On January 12th 2009, President John L. Hennessy of Stanford, launched a $100 million initiative to fund the Precourt Institute for Energy Efficiency (PIEE). This supplements the $30 million Stanford already spends on Energy Research, for example through the Woods Institute, the Global Climate and Energy Project and other such initiatives. The initiative will be headed by Lynn Or, Professor of Energy and Resource Engineering and brings together more than 130 faculty members working in 21 departments.
The Institute will focus research relating to improving energy efficiency, reducing greenhouse gas emissions, studying national energy policy and developing renewable energy power sources such as wind, solar and biomass. In addition to adding 6-8 new faculty, there will be fellowships for graduate students and postgraduates, as well as an “energy innovation fund” to finance promising research projects.
Here are some of my very rough notes from the fascinating panel discussion between Lynn Or and the following panelists:
Sally Benson, director, Global Climate and Energy Project
John Doerr, partner, Kleiner Perkins Caufield & Byers
Eric Schmidt, chief executive officer, Google Inc.
Jim Sweeney, director, Precourt Institute for Energy Efficiency
Jane Woodward, chief executive officer, MAP and consulting professor, Stanford University
New breakthroughs in Energy Technology
For starters, both Lyn Or and Sally Benson stressed that the issue is not that we will run out of energy resources but whether we can convert renewable energy efficiently and cost effectively (i.e. at a cost less than burning of fossil fuels). They pointed out for example that there is 6,000 times more energy that hits the earth than we use. Sally noted that what is promising today, is that working on nanomaterials and electronic transport, we can get solar to 45% efficiency. Today, we also have developments that allow us to print solar cells with an inkjet printer and even make liquid fuels with solar (e.g. hydrogen). The question really then is how to commercialize these technologies to the point they make good business sense. She however stressed that we needed the combination of all types of renewable energy to meet our energy needs (not to write off fossil fuels, but rather focus on how we can use it cleanly e.g. capture Co2, etc). She felt that what is exciting is that today, nanoscience, communication technologies and biotech come together to offer us with so many more options and potential breakthroughs.
Green makes good business sense
On the point of the business case, Eric Schmidt of Google emphasized that going Green already makes good business sense. He showed how Google started off when he asked his operations person why they were not going Green. He was told that the capital expenditure would be about $2-3 million, but when he inquired about payback, it appeared that payback was within 18 months only. Hence they started down that path. Payback is so quick even if you start with energy efficiency alone e.g. insulation, LED lights, etc, The Google Energy Plan predicts that in 22 years implemented, they can save $3 trillion. Today, in addition to their own Green efforts, Google invests in Energy Research and business models, and their aim is to make renewable energy cheaper than the burning of fossil fuels.
Decarbonizing the grid
As the issue of going Green using electric vehicles, Sally pointed out that it does not make sense calling this Green unless you also talk about the decarbonisation of the grid. 50% of electricity in the US still comes from coal, so we also need to talk about putting more renewables on the grid and about considering carbon capture and storage of C02. Another important issue she felt relates to the grid itself. The grid today is very centralized and unable to handle micro-grids of decentralized production facilities of renewable energy. There is a need for more distributed grids, for smarter grids and for grids to be able to handle intermittent sources of energy such as from wind and solar.
US lags behind the rest of the world
On that note, Jane Woodard and John Doer, both stressed that not enough research is being done. Jane pointed out that there was is a coming Energy Revolution as we become more concerned with how we use energy but more needs to be done. John felt that Energy is a $6 trillion economy. Since energy is the mother of all other markets, there is an opportunity for it to be THE biggest market. Yet for now he felt the US is lagging behind the rest of the world. He gave an example of how the US is not even in the race for the battery industry, which is the Holy Grail of Green Technology (the US currently buys from Asia).
There is much the US can do to change. Jim Sweeney felt that we could easily reduce by 30% our energy usage just by being more efficient. Yet he points that even if we had the technology, the economics and regulations, behavioral issues continue to be the major block for change. Cities, transportation, living conditions are all currently designed around cheap oil, and there is little incentive to change. Leadership is required for change, as clearly seen in Google’s case. Carbon tax and incentives, and other behavior changing methods may be required for more to happen.
Leadership needed to drive the Green Revolution in the US
There is clearly a need for Leadership in America on this Green Revolution. Government will clearly have a role to play in leadership and regulation. I was particularly taken with Eric’s clear call for action.
He says there is an opportunity now for the US to create Energy Banks much like the Foreign Credit Bureau’s back in the 70s. The US should also take the unemployed and reemploy them into the Energy Economy, for example take the unemployed construction workers and get them trained to insulate and make homes more energy efficient. When pressed about details of his advise to President Obama, he mentioned a few (these are my notes so it is not verbatim):
-To use the Economic Recovery Act to unify a national smart grid (rather than focus on highways only)
-To use carbon tax or clear cap regimes (or do both)
-To have national renewable energy portfolio standards (e.g. 20% of grid from renewable energy)
-To utilize regulation and incentives to drive zero carbon efficiency (using the utility monopoly i.e., the captured market to make changes)
-To put more dollars to fund research in Green technology (last year less than $1 billion was spent, which is less than 1 day of revenue to Exxon)
-To focus all efforts on the Green Energy Revolution even in education
Overall, it was indeed a very enlightening session and I hope I was able to share with you some key highlights of the sessions that I took away with me.