Green Tech

CAMBRIDGE, Mass.--President Barack Obama on Friday called on the U.S. Congress to pass energy-and-climate legislation, a move he said would stimulate technology innovation and improve the economic competitiveness of the United States.

Obama delivered a speech at the Massachusetts Institute of Technology here after touring student laboratories and before attending a fund-raiser for Massachusetts Gov. Deval Patrick.

President Obama speaking on clean energy at MIT on Friday.

(Credit: Martin LaMonica/CNET)

A "comprehensive" energy-and-climate bill will address both environmental and economic problems, Obama said. Countries around the world recognize that energy supplies are limited while demand is rising. That situation is giving rise to a "peaceful competition" among countries to develop clean-energy technologies that "will propel the 21st century."

"There are going to be all sorts of debate both in (the) laboratory and on Capital Hill, but there is no question that we have to do these things," he said. "The nation that wins that competition will be the nation to lead the global economy. I'm convinced of that, and I want America to be that nation."

Obama urged Congress to pass an energy-and-climate bill the Senate is now considering, the Clean Energy Jobs and American Power Act. He specifically praised the bill co-sponsor Democratic Massachusetts Sen. John Kerry, who was present at the talk, and Republican South Carolina Sen. Lindsay Graham. The senators co-wrote an editorial in the New York Times earlier this month outlining the main components of a desired bill, which was seen as a key step toward passage.

The House bill, which narrowly passed in May, includes a national mandate for utilities to use renewable energy and a cap-and-trade system in which large polluters can buy and sell permits for carbon dioxide emissions.

The president did not weigh into the details of the existing bills, but he did outline the contours of an energy policy that reduces the country's reliance on fossil fuels while making better use of natural resources.

The ingredients of energy policy should include clean use of coal, oil, and natural gas; "safe nuclear power;" sustainably grown biofuels; and energy from wind, solar, and wave power, Obama said.

"It is a transformation that will be made as swiftly and carefully as possible, to ensure we are doing everything we can to grow this economy in the short, medium, and long term. And I do believe that a consensus is growing to achieve exactly that," he said.

Obama said the Pentagon and energy security hawks are stepping up efforts to reduce oil imports while businesses and environmentalists are working together. Young people, too, view energy-and-climate as the challenge of their generation, he added.

"We are seeing a convergence. The naysayers, the folks (who) would pretend this is not an issue--they are being marginalized," Obama said.

He said key pieces of the Senate bill have been approved in various committees but he warned that opposition to passing an energy-and-climate bill will increase as passage gets closer.

There were about 700 people at the MIT talk, including a number of local green-technology entrepreneurs, investors, and students at the university, which has become a hotbed for energy science and technology research.

Editors' note: This is a guest post. See Paul Bell's bio below.

When President Obama addressed a joint session of Congress in February, he spoke to the need for the United States to become more energy-efficient. To that end, the stimulus bill he recently signed into law provides more than $30 billion for energy efficiency projects, innovative technology loan guarantees, the retrofitting of federal facilities, and the development of the initial framework for a "smart" electrical grid.

These measures put the country on a long-term path toward so-called green-led growth. But how they are implemented is as important as their passage. Moving forward, policymakers must adopt reforms and take advantage of the stimulus funds to make government IT operations more energy-efficient. They also should set policies that encourage and incentivize the private sector to do the same.

To start, they should spotlight the significant stimulus funds aimed at upgrading information technology in federal facilities. Newer, more energy-efficient IT will drive long-term cost savings and environmental sustainability, while boosting government productivity and reducing energy consumption.

The federal government is a major IT user and, as such, a major energy consumer. The most recent Environmental Protection Agency report on federal energy consumption indicates that federal servers and data centers accounted for approximately 6 billion kilowatt-hours of electricity use, for a total electricity cost of about $450 million annually (PDF). And energy use is slated to double by 2011.

The federal government can lead by example by pursuing two interlocking--but equally important--objectives:

First, the Obama administration should challenge federal agencies to freeze IT-related energy consumption at current levels while boosting computing output. This will be faster and potentially more effective than legislation.

