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Renewables Face New Challenges — Will They Be Ready for Prime Time Any Time Soon?

Panel Remarks by Dr. Dan Arvizu
Director, National Renewable Energy Laboratory

2011 EnergyBiz Leadership Forum
Feb. 28, 2011
Washington, D.C.

Thanks so much for the opportunity to address this impressive assembly of energy industry leaders from around the country.

Our endpoint is a low-carbon sustainable energy future and any technology that meets the requirements should be included. I believe renewable energy and efficiency can make a big contribution — a no regret option for the future.

When I first read the title of this panel discussion, it occurred to me there's something of a disconnect between those of us who work in the field of renewable energy, and others who are focused solely on so-called conventional energy.

Given that renewables are still viewed by some as in something of a separate category, somehow apart from the rest of the energy industry, I guess it's no surprise that we still get questions along the lines of, "When will renewable energy be ready for prime time?"

MY answer to that question is that renewable energy is already in prime time … today.

Less than10% of electricity generation comes from renewable energy. That's 130 gigawatts and only 53 GW of that is from sources other than hydroelectricity!

Though it may come as a surprise to some, in the United States today, the non-hydro renewable energy we generate is nearly equal to the energy we get from all of U.S. offshore oil production. Renewable power — that is wind, solar, geothermal and biomass — currently supplies 160,000 gigawatt-hours of electricity generation in the U.S. If we add renewable hydroelectric power, we obtain 430,000 gigawatt-hours of clean, renewable electricity annually.

If we were to calculate the amount of energy we get from offshore oil, the 683 million barrels of offshore oil we produce is about equal in energy equivalency to what we currently get from renewables.

So while renewable energy — excluding hydropower — has historically been seen as filling a limited, niche market, it has been growing rapidly in recent years. The installed renewable energy capacity both around the world, and in the United States, more than tripled between 2000 and 2009.

In the United States, renewable energy technologies have been capturing a greater and greater share of newly installed generation. In 2009, renewable energy accounted for more than 55% of all new electrical capacity installations. That's a huge change from just five years earlier, when all new renewable energy systems equaled just 2% of new capacity additions.

That's the good news. The less good news is that we may be on the verge of making the same mistake we have in the past when it comes to new energy opportunities.  Cuts have been proposed to the R&D programs of the Department of Energy that would devastate wind, solar, biofuels, geothermal, hydrogen, energy efficiency and a host of other promising new technology development programs.

I have to say that I fully support, and we all should support, the need to confront deficit spending. But cuts that approach 30, 40 percent, or more, of our R&D budgets, that most informed advisers would suggest are already grossly underfunded, would be incredibly short sighted. Indeed these cuts would be wasteful of the progress and momentum established by previous recent investments. Such cuts to serious programs would have devastating effects to very valuable research endeavors. They would set back by years, if not decades, the time when we get to reap the very real benefits of energy research investments we've already made.

The critical issue before the nation looms as large now as ever: Can we afford to abandon our efforts to find new, cost effective, clean energy technologies at a time when oil prices have climbed precipitously to $100 a barrel? With some predicting they will rise further to $140 a barrel oil in the near future? With oil imports climbing toward 70 percent of U.S. consumption, while a number of the nations on which we depend for oil are reeling under unprecedented political instability and uncertainty? With the need to move to sustainable, clean energy resources becoming more imperative with each passing day?

Further complicating the current situation, a number of misconceptions have clouded the perceived value and role of applied energy science. The assumption is that federal R&D can limit itself to long-term science, without regard to how and when, or even if, a viable commercial product results.

That position begs the question: Do we as a nation have a need for the benefits of new energy technology in the near term? Today, tomorrow, or in the next few years? The answer, I would assert, is that we unequivocally, absolutely do need these benefits.

I understand and support the idea that fundamental science is, in fact, fundamental. That we do need to embark on long-range science-based initiatives that will yield new, beneficial technologies years and decades down the road.

But our nation also has more immediate needs. Our nation will benefit tremendously if we can move the technologies that have already been developed, enable the private sector to do the necessary remaining work it takes to conceptualize those technologies into products and systems, and make certain that those technologies result in commercialized products that can create sustainable, job creating, businesses in the marketplace. The private sector is best able to move technology down learning curves and drive the costs to a competitive position in the market. But, government must help.

