Climate Challenge Hinges on Fueling China with Clean and Cheap Energy

This column originally published at the Breakthrough Institute blog

I've said it before and I'll say it again: when it comes to the global climate challenge, as goes China, so goes the world.

Driving that aphorism home, co2scorecard.org, a not-for-profit project that closely tracks global greenhouse gas emissions, now reports that China's CO2 emissions increased by 906 million tons in 2009 -- the second largest annual increase for any country in recorded history. China's soaring emissions were enough to completely offset the drop in emissions wrought by the economic havoc plaguing much of the Western world (see graphic below).

China's unprecedented surge in CO2

As Goes China, So Goes the World: Soaring CO2 emissions from energy use in China drive global greenhouse gas trends (click image to enlarge; source: co2scorecard.org)

Over the last decade, China's annual emissions of climate destabilizing CO2 jumped by 5 billion tons per year. According to Shakeb Afsah, President and CEO of co2scorecard.org, that's "the highest [increase in annual CO2 output] for a single country in recorded history, representing an average annual emissions increase of almost 12%--more than four times the rate observed [for China] the previous decade."

To put this unprecedented 5 billion ton increase in annual CO2 emissions in context, Mr Afsah and colleague Kendyl Salcito note that during the 14-year long post-war boom period of 1959-1973, during which U.S. CO2 emissions rose each year, America's annual output of CO2 jumped by only 2 billion tons.

This new analysis comes on the heels of the latest International Energy Agency's World Energy Outlook, which projects China's soaring demand will single-handedly account for 36% of all global energy demand growth over the next 25 years. According to the global energy watchdog group, China's energy use will rise 75% between 2008 and 2035, raising the nation's share of global energy use to 22 percent, up from 17 percent today.

Sliding backwards?

Despite a much-publicized national climate policy centrally focused on driving down the CO2 intensity of the Chinese economy through greater industrial and power plant efficiency, the amount of carbon emitted per unit of economic output in China slid backwards during four of the last ten years. In 2009, after four years of steady progress, the carbon intensity of China's economy took a big step backwards, regressing to 1999 levels, according to co2scorecard.org (see graphic below)

Backsliding: The carbon intensity of China's economy took a big step backwards in 2009, erasing a decade's worth of periodic gains to revert to 1999 levels. (Click to enlarge; Source: co2scorecard.org)

That factoid means there's more going on here than just simple economic growth driving emissions growth. China's macroeconomic policies are actually driving the carbon intensity of the nation's economy backwards, working at cross-purposes with the central government's avowed climate strategy.

The analysts at co2scorecard.org point the finger at China's promotion of an export-oriented manufacturing economy, including the nation's increasingly controversial currency policies.

Since joining the World Trade Organization in 2001, China has built up a manufacturing juggernaut that has taken over global supply chains for some of the world's most energy intensive industrial processes, including cement, steel, glass and chemicals production, turning predominately to carbon-intensive coal to fuel this economic engine. That was a recipe for both soaring economic output and carbon emissions alike.

The recent impact of the global recession has only exacerbated China's outsized role in global emissions. According to co2scorecard.com:

Through the global recession, China's depressed exchange rate protected its energy intensive industries, serving as a subsidy for export-oriented manufacturing industries (Wolf 2009). Other countries that would have grown their industrial sectors couldn't compete against China's deflated prices. So China has ended up with a lion's share of industrial production within its economic pie, subjecting itself to a sub-optimally large share of CO2 emissions and other industrial pollution.

China's carbon commitments: ambitious or lackadaisical?

To meet a targeted 40-45% reduction in carbon intensity by 2020, announced in November 2009 as China's pledge at global climate negotiations in Copenhagen that year, China's central government has recently forced the closure of inefficient factories and power plants, enforced planned blackouts, and launched other seemingly heavy handed steps to reduce the energy intensity of the national economy.

Despite these high-profile measures, analysts including Breakthrough Senior Fellow Roger Pielke Jr., have repeatedly warned that China's seemingly ambitious climate target really just amounts to continuing on a course of business-as-usual -- which would mean another decade of unprecedented emissions growth.

Messieurs Afsah and Salcito note that this latest evidence adds credence to such concerns. "Though impressive on paper," China's carbon intensity pledge "represents the status quo," the duo writes.

Between 2005 and 2008 China's average annual CO2 intensity reduction rate was 4.35%, according to co2scorecard.org's analysis. Simply continuing that BAU rate would see China's emissions shrink 45% in around 13 years - by 2018, or two years ahead of their pledged goal.

"Maintaining the 4.35% reduction rate would not require any additional effort on China's part," Afsah and Salcito write. But hitting their goal in 2020 instead of 2018 would mean China could even slack off a bit, requiring just a 3.9% annual reduction.

"China is not just setting itself up for a business-as-usual carbon intensity reduction plan; it has committed to a lazier plan, allowing its emissions to continue increasing for an extended period of time," write Afsah and Salcito (see graphic above).

A recipe for rebound?

Worse yet, China's primary focus on improving industrial energy efficiency as the key to meeting carbon intensity goals is almost perfectly designed to trigger rebounds in energy demand that erode or even negate climate gains from such measures.

As noted in Breakthrough Institute's February report, "Energy Emergence: Rebound and Backfire as Emergent Phenomena," energy efficiency measures lower the effective price of the services derived from fuel consumption -- heating, cooling, transportation, industrial processes, etc. -- thus triggering a rebound in demand for those services (see a FAQ on rebound effects here).

These "rebound effects" are likely to be particularly pronounced in both industrial sectors and in developing nations, like China, where demand for goods and services, including energy services, is far more elastic (responsive to changes in price), and where industrial productivity improvements are key drivers of economic growth. For every step forward taken through efficiency, rebounds in energy demand take China -- and the world -- one or more steps backwards away from climate mitigation goals.

Thus, increased efficiency, particularly in China's industrial sectors, will drive greater economic growth and energy use. The net effect: total CO2 emissions are likely to keep soaring, even as China meets its lackadaisical carbon intensity goals.

Breaking China's carbon dependence

Is there any way then to really break the link between China's soaring economic output and soaring emissions?

Pursuing China's current path of unambitious carbon intensity goals -- principally met with industrial efficiency efforts likely to trigger serious rebounds in energy demand -- looks like a recipe for continued disaster.

And while co2scorecard.org's Afsah and Salcito note that a halt to China's currency depreciation efforts and other economic policies designed to spur an exports and industrial manufacturing-fueled growth strategy would cool both emissions and economic growth rates, this analyst considers it unlikely that China will assent to policies that drive down carbon by simply slowing economic growth.

That leaves only one other real option then: de-link economic growth from carbon emissions by fueling China -- and the world -- with clean, affordable, and massively scalable energy technologies.

