By Edmund Kelly
In previous posts I have reasoned that clean energy proponents will only realize that current wind and solar cannot be more than a partial clean energy solution when that truth is real and present and beyond denial. This MIT article points to the beginning of such awareness. It discusses in detail how the limits have been reached in Germany and are fast approaching in California and Texas. Given that StratoSolar is only a variant of current solar PV that happens to address ALL the problems of current solar, perhaps it will get some attention when this awareness becomes more broadly understood by the clean energy community and their government supporters.
By Edmund Kelly
Large new supplies of Helium have recently been discovered by employing modern exploration tools. This discovery may be the tip of the iceberg. There is considerable potential for discovering a lot more. This could have positive implications for StratoSolar as it raises the possibility of using Helium rather than Hydrogen as the buoyancy gas for large scale platforms. There is a lot of concern about the safety of Hydrogen and the use of Helium is a simple fix. As discussed in a question in this FAQ, current world Helium supplies are too limited for large scale deployment of StratoSolar platforms and the cost is already prohibitive. Hydrogen is a viable buoyancy gas that can be safely used with proper attention to safety engineering. However, the image of the burning Hindenburg still banishes Hydrogen from consideration. Abundant Helium resolves this issue and significantly simplifies the engineering of StratoSolar platforms.
By Edmund Kelly
In the US, after lagging the rest of the world for many years, utility scale PV has grown rapidly over the last few years. The initial impetus was the drop in PV panel prices in 2010-2011. This coincided with stimulus money from the recovery act and the combination jump started a utility scale solar business that had not previously existed. Investment reduced BOS costs significantly, especially for large scale utility scale projects. This coincided with a historically low interest rate environment. As utility scale PV became accepted as a low risk investment the cost of finance reduced significantly. This was a combination of two factors; low interest rates and a higher ratio of debt to equity. Historically utility scale energy projects have had a 50/50 debt to equity ratio, but some PV projects are now 80% debt to 20% equity. For the project developer this is a very high leverage which magnifies the return on his investment. Projects in Qatar have low 2% financing at 4 to 1 debt to equity ratio. This enables decent investment returns with an unsubsidized LCOE of $0.05/kWh. The low financing and high leverage are not generally available and are a form of subsidy.
The US is not as supportive as Qatar, but the investment tax credit (ITC) and accelerated depreciation have enabled profitable projects with PPAs of $0.05/kWh. As well as reducing BOS costs and increasing efficiency with 1 axis tracking, large developers like SunEdison have been playing with leverage and may be in the 80% debt, 20% equity category for some projects. All of these developments show the rapid acceptance of utility scale PV as a safe investment. However, they have created the impression that PV prices are on a continuous trend of cost reduction that will continue indefinitely at the current rapid rate. This is highly unlikely. PV panel prices have not reduced significantly since 2011. The reduction in BOS costs cannot continue at its previous rate and the favorable financing regime has little room to reduce further. Optimists in the industry forecast that continuing improvements will make PV viable without the 30% ITC when it is reduced to 10% over the next five years. This is unlikely, but acceptance will only come after prices have failed to decline, not before.
The establishment of the utility scale PV business is positive for StratoSolar. However, it seems likely that PV will have to actually encounter its problems with cost and intermittency before the need for a solution like StratoSolar will become accepted. To replace fossil fuels just for electricity generation PV will have to grow to over 10 times its current US yearly installations. To replace all fossil fuels is two or three times more again. PV without low cost storage can only replace less than half of current generation and even this will involve a lot of curtailment of PV generation which will increase the cost. Normally theses issues are brought up by opponents of alternative energy as an argument for eliminating it. Advocates take the attitude that problems will be solved and naysayers should be ignored. This attitude has proven successful so far. However, the issues are real and ignoring them will not solve the problems. StratoSolar, by solving PV problems is a savior of PV, not a naysayer.
By Edmund Kelly
A previous post discussed the 50 plus year trend in the decline in productivity growth from 3%/y to 1%/y. This post introduced a model that ascribed all productivity growth to the “goods producing” part of the economy. As the “goods producing” sectors become a smaller fraction of overall GDP, GDP growth declines. The model also shows it takes an additional declining productivity of the goods producing sector from 5% to 3.5% to replicate the observed declining growth rate.
A succeeding post showed how the non-goods service sector has become dominated by sophisticated rent seeking.
As the title of the first post indicates, I originally saw the overall decline in productivity as an aberration or a problem. After some deliberation I have come to the conclusion that declining GDP growth is not a sign of a problem, but an inevitable consequence of technological progress.
