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Yesterday I asked what role the government should have in fostering alternative energy breakthroughs. The people who think the government can help a lot with this sort of thing often cite two examples:

1. Kennedy's race to the moon

2. The Manhattan Project to build a nuclear bomb

What do those two efforts have in common? Answer: no profit.

That's entirely different from the energy situation. Whoever figures out a way to cheaply turn seawater into fuel is going to be very rich. I would be surprised if there are any good ideas in the energy field going unfunded at the moment. My guess is that the energy investment environment has already become like the Dotcom era where venture capitalists were (figuratively) randomly knocking on dorm rooms and asking if anyone had any Internet ideas.

Someone said government can help remove red tape, or twist the arms of big companies where that needs to happen. But isn't that the reverse of how our system works? It seems to me that big companies are twisting the arms of government. So while we might wish it were the other way, reality is stubborn. And realistically, can we expect government to remove red tape?

Every now and then I have hunches about the future that feel both real and inevitable. My current hunch is that individual homes will become their own energy sources. This won't require any help from the government. All you need are three components that seem like they are creeping up on us:


1. More efficient solar cells (breakthroughs are coming daily)

2. Energy storage technology for the home, perhaps based on this:

     http://web.mit.edu/newsoffice/2008/oxygen-0731.html

3. Financing for solar cell installations


If you finance your installation of solar cells with a loan that costs you $300 a month, and save $400 a month in energy costs, you are cash positive on day one. At that point it also makes sense to have an electric car. There won't be much red tape to worry about in this model because every house is an island, and private companies can manufacture all of the parts.

I don't see the government having much of a role in creating that new world.

 
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Sep 3, 2008
Based on the link to the article about the MIT discovery... the role of government is to fund education as much as possible to ensure there are a whole bunch of smart guys with beards who spend their entire life trying to figure out how to use plants to store energy... interesting that it was NSF and a family foundation that helped this discovery happen.

There's a role for government to fund basic research, well upstream from profits, and let the results trickle down to the market... that's what the space program was... that's what the Manhattan Project was... the problem is that it is the US taxpayer footing the bill for technology that is good for earthlings in general. As a non-US earthling... thanks!
 
 
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Sep 3, 2008
SAVE 400 a month???? I have a 1650 square foot three bedroom house with lots of electronics on all the time and I have never paid even half that much. You either have a huge algore type house or you are getting screwed on your power bill.
 
 
Sep 3, 2008
The government may not have a role in the development, but I'd be willing to bet that they'll find a way to tax it to infinity. They are going to get their cut, somehow, some way.
 
 
Sep 3, 2008
The best way for governments to advance technology and clean up the environment is to set seemingly impossible targets and let the private sector and properly funded government agencies figure out the best way to get there.

Best example is the EPA in the '70s setting auto exhaust limits before the technology even existed to make it possible. The catalytic converter came out of that, but no one in government sat around beforehand and said, "Hey, let's offer incentives to a surface chemistry based solution, I bet that'll do it!"

Lower CAFE standards, lower oil imports, lower auto emissions - these are all quantifiable goals that governments can set. Industry & science can figure out the most economical ways to get there.
 
 
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Sep 3, 2008
Actually, I'd give two other examples:

1. Computers.
2. The Internet.

Both of these involve huge profits today. Neither would have existed were it not for government investment. Add in the WWW, which also was initially produced by researchers working for various governments.

Alternate energy systems could be similar, with government providing initial research funding. And even funding for the energy plants also.

Want an example of government funding of energy plants? How about the Tennessee Valley Authority and all of the hydroelectric dams that it built, which helped electrify rural America back in the 30's.

There's plenty of possibilities here, and plenty of examples of government investment producing or revolutionizing industries.
 
 
Sep 3, 2008
Do you realize that many decades ago, the Japanese government thought that the Japanese car industry was a complete non-starter & funded cheap trinkets manufacturers instead.

The reality of a dynamic market system is that no one really knows what will take off & what will bomb.

So as Mao said - " Let a thousand flowers bloom". But let's not demolish what doesn't fit the current paradigm.
 
 
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Sep 3, 2008
> What do those two efforts have in common? Answer: no profit

What?!

