4 Apr 2011

U.S. is slipping farther back in the clean energy race and not just to China

Written by energyscout

According to The Pew Charitable Trusts, the U.S. is losing the race to create the most robust clean energy economy not just to China but now also to Germany. This among the G-20 nations based on the amount of private equity investment in dollar-equivalent numbers. The U.S. ranked #1 through 2008.

If you look at the level of public clean energy investment as a percentage of a country’s Gross Domestic Product, the U.S. is farther behind, according to a recent Third Way report, “Creating a Clean Energy Century.”

Former Michigan Governor Jennifer Granholm enters the clean energy fray. Credit: Lansing State Journal

The Pew report, available here, and based on data from Bloomberg New Energy Finance, is to be used to build support in Congress for clean energy policies and jibes with President Obama’s push this Spring for the same. Helping to lead the charge is former Michigan Governor Jennifer Granholm who has joined the Pew staff.

The relative slippage by the U.S. comes amid a worldwide recovery in clean energy investments underscores the opportunities the U.S. is missing to scale up clean energy and boost its economy. When one looks at the 5-year growth rate of clean energy investments, the U.S. is in 11th position among the G-20.

All this said, the U.S.  remains the global leader in clean energy innovations to come, receiving 75 percent of all venture capital investment in the sector, a total of $6 billion in 2010, according to Bloomberg New Energy Finance. But the U.S. has been creating nowhere near the demand for deployment of clean energy as other nations are. “As a result it is losing out on opportunities to attract investment, create manufacturing capabilities and spur job growth,” said Michael Leibreich, CEO of Bloomberg New Energy.

While the U.S. consumes 25% of the world’s energy, it has but one of the ten largest wind energy companies in the world. Of the world’s ten largest solar energy companies, only two are based in the U.S.

GE Chairman Jeffrey Immelt and venture capitalist John Doerr chimed in with an op-ed in The Washington Post Sunday decrying these discrepancies. Here is their 5-point treatise to help the U.S. catch up and why, in short, neither will happen any time soon:

1) “Send a long-term signal that low-carbon energy is valuable.” Cap and trade failed and stands no chance of happening as Republicans swing back into a position of power.

2) “Get the rules of the road right for U.S. utilities. We must make our utilities a driving force for repowering America, driving efficiency through incentives, a renewable electricity standard and a national unified smart grid.” Utilities hold too much clout in just about every state they operate in.

3) “Set energy standards that grow steadily stronger. America should strive to have the most efficient buildings, cars and appliances in the world. The savings will land in the pockets of U.S. consumers and businesses.” Maybe, but balance sheets simply cannot support such massive investments without huge incentives, and the budget mess won’t permit them.

4) “Get serious about funding research, development and deployment, at scale. The federal government currently spends only $2.5 billion on clean-energy R&D a year — 0.25 percent of our annual energy bill. Sen. Jeff Bingaman’s Clean Energy Deployment Administration is a good idea that would be fast and flexible. But more such programs are needed.” It’s easy to call for more R&D, but the U.S. can’t afford it on this scale until it gets its fiscal house more in order.

5) “Fulfill President Obama’s commitment to ‘become the world’s leading exporter of renewable energy’ with a a robust trade policy that seeks to open markets abroad — including the Chinese market — for U.S. clean-energy products through new trade agreements.” The U.S. cannot muster enough influence to pull off such a coup.

Advantage China, and Germany, et al.



Leave a Reply