It’s time to bury the ‘clean vs. dirty’ debate in energy

After decades of instability and uncertainty, the United States suddenly finds itself in a peculiar position: In the driver’s seat as a net-supplier of energy, potentially the world’s largest.

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Driven entirely by the rapid progress of advanced energy technologies, oil and gas extraction is increasing; wind, solar and geothermal energy sources are booming; and energy efficiency is allowing us to do more and more with less energy.

For some, this is validation that the “old way” – oil and gas – are making a comeback; for others it’s about “clean” sources of energy reshaping our economy and protecting our environment.

The truth is that it’s not a zero sum game. Advancements in technology in all types of energy are leading to cleaner solutions, making the “clean vs. dirty” energy debate irrelevant to the opportunity that lies ahead. This technical synergy across the various energy markets is also leading to an accelerated transformation of the overall sector to advanced energy, which was a $1.1 trillion global market in 2011, making it larger than pharmaceutical manufacturing worldwide.

By focusing on making all forms of energy affordable, secure and clean, this technological revolution is succeeding because it provides an economic imperative that “clean” alone could never accomplish. Clean lacked the power of the invisible hand to align the incentives of the individual energy consumer with that of society’s energy needs. Advanced energy is different because it couples two important things: the ability to prosper and increase economic competitiveness while simultaneously improving the health and wellness of the United States.

Corporations embrace diverse energy sources

The retailer Kohl’s, the nation’s largest corporate solar panel owner, offers a good example of a large company that’s embraced advanced energy technologies for economic reasons. Kohl’s has made an effort to strategically diversify their energy mix, installing solar where there are strong renewable energy incentives on the books. Kohl’s has also implemented a range of energy efficiency programs, such as sophisticated lighting and energy management technologies, that deliver significant cost savings and emission reductions.

Intel and Google also actively deploy advanced energy technologies, including innovative energy-saving data center designs and an energy mix that features “traditional” energy sources, renewables and fuel cells.

General Electric, a long time supplier to the oil and gas industry, has similarly embraced an “all of the above” strategy in its product portfolio. In addition to its traditional offerings, GE now supplies a whole range of advanced energy products and services, including wind turbines, smart grid solutions, reciprocating engines that run on biogas, and some of the world’s largest and most efficient gas turbines, not to mention Energy Star appliances and LED light bulbs.

Advanced energy is a growth industry

It’s unlikely these successful companies would have embraced advanced energy so wholeheartedly if it offered no economic benefits.  Indeed, research indicates the United States as a whole is following suit:

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• The U.S. advanced energy market reached $132 billion in 2011, representing nearly 12 percent of the global market. This market is expected to grow to an estimated $157 billion in 2012, with the U.S. share of the global market expected to rise to 15 percent.
• Patents for advanced energy related technologies granted to U.S entities in 2011 exceeded the 1,000 mark for the first time.
• Wind, solar, biomass, geothermal and hydropower projects accounted for 46.2 percent of new electrical generating capacity for the first ten months of 2012, a 47.7 percent increase over the level recorded for the same period in 2011.
• All this is occurring while oil and natural gas suppliers enjoy robust, and in some cases, record profits.

From a macroeconomic perspective, with global energy demand expected to grow 40 percent over the next few decades, the economic opportunity is so vast that the growth in new energy markets like solar, wind and geothermal doesn’t interfere with the ability of traditional oil and gas businesses to grow their markets. That is why you now see unlikely combinations – small, innovative start-ups working hand-in-hand with traditional legacy companies – because it ties together scale with science to create economic opportunity in all markets.

That’s also why you see industry leaders like Arno Harris, CEO of solar PV developer Recurrent Energy, arguing that “stability can be found in a portfolio of both renewables and gas [that offers] more predictable prices and greater energy security.”

Energy is not a zero-sum game anymore. So let’s end the polarizing focus on “clean vs. dirty” energy and focus on migrating to an advanced energy future. Let’s ensure that we continue to invest in technology to drive down the costs of using all of our domestic sources of energy and make them healthier for consumption.

With an advanced energy mindset, the United States can be both prosperous and healthy as a nation.

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Hemant Taneja is a managing director at General Catalyst, a venture capital firm focusing on early stage and growth equity investments. In addition, Taneja co-founded Advanced Energy Economy, a business organization focused on catalyzing regional energy innovation clusters across America. The creation of AEE is modeled after the work he did in founding the New England Clean Energy Council, which received an award from the Department of Energy. He is also an entrepreneur in his own right; before joining General Catalyst in 2002, Taneja was founder and CEO of a mobile software company that was acquired. He is a graduate of MIT.

Rooftop solar panel photo: Shutterstock