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Google: Delaying Clean Energy Transition "Only 5 Years Could Leave Trillions on the Table"

By Stephen Lacey, Climate Progress
June 29, 2011 | 11 Comments

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Google, a leader of innovation in the digital economy, says that without a private and public focus on innovation in renewables, storage and electric vehicles, the cost of delaying the clean energy economy could be in the trillions of dollars to the U.S.

Google released an analysis of the economic impact of clean energy innovation today, modeling a variety of long-term scenarios and their influence on GDP growth, a reduction in energy costs and greenhouse gas reductions. They used McKinsey’s Low Carbon Economics Tool, which provides models to assess the macroeconomic impact of climate and energy policies.

Based on our modeling, we estimate that by 2030, innovation in the modeled technologies alone could have a transformative impact on the US, adding over $155 billion per year in GDP and 1.1 million net jobs, while reducing household energy costs by $942 per year, oil consumption by 1.1 billion barrels per year, and GHG emissions by 13% relative to BAU. By 2050, annual gains in GDP increase to $600 billion, net additional jobs to 3.9 million, and emissions reductions to 55%.

But delaying this “innovation arms race” by as little as five years with inconsistent policy that slows private investment (a delay not unlikely in the U.S.) could result in $2.3-$3.2 trillion in unrealized GDP gains — costing the U.S. over a million new jobs and preventing the reduction of up to 28 gigatons of CO2.

This study also highlights another important point: It will take far more than clean energy innovation to substantially reduce GHG emissions. The most optimistic Google models only enable electric vehicles, energy storage and renewables to reduce U.S. greenhouse gas emissions by 49% compared with 2005 levels. This study doesn’t address some of the other core climate solutions like building efficiency, demand response, advanced materials and agriculture.

The study also makes clear that innovation goes hand-in-hand with smart energy policies, including mandates for efficiency and renewables to accelerate deployment:

Policies can also amplify the economic, security, and pollution benefits of breakthroughs by creating markets, dis-incentivizing the highest-emitting technologies, and leveling the playing field for clean energy, leading to increased adoption.

The bottom line is that innovation plus policy (mandates or a carbon price) “has the best overall outcome.”

This article was originally published by Climate Progress and was reprinted with permission.

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The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on its Web site and other publications.

11 Reader Comments

Comment
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jtwitmyer

June 30, 2011

Excellent ... and yes as Pew said 'policy matters' ... but since there is no way any kind of mandate will be adopted in this Congress how about a new approach ... finding other money to make the needed investment? Look what Google is doing!

The banks aren't lending either, although investment researchers are getting the idea. Maybe there are more Googles out there. Accessing new money sources combined with the investment DOE is making might take us down the road to where we need to be.

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JimW

June 30, 2011

GreenGas.cc is 50 cents a liter and zero emissions. US DOE predicts 90% of vehicles sold in 2050 will still be internal combustion. Scientific American says peak 2014. What fuel are you going to use? Unless GreenNH3 gets some investment you and I are screwed.

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jtwitmyer

June 30, 2011

Jim W ... I am talking about the role DOE is playing in developing electricity alternatives to fossils.

Don't like that 2050 prediction either. How old is it?

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twolak

June 30, 2011

What I find interesting about this report is the lack of information regarding hydrogen and fuel cell technology. It doesn't even receive a notable mention within it.

With the US being the main producer of large stationary power fuel cells (200 kW - 1 MW units) and with the growing demand of these units world wide I was expecting something, but not nothing.

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GeraldR

June 30, 2011

Wakeup call? You can't leave anything on the table: some of it will get eaten by someone else if not you. Already, some parties in the US complain about foreign dominance in renewable technologies. Worse, there are a growing number of tariff barriers and tax policies to stifle adoption of renewables. The alternative policy to facilitating a vibrant home-grown market is protectionism which doesn't play well and does nobody any good.