Unfortunately, the menu of technologies that meet all three of those criteria -- clean (e.g. zero or very low-carbon), cheap (e.g. relatively affordable compared to conventional fossil fuels), and massively scalable -- is still quite limited. Cleaner energy alternatives must continue to improve in price, performance, or both, to meet a 'China-sized' appetite for energy.

China, America, Europe and the rest of the world must rapidly accelerate the pace of improvement in a whole suite of clean energy technologies, from nuclear and solar alike to plug-in hybrid vehicles, energy storage, and advanced biofuels. And a whole set of next-generation energy technologies must cross the Valley of Death from laboratory to commercialization in the coming decades

On this point, a cadre of energy experts including analysts at the IEA, U.S. Energy Secretary Steven Chu, dozens of Nobel Laureates, high-profile American business leaders, and leading think tanks, are all united: we must make clean energy cheap, and fast.

China is already on a roaring path towards single-handedly swamping any hopes of climate stability, and success is far from assured.

The only thing that is certain is that the clock is ticking, and there's no time to waste in developing clean, cheap, scalable energy technologies to fuel both China and the world. The entire climate challenge hinges on our ability to do just that.

As the writer and environmental activist Bill McKibben is fond of saying, "You can't negotiate with the planet."

Bill's right of course. But as TIME magazine environmental correspondent Bryan Walsh observes, "it turns out you can't negotiate with the human desire for growth and development either--not in any political system on this planet. We need policies that provide us with the energy for both--or we may end up with neither."

Jesse Jenkins is the Director of Energy and Climate Policy at the Breakthrough Institute

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Energy Innovation 2010: Rethinking Energy Innovation

Leading think tanks sponsor day-long conference rethinking energy innovation in the United States: getting to scale, making clean energy cheap, securing American leadership.


After two years of often-tumultuous debate in Congress, the national debate over energy and climate change policy has now been altered: cap and trade policy efforts have run aground in Congress, perhaps fatally, and Republicans are ascendant, reshaping the national political landscape. Meanwhile, with economic recovery the top priority for the public and policymakers alike, America’s clean tech competitors are surging ahead, raising the stakes for energy policy.

Against this backdrop, support is growing on both right and left for new national investments in energy innovation that can help address some of the most urgent imperatives of our time – renewing the economy, improving energy security and public health, and overcoming key environmental challenges.

A growing chorus of voices thus counsels a renewed national commitment to develop breakthrough energy technologies – and to the reform of America’s energy innovation system itself.

In recent months, energy experts have advised policymakers to: take a page from the nation’s long history of successful military research and procurement; build on the success of agricultural research stations and the National Institutes of Health by establishing new innovation institutes and clusters nationwide; promote the right mix of both competition and collaboration to spur innovation and productive knowledge spillover; reform energy subsidies to reward innovation; and restructure business taxes to promote investment in the building blocks of an innovation economy.

On December 15th, a group of America’s leading policy think tanks will host a day-long conference in Washington D.C. to rethink energy innovation.

Energy Innovation 2010, held at the National Press Club, will bring together leading experts from government, think tanks, academia, and business to ask hard questions about how energy innovation efforts can be brought to scale, how the innovation system must be restructured and reformed, and how to renew the kind of active partnerships between the public and private sectors that were responsible for so much of America’s prior technological innovation and economic strength.

The free, day-long conference is sponsored by the Information Technology and Innovation Foundation and the Breakthrough Institute, with the American Enterprise Institute, Third Way, Clean Air Task Force, Consortium for Science, Policy and Outcomes, Securing America’s Future Energy, and the Brookings Institution. The conference organizers are pleased to welcome TheEnergyCollective.com and Yale Environment 360 as media sponsors for the event.

Registration for Energy Innovation 2010 is free, but required in advance as space is limited, so register now.

Head here to find more information, see the full conference agenda and register today.

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Phasing out Fossil Fuel Subsidies Will Help, But Only Innovation Can Make Clean Energy Cheap

By Jesse Jenkins, originally at the Breakthrough Institute

Over at theEnergyCollective.com, Tyler Hamilton dives into the International Energy Agency's newly released forecast of global energy trends (exec sum here [pdf]) focusing on the disparity in global subsidies for renewables and fossil fuels:

The International Energy Agency put out its annual World Energy Outlook today and urges strong and sustained government support for the deployment of renewable energy. The agency pegs 2009 subsidies for renewables at $57 billion and calls for that to increase to $205 billion by 2035. "The share of modern renewable energy sources, including sustainable hydro, wind, solar, geothermal, modern biomass and marine energy, in global primary energy use triples between 2008 and 2035 and their combined share of total primary energy demand increases from 7 per cent to 14 per cent," according to the agency. Fossil fuel subsidies stood at $312 billion in 2009 and the agency urged that they be eliminated to accelerate the transition to renewables.

I applaud the IEA's call for major public investments in clean energy RD&D and deployment and certainly support the agency's calls to phase out fossil fuel subsidies -- excepting where doing so would expand the already deplorable share of the global population (about 2.4 billion) locked in energy poverty.

But while Hamilton and others focus on the disparity between total subsidies for fossil energy and renewables, the IEA figures are actually a stark reminder of the major price gap that persists between mature fossil energy sources and newer, costlier clean energy alternatives.

If renewables account for a 7% share of global energy energy demand, and receive $57 billion in subsidies, that's $8.14 billion for each percentage share of global demand.

In contrast, fossil fuels supply about 83% of the global energy mix (nuclear accounts for the remaining 6%, according to the IEA) and receive $312 billion in subsidies according to the IEA, for $3.76 billion per percentage share of global energy supplied.

In other words renewables receive more than double the subsidy rate per unit of energy supplied as fossil fuels.

When you consider that hydropower and biomass, which rarely require or receive subsidy, account for the vast share of global renewable energy production, the relative subsidy rate for wind, solar and other renewables per unit of energy produced is much higher.

Most renewable energy technologies are still relatively immature, emerging energy sources, facing off against entrenched, mature fossil competitors whose core technologies are many decades if not centuries old (burning coal in a boiler to make steam? That's so 19th century!). We should fully expect any emerging energy alternative to require market support policies to find a foothold in the energy market and have time to scale up and come down in price.

Yet, with the IEA forecasting that virtually all (93%) of energy demand growth over the next 25 years will come from developing nations that can ill afford massive energy subsidies, the reminders are everywhere: clean energy cannot scale to meet global energy needs if it requires ongoing, high subsidy rates.

This is why I always come back to the urgent need to make clean energy cheap, in real, unsubsidized terms.

While ending fossil energy subsidies will help level the playing field for cleaner alternatives and initial market support is needed for emerging energy alternatives, only real innovation to drive down price and improve performance for a full suite of clean energy technologies can ensure that a meaningful share of global energy demand can be supplied by low-carbon alternatives to fossil fuels.

