SEARCH

SEARCH BY CITATION

Structuring an Energy Technology Revolution . Cambridge, MA : The MIT Press . iii + 273 pages. ISBN : 9780262012942 , $24.00 cloth . Charles Weiss and William B. Bonvillian . 2009

The pace and direction of energy technological innovation since the 1970s has been maddening for those who seek to decrease American dependence on fossil fuels. During this period, U.S. energy policy has been characterized by multiple interests trying to achieve the best deal possible for their particular technology with little regard for collaboration or movement toward a uniform goal. Furthermore, public support for funding new energy innovations has been intermittent at best, often rising and falling with global oil prices, driving out many private investors. In their book Structuring an Energy Technology Revolution, Charles Weiss and William Bonvillian propose an analytical framework designed to establish a clear U.S. energy policy, encourage greater investment in energy technology, and speed up the commercialization of these technologies.

The overall premise of Weiss and Bonvillian's argument is that while policies which increase the demand for new energy technologies (such as a cap-and-trade system) are desirable, we cannot wait for these to be enacted before working on supply-side issues of further technological development. In order to move forward with this innovation, the authors propose a four-part analytical framework. The steps are to (1) group technologies based on their likely bottlenecks to commercialization; (2) design policy packages for each group instead of for individual technologies—technology-neutral policies are preferred; (3) survey existing mechanisms for the support of energy innovations in both the public and private sectors to identify gaps in this system; and (4) recommend new government institutions to fill these gaps.

Calling these four steps an analytical framework is not technically correct. Only the first step changes how we view and classify the policy issues—viewing technologies as groups instead of as individuals. The third step broadens the focus of the analysis, while the second and fourth steps recommend policy solutions.

The book has many strengths. Weiss and Bonvillian do an excellent job building their argument, starting with innovation theories and then expanding into why private investment alone is insufficient to achieve the technological innovation required to enhance U.S. energy security and dramatically reduce carbon emissions by 2050. They then make their case for public sector intervention to fill this innovation gap.

The authors' proposed role for the government is well thought out. They want to use government as a supplemental force to correct market failures in the energy market. Namely, Weiss and Bonvillian propose expanding federal funding for energy research and development projects and using a combination of government incentives and low-cost financing to better enable new technologiesto conduct large-scale demonstrations, quickly scale-up production capacity, and make the transition from the lab to the commercial market. While they acknowledge that there has been a long history of government intervention in the energy market, which has led to a competitive landscape greatly favoring established hydrocarbon producers, they emphasize that the private sector must take the lead in this process. The authors do not propose an explosion of government involvement in the energy sector. Instead, they call for strong collaboration between the public, private, and academic sectors in designing a national energy strategy so the government does not simply pick winners. They recognize that private sector innovation has historically fueled U.S. economic growth and seek government intervention only to fill in the gaps in this innovation process.

Weiss and Bonvillian's proposal to group technologies by their expected bottlenecks and then design technology-neutral incentive plans for each group is an innovative contribution to the literature. This approach would not only provide more structure around the government's support of energy technologies, but also move away from the current model where the strongest lobby gets the best deal. Their grouping methodology is well thought out and is supported by an overview of new energy technologies that does a spectacular job covering the main technological, political, and economic issues faced by each technology.

The strongest part of the book is Weiss and Bonvillian's discussion of the new institutions required to support further technological innovation. They provide detailed recommendations regarding what each institution should do, how it should be structured, and potential political obstacles that each will face. The authors make a point to recommend institutions where either past bipartisan political support for such an entity (such as Advanced Research Project Agency-Energy) has existed, or there is a clear demonstrated need that could garner such bipartisan support.

There are two things which the authors could have done to improve their argument. First, they make a very strong statement that market forces alone are insufficient to bring about the required technological change in the desired timeframe. While they use the presence of market failures to justify this statement, they overlook another particularly relevant point in that the “valley of death” between the proof of concept and market acceptance stages is particularly brutal for this market. Their claim would be greatly strengthened by including a few examples of promising technologies that failed either because the energy industry generally requires greater amounts of capital to commercialize technologies than other venture capital-funded industries, or the fact that new energy technologies enter a hostile competitive environment with strong established players who may view these innovations as a threat to their business model.

Second, it would have been nice to see Weiss and Bonvillian take a stand against using economically inefficient policies such as renewable portfolio standards or feed-in tariffs. Their desire to use all the tools available to help these new technologies prosper is understandable. However, the need for government action to achieve an energy technology revolution does not excuse utilizing suboptimal policies, which greatly favor particular technologies.

Structuring an Energy Technology Revolution does a good job of balancing the relevant political, economic, and technical issues. It then channels them nicely into a coherent plan that advances the policy debate toward achieving a uniform national energy strategy. Finally, the book provides a solid foundation for policy makers, researchers, and students interested in how to utilize public policy to further advance energy technological development.