This commentary originally appeared in the Austin American-Statesman on July 21, 2015.
Bill Gates recently stated his intention to double his investment in renewable energies to $2 billion within the next five years. This is a good thing for renewables considering federal subsidies are set to end within the next 18 months.
The investment by Gates would not include wind or solar projects due to their unreliability and instead will focus on other alternatives such as nuclear reactors, using recycled nuclear waste and increasing battery efficiency technology.
Critically, Gates’ investment in renewables would also urge governments to switch from subsidizing renewable energy sources to funding energy research and development — on the scale of the Manhattan or Apollo projects.
Gates’ statements and pending actions appear to be a call to arms for private investors and venture capitalists to follow his lead and double down on their investments in the energy sector. There may be some merit to Gates’ position; private investment could be the answer to renewables’ prayers if they are to become a viable or substantial portion of our energy mix.
If renewables are to survive, a new approach without the heavy support of federal dollars must be found. Finding private investors willing to back new, cutting-edge renewable technologies could save taxpayers hundreds of billions of dollars.
Diversifying state and national energy portfolios is vital for long-term success and the sustainability and reliability of electric grids. A variety of energy sources are needed to cover the necessary base load power that solar and wind cannot reliably provide — this includes breaking the taboo on nuclear energy.
Mandates and subsidies designed to force current renewable technologies on Texans have proved costly and untenable. But wise investments will spur competition amongst the private sector and help drive prices down. Ultimately, the winner will be the consumer. Entrepreneurs need to be willing to accept the risks necessary to realize the potential gains.
Texas is in a prime position to lead the nation in all categories of energy. Texas’ business-friendly atmosphere and world-class universities provide the best opportunity to lead the energy charge. Signs of Texas’ advantage are already showing with pending export deals that would send large volumes of natural gas to Mexico and Japan.
Cutting federal subsidies dedicated to inefficient wind and solar technologies will show consumers the true cost of renewables, thus exposing wind and solar providers to the competitive marketplace. There, renewable technologies will be forced to prove their validity as true alternatives.
Gates is correct in saying that the future of solar and wind has not yet arrived.
There should be other individuals pushing what Gates describes as “classic capitalism” to its limits by funding futuristic technologies, such as thorium reactors or graphene.
In the meantime, investors, not governments, could seek more immediate returns by funding improvements to existing energy technologies that maximize the efficiency of our coal and natural gas plants. Or those investors more devoted to renewables could join Gates in funding the development of safe and efficient recycled nuclear reactors and reliable battery storage systems.
Wanting to keep the planet clean for future generations is certainly a laudable goal. Few individuals will argue that clean oceans and clean air are bad things. However, accomplishing this should not come at the expense of funding inefficient consumer technology with taxpayers’ money.
If alternative and renewable energies are to have a real future, private investors like Gates, who are willing to shoulder the risks themselves, should be sought.
Thompson is a policy analyst with the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation. Brady is an intern with the Texas Public Policy Foundation.