Will the Smart Grid save us? Can the US capitalize on a robust energy efficiency market? Will China’s growing industrialization and energy demand continue to dominate the global energy landscape?
In a November 9 statement, Nobuo Tanaka, Executive Director of the International Energy Agency, sums up the significance of the World Energy Outlook 2010 (WEO 2010) report released late last year, saying, “The energy world is facing unprecedented uncertainty.”
With an eye on planning and prognostication, WEO 2010 provides “updated projections of energy demand, production, trade, and investment, fuel by fuel and region by region to 2035.” In addition, for the first time, the report includes a new future scenario that “anticipates future actions by governments to meet commitments they have made to tackle climate change and growing energy insecurity.”
The purpose of the annual report is to supply readers with the latest information and projections in regards to energy demand and supply projections for the current year and over the next two decades. The report supplies a variety of different future scenarios, with each option broken down by country, fuel, and sector, along with analyses of “the most pressing issues faced by the energy world this year.” Special consideration is also given to Russia’s energy prospects—and “their implications for global markets,” the role of coal in this “emissions constrained world,” fossil fuel subsidies in support of renewable energy, an analysis of the reduction in nuclear power usage, and the impact current events in the Middle East and North Africa could have on oil and gas supplies.
A new report released last week by the Harvard Kennedy School has determined that by spending “a few billion dollars more per year to spur innovations in energy technology”, the US government could save the economy hundreds of billions of dollars per year by 2050. The report, “Transforming US Energy Innovation”, also recommends that government double funding for energy R&D to about $10 billion per year.
The report is the part of a three-year project by the Energy Technology Innovation Policy (ETIP) research group in the Kennedy School’s Belfer Center for Science and International Affairs that aimed to develop “a set of actionable recommendations to achieve ‘a revolution in energy technology innovation.’” The report also found that by putting a “substantial price” on carbon or clean energy standards, the country could also achieve major reductions in carbon emissions.
Included in the project was the first survey ever conducted of “the full spectrum of US businesses involved in energy innovation, identifying the key drivers of private-sector investments in energy innovation.” More than 100 experts working in a variety of energy technologies were also surveyed as to their recommendations for energy R&D funding. These experts also offered predictions as to the cost and performance of energy innovations under different R&D scenarios. This expert input was then used to “conduct extensive economic modeling on the impact of federal R&D investments and other policies (such as a clean energy standard) on economic, environmental, and security goals.”
The research team also identified specific industries they felt would most benefit from increased innovation investment. As such, the report recommends that “the largest percentage increases for research and development in four fields: energy storage, bioenergy, efficient buildings, and solar photovoltaics.”
Modeling conducted for the report included additional relevant findings, including:
* That investing more money in energy innovation without also setting a substantial carbon price or stringent clean energy standards would not bring big reductions in greenhouse gas emissions.
* Without such carbon pricing policies or clean energy standards, companies do not have enough incentive to deploy new energy technologies in place of carbon-emitting fossil fuels.
* The performance of public-private partnerships and international partnerships on energy innovation would benefit from gathering information about the performance of previous projects.
Because the report concluded that the national laboratories continue to suffer from “fast-shifting funding and lack incentives for entrepreneurship,” the report proposes “ways for the government to strengthen its energy innovation institutions, particularly the national laboratories, so that the United States can get the most bang for its buck in its investments in energy innovation.”
In many ways, we are in the midst of a transformation: Power generation and delivery has morphed into a two-way enterprise, with energy now flowing both ways, from the centralized utility and from the distributed generation customer. Rickey concludes by reiterating that smarter grids will lead to smarter interactions. Connected customers will enable the creation of a whole new raft of energy products and solutions. And because utilities will be able to connect customers, stronger energy relationships based on demand- and supply-side management capabilities. Ultimately, the ability to increase the connectivity between complementary players to one another will build partnerships and strengthen alliances.