We’ve had eight Presidents since Richard Nixon promoting energy independence, and 19 congresses have supported each president’s intentions to achieve energy independence, said Hofmeister (The Daily Show made the same argument in this hilarious clip). But we are more dependent on foreign sourced energy now then when we started this conversation in 1973 on the heels of the first oil embargo, he said. While we have 2-year and 4-year mental models for how public policy should be organized and presented, the reality is that “energy extends over decades. It’s a critical problem,” said Hofmeister.

For example, just look at the recent decision of solar manufacturer Evergreen Solar to move its manufacturing to China, pointed out Hofmeister. Evergreen had been building a tax payer-subsidized manufacturing plant in Massachusetts, with an allocated $58 million aid package, until it decided to move its plant plans to China because of cheaper labor costs. The state reportedly invested $31 million directly in Evergreen and hopes to ‘clawback’ about $13 million of that, reports the Boston Herald. Hofmeister said that the U.S.’s short term policy led to Evergreen leaving for China because China’s policies are “more predictable, more understood and more supported.”

The U.S. needs a long term plan that looks at the short, medium and long term, said Hofmeister, and if it’s not it’s just “wishing into the wind.” And actually Hofmeister does have a suggestion for a solution for a long term plan that he thinks will help with the U.S. 2 and 4-year political cycles. Hofmeister wants the creation of an Energy Resources Board, that would be an independent regulatory commission and would set the parameters of the energy supply system over the next 50 years.

In terms of the stimulus package, Hofmeister said the $80 billion for green energy was “brilliant, and execution was good,” but that for the world’s largest economy with the oldest energy infrastructure, that’s a “frittering number,” which is “directional,” but “not material.”

However we solve the problem, Hofemister pointed out that we need to remember the sheer economics and volumes of the dependence on fossil fuels in the U.S.:

• The U.S. consumes 20 million barrels of crude oil to get through the day.
• That’s the consumption of 10,000 gallons of oil a second to get through the day.
• The U.S. uses 60 million cubic feet of natural gas per day.
• If we stack the cubic feet of natural gas on top of each other we’d go to the moon and back 25 times every day.
• We use 1200 train car loads of coal every hour.
• That’s one train car load of coal every three seconds, producing 49 percent of our electrons every day.

For more research, check out GigaOM Pro (subscription required):

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Well, now that we’ve entered into 2011, oil prices have shot back up, and are hovering once again around $100 a barrel, at their highest level in two years. The oft-cited oil benchmarks the West Texas Intermediate and Brent have yet to hit $100, but some of the more under the radar crudes are already trading above $100, points out the Financial Times. Other indicators are that hedge funds have raised bets on rising oil prices.

While oil prices are infamously volatile — by the end of 2008 oil prices had dropped back down to $37 a barrel — it will be important to see if average oil prices remain above, or around $100, in 2011. In 2008, average annual oil prices were at $99.7 a barrel. Oil prices could easily drop back down in the next few weeks or months.

The oil price prediction game looks a lot like drunken darts: it’s often all over the board, with numerous reasons and explanations (Ford Chairman Bill Ford made that analogy at a conference in 2009). In terms of the economy, high oil prices make consumers nervous, and spend less. Nobua Tanaka, president of the International Energy Agency, has already called the current high oil prices of 2011 “alarming.”

But high oil prices will actually be rather good for the green car sector. All-EV companies like Tesla, and Coda will feel a boost from high oil prices, and big automakers that have been aggressive on EVs and hybrids, like Nissan, GM, and Toyota, could reap rewards as well.

Even automakers that have a solidly mixed car portfolio, like Ford, will benefit from less volatility in oil prices. As Ford Chairman Bill Ford put it in a speech in 2009, he actually endorses a gas tax, to keep prices at a certain level. “If prices are gyrating wildly,” it becomes extremely difficult to know whether the company is planning the right vehicle or technology.

Oil prices seem to be headed upward over the long term. As Department of Energy Chief Steven Chu has put it: “I don’t know what it [oil prices] will do next year or in the next two years,” Chu said, but “the price of oil will go up in 10 or 20 years.” Chu says high oil prices and living in a “carbon constrained world,” means we should take a cue from Wayne Gretzky in terms of low carbon infrastructure: “skate to where the puck is going to be, not where it’s been.”

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That global slowed fertility rate is due to a variety of things. One of them is China’s one-child per person mandate. Another is planned parenting, education, and economic growth efforts under way in India, the country that is set to exceed China’s population by 2030.

At that replacement fertility rate, the world will reach a 9 billion population by 2045, which will deliver a world population density that will be a little more than half of that of France today, notes National Geographic. In theory, that doesn’t sound too bad. The current world population could actually fit inside Texas … if Texas had the same population density as New York City.

So we clearly have the space. The biggest problem associated with the coming population growth is that by 2030, 1 billion people in the developing world will join the world’s middle class, up from 400 million in 2005, notes the article. Those people in the middle class will naturally consume energy, food, water and other resources at a much higher rate than the rest of the developing world, and closer to that of Americans, Canadians, and Europeans.