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China Energy Use to Soar, Driving Demand for Coal, Oil & Clean Energy Alike

China's demand for energy will soar 75% by 2035, according to the latest world energy forecast from the International Energy Agency (IEA), released Tuesday. The growing economic aspirations of 1.3 billion Chinese, who today use just one-third the amount of energy consumed by an average European or North American, will put pressure on global energy markets, driving demand for both clean and dirty energy alike.

Oil prices will rise to $113 per barrel (in constant 2009 dollars) by 2035, as oil producers struggle to keep pace with soaring global demand, according the IEA, the world's global energy watchdog, based in Paris.

Oil markets will remain tight through much of this period, the agency expects, writing that "short‐term price volatility is likely to remain high."

Much of the pressure on global energy markets will come from China, which will account for more than one-third of all global energy demand growth over the next 25 years, according to the IEA.

“Chinese energy demand will grow by such huge terms it will put pressure on the global energy markets in terms of oil, coal and, to a lesser extent, natural gas,” said Faith Birol, the IEA's chief economist, speaking to the New York Times.

Read the full post exclusively at theEnergyCollective.com

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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.

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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.

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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

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India: A Path to 20,000 MW by 2022

By Madeline Tyson, Breakthrough Fellow. Originally posted at the Breakthrough Institute

India recently released the first guidelines for the rapidly-developing nation's ambitious National Solar Mission that outline how the program plans to successfully deploy 20,000 MW of grid-tied solar power within the next 12 years. That goal, which would see the equivalent of 13% of the India's entire current electricity generation come from solar panels by 2022, presents a formidable challenge, one that India seeks to address with proactive public policy.

From the guidelines:

"The objective of the Jawaharlal Nehru National Solar Mission (JNNSM) under the brand 'Solar India' is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible. The Mission has set a target of 20,000MW and stipulates implementation and achievement of the target in 3 phases (first phase upto 2012-13, second phase from 2013 to 2017 and the third phase from 2017 to 2022) for various components, including grid connected solar power.

The successful implementation of the JNNSM requires the identification of resources to overcome the financial, investment, technology, institutional and other related barriers which confront solar power development in India. The penetration of solar power, therefore, requires substantial support. The policy framework of the Mission will facilitate the process of achieving grid parity by 2022.

In order to facilitate grid connected solar power generation in the first phase, a mechanism of "bundling" relatively expensive solar power with power from the unallocated quota of the Government of India (Ministry of Power) generated at NTPC coal based stations, which is relatively cheaper, has been proposed by the Mission. This "bundled power" would be sold to the Distribution Utilities at the Central Electricity Regulatory Commission (CERC) determined prices."

While the target is certainly a reach, the new National Solar Mission guidelines demonstrate a clear understanding that without proactive government policies to remove key barriers to solar deployment, this emerging clean energy technology will never become cost competitive with well-entrenched competitors, like coal. Like early adopters for smart phones or flat panel TVs, by spreading the initially-high costs of solar power across overall rates through "bundling," India's National Solar Mission can create the early-adopter markets needed to scale-up solar power and bring down costs over time.

India also recently proposed the implementation of a per ton coal cess whose revenue would go into a "National Clean Energy Fund" to finance clean energy innovation. This strategy, in concert with the scale-up from the National Solar Plan, offers the other key ingredient needed to cut costs through innovation, learning, and deployment at scale. Such proactive policy support is essential to making clean energy cheap and abundant.

Image source: Greenpeace

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Over 100 Student Body Presidents Urge Congress to Support Energy Education

FOR IMMEDIATE RELEASE
April 28, 2010

Contact: Teryn Norris
Phone: 510-593-3716
Email: norris -at- leadenergy.org

WASHINGTON, DC, APRIL 2010 -- A group of more than 100 university and college student government presidents submitted a letter (PDF download) today urging Congress to launch a national program for clean energy science and engineering education. The presidents – representing more than one million American students –warned Congress that advanced energy education is critical for U.S. leadership in the global clean energy industry.

“The United States is rapidly falling behind in the burgeoning clean energy industry – especially in comparison to China – and our educational system and workforce is not prepared to compete,” declared the 107 presidents, including dozens of the country’s top universities. “American students are ready and willing to rise to this national challenge, and we need the federal government to support our education and training.”

The letter, organized by Americans for Energy Leadership and the Associated Students of Stanford University, calls on Congress to support the RE-ENERGYSE (“Regaining our Energy Science & Engineering Edge”) proposal, which would invest tens of millions of dollars annually in energy science and engineering education programs at universities, technical and community colleges, and K-12 schools. It was originally proposed by President Obama in April 2009 and is currently under consideration in Congress as part of the Department of Energy's 2011 budget request.



“RE-ENERGYSE represents the nation’s first comprehensive federal program to support clean energy education programs and train thousands of new energy scientists and engineers,” wrote the presidents. “We believe it is a critical step toward creating new energy industries and jobs while regaining American leadership in the global clean energy industry, which promises to be one of the largest new growth sectors.” RE-ENERGYSE was rejected by Congress last year, despite support from dozens of universities and professional associations.

Teryn Norris, Director of Americans for Energy Leadership, said the letter represents an overwhelming demonstration of support from the country’s young leaders. “The next generation of American leaders has delivered a unified message, and members of Congress should listen: the United States is failing to compete in a critical industry, and catching up requires a national strategy for advanced energy education.” Norris pointed to the report he recently co-authored with the Breakthrough Institute and Information Technology and Innovation Foundation, “Rising Tigers, Sleeping Giant,” as documenting the challenges facing the U.S. clean energy sector.

“Federal investment in advanced energy education, including RE-ENERGYSE, will more than pay for itself,” said David Gobaud, President of the Associated Students of Stanford University for the 2009-2010 academic year. “These are long-term investments in our future. Higher education is a foundation for competitiveness and growth, and the clean-tech industry is one of our generation’s greatest opportunities. We can lead this industry by investing in the next generation of clean energy innovators, and Congress must take action.”

The letter observed that the government has started to address the need for “green-collar” technician training, such as jobs related to building retrofits and renewable energy installation, but the government “has not implemented a higher education strategy to keep the U.S. at the leading edge of energy science, technology, and entrepreneurship.” A recent report by IEEE on the energy workforce concluded, “We need more electrical engineers to solve industry challenges, and … to keep the nation’s electric power reliable, secure, safe, and competitive. Meeting these needs requires long-term investment now.”

Foreign countries are producing substantially larger portions of scientists, engineers, and researchers that will benefit their clean energy industries. According to the National Science Board, science and engineering make up only about one-third of U.S. bachelor’s degrees, compared to 63 percent in Japan, 53 percent in China, and 51 percent in Singapore. “The U.S. ranks behind other major nations in making the transitions required to educate students for emerging energy trades, research efforts, and other professions to support the future energy technology mix,” states the Department of Energy's RE-ENERGYSE proposal.

