future clean tech

green business, policy and technology in australia and abroad

Posts Tagged ‘renewable

When clean energy will kill coal

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windpowerToday I was discussing the future of hydrocarbons with a colleague whose family has been highly successful in the fossil fuel industry, and in addition to his skepticism on the anthropogenic nature of climate change, he raised the issue of cost. He was of the opinion that we will become steadily more, not less, addicted to oil, coal and gas in the medium- to long-term.

I disagreed strongly with him, and here’s why. Within a matter of seconds, I had him agreeing with me that vehicles are rapidly shifting from oil. We shared the belief that electric vehicles are the future. His objection? Where are we going to get the electricity from? And his definitive answer? Coal. And perhaps some nuclear.

Of course, if we’d had this conversation a mere decade ago, he would have laughed off the suggestion that our vehicles would run off batteries in a matter of a few years. The technology was unproven, expensive, heavy, and on and on. And yet, here we are in 2009, on the cusp of what is widely recognised as the next phase in vehicle production. The future, as they say, is now.

The same will be true of coal. Within the next few years, there will come a point when power generated by one or more renewable sources will be cheaper than coal-generated power. Ron Pernick and Clint Wilder have pointed out that this tipping point already occurred in Colorado after Hurricane Katrina caused natural gas prices to spike, and clean energy produced by wind power briefly became not just competitive with but in fact cheaper than hydrocarbon-derived power. Demand for the local green power program quickly outstripped supply that November in Denver and the rest of that state.

Of course, this was temporary, but it was a harbinger of things to come. Coal is cheap because it is an entrenched, old technology. It is financially “safe” and relatively plentiful. Wind happens to be the clean technology that has become most widespread and most cost-efficient – and as the technology improves and returns to scale increase, costs will dip even further. In the long-run, the same is likely to be the case for solar, tidal, geothermal, wave, and other renewables. And as soon as these technologies deliver energy more cheaply than dirty energy, the growth in takeup will be explosive.

This is the very reason why a price must be put on carbon today. Is pricing GHG emissions “artificial”? Perhaps. But it is simply a policy decision that must be taken to speed up the consumer uptake of clean energy. Rather than waiting for all smokers to die of lung cancer, we put a price on lung cancer by taxing cigarettes and funding public health with the revenue; rather than waiting for double-digit unemployment, we put a price on unemployment by taxing progressively and funding reskilling and work-finding programs; and now we will put a price on carbon to reverse the damage that dirty energy has hitherto caused. The reason in the short-term is that we must put a price on the externality of pollution and climate change, but in the long-term it is a no-brainer: burning fossils – literally – is a 19th century practice that will inevitably be replaced by clean energy.

It is my view that the tipping point will occur with or without what I regard as sufficiecoal_power_plantnt government intervention. The current ETS being considered by the Australian government doesn’t even begin to take the issue seriously. But even this scheme, the CPRS, will drive innovation, and the cost-efficiency of the technology will snowball, and we will rapidly come to the point where we view burning hydrocarbons to produce energy as quaint, if not downright barbaric. Like the mainstreaming of electric vehicles that is about to take place, renewable energy which is already competitively priced today will – inevitably – become cheaper than coal and extremely widespread.

As an aside, US Interior Secretary Ken Salazar today proclaimed that wind power off the East Coast could replace 3000 coal-fired power plants. This is just the very beginning of what is in store for clean energy over the next decade.

Written by Gabriel Sassoon

April 7, 2009 at 6:42 pm

Opportunities in the midst of the “crisis”

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CrisisRegarding the global financial crisis (GFC): the Chinese word for “crisis” consists of two characters, which make up the compound word “problem-opportunity”.

While it is true that credit markets have seized up, and that there are undoubtedly rough economic times ahead, it must also be true that the GFC presents a tremendous “problem-opportunity” for those in the cleantech space.

This would in some sense be true even if governments didn’t provide regulatory and other stimuli for the industry. Good technologies and good business will bring the market to them because they will be appealing to the consumer (think Prius), and/or cheaper than legacy technologies and methods (think LPG).

The bonus for the cleantech industry is that governments around the world are banking (so to speak) on cleantech as the new economic driver. As I’ve mentioned previously, the Obama Administration has put its money where its mouth is. Barack is fair dinkum about cleantech. The Australian government is lagging behind, but in the event that the Rudd Government’s Carbon Pollution Reducation Scheme (CPRS) is passed, and some of the other regulatory elements make it through (such as the new renewable energy production target of 20% by 2020), the cleantech sector will probably boom.

We’re still waiting for the first big cleantech success story in Australia, but it will come. In the meantime, I will mention some of the overseas success stories and local hopes in the next couple of posts. Forget the Global Financial Crisis; think of it as a Global Financial Opportunity.

Written by Gabriel Sassoon

April 1, 2009 at 12:33 pm

Bleeding edge ideas for distributed power generation

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CleanTechnica posted a story yesterday about an MIT professor who argues that, even in the best case scenario, we will still be unable to meet our energy needs by 2050 using the centralised model of today. His solution, according to CleanTechnica:

Nocera said that MIT will announce its patent next week of a cheap, efficient, manufacturable electrolyzer made from cobalt and potassium phosphate. This technology, powered by a 6 meter by 5 meter photovoltaic array on the roof, is capable of powering an entire house’s power needs plus a fuel cell good for 500 km of travel, with just 5 liters of water.

Glass of water

The new electrolyzer works at room temperature (”It would work in this water glass right here”) to efficiently produce hydrogen and oxygen gases from water in a simple manner, which will enable a return to using sunlight for our primary energy source.

These sorts of technologies offer the hope for a kind of radical decentralisation of the power supply. It is also the sort of opportunity that is ripe for venture capitalist involvement (hence MIT’s patent announcement) because it does not require large-scale government funding and won’t face the kinds of bureaucracy that, say, building a new wind farm entails (development consent, NIMBY opposition, and so forth).


Urban wind power

Everybody is thinking about what the energy infrastructure of the future is going to look like. In the medium-term, we are going to see a partial decentralisation of the power supply alongside a significant increase in traditional, centralised renewable energy generation. While in the long-term (10-20 years from now) we will be aiming for fully renewable baseload power generation, in the medium-term baseload power will continue to be generated primarily, in Australia, by dirty coal. Nevertheless, while the broader transition to renewables gathers pace (a trend that I expect will result in not merely exponential but explosive displacement of fossil fuels with clean energy sources), it is entirely possible for peak power generation to be subsumed by, say, local councils using, say, urban wind turbines on main traffic arteries.

This week’s cleantech forum in Melbourne will be a welcome opportunity to hear where Australia’s cleantech industry sees the local energy sector going over the next few years. Watch this space.

Written by Gabriel Sassoon

March 29, 2009 at 10:35 am