Accelerating Energy Innovation To Get More Bang For the Buck

Oct. 9, 2013
Energy innovation is seen as costly; the EIA predicts it will cost $100 billion worldwide to solve the climate crisis. How do we get more bang for the buck to accelerate energy innovation?

Should we spend $100 billion to develop technology that could eliminate global warming? That’s the figure that many cite as the necessary investment. Or should we find a way to get more bang for our buck?

Go for the bang, says Lewis Perelman, author of the ebook, “Energy Innovation: Fixing the Technical Fix.”

Perelman’s bio suggests he’s a guy we should listen to. He has more than 30 years’ experience focused on innovation, and has held senior positions on several leading think tanks and research institutes, including the Solar Energy Research Institute, the Jet Propulsion Laboratory, the International Institute for Applied Systems Analysis, Hudson Institute, and the Homeland Security Institute.

“Energy independence and energy poverty cry out for innovation, and the kind of money people talk about comes to $100 billion worldwide,” he said in an interview. “The fact is, most governments, especially in supposedly wealthier countries, are in financially tight times. It doesn’t seem realistic to expect a big increase in public expenditures, even though there seems to be a need.”

Maybe we should put on the back burner the idea of drumming up $100 billion to end global warming, he said. Instead, we need to look at ways to get the biggest bang from the money we invest.

“The energy industry is one of the poorest in terms of investing in research and development, but there’s a lot of cash flow.” Compare that to Apple Computer, which funnels 30 to 40 percent of its revenues into research and development, he noted.

The trend, in the past, was to keep research and development efforts secret and in-house, said Perelman. But what we really need is open innovation. We need to invite as many minds as possible to solve big problems. We need bigger scale, not bigger money, he said.

From a financial perspective, this is a very cost-effective way to innovate, he said. “Now we’re seeing more opening up and people reaching out and saying ‘We have a problem, how can you help solve it?’ and providing incentives and rewarding people when they help out. A lot of things happen much faster by putting more minds to work on the problem.” To do that, we can take advantage of crowd funding and social networking, he said.

“People post a proposal: ‘Here’s what we want to do, here’s our plan, here’s how much money we need. Depending on how much you contribute, we’ll give you a reward. The more you give, the more we’ll give you,’” he said.

An example: The Defense Advanced Research Projects Agency offered a prize for self-driven robot vehicles, with an aim of sparking the invention of safer cars. In response, Google undertook its own project, and is aiming toward commercialization of a self-driven vehicle—which has implications for saving energy. “Robot-driven cars can be far more energy efficient,” Perelman said.

In a different industry, the University of Washington was studying a problem related to how proteins are formed and metabolized. The university created a computer game to help unravel the mysteries behind proteins, and attracted a quarter of a million subscribers. In a matter of days, some of the subscribers came up with a solution that had been stumping scientists for a decade.

“That’s the kind of thing that can occur when you put more minds to work. It’s another aspect of social marketing,” said Perelman. “We harness the power of the crowd. Science and engineering are catching up with the idea that there’s wisdom in the crowd, and if you put thousands of people to work on it, you’ll find a solution more quickly.”

Energy innovation can occur in smaller ways, as well. Innovation in energy efficiency financing is critical, said Perelman. Spreading the up-front costs of energy efficiency is an important way to boost investments in efficiency. For example, the California Public Utilities Commission has allocated about $66 million for a group of pilot programs aimed at leveraging ratepayer funds to access private capital. One approach would be to combine efficiency loan payments with utility bills, he said.

In short, said Perelman, we need to find innovative ways to create and finance disruptive energy technologies.

“Getting more innovation is not just a matter of spending more money on research and development. We need to restructure the process,” he said. Learn more about Perelman’s book here: Energy Innovation

Do we need new technology or can we solve the climate change challenge with existing technology? If we need game-changing technology, can we do it with crowd sourcing, social media and prizes?

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About the Author

Lisa Cohn | Contributing Editor

I focus on the West Coast and Midwest. Email me at [email protected]

I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.

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