There's been immense profit, both direct and indirect. All due to government investment that private industry wouldn't put up, because it was too much/or and the payback time was too great.

Additionally, here's what else the government can do in the situations we're discussing: Get the heck out of the way of the free market. If we'd stop propping up big oil, big agro, etc., advances an alt fuels would have been legion by now.

- Marc
 
 
Sep 3, 2008
We only need ONE THING for homes to become their own energy sources: photovoltaic that costs less than $3.00 per watt. That is the break-even point for the average home owner. Funding them with government rebates while the technology is still expensive and in short supply just seems wasteful. We don't need battery storage or any other kind of stupid and inefficient energy capture because the infrastructure is already there to provide the needed nighttime baseload at very cheap prices.
And to address the person confused about capacitors - Pros: they charge fast and don't wear out. Cons: they only work for very low voltages, need a large amount of space vs batteries of the same power, won't hold a charge for very long sitting on the shelf, and expensive. Oh, and they have a nasty habit of exploding if they're abused.
 
 
Sep 3, 2008
I read about a new cordless hand tool that uses a capacitor instead of a battery. On the up side, it recharges in a few seconds. On the down side, it only holds about half the charge of rechargable batteries.

Can someone explain the pros and cons of using capacitors rather than batteries? Is it even possible or feasible?

Thanks.
 
 
Sep 3, 2008
I think most of you are missing the point. There are certainly places in the world that would be poor places for solar cell technology, especially at current efficiencies. And there are also places that would be a great place to use them. So, fill up those areas with solar cells and related electric technology that uses the output of those cells, and you have more oil at a cheaper price for the other areas.

No one current technology can directly replace oil on a one for one basis. But a number of different technologies that WORK can greatly reduce our dependence on it, especially if we can convert most of our transportation dependencies.
 
 
Sep 3, 2008
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User Name: risingstarlp Sep 3, 2008
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Right now my home electricity bill is $70 in the summer, $110 in the winter (electric furnace.) Delivered to my house, my electricity cost is 7.2 cents/ kwh. Not even the most optimistic views have solar or wind even approaching that level of efficiency with in 25 years. And that does not count the storage efficiency or cost for batteries. Nuclear reactors are much more cost effective compared to any alternative energy supply. Furthermore, their cost is 100% American labor and 100% American resources (uranium, steel, concrete, etc). A lot of the materials used in solar cells and batteries are mined in places like Brazil. There isn't any good reason not to use all nuclear. This would eliminate all problems, and when hot fusion is eventually feasible as a power plant or if some advance is made in cold fusion, we'll use that.

[Okay, we'll put one in your back yard. -- Scott]

\

I would not be scared of a nuclear reactor placed in the nearest industrial-zoned area to me, which happens to be an old refinery that was decommissioned about 30 years ago (about a mile away). I'd only be scared of ignorant people who would irrationally drive down property costs in the area since they don't understand the technology. But it isn't necessary to build power plants within a mile of heavily populated areas. I think it should be criminal negligence on the part of the government to have so much red tape that clean, cheap electricity that will never suffer from price inflation, (as 95% of nuclear electricity costs are due to initial capital costs for construction) cannot be built. Money spent on energy directly takes away from GDP.
 
 
+2 Rank Up Rank Down
Sep 3, 2008
The only way the government can help is by raising taxes on gasoline & other fossil fuels so that alternative energies can be competitive. At the very least they shouldn't talk about CUTTING them (I'm looking at you Senator McCain).
 
 
+1 Rank Up Rank Down
Sep 3, 2008
If it weren't for government subsidies over the past 30 years, these technologies would just be getting off the ground...because there was no venture capitalist in 1980 for solar power. As you said, if there's not a potential profit, there's not an investment by the private sector. even WITH govt money, these technologies are only now just becoming profitable. What if the tech had to wait up until now to even get off the ground?

It goes hand in hand-govt should entice and stimulate R&D for projects we know are beneficial, but not necessarily profitable. (examples: cheap drugs to treat/cure illnesses. not enought profit to justify the R&D; solar power in the early 90's; ).
 
 
+1 Rank Up Rank Down
Sep 3, 2008
“o” ’t’s

"And what are these weird symbols that keep popping up in our posts?"

