Posts tagged “energy policy”
I recently asked a few colleagues over lunch the kind of wonky question that would only be allowed within the borders of the District of Columbia: Aside from more government investment – which is desperately needed – what are the big issues with America’s energy innovation ecosystem?
There’s no simple answer to that question, so we talked about a range of important ideas such as supporting advanced manufacturing, creating technology incubators, and reforming the DOE National Labs system. But what struck me was my colleagues’ insistence that what’s also needed is educating policymakers and advocates on how the energy innovation ecosystem fits together.
During the last five years, the U.S. federal government has added new institutions to spur innovation at different points along the technology development cycle, such as ARPA-E, the Energy Innovation Hubs, and Energy Frontier Research Centers. Analysts like myself argue more is needed. In response, policymakers fear duplication, extra bureaucracy, and inefficiencies often because these requests lack a clear case for how the policy pieces complement rather than repeat or compete with each other. This misunderstanding fuels – along with many other factors – a lack of support for strengthening the ecosystem as a whole.
Describing how these pieces work together can quickly get nuanced, but a metaphor came out of the discussion that merits repeating: think of energy innovation policy as a group of people mowing an Earth-sized, overgrown lawn. In this case, mowing the lawn is the stand-in for developing competitive, high-performance clean energy technologies. It is the problem we’re trying to collectively address and we’re implementing a coordinated set of policy solutions to do so.
Programs like the Energy Frontier Research Centers (EFRCs) within the DOE Office of Science are trying to solve fundamental science problems. For mowing the lawn, it is the equivalent of researching why the grass is growing in the first place. If we completely understand why the grass is growing, we can potentially develop better, more efficient solutions for mowing the entire lawn in the future. The EFRCs and Office of Science are studying underlying science problems in chemistry, material science, and physics that could potentially lead to more energy dense batteries, more efficient solar panels, and new low-carbon technologies we haven’t thought of today. We know that understanding the basic science is crucial because the possible outcomes of the work are unknown and unlimited.
The Energy Innovation Hubs are more goal-oriented. The Hubs are collaboratively working with academics, industry, and the National Labs to reach particular technological milestones (not particular technology). This is the equivalent of knowing what type of futuristic lawnmower the world needs to cut the grass, and exploring a multitude of ways to develop it. The Hubs have set audacious technology goals and are conducting crosscutting research that bridges breakthrough science with engineering and industrial application. For example, the Joint Center for Energy Storage Research is taking the last decade’s worth of breakthrough material and chemistry science to develop new battery storage pathways that are five times more energy dense than today’s best lithium-ion battery at one-fifth the cost in five years. We know that developing batteries with such characteristics would be game-changers for emerging industries like electric vehicles. In this case, we understand the technological characteristics necessary to revolutionize clean energy; we just need to figure out how to apply breakthrough science to get there.
ARPA-E is investing in transformative energy technologies by providing small grants on three-year terms to overcome research barriers to piloting potential breakthrough energy technologies. ARPA-E targets investments outside of traditional research pathways. This is the equivalent of going beyond asking how to develop a better lawnmower, to wondering how to develop grass that naturally grows half the length or half as fast so that we don’t need to cut it as much or at all. For clean energy, this has included investing in “electrofuels” – biofuels created by microorganisms and not plant material, like that used to make traditional biofuels. Electrofuels could be ten times more energy efficient than current biofuels at less cost because they do not rely on fertilizers or plant processing, and do not require large areas to grow crops. In this case, we are thinking outside the box and are making small, strategic investments to advance entirely unique and new breakthrough energy technologies.
An Oft-Used Energy Slogan
Last week, Real Clear Politics and API hosted an energy summit in Washington, DC entitled, “Fueling America’s Future”. It was intended to provide a quick overview of most of the key technologies and issues associated with an all-of-the-above energy strategy for the United States. Going through the highlights of the webcast gives me an opportunity to introduce my point of view to a new audience at Energy Trends Insider. I’d sum that up as “All of the Above”, with asterisks for the proportions and situations that make sense.
This slogan, at least in the manner in which it has been espoused by politicians in both parties, has attracted fair criticism for being overly bland and safe. I suspect that critique reflects a general sense that our energy mix has always been composed of all of the above, or all of the technologies that were sufficiently proven and economic to contribute at scale at any point in time. However, as both our technology options and choice criteria expand, our understanding of the evolving energy mix is hampered by metrics and assumptions that are overdue to be revisited.
Making Innovation Part of Climate Hawks Policy Pitch
In a previous article I argued that climate policy advocates should make energy innovation part of their policy elevator pitch. A good opportunity to start is now available through the debate on reforming and re-authorizing the America COMPETES Act.
Within the climate advocacy community there are those that argue for aggressive clean energy innovation policy (such as myself) and those that argue for aggressive deployment of existing clean energy technologies (such as Center for American Progress’s Joe Romm and 350.org’s Bill McKibben). Each provides different policy emphasis and nuance. Today, deployment policies receive higher priority, reflected in it dominating the narrative among advocates as well as dominating the portfolio of U.S. public investments in clean energy. As a result, conflict occurs over what policy changes should be made.
As Grist’s Dave Roberts argues (correctly to a degree), both “camps” agree on a lot and everyone should aggressively work for clean energy to be a national priority to “lift all boats,”—both innovation and deployment of today’s technologies alike. How then should this consensus be reflected in our pitches to policymakers?