Economists segregate GDP into services and other non-services categories, largely for accounting purposes. Services are any category that does not produce a physical output. However, many services are a part of the goods producing sector of the economy. When we buy a product we are paying for everything including sales and distribution and other business service expenses. The pure service sectors are government, healthcare, finance, education, and a few others.
Technology has made the goods producing part of the economy increasingly efficient. As time has passed fewer people are needed to make more goods, reducing the employment in the goods producing sector. This first happened in agriculture, where employment has gone from around 90% a century or so ago to less than 4% of all employment today. Goods producing has declined from 70% in 1945 to less than 35% today, and the trend continues unabated. By 2025 it will be less than 20%.
The improvement trend has slowed from 5% to 3.5% because not all parts of the goods sector are improving productivity at the same rate, so the slower improving sectors are reducing the overall rate of productivity improvement. Notable slow sectors are construction, where the small scale, regulatory impediments and cultural expectations have slowed overall productivity. The wholesale and retail sectors have suffered from low wages, reducing incentives to invest in improved productivity. Rent seeking patents and copyright have also contributed in certain industries. The overall increased consolidation of business along with lax government oversight of anti-trust and anti-competitive behavior has also contributed.
When historians examine economies before the industrial revolution, they break things into the 90% plus producers of everything, tied to the land and the 10% or so of elites in control who extract the small surplus of these low productivity agrarian economies. These old elites can be regarded as the government services sector of their time. In the modern US economy, the pure services sector runs on the surplus generated by the goods producing sector. The overall services sector has no productivity growth as measured by GDP. GDP growth only comes from the goods producing sector. Ultimately as technology continues to improve, the goods producing sector will shrink to a small percentage of the economy, much like agriculture has already shrunk and GDP growth will slow to very little. Economists have wrestled with the problem of measuring services sector productivity, as the output is impossible to quantify for most services. The answer is simply that services as a whole are a zero sum game with no measurable productivity. They compete for the surplus and “rent seekers” are the big winners. We need the equivalent of anti-trust and anti-competitive regulation for service sectors to control rent seeking. The classic remedy has been to allow rent seeking but tax high incomes. This is a blunt instrument.
Reducing GDP growth is an inevitable outcome, not a fundamental problem. Technology continues to advance, reducing the cost of goods and increasing the effectiveness of the services that are the vast majority of the economy. GDP just does not grow. The looming problem comes from behaving as if GDP growth will continue and basing borrowing on that assumption. For example, at the end of world war two the US had a large government debt. It never paid off that debt. Massive GDP growth made the debt as a percentage of GDP diminish to a small fraction of GDP over time. Today, GDP growth is slow and will get even slower over time. This means that increasing government debt will become an increasing drag on the economy and deficit spending which has become the norm based on growth expectations will have to reduce and eventually stop.
Also, its not just government debt that is a problem. Overall US debt, over two thirds of which is in households, business and the financial sector will not be able to rely on increasing GDP as an engine of debt reduction. Given that total US debt is about 350% of GDP, deleveraging is inevitable as GDP growth declines. Much of this deleveraging will likely involve debt write offs in some future financial crisis. The financial system will have to adapt to a low debt, low leverage world.
This post and the last two started from an attempt to quantify the effect of the declining productivity of energy production on the overall US economy. While energy is a contributor to declining growth, it is clear the US economy has far bigger immediate issues. This reinforces the perspective that the biggest problem with energy is the longer term problem of CO2 emissions and the growing evidence of their influence on climate change. The long term costs of dealing with the negative consequences of climate change will ultimately lead to a dramatic and perhaps existential threat to the economy.
By Edmund Kelly
The last post was about the steady and continuous decline in economic growth rate since 1960. This postulated that the decline in growth rate was due to the growing service sector not adding any growth rate. This post tries to explore and explain why many of the service sectors are non productive.
The title is not a spelling error, but a play on “gilded age” a term recently resurrected from the past by the current debate on income inequality. The original gilded age was around the late 1800’s. It was a time of monopoly power accumulated by the new captains of industry during the industrial revolution, particularly in railways, steel and oil. This accumulation of power was a result of natural unconstrained laissez faire market economics. The eventual political response (after much turmoil over decades) was to enforce free markets with government anti-trust regulation to break up the monopolies and outlaw anti-competitive practices. Free markets and democracy are the two bedrocks of our modern society. Contrary to common perception, as this history demonstrates, markets are only free if they are effectively regulated. Normal unconstrained human behavior will tend to monopoly control of markets, not free markets.
