March 19, 2010

World Energy Technologies Summit

Yesterday, thanks to the organizer's (Jim Clark) generosity, I attended the World Energy Technologies Summit at the Time Life Building in New York City.  It was a fascinating day full of very smart people talking about the current state of energy technologies and the challenges we face going forward.  In the following I will summarize some of the main ideas that seemed to recur over the course of the day.

Portfolio of Solutions
There was broad agreement that there is no silver bullet.  The full menu of renewables was represented as were ideas relating to improved handling of fossil fuels.  CCS (carbon capture and sequestration) was present only in the context that it is a long way off and very unlikely to be a significant part of our near-term management portfolio.  Combined Heat and Power (CHP) on the other hand was presented as an immediate and easily implemented improvement to a broad spectrum of our energy production facilities.  Clearly there will be other views on the details, but there was a strong sense that we need to be working very hard across a very broad spectrum of technologies.

Clean Energy Standard
The focus of all of the participants was on producing energy with low carbon impacts.  There was very little distinction made between renewables and low C fossil.  There was a strong case made that there is a lot of natural gas coming on line and that, properly managed, that resource could put a big dent in our (US) current CO2 emissions (to the extent that CCS was considered feasible, it was in the context of natural gas).  Hence there was a strong sense that Clean Energy Standards should replace Renewable Energy Standards.  (The case was made that by eliminating all fossil fuels from a standard, the perverse case of maintaining coal plants often results.)  Our attention needs to be on driving down the amount of carbon that is emitted into the atmosphere in the face of the very real demands for energy that will develop in the coming decades.

Information Technologies
It is clear that information technologies will play a big role in managing (reducing) our energy usage as we go forward.  Google is putting a lot of effort here and there was at least 1 other startup present focused on sub-household / sub-building level energy management.

The regulatory framework in the US is broadly perceived to be very badly broken.  In the context of arguing for Feed In Tariffs, Kevin Parker from Deutsche Bank argued that countries that will compete well for investment funds will have regulatory frameworks that have transparency, longevity  and certainty (TLC).  In the US we currently have none of these, while Europe and some countries and Asia do.  While not explicitly stated, it seemed implied that the floundering about wrt a cohesive energy policy in the US could be worse than not trying at all.  While there was broad agreement that we need a "good", systematic energy policy framework and there were many examples of policies that were counterproductive, beyond the need for TLC, there was no discussion of how we would go about designing a "good" policy landscape (not entirely true, see the links to the Breakthrough Institute below).

Finance and Investment
This issue is closely related to the previous point.  Many speakers encouraged vastly increased government investment in energy technologies, both on the R&D side and on the market side (e.g. in the form of loan guarantees).  It was also clear that the government cannot fill the demand for investment.  The notion of a "trillion $ market" came up often and it is clear that private investment will be needed.  The absence of TLC in the US policy landscape strongly discourages domestic investment because regulatory risk cannot be quantified; hence investment dollars go elsewhere (e.g. Europe and Asia).

A sense of urgency
Things are happening very fast in this arena.  Companies that did not exist 5 years ago are now global leaders in some sectors (e.g. photovoltaics).  While the US continues to have strength, Germany and China are rapidly emerging as leaders in energy technology, not only in manufacturing, but also in innovation.  While the state of play is not rosy, a presentation by the Breakthrough Institute made the case that with decisive action, the US can maintain its historical leadership role.

Many more bits and pieces, but I will leave it at that.