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On Clean Tech Headed for Stagnation
Partnerships and limited deployment incentives that drive innovation are what the energy innovation community is working on as we speak. Hopefully this discussion becomes louder and permeates into the halls of Congress in the coming months and years.
MS
On Clean Tech Headed for Stagnation
Jim, agreed if we can get the tech to work on a global scale (as with all clean tech). The quadrant example was more to point out that the longer we have to wait for a global clean tech scale-up the worse off we are. So if we can scale-up ocean thermal tech in the next year and it sequesters as much CO2 as you say, then great, we don't have to do any adaptation or geoengineering. But if it takes 20 years, even if it sequesters carbon, then we have to do other things. And my sense is that the sequester potential of this tech isn't well understood yet, but would like to learn more about it.
MS
On Clean Tech Headed for Stagnation
Rick (and Jim)
It seems worthwhile to view our response to climate change on a quadrant scale (simple x-y axis).
On the negative-end of the x-axis we have mitigation, which is to drastically reduce carbon emissions so as to halt the addition of more emissions to the atmosphere which by property bake in a certain amount of warming for the following 100 years. On the positive-end of the x-axis we have geoengineering, which is to either directly reduce global temperatures through technology or directly suck CO2 out of the atmosphere. And on the y-axis we have adaptation which is to not focus on reducing emissions but instead built resilience in our social, economic, and infrastructure systems for the warming to come. On the positive-end we have aggressive adaptation and the negative-end we have no adaptation.
Where are we on this scale? 40 years ago, probably in quadrant 4 - mitigation paired with no adaptation. We had time to develop the tech (but we chose not to). 10 years ago probably more in quadrant 1 - mitigation paired with modest adaptation.
Where do you think we are today? (I know, a long winded exercise)
Rick asked about sequestering the carbon already in the atmosphere, so he must think we are somewhere in quadrant 2 - mitigation, but with more geoengineering paired with some level of adaptation. Jim, maybe still in quadrant 1.
In other words, do we need to be worrying about sequestration (which we roughly already know how to do, but don't know how to suck it out of the atmosphere)?
MS
On Clean Tech Headed for Stagnation
HannahSolar -
I very much agree with the notion of cutting fossil fuel subsidies. In fact, I’ve proposed cutting fossil fuel subsidies to pay for increased federal investment in clean tech innovation programs like R&D. A couple of additional thoughts on this to ponder (and issues that the clean tech advocacy should ponder as well):
- Cutting fossil fuel subsidies isn’t a panacea for transitioning from dirty to clean. Depending on the source, fossil gets in the $4-10B per year (your source, IER, says ~$7B) in subsidies on a profit in the $100’s of billions. At most, cutting the subsidies would trickle down to consumers as a couple of cent increase in energy prices if at all. One could argue that because most of the subsidies are for the manufacture and production of oil or coal or gas, it could reduce domestic supply, and increase prices more which would help clean tech. But because oil is a commodity market, is at such consistently high prices, and the incentives are relatively small (comparatively to the price of oil), it seems to me it would still have only a small impact. Think of it another way, we probably pay more in the federal gas tax than we would if fossil subsidies were eliminated. Simply put, fossil is really cheap even without subsidies.
- Rising fossil prices have less impact on clean tech adoption than you think. For example, many countries in Europe pay $7-$10/gallon gasoline but few if any electric cars on the road. Those prices (tied with steep penalties for buying gas guzzlers) does lead to consumers buying smaller cars or more efficient vehicles, it doesn’t transition to electric vehicles (or a low-carbon alternative, which we need, given climate challenges). So a few cents added because of subsidy elimination still won’t make the Volt look any cheaper. And the same goes for coal power, especially with cheap natural gas, because the wind and solar alternatives are still very expensive unless heavily subsidized themselves even against.
- It’s not necessarily about how much subsidy fossil gets annually, it’s about how much they’ve received over a century. Oil and coal and gas have received 100+ years of gov largesse and support that has ‘baked’ them into the system vs. 40 years of off-and-on clean energy support. As such, some level of gov support will be needed in clean tech to scale new alternative to market to overcome these entrenched industries, like we did for fossil. So regardless of whether we eliminate them, the 'playing field' isn't necessarily level.