Economic studies have found that federal investment in higher education produces a high rate of return in GDP growth and long-term tax revenue. According to a report by the U.S. Congress Joint Economic Committee, the return on investment produced by the post-war G.I. Bill totaled above 400 percent over the course of 35 years. Most economists believe that technological innovation drove the majority of U.S. economic growth in the 20th century.

“This letter and RE-ENERGYSE are only the beginning,” said Norris, also a Senior Advisor at Breakthrough Institute and public policy student at Stanford University. “We will continue working with young leaders to develop proposals to advance American energy innovation, including a national education program on par with the post-Sputnik National Defense Education Act, and an increase in the federal energy R&D budget to the level of the National Institutes of Health. We look forward to working with members of Congress in the months ahead.”

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Download a PDF version of this press release

Additional resources:

RE-ENERGYSE 2-page summary, FY2011 Proposal

President Obama Announces RE-ENERGYSE at National Academy of Sciences

“Press Release: Over 100 Groups Urge Congress to Support Obama’s Energy Education Initiative"
Breakthrough Institute, 07/22/09

"Winning the Clean Energy Race: A New Strategy for American Leadership"
Teryn Norris and Devon Swezey, The Huffington Post, Nov. 2009

"Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate Clean Energy Race by Out-Investing the United States"
Breakthrough Institute and Information Technology & Innovation Foundation, Nov. 2009

For more information and media coverage, see here:
http://leadenergy.org/reenergyse/resources/

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A Clean Energy Competitiveness Strategy for America

By Jesse Jenkins and Devon Swezey

Accelerating U.S. clean technology innovation, manufacturing, and market creation has become not just an environmental necessity but an economic imperative. A recent Pew study showed that the global clean energy industry has experienced rapid investment growth over the last five years. New clean tech investments in 2009 reached $162 billion, which is expected to grow 25 percent to $200 billion in 2010. With the global clean energy economy emerging as one of the largest economic opportunities of the 21st century, government policy and public investment will be critical determinants of which countries come out on top in the race to attract private sector investment in clean energy technologies.

The United States is currently behind other nations in this race, and lacks an effective national strategy to compete. Climate legislation proposed in Congress to date, with its low price on carbon, ineffective renewable electricity standard, and collection of efficiency regulations, will not be enough for the United States to catch up to countries like China in building the clean energy industries of the future. To regain leadership in the global clean technology industry, the United States must enact a comprehensive clean energy competitiveness strategy that prioritizes major public investments in clean energy innovation, manufacturing, market development, education, and infrastructure.

This was the topic of a presentation we gave at the World Energy Technologies Summit in New York City last month. The theme of the conference, which was sponsored by TIME Magazine, was providing a "Reality Check" on the current state of energy technology and policy. The two of us therefore presented a wake-up call about America's lagging position in the global clean energy race, uncovered the realities behind several common myths about U.S. clean energy competitiveness, and outlined what the United States government must do to truly compete for the clean energy industries and markets of the future. After the video of our presentation below, this post summarizes each of these three key topics.


If you are having trouble viewing this video in your browser, you can head here to watch it (scroll down to the 4:40 pm time slot to find our presentation)

The State of the Clean Energy Race

As we concluded in Rising Tigers, Sleeping Giant, our comprehensive report on the competitive cleantech positions of the United States, China, Japan and South Korea, the United States lags its economic competitors in the production of virtually all clean energy technologies, from solar cells to wind turbines, nuclear reactors to high-speed rail, and advanced vehicles and the batteries that power them. China currently leads the world in the production of solar cells and wind turbines, and China, Japan, and South Korea collectively control over 90% of the advanced battery market.
These Asian nations are also quickly commercializing and deploying clean energy technologies. China has doubled its installed wind capacity each year for the past five years, including in 2009, when it installed 13GW of new turbines, surpassing the United States as the largest wind market in the world. South Korea has recently become a major market for solar PV cells, increasing its new annual installed capacity six-fold to make it the fourth largest PV market in the world.

And while the U.S. has historically been a global leader in energy innovation, other nations are moving quickly to close the gap. The United States government now invests only slightly more than Japan in energy R&D, and as a percentage of GDP Japan and South Korea both invest far more. China is also rapidly developing it's capacity for "indigenous innovation," and recently announced the creation of 16 new energy R&D centers to develop wind, grid, nuclear and other technologies.

Each of these nations employing comprehensive government strategies to build domestic clean energy industries, which include major public investments in R&D, manufacturing, infrastructure, and market deployment. Indeed, the governments of these three nations will out-invest the U.S. government by three to one over the next five years, even if the United States enacts into law the House-passed Waxman-Markey climate bill.

[Caption: Comparing public investments in clean energy, 2009-2013. Source: Rising Tigers, Sleeping Giant.]

One emerging features of the clean tech race is the development of clean energy clusters in countries around the world, and China in particular. Clusters act as regional "innovation ecosystems" that connect research and innovation activities with manufacturing scale-up, commercialization, and policymakers. Research has shown that such clusters can create enduring competitive advantages at both the regional and the national level. One example of an emerging clean energy cluster is the Chinese city of Baoding, which is composed of nearly 200 renewable energy companies and operates as a platform that links China' clean energy manufacturing industry with policy support research institutions, and other social systems.

Myths and Realities About the Clean Energy Race

Since the publication of our report last November and a number of later reports confirming the decline in U.S. competitiveness in the global clean tech industry, a few myths have proliferated about the reasons that the U.S. is behind and what it must do to compete in this critical economic sector.

The first myth is that China has a command and control economy, and their economic system is no match for the liquidity of U.S. private capital markets and the entrepreneurialism of the U.S. economy. The U.S. therefore shouldn't lose too much sleep over mounting cleantech competition from China.

In reality, however, the public policy environment created in China has allowed China to attract more private investment in clean energy than the United States. And while the U.S. still leads in VC funding for clean energy technology, Chinese companies dominated clean tech IPO proceeds in 2009, with 69% of capital raised, and attracted more overall private sector investment in clean energy sectors in both 2008 and 2009.

The second myth is that all the United States needs to do to compete with countries like China is to put a price on carbon. Public figures like New York Times columnist Tom Friedman and venture capitalist John Doerr routinely argues that putting a price, any price, on carbon, is the most important thing to building a clean energy economy.

But the reality is that China, Japan, and South Korea are all out-competing the United States without a price on carbon. Instead they are implementing comprehensive clean technology investment strategies. Even in European cleantech leaders like Germany and Denmark whose power plants and factories fall under the EU Emissions Trading Scheme, it is the much more targeted and substantial feed-in tariff policies and other direct public investments and incentives that are driving clean energy deployment and giving European solar and wind companies a competitive edge. Indeed, the carbon price established by the House-passed Waxman-Markey bill would provide an effective subsidy of just 1.5 cents per KWh, which doesn't even match the production tax credit driving wind power adoption in the U.S. and is a much smaller incentive than any targeted deployment incentives of our competitors, such as China's feed-in-tariff or wind, or Germany's feed-in-tariff for solar.

