Steven Chu’s “Time to Fix the Wiring” at four years

Former US Energy Secretary Steven Chu’s recent resignation — his farewell letter is here  — is no doubt celebrated in the fuel cell quarters as passionately (or more so) than it is mourned in the rest of cleantech.  Early in his term, Chu infamously argued (infamously, at least, to fuel cell enthusiasts) that fuel cell electric vehicles (FCEV’s) needed four miracles for commercial success, namely:

  1. most hydrogen comes from natural gas (so why not just use that as a fuel?)
  2. improvements in hydrogen storage were needed
  3. fuel cells needed to improve
  4. there was no distribution system in place

While many of my colleagues were hostile to Chu — some more than others (an inside joke) — I was largely unfazed, as Ballard had by then moved on to “everything except automotive fuel cells” in light of the commercialization timelines.  (Which reflected points 3 and 4 above.)  And Chu seemed open-minded towards stationary fuel cells.  From the MIT Technology Review article:

“I think that hydrogen could be effectively a “battery” in the sense that suppose you had a way of using excess electricity–let’s say a nuclear plant at night, or solar or wind excess capacity, and there was an efficient electrolysis way of turning that into hydrogen, and then we have stationary fuel cells. It could effectively be a battery of sorts. You take a certain form of energy and convert it to hydrogen, and then convert it back [into electricity]. You don’t have the distribution problem, you don’t have the weight problem. In certain applications, you don’t need as many miracles for it to happen.”

Chu, ARPA-E, and solar

Many people have already written panegyrics to Chu’s departure, Climate Progress and Grist among them.  Even coming from the fuel cell industry, I think on balance he deserves a lot of praise for carrying out the US Department of Energy’s ARPA-E program to fund next-generation energy research.  Even if he did get a bunch of things wrong, among them the prediction that solar needed breakthroughs to achieve commercial viability.

“But Chu noted that solar power, for one, is still far too expensive to compete with conventional power plants (except on hot summer days in some places, and with subsidies). Making solar cheap will require “transformative technologies,” equivalent to the discovery of the transistor, he said.”

In the past four years, it’s gotten there in Germany, is on the cusp in Australia, and is probably already there in several sunnier climes.  The cost-reductions in that industry have come almost exclusively from economies of scale and the nearly-universally-applicable cost-learning, or experience curve.

Mind you, given my political leanings, I’m generally supportive of government-driven industrial policy.  :)  Societies generally last a lot longer — centuries longer — than any individual businesses, so it makes sense that societies may want to fund projects with a payoff too far out for individual businesses to care about.  That said, I support the notion that “moonshot” projects should ideally have partial private-sector funding, so that business people have skin in the game, and can search out ways to commercialize achievements made on the way.

An intro to “Time to Fix the Wiring”

The above provides good context with which to revisit the essay Chu (and one of his underlings?  :)  ) wrote for a McKinsey & Company series on the future of energy, exactly four years ago today.  This was part of their “What Matters” umbrella, which covered energy, biotech and other topics.

They’ve since taken the series offline — I suppose they need to keep things fresh — but I was able to get permission from a McKinsey representative to reprint the essay below.

Hindsight is 20/20, of course, and in this case renewable energy has progressed far beyond his Olympiad-ago assessment.  Solar’s costs have come way down, as noted above; renewables may be now viable for 40% of a grid instead of  25% he cites, and some of the geothermal breakthroughs he discusses, can probably be borrowed from the shale gas fracking industry.

All in all, the essay is a reminder to environmentally and stewardship-inclined alike, that the clean energy sector has come  astonishingly far in four years.  I’ll delve into further detail when I continue my series on our renewable destiny. :)


Time to fix the wiring

By Steven Chu

26 February 2009

Imagine that your home suffers a small electrical fire. You call in a structural engineer, who tells you the wiring is shot; if you don’t replace it, there is a 50 percent chance that the house will burn down in the next few years. You get a second opinion, which agrees with the first. So does the third. You can go on until you find the one engineer in a thousand who is willing to give you the answer you want—“your family is not in danger”—or you can fix the wiring.

