NREL Leader Urges Investing with the Long View to Sustain Renewable Industry's Growth
Life is good for renewable energy companies, but sustained success will require a sustained commitment, says National Renewable Energy Lab director Dan Arvizu. He spoke at the Power-Gen Renewable Energy and Fuels 2007 conference in Las Vegas Nevada last week. Here are the highlights of his keynote address. (podcast) (photo)
March 12, 2007
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March 7, 2007 -- It's day two at Power-Gen RE, the renewable energy industry's version of Comdex. The agenda started with two hours of keynotes. We heard an upbeat presentation from Alec Dryer, CEO of Horizon Wind Energy LLC, about the state of the utility-scale wind business. The Governor of Nevada made a compelling case for building an energy business in his state.
Mac Moore, the person responsible for expanding Conergy AG's solar business from Germany to America, spoke about his company's perspective on the PV market in the United States.
National Renewable Energy Lab director Dan Arvizu urged Power-Gen RE attendees to promote investment in future energy technologies. (EP photo)
Dr. Arvizu spoke at the 2005 conference, when he was just weeks into his new job running NREL. This year his presentation was much more persuasive and forceful.
This conference has been an opportunity for speakers to preach to the choir or, this year, to cheer-lead about the explosive growth of renewables. Arvizu pulled no punches, however, in saying that the industry's success could grind to a halt without policies to support deployment, and continued investments in research.
"If we are to achieve the potential that I think these technologies have to offer in terms of our longer-term energy objectives, we have to think about our future differently than we're thinking about it now," Arvizu said. "We need a sustained commitment."
He pointed to a challenging set of requirements for the energy economy -- protecting energy security, increasing economic productivity, and protecting the environment -- and he said that we must accomplish all three.
"By mid century we'll have to add a whole bunch of new energy supply, something globally on the order of around 20 terawatts," said Arvizu. "Almost all of it will need to be carbon-free and sustainable in new ways that we have not seen. If renewables are to make serious and significant contribution, we have to do things dramatically differently."
How does he suggest we think about things differently?
First, the energy economy needs to take into account the externalities and public interests that aren't incorporated into the present system.
"There are serious environmental impacts," Arvizu said. "We have been a bit recalcitrant in looking at this issue seriously. I think in today's environment there is starting to be an honest dialog about the implications and how this affects our energy future."
His second point: We're under-investing in renewables. He showed a chart of the historical ups and downs of public and private sector investments in renewable energy research, and stated what has been anecdotally evident over the past twelve months:
"If you overlay on this the price of a barrel of oil, going back to the mid seventies, you see an uncanny correlation," Arvizu said. "What that correlation suggests to us all is in this country we care about energy when the price at the gas pump is high, and we don't care about energy when the price at the gas pump comes down and is within our tolerance range. This is what's wrong with our policy. What we need to do is start thinking more aggressively."
And there you have the third point: Energy policy needs to support private sector investments and reduce the risk for investors. Said Arvizu:
"The reason that we have so much money flowing into the sector is because there is an anticipation by the investment community that policies will be forthcoming to support it."
NREL's role is to develop technologies and to get them into the market, and it is budget time in Washington. Dr. Arvizu's overall message was clear: Renewable energy businesses are doing well today, but if renewable energy is to play a significant role in the future energy economy, then the U.S. needs to continue to, as he says, "prime the innovation engine." He's talking about funding the development of the next generation of renewable technologies and, beyond that, the third generation, in all of the major sectors.