Cleantech Crash or Crescendo: What “60 Minutes” Got Wrong… and Right

, Senior energy analyst | January 6, 2014, 6:09 pm EDT
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On January 5, “60 Minutes” included a story on “The Cleantech Crash,” claiming that investors, both private and government, haven’t gotten their money’s worth for all their investments in clean energy technology. As any rational look at the clean energy transition clearly reveals, the show got a few things right, but a whole lot more wrong.

Wind turbines? What wind turbines?

The “60 Minutes” segment is particularly disappointing because it’s a rehashing of the narrow, failure-focused thinking that we and plenty of others pushed back on a while ago, as in our Christian Science Monitor Op-Ed in early 2013 — pieces that neglect to take a look at the whole portfolios, in favor of a few sensationalized flops.

As Joe Romm’s response in Climate Progress puts it,

It’s as if 60 Minutes did a profile of the venture firm Kleiner-Perkins and focused primarily on its failed investments with only passing mention of AOL — and no mention at all of, Genentech, Sun Microsystems or Google!

And actually, the Department of Energy (DOE) loan window, while nailed shut for too long by politics and misinformation, is open for business again.

Source: U.S. Department of Energy, Revolution Now, Sept. 2013

Source: U.S. Department of Energy, Revolution Now, Sept. 2013

At one point, the interviewer asks, “Is cleantech dead?”

Wow. Clearly “60 Minutes” doesn’t read our blog posts carefully enough, and missed the fact that in some places wind is now out-competing natural gas. Or that coal is having a hard time competing with natural gas and renewables.

Even if maybe my particular year-end post on clean energy successes in 2013 just got lost in the holiday shuffle, they also clearly missed summary pieces like this article, or this one, or this one. Plenty of indications, from a range of voices and a plethora of markets, that things are changing for the better in so many ways.

A recent DOE report shows some of the fruits of smart public-private investments in basic technology and deployment in the energy space, shown in the tremendous growth in the use of a whole range of clean technologies, and the drop in their prices.

Curves like the one for wind power pictured here, and similar ones for solar, LED lights, and electric vehicles and batteries, led Romm to suggest that “the only thing in cleantech that is crashing is the cost of key components.”

Investing 101 (and energy policy 301)

CBS did get a few things right:

  • Cleantech investing isn’t easy. “60 Minutes” itself points out that “for every 10 startups, nine go under.” Some investments flop, others putz along, and only some soar. If that hadn’t been the case with the DOE investments, then that would have been an indication that it wasn’t taking the risks we needed it to. And, as CBS points out, private-sector investors guess wrong too… sometimes.
  • China is into this stuff. The “60 Minutes” segment includes an interview with the head of the U.S. branch of a Chinese company, talking about how they’ve picked up some of the pieces after investments have tanked. Even when some see crisis, others will continue to see opportunity — and turn it into real business. China’s strong investments in renewables in recent years — and its domination of world production of solar PV and leadership in installed wind capacity, among other superlatives — has to be viewed as being in part due to the country’s perception that there’s a whole lot of there there.
  • We do need a strong national energy policy. “60 Minutes” also includes one interviewee lamenting the lack of a “thoughtful and consistent energy policy.” That’s certainly right on. Clear policies from all branches of the federal government would send strong signals to investors and entrepreneurs about the value we put on energy security, economic development, environmental attributes, and more. A national renewable electricity standard, for example, or a price on carbon.

CBS was also right in pointing out that the recent abundance of natural gas has been part of the challenge. But they missed mentioning the perils that come with a headlong rush to gas, and how that underscores the need for more renewables.

Boldly going

In the meantime, we need to make sure we’re investing in other ways in expanding and deepening the range of technologies available to us to address climate change and more. When it comes to cleantech investment, including by the government, our greatest risk comes not from investing too boldly, but from not investing boldly enough.

