Last week, the American Energy Innovation Council released its energy policy recommendations. Comprised of business leaders like Bill Gates, the council’s mission involves fostering strong economic growth, creating jobs in new industries, and reestablishing America’s energy technology leadership through robust, public investments in the development of world-changing energy technologies. The council believes that “by tapping America’s entrepreneurial spirit and longstanding leadership in technology innovation, we can set a course for a prosperous, sustainable economy—and take control of our energy future.”
According to the Council, in order to achieve a sustainable energy future, the following recommendations must be met:
• Create an independent national energy strategy board
• Invest $16 billion per year in clean energy innovation
• Create Centers of Excellence with strong domain expertise
• Fund ARPA-E at $1 billion per year
• Establish and fund a New Energy Challenge Program to build large-scale pilot projects.
Although the council is made of up private actors, they are quick to point out that government still has in an important role to play when it comes to national energy policy. Laid out on the group’s Web site are two main reasons government must be involved:
1) Innovations in energy technology can generate significant, quantifiable public benefits that are not reflected in the market price of energy. These benefits include cleaner air and improved public health, enhanced national security and international diplomacy, reduced risk of dangerous climate change, and protection from energy price shocks and related economic disruptions. Currently, these benefits are neither recognized nor rewarded by the free market.
2) The energy business requires investments of capital at a scale that is beyond the risk threshold of most private-sector investors. This high level of risk, when combined with existing market structures, limits the rate of energy equipment turnover. A slow turnover rate exacerbates the historic dearth of investments in new ideas, creating a vicious cycle of status quo behavior.
While I think that the Council’s goals are to be applauded, I am concerned that the emphasis appears to be on large-scale, big-ticket projects. Significantly missing from the mix is any mention of onsite power or energy efficiency. In fact, the council specifically calls for more investment in large-scale pilot projects, but couldn’t entrepreneurship and private enterprise find equally fertile opportunities in onsite power systems and energy efficiency projects (including retrofits and equipment trade outs)?
What do you think? Should we embrace any and all energy funding that attempts to help us move away from fossil fuels? Don’t onsite power and energy efficiency deserve a seat at the table? What more can we do to promote the benefits of distributed energy and energy efficiency?