Clean Energy Clearing Way for Economic Bounce
Public-Private Partnerships Key
What’s a key to America’s economic success? Plowing resources into research and development to bring innovative tools and technologies to market. And among the critical concepts are those tied to the generation of electricity in the cleanest possible fashion.
That remains the message of the Obama administration, despite the persistent hard times and the constant onslaught of criticism. It’s an economic idea premised on the fact that older manufacturing processes have given way to modern protocols that are able to do things more efficiently. But, while the dreams are formulated here in this country, they are more adequately funded and created overseas.
The stark truth is that public-private partnerships have almost always been used to take viable ideas from conception to the market. Some proposals are bigger -- and more expensive -- than any one company. They therefore require the added resources of the public sector, assuming that they would be deemed to be on the cutting-edge. The energy sector, of course, is accustomed to such arrangements as government is working with it to develop everything from carbon capture and sequestration to energy storage that can harness wind and solar power.
“What we've realized is sometimes it takes a national investment and a national vision to spark private sector investment,” says Vice President Joe Biden, during a visit to the National Energy Renewable Laboratory. “The government never does it. But the government can spark it on occasion. And over and over it again it has been that American model of innovation that has allowed us to lead the world in technological advances over the last 150 years. It's part of our nation's DNA. It's embedded in our nation's history.”
In testimony before Congress, the clean technology community said that the market for such products and services is forecast to triple by 2020. That would take it from $740 billion today to $2 trillion. What will be the leading tools? They range from the smart grid to ultra high capacity transmission to electric vehicles.
But the same group cautioned that the United States is becoming complacent. For example, 6 percent of the worldwide solar PV cell production takes place here while 59 percent of it occurs in China. Interestingly, this country created 143,000 wind jobs and 58,000 solar jobs during the recession, although China and Germany have added hundreds of thousands to their totals.
“To be competitive, the US must not just maintain its edge in R&D investment, but focus even more on encouraging the growth of manufacturing and deployment at home, as are other countries around the world,” says Neil Auerbach, managing partner of Hudson Clean Energy Partners, before lawmakers. “America is not predestined to remain home to the most vibrant economy in the world forever. We need to rise to the challenge.”
Dealing with Debts
To be sure, the national debt is the greatest it has ever been and if the country does not clamp down, it will remain mired in difficulties. Simply, when the national treasure goes toward paying down the annual deficit it is not going into either feasible programs or tax cuts. Additionally, the government must increase the interest it pays to attract investors whose money is used to make those debt payments -- investments that compete with those in the corporate sector.
No one disagrees. However, if the nation is to develop tomorrow’s technologies then it must invest in them today. This is what the Asian nations are doing and why their clean tech sectors seem to be burgeoning. Here in this country, the solar sector says that the solar credit alone will create 440,000 new jobs and inspire $230 billion in investments if it remains in effect for an extended period.
Clearly, the federal government is already rooted in the energy sector and is participating in both early-to-late stage research. In point of fact, the $720 billion utility sector is heavily subsidized. The goal then is to prioritize those projects that are ready to emerge or those that could be life-changing.
The government’s role is to reduce the “acceptable risks,” says Dan Arvizu, director of the National Energy Renewable Laboratory. That allows the private sector to "move up and down the learning curve.”
Now is not the time to retreat, he adds; rather, it is right opportunity to invest in such things as grid optimization and solar photovoltaics.
The quandary that the nation faces is over to how to deal with mounting deficits while also facilitating a prolonged economic bounce. Budget cuts are assuredly in the offing. But lawmakers must be careful not to root out future technologies that encourage the efficient and clean use of energy.
EnergyBiz Insider has been named Honorable Mention for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.
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