Barriers to clean energies

By Robert Hickson 31/08/2011

Clean energy technologies are being hailed by some as the sixth great technology revolution — an insurrection that will free us from the shackles of fossil fuels, and provide the staging ground for further economic growth without the nasty environmental and military consequences of an addiction to hydrocarbons. However, this revolution will play out over decades.

[“Clean” is relative of course – reliance on digging rare earth elements out of the ground (or seabed) to build wind turbines or batteries isn’t totally benign. And some, of course, object to the visual and auditory pollution of wind turbines]

 The philanthropic recently modelled the impact of clean energy innovation on the US economy out to 2050. They concluded that ‘aggressive energy innovation’ could both more than halve greenhouse gas emissions while enabling the economy to grow and unemployment to fall. The ‘aggressive energy innovation’ requires both technological breakthroughs and comprehensive federal clean energy policies.

 As Pew Charitable Trusts noted, the US while a hot bed of innovative research and development hasn’t got its act together (at a federal level at least) on policies that stimulate the adoption of clean energy initiatives, and so is not doing that well in the ‘clean energy race’. Countries such as China, Brazil, and western European states are doing much better if you look at the rate at which they are increasing the proportion of renewable energy generation. They are deploying tried and trusted existing technologies (wind, solar, etc).

 After the global financial crisis national stimulus packages also allocated big wads of money to clean energy research and development. Followers of cleantech will know that there is an amazing variety of approaches to creating biofuels, improving the efficiency of solar panels, building better batteries, developing fuel cells, designing smart power grids, enhancing energy efficiency and removing carbon from industrial waste streams.

 Which technological developments are going to power us in the future? That’s easy — the cheapest ones. The key bottleneck is not science but economics. The only successful developments will be those that are able to provide energy at the same or lower price as fossil fuels. This is a large challenge, made more difficult by volatile prices of the fossil fuels continually changing the target price. While oil may become scarcer, coal and natural gas will continue to be abundant and cheap.

 Many countries have been subsidising their renewable energy initiatives, but subsidies are being reduced. Governments, however, can’t step back and leave it to the market to decide the shape of our future energy systems. Incentives will be needed to build the new energy infrastructure (as they were for fossil fuels). The International Energy Agency estimated that global subsidies for fossil fuels were US$557 billion in 2008 while renewal fuel subsidies in 2009 were around US$57 billion.

 Another concern is that as the funding pulses from stimulus packages are coming to an end a lot of promising R&D won’t be able to get to a stage where the private sector steps in to commercialise it. While venture capitalists in the US are putting more money into clean tech, they are getting pickier about what they back – focussing on ventures that are likely to give a return more quickly. This means that newer start ups and more ambitious projects may find it harder to survive.

 China [PDF, 1 MB], and some other countries, are though retaining longer term support for renewable energy development. The US military is a fan of clean technologies and, as the biggest energy user in that country, able to have a substantial influence on developments. The revolution will happen, but the timing and form of it are uncertain.

 Given the uncertainty, what policies and strategies are going to be needed by governments, organisations and communities to transition as smoothly as possible away from fossil fuels? As M. King Hubbert (he of ‘peak oil’ fame) noted 40 years ago, cultural constraints are likely to be the most significant factor in the transition; can we break away from our short but dramatic history of exponential economic growth?

 Changing where and how we produce energy will have major social consequences. Transition towns are one example of local communities, with government assistance, that are already taking a different approach to energy generation and sustainable living. Planning for the rebuilding of Christchurch is considering how the role new forms of energy will shape the city. Plans for the future development of Auckland don’t seem to be giving this as much attention.


New Zealand’s Energy Strategies

Increasing our renewable energy supplies is recognised in the Strategies released this week. Rod Oram commented yesterday on Radio New Zealand National about his frustration with the government’s lack of ambition about our energy future. Many other comments and analyses have and will be forthcoming.

New Zealand is both a developer and an adopter of clean energy initiatives. I’ll end by suggesting that whatever revenues the government receives from new oil and gas drilling, a wise decision would be to use a significant proportion of it to help the country transition to clean energy. Part of this should include developing expertise in clean energy services that could be sold around the world (as Iceland did with geothermal power expertise decades ago). But policy as well as technological developments need to be ambitious.