Good cause, bad argument

An attainable future:

Abengoa’s operating solar thermal power station at Sanlucar la Mayor near Seville

Some of the arguments for the Kerry-Lieberman “American Power Act” (my italics):

John Kerry:

It’ll help us create nearly 2 million new jobs, develop new products, and support the research and development to help us maintain leadership in the global economy.

President Obama:

Now is the time for America to take control of our energy future and jumpstart American innovation in clean energy technology that will allow us to create jobs, compete, and win in the global economy.

The group of 10 “Brown Dog” Democratic senators:

We know that other countries, in particular China, have already started to vie for leadership in the new clean energy economy. China has already become the world’s leading manufacturer of wind turbines and solar panels. This is a contest that America cannot afford to lose. Our nation’s economic future depends both on our global competitiveness and access to reliable energy sources. We must not allow our nation to become dependent on foreign clean energy industries or squander the opportunity to compete successfully in the global clean energy marketplace.

This stuff may be essential pap for the Democratic base but it really does not make much sense. The Brown Dogs’ claim even implies that buying a wind turbine from the Danes and sticking it in a field in Iowa creates a scary dependence as bad as buying oil from Saudi Arabia. I suppose the Danes could threaten to cut off the supply of gearbox oil. Look, this plant is easily replaceable kit for capturing your own renewable energy and you can buy it anywhere.

I won’t belabour the truism that national “competitiveness” is a category mistake and attempts to measure it are hokum. Does Switzerland suffer in any material way from having to import almost all its technology?

It’s more interesting to take a look at what is actually happening in the renewable energy sector. Here are bits of a March press release from GE, a US “national champion” in energy technology if you wanted one, puffing a new initiative in thin-film solar cells:

The GE/PrimeStar product is being developed at PrimeStar’s headquarters in Arvada, Colo….

The team in Munich, at the heart of the global solar industry, is utilizing world-class indoor and outdoor solar system test facilities where they study finished module performance to identify and address degradation mechanisms and packaging issues. …

In China, where most of the world’s CdTe raw materials are found, researchers at GE’s China Technology Center in Shanghai are focused on CdTe materials and the impact they have on device performance….

In India, GE is leveraging extensive modeling capabilities at its John F. Welch Technology Centre in Bangalore…. GE believes that dramatic improvements in the device performance and reliability will be realized through a deeper understanding of the materials and basic physics of the device. The team in Bangalore is tasked with building comprehensive models to help guide advanced device design.

Finally, GE’s research team in Niskayuna, N.Y., is working on all facets of CdTe module development, including material growth, device development and robust process development. …

An American company with the deepest technological pockets in the country is betting that a global approach to R&D is better than a national one: partly because the expertise is distributed, partly because it helps market access. GE is not spreading its R&D budget around in the Muslim and Arab world, where higher scientific education is poor, or Russia, which has good and cheap scientists but a capricious and predatory neo-Muscovite state.

You find the same globalisation in any renewable you care to name. The biggest wind turbine manufacturers by cumulative sales in 2009 were, according to Wikipedia :

* Vestas (Denmark) 35,000 MW
* Enercon (Germany) 19,000 MW
* Gamesa (Spain) 16,000 MW
* GE Energy (United States) 15,000 MW (Wikipedia for some reason also attributes this to Germany)
* Siemens (Denmark / Germany) 8,800 MW
* Suzlon (India) 6,000MW
* Nordex (Germany) 5,400 MW
* Acciona (Spain) 4,300 MW
* REpower (Germany) 3,000 MW
* Goldwind (China) 2,889 MW

For solar panels and modules, the 2009 top ten list of manufacturers is similarly dispersed:

* First Solar (USA) 1100 MW
* Suntech (China) 704 MW
* Sharp (Japan) 595 MW
* Q-Cells (Germany) 586 MW
* Yingli (China) 525 MW
* JA Solar (China) 520 MW
* Kyocera (Japan) 400 MW
* Trina Solar (China) 399 MW
* SunPower (USA) 397 MW
* Gintech (Taiwan) 368 MW

The solar PV industry is less concentrated than wind; the top 10 only accounted for 45% of module sales in 2009. The assembly and installation of panels, which require much less capital, is even more dispersed. In wind, the top 10 accounted for 73% of cumulative worldwide installations. (Calculated from data here).

It is excellent news that no one company and no one country has at present any prospect of dominating the renewable energy market. You can’t absolutely rule out some magical breakthrough somewhere like real cold fusion that would enserf us to the inventor’s IP, but chasing this mirage is no basis for sensible policy. The renewable technologies on the table result from a host of incremental improvements in many companies, labs and countries, not a few patentable breakthroughs. Many of these improvements are protected by patent; but none of them seem to have been critical enough to serve as an effective barrier to entry. Nor are there the economies of networking that protect Microsoft’s monopoly, or the herd status effects that protect Apple’s with the iPod. We are back to the comforting old model: build a better solar cell and the world will indeed beat a path to your door. Since the market is fast-growing and fast-changing, it is sensible industrial policy to encourage American (German, Spanish…) companies to keep a decent slice of the action by supporting R&D, as is being done; and a bigger home market would allow economies of scale. Basting this apple-pie stuff with the aggressive and fearful language of domination and control is offensive to foreigners and in the context ridiculous.

I suspect that many American politicians are still in thrall to the obsolete idea of technological hegemony: the historical aberration of the Cold War years, when the USA outspent everybody else in science and technology by a huge margin and often quite intelligently. As the rest of the world - first other OECD countries, now the BRICS - catch up economically, so they in turn spend more and better on R&D. The Internet is breaking down advantages of location: the Silicon Valley model no longer looks necessary for innovation, even in its own field (cf. Linux and Skype.) The world’s mobile phones run on low-power processors designed in the English Fens and fabricated in Asian foundries.

The last time the dream of industrial hegemony was seriously pursued in energy was with nuclear power. How did that turn out? Of all the countries that threw huge sums at the technology, including Britain, Canada, Germany, Japan, and the Soviet Union, only two - France and the USA - ended up with commercially exportable nuclear power plant designs; and have either actually exported many? After taking a hard look at the risks of the successor technology, all the countries capable of mounting a solo bid for world domination through fusion power have decided that it makes more sense to share the large costs and the hypothetical payoffs.

There are enough good arguments for the Kerry-Lieberman energy bill. Don’t weaken them by throwing in a bad one.