[Caption: Not All Carrots Are Created Equal: Waxman-Markey's carbon price does less to close the clean tech price gap between clean energy and fossil fuels than more targeted policies in other nations.]

The third myth is that as the United States continues to slip further behind its economic rivals in the production and deployment of clean energy technologies, American will still, as Tom Friedman has written, "specialize in research and innovation."

In reality, other governments are quickly closing the innovation gap with the United States and developing national innovation policies to boost their internal competitiveness. There is also little reason to believe that innovation leadership won't follow market and manufacturing leadership. Private companies are already starting to re-locate clean energy R&D activities near to areas with the most manufacturing and the strongest markets. Case in point is U.S. firm Applied Materials, which built the world's largest solar R&D facility in Xian, China.

A Clean Energy Competitiveness Agenda for the 21st century

In the face of aggressive foreign competition in the clean energy industry, the United States urgently needs a comprehensive competitiveness strategy of its own to accelerate the development of a domestic clean energy industry and take advantage of emerging export opportunities. Such a strategy should prioritize large and sustained public investments in clean energy R&D, advanced clean energy manufacturing, innovative deployment, and clean energy education.

Clean energy technologies today are still too expensive relative to fossil fuels to be widely deployed at scale around the world. In the long term, relying on either high carbon prices or permanent ongoing subsidies to make clean energy competitive will effectively close off export opportunities to developing nation markets that will be unable to impose either high carbon fees or sustain large ongoing subsidies for clean energy sources.

If the United States wants to tap the multi-trillion dollar export opportunity that lies in meeting the rapidly growing demand for energy in the developing world, we much therefore focus on making clean energy technologies cheaper in unsubsidized terms. The overarching goal that should permeate all aspects of a new clean energy competitiveness strategy should be to make clean energy cheap.

In light of this goal, there is strong expert consensus around the need to dramatically boost public investment in energy R&D by at least $15 billion per year in order to invent new breakthrough technologies, and improve existing clean energy technologies and reduce their costs.

The U.S. government must also invest in the creation of a robust clean energy manufacturing industry in the United States, and should adopt an explicit manufacturing agenda. They U.S. government has consistently lacked a set of policies to help U.S. clean energy manufacturers scale up, reduce costs, and stay at the cutting edge. The government must help provide the financing necessary for the creation of expansion of clean energy manufacturing facilities here in the United States.

The government must also rethink the way that it structures its clean energy deployment policies. Currently policies like the wind production tax credit (PTC) are designed simply to drive more wind turbines into the ground. Rather, we need a set of policies that treat deployment as part of the innovation process and rationalize deployment around reducing the real costs of clean energy technologies. One proposed institution, the Clean Energy Deployment Administration (CEDA), would help achieve this goal, and has explicit technology and cost improvement goals as part of its mission.

Lastly, and perhaps most importantly, the United States must inspire and train a new generation of scientists and engineers and equip them with the tools necessary to solve our long-term energy, climate, and economic challenges. U.S. students consistently trail their peers in leading science and math education indicators. Securing long-term economic competitiveness will require major new investments in our energy workforce as clean energy emerges as one of the most promising economic opportunities of our time.

America can still be the world leader in new global clean tech industry. We remain one of the most innovative and entrepreneurial countries in the world. But without a comprehensive clean energy competitiveness strategy that can compete with those implemented around the world, America will lose out on one of the greatest economic opportunities of the 21st century.

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Poet Biofuels: Charting the Future of Ethanol?

From its start on the family farm with a single farm-scale ethanol facility to dozens of multi-million gallon per year biorefineries dotting the Midwest countryside, POET LLC of Sioux Falls, South Dakota, is now the world's largest biofuels producer.

Today at theEnergyCollective.com I've posted an exclusive podcast interview with Nathan Schock, director of public relations for Poet. We discuss biofuels, the company's plans for a next-generation cellulosic ethanol biorefinery, and the future of the ethanol industry.

Head over to theEnergyCollective.com to listen to the full podcast interview and find out more about Poet's cellulosic ethanol plans, hear Schock defend the current excise tax credit for corn ethanol (which theEnergyCollective.com contributor Robert Rapier has argued is now a big waste of taxpayer dollars), and a discussion of the most important policy steps Washington can take to help innovative firms like Poet make commercial cellulosic ethanol production a reality.

Give it a listen.

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The Economics of the Bloom Energy's "Breakthrough" Fuel Cell

With all the hype today around the release of the "breakthrough" Bloom Energy fuel cell (which has become known as the "Bloom box" and is referred to by Bloom as an "Energy Server"), it's good to find a couple of posts looking at some real details:

Todd Woody, writing for the NYTimes GreenInc blog, has some details on the design of the Bloom Box solid oxide fuel cells from his look inside the Bloom Energy facilities this week. And Lux Research has this post looking at the economics of the Bloom Box, which is a good read.

It appears that the unsubsidized price of the Bloom Box is about $7-8,000/kW so their 100 kW units cost $700,000-800,000 without subsidy. As a fuel cell, it also needs fuel to run, in this case natural gas or another source of methane (such as landfill gas or biogas from anaerobic digesters).

After federal subsidies for fuel cells (they can claim the same 30% investment tax credit that solar gets) and a $2,500 California rebate, and assuming $7/mmBTU price for natural gas, a 100 kW Bloom Box unit generates electricity at 8-10 cents/kWh. That compares favorable to commercial electricity rates in many parts of the country,(average about 11 cents/kWh across US with higher rates in several states, including California, New York and Hawaii) so there could be good market for the Bloom Box in distributed generation applications in a variety of places, assuming federal/state subsidies holds out.

Unsubsidized cost would be 13-14 cents/kWh, with about 9 cents/kWh from the capital costs of the Bloom box and 5 cents/kWh from natural gas costs, according to Luz Research. If natural gas prices rise or fall 50% (gas prices are often volatile), overall price would fluctuate from 11.5-12.5 cents/kWh to 20.5-21.5 cents/kWh. That unsubsidized price is still too high to compete in most markets with retail electricity without subsidy. However, this is the first generation, and if Bloom can bring prices down (and/or natural gas prices are stable/low), there could be a significant market for this fuel cell.

As far as climate benefits, supposedly it generates electricity at 50-55% conversion efficiency. CO2 emissions when running on natural gas would be just under 0.8 pounds/kWh, which compares favorably to electricity from central station coal-fired plants (2 lbs/kWh) or natural gas plants (roughly 1.3 lbs/kWh) and the national average for on-grid electricity (around 1.3-1.5 lbs/kWh). Clearly, though the Bloom Box is still not a zero emissions tech and would only cut emissions by roughly 50% relative to the national average, unless it runs on landfill gas or biogas or hydrogen from electrolysis fueled by zero-carbon electricity (which would be much more expensive as you have to add cost of electrolysis unit, higher cost electricity, and about 30% conversion losses in electrolysis).

