NREL's Arvizu discusses U.S. competitiveness on technology, manufacturing

As the Obama administration focuses its efforts on green jobs creation and renewable energy development, the National Renewable Energy Laboratory is playing an increasingly important role in the development and manufacturing of new technologies. During today's OnPoint, Dan Arvizu, director of the U.S. Department of Energy's National Renewable Energy Laboratory, discusses the administration's renewable energy agenda. He also gives his take on the United States' competitiveness on renewables in the global marketplace.


Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. Joining me today is Dr. Dan Arvizu, director of the U.S. Department of Energy's National Renewable Energy Laboratory. Dan, thanks for coming on the show.

Dan Arvizu: Great to be with you, Monica.

Monica Trauzzi: Dan, with Congress considering a climate and energy package and the Obama administration urging the expansion of renewables, your lab is really front and center in the research and development of the technologies that we're going to be using moving forward. Is the agenda from DOE and Secretary Chu clear? Is there a clear direction on where your lab fit into all of this and what direction the administration would like to go in on renewables?

Dan Arvizu: So, the short answer to your question is absolutely. I think one of the things that's changed dramatically since the new administration has taken over is a redefinition of the problem. The goal that we've now set is this incredible reduction in CO2 emissions from our, essentially, energy economy over the course of the next several decades. And it is a huge change. First of all, it's a very, very difficult challenge and it sets a new expectation for where we need to go. So, all of the activities of our laboratory, which have really been in the space of innovation, they've been in the space of informing decision-makers, both in the private sector and the public sector, I think are all even more important today than they've been in the past.

Monica Trauzzi: Where do you see direction and funding from DOE going over the next year or two?

Dan Arvizu: Well, and this administration, I think, is very clear, what we're looking at is how do you get to that endpoint? Eighty percent reduction by 2050 of CO2 emissions is an absolutely daunting challenge. Not clear what the pathways are to get there. I think we can take inventory of what we have today and what that might offer us in terms of movement toward achieving those goals, but then there's some big gaps. And those gaps, I think, will have a lot to do with where the R&D agenda will take us. So the R&D agenda will be focused on what are those major breakthrough kinds of things, I think they called them golden swans in some analysis that we've talked about, that will essentially change the trajectory of the pathways that we're presently on in disruptive sort of ways. So, we're looking for innovation that really is kind of breakthrough longer-term. And then, of course, there's a component of that's related to investment in deploying technology more rapidly and also everything to do with a regulatory environment in which the marketplace can work better.

Monica Trauzzi: So, of course, a lot of this ties back to what Congress is currently working on. I mean how closely are you watching that and what do you feel absolutely needs to get passed this year in order for you to be able to do your work?

Dan Arvizu: Yeah, well, the way that this will eventually play out is that the market needs to work and the market won't work if there's uncertainty. And I think one other things any legislation, independent of what form it takes, needs to have this a little bit more certainty for investors, for the investor community, for the practitioners in this domain. And one of the things that is kind of missing right now is a value and/or price on carbon, on carbon emissions. Unless that changes, you don't get much of what I would call dramatic movement. You get more incremental kinds of movement, so people are waiting for that. So, whatever form that takes, whether it's a cap and trade, a tax, or some other form of a value on the emission reduction of carbon, then we really don't have much driver for change from where we are today.

Monica Trauzzi: Well, what we're really looking at is a revamping of our entire energy system. So, how is the lab playing a role in the implementation of this new energy system that's going to involve a variety of different sources of energy?

Dan Arvizu: Yeah, that's a great question and part of what we do in our laboratory in terms of strategic planning. What role do we play? And the very first thing you have to do is to define the problem accurately. I don't think we've done that well to date. And so one of the things is we put a focus on strategic energy analysis so we don't have this unintended consequences of an action that we've taken and all of the sudden it takes us in directions that we didn't anticipate. So, we need strategic energy analysis. That's one important new contribution I think the laboratory is trying to make and specifically so we can inform decisionmakers, whether they be policymakers or whether they be investment people. Then there's the innovation piece, that's the piece that we've been historically known for. And moving technology into the marketplace more quickly is kind of a third piece of that. So, there's the innovation, integration of that technology into the marketplace, and then the informing of the decisionmakers so they can be part of the solution.

Monica Trauzzi: And how do you effectively move technology into the marketplace and still keep a focus on the new technologies that are coming down the line?

Dan Arvizu: Well, that's kind of a good news-bad news story. The good news is that we've been investing really for 30 years and so there is a lot of technology that's I'm going to call market ready now. We don't have the regulatory processes and the incentives in the markets to actually take advantage of that, building efficiency being one of the prime examples of that. So, by making some structural changes now in the way in which the market performs, we can move those technologies in the marketplace more quickly. So we can get kind of the immediate bang for all the past investment. I call that harvesting the investments of the past. At the same time, it's not sufficient to get us to the endpoint that we've now defined for ourselves. So, therein lies the opportunity to put a lot more effort into technology innovation for the pipeline for the future, next-generation technology and subsequent generation technology.

Monica Trauzzi: International competition is obviously a big factor here. Are we doing enough to stay competitive with the international community on renewables?

Dan Arvizu: That's a judgment question obviously. I think we need to do a lot more in my own personal opinion. I think the rest of the world, whether you're talking about Europe or whether you're talking about Asia, have recognized that there is a business value in moving more quickly on green technologies. And so they put public policies in place that have encouraged manufacturing and deployment and so 90 percent of the world's marketplace, in green energy and renewables in particular, is not in the U.S. Ninety percent of it is international, 10 percent of it is in the U.S. So, where the markets are, that's where the business opportunities are. That's where the innovation tends to move. So, I think unless we start really moving more quickly in our environment I think we will fall farther behind, so I don't think we're doing enough. I think we can do a lot more and certainly it will become an issue of competitiveness very soon.

Monica Trauzzi: What are the fundamental things that need to be worked on from a technological standpoint in the near term in order to get us on the right track?

Dan Arvizu: Well, so the endpoint has to be decarbonizing the energy system and that can be done in a number of ways. So, I represent the renewable and efficiency piece of that equation. I think to maximize the use of efficiency and renewables we need to do some things fundamentally different than we do them today. I always like to say you do not want to shove more green electrons into a very inefficient system, so let's work on efficiency first. Let's reduce the footprint of our energy conversion and use so that we're much better in utilizing the generation that we have and then let's work on the supply part. In terms of R&D agenda, we've got to get the cost down of these alternative energy technologies. We've got to work on storage for those technologies that are essentially variable in terms of their generation capacity. And we really need to work on transmission and distribution and the smart infrastructure for how you put distributed resources on to the energy grid.

Monica Trauzzi: OK, we'll end it right there, a lot to work on clearly.

Dan Arvizu: There sure is.

Monica Trauzzi: Thank you for coming on the show.

Dan Arvizu: You're welcome, thanks.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]



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