And it's not as difficult as it sounds, but depends on successful implementation of three measures: New federal data centers must use the best available energy-efficient IT; existing federal data centers must be converted to "green" data centers within three years; and federal data centers must be connected to intelligent utility networks or smart grids, where possible. This will reduce energy consumption and drive significant cost savings for consumers, small businesses, large enterprises, and public-sector organizations, while enhancing U.S. competitiveness.

At Dell, we've learned that going green doesn't have to involve building costly new data centers. By applying a green approach to our own data centers, we are on track to save $52 million in related costs by the end of this year, and we've avoided the need to build a new data center altogether. We're able to compute more while consuming less.

The federal government must modernize data centers to improve energy efficiency. Most government--and private-sector--data centers have significant unused capacity due to servers consuming power but not always doing a lot of work. That can change by embracing technologies, such as virtualization, that optimize server productivity.

Virtualization is a technology that allows one server to do the work of many. Using software to create multiple virtual machines inside each physical system, virtualization reduces the number of servers required to run a data center. Combined with other technologies, a data center can do as much as three times more work using the same power and space. This unlocks unused capacity, increases computing power, and avoids the expense associated with overprovisioning and buying additional servers.

Second, government should establish policies that encourage greater IT energy efficiency in the private sector. The American Council for an Energy-Efficient Economy found that for every extra kilowatt-hour of electricity consumed by information and communications technologies, the U.S. economy increases its overall energy savings by a factor of 10. In essence, efficient IT saves more energy than it uses.

Congress, regulators, and the Obama administration should start with a comprehensive assessment of government servers by class and power use. They also should develop a national strategy for deploying IT that drives energy efficiency. A senior White House representative, perhaps federal CIO Vivek Kundra, should coordinate federal efforts on energy-efficient IT, working with Congress to advance this agenda.

Policymakers also should develop a framework to support private-sector energy efficiency, including:

• Tax credits to invest in projects that reduce energy demand.
• Immediate expensing, or accelerated depreciation, for retrofitting or replacing IT that improves energy efficiency by at least 25 percent. Similar benefits should be considered for investment in broadband or related IT that supports flexible work or virtual-meeting programs.
• Energy efficiency investments for small-business administration loan programs.

In an era of tight budgets, Washington can invest in greater energy efficiency--an investment that will show a strong, timely return. While this is an investment for the long-term, it's imperative that desired efficiencies can be realized immediately.

Technology is the great catalyst for human progress, and now there is a valuable opportunity for government to help the sector realize vast new efficiencies, reduce costs, and simplify IT management.

President Barack Obama on Monday said U.S. automakers General Motors and Chrysler will require further restructuring to receive additional government aid.

In a press conference at the White House, Obama, flanked by members of his Cabinet, detailed the measures the administration is imposing on the struggling companies following the evaluation of his auto industry task force.

President Obama announces initial findings of the government's auto industry task force.

(Credit: Screen capture by Martin LaMonica/CNET)

The U.S. government will give GM working capital for 60 days but has demanded additional concessions from GM bondholders, union workers, and management. Rick Wagoner was asked to step aside as CEO and will be replaced by Frederick "Fritz" Henderson.

In its evaluation, the U.S. government found Chrysler less financially viable. An additional $6 billion loan is contingent on Chrysler striking a partnership with Fiat or another automaker in the next 30 days.

In his comments, Obama made clear that the administration considers fuel-efficient vehicles integral to revitalizing U.S. automakers.

"I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars," Obama said. He noted that many American-made car companies, including GM, have made significant advances in producing fuel-efficient cars.

The administration determined that bankruptcy is one possible way to restructure GM quickly, although Obama said he opposes a drawn-out legal proceeding or dismantling the company. "What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down," he said.

When the president announced on Monday a $1.2 billion investment in science research at national labs, he spoke at the White House before a select group of companies that reflect his commitment to reviving the economy through investments in green technology.