It is also worth noting that the average emissions rate of grid electricity in some states is less than the Bloom Box's 0.8 lbs/kWh. According to EPA's eGrid database, that list of states includes Vermont, Idaho, Washington, Oregon, California and New Jersey. However, EPA does not account for imported electricity across state borders, which tends to increase the emissions rates of most of these states. California, for example, has an emissions rate of about 0.65 lbs/KWh according to eGrid - which is notably less than the Bloom Box's emissions rate running on natural gas - but more like 1.0 lbs/KWh when imports of mostly-coal-fired electricity from out of state is factored in (author's calculations). When imports are factored in, this author calculates that average emissions rates for on-grid electricity in Vermont, Washington and Oregon still fall below that of the Bloom fuel cell (but emissions rates vary within each state from utility to utility as well).

Solid oxide fuel cells have notoriously faced challenges with durability, since they operate at very high temperatures, which the Bloom box will also have to overcome to prove profitable. Todd Woddy writes:

In seven months of [pilot test] operations, Bloom has replaced a few fuel-cell wafers, but the machines have otherwise operated without a problem, Ms. Skoczlas Cole [of Ebay] said.

Bloom executives said the company spent years developing a proprietary seal made from low-cost materials to prevent cracks and leaks. They estimate that the Bloom boxes will have a 10-year lifespan and that the company will have to swap out the fuel-cell stacks twice during that time.

Mike Brown, an executive with UTC Power, a leading fuel-cell maker, said the fuel cells need to last at least four or five years for the technology to be competitive.

The advantage of solid oxide fuel cells running so hot is that all that waste heat can potentially be put to good use. When co-generating heat and electricity, solid oxide fuel cells can reach combined efficiencies upwards of 85 percent, which is excellent, but no word yet whether or not the Bloom fuel cell will co-generate heat. At this point, it appears that it does not (particularly given it's use to power data centers and the like, which can't put the heat to very good use; cooling is more of an issue for data centers!). That's a shame, but perhaps another model of the product at some point in the future will be suited to co-generation applications (e.g. to provide process heat to industrial facilities or neighborhood district heating schemes). [Update: commenter Amazingdrx at Grist reminds me that waste heat can indeed be used to provide cooling using the common absorption refrigeration technique (which I should have recalled, since the entire campus at my alma mater, the University of Oregon - Go Ducks! - was cooled using absorption chillers run by our natural gas plant). So the waste heat from these fuel cell stacks should be used to cool the data centers they also power, increasing the efficiency and economics of the system...]

I also hear that it may require zirconium oxide as a membrane (can anyone confirm that?) and zirconium doesn't grow on trees, nor is it processed quickly, which may hamper production volumes.

So is the Bloom Box the solution to all the world's energy problems? Of course not. But could it finally move fuel cells for stationary power generation a big step forward? It looks like the chances are good. Only time, and the tests of the market, will tell...

It's worth noting though that with the idea initially funded through NASA's Mars program and initial product launch only enabled by public deployment incentives, the Bloom Energy fuel cell is another good example of how public investments in technology R&D and deployment can catalyze significant private sector investment, innovation and entrepreneurship to drive forward a new technology with potential for widespread application as costs come down.

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India Poised to Launch Far-Reaching National Solar Mission

Last summer, India announced an ambitious new National Solar Mission to transform the rapidly developing nation into a world leader in solar power. The government announced a sweeping plan that included $100 billion in government investment over the next twenty years to support the nation's drive to become a world solar leader and install 20 gigawatts of solar power by 2020.

In my latest column at theEnergyCollective.com, I present an interview with the President of Applied Materials India (AMat is the world's largest producer of the equipment used to manufacture solar cells) and discuss the latest on India's sweeping solar plans.

Read the full post here.

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One for the People...

Two for the globe...

Three for the future... keep it eco...

So many reasons to attend 350's International Day of Climate Action this Saturday! What's yours?

ACE will be getting down at several events across the country, not just in SF... Find us, click HERE!

Look for the ACE tshirts and/or tables at the events. If you say the password "climate hero" when you see us, you may win a secret prize...

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National Institutes of Energy Needed to Fill Energy R&D Gap

Originally at the Breakthrough Institute

Friday factoids time: The U.S. biomedical and pharmaceutical industry invests between 10-20 percent of revenues in R&D and new product development, spending $58.8b on R&D in 2007. The U.S. government adds an additional $30 billion per year investment in biomedical R&D through the National Institutes of Health.

In contrast, the U.S. energy sector invests well below $3 billion annually in R&D in an industry with well over a trillion dollars in annual revenue. The energy sector's R&D spending as a percent of revenues - call that figure the industry's innovation intensity - is just 0.23%. That compares to a national average innovation intensity across all industries of 2.6%, or ten-times greater than the energy-sector's innovation intensity. And it pale sin comparison with the innovation intensity of leading technology and innovation-intensive sectors including biomedical technology (10-20%), information technology (10-15%), and semiconductors (16%).

This downright paltry private-sector energy innovation spending leaves a massive energy innovation gap that the U.S. government barely begins to fill, investing only about $5 billion annually in energy R&D. That's barely more than half the levels spent on public research to pursue clean and affordable energy alternatives during the late 1970s and early 1980s. The scale and urgency of our national energy challenges have clearly grown since then, yet the national commitment to energy innovation has moved in the wrong direction. Public R&D spending on health care ($30b) and defense ($80b) signal the scale of true national innovation priorities and begs the question: when will the U.S. get serious about investments in clean energy innovation? When we do, a new National Institutes of Energy and a major increase in federal energy R&D investments are needed to fill the energy innovation gap and spur a clean energy revolution.

(click either image to enlarge)

For more on a National Institutes of Energy, see our archives here or the following selected content:

• Jumpstarting a Clean Energy Revolution with a National Institutes of Energy - policy report from Breakthrough Institute and Third Way (September 2009).


• "National Institutes of Health: A Model for Jumpstarting Energy R&D"


• "Senator Brown, Leading Energy Think Tanks Push for More Research Investment and New National Institutes of Energy"


• "Jumpstarting a Clean Energy Revolution: A Gathering Global Consensus"

(All factoids and figures from either the BTI, Third Way report, Jumpstarting a Clean Energy Revolution with a National Institutes of Energy, or Charles Weiss and William Bonvillian's excellent book, Structuring an Energy Technology Revolution)

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EVENT: A National Institutes of Energy: The Clean Energy Revolution Needs R&D

The Breakthrough Institute and Third Way have prepared a new report detailing how the United States can jumpstart a clean energy revolution through investing in research and development and creating a National Institutes of Energy (akin to the NIH) to spur the development of innovative clean energy technologies.