Since world war two the US economy has evolved from a largely goods producing economy to a largely service based economy. The rules and regulations established to end the gilded age apply largely to the goods producing part of the economy. Service industries do not fit the model of goods producing industries and have evolved effective methods to evade the anti-competitive constraints imposed on goods producing industries.
During the middle ages, anti-competitive guilds evolved in northern Europe to control and develop merchant traffic and craft based industry. These guilds came to dominate the commerce of the period. The merchant guilds established geographically distributed networks of trust which ultimately led to finance and banking. The benefit of craft guilds was education and quality control through a standard training system. Guilds acted to ensure the benefit of their members by limiting supply and thus increasing the income of their members. This was an effective monopoly of trade and the skilled labor supply that economists now call “rent seeking”.
The growth of income inequality in recent decades has been referred to as a new gilded age. A better moniker would be “a new guilded age”. Many service industries have become effective guilds that benefit their members in much the same “rent seeking” way that medieval guilds benefitted their members.
Guilds enrich their members through “rent seeking”. As such they differ from industrial goods based monopolies that primarily enrich their owners, not their workers. Guilds should also not be confused with unions. Unions are organized labor that grew to defend worker’s rights during the industrial revolution. Some unions particularly craft unions still have attributes of guilds, such as apprenticeship, but most unions lack the power of guilds because they do not control the supply of labor. However, the guild analogy is apt for the case of some service sector unions.
The US economy has some classical guilds. One of the more obvious and powerful is doctors and medical professionals where the AMA through various means controls the supply of doctors. Other guilds are in film and TV, newspapers, real estate and law. These are a relatively small part of the economy and employment. However, the modern economy has evolved other less obvious, much more powerful, guild like groups that control the majority of the service sector. Examples of guild like groups are corporate officers and board members, banking and financial services, education services and public service unions for police and firemen. The new guild like groups all have infiltrated the regulators meant to regulate or pay them. The regulated have become the regulators.
Corporate governance: Boards of directors and company officers make a common distributed guild that mediate their behavior with each other and government through the lawyers and accountants they all employ. This self serving group have enriched their members at the expense of shareholders and employees by peddling false narratives. In theory, boards of directors are meant to act on behalf of shareholders, but lax government oversight has led to the regulated seizing control of the boards that are meant to be the regulator. The most obvious evidence is the many CEOs that are also chairmen of the board of directors. The governance of public companies seems completely broken with average executive pay over 20 times what it was in 1960 and hundreds of times that of average workers.
Finance: The financial system as a whole acts as a guild. The key problem is well explained by this paper by Margaret Blair. Banks are incentivized to maximize leverage, which maximizes profit at the cost of increased risk. Regulators should seek to limit leverage which can seriously damage the economy. The false meme that regulation stifles free markets was used by bankers to relax regulations meant to control leverage that were introduced during the great depression. This was aided by the bankers taking control of the government regulators using the argument that banking is so complex, only bankers can understand it. They also corrupted the private ratings agencies that were meant to act as part of the regulatory system. Finance became adept at increasing leverage with new complex financial instruments that expanded debt and hid it from public scrutiny. Income to the guild members was maximized by high-risk, excessive leverage with no personal risk from a “too big to fail” government guarantee.
Unfortunately, as well as enriching bankers, the increased leverage has seriously damaged the economy and still poses a huge danger. It raised debt from 150% of GDP in 1980 to 350% of GDP in 2008. This oversupply of debt was mostly used to buy assets, inflating their value and leading to more lending to finance the higher value. Many of these assets were real estate. As a consequence, rents have also inflated as a rent is mostly a mortgage payment and consumer mortgages are effectively rents. Paying these interest “rents” takes 25% of GDP. This is classic “rent seeking” and the main source of the recent growth in income inequality. Debt at these levels is historically unstable as explained by Ray Dalio. The bubble bursting in 2008 was advertised as deleveraging event that was reducing excessive debt. However, the financial sector has proved adept at defending its privileges. Debt, after a small decline is growing again. Its back to about 340% of GDP in 2015. The great recession has not fixed the economy and more turmoil lies ahead until we actually deleverage.
