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Building the U.S. Renewable Energy Infrastructure

Posted Jan 28 2009 3:51pm

The United States is at a critical crossroads in its energy policy.  The Obama energy transition team is currently developing the initiatives that will shape the incoming administration’s energy objectives.

The U.S. is in a global race to develop renewable energy technologies – to compete with leading countries in Europe and Asia. New York Times columnist and author Tom Friedman makes this clear in his newest book, “Hot, Flat and Crowded.”  He talks about how the U.S. must be a leader going forward in what he terms “ET” (Energy Technologies).

In order to compete, the US has to be strong in each and all of the fundamental stages of the Energy Innovation Ecosystem:

  1. Research
  2. Development
  3. Commercialization
  4. Scale-Up & Job Creation

In the last stage, “Scale-up and Job Creation, we will see extensive “green” economic stimulus projects in the overall stimulus package – i.e. stimulus projects that will aim to create tangible jobs through the building of wind, solar and other renewable energy projects. In addition to funding green projects that will create measurable jobs, another obvious place for the incoming administration to put funding is first stage of the energy technology continuum, “Research”.

But we also need to make sure that over the long run we are strengthening the near-term home run technologies that are two to six years away from Stage 4.  This is where the investments of corporations and investors such as venture capitalists are key.

An example of a technology in this stage is cellulosic ethanol. Celluosic ethanol is two to four years away from Stage 4, and is currently moving from Stage 2, into Stage 3 – Commercialization.  The U.S. has led in the development of this breakthrough technology – and we NEED to lead in the commercialization of this technology so we reap the vast economic rewards that will inevitably follow.

A great example of innovation and scale-up in cellulosic ethanol is Mascoma Corporation, which has raised about $100 million in equity investments, and has also brought in more than $100 million in state and federal grants. Mascoma has developed a partnership with Governor Jennifer Grandholm and the State of Michigan in developing a major cellulosic fuel production facility that uses non-food biomass to convert woodchips into fuel.  In Michigan, the company has received $26.0 million from the US Department of Energy and $23.5 million from the State of Michigan to accelerate Mascoma’s construction of their plant in that state.  The CEO of Mascoma said, “Working with the state of Michigan, two of its leading universities, and JM Longyear on this significant project brings us closer to commercial scale production of biofuels that can promote energy independence, reduce greenhouse gas emissions, and stimulate regional economic development.”

Note that this is a rare example – of a leading start-up technology company that is working with state and federal government agencies and major corporations to scale-up and build major projects.

This is what our government should be looking to foster with its green initiatives now – with a small but reasonable portion of its overall renewable energy effort.  It is fine that the majority of funding will probably go to technologies in the 1st and 4th stages – but we need to put a reasonable amount of money and effort into the 2nd and 3rd stages as well.

It is critical that we in the United States design these efforts in the building of ET so that we move fast to compete in the global economic race.

Weakness in any one or two areas of this Energy Innovation Ecosystem make the whole ecosystem weaker.  Each of the four parts of this Innovation ecosystem need to be analyzed and strengthened for the U.S. to be successful in leading in “ET” and reaping the global economic benefits.

We can not afford to be MEDIOCRE competitors in this race.  We need to hit on ALL cylinders to successfully transition the U.S. into one of the leading economies in “ET” for the 21st Century.  This transition will not be easy!

By Jim Hurd, Director, GreenScience Exchange

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