Renewable Energy vs. Renewable Energy Policy

Another $249 million US government grant vaporized as A123Systems, a lithium ion battery manufacturer, declared bankruptcy on October 16th.  It is the one of the largest failures of green energy companies after the bankruptcy of Solyndra with $528 million government loan as part of President Obama’s alternative energy project of stimulus package.  Green energy technology such as solar photovoltaic is important for the future, but it should not be substitute or granted by government just for the purpose of increasing their capacity.  Instead the government should pay more attention on the development of the actual technology, such as investing more in research institutions, to improve its efficiency and reliability.  It is essential to make green energy a real competitor against conventional energy on both environmental and financial aspects.  Overall, the federal government can’t babysit clean energy forever.

Alternative energy is no doubt the future for energy industry.  It is not because of the climate change.  Many people may have a false assumption on the need to alternative energy is solely base on the possible cause-effect relationship between climate change and CO2 emission.  Therefore, people refuse to support alternative energy by arguing the cause of climate change is not proven to be human activity or CO2 emission alone. Like Governor Mitt Romney said in his speech at Consol Energy Center, “my view is that we don’t know what’s causing climate change on this planet.”  His view may be true, but it proves nothing against developments of alternative energy.

Fossil fuel as a limited recourse is the real reason behind the need of alternative energy. Facing the rapid growth of world energy consumption, the end of precious fossil fuel is going to come.  When governor Romney said, “I will fight for oil, coal andnatural gas,” he did not realize that there will soon be no more oil, coal and natural gas to fight for.  The world needs to move on to another form of energy for its demands. 

Therefore, when president Obama supported developments of alternative energy as part of his the Stimulus package, it is like finally somebody know what is the right thing to do.  However, the result is not so right.  The Stimulus package did not only do the right thing of promoting clean energy, it also did bad thing, like loaning millions to individual companies, which turned out to be complete failures.   The share of clean energy in US barely passed 12% in 2011, after spent almost all of $90 billions.  Two large federal supported companies bankrupted, which lead to almost $800 million taxpayers’ money gone to nowhere. Moreover, for every MW-h of solar energy people use, more than $700 vaporized under the name of federal subsidies. Governor Romney may be wrong on his view on future energy industry, but his is right when he said, “in place of real energy, Obama has focused on an imaginary world where government-subsidized windmills and solar panels could power the economy.”

One thing people have to realize is that building an unsupported frame of clean energy by pouring taxpayers’ money is not going to help the transition of energy industry in the long run.  It is going to collapse as soon as the money disappears.  Base on the national debts of US, it is not so far away.  The only way to strength the structure is to build a strong foundation, which is effective clean energy technology itself.  The only reason for the government to spend this much money in support is clean energy technology is unable to support itself on the market to compete with conventional energy on both efficiency and production costs.  The concept of free market is only in favor of strong competitors.  By thinking in the long term of clean energy development, it is critical for it to be able to compete in the market by itself without much government financial supports.  It is only can be achieved by improving technology’s efficiency and reduce production costs. 

In term of improving this new technology, no place does it better and science and innovation institute.  It was the National Renewable Energy Laboratory decreased costs of wind power production.  However, only $2 billions of Stimulus package went into science and innovation.  It is not a small amount of money, but the money could do better if instead of throwing money to a company, which major goal is to be profitable, it went into science institutions where innovation is the priority.