The key to global sustainability of this population growth will be figuring out resource management and city planning. As all you greentech entrepreneurs and investors know, delivering resource management is really what is at the heart of the industry’s innovations and technology.

The coming massive energy consumption boom from this middle class will, in particular, be the sticking point, and the biggest opportunity, for energy efficiency and clean power-focused entrepreneurs. A substantial jump in the daily energy consumption of so many people could push us over a tipping point in terms of climate change.

Todd Woody predicts that early stage energy efficiency plays will be big in 2011. Greentech investors seem to have taken some big risks — and failed to generate substantial returns in the near term — in terms of clean power over the past few years. But energy efficiency can be low-capital-intensive (software, behavior change, wireless networks) and is widely available now.

Water technology — from desalination to water metering — will also be a big opportunity for sustainably managing this population growth, as will food and agriculture-base technologies, like biotechnology, and new forms of farming.

It will be city planning and these types of innovations that will help determine what a population of 7 billion, and then 9 billion, will look like. The National Geographic article points out that in Collapse, author Jared Diamond argues the Rwandan genocide was partly a result of too many farmers dividing up a too small a space of land — basically, overpopulation. Some researchers think there will be a global food shortage at 9 billion people.

The 9 billion person world doesn’t have to be some apocalyptic urban jungle; it can be managed sustainably with smart resource management and technology. It’s a massive problem, and an opportunity. And we really don’t have a choice.

For more research on cleantech financing check out GigaOM Pro (subscription required):

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Positing global warming as the primary reason for renewable energy adoption has effectively polarized the Republicans and Democrats and their respective constituents into two predictable and unmovable camps. In order to cross the aisle and get consensus, we need to shift the message over to national security.

Even politicians beholden to big oil companies don’t want to be perceived as supporting America’s enemies in these dangerous times. Both parties can agree that even more than the economy, national security is of paramount importance to America.

What has been made apparent, via leaked State Department cables distributed by Wikileaks, is that oil-rich countries in the Persian Gulf either directly or indirectly sponsor terrorism against the U.S., Israel and the West. In other words, when the U.S. buys oil from these countries, we are bankrolling the very same enemies we proclaim to be fighting in Iraq and Afghanistan, and more broadly, in the West’s collective battle against fundamentalist Islamic terror groups.

The leaked cables have shown how the governments of nearly every Arabian Peninsula state have done little to stop the tremendous amount of funding going to terrorist groups from their countries, mostly from private citizens. One cable originating from the Secretary of State and addressed to various Middle Eastern embassies expressed U.S. frustration over the Gulf states’ relative inaction regarding the funding of international terrorism. From another angle, other cables have shown that Iran, possessing the second-largest amount of oil reserves in the world, is viewed as a true nuclear threat, in addition to directly funding Hezbollah and other terrorist regimes.

But wait, there’s more: For anyone in the U.S. claiming that energy independence can occur through domestic and neighboring oil, Wikileaks seems to have an answer to that, too. Wikileaks founder Julian Assange claims to have some damning reports against BP, the company responsible for the disastrous Gulf of Mexico oil leak. Another leaked cable shows that both Canada and the U.S. are very aware of the highly destructive effects of Alberta’s tar sands oil, despite the governments’ public claims that the damage would be minor.

Two things: In light of these very real threats, a push for alternative energy is absolutely necessary, and this should be apparent to everyone now. But perhaps even more important is that Wikileaks has given all of us in the renewable energy and cleantech world ammunition with which to make the case that our industry deserves public support and assistance from governments around the world.

The right strategy for all of us is to focus on how the cleantech sector offers a solution to our extremely unstable world. Not because they make the world a cleaner place, or a cooler place, but because they make our world a safer place.

So let’s really try to know our audience and tailor our messages. While the climate change message might work in Brussels, London and Barcelona, as they say in the movie business, “…it’ll never fly in Peoria.” Wikileaks may have already revealed that there are much more “pressing” issues at hand than even climate change.

Shifting the message over to national security is the smartest way to win our ongoing war against terror groups and those who support it. This strategy attacks the source of the conflict before it has a chance to rise against us. Rocky Mountain Institute founder, Amory Lovins likes to say about the “negawatt”: “The cheapest watt is the one that’s never created.” In a similar vein, the safest wars are the ones you never have to fight.

David Andrew Goldman is director of global communications at Expansion Media, an integrated PR/SEO firm that focuses on clean technology clients including AeroFarms, Entech Solar, BioPetroClean, ThermoEnergy Water, Airdye Solutions, Advanced Telemetry, Variable Wind Solutions, GreenRay Inc, Silentium, Phoebus-Energy, Solergy, Inc, and  Bandgap Engineering.

Image courtesy of Takver.

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1. DOE Secretary Steven Chu. An obvious one, but Department of Energy Secretary Steven Chu had arguably the biggest influence on the greentech sector in 2010. The DOE has funneled billions from the stimulus package into greentech sectors across the smart grid, green cars, energy efficiency, carbon capture and sequestration, and clean power. As a scientist he “gets” the issues, and also is on the cutting edge calling for open research and collaboration. I’m clearly a fan.

