From Stanford University comes another head exploder for Joe Romm.
IMAGE: In the fast-globalizing clean-energy industry, the US should press its advantage in engineering, high-value manufacturing, installation and finance, writes Stanford researcher Jeffrey Ball.
America’s approach to clean energy needs to be reformed if it is to meaningfully affect energy security or the environment, according to two new articles by Stanford writers.
The debate over how to fundamentally change the world’s massive energy system comes amid taxpayers’ $500 million tab for the bankruptcy of Fremont, Calif., solar company Solyndra, the global recession, government budget cuts and plunging U.S. prices for natural gas. Making the change cost-effectively will be crucial, write Jeffrey Ball and Kassia Yanosek, both based at Stanford University’s Steyer-Taylor Center for Energy Policy and Finance.
Ball, scholar-in-residence at the Stanford center and former energy reporter and environment editor for the Wall Street Journal, writes in the current edition of Foreign Affairs that the world’s renewable-energy push has been sloppy so far. It can be fixed through a new approach that forces these technologies to become more economically efficient, he writes in the article, “Tough Love for Renewable Energy.”
“It is time to push harder for renewable power, but to push in a smarter way,” Ball writes.
Kassia Yanosek, entrepreneur-in-residence at the Stanford center and a private-equity investor, writes in Daedalus, the journal of the American Academy of Arts and Sciences, that attempting to accelerate a transition to a low-carbon economy is expensive and risky. Policymakers, says Yanosek, need to realize that achieving a transition with government-aided commercialization programs will require putting billions of taxpayer dollars at risk, often in a high-profile way.
“If government officials wish to accelerate the next energy transition, they will need a different strategy to develop an industry that can survive without major subsidies, one that prioritizes funding to commercialize decarbonized energy technologies that can compete dollar-for-dollar against carbon-based energy,” Yanosek said.
With natural gas prices so low due to huge new supplies of shale gas, besting the current energy system has become tougher.
Reinvention, not rejection
Ball writes that governments and investors have spent big money on renewable power, slashing the cost of many renewable technologies and creating jobs. And yet, he notes, modern renewables remain a very small percentage of the global energy mix.
“Wind and solar power will never reach the scale necessary to make a difference to national security or the environment unless they can be produced economically,” he writes. “The objective is not wind turbines or solar panels. It is an affordable, convenient, secure, and sustainable stream of electrons.”
Taken together, the analyses by Ball and Yanosek argue for driving down the costs of key technologies and speeding up their deployment, said Dan Reicher, the executive director of the Steyer-Taylor Center, launched a little more than a year ago at Stanford Law School and the Stanford Graduate School of Business.
“This will require the right mix of targeted government policy and hard-nosed private sector investment,” said Reicher, also a Stanford law professor and business school lecturer, and formerly an assistant U.S. energy secretary and private-equity investor.
Ball, in Foreign Affairs, writes that rationalizing “the conflicting patchwork of energy subsidies that has been stitched together over the decades” is essential. Supporters of renewable energy point out that public subsidies for these technologies are a fraction of those for fossil fuels, both globally and in the United States. Realistically, Ball figures, subsidies should be examined not just in total dollar amounts, but also per unit of energy produced. This more apples-to-apples comparison would help foster an honest debate about which subsidies best promote the type of energy system countries want.
Also key to America pursuing clean energy in the most economically efficient way is for the country to exploit globalization rather than fight it, Ball writes. Despite mounting trade-war tensions with China over wind and solar power, he writes: “If the goal of the renewable-power push is a cleaner, more diversified power supply, then low-cost solar equipment, from China or anywhere else, is a good thing.”
In the fast-globalizing clean-energy industry, Ball writes, the United States should press its advantage in engineering, high-value manufacturing, installation and finance. “Much of the machinery used in Chinese solar-panel factories today is made in America,” he writes. Installation remains a domestic business, and the U.S. financial system allows homeowners to install rooftop solar panels at no upfront cost. Ball notes that two other energy shifts will be at least as important as renewable sources: cleaning up the process of burning of fossil fuels, which provide most of the world’s energy; and using energy from all sources more efficiently.
Nevertheless, Ball writes, America’s renewable-energy tax credits need to be changed. He and Yanosek agree the current credits have contributed to an inefficient, boom-and-bust approach to renewable energy.
