The Clean Energy Race and the China Challenge

In Monday’s speech to the National Press Club Energy Secretary Steven Chu called clean energy the “Sputnik moment” of our time. It’s a neat metaphor. Throughout history the power that dominates the day’s game-changing technology becomes the dominant one. Such was the case with the domestication of horses, movable type, firearms, the Winchester repeating rifle, the steam engine, ironclad ships, the assembly line, the A-bomb, the computer chip, and of course, the rocket sciences needed to put humans on the moon first and return them safely.

Our global warming crisis elevates clean energy technology above economics to the level of a moral imperative for mankind. The nation with the know-how and, more importantly, the will, to lead humanity from the brink of certain disaster will lead the world for generations. China’s rise as the world’s foremost clean-energy power is an impressive bid for that role in the not-so-distant future.

Thanks in part to aggressive government subsidies, China’s solar-panel makers lead the world in cost efficiency, with about a 50% share of the global solar-panel market as of early 2010. In 2009 Chinese firms shipped $6.6 billion worth of panels that can generate 3,300 megawatts of electricity. That’s enough to power about 2.6 million U.S.-style homes. That will likely double in 2010.

In just the past two years aggressive pricing by Chinese producers has brought down the cost of solar panels by more than half. This has enabled solar plants to begin matching the cost of electricity from the conventional power grid. For example, solar power will reach parity with power-grid electricity by 2010 in parts of southern Italy, by 2012 in some regions of Spain, and 2015 in Germany. Even the big solar power stations being built in the U.S. will use mostly Chinese solar panels. In a real sense, China has already taken us a long way toward a clean-energy future.

And it’s leading by example as well. The world’s two biggest solar-energy farms are now in China. In 2009 China spent about $34.6 billion on clean-fuel projects, about twice as much as the U.S. through mid-2010. That superiority in solar power, and to a lesser extent in wind power (along with India), is accelerating rather than decreasing.

Current developments in the U.S. won’t change the status quo. Our R&D in clean energy peaked in 1979 and has been decreasing steadily. Of our $3.6 trillion federal budget for 2010 only 0.14% was allocated for that purpose. And even Obama’s disappointingly modest allocation to the Energy Department of $40 bil. of the $862 bil. stimulus will be targeted for elimination by the ascendant GOP. The ranking Republican member of the Energy and Commerce Committee, Fred Upton (Michigan-R) made a pointed reference targeting the elimination of those funds as a GOP rallying cry.

But all is not lost. Obama has recently shown a willingness to put some oomph behind his talk of a clean-energy future. At a recent speech he cited as an example BrightSource, a different kind of solar-energy company breaking ground on a Mojave Desert solar plant. The plant will power 140,000 homes when completed and will create a thousand jobs in the process. Obama renewed his pledge to double the nation’s renewable energy capacity during his term.

“With projects like this one, and others across this country, we are staking our claim to continued leadership in the new global economy,” Obama said. “And we’re putting Americans to work producing clean, home-grown American energy that will help lower our reliance on foreign oil and protect our planet for future generations.”

In the race for clean-energy superiority China currently has the lead and the edge because it doesn’t have to wrestle with an opposition party heavily backed by oil industry contributions. It’s one of the biggest advantages of a “socialist system with Chinese characteristics” over American-style democracy. But, as Chu implicitly argued in his speech, the U.S. can still come from behind to take its place of leadership in the new green energy era, just as it responded aggressively to Yuri Gagarin’s orbital flight with a national drive that landed Armstrong and Aldrin in the Sea of Tranquility just eight years later. If we fail to do that in this more important race, the world will embrace the advantages of Chinese-style socialism for the really important things, like saving planet earth.