This report focuses only on the value that can be accessed through policy and technology - really only the tip of the iceberg. Economies of scale are as important; the report does consider that technologies with greatest adoption have an economic advantage but it's not clear it captures the full potential of economy of scale. A portion of that is due to technology but only a fraction of that is in the product itself: more is in the manufacturing technology that evolves with a mass market. Additionally, the experience curve extends to the users who become more efficient in their utilization. They're right on in suggesting that policy can shape the market which in and of itself can drive cost down.
So far, all of the studies of this sort assume coal as a constant baseline. This is probably a bad assumption. One trend is that the US is becoming a substantial exporter of coal. China, for instance, is investing heavily in clean coal technology (another confluence of policy and technology). The global demand for coal will drive up the price substantially and the cost of coal power will go up even if government policy does not force the adoption of clean coal technology. It may already be more lucrative for US and Canadian coal producers to export their coal than to sell it domestically. Currently, port capacity appears to be the only limiting factor but one easily remedied. In the global market, a number of former net exporters are headed to net imports. One can only hope that the evolution of natural gas and renewables can offset this.

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DWagner

June 30, 2011

One thing that this article does not mention is that the delay will also mean that the technology will be developed and produced by other countries. While we are moving slowly, the other countries will be the ones with the innovations and the early cost reductions. It looks like most of these projections tend to be fairly conservative in estimating future advancements. I just saw a presentation by Sol Focus about future costs. They were real conservative on their estimates. Ironically it was a bank with the most aggressive (and in my opinion the most realistic) estimates for future cost. Just in the last few months there was a record for a single junction solar cell by Alta Devices at 27.6% and a record by Solar Junction for a 3-junction solar cell at 42.3% http://en.wikipedia.org/wiki/File:PVeff(rev110408U).jpg . It looks like there will be a lot more advances in the next year. A new approach like the Rainbow Concentrator by Sol Solution (www.Sol-Solution.net) may also bump the efficiency up. In the next three or four years the majority of the big players for the next twenty years will be decided. Solar is a very capital intensive industry. Once a company with the right technology scales up, it will be hard to upset them.

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JohnGiannasca

July 1, 2011

Everyone seems to agree that economically viable energy storage is key to main stream renewables. We have so many different incentives in the renewable area but precious few specifically aimed at the large scale take up of storage. We have seen what government incentives have dome arround the world to uptake of wind, solar PV and now solar thermal. If we decided to put the same thrust into the uptake of storage we would see a similar trend up volume uptake encouraging new entires and inovation and the eventual increase in performance and decrease in price. Lets make the thrust storage...the rest will fall into place.

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marcmett

July 1, 2011

I agree with John that energy storage is the not only the key, but the bottleneck. One innovative new technology that is getting some notice is the RPM invention that can store AC power as real AC, without conversion. This in itself could be the future of energy storage. I just saw this regarding their 2nd patent on the the wire. I would like to see the government get behind it.
http://www.prweb.com/releases/2011/6/prweb8605066.htm

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JohnGiannasca

July 2, 2011

Thanks Marc, I had not come across this technology before. It seems that it achieves the short term power quality support that is needed to overcome some of the problems associated with the large scale introduction of renewables onto the grid. The information I was able to view did not give an indication of storage capacity and I am guessing its in the seconds/minuits rather than hours/days. This is not in anyway to diminish the storage ability, quite the opposite. Any storage solution needs a suite of products to adequately solve the problems. This solution along with flywheels and ultra-capacitors will do a great job of instantaneous high power short term dispatch to solve power qualities. Then we need medium duration such as VRB and NaS type and then we need the long term Pumped Hydro, compressed air and, if i be so modest, modular graphite storage (I say modest because I was involved in the design).
But you are right in encouraging the government to get behind RPM. We need this industry to be championed.

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mmondzelewski

July 14, 2011

This is very useful information. The united states all govern themselves. Mr. Chu has suggested some federal guidelines but they don't influence the states. Some states are different and may require different circumstance.

Thank you for sharing
Matt

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dksinclair

August 21, 2011

I really enjoyed your analysis of what a potential delay in research and devolopment could bring.

It really boils down to education for me, people understand there are renewable energy sources, but how much of the public actually understands the different types, the strengths and weaknesses of both.

If your an outsider looking in you don't know that the average efficiency of a solar panel is 12%, or that you could shorten an individuals investment to about 3 or 4 years if that efficiency is doubled. Educating the masses to where renewable energy is hot button topic, will put pressure on Washington to create better green legislation.

Awareness is always the answer, and we are lagging behind. I always relate it to smoking, the majority of smokers no its bad for them, and that it will adversely effect their health at some point down the line. However the older they get and the more their health deteriorates, the more they are educated to what the potential end will look like, the more they are able to break their habit and try to live a cleaner life.

Public Awareness is the answer!

http://ecovized.com

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Stephen Lacey

About: I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, wh... more »