DOE senior advisor: 'We need to have clarity around rules' for cleantech

If clean technology is going to be a success, the rules for how to do business in the sector must be clearer, experts say.
Written by Andrew Nusca, Contributor

If clean technology is going to be a success, the rules for how to do business in the sector must be clearer, experts said last week.

Speaking the seventh annual Renewable Energy Finance Forum–Wall Street at New York City's Waldorf Astoria Hotel, venture capitalists and federal policymakers agreed that smoothing out the path for cleantech startups was a necessary step to ensure that an insecure economy does not impede the burgeoning industry's growth -- and American competitiveness on the global stage.

"We're making a very important transition now, from 18 months of intensive policy to making a downpayment on a long-term journey," said U.S. Department of Energy senior advisor Matt Rogers. "Our challenge is to provide the market structure to move forward."

Rodgers acknowledged that job recovery is accelerating, demonstrating that economic recovery is beginning to take hold. Still, he warned that despite a "river of innovation" in the U.S. -- "The rate of innovation in the clean energy sector in the United States is faster than anywhere in the world," he said -- the government must continue to support basic research as it hands control of the industry to the private sector.

"We need to have clarity around rules," he said. "Once we have clarity, you can bring private capital off the sidelines and at scale, without uncertainty."

Rogers said the U.S. over time "lost the linkage" between innovation and manufacturing, and needs to capture the systems integration opportunities to solve problems ahead.

"We are in competition with the Chinese [and] the Europeans for global market share," he said. "Part of that is having the best products, part of that is about innovating in the workplace. We lost the focus on productivity. We don't just win by having the best yield in the laboratory."

Rogers called the formation of capital as a bellwether for the "next industrial revolution."

"We hold the potential to transform these energy sectors in ways we can't even predict," he said, likening the industry's trajectory to DARPA's 1960s development of Arpanet, the precursor to the modern Internet.

"This comes back to a conversation about core American values, about innovation and entrepreneurship, and about the self-driven and self-determination that is self-evident in this room," he said, adding that it is America's duty to use its own resources. "It's a value story that distinguishes the United States."

Also weighing in on government's role in cleantech was Green Strategies president and Arborview Capital venture partner Roger Ballentine, who acknowledged two "meta-vectors" that should be considered:

  1. The global trend toward low- and no-carbon energy. "If you're on the wrong side of this movement, you're putting yourself at tremendous risk," Ballentine said.
  2. Fiscal austerity in the U.S. and Europe. "You're making an investment that requires significant fiscal engagement in the long-term," he said. "That's a problem; that's a risk."

Ballentine also listed two policy issues that could have significant impact on the direction of the industry

  1. Climate and energy legislation. "I think there is still a decent chance of a price on carbon, at least in the utility sector," he said. "[The] renewables industry really needs to take a hard look" at its prospects against carbon.
  2. The debate over natural gas "fracking," or extraction. Natural gas could have a "profound, game-changing effect on industry in general" with regard to price competitiveness for renewable energy.

"A lot of what we need to do on carbon can be solved on lower-carbon technologies first," Ballentine said. "If you're in renewables or you're investing in renewables you should be watching that debate very closely."

To close, Ballentine quickly ran through several major clean energy source and his take on each one's prospects.

In summary:

  • Biomass: "Tremendous potential. Serious issues here." (He did not explain why.)
  • Biofuels: Tax credit is an issue. Bigger trend: electricifcation of transportation, and growing natural gas movement for transportation fuel.
  • Distributed solar power: the price continues to drop.
  • Wind power: The Renewable Portfolio Standard (RPS) remains as a top objective. Other issues: Transmission (moving wind power to load centers, i.e. cities), energy storage (for times of peak use). "The wind industry doesn't really want to talk about it. I think that's a huge strategic error."
  • Hydro power: 80,000 megawatts of very low-hanging fruit out there. "I don't think we talk about it as much as we should."
  • Utility-scale solar power: Impacted by natural gas discoveries. Also has transmission issues.

"All of these technologies are very impacted by policy," he said.

This post was originally published on Smartplanet.com

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