Unlocking Energy Innovation: How America Can Build a Low-Cost, Low-Carbon Energy System

by Richard K. Lester

Experts outline a plan to overhaul the U.S. energy innovation system for accelerated, large-scale adoption of reliable, low-cost, low-carbon energy technologies. Energy innovation offers us our best chance to solve the three urgent and interrelated problems of climate change, worldwide insecurity over energy supplies, and rapidly growing energy demand. But if we are to achieve a timely transition to reliable, low-cost, low-carbon energy, the U.S. energy innovation system must be radically overhauled. Unlocking Energy Innovation outlines an up-to-the-minute plan for remaking America's energy innovation system by tapping the country's entrepreneurial strengths and regional diversity in both the public and private spheres. “Business as usual” will not fill the energy innovation gap. Only the kind of systemic, transformative changes to our energy innovation system described in this provocative book will help us avert the most dire scenarios and achieve a sustainable and secure energy future.

Genres: Nonfiction

342 pages, Kindle Edition

First published October 21, 2011

Reviews

[Chris · Rating 3 out of 5]

I would not recommend this book to anyone beginning to learn about US energy policy. It's a bit of a dry read. While clear, it's policy suggestions are tame.

How do Lester and Hart believe the US can reduce it's carbon footprint 80 percent in 40 years?

Wave 1: Efficiency
According to National Research Council (NRC) the country could cut its energy use in buildings by 20 to 30 percent over the next 20 to 25 years without any changes in technology (p79). Steve Selkowitz, who leads the building technologies group at Lawrence Berkeley National Laboratory put it this way in a 2009 workshop at MIT: “Building energy efficiency is not low-hanging fruit, it is fruit that is lying on the ground rotting!” (p79).

Federal government should provide strong incentives to encourage states to enforce more efficient building codes, increasing the required efficiency by 4% a year. Incentives should be expanded to attract more private funding for (existing) building retrofits. Finally, federal efficiency requirements for major appliances are going strong presently. This should continue.

Wave 2: Low-carbon deployment
Efficiency alone cannot get us to an 80% reduction. In the years 2020-2050 improved renewable technologies need to hit large-scale deployment. To ensure this happens the valley of death (what's that?) needs to be bridged.

Lester and Hart suggest the creation of Regional Innovation Investment Boards(RIIBs). Comprised of all segments of the electric power sector, RIIBs will allocate funding to first-of-a-kind large-scale demonstration projects, “next few” post-demonstration projects, and early deployment programs. The RIIBs will choose among competing projects to fund. The RIIBs themselves will compete with one another to build strong project portfolios in order to attract financial support from state-level trustee organizations. Funded by what? An innovation surcharge on retail sales of electricity, meted out to the RIIBs by state trustee organizations. For more on the pros and cons of the RIIB approach see page 114.

Obviously this is new. Lester and Hart also advocate for the disintegration of the vertically organized utility as a means to allow more institutional innovation. As utilities split off their generation, transmission, and retail sales units, new firms will enter the market. 1)Independent power producers—now account for one third of electric power generation in the US, a dramatic increase from just 3% a decade ago (p70). They are more likely to work closely with new entrants among power plant equipment vendors, who are responsible for much of the innovation in this industry (p71). 2)Energy Management Service Providers—behind the meter. A provider would help house holds and businesses react to time-varying pricing, analyze and adjust their usage patterns. Its services might include expert advice, financing, software, and heating, lighting, and other end-use equipment along with kilowatt-hours of electricity (p69).

In this new energy marketplace, innovations on the customer and generation ends of the system will advance rapidly. The path between them needs to be a smart integrator. What exactly a smart integrator is is a question I still have after reading the book. Page 67 seems like a good place to start your investigation.

Finally, Lester and Hart have a lot to say about the emerging smart grid. It needs to be open architecture for all entrants to the market, not proprietary. Innovation would benefit from having strong customer controls (as opposed to utility control). Customers should pay for the customer side of the grid with modest pubic support, while the profit seeking firms pay for their own side. Most importantly, some form of dynamic pricing needs to be implemented.

Wave 3: Breakthrough ideas
Lester and Hart believe the bulk of our decarbonization can be achieved with the first and second waves by 2050. However, our challenge will not end there, as new innovations will be needed to continue powering civilization in an unsure future. To this they advocate expanded federal investment in fusion, carbon-neutral biofuels, advanced solar, and "sensible" cities (that is, ones constructed with smaller transportation needs constructed from carbon-lite microconcrete). They stress this investment needs to be stable and sustained. It should come from a multitude of federal agencies (pluralistic funding) and involve international collaboration.


The book concludes with a 10-point list of the major points. It's like the tl;dr for the whole thing. I would suggest the interested reader start there, and consult the rest of the book where his or her curiosity necessitates. Going front-to-back is likely to be a test of perseverance for anyone not currently involved in energy policy or administration, since the policy recommendations are largely bureaucratic and staid.

[Jerry · Rating 4 out of 5]

What I like about Lester and Hart's book is that they understand the difference between now, next, and next after next. If you are serious about energy and innovation policy, read the book to see how this is fully developed.

Inelegantly put, it means that in large organizations (I learned this from Navy Secretary John Dalton, while serving in the Pentagon as the Under Secretary) that a good way to think of things is to say that you run and improve the organization you have been given (the now); you design and build the next generation of your organization using science, technology, and the main thrusts of the future that you can already see (that's the next); and you set in motion the science and technology that will give you the flexibility to design and build solutions for a future you can barely predict (that's the next after next).

Of course, in the case of energy, the future out to about 2050 seems pretty clear -- we need more energy and we need cleaner energy. So Lester and Hart give a good roadmap for getting there.

I would add a dose of Nassim's Antifragile to their thinking, since it's likely the future will be more complex and demanding than this book implies, but that's frosting on the cake. If we had a certainty the nation would do what Lester and Hart propose, we could easily handle the serendipity and non-linearity that is likely to arise on the road to 2050.

So is there a problem with this book? Well, yes there is. The authors require a lot of good behavior, rational action, smart policies for things to work out. Why should we believe this will happen. Perhaps someone will write a book that says, given the likely low trajectory of our policies and programs, here's a plan that works even with failures and lethargy in abundance. If you could write such a book, it would be helpful.