The NYT Freakonomics column is attempting to figure out what affect the economic downturn is going to have on the clean technology industry. By asking three of the leading experts in the field (George Tolley, Professor Emeritus of Economics at the University of Chicago and president of RCF Inc.; John Whitehead, professor in the Department of Economics at Appalachian State University and contributor to the blog Environmental Economics; and Ethan Zindler, head of North American research at New Energy Finance) Freakonomics has done a pretty good job of summarizing what 2009 will probably look like.
If you're looking for a great wealth of analysis, head to the original article. But if you don't have time for that, here's a quick summary:
The cost of fossil fuel is dropping once again, so the cost differential between renewables and fossil fuels is widening, not closing (like it was for years.) In short, that's bad news. It's also bad news that people will have less disposable income with which they will choose renewables (when given the choice.)
And, in the short term, there's less capital for investments and IPO's, for certain. But the fundamentals of the sector are extremely strong. Oil and natural gas prices remain historically high, state and federal renewable energy mandates remain in place, and the possibility for further carbon regulation is extremely strong.
In short, everyone expects things to stagnate for a little while, but the sector will remain an important growth industry, and the possibilities for exponential growth in wind, solar and other renewables remain strong.
The US's new President has a lot on his plate. An unsustainable and unstable energy supply, a crumbling economy with skyrocketing unemployment, and an environmental crisis the likes of which have never been seen.
And, I suppose, he could take on all of these issues one by one...but that just wouldn't be in the spirit of things. Obama seems to have a "one plan to cure them all" kind of attitude and, so far, I'm a fan.
According to his weekly YouTube address, shown above, Obama plans to add three million jobs to the American economy by doubling renewable energy production and vastly improving the efficiency of existing buildings. Jobs, Energy and Environment in one sentence! And if he's including hydro-electric in his renewable energy production numbers, than this is a HUGE commitment. Of course, he doesn't say when it will be done, so we should all reserve judgment until we get a few more specifics.
Of course, this approach is dangerous. By focusing on all three, it's possible that none of them are going to be addressed adequately. Indeed, this plan might be the worst way of all to create jobs and deal with our environmental crisis. But that's not the way it looks to me.
By focusing on efficiency, Obama guarantees energy savings for his buck, and also the creation of infinitely employable jobs retrofitting existing buildings. This creates a very high number of jobs per dollar spent, and they are jobs that can never be outsourced.
Additionally, by setting high but achievable goals for renewable energy production, he creates the foundation of a long-term energy strategy in which we don't just use less, but we replace existing power generation with clean sources. And, theoretically, this plan might breathe a little life into the all-promising growth sector of renewable energy.
Now, I could be wrong about this, I might just be a fanboy with very little economic training (OK, I definitely am.) But I think the time is ripe for a real domestic energy strategy that utilizes the innovation and dedication of the American people.
It can sometimes be a little unclear (especially first day of a new year) how the previous year changed the world. No one guessed in 1946 that the Magnetron Spencer Percy was developing for use in a RADAR system (and that subsequently melted a candy bar in his pocket) would one day become the microwave oven. But I like to think that we can make some pretty good guesses about which of this year's innovations are going to be with us, and changing our world, for a good long time.
Here's my list of the top ten clean tech innovations of 2008.
You know how you can capture and produce radio waves with antennas? Well, what if you could built an antenna so small, it could capture and emit light? The first large array of these nano-antennas was produced this year, and the possibilities for them are endless. They may become efficient light sources, efficient solar panels, or simple ways to transfer energy we feel as heat into energy that we don't feel at all, making them a kind of passive climate control system.
President Barack Obama
Maybe not an innovation in the traditional sense, though, I like to think that it took some innovative thinking to get this man elected president. But President Obama's Administration has already grown to include clean technology advocates and researchers, and carries with it promises of green collar jobs, carbon markets, and restored protections for many of our imperiled ecosystems.
EEStor Begins to Emerge
The power storage company, EEstor, which we're still not 100% sure isn't full of crap did finally begin to tell us some things about their miraculous-sounding power storage technology. If true, vehicles could have batteries lighter than gas tanks, that could charge in five minutes and would never degrade. These ceramic "electrical energy storage units" have not yet seen the light of day (or independent verification) but they do already have contracts with Lockheed Martin and plans to deliver their first unit to an electric car company shortly.
The Gas Crunch
Hey...remember back when gas was freaking ridiculously expensive? Well, while the market may not (the Ford F-150 is, once again, America's most popular vehicle) the innovations that poured into the market to try and help consumers deal with high gas prices will not go away. Better hybrid systems, more efficient engines, massive investments in biofuels, the re-emergence of diesel in America were all direct implications of skyrocketing gas prices.