Representatives from more than two dozen companies joined an audience of lab directors and researchers to hear the president commit to funding projects that can spur job creation in the green-tech sector. The companies present mirrored the president's goals: there were many venture capital firms that have helped establish successful clean-energy companies, start-ups waiting for late-stage investments, and large companies that could represent the success possible.

"Progress is rarely easy, and I know people in this room understand that," Obama said. "Sometimes the funding dries up, or the investors walk away. Sometimes you have to fail before you can succeed. And often it takes not just the commitment of an innovator, but the commitment of a country to innovation."

The president highlighted the accomplishments of a few companies, including Serious Materials,which makes energy-efficient windows. The California-based company recently reopened a window factory in Pennsylvania that shed more than 100 jobs when it shut down.

Representatives from Solyndra were also present at Monday's announcement. The solar start-up is the first company to receive a grant from the Department of Energy as a result of stimulus funding. The funding will allow the company to build a second plant, which will employ about 1,000 people, once operating, and employ 3,000 people in its construction.

Representing both the potential in solar power as well as the potential to develop commercial products from basic research, executives from the firm Suniva also attended the White House event. The company last year received $50 million from investors, including New Enterprise Associations, to commercialize its photovoltaic cell technology.

New Enterprises Associates, one of the first venture capital firms to focus on energy-related investments, was present, as was RockPort Capital Partners, which funds energy, environmental, and advanced materials companies. There were also two investment banks present: Pacific Crest Securities is a technology-focused investment bank, and Fourth Sector Bancorp is the first venture bank devoted to sustainable enterprises.

One venture capital firm at the event, Craton Equity Partners, invests in green building materials, an area with potential for growth. Autodesk, which produces design software with a focus on sustainability, was also present. The president also highlighted the Seattle-based firm McKinstry Company, which is retrofitting schools and businesses to make them more energy efficient and expects to hire as many as 500 new workers in the next few years.

Updated at 12:55 p.m. PDT with comments from Foundation Capital. Updated at 3:45 a.m. PDT March 24 with corrected figure for total government investment in clean energy and efficiency.

Seeking to boost the U.S. clean-energy industry, President Obama on Monday announced $1.2 billion for science research at national labs and a proposal to extend a business tax credit for investments in research and development.

At an event at the White House, Obama told researchers and green-technology business people that their work was vital to revitalizing the U.S. economy and cutting the country's dependence on foreign oil. About 120 researchers, lab directors, and CEOs from energy technology companies attended the event.

President Barack Obama at the White House speaking to researchers and clean-technology company CEOs.

(Credit: Screen capture by Martin LaMonica/CNET)

"We need some inventiveness. Your country needs you to mount a historical effort to end, once and for all, our dependence on foreign oil," Obama said. "Your country will support you, and your president will support you."

Obama said that his administration's budget proposes a 10-year extension to a tax credit for businesses that make investments in research and development. This tax credit has been in place in the past, but lacked a long-term commitment from the federal government, he said.

For every dollar that the government spends on this tax credit, it delivers two dollars to the economy, Obama said.

Obama also announced the availability of $1.2 billion in basic research at the Department of Energy's national laboratories. In addition to money to upgrade facilities at national labs, grants are available for research in renewable energy, such as solar power and biofuels, as well as in nuclear energy, underground storage of carbon dioxide, and hydrogen.

The stimulus package calls for an additional $371 million in research, which officials have not yet approved, according to the DOE.

Obama said that through the stimulus package, the federal government has set aside $59 billion in direct spending and in tax incentives to promote clean energy and energy efficiency. That investment will lead to 3.5 million jobs, 90 percent of which will be created in the private sector, he said.

During his talk, he singled out a few companies for their innovations and contributions to creating jobs.

Among them was Serious Materials, which makes energy-efficient windows and drywall that uses 80 percent less energy to produce than gypsum. Earlier this month, the California-based company reopened a window factory in Pennsylvania that had closed, resulting in 100 lost jobs.

The research and development investment tax credit is a "crucial tool" for green-technology businesses, said Paul Holland, a venture capitalists at Foundation Capital, which invested in Serious Materials and many other green-tech start-ups.