Yanosek writes that smarter government polices could help innovative technologies overcome what she describes as the main financial barrier – the “commercialization gap.” To do this, though, politicians and taxpayers must realize that government efforts to help accelerate an energy transition will require massive and risky investments, she says. A project like building a next-generation nuclear power station or a new type of utility-scale solar thermal plant can require hundreds of millions, or even billions, of dollars.
The commercialization gap
After developers show that new technologies can work in prototype, they often cannot get the backing of traditional investors to build the first commercial project because the risk/return profile is not attractive to private investors, writes Yanosek, who invests in the energy sector at Quadrant Management. Such projects require more money than venture capital investors are willing to bet. But, says Yanosek, the risks of failure in such first-time projects are too great for private equity funds or corporate balance sheets.
If policymakers decide that funding commercialization is a priority, Yanosek’s article provides a roadmap for government support. First, limited public dollars would be best spent moving a bunch of promising new technologies to the next stage.
That leads to Yanosek’s next rule of the road: Government clean energy technologies must not become hostage to stimulus spending and job creation objectives. The legitimate beneficiaries of commercialization-gap support are promising but unproven technologies with no steady revenue stream. They have the potential for cutting prices, but by nature are not likely to ramp up employment significantly until after they have successfully crossed the commercialization gap.
Loan guarantees in many cases are not the best structure for funding companies that push the boundaries of cost and efficiency, Yanosek argues. Instead, the government should invest equity and thus profit proportionately when a beneficiary succeeds, setting up a revenue stream for continued funding. The funding body, furthermore, should take advantage of private-sector expertise and maintain independence from the Department of Energy, where awards can be slow in coming and may be politicized.
Ultimately, Yanosek says, policymakers and taxpayers must embrace the incremental advances and understand that there will be failures along the way. For government to push an energy transition faster than the historical pace, it cannot remove the steps, but only hope to take them more quickly.
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@ur momisugly Gail Combs says:
May 2, 2012 at 2:30 pm
Sun Spot says:
May 2, 2012 at 11:39 am
The biggest problem is the huge subsidies for fighting WARs !!!
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Do you home work first before making such a statement (I also want the USA out of other people’s business BTW)
The history of the world is the history of violent conflict. Even ants wage war. Both of you need to get used to the idea.
polistra says: @ur momisugly May 2, 2012 at 10:59 am
Cheapest way to “push harder for renewable power:”
STOP TEARING DOWN THE DAMN DAMS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Gunga Din says: @ur momisugly May 2, 2012 at 1:23 pm
Have any of them even mentioned hydopower? It has a proven track record. I’m sure there a plenty of dams that could be retrofited with turbines …. and when’s the last time a dam went bankrupt?
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Dams hurt the little fishies so dams are not “Green”!
It seems the watermelons do not like ANY type of energy: Sierra Club, NRDC Sue Feds To Stop Big California Solar Power Project. And that is the KEY point. that is missing in this article. Zombie has their philosophy nailed.
You can see that philosophy shining through this interview.
So-called “renewable energy” sources turn out to involve polluting mining or noise and bird-slicing side effects.
Besides, there is SUPERRENEWABLE energy using carbon nanorads from deep within the earth (oil) and coal and gas: once you burn them, they become renewable energy such as wood. So you get new renewable energy that didn’t exist until you released it from long confinement.
All life forms come from the reduction of carbon dioxide. Thus, the major side effect of carbon-fuels is MORE LIFE ON EARTH. I want that side effect; I want it badly; and I fight for it here on this site.
Massive subsudies cannot over come basic physics. Photovoltaics produce a measily 1.5 watts per sq ft at 1.5 volts for at most 40% of a 24 hr day. The lowest cost ‘solar cells’ are semi-pure Silicon crystal sheets with Boron & Phosporus embedded. Solar photons excite the one ‘excess’ Boron outer shell electron which exits the cell as one way direct current. This is molecular erosion, a process that is COMPLETELY exhausted in 20 years. To produce one ton of Silicon you also produce eight tons of toxic waste Ammonium Chloridadized Silicon waste. That is why one reason OSHA & EPA restriced plants in the US cannot compete with the Chinese slave colony. To get the one ton of semi-pure and eight tons of toxic Silicon you must mine a HUNDRED tons of total Earth material. Photovoltaic can never produce 1/10th of the original fossil fuel investment energy. Read “Green Prince of Darkness” for more on this, chemical storage batteries and the less-than-permanent magnets needed for Direct Drive motors and generators. We have been lied to about everything. Beware of the college grant weasels.
