Posts tagged “cleantech”
From time to time I will start highlighting some groups that are finding new ways to solve some of the many energy financing challenges that we face. I will be looking at both groups that are finding ways to fill gaps as well as companies that are rethinking old approaches to energy finance.
I thought I would start this series with a look at Greentown Labs, which is actually in the midst of both building a platform to fill a gap in the energy finance marketplace and exploring the use of new financing techniques, namely crowd-funding, to try and take their vision to new heights.
Greentown Labs is a cleantech incubator based in Boston (though in the process of moving to new and expanded space in neighboring Somerville in September). The idea – started two years ago – was to provide early-stage companies a place to not just collaborate on ideas and share services, but to have space to actually build the energy hardware of tomorrow. The lab has all of the things you’d expect to find at an incubator – collaborative space, mentors, and inspiration, but what sets it apart are the work areas – more than a dozen projects were underway on the lab floor (which boasts a machine shop and an electronics shop to go with the more typical software platforms and office-like work space), ranging from systems that fit on a table top to 40 foot long welding projects. Rather than my experience with most incubators – something along the lines of coffee shop meets office meets collaborative space – Greentown looks 1 part incubator and 2 parts mad scientist workshop.
Innovation vs. Deployment
One of the continuing debates among climate and energy analysts and advocates is whether public policy should emphasize innovation or deployment. A hardy round of wonky discussion brought to light the nuances of each point of view, but it still leaves one lingering issue: how do we make energy innovation part of advocates’ climate policy pitch?
There are two levels to the debate between innovation analysts and deployment advocates. The most significant debate is over policy nuance and is what has been in the blogging spotlight recently. The debate logic chain typically plays out broadly this way:
- Mitigating climate change requires cutting global carbon emissions to near zero, which requires no less than a transformation of the global energy system from fossil fuels to clean energy. For its part, the United States has set a goal of 80 percent carbon reductions by 2050 and a midterm goal of 17 percent reductions by 2020.
- Innovation analysts argue today’s technology isn’t enough to get us to 80 percent global (or US) carbon reductions. Cheaper and better technologies are needed to fully address climate change, which requires looking at the full innovation ecosystem and aggressively strengthening through policy. Today’s policy approach is woefully lacking because it underinvests in research, development, and demonstration, and provides limited deployment incentives that don’t drive innovation. As a result, innovation analysts (for example, myself) typically focus on boosting R&D budgets, bridging the valley of death, and reforming deployment policies to drive technological improvements as the best path to addressing climate change.
- Deployment advocates argue today’s technologies are enough to at worse meet our midterm climate goals and at best get us much closer to our 80 percent goal than innovation analysts argue. Most commonly, this extends to deployment advocates arguing that big innovations really aren’t necessary. In other words, we need to do everything we can to push deploying today’s technologies by using policies including subsidies, carbon pricing, and mandates. By no means is funding research not important, but it’s not a high policy priority. As a result, deployment advocates (for example, Climate Progress Editor Joe Romm) champion clean energy subsidies and incentives to accelerate the deployment of existing technologies and as the best path to addressing climate change.
As Dave Roberts at Grist argues, there is in fact a lot both “camps” agree on at this level. Cheaper and better clean energy technologies will make deep carbon reductions less and less “difficult, expensive, and politically contentious” than if we relied solely on today’s technologies. The agreement only breaks on the policy implementation side.
This is the 5th and final post in a series analyzing and detailing federal investments in clean energy innovation. Part 1 defined “clean energy innovation.” Part 2 broke down the federal clean energy innovation budget. Part 3 took a look at federal investments in clean energy demonstration projects. Part 4 took a deeper dive into clean energy deployment policies.
In the first post of this series, I called attention to the eminent need for supporting a well-developed and funded clean energy manufacturing sector as part of a robust innovation ecosystem. The feedback loops between manufacturing and research is explicitly linked. Even with all the R&D, demonstration, and deployment of clean energy, the United States could lose its competitive advantage over production resulting in the industry (and future innovation) to move overseas without strong policy support for advanced manufacturing. But like many other parts of America’s energy innovation budget, support for advanced manufacturing is rapidly declining.
The figure below shows that investment in clean energy manufacturing has fallen from nearly $9 billion to only $700 million between FY2009 and FY2012, or a 92 percent decrease. Direct spending in FY2009 and FY2010 was directly supported by the distribution of the Recovery Act’s 48 advanced battery manufacturing grants, which the Department of Energy awarded to a range of electric-drive, battery component, and battery recycling facilities. The grants were all devoted to accelerating the development of U.S. battery and electric vehicle manufacturing (a full list of grantees is available here).
This is Part 2 of a series of posts analyzing and detailing federal investments in clean energy innovation. Part 1, defining clean energy innovation, can be found here.
Clean energy innovation encompasses more than any one policy, whether it is R&D, tax incentives, regulation, or an economy-wide carbon price. Well-designed public investments impact the entire energy innovation ecosystem and fill gaps in next-generation technology development and deployment. Using data from the Energy Innovation Tracker, this post takes a top-line look at the United States’ portfolio of clean energy investments between 2009 and 2012.
The figure below details federal investments in energy innovation since FY2009, which are divided into ‘technology development’ and ‘technology deployment’ categories. In this case, technology development captures all investments in basic science, research and development, demonstration; technology deployment investments facilitate the installation and procurement of clean energy technologies in commercial markets, along with supporting investments in siting and permitting and training and education.
During the past four years, the balance between development and deployment has evolved dramatically, driven in part by increased procurement of emerging and commercial off-the-shelf energy technologies by the Department of Defense, as well as expanded deployment initiatives and tax incentives through the Department of Energy and the U.S. Treasury Department.
Mike is a true clean energy entrepreneur, starting way back with a fuel cell start-up in the late 1990s, he’s run a venture capital firm, been an executive at a solar company and founded another solar company… and he’s voting for Mitt Romney.
This week’s episode of R-Squared Energy TV answers the following viewer questions: Do you have any comments on Matthew Nordan’s recent 4-part response to Peter Thiel’s comments on cleantech VC as a failure? Do you retain any oil industry ties that your readers/viewers might like disclosed? What books do you recommend that choose a more positive outlook on our future, and are actual realistic predictions? Do you see a future in petroleum engineering, as most think it will be a doomed profession within the next twenty to thirty years? If I choose to become more involved in other energy solutions what would you recommend studying? Readers who have specific questions can send them to ask [at] consumerenergyreport [dot] com or… Continue»
Battle Over the Definition of Success in the ‘Cleantech’ Industry This past week PayPal co-founder Peter Thiel — who was also an early investor in Facebook — made headlines when he declared that “Cleantech is an increasingly large disaster that people in Silicon Valley aren’t even talking about any more. The failure in energy and transportation points to a larger failure in clean energy — we aren’t moving any faster, literally, than we were when modern airplanes first came out.” Those comments ruffled the feathers of Cleantech VC Vinod Khosla, who responded “Cleantech is not a disaster.” So who is correct? It depends entirely upon how one defines success: Over the last 12 months, Khosla has generated more than $1… Continue»