Last month, Bill Gates said he plans to invest $1 billion of his own money in clean tech projects. The Microsoft founder and philanthropist has thrown his clout and cash at numerous problems afflicting the globe, but when it comes to clean tech and climate change, he said private investment isn’t enough to solve the problem.
“When it comes to preventing the worst effects of climate change,” Gates wrote in a blog post, “the investments I make will matter much less than the choices that governments make.”
The U.S. government took a step in that direction this week with the release of its Clean Power Plan, an Obama Administration initiative to cut emissions 32 percent from 2005 levels. The plan hinges on CO2 emissions targets for each state. The feds tell states what their emissions should be by 2030; it’s up to the states to come up with a plan by 2018 and start cutting emissions by 2022. If those requirements aren’t met, the Environmental Protection Agency gets to take over.
In Washington state, the Clean Power Plan could yield mixed results. The state’s sources of electricity likely won’t change much. Most electricity in Washington is generated by carbon-free hydropower operations, and the state’s lone coal-fired plant, near Centralia, will be retired by 2025. CPP could lead to the shutdown of coal-fired plants in Montana that supply electricity to Puget Sound Energy, too. The EPA estimates Washington is on track to emit 3.8 million tons of carbon in 2012, about a third of what the feds want the state to be emitting by 2030. But while Washington isn’t in need of wholesale energy source conversions, other states are far more reliant on fossil fuels, and that means potential customers for area companies.
“We’ll continue to do rooftop solar and probably a little more wind development. But I think the main advantage that we’re going to have is technology exports,” said Steve Gerritson, who heads up clean technology development for the Economic Development Council of Seattle and King County.
Venture money is hard to come by for clean-tech firms, and government action like the CPP could spur more investments like Gates’ and hasten societal adoption of alternative energy. That means companies hawking solar panels and wind turbines could get a second look from customers and investors alike, and those who build the technology to facilitate a multiple-energy-source world stand to gain from the inevitable complexity thrown into the energy system.
One area Gerritson said is particularly enticing is grid management technology. The U.S. grid is in need of overhaul, and it’s optimized for single power sources — a coal plant here, a natural-gas plant there. As alternative-energy plants, most of which produce direct-current electricity, proliferate, the nation’s electric grid will need to be updated and better able to toggle between sources. This is where grid-management software companies such as Calico Energy Services in Kirkland can come in.
States and companies trying to shift away from fossil fuels altogether could consider alternative energy systems from companies like Redmond-based Helion, which is building a fusion engine.
The CPP does little more than set guidelines; states can meet them however they wish. The plan means Centralia likely won’t be the only coal-fired plant to shut down in the coming years, but it’s expected most utilities will switch to natural gas, a fuel that is cleaner than coal but not renewable and acquired largely through hydraulic fracturing, a water-intensive extraction method that can pollute groundwater supplies.
Alternative energy adoption, and thus adoption of supporting technologies, depends largely on one thing — price. “Right now, wind and solar are approaching the cost of natural gas per kilowatt-hour,” Gerritson said. “Natural gas is still really attractive because the price is really low and it’s reliable and it’s relatively clean and it’s base load (constant). Renewables have some problems; they fluctuate for the most part and the transmission system is not ideal. But as the price comes down and we get closer to 2030, renewables start to look more attractive.”
Technology advancements can keep prices coming down, but a carbon market similar to the one Gov. Jay Inslee tried to implement could also spur the adoption of renewable energy. Regardless of government action, Gerritson said the market would likely diminish the nation’s reliance on fossil fuels. But CPP, if it survives the impending legal challenges, accelerates America’s cleaner-energy future.