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  • Steven Shepard

    The 60 Minutes article did not go far enough to expose the dirty under belly of the Renewable Energy industry (RE). At this time the RE industry is financially exploiting the unemployed, the poor and anyone trying to get into the RE industry. The RE industry will not hire anyone unless they are NABCEP trained and certified. NABCEP is charging new workers thousands of dollars for training and certification tests. And NABCEP requirements are being used to keep people out of the industry. NABCEP was forced upon the industry by the oil companies and the utility companies who are desperate to maintain control of the energy industry. The RE industry is using NABCEP requirements to tell degree engineers, licensed electricians and qualified technicians they are not qualified to harvest sunshine. And yet NABCEP certification will not allow anyone to connect a RE power system to any building or the existing electric grid. NABCEP is a racket and is fleecing American workers. Hopefully the media will soon expose this crime against American workers and appropriate prosecutions will follow.

    • Thanks for your comment, Steven. I can’t comment on the particulars, but I can say that strong certification of technology and installers seems really important for making sure that the market continues to be confident about the ability of renewable energy to deliver. There’s so much going on with renewable energy and cleantech, and we need to make sure that the technologies are given the means to live up to their potential, with good training, good systems integration, and solid, proper installations.

  • Solar power, yes. Wind power, not so much. See my post on the topic “Beyond Coal or Natural Gas” on this site. The carbon footprint of windmill construction is considerable. They kill birds. they are intermittent. They cannot produce base load power. At first I was thrilled to see windmills rising above the Laurentian divide north of my hometown of Virginia, MN, but I soon realized that on average 15 percent of them were not working – even when there was abundant wind. Wind sounds great, but it’s downside has not been honestly addressed. You may email me for details.

    • Thanks for weighing in, George. We address a lot of the issues you bring up elsewhere; you might be interested in particular in our Tapping into Wind and Ramping Up Renewables mini-reports.

      On the issue of wind turbines and variability, for example, we discuss some of the tools available to address that, such as geographic diversity of installations, improved forecasting, diversity of power sources, and dynamic grids. Of course nobody expects wind turbines to spin 100 percent of the time; lots of factors, though, can increase capacity factors (the amount of power they produce vs. what they could if the wind always blew), including siting, technology, and availability of enough transmission.

  • wayne florea

    The U.S needs to invest more time and money on solar energy if we were to put solar panals on every roof top in a city like L.A the energy that would be produce could off set the companies power bills and selling the left over power back to the power company could pay for the panals in a year or two.

    • Thanks, Wayne. A lot of that is happening, and the incredible growth rates in U.S. solar installations, including rooftop, show the power of policies and markets to work well together. And more will be even better.

  • John Smith

    You’re right that the venture capital industry model is that 9 out of 10 companies fail. But that works because 1 out of 10 companies deliver a fantastic return.

    With the Department of Energy “investments,” even its winners are losers for the government. Take Tesla, for example. What return did the government get on its money? All told, it lost money on the deal.

    In my mind the government has no business being in business. Leave that to the private sector.

    • Robert Karaffa

      “All told, it lost money on the [Tesla] deal.”

      Care to share a link supporting that claim?

    • Luke Lien

      That’s a thoughtful comment. One reply though, to: “government has no business being in business”

      That means government has no business giving subsidies to oil companies. That means government has no business giving subsidies to farmers for any reason. That list goes on…

      My opinion is that you may be right about lack of profit, which is all the more reason FOR government to be involved. In the case where there is a pursuit of a technology or set of technologies that serves the greater good, but it may not be profitable, it may be the government’s responsibility to step in and fund it with taxpayer money.

      The idea is not for the government to be an investor or similar to a private speculator. The idea is that public funding is directed at a specific problem and therefore moves the problem toward solution. This has happened. The result of government funding has been that several renewable energy generation technologies have become much more viable than they were before the funding took place.

    • Thanks for your comments, John, Robert, and Luke. John’s right that the venture capital model isn’t a perfect analogy; I would imagine that breaking even would be plenty good for these types of government investments. And Robert’s right that Tesla seems to have paid everything it owed, and nine years early — which would mess up a VC’s expectations of future interest income but sure is cool.

      Luke’s comment is right on: there’s a strong case for government to intervene in catalytic ways — in basic science, as we’ve done for decades, and in commercialization, as we’ve also done for decades. The investments in renewables in the wake of the economic crisis were important not just for general stimulus but for keeping momentum going within a key sector of our society and a key area of focus for addressing climate change. The amount of positive movement in renewables over the last several years has been amazing, important, and really fun to watch.