Uh, make that carbon nanorods.
“The objective is not wind turbines or solar panels. It is an affordable, convenient, secure, and sustainable stream of electrons.”
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I’m probably the ninth person to clip and post this, but those two sentences are the essence of renewable power. Governments have their eye on the wrong ball.
I think Stanford needs to put their money where their mouth is and power everything on their campus (including SLAC) solely with renewable energy. Lets see how well they can run their energy intensive university with the systems they propose for the rest of us.
“”””” Faux Science Slayer says:
May 2, 2012 at 4:01 pm
Massive subsudies cannot over come basic physics. Photovoltaics produce a measily 1.5 watts per sq ft at 1.5 volts for at most 40% of a 24 hr day. The lowest cost ‘solar cells’ are semi-pure Silicon crystal sheets with Boron & Phosporus embedded. Solar photons excite the one ‘excess’ Boron outer shell electron which exits the cell as one way direct current. This is molecular erosion, a process that is COMPLETELY exhausted in 20 years. “””””
You need to find some better issues of Popular Mechanics to read. Readily available Silicon solar cells routinely produce 15 Watts per square foot in standard sunlight, and furthermore their optimum matched load Voltage is 0.5 Volts; not 1.5 Volts.
As for them being made out of “semi-pure” silicon; even the lousiest of silicon solar cells, are far more pure than anything the EPA or the FDA will allow to be sold in any supermarket or drug store; and electrons don’t “exit” a solar cell; they pass through it.
You and Myrrh should get together for a Science Jamboree.
Gail Combs says:
May 2, 2012 at 2:30 pm
Sun Spot says:
May 2, 2012 at 11:39 am
The biggest problem is the huge subsidies for fighting WARs !!!
_______________________________
Do you home work first before making such a statement (I also want the USA out of other people’s business BTW)
The bigest chunk of the federal budget is actually PENSIONS. Forbes states: “State and local unfunded pension liabilities and health benefits for retirees” has a gaping range, anywhere from $1.2 trillion-$4.4 trillion, or 8%-29% of GDP. and that does not include the federal pensions (This is not SS or welfare)
For the federal government, 2012 pensions are 16% of the spending while defense is 14% chart
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Pensions and health care will crush America. And when interest rates go up, financing government debt will take over.
Also, the US, like many countries, uses its military as a form of employment. Cut the military and you have a large number of young men and women with little to no life skills looking for work. So tread lightly when you criticize the military. Many people leave the military well-trained and very disciplined.
Curiousgeorge says:
May 2, 2012 at 3:25 pm
“• The World Health Organization (WHO) attributes 141,000 deaths and 5.4
million lost Disability-Adjusted Life Years (DALYs) in 2004 to global warming.
This is only 0.2% of all deaths and 0.4% of the burden of disease (Figure 1;
WHO 2008a, 2009).”
It would be interesting to know exactly what causes of death and disability are deemed responsible for those stats and how they are related to the temperature state of the planet. As far as I can tell the only deaths attributable to GW are those that have resulted from the ill-considered and futile attempts to respond to a CO2 crisis which does not exist
Steve from Rockwood says:
May 2, 2012 at 4:46 pm
….Also, the US, like many countries, uses its military as a form of employment. Cut the military and you have a large number of young men and women with little to no life skills looking for work. So tread lightly when you criticize the military. Many people leave the military well-trained and very disciplined.
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I have no problem with a good size standing army. It keeps the bullies in line. (I am very much against closing military bases) However I do have a problem with the lives of our young people being wasted in third world hell-holes where we have no business being in the first place. Especially when the real reason is so bankers/military contractors can make oodles of money off the deaths of others.
I was an Army wife during ‘Nam where the military was completely hamstrung by the idiots in DC. There were a lot of very angry officers in that war.
Solar thermal energy does not work. It has to be where it is mostly sunny, needs a lot of water, and near the sites where the electricity is needed. That makes it a very limited application.
Solar panels and wind turbines are useless for anything but ancillary energy at the end user, to take load off the grid but not to supply the main power of the grid. Wind turbines are so 1700s and there is a reason they never took off. They need to can the wind farms as simply too expensive, unreliable, and environmentally damaging. Solar panels need much more maintenance that is generally mentioned and also terribly ungreen. These are the least green forms of energy.