Many successful tech companies, like Intel and Netflix, would "not be where they are today if it were not for the progressive policies, such as the federal R&D tax credit and the stimulus plan," Holland said.

In an interview, Holland said the federal government needs to play a role in the financing "food chain" for green-tech start-ups that need capital to expand.

"The middle tier of finance--the private equity firms, which were pretty vital to clean tech have been decimated over the last couple of years," he said. "The federal government has become the provider of last resort in that part of the food chain."

On Friday, the Department of Energy said it expects to provide a $535 million loan guarantee to solar start-up Solyndra, the first loan done by the DOE in four years.

Another speaker at the event was Susan Hockfield, the president of the Massachusetts Institute of Technology, where researchers have created a number of energy-related innovations over the past few years, such as fast-charging battery technology and more efficient solar energy conversion.

She lauded the Obama administration's commitment to clean energy, saying the investments in research are comparable to the jolt of technology development that occurred during the space race in the 1960s.

"(The research and development tax credits) offer the only route to the breakthroughs we need to address energy security, rapidly increasing energy demand, and climate change," Hockfield said.

Holland said that the clean-tech industry has shown it can effectively spin out companies from research universities or national labs.

"I think this is just a different time," he said. "The focus in Washington is on invention, innovation, getting jobs, and getting various pieces of the clean-tech industry more competitive for the long term."

President Barack Obama on Thursday launched a $2.4 billion program to boost development of plug-in electric vehicles in the U.S., including grants to finance domestic production of auto batteries.

Obama spoke at Southern California Edison's Electric Vehicle Technical Center in Pomona, Calif., where he said the Department of Energy has now started taking grant proposals from electric-vehicle battery makers.

Obama speaks at Southern California Edison's electric-vehicle testing center in Pomona, Calif., on Thursday.

(Credit: CBS)

The stimulus plan passed earlier this year set aside $2 billion to jump-start electric-vehicle manufacturing. Out of that total, $1.5 billion is available for U.S. battery manufacturing and $500 million for related technology, such as electric motors.

The Department of Energy is making another $400 million available to build and test the infrastructure needed for plug-in electric vehicles. This includes charging stations and training for technicians in electric vehicles.

The funding will help meet the president's goal of 1 million plug-in vehicles by 2015 and position U.S. companies for the next wave of transportation technology, Obama said.

"Even as our American automakers are undergoing a painful recalibration, they are retooling and reimagining themselves into an industry that can compete and win, because millions of jobs depend on it," Obama said at the event.

Echoing comments he made during his address to Congress last month, Obama said the U.S. lags other countries in plug-in battery technology, which the grant program is designed to address.

Because the company considers it strategic technology, General Motors earlier this year decided to build the battery packs and power controls for its forthcoming Chevy Volt electric sedan in-house. Battery companies A123 Systems and Ener1 have already applied for DOE loans and are expected to seek participation in the $2 billion battery manufacturing grant program.

"Show us that your idea or your company is best-suited to meet America's challenges, and we will give you a chance to prove it," Obama said, addressing electric-vehicle companies. "Every company that wants a shot at these tax dollars has to prove their worth."

To spur demand for electric vehicles, the stimulus act gives consumers a federal tax credit worth up $7,500 for the purchase of plug-in electric vehicles.

But executives at U.S. auto companies have voiced concern over the ability of the industry to supply enough batteries for an oncoming wave of plug-in electric sedans. Creating the capacity for hundreds of thousands of plug-in passenger cars in two or three years requires big investments today, Charles Gassenheimer, the CEO of Ener1 said on Tuesday.

"Demand is not the issue. It's the ability to supply," he said. "You still need to make the investments in the platforms today. Otherwise, you miss the window of opportunity."

Environmental activist and author Van Jones, one of the first to recognize the power of a "green collar" job corps as a tool for social justice, has been tapped by the Obama administration to serve as special adviser for green jobs, enterprise, and innovation at the White House Council on Environmental Quality (CEQ).

Under his new post, which he'll start Monday, Jones will shape and advance the administration's energy and climate initiatives "with a specific interest in improvements and opportunities for vulnerable communities," said Nancy Sutley, chair of the CEQ, in a statement Tuesday.