2. Bloom Energy CEO KR Sridhar. While it’s not entirely clear how successful the oh-so-buzzy fuel cell company Bloom Energy will be in the long run, it’s clear that in 2010 Bloom Energy ruled the mainstream green tech news. Heck, the company’s launch dominated our top 10 most read stories of 2010. The combo of the eight years of stealth mode, the Kleiner Perkins backing, the Colin Powell connection, the 60 Minutes launch and the high-profile first customers blew the rest of the green tech industry’s PR attempts out of the water. To me, that says the greentech industry is still very small, and is craving a success story.

3. Tesla CEO Elon Musk. Another easy choice. Tesla CEO Elon Musk helped the Silicon Valley electric car startup climb a mountain in 2010. The company had one of the only successful greentech IPOs out there; it scored a key OEM deal with Toyota; it bought the NUMMI plant for cheap, and its stock keeps climbing (above $30 today). Now about those two more years ’til the Model S comes out…

4. Kleiner Perkins Caufield, Byers Partner John Doerr. While Kleiner seems to be pulling back a bit from its greentech ambitions, the Valley’s most well-known venture firm shaped the greentech investing landscape of 2010. In particular, Doerr commonly spoke throughout the year about the massive market size of greentech and the importance of federal energy R&D. If the firm does pull back significantly from greentech, it will also have wide influence on the rest of its greentech VC peers.

5. Philanthropist Bill Gates. For the first time, the Microsoft founder and billionaire philanthropist took an interest in energy and green tech in 2010. Gates’ coming out party to greentech was his TED speech in February 2010, and since that time, he’s unveiled investments in startups like nuclear firm TerraPower and efficient engine tech EcoMotors. He’s also put money in Vinod Khosla’s fund. The technologist brings a new perspective to the industry, pointing out Moore’s Law doesn’t apply to batteries and the pace of innovation in the sector has been very slow.

6. Nissan CEO Carlos Ghosn. Ghosn has been one of the most outspoken and aggressive auto CEOs when it comes to electric cars. He sees “a big future” for the company’s upcoming electric car, the LEAF sedan, and has also partnered with Silicon Valley EV infrastructure company Better Place. Ghosn said this summer that Nissan was in “crisis mode” and the company’s future looks to be resting on EVs.

7. DOE’s Loan Chief Jonathan Silver. Just about one year into his role heading up the Department of Energy’s loan program office, former venture capitalist Jonathan Silver believes the agency has come a long way from its first few years of neglect and delays. He told us in a recent interview that the loan program functions “as well as, and possibly better” than private counterparts, when you consider the scale and complexity of the projects it’s meant to support. Not that there haven’t been hiccups and hurdles in the process.

8. GE’s CEO Jeff Immelt. GE has made one of the biggest bets on clean power and energy efficiency products with its Ecomagination line. Whether it’s wind turbines, smart meters, energy efficiency technology, power grid batteries, or its new electric car charger, GE has its fingers across the greentech sector. The company even got creative this year with its launch of a smart grid fund, where companies can compete for funding from GE and a group of venture capitalists.

9. NRG Energy CEO David Crane. The CEO of power company NRG Energy, David Crane, led the company to make massive investments in solar projects, including its most recent plan to spend up to $450 million in equity over four years on a 250-megawatt project being developed by SunPower. NRG Energy is also building what it says is the first privately funded electric vehicle infrastructure project. Crane was also a regular on the greentech speaking circuit in 2010.

10. Executive Secretary for the UNFCCC Christiana Figueres. After a disastrous U.N. climate meeting in Copenhagen in 2009, the Cancun negotiations in 2010 were able to complete one task: They saved face for the UNFCCC process. That’s actually a pretty big deal. Thanks can go in part to Christiana Figueres, who held the negotiations together and rallied the troops. Now we’ll see if she can push for an actual agreement from countries before the Kyoto Protocol expires in 2012. While the greentech industry tends to feel disconnected from this process, the agreement (or lack there of) that will come out of these negotiations will be fundamental to greentech business.

To read more on greentech policy check out GigaOM Pro (subscription required):

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• Report: Cleantech’s Third Quarter Growing Pains

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The so-called Energy Literacy guiding document, as the organizers of the meeting were calling it, will be modeled on the Climate Literacy and Ocean Literacy projects, and will be a dozen or so pages of text and images that lay out the context, background and definitions of energy consumption, put energy in the context of global warming and explain what it means and why it’s important to be energy literate.

As most people know who read this site know, the average American knows very little about personal energy consumption and energy savings. According to a survey published in The Proceedings of the National Academy of Sciences, Americans overestimate the energy savings of actions like turning off lights, and riding public transportation, but underestimate the energy consumption of other things like using central air conditioning. A key to guiding people to make better decisions about their own energy usage, will be establishing the knowledge about how energy flows work at an earlier age.

This brings us back to the document that will be the reference point for this energy education revolution (hey, sometimes revolutions start out in very boring ways). While a dozen-page document might sound like something you could punch out in a couple of weeks, the idea is to draw feedback from across the various interested groups and create something that can be used as a single reference point. The project, led by Matthew Inman, an Albert Einstein Distinguished Educator Fellow with the DOE (who is the embodiment of your favorite high school teacher), will use a wiki to draw feedback from interested parties over the next few months, and will hopefully deliver the first version of the document by the summer, 2011.