Healthcare: US healthcare costs twice as much as European countries but health metrics like infant mortality, and overall mortality are significantly worse. Healthcare in the US has evolved into a complex system that operates for the benefit of providers and not consumers. This is a definition of a guild. Insurance provided by employers separates buyers from sellers, hiding costs. The system is “fee for service” which incentivizes providing excess services and makes no one accountable. Insurance is incentivized by overall rising costs, as their income is a fixed fraction of costs. There is no constraint on cost except the willingness of employers to provide insurance. This has proved a weak and slow acting constraint. Within the system, doctors keep a tight control on the supply of doctors and doctor’s privileges. Hospitals maintain local monopolies on supply without regulatory constraint. Hospitals charge arbitrary amounts based on their costs and extract money from patients based on their ability to pay. This is a clear sign of monopoly. Again the regulators have been captured by the regulated. Health insurance is regulated by the States which fragments and weakens insurance market regulation. Health insurers in contrast are large national entities with far more clout than state regulators.
Education: College education is the clearest education guild. Colleges charge based on the parents ability to pay, not the service they provide. Prices are raised without regard to costs. The benefits accrue to the guild members, not owners. The basis seems to be the exploitation of parent’s basic desire to help their children succeed in life. Recently this has assumed absurd levels where student debt now exceeds consumer debt. Many kids and parents were duped into borrowing excessively for worthless diplomas from corrupt diploma mills. A whole generation is starting out with a millstone around their neck that will damage them and the broader economy. K through 12 education is another guild. This guild operates to expand its membership and protect employment of its members. This is the opposite of skills based guilds like doctors that try to restrict entry and increase compensation
Public servants: Most government spending occurs at the state and local level. Public sector unions have become adept at getting pro-labor local and state public officials elected by appealing to public sentiment. These officials have provided generous benefits to public employees, particularly generous pensions for police and fire. This is a clear case of regulatory capture.
To summarize, modern guilds are hard to identify and have great defensive narratives that justify their excess remuneration. They also exploit complexity that misdirects attention. They also exploit natural human biases and weaknesses in their customers. Houses always increase in value. Doctors are altruistic. Only bankers understand banking. A good education is worth great financial sacrifice. Cops and firemen are heroes. Nurses and teachers are saints.
By Edmund Kelly
This graph shows real US GDP per capita statistics from the period of 1960 to the present (54 years) with extrapolated trends to 2025. The data is from the US Bureau of Economic Analysis and the US Census Bureau. The chart also shows some simple modeled data based on the actual data. The modeled data is the stacked bar chart of GDP and the goods sector GDP growth rate trend line. This makes for a busy chart but puts all the data in one place to show how the model matches the real data.
The jagged light blue line shows actual GDP growth per year (axis on the right). The heavy blue line shows the linear trend of this jagged growth % line. This shows a steadily declining growth rate trend line that starts at 3% in 1960 and is currently at 1% in 2015. Looking at more recent periods shows an increasingly larger rate of decline, so this is optimistic.
The wavy purple line shows real GDP per capita (axis on the left). The stacked bars show a calculated GDP per capita generated only from the declining growth rate trend line and an initial 1960 GDP value. This accurately tracks actual GDP with small variations which validates the accuracy of the trend extracted from the very jagged GDP growth rate data. Periods where GDP is above and below the bars are periods with above and below the trend growth rate. The biggest up deviation is the decade preceding the financial collapse in 2008. This aligns well with the view that the 2008 collapse was caused by a debt fueled bubble that artificially temporarily maintained a higher growth rate.
This declining GDP growth rate trend implies that we may no longer be at the comforting 2% longer term 115-year trend in economic growth that still seems to be the conventional wisdom of economists and politicians. This is no small matter. Modern prosperity since the industrial revolution is based on a growing economy based on increasing productivity that steadily produces more output per person. A rising tide that raises all boats. A falling tide is a good explanation for the stagnant wages and growing income inequality of recent decades, as decreasing gains are captured by minority segments of the economy.
So, what explains this potentially disastrous decline in GDP growth rate? It could be assumed to be uniform across the whole economy with all sectors declining in productivity every year. This would imply some malaise that applied uniformly to the economy as a whole. However, we know that various sectors of the economy have different productivity growth rates, some improving, some declining or flat.
The graph above, again based on data from the Bureau of Economic Analysis and the Census Bureau, shows the proportion of employees in each economic sector from 1948 to 2011. This shows that manufacturing and goods producing sectors in the economy have roughly halved from 70% of employees to 35% of employees, while dramatically increasing the output of goods. This is the textbook definition of increasing productivity. It also shows that government has about the same 15% proportion of employees in 2011 as in 1948 for roughly the same government services, so there has probably been no overall productivity gain. The finance and services sectors have gone from 15% of employees in 1948 to 50% in 2011.
