Guest Post: President Obama Doesn’t Know How to Deploy New Energy

Jigar Shah weighs in on the nomination of Ernest Moniz as the Secretary of Energy.

With the likely nomination of Ernest Moniz as the Secretary of Energy, President Obama has chosen invention over deployment -- and R&D over job creation and carbon reduction.

The president has mentioned climate change, oil energy independence, renewable electricity manufacturing, and other goals in his speeches. But practical, concrete goals are absent in his speeches and absent in this choice.

This is the second time we might miss the mark. Hiring Nobel Prize winner Stephen Chu as first Secretary of Energy was simply a risky move. Secretary Chu is comfortable in the lab but displayed discomfort with D.C. politics -- a city that is known for eating a scientist or two for breakfast.

Stephen Chu was given the opportunity of a century: the chance to remake the entire energy landscape in the U.S. in four years. Armed with $30 billion in earmarked stimulus dollars and a revolution in solar and wind prices, he attempted to scale the mountain. Instead of remaking energy, energy remade him.

Early in his tenure, it became clear that Dr. Chu did not understand deployment and so he relied on his strength: research. Not that research is bad. Unrelenting support for research is the main reason that the United States has driven to the lead position in energy innovation. However, innovation that is not deployed leaves the president’s promise of oil independence and renewable electricity unfulfilled. One would expect that the Secretary of Energy would be overtly committed to showing concrete results in achieving success.

With the latest appointment of Ernest Moniz, President Obama underscores that there will once again be no plan from this administration on oil independence.

We do not have concrete answers about the intentions of this nominee. Does the Secretary of Energy believe that natural gas is the best way to reach our goals? How much of the mix will electricity and fuel efficiency play? Investors and entrepreneurs benefit from clear direction. So far the U.S. government and the Secretary of Energy have none to offer.

On solar power, my area of expertise, the Secretary of Energy decided to launch a program called SunShot to achieve price levels of $1 per watt installed. Never mind that every solar practitioner told him this was a terrible idea because the capital cost of solar has no meaning. It is only the translation to cost per unit of energy (cost per kilowatt-hour) that is most relevant to consumers. Some breakthroughs might actually cost more upfront but result in more output and ultimately a lower cost of energy. 

After one year of treading water, the solar industry was able to change the program’s direction toward financing and soft costs.

With almost all economists acknowledging that energy and infrastructure will be the main way to jumpstart economic growth, the president has redoubled his efforts in his speeches. But, the way he has redoubled efforts is puzzling. He finally acknowledged our moral responsibility to solve climate change in his inaugural address.

Yet President Obama does not have a single close advisor in the White House with energy experience.

A governor like Ed Rendell, Bill Ritter, or even Christine Gregoire as Energy Secretary could combine science with execution. Governors know how to work with Congress, but also possess the needed political instincts to bring the country along for the ride. Another choice could be politicos like John Podesta or a former Fortune 500 CEO. These folks also have good political instincts, know how to get the most out of a complex agency, and can move an entire industry. 

Instead, the administration’s bet is on Ernest Moniz. Is this another risky move? More likely, it's a move destined to keep the Secretary of Energy out of the public eye and our industry treading water.

Don’t get me wrong; Dr. Moniz is a highly accomplished man. He knows the DOE, especially the nuclear side. So, is that just how like the White House likes it? Appoint a person who will focus on the nuclear weapons side of the job, and focus the DOE on the search for the “silver bullet” through more intensive R&D.

With enough pressure, I am sure that we can incent Dr. Moniz to drive useful deployment on climate change, energy policy, and other areas, but why do we need incentive for the Secretary of Energy to deploy energy solutions? Is President Obama all talk and no action on our issues?  Does he not understand that we are at the point where talk must end and action is absolutely everything?

Whether it is on transportation, electricity, or other sectors, we have already invented the technologies necessary to cut our emissions profitably to help meet our 2020 climate change goals -- without banking on a continued recession. From efficiency to alternative fuels, we need a “deployment” Energy Secretary. One who understands how entrepreneurs move from research to revenue. One who understands the difference between venture capital and project finance -- the difference between research and deployment.

The President wants the United States to lead Germany, China, and other countries around the world on clean energy. To accomplish that goal, our Secretary of Energy must understand deployment at trillion-dollar scale. So, let’s unlock our economy while meeting our climate change goals. 

In this time of budget cuts, we don’t need more money from DOE. 

What we need is a plan, industry coordination, finance securitization, and to actualize the notion that clean energy access is the number-one thing we can export to lift millions out of poverty. America has invested the technologies to show the world how to democratize energy. Finding the right Secretary of Energy to deploy existing solutions to drive the next economy is the crucial next step.