A project with so much potential input, and with such lofty goals, is bound to face that classic problem: way to many cooks in the kitchen. As an outsider to most policy and academic discussions, and as the only journalist at the meeting last week, I was overwhelmed by all the various opinions thrown out about what words to use and avoid by the end of the meeting.

For example, Inman presented some of his first thoughts on wording for definitions of energy use that sounded like a physics lesson, while some in the group thought the definitions should be connected more to climate change from the start. Still, others in the group thought aligning the energy discussion too strongly to climate change would politicize the document. Sometimes a democracy isn’t always the cleanest and fastest way to reach a conclusion.

For me, I was asked to join the discussion mostly as a way to help the language and the document be more accessible to the public. I can envision a document that’s also easy to digest by the average reader, not just by academic leaders and policy makers. If you’re interested in giving input to this document, stay tuned, and I’ll send out the wiki when it goes online.

Beyond the nitty-gritty of the wording of this baseline document, it’s clear more than ever that we need to become much more energy literate by whatever means necessary. Technology can be one tool. Some think a sort of sixth sense for energy, in the form of design elements in buildings, appliances and gadgets, will be a key. Griffith spent time putting together his own energy footprint of a year of his life, and after realizing he had no idea he was consuming so much energy, helped launch the energy tracking website Wattzon.com.

What about you? Are you energy literate?

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• Predictions for the Greentech Marketplace in 2011
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Schwarzenegger told the L.A. Times that when he leaves office, he plans:

[T]o go back to Washington with Secretary [George] Schultz and others” to push for a new approach to energy policy. He said the country needs to bring Democrats and Republicans together on energy policies that both sides can agree on in order to reduce dependence on foreign oil and become competitive, “rather than always talking about global warming, which turns some people off.

Schwarzenegger also said he would consider a position with the Obama administration. On Schwarzenegger’s official website, he identifies California’s Global Warming Solutions Act of 2006 as one of his “most notable accomplishments in his first six years in office.”

Note to Department of Energy Secretary Steven Chu: Perhaps Schwarzenegger, a longtime, moderate Republican, could help reach across the aisle and help maintain aggressive energy policies in the face of the recent political shift.

When Jerry Brown takes the gubernatorial office, he’ll have sizable green shoes to fill. Brown (who spoke at our Green:Net event in 2010) has a plan to create a half a million green jobs in California and also plans to appoint a “Renewable Energy Jobs Czar.”

To read more on greentech policy check out GigaOM Pro (subscription required):

• Predictions for the Greentech Marketplace in 2011
• Smart Algorithms: The Future of the Energy Industry
• Report: Cleantech’s Third Quarter Growing Pains

Image courtesy of the Schwarzenegger administration, signing legislation at Nanosolar.

The idea behind the exemptions are that the benefits of projects that lead to more clean power, energy efficiency and green jobs outweighs the environmental drawbacks. But The Center for Public Integrity points out that a variety of the green projects funded by the stimulus package are being developed by companies with significant records of being polluters, including Duke Energy, Westar Energy, DuPont, and ethanol maker Didion Milling.

The administration told the researchers that it didn’t have time to review companies’ previous pollution records in accordance to awarding stimulus funds, and also the administration doesn’t think that pollution violations in general should affect stimulus funding. However, the report points out some more egregious examples, including how Didion Milling was awarded a stimulus grant a month after a federal judge ruled its plant had violated the clean-water law many times.

When it comes to certain sensitive cases like biofuel plants or massive solar farms, I think the report has many valid points. At the same time, there are already many critics that say that the greentech stimulus funds haven’t been allocated fast enough, and NEPA reviews would have added months, if not years, to the process.

The report also lumps in smart grid stimulus funds along with other more environmentally-sensitive clean power projects. Yet adding IT — wireless networks, software, sensors systems — won’t have much more environmental impact than the power grids that the smart grid tech is updating, so I’m not sure how helpful a lengthy environmental review would be. And the smart grid industry would certainly argue with long environmental reviews. What do you think?

To read more on the smart grid check out GigaOM Pro (subscription required):

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The tees are courtesy of designer Martin Hsu, and you can buy your own here for $28. Because the DOE, led by Chu, has been majorly supporting the greentech industry over the past year. A good way to say thanks!

For those not familiar with Chu, he previously won the Nobel Prize in Physics, supports open collaboration in science, and also has a sense of humor.

• Dark roofs can heat up to 50 degrees hotter than light roofs.
• Dark roofs in the U.S. have delivered at least a billion dollars a year in extra power bills.
• Cities are often 2 to 5 degrees hotter than less urban areas due to dark surfaces.
• A cool roof can lead to 10 to 15 percent lower energy bills.
• If a little more than 3/4 of commercial buildings in the U.S. got a cool roof, the U.S. would save enough energy via air-conditioning to reduce carbon emissions by about 6 million metric tons each year.

