Some of my favorite questions begin with the same four words: "What
would it take..." What follows those four words can be just about
anything, as in: What would it take to ... make solar energy as cheap
and efficient as fossil fuel-based electricity?... routinely build
zero-waste factories?... recycle 90 percent of the waste in my city
within five years?... make organic foods cost-competitive with
conventional ones? ... make airplanes operate on electric power? ...
create zero-energy low-income housing? And so on.
Such big, hairy audacious questions get past the ideal to the real,
looking at the specific changes in technologies, policies, capital
flows and cultural norms that would be required to achieve a goal.
Sunil Paul has asked one such audacious question -- and answered it, too. His
Gigaton Throwdown
report, released today, asks: What would it take to aggressively scale
up clean energy to have a major impact on job growth, energy
independence and climate change over the next 10 years? Specifically,
the report examines what it would take "to reach gigaton scale for nine
technologies currently attractive to investors."
To attain gigaton scale, a single technology must
reduce annual emissions of carbon dioxide and equivalent greenhouse
gases (CO2e) by at least 1 billion metric tons -- a gigaton -- by 2020.
For an electricity generation technology, this is equivalent to an
installed capacity of 205 gigawatts (GW) of carbon-free energy (at 100 percent
capacity factor) in 2020.
The good news, the study concludes:
Eight of the nine technologies that we analyzed are
capable of aggressive scale-up to avoid at least 1 billion tons of
carbon dioxide equivalent emissions (CO2e) reductions by 2020. Of these
nine, there are seven -- building efficiency, concentrated solar power,
construction materials, nuclear, biofuels, solar photovoltaics and
wind -- that are ready to scale up aggressively today. One, geothermal,
can scale up fully after an intense period of research, development,
and deployment of pilot plants for new engineered geothermal systems.
Combined, these eight technologies can meet over 50 percent of new global
energy demand with reliable, clean, low-carbon energy and would avoid
over 8 gigatons of CO2e reductions globally.
The bad news: Annual investment in these technologies must grow more
than threefold in the next 10 years to make good on climate
stabilization goals.
The Gigaton Throwdown project began two years ago, when Paul -- part
of a wave of successful tech entrepreneurs who found their way to
cleantech after the one-two punch of 9/11 and the dot-com bust -- heard
a friend say, "You know, you clean technology guys could make a bunch
of money and not make that big of a difference." As Paul told me
recently, "It struck me that, 'Wow, he's right. Many of these
technologies could increase by a factor of 10 and I'd do well, but it
just would not make that big a difference.' That essentially started a
quest on my part to find out what does it take to really make a
difference."
A big part of the challenge was creating a framework: How do you
think about a problem of this magnitude? The notion of gigatons, says
Paul, "made a lot of sense because one gigaton per year is enough to
make a major difference by 2020. We chose an amount that matters and we
chose a time frame that's relevant to entrepreneurs and investors."
Paul engaged dozens of people -- the mailing list of people connected
to the project listed more than 130 names, including venture
capitalists, academics, entrepreneurs, lawyers, policy makers,
nonprofit leaders and corporate types from utilities, energy
companies, Wall Street investment houses, engineering firms and
others. A group of post-docs at the University of Michigan and
Stanford, and faculty at Drexel and Berkeley did a lot of the heavy
lifting.
Their report (
download - PDF)
looks at nine "pathways" that could achieve gigaton scale. One of the
pathways, wind power, was found to be already growing fast enough to
achieve gigaton scale.
The wind industry has been growing at an annual rate
of 28 percent over the last decade and will soon reach 100 gigawatts (GW) of
installed capacity globally. At currently projected growth rates, it
will exceed half a terawatt (TW) of installed capacity by 2020 and
deliver close to 2 gigatons of CO2e reductions. Efficiency
technologies, solar, biofuels and nuclear all offer solutions that
have been tested and deployed and can scale more rapidly than the
current projections. These are not laboratory curiosities. They are
active technologies that are supplying power in multiple markets. With
sound policy support, they will do much more.
Meanwhile, another technology, plug-in hybrid electric vehicles
(PHEVs), was seen to face "severe challenges to achieving massive scale
in the near-term."
To reach the gigaton target, the [auto] industry
would need an estimated 300 million PHEVs on the road in 2020. This is
equivalent to the total number of new cars to be added to the fleet
worldwide in the next 10 years. While perhaps technically feasible, the
disruption to current operations, the junking of existing vehicles, and
the sheer amount of capital needed for this transition make this
pathway infeasible by 2020 in our estimation. We do not include PHEVs
in our gigaton projections.
What would it take for technologies reach gigaton scale? In a word:
policies. At least, that's the principal conclusion of the Gigaton
Throwdown report. And that makes sense, to a point. The Obama
administration and Congress -- not to mention their counterparts in
other countries -- are focusing on energy and climate issues like never
before. This is a time for policy makers to step up with the right
kinds of laws and incentives at a scale sufficient to make a
difference. The report urges a range of policy prescriptions: long-term
stable carbon pricing, loan guarantees, tax credits, government
purchasing, renewable energy standards, fuel standards, efficiency
standards and more -- a lengthy list that has long comprised the wish
list of the clean-energy community.
But it's not all about government -- and it's not even all about
money. The markets for clean technology involve a coordinated effort in
three principal areas: technology, policy and capital. Each of these
plays a role in scaling technologies, clean or otherwise, and each of
these "levers" must be pulled in proper sequence so as to create
sustained, orderly markets that can exist without subsidies. Oh, and
education, too -- lots of it, to encourage legislators, business
executives, investors and voters about these critical needs.
"We sort of already get the technology pieces of it," Paul responded
when I pointed this out. "And we know there is a lot of capital sitting
on the sidelines that is ready to invest given the right kind of
long-term opportunity." What's needed now, he says, is political
leadership and action.
"The single most important action to direct this flow of capital is
stable policy that establishes a meaningful price on carbon," he
explained. "This will encourage investment across the clean energy
sector and allow capital to flow to the most cost-effective
technologies."
There's no shortage of capital needed: The eight technologies at
gigaton scale represent an investment opportunity of over $5 trillion
dollars over the next 10 years, according to the report. At this scale,
says Paul, clean energy -- including efficiency improvements -- would
meet close to two-thirds of the new global capacity requirements in
2020.
I'm not able to quibble with such figures -- or the overall strategy,
for that matter. In fact, despite some skepticism about the approach, I
like the overall vision. Thinking in gigatons should become the new
metric for considering technologies, policies and investments. Paul
says that at least two companies --
Serious Materials, a green buildings materials start-up based in Silicon Valley, and
Novozymes,
a Danish company focusing on biofuels and other "bioinnovations" -- have
already started doing so, with others to follow. Paul says his own
investment firm,
Spring Ventures, is doing likewise.
If that's the case -- if "gigaton-scale" becomes a lens through which
innovators and policymakers view their work -- the considerable efforts
of Paul and his colleagues will represent a valuable contribution to
moving clean energy technology forward to achieve the scale and speed
it deserves.
