We are defining the energy future of America before our eyes. The forces of change at work offer both opportunity and risk. In choosing our policy, energy strategy and technology options we risk being tactical rather than strategic, politically correct rather than policy smart, and technology enabling or protectionist.
A combination of economic and other forces are turning energy strategies upside down. Side by side with that turmoil also comes the advance of technology including smart grid and increasingly more powerful networks, virtualization and the distributed potential of millions of devices humming in concert to be come more than the sum of their parts. The lubricant for all of this is a changing set of policies and tax credits and regulations that reflect both strategic goals and current fads in an awkward dance of competition across markets and regulations across industries.
The energy strategies of the future now taking shape are a convergence of energy, technology and policy all competing for dominance. We need measured doses of each to make this dish taste good. Too much of any one ingredient throws off the balance and ruins the feast.
The energy industry since the days of Thomas Edison has been big and slow requiring large capital investment, years of infrastructure construction, and constant real-time maintenance to keep the dance of electrons flowing in balance. Technology, on the other hand, is often fast and to be successful must rapidly become cheaper to scale and gain market share. Policy is the intangible ingredient in the dish. It can be spicy or bitter depending upon the last election. It can subsidize and punish. It can lubricate markets or distort them. Policy driven growth can rapidly move the ball down field—look at the rise of ethanol as an example, but policy fumbles can rapidly result in turnovers and losses.
So what’s the point, you ask?
America’s economy runs upon a steady, reliable, affordable supply of electric power. The current recession will end—and when it does—America will need even more energy and even more affordable prices to fuel its recovery and return to growth. We can and should use the correction side of the business cycle to retool our energy portfolio. If we are smart and strategic we can build a smart grid to connect clean energy supply sources and the vast array of new technologies to be more efficient in our energy use in a policy framework that strikes the right balance of reliability and competition, forward thinking and pressing the boundaries of change, policy smart and not politics foolish.
America needs all the home grown energy supply sources we can responsibly produce. We need to harness the sun and wind and the power of geothermal. We need to invest in new technology options like algae and fuel cells. We need a revitalized power grid that is smart, moves power East and West instead of just North and South, and uses the amazing power of networks to enable us to manage our real time energy use with real time energy information.
But America is blessed with large and underutilized energy resources from coal, natural gas especially from newly accessible unconventional sources, and oil off-source and from shales. We ignore or punish use of these resources at our strategic peril. And worse, we risk placing too much of a burden too soon on the clean energy supply sources we most seek to grow by trading rapid change for long term reliability and stability.
We also need the power of competitive markets to rationalize these forces and create a sustainable future beyond the policy prescriptions of the current Washington party in power. Only from consistent pressures from competition are we likely to get the best long term results. Renewable energy, smart grid and other policy fashion today must be able to become sustainable without political bias if they are to meet our needs and achieve their vision of a clean energy future in our future.