Chu is calling for more buildings owners to opt for cooler roofs, as a way to reduce carbon emissions, but also to save money on air conditioning bills:

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Adaptation technology has long been a slightly taboo subject, with the idea that technology should be used to stop global warming, not help humans deal with it. But more and more scientists, companies and pundits are taking the subject seriously in recent weeks, including an excellent article in The Economist last month. As The Economist article points out, the world will warm by 3.5 degrees C by 2100, and that’s if countries hit the emissions reductions targets put forth in the Copenhagen Accord.  The much-discussed 2-degree safe temperature rise is now a joke we can’t realistically hit.

So, in the face of us all crying into our pillows every night, here are 10 technologies we’ll need to help the world adapt to climate change over the next century. In Cancun, governments agreed to supply $100 billion via a Green Climate Fund for climate change adaption by 2020. Many of these technologies will be used by the world’s poorest, by farmers, and by country’s that already are facing droughts or extreme weather conditions:

1. Innovations around infectious diseases. Hotter global temperatures will lead to the spread of more infectious diseases such as malaria, dengue, tick-borne encephalitis, and Lyme disease, according to the UNFCCC. Most of this will happen in regions that are tropical and close to tropical geographies. Higher temperatures will also lead to increases of food-born diseases like Salmonella in more developed regions. Innovations in drug delivering, drugs themselves, and prevention will be needed.

2. Flood safeguards. Building owners and farmers in vulnerable regions will increasingly look to technologies that can help them adapt to potential floods. Those could include building homes on stilts, to crafting barriers around rivers in populated regions, and using seeds and crops that are more resistant to floods.

3. Weather forecasting technologies. Extreme weather conditions, from massive floods to hurricanes, will become more common in certain regions because of the warming of the Earth. Weather forecasting has been an area of little innovation (as Google pointed out to me recently), and will depend heavily on information technology tools (satellites, software, computing, sensors) to inject some much-needed innovation into the sector.

4. Insurance tools. To help spread the risk of extreme weather events and higher temperatures, farmers and governments in developing countries could invest in insurance programs that would pay out when poor conditions happen. Already, insurance companies in some areas are seeing more events around flooding due to climate change. In particular, look to insurance tools that came out of the Internet industry — like WeatherBill — to find solutions.

5. More resilient crops. High temperatures can cut annual crop productivity dramatically, can lead to droughts or more rain fall, and can lead to longer or shorter crop seasons. Farmers that grow crops on risk-prone lands will be looking for seeds that can withstand higher temperatures, more or less water, and fluctuating crop cycle times. Genetically modified crops could play a key role in this movement, which will be a controversial point, given countries in Europe, and Japan, are opposed to GMO crops.

6. Supercomputing. Weather forecasting and climate change data will benefit immensely from more powerful and faster supercomputers that can crunch data and make important predictions in real time. Can exascale computing save us?

7. Water Purification. Harsher and more wide-spread droughts will lead to a strain on communities and farmers that need fresh water. At the same time, rising sea levels will affect coastal regions, potentially leading to an increase of salt in ground water. So-called desalination technology has seen an under-investment by the venture capitalist community, as VCs are unfamiliar with the markets for water technology.

8. Water Recycling. Beyond desalination, other water technologies include using gray water and harvesting rain water, for crops and everyday human uses. The key to this type of technology is that it has to be cheap, cheap, cheap.

9. Efficient Irrigation Systems. While it’s not cutting edge technology, farmers in affected regions will be quick to embrace irrigation systems that are much more efficient than they currently use. Packaging a product attractive to this segment could be popular.

10. Sensors. With all the potential problems and fluctuations in the environment due to global warming, there will be a growth in the need for accurate environmental data, particularly from sensors. Whether these are located in the ocean, in the atmosphere, in soil, in flood zones or in arid drought-stricken lands, organizations, governments and companies will want to track the changes in order to develop solutions to deal with the problem.

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Silver’s task is to oversee the application process, the analysis and the negotiations for loans and loan guarantees, and he’s also responsible for staffing and working to streamline the agency’s operation. Silver heads up three related programs: the Advanced Technology Vehicles Manufacturing, or ATVM, program, which provides low-interest direct loans for green car manufacturing projects, and two loan guarantee programs (sections 1705 and 1703).

A loan guarantee serves essentially as a promise by the government to make good on a loan if the company can’t, and typically enables better interest rates and lower costs than would otherwise be available to a company for project financing. We sat down with Silver in San Francisco this week to talk about changes, progress and challenges ahead for the loan program.

Solyndra: Not So Bad

The DOE announced its first loan guarantee — for Fremont, Calif.-based thin-film solar startup Solyndra — back in March 2009, about three years after Solyndra first applied for the funding (and several months before Silver came on the job). The company became a poster child for the Obama administration’s efforts to stimulate green job growth through investment in clean energy projects.

But last month, Solyndra announced plans to close its first factory (called Fab 1) and lay off dozens of workers — a move that some viewed as pragmatic cost-cutting that would enable the company to concentrate production efforts on a more efficient new facility being built with DOE support. Others, including Katie here on Earth2Tech, viewed the plant shutdown as a symbolic “disaster” for the loan guarantee program.

