Innovation, Meet Deployment: Climate Policy’s Twin Imperatives

Innovation, Meet Deployment: Climate Policy’s Twin Imperatives

Among other achievements, the Paris climate conference gave birth to the Mission Innovation Initiative, a joint effort by 20 world governments to accelerate the pace of “clean energy innovation” by doubling energy R&D over the next few years. The launch statement begins by explaining that current technologies are inadequate to solve the climate crisis, noting that, “while important progress has been made in cost reduction and deployment . . . . the pace of innovation and the scale of transformation and dissemination remains significantly short of what is needed.”

This sentiment was echoed by President Obama, who said at the Paris conference that “we’re also going to have to just invent some entirely new technologies,” and futurist Ted Nordhaus, who flatly states that “we do not, in fact, have all the technology we need to achieve deep a reduction in emissions.”

To the casual listener, these statements might sound a bit defeatist regarding near-term action. Current technology not up to the task? OK, let’s just chill while our scientists engage in a moon-shot program to invent better gear. Why deploy today’s not-up-to-snuff clean energy sources when we can just wait for better and cheaper stuff?

This interpretation isn’t merely wrong – it’s dangerous. If it was simply a matter of building and installing new hardware, we could vastly reduce energy greenhouse gases with clean energy technologies available now. Wave a magic wand that installs all cost-effective energy efficiency technologies and carbon emissions would drop overnight by ten to twenty percent, probably more. Wave a second magic wand, to electrify transport and power it with carbon-free power, and shazam: roughly a third of world carbon emissions would disappear. That carbon-free power could come – today – from wind, solar, geothermal, hydro, and yes, nuclear energy sources, all of which operate thousands of megawatts of commercial power right now.

But Mission Innovation’s real point is rather that today’s clean energy technologies are, in many places, still more expensive to the customer — that is, not counting subsidies or external costs. It would certainly be much better if “breakthrough” clean energy sources emerge cheaper than current clean energy plants. Cheaper and better technologies are always easier to adopt more quickly.

However, when juxtaposed with the critical need to decarbonize during this century, this premise turns the defeatist view of Mission Innovation on its head. If the goal is much cheaper clean energy technologies, and much more rapid deployment, the imperative is to redouble our efforts to adopt and improve current energy efficiency and clean energy technologies, not invent brand new ones. Through these efforts we will vastly reduce clean energy costs, start to change government and regulatory institutions and policies, and expand clean energy markets.

While clean energy breakthroughs are certainly welcome, it is important to understand that many current clean energy technologies are themselves breakthroughs that are already busting deployment speed records and thereby getting steadily less costly. LED light bulbs have declined in price by 90% since 2008, as deployment leapt from 400,000 lamps to 78 million. U.S. solar PV costs have declined at a torrid 12% per year since 2008 as installations have grown at double digit rates. Wind power (tripled since 2008), batteries, and other clean energy technologies also continue to drop steadily in cost with every successive generation. By finding even more effective ways to deploy these technologies, with careful attention to keeping energy affordable and accessible, we will save millions of tons carbon and reduce the costs of these here-and-now solutions as we go.

There is an even more important reason why maximizing deployment today will critically assist Mission Innovation itself and our overall climate goals. No matter how bold the inventor nor committed the leader, energy innovations take a long time to deploy – longer than we have. Energy technologies must be tested for safety and performance, financed by governments and investors, accepted by customers, and technologically integrated into a diverse set of delivery grids. In less networked industries, innovation can drive inferior products out of the market in a matter of years. In energy systems, the more disruptive and innovative the technology, the longer it takes to work through the safety, financial, and engineering aspects of widespread adoption, not to mention the economic and political dislocation.

Civilian nuclear power is arguably the best example of how rapidly a breakthrough clean energy technology can be deployed in the presence of massive government support. Nuclear power was bench scale in 1939. When full scale reactors were ready, it took relatively little revision of the economic or technical structure of the power industry to fold them in. They benefitted from extremely strong commitments by many governments – an estimated $150 billion in subsidies in the U.S. alone. For all this push, seventy-five years later nuclear power supplies above 11% of the world’s
electricity and about 4% of total world primary energy.

If Mission Innovation can muster a dozen such breakthroughs, get governments to support them as strongly as they supported nuclear power, and deploy them as rapidly despite more challenging grid integration issues, we will have a clean energy system in 2090. This strategy alone simply won’t work.

Today’s clean energy technologies are forcing the world’s energy systems to start the long process of technical, financial, and regulatory adaption to a no-carbon power and transport grid. These human and institutional processes will take decades to complete, but the more we deploy new technologies along the way the more policymakers and energy system operators will learn to adapt. All of this will pave the way for breakthroughs to enter the energy system much faster than starting from scratch while providing huge benefits in the meantime.

It is undeniable that renewable energy sources cannot now supply the world’s energy demands as cheaply as fossil fuels. There is no question that better and cheaper technologies will help us. But the critical conclusion to take away from Mission Innovation is this: the world may not be able to solve the climate crisis with only today’s technologies, but neither can it afford to stop the strongest possible efforts to deploy current solutions as quickly and cost-effectively as we can. We wish Godspeed to all those hunched over lab benches searching for clean energy breakthroughs. The rest of us have a parallel mission every bit as urgent.

Peter Fox-Penner is a Professor of the Practice at the Boston University Questrom School of Business where he is leading the creation of a University-wide Institute for Sustainable Energy. In addition, he advises The Brattle Group and Energy Impact Partners and is on the boards of LRI and the Solar Foundation.

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