In very real terms, what applied energy science does is reduce the acceptable risk of investing in new technology, so that companies and the venture capital community can have the confidence they need to adequately invest in those new technologies.  What we at NREL and other applied science laboratories bring to the table are world-leading expertise, tools and experience in bringing the most promising technology into the real world. We need to address not just the science, but the full life-cycle impacts of the R&D we undertake.

Let me emphasize that this is not a matter of undercutting long-term science to the benefit of applied energy research. Because we need both, it really is a matter of balancing the federal research portfolio to maximize the impact of new technology — to get it to commercialization sooner, where it can impact the market and contribute in real ways to the nation's crucial energy needs.

For those of us in the business of using applied science to create new clean energy options, this is not an abstract concept. Working with industry on cutting through real-world barriers to innovation is what we're about.

For instance, the laboratory I lead, the National Renewable Energy Laboratory, today is working with more than 350 separate companies, from industry mainstays, to entrepreneurial start-ups. For the 133 Cooperative Research and Development Agreements at NREL in FY10 alone, we have invested $50 million of Department of Energy shared resources in these agreements to attract more than $60 million of funds in cost share and $250 million of shared resources — that's 6 to 1 leverage! Since our institution began more than 30 years ago, our work in applied energy science has put us at the pivotal center of each of the emerging clean energy industries. And we remain a vital resource even as these growing industries gain some maturity.

In the field of solar PV, for instance, NREL's National Center for Photovoltaics has been working with some 75 different companies. They include Ampulse, a rising up-start — a venture-capital-supported firm with a new thin-film technology that could drastically reduce costs and improve PV efficiencies by taking novel substrate material developed at Oak Ridge National Laboratory for high temperature superconducting wire and a novel hot wire deposition process from NREL to develop a new class of PV material. And our partnerships extend all the way to First Solar, the largest PV manufacturer in the United States, which has a decade-long history of working with NREL on thin-film technology pioneered in the DOE program.

On the biofuels front, our active collaborations with leading industry partners have put us on the verge of reaching our primary goal: that of producing cellulosic ethanol at a cost that will be price-competitive with corn ethanol, and eventually gasoline. This next-generation ethanol technology has many environmental and carbon-reduction advantages over corn ethanol, and ends the fuel-vs-food debate that surrounds use of corn grain as a feedstock.

Each of these examples demonstrate the value of applied energy science. It's using R&D to solve today's energy problems, and create new solutions for our energy future.

Federal support for applied energy science is in no way a partisan issue — nor should it be made into one. The rationale for, and the benefits from, clean energy research and development remain as strong, relevant and as compelling as ever — political ideology notwithstanding. We've been fortunate to have strong bipartisan support throughout our history, and are optimistic that will continue.

We are also optimistic about our continued contributions in the future — in part because we know what a focused R&D program has accomplished in the past. Looking at the real price for a unit of energy produced, solar, wind, biofuels and other renewables cost anywhere from 70 to 90 percent less than they did when the federal research effort began in the early 1980s.

And we know applied energy science remains very relevant to the issues that confront our nation today. If you consider the economic recession and the need for job creation as the most pressing issues before the nation, then clean energy R&D should be a priority. If you're seeking ways to increase our nation's economic competitiveness, then clean energy research should be on top of your list as well.

And, if you are looking to strengthen U.S. energy independence, and reduce our reliance on imported oil — while at the same time achieving the benefits to national security and improved balance of trade that would go along with those goals — then clean energy research is again one of the best policy options we have available to us.

To have the energy options we need will require innovation through research and development on multiple technology pathways. This long-term clean energy R&D portfolio must include cellulosic ethanol, biodiesel, fuels produced from algae, renewably produced hydrogen, solar, wind and geothermal power, new battery and other energy storage systems, and of course, energy efficiency technologies as well.

And I can attest, that after more than three decades of observing innovation in the laboratory, that there are more exciting innovations in the lab today than ever before — and this is not the time to retreat on our investments in our energy future!

Thank you.