Asked whether he agrees more with the positive or negative takes on Solyndra’s decision, Silver said he believes reality is somewhere in between. “They were going to close Fab 1 at some point anyway,” he said, noting that the company has been able to take tools from the first plant for its new manufacturing facility.

White House Worries

In a memo sent in October and leaked last month, three White House advisers expressed concern about the DOE loan guarantee program in three areas. First, there is the potential for some funds to be lost if they’re not obligated to projects by the deadline. Second, the officials noted a risk that the program would be criticized for slow implementation. And third, they highlighted the potential for funds to be committed to projects that would have happened anyway, without government assistance.

Silver acknowledged that the program may face some risk in each of these areas, and others as well, commenting, “You can never say ‘zero risk.’” But he also emphasized that the loan program office is very close to using all of the credit subsidies under 1705, and if more funding became available, “we could use that too.”

Tax Grants Key for Big Projects

An incentive program that allows renewable energy developers to get cash grants in place of tax credits is an essential piece of the puzzle for financing these large-scale energy projects, according to Silver. Emphasizing that he was not speaking for the Administration at large, he said he sees the tax-grant program — which is known as 1603 and is set to expire at the end of this month – as a vital “sister program” with the loan guarantee programs.

“A vast majority of the applications that we have in incorporate 1603 cash grants, which are the monetization of the [investment tax credit].” he said. “You can do small projects with 1603,” Silver explained, “but you can’t do really, really large complex ones without a combination of the two.”

Extending the 1603 tax grants, which can provide a direct payment to developers for up to 30 percent of project investment costs, has become a top priority for the solar and wind industries. On Wednesday, Solar Energy Industries Association Rhone Resch called the program “the most important policy for continuing growth of the renewable energy industry in the United States.”

Investments On Track, Under the Gun

Far from worrying about losing non-obligated funds, Silver said the loan program office has issued term sheets for more projects than it actually has the budget to finance. (A term sheet details the terms and conditions under which the Energy Department may enter into a conditional commitment with the applicant.) Not every term sheet will lead to a final loan agreement, but according to Silver, there are “more solid projects in the queue than we have capital for.”

Regarding the perception that the loan guarantee program is plodding along slower than it should, Silver believes this criticism is outdated. From a “standing start,” with too few staffers and not enough institutional knowledge, said Silver, the program has reached “ramming speed,” with more than 165 people on staff and investments in as many as 23 projects.

As for the risk that the government will pour public dollars into projects that would have gone through without the assistance, Silver acknowledged that “private capital markets have come back for less complex projects,” including some solar and wind developments. As a result, he said, we’ll see fewer small and medium-sized wind deals coming out of the loan guarantee program.

Efforts to Streamline

At this point, said Silver, the loan program office typically takes a deal through the process “soup to nuts” in six months. His team has developed a group of templates that can be used to help streamline the process of issuing term sheets for different types of projects. Small wind projects generally fit one basic term sheet template, for example, while solar manufacturing projects fit another.

One factor contributing to a smoother evaluation process for loan guarantee applications, said Silver, has to do with the applicants themselves. Proposals are getting stronger and more sophisticated, he said, now that many applicants have learned what makes a good application.

In the biofuels sector, said Silver, the agency is seeing more partnerships between “producers and off-takers.” Partly as a result of these alliances, he said, the “first couple biofuels deals” will be announced, “shortly.” He declined to provide more specifics, but said biofuels will likely be among the next several loan guarantees. In the coming year, he said, we’re also likely to see “additional interest” in nuclear and “advanced fossil fuel technologies,” such as “clean coal” and carbon capture.

Auto Loan Update

When it comes to the ATVM program, which has provided loans for Tesla Motors, Fisker Automotive, Nissan, Ford, and Vehicle Production Group, the trend toward more sophisticated applications has not been as apparent as in the loan guarantee programs, according to Silver. “Projects under ATVM have not changed dramatically,” he said.

In general, they fall into three basic categories: battery technology, “price point” plays (vehicles that match a certain efficiency level to a certain price point) and special purpose vehicles (such as the natural gas powered vehicle designed for wheelchair access by the most recent ATVM recipient, Vehicle Production Group). ”I don’t know how many will go through at the end of the day,” said Silver, “because you’ve got to be able to distribute, you’ve got to be able to sell, there’s got to be a channel strategy.”

Among the next several awards coming out of ATVM will be some component deals, according to Silver, and some “additional variations” on the types of projects that have already secured DOE loan commitments: electric and plug-in hybrid vehicle production, battery manufacturing and OEM factory retooling for more efficient models.

During 2011, said Silver, the loan program office will expand its focus on portfolio management. After all, Uncle Sam will have millions of dollars on the line for some of these projects for decades.

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The message was unmistakable:  At best, we’ll get baby steps on clean energy in D.C. for the foreseeable future, so it’s up to the states now to move us forward, and California is the place to lead the charge.

• California re-elected the strongest clean energy Governor it’s ever had — Jerry Brown — and chose several other clean energy leaders: promoting San Francisco Mayor Gavin Newsom to Lt. Governor, and keeping Barbara Boxer as the U.S. Senator chairing the Senate Environment and Public Works Committee

• California resoundingly defeated Proposition 23, mobilizing the largest environmental advocacy campaign in it history and setting new precedent for the powerful alignment of environment and business.

