BOSTON--If you attached a cost to putting greenhouse gases into the atmosphere, how would the energy business change?
Steven Koonin, the undersecretary for science at the Department of Energy and former chief scientist of BP, has thought this question over. Koonin was the keynote speaker Thursday at the Fifth Annual Conference on Clean Energy here, where he offered a big-picture analysis of how the U.S. should convert to low-carbon energies.
The main drivers toward cleaner energy are efforts to improve the country's energy security and to cut greenhouse gas emissions. But there are many paths to that destination and we won't get there by only putting a price on carbon, Koonin said.
"Now the economists will tell you that all you need to do (is put a price on carbon emissions) and the market will take care of itself after that," Koonin said. "And that may be true, but as a technologist I have the ability and in fact the responsibility to look ahead and ask what the likely responses will be if there is a carbon price."
Establishing a significant, long-lasting, and universal carbon price would act as a "supply side" signal to the energy industry and favor certain technologies, he said.
One clear implication for the U.S. would be a greater shift toward natural gas, which is significantly less-polluting than coal for making electricity. Recent drilling improvements allow for capturing large amounts of natural gas from shale in the U.S., Koonin said.
Onshore wind is economically competitive in many areas in the U.S. and has the potential to supply 20 percent of the country's electricity by 2030. Another clean source of power is small and medium-size hydro power, which can supply tens of gigawatts from small dams.
Nuclear fission, which now supplies about 20 percent of the electricity in the U.S., is also poised to expand in an economy with a carbon price because there are no emissions during power generation. Carbon capture and storage facilities attached to coal-power plants, too, are needed because existing coal plants will continue to operate, he said.
Finally, increased conservation and efficiency are required in both the transportation field and for heating and power, he said.
Not just about technology
Koonin favors a cap-and-trade system to regulate carbon emissions, a system proposed in the energy and climate legislation now being debated in the Senate. Under cap and trade, heavy polluters such as utilities are given pollution permits and can buy additional permits to stay under a government-set limit on carbon.
But other policies are required, in part because the energy industry by its nature changes very slowly. Koonin specifically mentioned portfolio standards, where utilities need to get a portion of their electricity supply from renewable sources or a "low carbon" portfolio standard.
"One of the most important things we need to do beyond technology is to accelerate energy change," he said. "It takes decades to affect significant changes in the energy system."
It's a mistake to look at the IT industry as a model for how quickly energy can change, Koonin said. Whereas digital technologies evolve very quickly, energy changes slowly because power plants and buildings last decades and even cars last 15 years.
The first hybrid passenger car came to the U.S. in 2001, and even now, eight years later, there are fewer than 1 million sold, out of a total 150 million cars, he noted.
The scale and investments required to adopt different energy technologies is much bigger in than IT, and the energy industry is dominated by incumbents with well-optimized processes, he added.
To accelerate changes in energy, the DOE has established different types of research centers. This year, there will be $25 million a year to fund three "innovation hubs" at universities focused on specific problems, such as advances in nuclear. The DOE also recently awarded grants for ARPA-E, research aimed at breakthrough technologies.