Wind is getting behind some high-profile sales of late.
But venture capitalists remain far from convinced that renewable energy is anything more than this week’s corporate green mouthwash.
In other words, show me the real money – not the politically compromised taxpayer subsidies that prop up wind and other renewable energy projects.
Google recently became the latest marquee business to invest heavily in wind power: a US$5 billion transmission grid for offshore wind farms along the U.S.A.’s Atlantic Seaboard. It follows such heavy-hitters as T. Boone Pickens as prominent 21st century converts to renewable energy. But renewables are a long shot to ever be significant contributors to the power grid. Wind and solar, for example, currently account for a mere one-sixth of 1% of America’s annual energy use.
Still, B.C. fancies itself a rising star in renewables and green energy technology. An admirable ambition, indeed. But a recently released Pacific Institute of Climate Solutions report outlines some of the challenges facing B.C.’s clean-energy aspirations.
Topping the list: investment capital and market potential.
As the report points out: “the capital-intensive nature of clean tech makes for highly illiquid investments, which are not ideal for venture capital … it generally takes longer in clean tech to exit.”
In other words, clean tech is not a get-rich-quick scheme. It might not be a get-rich-at-all scheme.
B.C.’s renewable ambitions also face many other hard economic realities, not the least of which is pursing them in a province with a huge geographic area and a relatively small population that’s distant from major renewable energy markets.
Still, as the report points out, B.C. is home to Canada’s largest cluster of clean-tech companies – more than 1,300 – and its Pacific Gateway role gives it a leg up on the rest of the country when it comes to Asian market access.
That access will be critical, because B.C.’s domestic market is too small to support an industry or attract venture capitalists. Meanwhile, major nearby markets for renewables like California present other challenges.
They include subsidies to cultivate their renewable industry, the technical complications of importing new sources of green energy into their power grids and green-energy definitions that don’t include B.C. run of river or large hydro.
The Business Council of BC also points out that the province’s Clean Energy Act focuses exclusively on renewables and neglects B.C.’s vast reserves of natural gas, which promise to be a major piece of any realistic cleaner-energy puzzle.
Fossil fuels drive the global energy bus, especially in transportation, and will for the foreseeable future.
They’ll also sustain the economy needed to bankroll the research and development that could wean green energy from government subsidy.
Renewables need to work with traditionals to arrive at any sustainable energy solution.
So, some suggestions:
- develop low-cost energy storage systems to bank power from renewables, which are intermittent and dilute;
- develop more technologies to reduce transportation pollution;
- concede that the honest answer to a cleaner-power future requires investing in making dirty energy cleaner and green energy more economically viable; and
- do not impose energy impoverishment on our economic system through crippling penalties on carbon emissions, which have minimal impact on climate change anyway.
That shopping list might not sell in green dreamland, but it will in the world of entrepreneurs willing to risk the capital and resource needed to bring commercially viable power solutions to market.