That is the situation we face today with global warming. We can either fix the wiring by accelerating our progress away from dependence on fossil fuels, such as coal, oil, and natural gas, or we can face a considerable risk of the planet heating up intolerably.

The need to act is urgent. As a start, governments, businesses, and individuals should harvest the lowest-hanging fruit: maximizing energy efficiency and minimizing energy use. We cannot conserve our way out of this crisis, but conservation has to be a part of any solution. Ultimately, though, we need sustainable, carbon-neutral sources of energy.

It’s important to understand where we are now. Existing energy technologies won’t provide the scale or cost efficiency required to meet the world’s energy and climate challenges. Corn ethanol is not a sustainable or scalable solution. Solar energy generated from existing technologies remains much more expensive than energy from fossil fuels. While wind energy is becoming economically competitive and could account for 10 to 15 percent of the electricity generated in the United States by the year 2030 (up from less than 1 percent now, according to the US Energy Information Administration), it is an intermittent energy source. Better long-distance electricity transmission systems and cost-effective energy storage methods are needed before we can rely on such a source to supply roughly 25 percent or more of base-load electricity generation (the minimum amount of electrical power that must be made available). Geothermal energy, however, can be produced on demand. A recent Massachusetts Institute of Technology (MIT) report suggests that with the right R&D investments, it could supply 10 percent of US power needs by 2050 (up from about 0.5 percent now).

Coal has become a dirty word in many circles, but its abundance and economics will nonetheless make it a part of the energy future. The United States produces more than half of its power from coal; what’s more, it has 27 percent of the world’s known reserves and, together with China, India, and Russia, accounts for two-thirds of the global supply. The world is therefore unlikely to turn its back on coal, but we urgently need to develop cost-effective technologies to capture and store billions of tons of coal-related carbon emissions a year.

Looking ahead, aggressive support of energy science and technology, coupled with incentives to accelerate the development and deployment of innovative solutions, can transform energy demand and supply. What do I mean by such a transformation? In the 1920s and 1930s, AT&T Bell Laboratories focused on extending the life of vacuum tubes, which made transcontinental and transatlantic communications possible. A much smaller research program aimed to invent a completely new device based on breakthroughs in quantum physics. The result was the transistor, which transformed communications. We should be seeking similar quantum leaps for energy.

That will require sustained government support for research at universities and national labs. The development of the transistor, like virtually all 20th-century transformative technologies in electronics, medicine, and biotechnology, was led by people trained, nurtured, and embedded in a culture of fundamental research. At the Lawrence Berkeley National Laboratory—part of the US Department of Energy and home to 11 Nobel Laureates—scientists using synthetic biology are genetically engineering yeast and bacteria into organisms that can produce liquid transportation fuels from cellulosic biomass. In another project, scientists are trying to develop a new generation of nanotechnology-based polymer photovoltaic cells to reduce the cost of generating solar electricity by more than a factor of five, making it competitive with coal and natural gas. In collaboration with scientists from MIT and the California Institute of Technology, yet another Berkeley Lab research program is experimenting with artificial photosynthesis, which uses solar-generated electricity to produce economically competitive transportation fuels from water and carbon dioxide. If this approach works, it would address two major energy challenges: climate change and dependence on foreign oil producers.

In the next ten years, given proper funding, such research projects could significantly improve our ability to convert solar energy into power and store it and to convert cellulosic biomass or algae into advanced transportation fuels efficiently. Combined, this would mean a genuine transformation of the energy sector.

The world can and will meet its energy challenges. But the transformation must start with a simple thought: it’s time to fix the wiring.

This article was originally published in McKinsey’s What Matters. Copyright (c) McKinsey & Company. All rights reserved. Reprinted with permission.

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  • By Electron democracy | Eclectic Lip on July 26, 2013 at 10:36 am

    […] long-belated companion to Steven Chu’s “Time to fix the wiring” essay I posted earlier, this is the white paper I co-authored for the same McKinsey & Company […]

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