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Nathanael Greene’s Blog

Congress' $2 trillion dollar clean energy challenge

Nathanael Greene

Posted June 13, 2012

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Two trillion dollars is a lot of money.

That’s how much experts expect the world’s economies will spend on clean, renewable energy between now and 2020.

As an advocate for technologies such as wind and solar power, energy efficiency, and geothermal energy, I’m thrilled at the prospect of all that investment in clean, renewable power. After all, renewable energy has produced jobs by the tens of thousands annually here in the US in recent years—jobs for construction workers and engineers, accountants, secretaries and scientists. Renewable energy creates clean air for our kids to breathe. As the father of two beautiful girls, this is what drives me the most. And, importantly, clean, renewable energy promotes American self-reliance. It can free us from some of the world’s military and economic conflicts over energy.

But as excited as I am about the incredible advances renewable energy has made, I am equally concerned that the US will miss out on the paradigm shift in the world energy market. That concern was highlighted recently by the release of three important reports, one from Third Way, one from the Pew Charitable Trusts, and one published jointly by the Breakthrough Institute, the Brookings Institute and the World Resources Institute. All three highlight that we’ve made incredible progress in the last several years towards a clean, renewable energy future.  But all three also point to the same conclusion: We can let slip this incredible economic opportunity if we allow key federal incentives for clean, renewable energy to expire.

The Third Way report likened our current moment to one faced by photography giant Kodak which failed capitalize on its early—in fact, industry-leading—digital photography technology. Congress, too, seems to be having a Kodak moment, failing to grasp the energy paradigm shift now underway. Perhaps that’s why, they’ve let several key renewable energy incentives lapse, including the Section 1603 cash grant program for solar, credited with producing 75,000 jobs. Others, like the Production Tax Credit for wind, and several advanced energy manufacturing incentives will expire soon, reduce employment in wind by 37,000 jobs

All told, per the Institute report, federal investment in clean, renewable energy will fall to just a quarter of its 2009 total by the end of 2014. If we fail to continue investing in renewable energy, we’ll lose our recent global leadership in clean energy investment to countries such as China, Germany and South Korea. They’re still pouring hundreds of billions of dollars into this exciting field, just as it’s starting to transform the way the world gets power.

World renewable markets are growing exponentially of late. Less than ten years ago, solar power was a cottage industry. Now, it’s what a recent report by McKinsey & Company calls “a $100 billion business with global reach.” Federally funded advances in both in technology and in the way that technology is deployed have helped drive this growth. Already, the price of wind power has dropped 90 percent in the last 30 years, thanks to innovations developed at the National Renewable Energy Laboratory and promoted through the soon-to-expire Production Tax Credit.

Similarly, the price of solar electricity has plunged over the last eight years, as government incentives and standards have driven both demand and incredible economies of scale. In 2004, one manufacturer of US-made solar panels sold them for $2.94 a watt. Today, their price is 73 cents a watt—75 percent lower.

That’s why it’s troubling, and a bit perplexing, too, to see Congress oppose the extension of programs that have driven so many advances and produced so many jobs in this burgeoning field. Clean, renewable energy creates jobs, cleans the air our kids breathe, and reduces our dependence on dirty coal and foreign oil. Let’s not miss out on the economic chance of a lifetime by pulling the rug out from under these programs. They spur clean, renewable energy’s success, both in the US and in the $2 trillion world market.

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Stan LippmannJun 13 2012 02:46 PM

Your argument are ok, and I see you gave up on the AGW scam. The most important thing to despite your global warming guilt is to expose the scam in the principal that globalist scams are the real problem to begin with.

barry bielatJun 13 2012 06:38 PM

Solar projects can now produce electric power in many areas of the world as cheap as any other IPP when infrastructure and future feedstock costs are put in to the equation. Our company is looking at project finance for over 1GW of solar over the next 12 months.

Barry Bielat- BSC Clean Energy, LLC

Andrew WestJun 13 2012 06:51 PM

It is amazing, even disturbing, that we continue to see these articles suggesting that wind and solar make sense OR have any significant part of our energy future. This is public relations at its worst. OF COURSE those getting enormous government subsidies want them to continue, but that misses the point. Math is required here. Have wind and solar made a

measurable difference in our energy mix and have they helped to reduce C02 emissions?

No. Not at all. It has been a huge disappointment and waste of public funds. We are just beginning to learn that developers make money when the deal is done, not based on performance. This sounds a lot like sub-prime mortgages.

I think we all need to start telling the truth - especially journalists.

Solar and wind schemes have not reduced CO2 emissions and they have only raised electricity rates. "Energy farming" (wind and solar) will NEVER replace coal (or oil) and they are simply an over-priced supplements, not "alternatives." Incentives gave people false hopes about solving the problem and we are now beginning to learn the truth. Polls demonstrate that nearly 60% of Americans "believe solar will replace our dependence on oil," yet it is impossible.

Despite significant subsidies in the last 5 years ($1 trillion worldwide) wind and solar are less than 2% of our total electricity generation (solar is .1%). Plus, because they are unreliable any attempt to accept their unpredictable electricity generation requires us to ramp down our base load electricity generation, creating additional costs and more CO2. This 2% addition of renewables hasn't changed CO2 emissions at all - even new demand has

been 3X wind and solar. These schemes have made NO difference at all.

Cheerleading for wind and solar might extend the incentives, but it won't solve the energy problem. We need clean, affordable electricity.

My work is here:

It would be a shame to waste another $2 Trillion and have nothing to show for it.

Freed Jun 19 2012 12:46 PM

AGW is accepted as real and extremely destructive by virtually all scientific bodies. Maligning the science benefits fossil fuel industries. Don't be a fossil fool OR a fossil tool.

BSJun 19 2012 06:12 PM

In response to: "AGW is accepted as real and extremely destructive by virtually all scientific bodies."

No, it is not. The greenhouse effect is probably generally accepted. The impact of carbon "pollution" on the climate is not. If it were, proponents of "extremely destructive" AGW would not have to resport to campaigns of misinformation to achieve their goals.

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