How can clean energy be more affordable?

Key Concepts

• Commercial Liftoff: The process of moving clean technologies from the lab to widespread market adoption.
• Pathways to Commercial Liftoff: Reports developed by the US Department of Energy (DOE) to provide roadmaps for decarbonization technologies.
• Ecosystem Influence: The idea that successful technology deployment requires influencing a broader system, not just the core technology itself.
• 80/20 Rule in Business: CEOs often make decisions based on 80% gut instinct and 20% data, contrasting with the rigorous data-vetting of scientific research.
• Affordability as a Driver: Making clean technologies affordable is crucial for consumer adoption and addressing climate change.
• Government's Role in Risk-Taking: The government should take on risks that the private sector is unwilling to, especially in early-stage technology development.
• Appropriations and Budgeting Challenges: The US federal government's budgeting process, where Congress sets the budget but agencies cannot directly influence it, creates inefficiencies.
• "First of a Kind" vs. "10 of a Kind": Shifting focus from single, high-risk initial deployments to financing the first few iterations to drive down costs.
• Learning vs. Failure: Reframing unsuccessful experiments not as failures, but as opportunities to learn and inform future endeavors.
• Innovation and Entrepreneurship: Fostering the translation of research into real-world impact.

Decarbonizing the Economy: From Lab to Market

This discussion with Vanessa Chan, Vice Dean of Innovation and Entrepreneurship at the University of Pennsylvania School of Engineering, delves into the critical challenge of moving clean technologies from research and development to widespread market adoption, a process she terms "commercial liftoff." Chan, formerly with the US Department of Energy (DOE) where she championed clean energy technologies, emphasizes that successful decarbonization requires more than just scientific breakthroughs; it necessitates influencing the entire ecosystem surrounding a technology.

The Light Bulb Analogy: Invention vs. Deployment

Chan uses the example of the light bulb to illustrate this distinction. While Jonathan Swan is credited with inventing the light bulb by discovering that carbonizing a wire and passing electricity through it could produce light, it was Thomas Edison who brought it to the market. Edison's success wasn't solely based on the core invention but on solving crucial practical challenges:

• Longevity: Increasing the bulb's lifespan beyond a few hours.
• Vacuum Sealing: Creating a vacuum within the bulb to extend its life.
• Manufacturing at Scale: Developing cost-effective production methods.
• Infrastructure Shift: Convincing utilities to transition from gas to electricity distribution.

This highlights that "influencing an ecosystem to do things" is as vital as the technological heart of an invention for its market success.

Navigating Washington: Challenges of Disruption and Change

Chan recounts her experience at the DOE, where she worked on "Pathways to Commercial Liftoff" reports, designed as roadmaps for decarbonization. She acknowledges the inherent difficulty of being a "disruptor" in Washington D.C., where established processes can be slow and resistant to change. Her strategy involved identifying and collaborating with like-minded individuals within the organization, including federal employees and political appointees who understood the need for a different approach, especially with the infusion of new funding.

This collaborative effort led to the development of "Pathways to Commercial Liftoff," a national roadmap co-created with the private sector, outlining the steps necessary for bringing technologies like hydrogen, nuclear, long-duration energy storage, and carbon management to market.

The Scientist's Mindset vs. the Real World

Chan, with a PhD in Materials Science and Engineering from MIT, shares her personal transformation from a rigorous, data-driven scientific mindset to the more pragmatic, "80/20" approach prevalent in the business world. She explains that while scientific integrity demands meticulous data vetting, CEOs often make decisions based on intuition and "good enough" data. This shift was initially challenging, and she recognized the need to guide others through this transition, emphasizing patience, listening, and building collaborative teams without egos.

Framing the Climate Crisis: "It's Bad, It's Now, There is Hope"

Addressing the urgency of climate change, Chan advises caution with language that can induce panic. She believes in finding language and approaches that foster agreement. Her focus at the DOE was on risks and economics, recognizing that the private sector is driven by profitability. Therefore, making clean technologies affordable is paramount. If these technologies are affordable, consumers will adopt them, thereby addressing climate change. The narrative, for Chan, is about the affordability of technologies that also contribute to solving climate change.

She expresses hope in the progress made with the "Liftoff" reports across various technologies. However, she cautions against an immediate, absolute switch from fossil fuels, citing current economic realities. She acknowledges the continued role of natural gas, especially with the rising energy demands from AI and data centers, emphasizing the need for economically sensible solutions.

Chan identifies affordability as a primary motivator for individuals, particularly those facing economic hardship. She advocates for meeting people where they are, highlighting the cost savings of clean energy options like solar as a pathway to adoption. The key, she suggests, is understanding individual motivations and driving towards shared goals.

Global Perspectives and Policy Challenges

The discussion touches upon global efforts, referencing a joint letter from 16 world leaders at the UN General Assembly calling for accelerated clean energy adoption. Chan also shares her observations from a recent trip to China, noting their rapid advancements in electric vehicles, solar, and wind energy.

She contrasts China's approach with the perceived "windshield wiper" effect of US policy, where shifts in administration can lead to policy reversals. A significant frustration for Chan within the US system is the appropriations and budgeting process. She highlights the disconnect where Congress sets the budget, but agencies are restricted from directly influencing investment decisions, leading to a lack of strategic planning and rushed spending. This contrasts with China's multi-year strategic planning and funding approach, which she sees as more akin to the private sector.

Chan believes the government's role is to take risks where the private sector won't, but the ultimate challenge lies in creating certainty for the private sector across different administrations. This certainty is crucial for long-term investment and innovation.

The Role of the Private Sector and Driving Down Costs

Chan emphasizes that regulations should be used to spur the private sector. "Liftoff" is defined as the point where a technology no longer requires government support because all players in the value chain can profit, and it is affordable to consumers. She uses the example of solar photovoltaics, which the US invented but China scaled due to their willingness to invest and lose money in the early stages to drive down costs. This allowed China to capture the market when solar became profitable.

She advocates for a shift from financing "first of a kind" technologies to "10 of a kind" to accelerate cost reduction. The current environment, she notes, is characterized by a reluctance to be the first or second to invest in new technologies due to the high risk of financial loss.

Reframing "Failure" as Learning

Chan strongly refutes the notion of "failure," preferring to view unsuccessful experiments as learning opportunities. As a scientist, she sees an experiment where the hypothesis is wrong not as a failure, but as a valuable outcome that provides insights for the next experiment. This reframing is crucial for driving progress and encouraging iteration, especially in the context of innovation. The negative connotation of "failure" can be detrimental, whereas "that didn't work, I learned something, here's where I'm going next" is a more constructive perspective.

Future Focus: Cultivating Impactful Innovators

Chan's current passion is her role as the inaugural Vice Dean for Innovation and Entrepreneurship at Penn Engineering. After 25 years of focusing on how research translates to real-world impact, she aims to cultivate the next generation of scientists and engineers who can drive significant change. Her approach involves bringing the "world into the universities" to ensure students understand the problems they are trying to solve. Her ultimate goal is to foster the "next Thomas Edison," individuals who understand the real world and can lead technological advancements.