Van Jones, founder of Green For All, on Monday will start a new post as special adviser for green jobs, enterprise, and innovation at the White House Council on Environmental Quality.

(Credit: Green For All)

The Yale-trained attorney from Tennessee made a name for himself in the San Francisco Bay Area through his work on youth-violence prevention and police- and youth-justice reform with the Ella Baker Center for Human Rights, which he co-founded 11 years ago in Oakland, Calif.

More recently, however, he's been catapulted to the national stage by his push to get national funding for green jobs training. He also launched Green For All, an organization dedicated to building an inclusive green economy strong enough to lift people out of poverty. And his recent book, "The Green Collar Economy," made The New York Times best-seller list for nonfiction hardcover books.

His hope is that low-income, minority communities will be able to share in the potential fortunes of the emerging clean-tech economy.

"We need to be very sure we are not replicating the mistakes from the dot-com days when we set ourselves up for a digital divide," he told CNET News in a 2007 interview. "We should work very hard to avoid having an ecodivide where we have ecological haves and ecological have-nots."

"There's an opportunity here to take a photovoltaic panel and use that not only to push down the amount of carbon in the atmosphere, but also begin to push people up out of poverty," he continued in the interview. "I think it would be very smart for Silicon Valley to think about these technologies as social uplift, job-creating technologies as well as global warming solutions."

Taking the reins at Green For All will be Phaedra Ellis-Lamkins, the former executive officer at the South Bay AFL-CIO Labor Council.

Former CNET News staff writer Elsa Wenzel contributed to this report

The Obama administration's proposed budget will increase investments in renewable energy and fuel efficiency, while projecting billions of dollars in revenue from carbon regulations.

The budget blueprint, published on Thursday, bumps up the Department of Energy's 2009 spending by 40 percent with more basic science research and loan guarantees for energy technologies that reduce or sequester greenhouse gases.

Specifically named are smart-grid technologies to modernize the power grid and $3.4 billion in research for "low-carbon coal technologies," such as pumping carbon dioxide underground at coal power plants.

The program to store nuclear wastes at Yucca Mountain in Nevada has been scaled back until there is a new strategy for waste disposal.

Within the budget for the Environmental Protection Agency, the administration details the outlines of cap-and-trade regulations for cutting greenhouse gas emissions.

The plan calls for generating $15 billion a year starting in 2012 through an auction--essentially selling permits to emit carbon dioxide to heavy polluters. Those allowances can be bought and sold if participants go over or under the mandatory limit, or cap.

Government estimates for the amount of revenue from a carbon permit auction are about $50 billion in the initial years of operation and up to $300 billion a year by 2020, according to a report in the Energy & Environment Daily.

This market-based mechanism was developed and successfully used to reduce air pollutants that cause acid rain. Because utilities are expected to pass on costs from the permits, some revenue from the auction would be passed on to consumers, according to the budget.

Another source of funding for clean-energy programs is repealing a tax break for oil producers and new charges on oil and gas production. Those changed are expected to result in $31.5 billion over 10 years, according to reports.

The Department of Agriculture budget projects $250 million in loans for renewable energy projects in rural areas.

President Obama signed into law a government stimulus package Tuesday and said the energy provisions will pave the path for doubling the amount of renewable energy in the next three years.

Energy is a major piece of the massive $787 billion package, totaling about $38 billion in government spending and about $20 billion in tax incentives over the next 10 years, according to estimates.

President Barack Obama signs the American Recovery and Reinvestment Act in Denver.

(Credit: Screen capture by Martin LaMonica/CNET Networks)

Obama signed the bill, called the American Recovery and Reinvestment Act, into law at the Denver Museum of Nature & Science where he later took a tour of the museum's solar-panel installation.

The energy portions of the law are intended to promote rapid development of renewable energy sources and increase energy efficiency in buildings, appliances, and other sectors of the economy.

The president said he hoped that the clean-energy-related portions of the bill will inspire Americans the same way that President Kennedy's goal to put a man on the moon did in the 1960s.