Solar at Grid Parity
The cost of delivering electrons to the grid has gone up a little bit in the past year, and the cost of delivering electrons to the grid using solar power has dropped dramatically. The first solar electrons costing roughly the same amount as natural gas electrons were produced this year. There's no reason to think that this trend will end, as natural gas gets more expensive, and solar systems get more efficient. In fact, one company is already promising solar power at the same price as coal!
Project Better Place Expands Wildly
While I'm still not 100% sure that Better Place, with it's many battery swapping stations, cell phone-like payment plans and "one sized battery fits all" platform makes the most sense, they have managed to get a lot of governments to bite. California, Hawaii, Australia and Denmark have all signed deals with Agassi's gigantically ambitious electric car program. It could all become extremely passe if EEStor's technology pans out. But otherwise it's one of the few solutions that will work now, instead of waiting for battery technology to catch up with our goals as car drivers.
Pickens Counterbalances Gore with a Real Vision
We've tired of Al Gore. The love affair was great while it lasted, but he's been attacked from too many angles to really latch onto his message anymore. But what about an ultra-conservative, Texas oil man? Now that's the kind of champion clean technology needs! And not only does he provide a different perspective, he provides a clear plan for how he wants to change our energy future. And while it might be a plan that would make him one of the richest people in the world, it's also actually a pretty good plan.
There are many shades between brown and green. Somewhere in between devil-may-care, pollute-as-you-go, overindulgent consumerism (Dubaiâ€™s planned air-conditioned beach being a perfect, albeit cartoonish example) and the eco-ascetic philosophy - that we must learn to live without any of the things we like â€“ is a man named Johnathan Goodwin.
Mr. Goodwin, a native Kansan, retrofits cars so that they can run on renewable fuels, such as biodiesel, hydrogen, or electric batteries. In that sense, heâ€™s just doing what lots of other ecogeeks out there are doing â€“ tinkering with cars so that they donâ€™t need to run on gas. But Goodwinâ€™s projects are no frugal economy vehicles â€“ they exude luxury, size, power and style.
Consider, for example, his 1400 pound Ford F450 that runs on diesel, hydrogen or natural gas. Or a â€™64 Impala that has a raging 850 horsepower engine and gets 25 mpg. Goodwin works on projects for the rich and famous; his clients include Neil Young â€“ whose 1959 Lincoln was converted into an EV with a 100 mile range â€“ and Governor Arnold Schwarzenegger, whose 1984 Jeep now gets twice its old fuel economy (in addition to received souped-up power and handling). And then of course thereâ€™s his literally green Hummer that gets 40 mpg.
Dr. Steven Chu, President-elect Obama’s recent choice as the next Secretary of Energy, is going to have a lot of responsibility on his shoulders. Obama has made energy a top priority, and it is going to be largely up to Chu to help figure out exactly HOW to develop our renewable capacity, reduce dependency on oil, reduce carbon dioxide emissions, etc.
But even if Obama had not personally advocated energy issues to the extent that he has, the position of Secretary of Energy is simply much more important in 2008 than it ever was before. For all intents and purposes, Dr. Chu will be the first Secretary of Energy to take office in a world where clean tech is a reality, not just a dream.
So who is this guy?
Well he’s no dummy, that’s for sure. He got undergrad degrees in math and physics, got a PhD in physics from Berkeley, served as a professor and department chair of physics at Stanford, as well as the director of Lawrence Berkeley National Laboratory. Oh yeah, and he also won the Nobel Prize in 1997. Not too shabby.
More to the point, he loves renewable energy. At LBNL, Dr. Chu helped kick off the Helios Project, a DOE-funded research effort to develop solar energy and biological-based fuels. The project endorses a broad strategy which involves looking into multiple areas – carbon sequestration, cellulosic fuel, geothermal energy, and improving efficiency. He doesn’t believe one technology will solve our problems, and he seems to have a good sense of which technologies should be employed when.
I think what’s most likeable about Dr. Chu is that, from listening to him speak, you get the sense that he is simply a scientist trying to do what is best for the world, with no hidden motives. His approach to the issues is honest and straightforward – let’s give people the energy they need in a way that is good for the country and possible with available technology. Of course, high ranking political positions can get to a man’s head (cough), but at least for the time being it’s nice to know that the nation’s energy future is being led by a man with optimism and ideals.
If you want to get a better sense of who he is, check out this video of a lecture he gave about the Helios Project, and energy issues in general.