Matthew Stepp
Senior Analyst, ITIF
On Clean Tech Headed for Stagnation
Rajat -
I think you're very much right. A key example is Solyndra. We guaranteed a $500 million investment, which is twice the budget of ARPA-E which is making dozens and dozens of investments in high-risk, high-potential tech ideas. I think at this stage of the game we would be better off putting more emphasis on R&D, ARPA-E type investments to create tech pathways to affordability and subsidy independence.
With that said, there is a desperate need for a rethink on what to do once a technology moves beyond the pilot-scale. The commercialization valley-of-death is very real in the energy space because of the billions of dollars in investments needed to scale to the commercial market, reduce risk to investors, etc and the fed gov has a role to play here, but the question is what that role looks like. I think this is where your call for partnerships could be key in rethinking through some of the traditional policy responses to this, like LGP's, and figure out a better way to support the scale-up of innovative tech. But a discussion on what to do about scale-up expands to a broader discussion on how to link all this great fed R&D going on to commercial scale (which we do a terrible job at doing).
Matthew Stepp
Senior Analyst, ITIF
On Should we be techno-optimists about climate change?
David -
Thanks for your thoughts. I think the typical time it takes for next-gen energy technologies to reach materiality and widespread deployment is important. It should give pause because at its core addressing our energy challenges require new clean energy technologies. So if we're to address those problems in the relatively short (and getting shorter) amount of time left, we need to look at the innovation lifecycle and figure out ways of accelerating that lifecycle. In some ways, we get that (Innovation Hubs, SunShot, ARPA-E) and in other ways our policies don't reflect it.
Matthew Stepp
Senior Policy Analyst
Information Technology and Innovation Foundation
On SMR developers are racing to the market
Dan -
My understanding was that the cuts to the advanced nuclear R&D programs were "soft" in that there is some carryover funds that will make up for a small part of the difference, and much of last years SMR R&D budget was used for R&D in the permitting/siting process in the lead up to liscensing. The latter work apparently finishing up so no need for those funds. It's not clear that core advanced R&D projects are being cut.
At least that was my read of the budget proposal. Any thoughts?
Matthew Stepp
Senior Policy Analyst
Information Technology and Innovation Foundation
On The Future of Global Climate Policy: Clean Energy Innovation Imperative
Alan -
Thanks for your always thoughtful comments. Two main points I (and Jesse) want to make:
1. R&D and deployment are but two parts of a broader ecosystem of innovation stages and areas of support for energy innovation.Both are necessary, but what's needed is for policy to fill in the gaps. Public support for R&D is a significant gap. See our analysis at the Energy Innovation Tracker: http://energyinnovation.us/data/analysis/gaps-analysis/
We need a 2-10x increase in public R&D support. In other words a lot, which will take a significant amount of policy support. Thus we need to make support for R&D one of our top priorities (not something we get to after accomplishing a list of other policies) and not just an afterthought. We need to get creative and fight for new revenue avenues for supporting these efforts. And we need to be mindful not to pay lip service for the vital role R&D plays.
Even in the Nemet example we talked about and you critiqued, there is more there than just 30% cost reductions from R&D. For instance, Nemet et al talked about cost declines in crystaline solar PV - a much more mature technology that has recieved significant R&D support over many decades. But would the same 30% hold for thin-film solar? Probably not as I suspect it would be higher. Thin film is a jump to an entirely new cost curve that's a direct product of NREL/DOE research efforts. First Solar, Nanosolar, and GE's solar tech wouldn't exist without that public R&D. So we did all that with underfunded public R&D institutions, imagine what we could do with a properly funded institution system? At the very least it would great accelerate the cost declines of clean energy and would most likely more quickly develop the new technologies on new cost curves we need to make clean tech globally cost competitive without subsidies.
2. Another idea is we need to take a good look at our deployment policies to ensure that they're geared towards spurring greater innovation. My inclination is that they aren't right now. I'm thinking more along the lines of dynamic performance incentives, declining subsidies, etc. Tying our current crop of deployment incentives to driving innovation would go a long way to making the clean energy industry long-term viable and driving down clean tech costs more rapidly. Something to chew on.