Breakthrough Institute, Third Way, and U.S. Senator Sherrod Brown (D-OH) will be holding a forum detailing the findings of Third Way and the Breakthrough Institute's new paper and describing how a focused program of innovation will help make promising clean energy technologies a reality and create a clean and prosperous energy economy.

Please see the event details below. We hope you can join us for this exciting event!

Event:

A National Institutes of Energy: The Clean Energy Revolution Needs R&D

Date:

Thursday, September 17th

Time:

10:00 - 11:00 am
Coffee will be served

Location:

Dirksen Senate Office Building
SD-G-11
Washington, DC 20002

Please RSVP to rsvp@thirdway.org and indicate this event.

If you have any questions, please contact Jen Pengelly at 202-775-3768 ext. 214 or jpengelly@thirdway.org.

ABOUT THIRD WAY: Third Way is the leading think tank of the moderate wing of the progressive movement. We work with elected officials, candidates, and advocates to develop and advance the next generation of moderate policy ideas. For more information about Third Way please visit www.thirdway.org.

ABOUT THE BREAKTHROUGH INSTITUTE: The Breakthrough Institute is one of America's leading think tanks developing climate and energy policy solutions. Since 2002 Breakthrough has been a pioneering advocate of an innovation-centered approach to the nation's energy and climate challenges, calling for major federal investments to make clean and low-carbon energy technologies cheap and abundant, strengthen America's economic competitiveness and energy security, and slow global warming. For more information, please visit www.thebreakthrough.org

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CS Monitor: China Aims to "Leapfrog" U.S. in Clean Energy Race

Originally Posted at The Breakthrough Institute

Imagining China as a giant green frog seems a little ridiculous, but, as Peter Ford of the Christian Science Monitor reported last week in a piece entitled "China's Green Leap Forward," China's intent to "leapfrog" the United States in the clean energy race is far from ridiculous - it may soon be a reality.

While the U.S. languidly inches forward in clean energy RD&D, China's burgeoning clean and renewable energy industries are growing at an unprecedented pace for a developing nation. Much more than a response to the suffocating pollution clogging the airways of its major cities, the explosion of clean energy technology is part of a national strategy to dominate the industry. As Ford succinctly puts it:

China price" and "China speed" are poised to snatch the lion's share of the next multitrillion-dollar global industry - energy technology... Indeed, China is pushing ahead on renewable technologies with the fervor of a new space race.

Indeed, China is approaching clean energy with a "space race" mind-set, however, the U.S. has yet to adopt the same sense of urgency. As Americans wait for a Senate decision on the significantly weakened American Clean Energy and Security Act (H.R. 2454), which will invest just $1 billion per year in clean energy R&D and $10 billion for clean energy investments broadly defined, China has already implemented a suite of clean energy policies beginning with the Renewable Energy Law of 2006.

By supporting the growing wind sector with subsidies, tariffs, and an obligatory renewable energy requirement for power companies, China now expects wind manufacturing to grow from 8GW in 2007 to between 12GW and 20GW by 2010. In comparison, the U.S. manufactured just 2.4 GW of wind turbines in 2007 despite having the largest wind market in the world.

While China is already the world's leading solar manufacturer and is preparing to launch the first mass-produced electric car, as Ford points out, the story of "clean coal" (i.e. carbon capture and storage technology, CCS) may be the best portent of the future of China's clean energy competitiveness. Neither the U.S. nor China will easily bump coal from their energy mixes in the near future. Since China and the U.S. glean 80% and 50% of their electricity from coal generation (respectively), both will need innovations in CCS technology to mitigate their dirty fuel usage.

Despite America's thirty-year head start in clean coal R&D, there is surprisingly significant uncertainty as to who will dominate the CCS market. Under ACES, $1 billion would be allocated to CCS demonstration and another $2.4 billion would be provided for deployment, improving the outlook for the more experienced U.S. Still, after watching the U.S. Futuregen project become mired in cost and political obstructions, China started the Greengen initiative, which is predicted to be the "most efficient and cleanest coal-fired power station every built." According to Chinese officials, it should begin operating at the end of 2010.

In the story, Zhang Hongmei, the director for technology strategy and development at China's largest privately owned clean energy provider, ENN, astutely assesses the CCS hold-up in the U.S.:

In America, some people say there is no such thing as clean coal. It is very controversial. Here [China] it's not a question of debate or lobbying. It's a question of doing something.

Ford reiterates a question Breakthrough's Jesse Jenkins and Teryn Norris recently asked in an op-ed in the San Francisco Chronicle - will American lose the clean-energy race? - and, if China wins, what are the implications for the rest of the world?

In order to stay abreast of the China and the other Asian tigers in the clean energy race, Breakthrough has repeatedly called for increased investment in clean energy deployment, R&D, and manufacturing. Furthermore, Breakthrough is currently advocating for RE-ENERGYSE, President Obama's energy education program that was recently dropped from FY2010 appropriations budget. A science and math initiative that encompasses K-12, undergraduate, and graduate education, the program is designed to usher in a clean energy workforce prepared to compete in the global clean energy industry.

Both nations are fully cognizant of the economic advantages of clean energy dominance and the urgency of the clean energy race is more salient than ever as demand for "green jobs" dominates news headlines.

As President Obama, Breakthrough and others (see here and here)have cautioned, without a strong, comprehensive effort by the U.S. to expand its clean energy industry on a global scale, China's looming shadow, frog-shaped or otherwise, will be perfectly positioned to eclipse the U.S. as the world's next economic powerhouse.

Click here to see Breakthrough's complete coverage of the clean energy race...

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Study: Geothermal Could be Cost-Competitive for a Fraction of Oil and Coal's R&D Investments

By James Burgess. Originally posted at the Breakthrough Institute

A recent study at NYU's Stern School of Business analyzes the returns on government energy R&D investments and comes to the conclusion that geothermal and wind power could, for a relatively low price, become cheaper than fossil fuel electricity in a matter of years.

The study used a well-known method of analyzing technology cycles that predicts learning curves for emerging technologies. This "S-curve" heuristic guesses that the performance of new technologies, plotted against effort (i.e. total money invested) is shaped like an S.

Early in the life of the technology, improvements are gradual as the basic properties are worked out and an effective design is formed. Next comes a period of rapid growth as the now-stable technology captures "process innovations" and economies of scale. Finally, the rate of improvement slows as the technology becomes mature and improvements become hampered by the dominant structure of the technology and its industry - until the potential emergence of a new competing technology with its own S-curve.

Although such an analysis makes some major simplifications, these S-curve cycles are well-documented throughout history in technologies as diverse as disk drives, steam engines, semiconductors, and automobiles (to name a few).