But no one should be thinking that climate change or global warming was the message that won the day for Californians.

Here’s the real message: “Jobs, jobs, jobs, clean air, jobs, clean energy, jobs”

With the validation of California’s Global Warming Solutions Act (AB32), the voters said clearly that they wanted clean energy jobs to be the engine of economic recovery, and they wanted them now.

So, yes, “Go west, everyone”, but come to California bearing jobs.

AB32 Sets GHG Reduction Targets – Now We Need Arrows

The primary goal of AB32 was to reduce California’s greenhouse gas (GHG) emissions to 1990 levels by 2020, but many people don’t know that it needs a host of complementary legislation and programs to hit that target.

Most people equate AB32 with cap-and-trade but in fact, the cap-and-trade system in California (that’s supposed to work in concert with the regional Western Climate Initiative) is only expected to account for approx 20 percent of the required AB32 reductions.  The rest of the reductions come from the “arrows:” programs such as Energy Efficiency Standards, the Low-Carbon Fuel Standard, and the 33-percent-by-2020 Renewable Portfolio Standard (RPS).

Clearly, the voters are demanding we don’t just hit the target with these arrows; those arrows need to employ as many archers as possible, as soon as possible.

Of all the GHG-reducing policies, renewable electricity generation is seen as one of the best ways to create new green-collar jobs.  The 33-percent RPS will achieve approximately 13 percent of the AB32 reductions by requiring that California utilities acquire 33 percent of the electricity delivered to consumers from renewable sources.

So what’s the best way to create the most in-state jobs on the way to 33 percent?

Get FIT for California

Governor-elect Brown answered that question with his Clean Energy Jobs Plan published during the campaign.  (Note how this wasn’t titled “Clean Energy Plan.”) The very first part of his plan was to deploy 12,000 megawatts (MW) of “Localized Electricity Generation”.  In other words, he envisioned thousands of small-to-medium scale projects bringing clean energy and local jobs to communities across California.

To put that in perspective, 12,000 MW would power the peak needs of approximately 3 million homes.

Brown went further to specify the type of policy that would get those projects online: a feed-in tariff (FIT).  FIT policies have been the most successful policies in the world for bringing online massive amounts of cost-effective, renewable energy. In fact, over 50 percent of the world’s wind energy was installed under a FIT, and almost 90 percent of the solar power installed in the world in 2009 was driven by FIT programs.

Brown not only recognizes the unparalleled success of FIT programs, but also knows that a full scale, comprehensive feed-in tariff will create more green jobs for California than any clean energy program the state has tried so far.

A recent UC Berkeley study, conducted by world-renowned energy policy luminary, Dan Kammen, showed that, compared to current plans for achieving the 33-percent RPS, the FIT Coalition’s REESA FIT program would create 300,000 more job-years while bringing over $50 billion in additional private investment and billions of additional tax revenue to the State of California.

Not only would the FIT create more jobs, those job opportunities would start to appear quickly, instead of waiting years for the jobs to come.  The FIT would spur projects that can be built in months and don’t need to wait for new transmission lines or lengthy environmental permitting.

Get FIT for Clean Energy Jobs

Post-Nov. 2, clean energy supporters around the country are asking, “what now?”  The clear answer is, “Go to the states,” and the best bang for your buck is likely to be in California.  Thankfully, the new Governor already knows what clean energy policies will be win-win on climate change and the economy.  Let’s make sure we all know how to Get FIT for our future.

Ted Ko is Associate Executive Director of the FIT Coalition (www.fitcoalition.com).  The FIT Coalition is a leading force in replicating Feed-In Tariffs and other global renewable energy best practices throughout the United States.

Image courtesy of Wayne National Forest.

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Beyond the greater good, scientists who are more open with their research and willing to collaborate with their peers are generally more successful in their careers, and usually don’t look at a single breakthrough as the last one they are going to make, pointed out Chu. For example, he and two other scientists collectively won the Nobel Prize in the late 90s, and Chu said “We were competitors, but we shared notes and tried to collaborate on aspects of research together. We were friends before the Nobel Prize and we are friends afterwards,” said Chu.

How open researchers should be with greentech breakthroughs is a subject of much debate, both at the U.N. climate negotiations in Cancun, and also in the ongoing discussions about how to work with China’s greentech industries. The climate negotiations in 2009 in Copenhagen resulted in an agreement to create a technology mechanism that would facilitate tech transfer from developed nations to developing nations, but there’s still remains a lot of work to do about where IP fits into that group.

Openness plays into greentech relations with China because some Western companies are leery of handing over IP to Chinese firms for fear that they’ll be taking one for the team, so to speak. That’s one reason why Chu helped put together a new U.S.-China Clean Energy Research Center starting with a total of $15 million in funding (split equally) from the two governments. Made up by teams of scientists and engineers from the U.S. and China,” the research center is meant to create “a clearinghouse to help researchers in each country.”

