This is the first in a series of posts on the recent Google analysis on energy innovation. The second post explains why technological breakthroughs alone aren’t enough to displace coal. The third focused on the relationship between natural gas and clean energy.
Google has an interesting new analysis out on the economics of energy innovation. The exercise assumes major and highly ambitious breakthroughs in cost/performance levels for solar photovoltaics (PV), concentrated solar power (CSP), on-shore and off-shore wind, geothermal including Enhanced Geothermal Systems, carbon capture and sequestration (CCS), nuclear, Plug-In Hybrid Electric Vehicles (PHEV), Hybrid Electric Vehicles (HEV), Battery Electric Vehicles (EV), rapid and long discharge grid-storage, and natural gas.
The modeling is done using McKinsey’s Low Carbon Economics Tool and incorporates multiple policy scenarios as well. I’ll follow-up with more thoughts on the report, but the purpose of this post will just be to summarize. Below I’ve included all of the top line takeaways as well as some reactions from around the blogosphere. But if you take anything away from this report, make it this:
- Energy innovation pays off big: We compared “business as usual” (BAU) to scenarios with breakthroughs in clean energy technologies. On top of those, we layered a series of possible clean energy policies (more details in the report). We found that by 2030, when compared to BAU, breakthroughs could help the U.S.:
- Grow GDP by over $155 billion/year ($244 billion in our Clean Policy scenario)
- Create over 1.1 million new full-time jobs/year (1.9 million with Clean Policy)
- Reduce household energy costs by over $942/year ($995 with Clean Policy)
- Reduce U.S. oil consumption by over 1.1 billion barrels/year
- Reduce U.S. total carbon emissions by 13% in 2030 (21% with Clean Policy)
- Speed matters and delay is costly: Our model found a mere five year delay (2010-2015) in accelerating technology innovation led to $2.3-3.2 trillion in unrealized GDP, an aggregate 1.2-1.4 million net unrealized jobs and 8-28 more gigatons of potential GHG emissions by 2050.
That’s from the summary on Google’s blog. Teryn Norris also has a nice summary at Americans for Energy Leadership. Here’s Stephen Lacy at Think Progress. Matt Hourihan on ITIF has good thoughts, and here’s NYT’s post. A list of findings is included below the fold.
Below are the Section Headings from the analysis:
1. Innovation Benefits GDP, Jobs, Security, and Emissions.
2. Reaching tipping points in Electric Vehicle (EV) battery technology could be transformative.
3. Cheap Grid-Storage: Significant Opportunity and Unintended Consequences.
4. Delaying Breakthroughs = Delaying Benefits.
5. Technologies that Innovate Fastest Win.
6. Smart Energy Policies and Breakthroughs are Mutually Beneficial.
7. Reaching 80% reductions in GHG emissions by 2050 requires multiple solutions based on
the scenarios and technologies we modeled.
8. Coal is Very Hard to Displace on Economics Alone
9. Cheap natural gas could reduce GHG emissions in the short term but also slow the deployment
of clean energy sources in the long term.