We are number one in military spending, but our investment in clean energy is lagging far behind China and Germany. A new report from the Pew Foundation lays out the numbers in a report entitled, "Who's Winning the Clean Energy Race? 2010 Edition" (pdf).
The Americas region is a distant third in the race for clean energy investment, attracting $65.8 billion overall in 2010. Investments in the United States rebounded 51 percent over 2009 levels to reach $34 billion, but the United States continued to slide down the top 10 list, falling from second to third. Given uncertainties surrounding key policies and incentives, the United States' competitive position in the clean energy sector is at risk.
What is disheartening about this report is not just that we are now a distant third in funding clean energy projects. Our investment in the clean energy sector is dwindling while it is soaring in Asia, Europe and Latin America. Other countries understand the importance and benefits of moving away from a polluting and extraction-dependent energy supply.
In no uncertain terms, China is now the dominant power in installed clean energy and set new records for investment and manufacturing.
China continued its seemingly inexorable growth in clean energy investment, growing 39 percent in 2010 to attract a world-record $54.4 billion. In 2009, China surpassed the United States as the number one nation for installed clean energy capacity, further solidifying its position as the world’s clean energy powerhouse. With a staggering $45 billion invested in wind, China was able to drive installation of 17 GW of additional wind energy generating capacity. Another $4.7 billion was invested in the solar sector, as China begins reaching for its new goal of 20 GW of installed solar energy by 2020. It also has a target of installing 150 GW of wind power by 2020. China has also established itself as the world’s leading clean energy manufacturer, producing almost 50 percent of all wind turbine and solar module shipments.
Also impressive was continued growth of clean energy installation in Germany. Much of that growth was devoted to small-scale (rooftop) distributed solar power.
Clean energy investments in Germany increased by 100 percent in 2010, to $41.2 billion, surpassing the United States and ranking 2nd in the G-20. Germany’s dramatic growth was led by a sharp increase in deployment of small-scale solar projects, which increased 132 percent to enable an estimated 8 to 9 GW of new solar capacity to be installed. Eighty-eight percent of 2010 clean energy investment in Germany was directed to the solar sector, some $36.1 billion. Another $4.7 billion was invested to increase Germany’s considerable wind assets. Germany leads all nations in clean energy investment intensity.
Here is the distribution of solar installations by size of project. The vast majority of the installation was under 1 MW per project. Basically, we are talking about the rooftops of homes, offices, and industries.
Source
To fully appreciate Germany's accomplishments, consider the following. Renewable energy sources now account for 17% of the baseload capacity. However, on any given day, the combined generation from wind and solar power can now exceed 30% of power transmission, allowing dirty energy sources to be held in reserve. Here is an hour-by-hour percent transmission penetration from wind and solar power in Germany on February 7, 2011.
Source
The United States fell to the third, thanks to a collapse in wind energy generation. However, the news was not all bad. The past year saw rapid growth in installed megawatts for solar power. Here is a summary of data reported by the Solar Energy Industries Association.
2010 was a banner year for the solar energy market in the United States. In contrast to U.S. GDP growth of 2.8%, the U.S. solar market grew 67% in value in 2010. Not only did the market expand greatly, but it showed substantial diversity across market segments, geography, and technologies. Solar is growing quickly across the U.S. at the residential, commercial, and utility scale levels.
Solar Energy Industries Association
Now for the bad news. Wind power installations fell sharply in 2010, declining nearly 50% from 2009 and falling slightly below 2007 levels. This chart from the American Wind Energy Association says it all.
The Pew Foundation report points to policy failure. In particular, many of the incentives for clean energy in the 2005 and 2007 energy bills were short-term and beginning to expire. The fossils in Congress are not going to renew those incentives any time soon. However, those fossils have seen fit to preserve subsidies and tax breaks for oil, gas, and coal. Thus, the prospects for the immediate future are grim.
For a variety of reasons, the United States’ competitive position appears to be eroding. Stimulus funding that helped the clean energy industry recover from sharp recessionary declines will expire this year, and there is little indication of any significant policies or incentives to fill the gap in the near future. In fact, investors have noted ongoing uncertainty in United States. policy as a key reason that capital is sitting on the sidelines, or looking for certainty and opportunity abroad. Concerns include a lack of clarity on the direction of energy policy, uncertainty surrounding continuation of key financial incentives (e.g., production and investment tax credits), and disproportionate government supports for century-old fossil energy sources. These uncertainties for clean energy are reflected in the United States’ subpar standing on a variety of key measures, including the five-year rate of investment growth and investment intensity.
It will be a miracle if the United States is able to stay in the top 10 countries in clean energy installation by 2020, much less hold our own. The deck is increasingly stacked against clean energy. We do not have a national renewable energy standard. President Obama has called for one, but has failed to provide a coherent narrative to build public support to make that a reality. His speech today was filled with contradictions. For example, here is a statement that pays to lip service to the folly of relying on fossil fuels because of negative consequences for our economy and climate.
The United States of America cannot afford to bet our long-term prosperity, our long-term security on a resource that will eventually run out, and even before it runs out will get more and more expensive to extract from the ground. We can’t afford it when the costs to our economy, our country, and our planet are so high. Not when your generation needs us to get this right. It’s time to do what we can to secure our energy future.
Yet, it also included many WTF moments (which does not stand for "win the future"). I would call this part "what the frack."
But the potential for natural gas is enormous. And this is an area where there’s actually been some broad bipartisan agreement. Last year, more than 150 members of Congress from both sides of the aisle produced legislation providing incentives to use clean-burning natural gas in our vehicles instead of oil. And that's a big deal. Getting 150 members of Congress to agree on anything is a big deal. And they were even joined by T. Boone Pickens, a businessman who made his fortune on oil, but who is out there making the simple point that we can’t simply drill our way out of our energy problems.
Here is a "what's the footprint" moment:
I set this goal knowing that we’re still going to have to import some oil. It will remain an important part of our energy portfolio for quite some time, until we’ve gotten alternative energy strategies fully in force. And when it comes to the oil we import from other nations, obviously we’ve got to look at neighbors like Canada and Mexico that are stable and steady and reliable sources.
The oil from Canada has the highest carbon footprint of all liquid fuels. You cannot mitigate climate change and make tar sands oil the dominant fuel source. As for Mexico, their conventional production is falling fast.
Mr. President, there is more of a chance that the Koch brothers will donate a billion dollars to your re-election than coal ever being "clean."
And then there is the whole "we will make nuclear power safe" thing. Mr. President, may I remind you that our dear Republican friends oppose stringent regulation and enforcement. Period. Ask the Russians what can happen when cut corners. Ask the Japanese what can happen when natural disaster strikes. To make nuclear power fail-safe means making it cost-prohibitive.
Republicans are also now targeting state renewable energy portfolio mandates. For example, Scott Walker raised the issue of ignoring the renewable energy mandate in Wisconsin within days of the election. A move to kill the mandate is underway in the North Carolina state legislature with lobbying assistance from the John Locke Foundation, an astroturf bastard child of the American Enterprise Institute with funding from the Koch brothers. These are just the tip of the dirty iceberg.
From superpower to ship of fools in a generation.
Recommended reading
The Pew Foundation Report: pdf
On the president's energy speech:
A Siegel Energy DUMB Policy from a Politically Tone-Deaf WH?
TheGreenMiles Obama Compromising With Himself on Energy, Again