-emotional response to the BP oil spill, and in anticipation of a $600 billion clean energy industry projected for 2020, Obama must direct the power of his office towards energy competitiveness the way he did with health care last year. Some Republicans have already indicated a willingness to work with Democrats on clean tech, and this effort could mark the first time in his presidency that Obama can successfully unite the parties towards a common policy. But, politics aside, the United States can't afford to sit on the bench any longer.

Read more!

Getting it Wrong on Carbon Caps and Clean Tech Investment

By Devon Swezey, originally published at the Breakthrough Institute

In a new article at the Washington Independent, Andrew Restuccia falls into the trap of equating the failed cap and trade bill with a proactive clean economy strategy that would drive considerable private investment in clean energy.

We warned about this last Friday, when we argued that cap and trade advocates would use recent news that Deutsche Bank is moving clean energy investment overseas as evidence that cap and trade would have kept investment in the United States.

According to Restuccia:

"It turns out that an economy-wide cap on carbon emissions really is necessary to spur investment in what President Obama likes to call the "clean energy economy." At least for Deutsche Bank."

Actually, according to Deutsche Bank's own reports, a carbon cap would have done little:

"While emissions targets express an intention and carbon markets might deliver a price signal in the long-term, governments must strengthen underlying mandates and incentives immediately if capital is to be deployed to cover the gap, creating more investment and jobs."

Those underlying incentives are public investments, in the form of feed-in tariffs and procurement policies in countries like Germany and China that have "demonstrated their ability to deliver renewable energy at scale" and earned those countries a "low-risk" investment rating, according to the Bank.

Indeed, in his comments to Reuters, Deutsche Bank Head of Global Asset Management, Kevin Parker, is careful not to mention cap and trade directly. And if he is referring to cap and trade, then he's being disingenuous, as his own reports criticize the "volatile market incentive approach" of the United States.

China planning public investment, not cap and trade

Restuccia also writes that China, which has attracted the bulk of private investment in clean energy, will "begin capping carbon emissions" in the near future. Yet China is not considering absolute emissions reductions targets or an economy-wide cap and trade system, but is considering localized trading systems, similar to the voluntary exchanges we have in the United States. A recent Reuters article on the subject states that China "won't be rushing to launch a national emissions trading scheme or to commit to absolute emissions reduction targets."

The real story that Restuccia and many others miss is the country's planned $740 billion, 10-year investment package expected to be announced soon. Indeed, the reason China has become a hub of clean tech investment is that it's government is very actively promoting the sector through major public investments in R&D, manufacturing, and deployment incentives like procurement and feed-in tariffs.

It's time for clean energy advocates to recognize no congressional cap and trade bill will drive substantial private investment without a targeted, proactive clean economy strategy that prioritizes major public investment in clean energy technology.

Read more!

Does New Republican Bill Signal Bipartisan Support for Clean Energy Investment?

By Jesse Jenkins, originally at the Breakthrough Institute

New legislation introduced by Republican Representative Devin Nunes (CA) and backed by several GOP House members would invest billions into renewable energy deployment, signaling an opportunity for bipartisan support for clean energy technology policies.

Over at CNBC, reporter Trevor Curwin has been one of the first to note the significance of the Republican bill, which Nunes' says could "potentially provide hundreds of billions in financing" for renewable energy over the next several decades.

Rep. Devin Nunes' (R-Calif.) who introduced the bill, in late July, wants to use a reverse auction process to allocate future federal oil royalties to the best renewable energy projects and technologies, with the lowest-price-per-megawatt, (MW), bid winning funding.

"It's clear and transparent; the people with the best technology will get the help," Nunes says of the bill, dubbed "A Roadmap for America's Energy Future,"

Depending on how much territory is eventually opened up to drilling, research firms estimate the royalties could be worth $10 billion to $50 billion a year.

As Curwin notes, Nunes' plan would rely solely on new revenues from oil and gas leasing to fund the renewable energy investments, including the always contentious proposals to open up areas of the Arctic National Wildlife Refuge as well as the development of oil shale resources and expanded offshore drilling. While more offshore drilling enjoyed bipartisan support just months ago, in the wake of the BP Deepwater Horizon disaster in the Gulf, the prospects for new offshore oil and gas production are uncertain.

But there are other ways to fund the renewable energy investments Rep. Nunes' and his GOP colleagues envision. Curwin quotes my recent suggestion, along with Breakthrough's Yael Borofsky, that a small fee on each barrel of oil sold could do the trick.

A $5 per barrel fee on all oil consumed in the United States, for example, would raise roughly $40 billion annually for critical national investments in clean energy technologies and industries, and would increase gasoline prices by just 12-15 cents per gallon. That's in the regular 'noise' of gas price fluctuations, which have risen or fallen by 15 cents or more on 14 different occasions in the last two years, according to data from the U.S. Energy Information Administration.

Other alternatives include a very modest fee on carbon pollution ($5 per ton would raise roughly $30 billion annually and increase gas prices by less than a nickel per gallon) a wires fee on electricity sales ($10 billion could be raised annually without costing the average household more than $5 per month on their utility bills), the sunsetting of well-worn subsidies for mature energy sources (including oil, coal, corn ethanol and probably even wind power), or some combination of the above.

At the end of the day, the choice of revenue raiser is important, but not the central issue. With representatives on both sides of the aisle now recognizing the importance of national investments in clean, American energy sources, new opportunities for bipartisan progress on clean energy may be possible where efforts to pass contentious cap and trade legislation have repeatedly failed.

As I told CNBC, Nunes' proposal is a positive step forward, a sign that smart investments to boost U.S. clean energy production, spur innovation to reduce the price of emerging clean energy technologies, and strengthen America's clean energy industries and entrepreneurs are all points that can enjoy bipartisan consensus.

On it's own, a program for strategic, competitive deployment incentives to spur clean energy adoption, similar to that proposed by Rep Nunes and his colleagues, could be a key component of a 21st century clean energy strategy.

A comprehensive strategy to make clean energy cheap and abundant and ensure American leadership in clean energy markets would also include key public investments in clean energy research, energy science and engineering education, advanced manufacturing, and enabling infrastructure, each areas that both Republicans and Democrats can support.

Regardless of what you believe about the urgency or importance climate change, we can agree that making more clean, American energy, making it more affordable, and making it right here in the USA are all in the national interest.

See also:

$40 billion for clean tech at 12 cents per gallon? Yeah, why not?

Time to Bury Cap and Trade and Plan Anew

After "Drill, Baby, Drill," Obama Should Embrace Another GOP Energy Plan

Read more!