Saturday, November 27, 2010

Inventing to Outcomes

Innovation at Pacific Northwest National Lab

J. Michael Davis, Associate Laboratory Director for the Energy and Environment Directorate at Pacific Northwest National Laboratory
J. Michael Davis, Associate Laboratory Director for the Energy and Environment Directorate at Pacific Northwest National Laboratory (PNL) gave a thought-provoking keynote address November 9 at the Future Energy Conference in Seattle. He spoke both about PNL's role in national energy innovation and on the importance of formulating a national energy policy. His remarks echoed some of those made at the conference by US Representative Jay Inslee and by Puget Sound Energy President Kimberly Harris, from the government and utility perspectives, respectively.

Davis spoke compellingly of the essential role played by the national laboratories in shaping our energy future. Quoting Bill Gates, Davis declared that, as a nation, "we have to be swinging for the fences." We are making progress, but not quickly enough, and results are too incremental. Innovation is key to seizing real opportunities and making progress towards our energy future; however, an unfocused approach doesn't reflect the urgency of the challenge. This is why PNL seeks to "invent to outcomes" thus harnessing innovation to critical objectives.

There are four desired outcomes that inform PNL invention:
  • Expanding and strengthening the foundations of science in the US
  • Achieving energy independence, boosting domestic energy capacity and reducing dependence on foreign oil
  • Countering terrorism, WMD, and advancing anti-proliferation
  • Creating sustainability and reducing negative environmental effects
Specific business areas include:
  • Clean fossil energy
  • Electrical infrastructure
  • Energy efficiency
  • Renewable energy
  • Environmental health and remediation
  • Nuclear energy
Taken together these seem rather a grab-bag of disparate initiatives, but Davis wove some worthy unifying themes: the importance of energy density, the growth of electricity demand, and the urgency of solving our energy needs without creating "residuals" from its supply or use.

While "the world is moving forward" on nuclear energy, "we must think carefully" about expanding it. Local history provides an enduring caution: PNL has labored on numerous remediation tasks at the sprawling Hanford Nuclear Reservation to address its disparate and daunting contamination challenges. Generating electricity from nuclear has appeal, but we aren't solving the big problem of the residuals—the waste—fast enough.

The use of coal and other fossil fuel sources remain widespread, but also suffer from the problem of residuals: despoiled landscapes, massively befouling accidents, and emissions. These resources are limited and Davis recognized the inevitability of a transition away from them, although he believes that fossil energy will be with us for a long time. As CNN reported earlier in the day, by 2035 China will still have a significant fleet of coal-fired plants and demand for oil will remain high. Renewable energy output will be triple what it is now (at least) but use of coal will still be growing, even as the quality of that coal declines. Hence the PNL target of eliminating the residuals from the use of fossil sources.

"We cannot continue to have residuals from the use of energy." The only current sources of energy without residuals, according to Davis, are hydrogen and electricity (depending on how it is generated.) Electricity demand will continue to surge. 1.5B people do not have electricity today, and the world's population will grow 50% to 9B people by 2040, in essence doubling the potential consumers of electricity from today's totals. PNL is very focused on electricity generation and efficiency because of this future demand.

The US can continue to expand renewables if we "get the policy right." It is not right yet.

Policy should be directed to "special outcomes" and not special interests. Davis showed an interesting spectrum from long-term outcomes at one end and short-term interests at the other. Each had an associated period of years that defined its horizon, and which bears directly on whether it is an outcome to which we should innovate, or merely an interest that distracts from those outcomes:
  • Climate—millions of years
  • Energy Supply—20-50 years
  • Science & Technology—10 years
  • Political Elections—2, 4, or 6 years
  • News Media—daily
Davis noted that the US is great at innovation, "but we suck at deployment." There are two aspects of this: governmental micro-management, and a misplaced faith in markets to satisfy all the desired outcomes.

There is no silver bullet to address our energy needs; there are many components necessary for a full solution. China is arguably our greatest competitor in the race for global cleantech competitiveness, and what it does is instructive. The Chinese don't write thousands of pages of legislation, but instead mere paragraphs of desired outcomes. These serve as broad directions which are "driven down" regionally to "implement solutions closer to the problem." Echoing US Senator Jeff Bingaman, Davis said that energy policy needs to be regional (and "not partisan") because no one energy solution will fit varying resources and needs everywhere.

Government must play a role, however, especially as the balance between energy needs and the common good "is out of whack." Markets are great but they don't concern themselves with the strategic objectives we have as a country. Our private energy system is good, but scaling new energy approaches is only possible if the government enables it. We need mandates or a policy that enables the scale deployment of energy solutions resulting from America's abundant innovation. Reiterating what is fast becoming a growing national chorus, Davis concluded with a call for urgency: the private investment that will deploy energy solutions will remain uncommitted in the face of policy or regulatory uncertainty.

We need, as a nation, to formulate and implement a coherent and actionable energy policy that focuses on strategic objectives and removes the risk and uncertainty that retards private investment. Our global competitors are doing this; why aren't we?

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