Scaling the Energy Transition

The August 13 issue of Science, the journal of the American Association for the Advancement of Science (AAAS), devotes a special section to "Scaling Up Alternative Energy". Most of the section, including some nifty comparative infographics, can be accessed free of charge until August 27, requiring only a free site registration. I encourage you to read it while it's available. The articles cover topics such as the prospects for cellulosic ethanol and the challenges of siting renewable energy projects. Another entitled, "Do We Have the Energy for the Next Transition?" particularly caught by attention. I've been focused on this issue from the inception of this blog in 2004 and long before that. This is an issue that's not about to go away or be solved overnight, no matter how much wishfulness we apply to it.

I know I've been beating this drum for a long time, but here's a clear and concise explanation from the top science journal in the country on why the transition to alternative energy won't--and can't--be quick, cheap or easy, as well as why it's necessary to pursue in spite of these limitations. The low energy and power density, intermittency, and uneven geographic distribution of renewables aren't just talking points; they're genuine technical problems that must be overcome. The author compares the transition that's now underway to previous energy transitions and finds fundamental reasons why such shifts take a long time, and why the transition to renewables can't be as quick as many would like. He quotes one expert as saying, "They don't offer new services; they just cost more."

That's a crucial point for anyone who sees this energy transition driven not just by concerns about energy security and greenhouse gas emissions, but by notions of clean energy as the next big wealth-creating global trend, akin to the computer revolution. A kilowatt-hour or BTU does the same work, regardless of its source, so unless it can be produced for significantly less than from conventional sources, greener energy offers no productivity gains of the kind that have fueled the global infotech transformation. As the article notes, using current technologies it is likely to reduce productivity, at least in the energy sector, unless it addresses cost-effective energy efficiency.

And while it's certainly true that the current price of conventional energy omits a number of important externalities, including those relating to climate change, monetizing them by increasing the price of energy will not improve productivity in the sense of creating new wealth; it will merely transfer of wealth from one sector to another. We may still have to do that, but we shouldn't harbor illusions about the ultimate source of the earnings this will create for green energy companies and entrepreneurs, until someone comes up with an energy source that is truly better/faster/cheaper than what it's replacing (without subsidies.)

Although the article doesn't dismiss the potential of renewables to supply a much larger proportion of our energy needs, it suggests that the greatest near-term potential lies in reducing energy consumption, which would simultaneously stretch out our conventional energy resources, reduce their impact, increase the leverage of the renewables we have, and provide more time to improve them. It also points to a transition that looks more like a gradual shift in our energy mix than a sudden displacement of one set of sources by another. That doesn't sound nearly as radical or glamorous as what some pundits have suggested is possible, but it still provides renewable energy businesses with the enviable prospect of making steady inroads into a vast market, the potential of which they couldn't exhaust for decades, as long as they've got a proposition that makes economic sense in light of current and anticipated regulations and incentives.