 
 
Sep 3, 2008
I think for most people the dream of being “off the grid” isn’t about saving money. It’s about independence. It’s about not losing your power when some knucklehead three states over neglects to trim his trees and causes a multi-state blackout. It’s about knowing the fixed cost of your energy needs over the next 20 years.

Because of economy of scale, it will always be cheaper to mass-generate energy for millions of homes than for those millions of homes to generate their own power individually.

I do believe we’ll see more of these energy self-sufficient homes in the future. But they will be luxuries for the “haves” not a cheap energy solution for the “have-nots.”
 
 
Sep 3, 2008
It's a fascinating topic.

I like the prediction about self generated power, but If we could predict what the free market solution would be, we wouldn't need to wait for the free market to find it. As long as there is massive outside investment to solve the problem, you are right, the government doesn't need to do much to help it along.

It's interesting that you draw an analogy to the internet and the dot.com days. The internet is not only an example of a technology that was significantly helped by government involvement but a great demonstration that the goverment doesn't have a monopoly on wasteful investment.
 
 
Sep 3, 2008
I don't know why you think government is run by companies. The fact is that it goes both ways. Some companies (GE, banking industry) have a ridiculous amount of control over the government while others (Exxon) are pushed around constantly. If you don't agree about Exxon then tell me why they keep having to report to Congress while only reporting between a 8-9% margin. The fact is that government needs to butt out... but I digress.

The adaption of new technology that is worthwhile ALWAYS happens faster than government can subside or mandate. The internet is the best example. I cringe when I hear government ought to help fund these projects when the fact is that private investment would drive these much more efficiently if they were worth anything. My opinion is that funding, private funding, should occur to drive these markets once they become competitive. In the examples you cite, that won't be for at least 10 years.
 
 
Sep 3, 2008
There is a pretty good study that shows that every 1$ spent in the moon shot resulted in $10 of follow-on tax revenue from consumer products based on the tech that would not have been created had it not been for the moon thing.

I think you are looking at the "curve from here to there" as a straight line - it isn't (not even close). Yes, there is a point in the future where things work well for obvious reasons (like your solar example), but the forces of the economy won't get there on their own at a smooth pace. Imagine a "tech-curve" that goes up and then flattens out for a long time, and then shoots up at a high degree - that is the alt-energy-efficiency curve. Normally movement up that line takes place because businesses are profitable, and then invest money into improving tech, which keeps the line moving up, but in that "long flat period" there is no profit for those companies, and as such, there is no reason for further investment. When government makes that middle period profitable, it allows for further tech investment which can result in that end state.

This is why government is needed to keep things moving. You might be thinking, if we just wait long enough that we'll eventually get that tech from pure need, and we might, but it will be a painful painful transition, that will rely on several advances in technology happening at a speed that might not be possible (along with terrible human effects).

You also need to remember that other governments are working on the other side of this equation. If the price of gas drops to $2 because OPEC wants it that way, then all those electric car initiatives get wasted and billions is lost. 3 years on, gas goes to $5!...then back to $2....then back to $5.... Government can provide stability in important markets (a floor) to keep those important advances coming, which is needed or else all those inventors will go back to making vacuum cleaners.

 
 
Sep 3, 2008
If the "race to the moon" had been a privately funded accomplishment, we would have permanent colonies there by now. Government dropped the ball.
With atomic weapons, I doubt those would have been buily privately. Killing people is what government of any sort does best.
Two strikes against government.
 
 
Sep 3, 2008
The role of government in alternative energy is to decide how much we think it's worth to reduce CO2, and subsidize alternative energy sources accordingly, so that the profit can be calculated on the net value rather than on the cost of today's energy. One approach to this is a cap-and-trade type system that can set the value of CO2 emissions.

Also, companies tend to be short-sighted, looking for profit over spans of a few years. Government can subsidize research into the technologies that will be useful 20 or 50 years from now.

Finally, some energy storage solutions (such as hydrogen) require a lot of infrastructure to be worthwhile. Government can guarantee that hydrogen fueling stations will be widespread enough that it makes sense to buy a hydrogen fuel cell car.
 
 
 
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