Inefficiencies: A Sunny Future

Last week, I attended a conference on plug-in hybrid cars and Washington policy, sponsored by the Brookings Institution and Google.org.

Jim Woolsey, a security powerhouse as former CIA director and senior guy at Booz Allen Hamilton, described our continued reliance on oil as the dumbest move our civilization could make. Peter Darbee, CEO and President of PG&E, talked about how a society that plugs in its cars late at night, when it’s off-peak for the grid, could greatly reduce costs and stresses on the energy infrastructure, as well as push energy supplies from imported to domestic.

While the conference was significantly optimistic, I am thinking that it wasn’t optimistic enough. It would be nice if Washington’s public policy supported a healthy investment climate for alternative energy, but right now it’s no guarantee. Barack Obama recently talked about his energy plan, which is a wonderful $15 billion a year for 10 years, financed by a cap and trade system for tradeable pollution permits. My entrepreneurial mindset tells me that this is a huge business opportunity as well as a good public policy indicator. McCain, of course, blithely stated that he doesn’t support this public investment because it distorts the market.

No shit, dumbass. We NEED that right now!

As I posted before in my blog, I wrote for my final paper that the authors we read in our class were unable to see past the present paradigm of energy and international relations. This was particularly astounding since one of them, J.R. McNeill, a Georgetown history professor, wrote about how technological advancements kept the path of mankind on a path of growth, but does not anticipate how close we are to unlocking the power of the sun to solve the world’s energy problems.

There are already market-ready hybrid vehicles that can get up to 100MPH. This is despite little improvement in energy storage capacity in batteries. The Army still carries very bulky alkaline or other element batteries that run out of juice quickly, for example.

100MPH cars would quadruple or at least triple current fuel efficiencies in the US. Reduction of steel usage in vehicles as other materials replace them will eventually trickle into China and other countries bound to have an explosion of car owners. New enthusiasm for nuclear plants will bring that power online. Solar paneling is becoming cheaper to produce and more efficient. Studies into urban design and mixed-use neighborhoods coming at a time of the unprecedented housing crash signal a death knell to suburbs (although not, perhaps, to walled-in gated communities), requiring less driving and spurring more community.

Megaslums are still a major problem and will continue to be without significant public efforts and international aid. All this technology will not necessarily help the poorest people in the world. It should definitely improve conditions within the US though, public policy or not.

I was thinking about where the sunniest places in the world are. According to a WikiAnswers article, some of those places are in Sudan, Namibia, Algeria, and Niger. This potentially means that they could have a competitive advantage in collecting solar power. Even a small, but stable increase in electricity in those countries could allow for sustainable agriculture and economic growth. It is not a slam dunk though, as corrupt governments could impede development, or lack of infrastructure to utilize or trade that energy could make it a useless endeavor for the time being.

But I was also struck by reading Jeffrey Sachs’ latest book, Common Wealth, which reminds me that humankind by nature is exponential. The population growth in the 19th and 20th centuries proves the point, once coal and steam power were unlocked, and before that, agriculture.

I think the same will happen again, once solar power becomes economical. The sun is currently the source of many problems, heating our glaciers and water, causing droughts, etc. But it may prove to be our salvation, bombarding our planet with far more energy than we could ever hope to use. I hate to say it but it would be poetic if the sun ended up freeing us from our scarcity conflicts.

So as an entrepreneur, I am thinking about these places with lots of sun, the investment inflows into solar power, and possible exponential economic growth and lifting of millions from poverty and peaceful entanglement of nation-states. All of it happening far sooner than most are predicting. Perhaps I am optimistic and too soon on this one, but I just think that we have been laying the foundation for success through an increasingly globalized world.

So when solar power has a major breakthrough, its effects will be swift, dramatic, and far-reaching, spreading and gaining positive network externalities as it advances. And I intend to capitalize on it when it happens.