Recently in clean energy Category

It was recently reported in several papers that the oil price shock of 2009 was caused
by a drunk oil futures trader who bought 7 million barrels of oil. Almost instantaneously, the clean/renewable energy sector was brought back to life worldwide.

Imagine that. It had to take a drunk oil trader to rescusitate this industry. Sadly, the
rescusitated renewable energy sector is in danger of crashing back to earth
every time the price of oil drops back to normal levels. Most users will try to seek
the cheapest source of energy available - in general these are the fossil fuels. Never
mind if climate change is an issue. Between environmental benefit and cost, the latter
often always wins out. People always speak in favor of clean technologies, but when it
comes time to pull out the checkbook, well wait a minute...(also known in Tagalog as "teka muna.")

This is not the first time this has happened. Renewable energy's growth is correlated
with the price of oil. In other words, when oil prices go up, the renewable energy
sector becomes a growth sector. Inversely, when oil prices drop, renewable energy
becomes a last priority.

A few years after the end of the first OPEC oil crisis, the Reagan administration removed the solar panels from the roof of the White House, signaling the end of a short love affair with renewable energy. With oil prices more or less at normal levels, many industries and customers are again rethinking the rationale for investing in renewable energy. The same story happens over and over again. Oil prices shoot up. Renewable energy becomes hot again. Oil prices revert to normal levels. Renewable energy becomes yesterday's trend again.

Something has to happen to break this cycle. Because renewable sources like wind and solar are currently more expensive, investors want to make sure that the return will be higher than investments in fossil fuel based sources. Some Asian countries have started to legislate measures like Feed-in-Tariffs and Renewable Portfolio Standards that try to guarantee a market for renewable energy investors with a slightly higher return than fossil sources to make it attractive to investors.

The way it is typically done (e.g. the 2008 Philippine Renewable Energy Act) is to softly introduce a 1% requirement for utilities to source their electricity from renewable energy sources (called a Renewable Portfolio Standard) and allowing a higher price to be charged for it (called a Feed-in-Tariff). These measures are often easy to introduce at the start. This percentage by law is often increased annually, often to a 10-20% renewable energy percentage at the end of a decade.

The hope is that a guaranteed market that increases annually, and is decoupled with oil's price, will assure investors, entrepreneurs and technologists that their investments and efforts will not be in vain. With a guaranteed market that increases, economies of scale and spurts in innovation will happen that will hopefully lead to cheaper and more efficient renewable energy equipment, much like the increased adoption of PC's and chips led to better, faster and cheaper growth for these industries.

But therein lies the challenge. By increasing that renewable energy percentage annually, customers will at some point notice that the more expensive renewable energy sources are pulling up the average cost of power, particularly with sources like wind and solar.

They may not notice it at the start with a 1% percentage, but see what happens with
increasing percentages. Hopefully the technologists can discover cost breakthroughs
that will not make this necessary, but there is a chance that they will not be that fast,
especially if the investment climate for renewables seems to swing back and forth like
a pendulum.

Here is the challenge for governments, media, and concerned citizens. How do we make customers happily pay for the increased average cost of electricity when mixed with increased renewable energy sources? By convincing citizens to bite the bullet for a few years, we ensure the steady growth of renewable energy, that will lead to a faster pace of investment, innovation, efficiency and cost savings. It's all about getting citizens to commit to renewable energy, regardless of the price of oil.

It has happened in the cellphone industry - there are cheap cellphone calling plans, but there are also more expensive calling plans. With citizen commitment, a Green Option (sort of like a special calling plan, but for electricity) can succeed where certain customers happily pay for slightly more expensive power that comes from renewable energy sources.

The alternative if we do nothing, is to wait for another drunk oil trader to shoot up the
price of oil every few years just to keep the renewable energy sector alive.

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Dennis Posadas is the author of Jump Start: A Technopreneurship Fable (Singapore:
Pearson Prentice Hall, 2009) and has a new business fable on clean energy.

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By Alexander Villafania INQUIRER.NET MANILA, Philippines – “Keep your interests alive.” This was the message of Balik-Scientist awardee Dr. Baldomero Olivera at the start of the 2009 National Science and Technology Week at the Manila Hotel. Olivera, a distinguished professor of biology at the University of Utah, first gained fame for his discovery of painkilling properties in the highly toxic, ocean-going cone snails that are abundant in Philippine waters. Olivera’s discovery led to the development of a commercial painkiller called Ziconotide (Prialt), which is administered to patients suffering from extreme pain. Unlike traditional painkiller morphine, Ziconotide is not known to cause painkiller addiction and lasts much longer in the system. Olivera graduated from the University of the Philippines and moved to the US to take up his graduate degree in chemistry at the California Institute of Technology. His interests in cone shells started long before he started college; in fact, he started out at a tennis court collecting shells. “Seashells were used to compact the surface of tennis courts. They were dredged from Manila Bay and were dumped near the tennis courts. While waiting for my dad, I used to sift through the heap of shells and identified what were interesting.” It was this interest that made him go back to cone snails for possible research. It also won him “Scientist of the Year” in 2007 by the Harvard Foundation. At his keynote speech during the NSTW opening ceremonies, Olivera said he hopes more Filipino scientists to continue their research endeavors and to give back to the country. He said many researches can provide economic gains to both the scientific community as well as to the country. Department of Science and Technology Secretary Estrella Alabastro said this year’s NSTW aims to spur Filipino scientists and researchers to find ways in resolving global issues. One goal is to alleviate global climate change, which is causing destruction in many industries in the Philippines, particularly agriculture. Numerous programs will be conducted in different locations nationwide for the entire week of the NSTW. There are seminars of nanotechnology, robotics, awareness programs on waste management, business ventures based on scientific output, research presentations on health, genetics, food development, among others. The NSTW was first created under Presidential Proclamation 2214 in 1982 and was later amended in 1993 through Republic Act 169. This declared celebrations for the NSTW on the third week of July every year.