Given that we know the goods producing sector has maintained productivity, and the overall growth rate is declining, a simple first approximation would estimate no overall increase in growth rate for the finance and services sectors. This suggests a simple model that assumes the economy is divided into two broad sectors, a non productive sector NP that generates no GDP growth rate and a productive sector P that generates all GDP growth rate. This is probably an oversimplification, but the data shows it is very close to the truth.
The stacked colored bars in the top graph represent GDP per capita (axis on the left) and illustrate two sectors P (productive) and NP (non productive) where GDP = P + NP. The red sector, P is set to 70% of GDP in 1960 and reduces to 35% of GDP in 2015. These numbers are chosen to approximately match the historical employment and gdp contribution of sectors in the economy shown in the employees by sector chart above. The following sectors are assumed to approximate a P sector: agriculture, mining, construction, manufacturing, transportation and utilities, wholesale trade and retail trade. Finance, services and government are the NP segment. This breakdown is oversimplified but broadly correct.
These official statistics do not break out an energy sector. Energy is made up of pieces of other sectors mostly in the goods producing P segment. We know that energy consumption was around 8% of GDP in 2015. This means it was about 15% to 20% of the P sector. We know that energy’s contribution to GDP productivity growth as a sector is negative as it is taking more resources to produce the same energy over time.
Using the historical decline in the overall rate of economic growth along with the historical reduction in the goods producing sector we can calculate a growth rate estimate for the P segment. This is shown with the purple line in the graph above. It starts at about 4.5% in 1960 and declines to about 3.5% in 2015. Given the increasing contribution of declining productivity energy sector to the goods producing P segment, it seems reasonable to infer that the energy sector is largely responsible for the 1% decline in P sector growth rate.
The goods producing P sector is the engine of growth for the whole economy. The reduction in productivity of energy has a disproportionate affect on this engine of growth. To match the trend in overall growth rate decline, the graph shows that the decline in P sector growth rate is accelerating as energy becomes a larger fraction of the P sector.
By 2025 if the current trend persists, the model shows that the non productive sector becomes 70% of the economy. The goods producing part of the economy is declining in absolute terms. The overall growth rate is well below 1%.
This reduced rate of overall economic growth is already causing severe economic problems, contributing to income inequality and stagnant wages as the limited economic gains accrue to a powerful few. These problems will only get worse if the growth rate continues on its current downward trend. This illustrates that economic growth is a sensitive thing that cannot survive a large and growing part of the economy becoming less productive. This simple model shows that fixing the problem of lower growth means reducing the relative size of the non productive sectors. For the service sector problem areas, like finance, healthcare and education, the solutions are mainly political, but for energy the solution has to be mainly technological.
By Edmund Kelly
Bloomberg came out with a 2015 update to their report on world investment in clean energy. Above are a couple of charts showing the overall investment by type and by region. Total investment rose slightly (3%) over 2014 to $328B of which $161.5B or 50% went to solar. The overall investment level has not changed significantly for the five years, 2011 to 2015. Over this period solar has stayed about the same percentage of clean energy investment. Annual solar capacity has grown from 25GW to over 50GW, so the average cost of solar has dropped significantly from about $6.40/W($161/25) to $3.20/W($161/50), moving solar closer to wind in cost. PV panel costs have not declined much over this period ( after a dramatic decline around 2011) so most of the solar cost reduction has been from the rest of the system. The rate of these system cost reductions is slowing. The overall world average cost covers a very wide range of systems, from high cost rooftops over $6.00/W to very large utility arrays at less than $1.50/W, along with large regional differences in labour and regulatory costs.
As the regional market chart shows, there has been a significant change in where the investments are taking place over the five years. The two biggest trends were the decline of Europe and the rise of China. Without China’s decision to dramatically increase its clean energy investment in 2014 and 2015, the overall market would have declined every year from 2011.
Despite dramatic reductions in price, investment in solar has hardly increased. This tells us that solar investment is not yet driven by market forces. The price will have to fall substantially from current levels for solar to become market competitive. Overall the charts present a picture of a stagnant clean energy market. Given the need for government support to maintain the market, the world economic slowdown does not bode well for growth in the clean energy market, particularly in China.
Despite its greater than $300B/y size, the current clean energy market is not reducing CO2 emissions by any noticeable amount. Based on these charts it is not on a path to do any better. There is a need for a change.
