German legislator: 1, Vinod Khosla: 0

One of the really refreshing things about the green-technology industry is that people are willing to argue with each other on stage. It's a new industry, after all, and no one knows whose shiny vision of the future is going to be right.

Case in point: Hermann Scheer, a member of the German Bundestag and the author of Energy Autonomy, taking venture capitalist Vinod Khosla down a peg during a roundtable discussion at Pacific Gas and Electric in San Francisco this week.

Khosla began by saying alternative technologies will have to provide energy for a lower price. "If it's not cheap, it won't work," he said. To that end, Khosla said wind power will likely never be huge: the wind doesn't blow all the time.

He then disparaged solar photovoltaic energy, which comes from rooftop solar panels. "I think (almost) all of the PV investments are going in the wrong direction.

Instead, Khosla said he prefers solar thermal energy. In creating STE, massive arrays of mirrors in the desert focus solar heat onto liquid-filled tubes. The liquid turns to steam, which spins a turbine to create electricity for distant metropolises.

"Three percent of the land area of Morocco could support all of the electricity for Western Europe," Khosla asserted.

That's when Scheer, who was instrumental in getting the German government to pass laws subsidizing solar power, began to sputter. Solar thermal has been around for decades, and it really hasn't grown that much, he said. By contrast, the solar-panel industry is booming, growing at about 40 percent a year. (Demand in Germany is so high, it engendered a worldwide silicon shortage.) Making solar thermal energy additionally requires building high-powered transmission lines, which is one of the highest costs in delivering electricity.

"It practically needs a blue sky free of clouds and dust," Scheer said in a loud voice.

Michael Peevey, president of the California Public Utilities Commission, chimed in as well. Solar thermal works, he said. California has one of the biggest plants in the world in the Mojave Desert. But making a continent reliant on a plant in Morocco would have issues.

"It could be quite an exciting place to visit with a small nuclear weapon," he chuckled.

Later, everyone calmed down, and Khosla said that even though he disparaged solar panels, he actually has investments in the field.

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