Matthew Stepp, Clean Energy Policy Analyst, ITIF
On Don’t Get Ahead of Yourself: The U.S. Needs a Comprehensive Long Term National Energy Plan
Andrew_W -
You are absolutely right, many "comprehensive plans" - be that the one I critique here (Coalition for Green Capital/Center for American Progress) or the cap and trade bills debated the last few years - just don't understand that clean energy is a technology innovation problem.
At ITIF, we advocate policies that have this reality in mind. Check out the Senate Testimony given by ITIF President Dr. Robert Atkinson on this very subject (http://www.itif.org/files/2010-testimony-clean-tech-tax-credits.pdf). Also at www.itif.org, we have released a number of reports on the ened for clean energy innovation.
The fundamental issue is that the U.S. must develop clean energy technologies that are lower cost than coal (for electricity generation) and cheaper than driving a gasoline powered vehicle (though infrastructure and other vehicle characteristics play an important role here as well). And these cheaper technologies need to be cheap without being subsidized by the government.
Now some "X-prize" like initiatives have been implemented at DOE - the one that comes to mind is the prize for developing a 100 mpg non gasoline vehicle. But prizes in my opinion are deficient in that some of the technology barriers are capital intensive and those costs far outweight the prize itself.
Another way forward is to learn from the past. The U.S. history of technology development provides a way forward and that is through public-private partnerships, government acting as a first customer for new technologies in need of a market (e.g. procurement policy), and for government providing support across the full innovation spectrum. Doing this, we will develop affordable options to coal and gasoline.
On Don’t Get Ahead of Yourself: The U.S. Needs a Comprehensive Long Term National Energy Plan
DG -
Good catch on Oregan State. For some reason, the RSS feed didn't pull in the final edits I made to the post. Meant no disrespect to Oregan State!
As for government support for nuclear energy - I couldn't agree more. A thorough review and reform of public nuclear energy support - starting at funding of breakthrough technology from basic science through deployment and through the liscensing process - is absolutely needed. This need is more acute when thinking about SMR's, which in the future could be produced in a factory line style (reducing construction time and cost), but if it still takes years and years to go through the review process, then what?.
Now much of the problem is staffing - the NRC is considerably under staffed to handle any big uptick in new plant applications. And the NRC has recently reformed their application process to combine liscensing and construction applications (instead of going through two explicit processes). NRC has also made it so plant applications can be expidited if an already approved plant design is used in sequential new power plants (reducing the app process). So, it seems the application-to-power generation timescale should decrease in the coming years.
Though more needs to be done of course. It will be interesting to see how the NRC's new Office of Advanced Reactors comes together in the coming year. They were fairly recently created to deal with SMR's.
Matt Stepp
Clean Energy Policy Analyst
Information Technology and Innovation Foundation
On Drawing the Right Conclusions from the Problems at A123
Jim -
Business failures aside, I wonder if the governement support for near-term tech vs. long-term development is more prominent an issue here than you discuss. The major issue, it seems, is whether we want to accelerate the development and deployment of batteries that have future cost and performance competitiveness potential or those that don't. It seems like in some cases - maybe even A123 - we supported those that don't to gain short-term economic benefits. So it's failure - or in this case financial trouble - is directly linked to that. In the case of A123, other government grants tried to build market support for the batteries (i.e. Fisker, Volt, etc.), but that support, because of vehicle costs largely due to high-battery costs, hasn't flourished into a robust market.
On the other hand, the next-gen batteries in development offer the potential for cheaper electric vehicles with better performance - which by itself would create a bigger market. In every discussion and presentation I see or am a part of, the future of electric vehicles isn't going to reside in current-gen batteries - even those currently produced by A123. It's going to be in those 2nd, 3rd, or 4th-gen variants being developed at the Innovation Hub, through ARPA-E grants, and even at Universities and Fed labs. Grants to more 1st-gen EV batteries may be expanding some supply chains and helping spur some incremental innovations, but it's surely not enough to accelerate industry development. Those grants would be better spent down the line one tech options that hold better promise of competitiveness.
Matthew Stepp
Senior Analyst, ITIF