What the New DOE Chief Steven Chu Means for Clean Technology

UPDATED Steven Chu established himself as a well-known scientist and administrator years ago, running the Lawrence Berkeley National Laboratory and winning a Nobel Prize. He has called for urgent action on climate change and (now famously) described coal as his “worst nightmare,” so cheers from environmental groups were unsurprising when President-elect Barack Obama named the physicist as his pick for energy secretary.

But what does Chu’s entry into politics really mean for emerging industries such as smart grid technology, alternative vehicles, and renewable energy (assuming the energy committee approves his nomination)? Today’s confirmation hearing suggests a Chu-led DOE will ramp up energy-efficiency programs and support R&D for biofuels that work in existing pipelines and car engines. But coal and gas-powered vehicles aren’t going anywhere just yet.

In a nutshell, the incoming energy chief sees “the age of fossil fuels” (petroleum for transportation, coal for electricity) as far from over, according to an interview with as the Heritage Foundation put it published yesterday. (Update: The quote comes from the Foundation, not Chu.) He backpedaled on the nightmare line (now he says continuing status-quo coal burning in the U.S., Russia, India and China is “a pretty bad dream”), declared gas tax hikes “off the table,” and offered a tepid embrace of cap-and-trade as a system for limiting greenhouse gas emissions today — apparent concessions to political interests on Capitol Hill. He also described nuclear energy as a key piece of future electricity generation in the U.S. — which could mean new opportunities for nuclear-in-a-box startup Hyperion.

Overseeing billions in spending (current energy secretary Samuel Bodman has a budget of $23 billion) and the operation of 24 research labs and facilities, Chu could push Uncle Sam to support technologies like algal biofuels and smart metering the way the feds have in recent years backed corn ethanol — which could mean access to new capital for startups like Positive Energy, which makes software and analytics systems for utilities with smart metering services, and power management hardware and software developer EnergyHub.

What Chu won’t have is a blank check — Congress still makes appropriations. But the DOE sets rules for awarding approved funds. With more and more companies lining up for the agency’s growing pot of cash for vehicle technology R&D and manufacturing (Tesla Motors, A123Systems and 3M, to name a few), and the upcoming stimulus package expected to include a big chunk for electric vehicles, hybrids, and EV battery technology — that’s where Chu may end up having the biggest impact. “These first electric hybrid cars don’t have the energy capacity and the battery lifetime we need,” he said today. “Let’s push hard towards more fuel-efficient personal vehicles.”


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