Clean Energy Innovation insights from Matthew Stepp and Megan Nicholson
The Department of Interior (DOI) announced this week the first-ever competitive offshore wind auction. Many policymakers and advocates are hailing it as a milestone moment: the auction offers leases for almost 165,000 acres of ocean off the coast of Rhode Island and Massachusetts, which if fully-developed, could power one million homes using clean wind power. While these short-term impacts are important, they’re still small compared to the overall clean energy needs of the United States (and the world). DOI’s auction is a much more important long-term step in support of offshore wind innovation.
Without a doubt, the opportunity is ripe for offshore wind technologies to generate low-carbon electricity. Seventy-eight percent of U.S. electricity demand comes from 28 coastal and Great Lake states, which geographically correspond well to high-speed offshore wind patterns. Many of these states pay higher average electricity costs than the rest of the country, providing an opening for low-cost, low-carbon energy alternatives (price data found here, page 7). But offshore wind has a big problem: it’s not cost-competitive with other sources of electricity.
The federal government, partnered with coastal states, recognizes this challenge and is implementing a … Read the rest
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 … Read the rest
The impacts of budget sequestration are slowly being unveiled to the general public. Furloughs at the Federal Aviation Authority (FAA) led to air traffic gridlock and angry travelers. Parks and national tourist sites are cutting back hours. And the Department of Defense (DOD) recently announced furloughs for 680,000 civilian employees. While these short-term impacts are painful, in particular to those losing work hours and income, sequestration is initiating cuts with negative, long-term impacts, which are not yet immediately apparent.
One area of specific concern is the potential $381 million in cuts to energy innovation investments at the DOD – a 25 percent cut compared to FY2012 levels. Since 2009, DOD has invested $5 billion in clean energy research, development, testing, demonstration, and procurement, representing almost 25 percent of U.S. clean energy funding in FY2012. DOD’s focus on clean energy innovation is important for three reasons:
- The DOD has been the source of some of the last century’s most important breakthrough technologies, including the Internet, GPS, and microchips and it could have a similar impact on clean energy technologies like batteries and smart grid;
- The DOD has developed its own cohesive
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?
In my … Read the rest
Buried in the President’s FY2014 budget proposal is an interesting reform that could impact energy innovation without relying on Congress for any new – and hard to come by – federal investments. The idea is to create eight new research incubator programs at the Department of Energy that forge collaborations with early-stage start-ups to bring promising new ideas closer to commercial scale. In particular, the incubators would focus on promising technology pathways DOE is not currently investing in.
The incubator programs would be housed within each of the energy technology offices (except for geothermal) and leverage a small share of existing research budgets. The figure below provides the proposed budgets for the new incubators. (Note, the DOE is also continuing its existing solar incubator program.)
Each incubator is expressly aimed at emerging areas of research and technology development not “supported in any meaningful” way by existing DOE projects.
For example, the Vehicle Technologies Program wants to focus on advanced power electronics and electric motor ideas. The Advanced Manufacturing Program wants to invest in “revolutionary” technology pathways that cut energy-use in production, but also make U.S. manufacturers more competitive. And the … Read the rest
New York Times columnist Thomas Friedman is nothing but consistent: he wants a carbon tax and he wants it bad. Since 2005, he’s mentioned “carbon tax” 41 times in his column. Yet, while his support for a carbon tax hasn’t waned, the characteristics of his preferred carbon tax policy have.
As ITIF argues in Inducing Innovation: What a Carbon Price Can and Can’t Do, pricing carbon by itself does little to support clean energy and carbon reductions. It can be a useful tool for nudging near-competitive low-carbon technologies into the market and spurring modest carbon cuts, but it’s at best a complementary climate policy. That changes if we use a carbon tax as a revenue-raiser to support additional policies aimed at making clean energy cost and performance competitive with fossil fuels. In other words, tying a carbon tax to aggressive energy innovation policy can get us better climate mitigation “bang” for our climate policy “buck.” It’s why I proposed an “Innovation Carbon Price” that ties 20 percent of carbon tax revenue to public energy innovation investments and 80 percent to strengthening corporate tax incentives for training, research, … Read the rest
It’s clear that the world is losing the race against global climate change. The International Energy Agency put numbers to this fact in a new report, Tracking Clean Energy Progress 2013, which finds that, “the amount of CO2 emitted for each unit of energy supplied has fallen by less than one percent since 1990.” In other words, for all of the global growth in renewable energy in the last decade, the world continues to rely on fossil fuels to the detriment of more global warming. Of course, this has to change and change fast.
This past weekend, I participated in a day-long symposium at Villanova University aimed at discussing what kind of changes need to be made. The conference hook was brought on by Rutgers Law Professor Howard Latin who provided the keynote address based on a book he published late last year titled Climate Change Policy Failures that argues conventional climate policy approaches fought for during the last twenty years such as cap-and-trade, international negotiations, and emission regulations won’t successfully produce deep carbon reductions. Latin contends that these “incremental” policy approaches simply kick the emission reduction can … Read the rest
Last week, in a surprise to many, the European parliament defeated a proposal to postpone the auctioning of emissions permits, a move that would have propped up prices in the bloc’s carbon market, known as the EU Emissions Trading Scheme or ETS. The market reaction was quick and brutal, with the price of carbon allowances falling by more than 30%. The political reaction was similar — the Wall Street Journal wrote that the vote was the ‘equivalent of the pope renouncing celibacy‘.
Such proclamations are not limited to those opposed to action on climate. In London, a carbon industry insider explained that ‘We have reached the stage where the EU ETS has ceased to be an effective environmental policy.’ However, the fact that the ETS has fallen short of expectations has much more to do with unrealistic expectations than it does with a surprising decision by the European parliament. After all, the price of EU emissions allowances was €4.50 before the vote, hardly an
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 … Read the rest
Innovation is one of America’s most prized assets. If our country is going to successfully compete on the global stage over the course of the next several decades, we must develop the new technologies, businesses and industries that will allow us to keep pace. President Obama’s just-released budget for 2014 contains several key components that further this goal.
ITIF applauds the President’s $1 billion request to create a series of manufacturing innovation institutes that will help propel advanced manufacturing and rejuvenate a sector of our economy that has been hit especially hard over the past decade. The National Network for Manufacturing Innovation will create 15 advanced manufacturing centers across the country that will spur research, development and deployment of next generation technologies, products and processes. As ITIF has shown, improving manufacturing innovation is central to enhancing American competitiveness and furthering economic development and business creation.
On energy innovation, the President’s budget request continues to push for greater public investment in the development of new clean energy technologies. The budget proposes boosting clean energy research to nearly $5 billion, a 15 percent increase compared to the FY2013 Continuing Resolution (CR) … Read the rest