In fact, Gates is more wrong now than he was in 2010. Why? Because in the last six years, we have seen that aggressive deployment of clean energy technology driven by government policies has — as was predicted — led to precisely the kind of game-changing cost-slashing innovation that Gates mistakenly thinks happens primarily from basic energy research and development (R&D).
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Significantly, “the time of break-even [when an energy technology becomes competitive in the marketplace] depends on deployment rates, which the decision-maker can influence through policy,” as the International Energy Agency explained in great detail way back in 2000 in its report, “Experience Curves for Energy Technology Policy.” Here is the key conclusion:
“… for major technologies such as photovoltaics, wind power, biomass, or heat pumps, resources provided through the market dominate the learning investments. Government deployment programmes may still be needed to stimulate these investments.”What is particularly ironic about Gates’ mistaken energy-miracle-centered strategy, as I’ll discuss at the end, is that it is the exact opposite of the deployment-driven innovation strategy Gates himself used to make Microsoft a software giant and to make personal computers the “miracle” that Gates calls them today.
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Indeed, my criticism last year of Gates’ big new breakthrough energy technology fund was not that it was a total waste of money. It isn’t. Rather, it simply isn’t close to the optimal use of his money given his stated goal of avoiding catastrophic warming and getting lower-cost low carbon technologies into the marketplace as fast as possible.
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To Gates’ credit he is, at least, going beyond mere talk to actually putting up some money to do the basic energy R&D he thinks is so crucial. Working with other billionaires, Gates has created a new multibillion-dollar “Breakthrough Energy Coalition.” As I wrote at the time, while a boost in cleantech R&D funding is always welcome, what is most needed now is money for accelerated deployment and project financing of technologies that are now market-ready. Low or zero-interest loans and loan guarantees can leverage money 50-to-1 (since default rates are 2 percent or less). With $2 billion, you could create a $100 billion revolving fund for backing clean tech projects — which is getting to the scale of investment we need.
The key points are that:
- The world needs about 100 times as much money for deployment of carbon-free energy as it does for R&D right now;
- Key developing countries like India are making decisions about building coal vs. carbon-free power right now that could lock in carbon pollution for decades; and
- Genuine technology breakthroughs are exceedingly rare in the energy arena and generally take decades and vast resources to deploy once they do make it to market.
Moreover, no one I know of is saying that increased R&D isn’t useful or even very important. We are saying that it isn’t the best use of his money — and that if we don’t vastly expand deployment now, all the R&D in the world is not going to come to fruition in time to avoid catastrophic global warming.
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Let me quote two people who know a lot more about this than Gates does. According to Alexander MacDonald, co-lead author of a major new NOAA study and recently retired director of NOAA’s Earth System Research Laboratory, “our research shows a transition to a reliable, low-carbon, electrical generation and transmission system can be accomplished with commercially available technology and within 15 years.” Similarly, the lead energy specialist at the World Bank, Morgan Bazilian, told Bloomberg after 20 years studying this issue, “Very high levels of variable renewable energy can be accommodated both technically and at low cost.”
Read more at No Bill Gates, We Don’t Need ‘Energy Miracles’ to Solve Climate Change
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