YOU CANNOT BUILD A RELIABLE ENERGY SUPPLY FROM UNRELIABLE ENERGY SOURCES.
Lady Life Grows says:
May 2, 2012 at 4:01 pm
….All life forms come from the reduction of carbon dioxide. Thus, the major side effect of carbon-fuels is MORE LIFE ON EARTH. I want that side effect; I want it badly; and I fight for it here on this site.
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It is interesting that the use of commercial fertilizers started in the 1850’s. Irrigation started even earlier. Hybridizing was practiced in the late 1800’s and the use of herbicides and pesticides in the 1940s. It looks like at least part of the increase in grain yields today is probably due to CO2 fertilization.
In 1830 5 acres yielded 100 bushels of wheat and 2-1/2 acres was required to produce 100 bushels of corn.
By 1910 to 1920 The average annual consumption of commercial fertilizer was 6,116,700 tons. However in 1930 it still took 2-1/2 acres to produce 100 bushels of corn, and 5 acres was still required to produce 100 bushels of wheat.
By 1945 it was down to 2 ac for the 100 bushels of corn. In 1955 it was down to 4 ac for the 100 bushels of wheat. (Pesticides and herbicides?)
By 1965 it was further reduced to 3 1/3 acres for wheat and by 1975 3 acres (wheat). In 1975 to produce 100 bushels of corn only took 1-1/8 acres. (data from link)
HYBRIDIZING
The proposal for hybrid maize was made by G.H. Shull in 1909
Pesticides and herbicides
From the article
“If policymakers decide that funding commercialization is a priority, Yanosek’s article provides a roadmap for government support. First, limited public dollars would be best spent moving a bunch of promising new technologies to the next stage.”
NO! NO! NO!
many of the bloggers here get it while the univesity professors and the DOE, etc. do not!
The problem is that half baked concepts are moved to the next stage when the basic research and the “foundation” has not been completed. Just look at the list of failures outlined.
Having worked on numerous energy development jobs including alterrnative fuels, it has become clear that failure is the natural result when all the research and economics have not been properly sorted out. Investments should focus on the basic research, moving to the next stage is very expensive and failure guranteed using the subsidized route since “it’s not my money” The government cannot pick sucesses and primarily uses the procedure to “subsidize my bundlers”
And by the way it time to give up on solar and windmills since the laws of physics and chemisty put a low upper bound on energy production barring a huge breakthrough in the Lab, which is highly unlikely. As some point a smart person realizes that you cannot get blood out of a stone.
If there is a real breakthrough in alternative energy I predict it will not be any of the current ones being pushed by the government. It will be something we never expected like nuclear energy was.
BTW the fossil fuel business is discovering and and applying new technologies every day that should make wind and solar ashamed of their meager accomplishments. Think fracturing, deep water drilling, horizontal drilling, catalyst developments, geological technologies that pinpoint promising reserves, oil sand extraction, coal liqufaction, gas to liquid conversion, gasification, and who knows what next.
The large energy companies are not chasing red herrings, they generally know not to go to the next stage until it is demonstrated technology and economically viable. Believe me, I have worked on and witnessed many challenging projects cancelled before investing and loosing a fortune.
All this without government subsidies!!
Gail Combs says:
May 2, 2012 at 5:06 pm
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There are a lot of idiots in DC.
Great posts Gail. Keep them coming.
One issue that annoys me is the switch from R&D funding to subsidy when a technology isn’t ready. I’m OK with the R&D funding from government tax dollars but why introduce a technology (wind turbine or solar panel) that costs 5-10 times more when commercialized. Put that subsidy back into the technology and only implement it when it is competitive.
The disadvantage of both wind and solar is that they are intermittent.
A bigger problem with solar is seasonality (outside the tropics of course).
I live in a very sunny place. Summer cloud cover is less than 10%. My rooftop PV system produces 8 to 10 kwh pretty much every day in summer. But come winter that falls to 2khw on a sunny day, and on cloudy/rainy days less than 1kwh. And perhaps half the winter days are cloudy.
“The objective is not wind turbines or solar panels. It is an affordable, convenient, secure, and
sustainable stream of electrons.””
Why electrons?