With the S-curve model in hand, the authors of the report sought to determine the curves of some major alternative energy technologies in order to project how much investment is necessary to reduce the their marginal costs.

Their results show that the total sums are surprisingly small - in the context of energy R&D investments. Just over $3 billion would be necessary to make advanced geothermal technologies cost-competitive with fossil fuels, the authors conclude. (N.B.: that's "hot rock" or "enhanced" geothermal technology, which can be used essentially everywhere, not just at hot springs locations, see graphic.) This is because geothermal's S-curve is currently going steeply up - each additional investment causes a huge reduction in the cost of the technology.

That's $3 billion, total - not annually.

A landmark 2007 MIT study The Future of Geothermal Energy similarly concluded that for investments totally less than a half a billion dollars annually, advanced geothermal energy technologies could provide cost-competitive, carbon-free, baseload energy to rival coal. Compare this number with the $38 billion spent by the US government (dwarfed by the industry's own spending) on fossil fuel R&D between 1974 and 2005.

The authors of this paper also plot fossil fuel technologies onto S-curves. The data show overwhelmingly that fossil fuel technologies have reached the top of their curves. That is, having reached the limit of achievable cost savings, the marginal price on fossil fuels is almost entirely driven by market fluctuations - not innovation - making further R&D investments a far less effective use of funding than investments in less mature but potentially breakthrough technologies like advanced geothermal.

Given the need for non-emitting energy that is fast, clean, and cheap, and the poor return that we're getting on our annual fossil fuel investments, isn't it time to move our government's money to technologies with more promise?

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34 Nobel Prize Winners Write President Obama Urging Support for Clean Energy R&D

By Tyler Burton. Originally posted at the Breakthrough Institute

In a letter submitted to President Obama today, a group of 34 prominent Nobel Prize recipients decried the lack of clear support in "The American Clean Energy and Security Act" (ACES) for the President's own promise to establish a Clean Energy Technology Fund of $150 billion over the course of ten years. The Nobelists, including many of the world's most prominent physical scientists, are calling on Congress and the President to ensure the climate and energy bill currently being debated by the Senate includes adequate and sustained support for clean energy innovation.

This letter represents the best and the brightest of the American science community, and echoes a call long issued by the Breakthrough Institute for large investment in clean energy (see "Letter to Obama & Congress: $30 billion Annually Needed for Energy Technology" and "Top Energy Scientists Call for $30 Bi Annual Investment in Clean Energy").

In an effort to "invest in the clean energy jobs of the future", President Obama's website continues to call on Congress to "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy." As President Obama has repeatedly stated, "The nation that leads the world in creating a new clean energy economy will be the nation that leads the 21st century global economy."

Yet the American Clean Energy and Security Act recently passed by the House of Representatives stripped President Obama's inital plan for $15 billion annually in clean energy R&D funding to roughly one-fifteenth of that. Instead of investing in a proactive clean energy technology and competitiveness agenda, the ACES bill gives away many of the pollution permits for free to entrenched interests (with powerful lobbyists) including electricity and natural gas utilities (supposedly on behalf of customers), coal plants, oil refiners, and heavy industry.

Leaving out a proactive clean energy investment fund "is a dangerous omission," said Burton Richter, the leader of the group of laureates who signed the letter and winner of the Nobel Prize in Physics. "Much can be done with the current generation of technologies. However, study after study has confirmed that to combine growing prosperity worldwide with sharply reduced production of greenhouse gases will require technological advances that are possible only through research."

Furthermore, if the United States is going to become a leader in the clean energy race, the scientists maintain, the clean energy R&D investments in the ACES bill are far too small.

The letter comes at a time of mounting concern about Asia's aggressive investments in clean energy technology. In a story published in today's Washington Post, "Asian Nations Could Outpace U.S. in Developing Clean Energy", Breakthough's director of energy and climate policy, Jesse Jenkins, is quoted as saying: "If the Waxman-Markey climate bill is the United States' entry into the clean energy race, we'll be left in the dust by Asia's clean-tech tigers."

July 16, 2009

The Honorable Barack H. Obama
President of the United States
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President:

You have repeatedly and appropriately called for a Clean Energy Technology Fund of $150 billion over ten years that could be funded from receipts collected from a greenhouse gas cap and trade program. The stable support this Fund would provide is essential to pay for the research and development needed if the U.S., as well as the developing world, are to achieve their goals in reducing greenhouse gases at an affordable cost.

This stable R&D spending is not a luxury. It is in fact necessary because rapid scientific and technical progress is crucial to achieving these goals, and to making the cost affordable.

We are concerned that "The American Clean Energy and Security Act" (H.R. 2454) that recently passed the House provides less than one fifteenth of the amount you proposed for federal energy research, development, and demonstration programs. The legislation provides no stable, specific funding for sustained research in the Department of Energy's (DOE) Office of Science, or for the energy research and associated technology development programs of DOE (at the Energy Efficiency and Renewable Energy, Electricity Deliverability, Fossil, and Nuclear offices).

Given the expected growing federal budget deficits, and the corresponding pressure on the government's discretionary budget, this is a serious deficiency.

We hope that you will urge the Congress to send you a bill that will invest in energy research, development, and demonstration at an amount approaching the stable $15 billion annual support that you have proposed.

We stand ready to assist you in any way we can.

Signed,

Paul Berg, Physics 1980
Stanley Cohen, Physiology or Medicine 1986
Robert F. Curl, Jr., Chemistry 1996
Johann Deisenhofer, Chemistry 1988
Val L. Fitch, Physics 1980
Jerome Friedman, Physics 1990
Sheldon Glashow, Physics 1979
Roy Glauber, Physics 2005
Dudley R. Herschbach, Chemistry 1986
Wolfgang Ketterle, Physics 2001
Roger D. Kornberg, Chemistry 2006
Herbert Kroemer, Physics 2000
Robert B. Laughlin, Physics 1998
Leon Lederman, Physics 1988
Anthony Leggett, Physics 2003
John Mather, Physics 2006
Marshall Nirenberg, Medicine 1968
George A. Olah, Chemistry 1994
Douglas Osheroff, Physics 1996
Arno Penzias, Physics 1978
Martin L. Perl, Physics 1995
William D. Phillips, Physics 1997
David Politzer, Physics 2004
Robert C. Richardson, Physics 1996
Burton Richter, Physics 1976
F. Sherwood Rowland, Chemistry 1995
Phillip A. Sharp, Physiology or Medicine 1993
George Smoot, Physics 2006
Horst Stormer, Physics 1998
Richard Taylor, Physics 1990
Daniel Tsui, Physics 1998
Steven Weinberg, Physics 1979
Frank Wilczek, Physics 2004
Robert W. Wilson, Physics 1978

Link to the original press release.

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