The debate about how open to be is one that has fundamentally shaped information technology, with some tech and Internet groups focusing on releasing software source code in the public domain, like Google, while other companies like Apple are famously closed (but successful).

Chu, for all of his successes, joked during the Q&A session that though he had 10 patents, he hadn’t taken advantage of his patents in the business world, and said that throughout his career he rarely took Board seats at companies that were using his patents to pursue commercial technology. “My parents did something wrong,” Chu joked. But still, the line between financially leveraging IP and working more collaboratively is a delicate one, and will be a fundamental questions for energy innovators.

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Image courtesy of Center For American Progress Action Fund.

The “advice” came out of an onstage interview with both Branson and CNN founder and environmentalist Ted Turner, and Turner echoed the call to action: “Let’s do it. Let’s do it now before it’s too late. Let’s stop doing the dumb things and let’s start doing the smart things.”

What both Branson and Turner are asking is for the group of negotiators at COP 16 to find common ground and to create some sort of agreement on countries’ carbon emission reduction goals. That’s looking like a very difficult task, given countries are split over whether to continue with and extend the Kyoto Protocol, which has a deadline of 2012 (what developing countries want), or to beef up the Copenhagen Accord (what the U.S. wants) and abandon Kyoto (what Japan sounds like it wants).

Branson urged the delegates to start with small targets, as did United Nations Framework Convention on Climcate Change (UNFCCC) Executive Secretary Christiana Figueres in a speech on Saturday morning. Branson: “As long as they do it fairly and equally and across industries and on a global basis, no one’s going to suffer. And it doesn’t have to be very much initially and then encourage people to go after clean energy.”

It’s clear that if the negotiations stall again in Cancun — as they did last year in Copenhagen — businesses will be ever more responsible for stepping into the role of implementing energy efficiency and clean energy as part of their corporate strategies. Branson, who co-founded the Carbon War Room, a group for business leaders to come together to fight climate change, said, “Between us all, with enough commitment, we’ll have to get on top of it.”

Sunil Paul, early stage cleantech investor and founder of the Gigaton Throw-Down project, expressed a similar sentiment to me last week, saying, “Even in the absence of government action, companies are taking actions.” Branson and Turner spoke in conversation during a dinner for Paul’s Gigaton Awards, held at the World Climate Summit, and which awarded prizes to businesses that showed leadership in carbon emissions reductions. 3M won the overall award, while Vodafone, Nike and Suzlon received awards in their respective categories.

The interview was one of the first times that Turner and Branson appeared in conversation together, and when asked if they would work together to help businesses fight climate change, Turner said,  “We’re toiling in the same vineyard, and we’re in contact with each other. When we can help one another, we’ll do it.” The two genuinely seemed to like each other, and when the interviewer pointed out that Branson’s space port was being built next to Turner’s ranch, Branson joked, “Anywhere in America is next to Ted’s properties.”

The COP negotiations continue this week, and will likely get more heated later in the week as countries’ ministers arrive.

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This week, Japan has publicly discussed a stance that the Kyoto Protocol should not be extended beyond 2012 (though it doesn’t seem to have officially abandoned the treaty), and it’s a feeling shared by Canada and Russia, too. At the same time, countries are unsure how to deal with the Kyoto’s Clean Development Mechanism if the treaty isn’t extended beyond 2012. China, India and developing countries, not surprisingly, don’t want to shift away from the Kyoto Protocol, while the U.S., which was the only developed nation not to ratify the Kyoto Protocol, wants a version of the Copenhagen Accord, the fly-by-night agreement that was hashed out in the 11th hour at last year’s COP.

It’s pretty clear international negotiators probably wont be making much progress anytime over the next week (fingers crossed, though!). Combine that with the failure of the U.S. Congress to pass a comprehensive energy bill in 2010, as well as recent indications by House Republicans that they’ll shut down a global warming committee created by Democrats. Governments, in terms of policy moves, just aren’t coming through.

What remains, and what will likely provide the most optimistic glimmer out of the Cancun talks, will be the future of greentech and green-leaning business. Sunil Paul, early stage cleantech investor and founder of the Gigaton Throw-Down project, heads to Cancun tomorrow to help put on the Gigaton Awards, which will give an award to a company that has demonstrated the most leadership for emissions reductions. Paul told me in an interview on Thursday that “Even in the absence of government action, companies are taking actions.”

Indeed, one of the most high-profile side events of the COP 16 negotiations will be the World Climate Summit, which is a meeting for business leaders, and will feature talks by entrepreneur and investor Richard Branson, media mogul Ted Turner and Emilio Azcarraga, President and CEO of Grupo Televisa.

China is looking at the problem through this same lens as well. While China and the U.S. were at odds over disclosures needed for the Copenhagen Accord last year, and China, along with the U.S., is one of the biggest barriers to moving forward, the Chinese government is taking a decidedly different approach in terms of stimulating its domestic greentech industries. In its backyard, China is investing an unprecedented amount into clean power, smart grid and electric vehicle technology, taking advantage of its swiftly growing economy.

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• Cleantech Financing  Trends 2010 & Beyond
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• Car Data As the Next Platform for Innovation

Image courtesy of Mike McHolm.