StratoSolar makes today's PV a practical replacement for fossil fuels. Its an incremental improvement of PV, not a dramatic revolutionary new technology. It is easy, quick and cheap to prove its viability. The path we are on is clearly not working. It is worth giving StratoSolar a try.
By Edmund Kelly
The attached white paper is a more comprehensive look at the impact of higher energy costs on reducing GDP growth. This tells us two things.
First, we are in serious economic trouble already with a low and declining rate of economic growth from the continually increasing cost of fossil fuels.
Second, replacing fossil fuels with more expensive alternative energy sources will only make the problem worse. So far, wind and solar have been a relatively small economic factor, but growth to a level where they can contribute to a significant reduction in CO2 emissions would quickly get us into economic decline, and the political unrest that comes with economic decline.
StratoSolar's lower cost of energy production than fossil fuels can reverse the current decline in the rate of economic growth by making energy cheaper on a continuing basis.
By Edmund Kelly
An argument against large scale deployment of alternative energy is the negative impact of the higher cost on gdp growth. The following is an attempt to quantify this effect based on the increasing cost of energy since around 1970.
The modern world is based on sustained economic growth. As the chart below shows, US real gdp per capita has maintained an overall 2% per annum growth rate through depression, recessions and two world wars. This has been possible because of technological advances increasing the productivity of all economic sectors.
Since around 1970, the cost of producing energy has steadily risen. Initially this was driven by the increasing cost of oil production, and more recently the cost of expensive alternative energy production has also become a significant factor. Energy is a significant part of gdp, so its share growing from around 5% to around 10% of gdp should clearly have been a drag on the growth rate of gdp, reducing it from its long term 2% per annum historical trend.
When we examine US GDP growth rate data for various periods from 1960 to today, regardless of the period chosen it is apparent that growth rates have been on a steadily declining trend. The straight line in the graph below shows a snapshot of the actual downward trend from 2000 to 2015 projected forward to 2025.
The colored bars also illustrate a simple model that assumes the economy has two sectors. One sector has a high productivity growth rate of 3% and the other sector is stalled out with 0% productivity growth rate. To make the numbers fit the data we need to start with the non productive sector at 25% of GDP. This produces a breakdown like that shown, with the non productive sector continually increasing as the overall growth rate declines.
These numbers imply that a larger sector of the economy than just energy is contributing to the recent decline in economic growth rate. Increased energy costs account for about a third of the decline by 2015. The other likely contributors to low growth rate are substantial parts of the financial sector, health care and education. This reduced rate of overall economic growth is causing severe economic problems already, with income inequality and stagnant wages. The problems will only get worse if the growth rate continues on its current downward trend.
This illustrates that economic growth is a sensitive thing that cannot survive a large part of the economy becoming less productive. This should make it clear that a competitive, lower cost source of clean energy is a necessary condition for an energy transition that does not destroy economic growth. Current wind and solar are currently several times the needed lower cost and are reducing in cost at too low a rate to be an affordable solution for a long, long time. Other approaches like StratoSolar that can solve the problem without destroying the economy deserve some serious attention.
This white paper covers the topic of the reduction in economic growth caused by the increasing cost of energy.
By Edmund Kelly
COP21 brought some attention to climate change and produced some new long term commitments. Bill Gates used the media attention to get some attention for his new breakthrough coalition which is focused on clean energy R&D. It will be interesting to see if this new effort will produce any tangible results. Previous R&D efforts, while proclaiming a goal of exploring new and risky “breakthrough” solutions never seem to have had the courage of their convictions. They all seemed to narrow their focus to technologies that conform to the politically correct academic consensus, rather than risk the embarrassment of trying unusual solutions that don’t fit this status quo.
This has been especially true of ARPA-E where breakthrough has been interpreted to mean investing in basic research science projects from peer reviewed academia that might be commercially viable twenty years down the road. Bill Gates himself is informed by elite consensus and has already invested in nuclear power and a varied portfolio of energy storage technologies. Unfortunately, this narrow perspective is probably indicative of where the new breakthrough coalition will focus its efforts.
These are admirable investments, but all are from within the box of elite consensus and are incremental in nature. None are inherently outside the box or “breakthrough” in nature. None are focused on complete economically viable clean energy solutions.
At its core, clean energy is not a science problem. Its an economic and engineering problem. The R&D focus needs to be on engineering economically viable solutions. This is the domain of business, not academia or basic research. This, unfortunately is where StratoSolar fits in. It is engineering, not science. Somebody has to risk the embarrassment of investing a little in an unusual “breakthrough” engineering solution.
By Edmund Kelly
President of StratoSolar