"I hope this investment will ignite our imagination once more in science, medicine, energy and make our economy stronger, our nation more secure, and our planet safer for our children," Obama said before signing the bill.

The major energy-related portions of the law were largely left intact after Congressional debate. Overall, the plan will more than triple the amount of spending on clean-energy programs, said Daniel Weiss, a fellow at the Center for American Progress.

Major energy portions include:

• A three-year extension to the tax credit for wind, which would have expired at the end of this year, and an extension until the end of 2013 for geothermal and biomass renewable-energy projects. The credit has been increased to 30 percent of the investment.

• $4.5 billion in direct spending to modernize the electricity grid with smart-grid technologies.

• $6.3 billion in state energy-efficient and clean-energy grants and $4.5 billion to make federal buildings more energy efficient.

• $6 billion in loan guarantees for renewable energy systems, biofuel projects, and electric-power transmission facilities.

• $2 billion in loans to manufacture advanced batteries and components for applications such as plug-in electric cars.

• $5 billion to weatherize homes of up to 1 million low-income people.

• $3.4 billion appropriated to the Department of Energy for fossil energy research and development, such as storing carbon dioxide underground at coal power plants.

• A tax credit of between $2,500 and $5,000 for purchase of plug-in electric vehicles, available for the first 200,000 placed into service.

(Click here for full summary from the American Council on Renewable Energy (ACORE) and from law firm Dewey & LeBoeuf.)

Measuring the impact
In general, companies in the green-technology field have welcomed the focus on energy efficiency and renewable energy production in the law.

The law gives renewable-energy project developers an alternative to the existing federal subsidy. Many renewable-energy projects have been stalled, or scrapped, because many investors don't have enough income to take advantage of a 30 percent federal tax credit. The bill now allows renewable-energy project developers to effectively get the same credit by applying for a loan from the Department of Energy for 30 percent of the project, explained Rhone Resch, the president of the Solar Energy Industry Association (SEIA).

The loan guarantees are designed to help companies to commercialize new energy technologies, by providing money for a manufacturing facility, for example. A number of green-tech companies, including flywheel storage company Beacon Power, electric-car company Tesla Motors, and battery maker A123 Systems have applied

More generally, investors and analysts said that the significance of the law is that it's a step toward crafting a more comprehensive energy policy, based on sustained commitment to renewable energy and efficiency.

"For years, U.S. policymakers' support for clean energy has been uneven," said Michael Liebreich, the CEO of research firm New Energy Finance, in a statement. "No longer...the U.S. will have a great chance to be the growth engine for our industry over the next several years.

The spending on the bill on things like smart grid technologies and energy efficiency should have a rapid impact, said Dennis Costello, a venture capitalist at Braemar Energy Ventures. But he said that even with the economic stimulus of the government spending, the conditions for energy technology firms remains very difficult.

Specifically, he said the drop in the cost of oil over the past year makes it harder for a firm that is seeking to develop a replacement, such as biofuels. Also, the overall recession continues to dampen demand for products and financing remains challenging.

"It's kind of refreshing to see at least beginnings of a real energy policy, some sort of unified approach to our energy problems," Costello said. "But it isn't going to solve our energy problems. There are a lot of countervailing factors to give pause to being overexuberant on the future of energy sector and clean tech."

Analysts noted there are other challenges to a rapid change in the slow-moving energy sector.

The stimulus act gives the Department of Energy control over billions of dollars in loans and spending on research and development projects--more than the department's annual budget. But the Energy Department has not dispersed money in the past few years because of its slow approval process, which Secretary Steven Chu said he intends to speed up.

Also, a sharp increase in renewable energy from wind and solar power requires building new power lines to bring electricity from windy and sunny areas to more populated regions.

Bramaer's Costello said an industry association estimated that the stimulus act spending could lead to 3,000 new miles of transmission lines. However, siting these new lines is a contentious process and likely to meet local and state opposition.

"Siting of transmission lines is this going to be the Achilles' heel of renewables," said Elgie Holstein, a senior energy policy adviser in the Obama administration.