Monday, May 6, 2013

Things one sees from there one may not see from here – Take Two

Dr. Sened is a Professor of Political Science at Washington University in St. Louis, and former chair of the Political Science Department at Washington University. His main interests are comparative theory of institutions, game theory and mathematical modeling. Dr. Sened teaches Undergraduate and Graduate level courses in the Political Science Department.

In this second in a series of three posts, we review the vision of Dr. Rolf Wuestenhagen, the Good Energies Chair for Management of Renewable Energies at the Business School of The University of St. Gallen in Switzerland.  We apologize for posting this a little later than earlier expected/promised.  Besides being visionary and insightful, we highlight how different this approach and attitudes more generally towards clean energy in Europe compare to those we are more commonly exposed to here in the U.S. In the previous post we discussed the origin of these differences and the policy consequences they entail.  In this post we want to talk more of the essence of the argument and what it means.

Discussions in the U.S. on the expansion of the clean energy sector are wrought with skepticism.  There is the general skepticism regarding the viability of the whole enterprise and specific skepticism regarding almost any aspect or detail involved.  Whenever the conversation begins, discussants will raise the issue of storage, or price, or intermittency, reliability and what not.  In the process no one ever mentions the cost of the recent oil spillage in the Gulf of Mexico south of Louisiana, estimated at everywhere between 50 – 100 Billion dollars or the Fukushima disaster that has topped 100 Billion and in both cases we are still counting.  The loses related to some mishaps in the clean energy sector, so widely advertised, are hardly pocket change next to these figures and most of the skepticism regarding some of the technical challenges facing the clean energy sector have either been already solved or are on their way to be solved.

It is in this context that Dr. Wuestenhagen’s vision seems much more in tune of scientific state of the art and with simple common sense.  The simple truth is that we cannot continue to rely on fossil fuels as our main source of energy for very long.  Climate change, pollution related disease and associated health care costs, not to speak of the real cost of fossil fuel energy - if we calculate it after striping it from the wide range of significant subsidies it enjoys.  Calculated that way the cost of fossil fuel is, for the long run, prohibitive by any account. Yet we keep our head buried in the sand as if this problem is going to solve itself.  Well it isn’t and anyone who knows anything about this knows it perfectly well.

Dr. Wuestenhagen, offers a remarkably simple concept:  Let us move from 20:80 to 80:20.  These numbers refer to the ratio between clean energy or renewable energy and nonrenewable fossil fuel energy now, as compared to the world envisioned by Dr. Wuestenhagen. 

It should be highlighted that Nuclear Power is a category in between -- while not renewable it has been considered for many years to be clean, because everyone chose to turn their heads the other way not taking into account the Chernobyl and Fukushima type disasters and the issue of what to do with the nuclear waste emanating from Nuclear Power reactors.  In Europe, as we showed in our most recent post, Nuclear power is as dirty as they get.  Again, what they see from there, we may not be able to see from here.

So how do ‘European minded’ experts like Dr. Wuestenhagen, think we can ever move from mostly (80%) relying on fossil fuels and nuclear power to 80% reliance on clean and renewable energy sources?  First thing first, drop the skepticism and try to see clear through the misleading or simply inaccurate information.  Then, the key is in implementation.  One of the huge advantages of the use of Nuclear and Fossil fuel energy sources is how simple it is.  It may not be cheap and it may not be safe and it certainly is dangerous for the future of the planet, but it is simple.  You use the vastly inefficient infrastructures, you have you find oil wherever you do and natural gas wherever you do or you build nuclear reactors wherever you may and you pump the energy into the system.  End of story. 

Clean energy requires a lot more.  It is, by its nature, decentralized, produced in relatively small quantities with a huge geographical spread.  So one must build local and regional smart grids to cultivate and crop the energy from wherever it comes and distribute it to wherever it is needed in a much smarter way.  From whence the concept of smart grids that is so critical to the implementation of clean energy infrastructure. One must find new ways and build new infrastructures to distribute electricity to electric cars instead of the existing oil distribution network of gas stations.  Again, cheaper, cleaner but somewhat more complicated.

And the list goes on and on.  The world of renewable and clean energy is a complex one.  It requires new modes of thinking and resource management, very different infrastructures and management models. 

But whatever happened with the value in innovation?  Why is it all of a sudden the right thing to stick with what we have rather than look forward for change?  Why should we stick by fossil fuels that have proved themselves to be dirty, polluting risky and expensive.  The future is in clean energy, we all understand it so why are we not embracing the change for the better faster?

The short answer to that is probably ‘short sightedness.’  The long answer is what this blog is all about.  In the meantime we recommend the annual report of the Good Energies Chair for Management of Renewable Energies at the Business School of The University of St. Gallen in Switzerland at the link below so as to get a taste of the ‘things that you see from there and may not see from here.’

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