Far before electricity shortage becomes a problem, whe are facing a rapidly growing severe shortage of conventional liquid fuel that is critical to transport (aka “peak oil”). That is now beginning to force us to alternative fuels including producing fuels from bitumen, heavy oil, coal, gas etc.
See production for north sea, Texas and global.
http://www.theoildrum.com/node/8859#comment-867448
See 13% decline in Available Net Exports (after China & India) since 2005.
Prior to the invention of the steam engine, water power was always preferred over wind power. The reason Holland had lots of windmills is it is flat, and water power wasn’t an option.
The most neglected, but most viable way of producing ‘renewable’ energy in much of the world is small scale low head and micro-hydro (see the wikipedia pages). If you want to spend R&D money that’s probably the best place to spend it (after small scale nuclear).
They never learn, do they.
Here in Australia the Greens extracted a promise of $10 billion (a lot in our small economy) for ‘clean energy’ boondoggles like the ones being advocated in the article. It’s the same crappy reasoning – these things are not economically viable, so the answer is to give the earnings of hard working taxpayers to alternative energy outfits and their well-paid executives. If it goes belly-up (as they usually do), tough luck, taxpayers, while the people who took the money get to keep whatever they managed to extract for themselves.
As for solar energy, growing up in this sunny country, I have been hearing about the breakthrough which is just around the corner for at least 40 years now. I think it’s safe to say that solar is a dead-end – billions have been spent on research over many decades for very small improvements. The laws of physics aren’t showing any signs of changing. There are useful niche applications for small scale solar, for example in remote areas, but that’s about it.
I think there is a role for governments in funding basic research, but as soon as taxpayer money goes into the commercial world it tends to vanish, never to be seen again. Of course, this can happen to private investment money too, but the difference is that the investors took a voluntary risk with their own money. Nobody asked US taxpayers if they wanted to risk $500 million of their money with Solyandra, and nobody is going to ask Australian taxpayers if they want to risk $10 billion of their money with the ‘clean energy’ companies, who are licking their chops as I type. Our only hope is getting rid of this government before they give it all away.
hagendl says: @ur momisugly May 2, 2012 at 6:55 pm
“The objective is not wind turbines or solar panels. It is an affordable, convenient, secure, and
sustainable stream of electrons.””
Why electrons?
Far before electricity shortage becomes a problem, whe are facing a rapidly growing severe shortage of conventional liquid fuel that is critical to transport (aka “peak oil”)….
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That is being worked on.
Thorium lasers: The thoroughly plausible idea for nuclear cars
Thorium was originally tested as a fuel for nuclear powered Aircraft in 1954. A reactor was run for four years. This holds promise as power for ships, trains and aircraft.
“If government officials wish to accelerate the next energy transition, they will need a different strategy to develop an industry that can survive without major subsidies, one that prioritizes funding to commercialize decarbonized energy technologies that can compete dollar-for-dollar against carbon-based energy,” Yanosek said.
So Yanosek doesn’t want subsidies, she wants government fundings.
“Investment advisor to the energy sector; Founder, Tana Energy Capital LLC
Kassia Yanosek is an investment advisor to the energy sector and is founder of Tana Energy Capital LLC. She also serves as a Steering Committee member of the U.S. Partnership for Renewable Energy Finance, a group she co-founded in 2009 with other financiers from leading institutions to provide insights to U.S. government officials on renewable energy policy from a capital markets perspective. In 2005, she served in the White House as an advisor on energy and economic policy at the National Economic Council.”
http://www.intelligencesquared.com/people/y/kassin-yanosek
It’s all a lot of lobbyist twaddle.
There are really only two, long term, sustainable energy sources. Nuclear and space-based solar. Unless we return to a world population of a few million, those are really the only two.
Starting from the assumption that renewable is so much better that it must forced. Recycles old arguments about why the government has to do it. Not much to recommend here.
Again with the group-think academic as dual moral/expert authority and activist.
Time for LENR. Where is Rossi when we need him?
Curiousgeorge says:
May 2, 2012 at 3:34 pm
The history of the world is the history of violent conflict. Even ants wage war. Both of you need to get used to the idea.
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Of course it is that is why I am in favor of a large standing Army. However it does not mean a civilized people should jump into war at the drop of a hat. Now a days the only winners of a war are the bankers who lend governments money and the arms dealers.
A government NEVER wins a war unless they can grab compensating land and resources. War is ALWAYS a loss of people, property and wealth.