Recently Sens. Jeanne Shaheen (D.-N.H.) and Rob Portman (R.-Ohio) reintroduced the Energy Savings and Industrial Competitiveness Act. The bill is meant to spur the use of energy efficiency technologies in residential and commercial buildings as well as in industrial and manufacturing operations. One of the key focal points of the bill is on supporting the update of building codes to integrate energy efficiency improvements and requirements.
I work on energy policy for a national security think tank, so I am often asked to talk about energy security. Last week, I participated in a conference in which we were asked to comment on “U.S. Energy Security: How Do We Get There?” As I listened to the presenters at the conference, I realized that how you viewed the problem of ‘Energy Security’ depends on how you identify it. We all seem to have determined that energy security is a problem, but we each had different understandings of what the term ‘energy security’ actually means! Of course, that means there were very different prescriptions for how to ‘solve’ the problems of ‘energy security.’
In the absence of a definition, everyone defines energy security differently –both speakers and listeners. It is something like the late Margaret Thatcher said about the politics of consensus: “it is something in which no one believes and to which no one objects.” Along those lines, I believe that ‘energy security’ has devolved into simply a buzzword: a phrase that everyone favors, but defines differently. Pundits, politicians, lobbyists, industry, and campaigners from across the political spectrum cry ‘energy security’ because it polls better than their preferred policies. I have done it as well. Listeners, then, are misled because, really, who could actually be against ‘energy security?’ It is like being against mom, America, and apple pie.
President Obama released his long-awaited FY2014 budget request and while it’s unlikely the budget will be taken up by Congress in its entirety, it remains an important document. Namely, the proposal is significant because it steadfastly argues that America can continue to support next-generation industries like clean energy. In fact, the President’s proposal budgets for a number of high-profile, high-impact programs, including those aimed at growing the domestic clean energy manufacturing sector, reduce transportation fuel use, and calls on Congress to fund a new Energy Innovation Hub to transform the electricity grid.
Across the board, the FY2014 request boosts key energy innovation offices at DOE by about 15 percent compared to the FY2013 Continuing Resolution and seven percent higher than the President’s FY2013 request. The lion’s share of budget gains are aimed at the Office of Energy Efficiency and Renewable Energy (EERE), which would see a budget increase of 54 percent from FY2013 CR levels, and at the Advanced Research Projects Agency-Energy (ARPA-E), which would see a budget increase of 46 percent.
Expanding Research Capabilities in Advanced Energy Manufacturing
The largest budget increase target at EERE – 22 percent to be exact – is for the department’s Advanced Manufacturing Office, which invests in transformational research and development of integral clean energy manufacturing technologies and practices. This investment would support and complement EERE’s recently announced Clean Energy Manufacturing Initiative, which aims to aggressively increase the international competitiveness of emerging energy manufacturing. The program is designed to begin reversing a decade’s long decline in U.S. manufacturing – immediate goals include transferring new research, technologies, and industrial education and training to industry through a new research institute under the banner of the President’s National Network of Manufacturing Innovation as well as EERE’s Better Plants Challenge.
Last week I made my debut as a contributor to the Wall Street Journal’s (WSJ) new feature The Experts: Journal Reports. The idea is that the WSJ poses questions to the panel, and each panel member provides a response of 300 words or so. The first 4 questions that were asked — and answered — last week were:
- Growing oil production has led to predictions that the U.S. could pump more barrels than Saudi Arabia by 2020 and that North American could become a net exporter at a later date. What does this mean for energy markets and geopolitics? (My answer)
- Should the government be financing new-energy technologies? (My answer)
- Should there be a price on carbon emissions, and if so, what’s the best way to do it? (My answer)
- What technological breakthrough is most likely in the next 10 years that could completely change the energy equation as we now see it? (My answer)
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.
Solar energy entrepreneur Jigar Shah took to the site Greentech Media to criticize U.S. energy policy leaders for failing to champion deploying today’s clean energy technologies. Shah’s focus on ways to better deploy competitive clean energy underscores the critical need to re-frame the clean energy debate in terms of innovation and have a healthy discussion on building better policy solutions for deployment that drive innovation and support the growing clean energy industry.
Assessing the Character of U.S. Energy Policy
According to ITIF’s Energy Innovation Tracker, the United States invested $68.3 billion in clean energy innovation (in addition to $35.6 billion in loan guarantees) since 2009, 67 percent of which went towards clean energy deployment policies. This included deploying existing technologies through Stimulus policies like the loan guarantee program, energy efficiency grants, advanced manufacturing, and almost single handedly saving the solar and wind industry through the 1603 cash grant program at the height of the recession. Even in FY2012, which is absent Stimulus funding, 63 percent of the $14 billion in clean energy innovation investment went to deployment projects and programs.
Energy Security Trust
Energy policy is a major topic of discussion during almost every State of the Union address. The most recent address was no exception, with President Obama devoting a substantial portion of his speech toward reviewing recent energy accomplishments, and then promoting new energy initiatives.
One of those initiatives was one of the three major energy policy recommendations that I promoted in my book Power Plays. Here was President Obama’s version during the State of the Union address:
I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long. I’m also issuing a new goal for America: Let’s cut in half the energy wasted by our homes and businesses over the next 20 years.