Ron Pernick of CleanEdge addressed a meeting of the Northwest Energy Angels this morning and presented an optimistic vision for the future of clean energy worldwide. The revolution will not be overnight–it will take decades–but the move to a clean tech economy is advancing.
Pernick argued that there should be four policy hallmarks for advancing a clean energy agenda. First, we should be technology agnostic–let the best technology win through in the marketplace. Second, focus on real world infrastructure deployment. Third, leverage private capital and keep public funding for the “edges.” Fourth, inspire and exploit American innovation.
Cleantech is moving forward, he argued. California and Germany are targeting to have renewabes account for a third of their electricity generation by 2020 (Pernick believes that they will be successful.). Six states already generate ten pecent of their electricity through wind power with Iowa and South Dakota at twenty percent. The Prius is the third best selling car globally. Cleantech venture capital investments have increased from one percent in 2000 to twenty-three percent in 2011. Solar power costs have dropped for peak watt installed from $7.20 in 2007 to $3.47 in 2011–and are now near $3.00.
The driving factors, Pernick said, are costs, capital, competition, consumers, climate, and connectivity. Obstacles come from partisanship, governmental budgets, low-cost natural gas, and volatile public markets with few exits.
By Pernick’s reckoning, the U.S. ranks second globally in cleantech and Washington State is fourth in the nation.
Given challenges in Washington, D.C., the states are now the driving forces along with metropolitan centers. Over half of the highest ranking metro centers are on the West Coast.
There are five “laws” of cleantech, according to Pernick:
- Cleantech can scale.
- The developed world does not need new nuclear or coal generation.
- “Small tech” will play a central role through developments like new materials.
- It will be a dispersed revolution with sites around the world leading.
- It will take decades–energy transitions are lengthy.
Pernick argued for the implementation of a seven point policy plan to enhance cleantech:
- Enact a national electric renewable standard of thirty percent by 2030.
- Create a green bank to fund infrastructure development.
- Leverage proven, existing investment tools (such as those used in real estate and the oil and gas field.
- Phase out all energy subsidies within ten years.
- Foster open-source collaboration to set cleantech standards.
- Fully fund military initiatives on energy and water security.
- Launch Federal-backed prizes for cleantech innovation.
A panel that included Sue Preston of CalCEF and Kirk Washington of Yaletown Ventures responded.
Preston said that economics drives everything and emphasized that innovations must be successful from a market perspective. She forecast that the transition would require fifteen-to-thirty years. There were, she said, lots of dumb investments six-to-eight years ago.
Washington said that the industry is suffering from over-investment in the past several years. We are now in a cycle of under-investment. There was, he said, a “drunken stupor on the way up.” This is an evolutionary transition, he agreed, that is all about costs.
Pernick agreed that innovations need to cost the same of less to be successful.
The Northwest Energy Angels have invested in over $3 million in the past three years and expect to close a new deal in the coming days. The NWEA now has grown to sixty-five members.