technological engineering….it’s behaviors, policies, business models.” (Lessard said out that the new energy minor for MIT undergraduates “is all about thinking across these domains,” a point that drew enthusiastic applause from the audience.)
Technology “is only part of the solution,” Wiberg agreed. “It’s the fundamental underpinning, but before we make an investment we look at the full value chain. Is there a breakthrough that is going to allow you to compete in a commodity market?”
On the technology question, Lampe-Onnerud pointed out that for a startup, having a strong patent position can be invaluable. Boston-Power has 43 patents worldwide on lithium-ion technology, she said. “That’s allowing us to win really strategic deals and meet customers who have unmet needs and have them trust that we will be around.”
Aulet suggested that the venture capital model might have to be adjusted to help more laboratory solutions to energy problems find their way into the marketplace. Matheson agreed. “Everything around the VC industry innovates, but the VC industry itself innovates very little,” he said. “But a whole capital supply chain has started to form over the past couple of years, with the VC industry, private equity, public market investors, hedge funds, the whole financial industry figuring out how to support innovation.” Matheson said that, in particular, he’d like to see venture firms figure out how to finance service-based startups in energy-related areas like carbon trading. “A lot of money is going to be made without necessarily having new technology at its core,” he said. “Whether the venture industry is going to get behind those non-technology-related innovations will have a big part in driving their value.”
Aulet then asked the panelists to say briefly which new energy technologies they think have been getting too much attention, and which have been getting too little.
Lampe-Onnerud said she believes most strongly in solar energy. “Solar is the only way to go, and I believe [solar energy] has to be stored in battery applications,” she said. “Fuel cells will be used as a backup for homes and buildings, but not for portable power. You will see batteries as the storage mechanism for many projects, including vehicles, wind, and solar.”
Matheson named water—that is, ensuring an ample supply of clean water or fresh water for industrial purposes—as a problem equal in stature to energy. “Water is the next oil,” he said. “We’ve got to get our arms around that. It’s going to get more expensive.” And Matheson pointed out that energy technology and water technology are intertwined: an astonishing 20 percent of the energy used in California, for example, goes toward moving water around.
Lessard said “There is too much focus on energy sources, and not enough on energy waste and energy usage. There are some very boring solutions that could get at the low-hanging fruit very quickly.”
Wiberg declined to name which energy innovations he thought would be winners and losers, saying, “We are not very smart about figuring that out. Venture funds are going to make a lot of money on cleantech, and they’re going to lose a lot of money on cleantech.” But Wiberg did second Matheson’s point about water: “People don’t pay for water and they don’t realize the true cost of water,” he said. “We have spent four years looking for a good investment in the water area, because we see it as a trend that’s critical.”
Before the discussion ended, Aulet launched a “lightning round,” asking the panelists to name the one thing they’d advise President-elect Barack Obama to do about energy policy, given the opportunity.
Wiberg: “Getting a real price on carbon is the number-one issue—put a cap-and-trade mechanism in place immediately so that people can make decisions that incorporate the true cost of carbon.” (Lessard made a point similar to Wiberg’s, but unfortunately I wasn’t able to get it down accurately in my notes.)
Matheson: “All of these cross-disciplinary issues have to be under one roof. The Department of Energy was started to manage nuclear power. We’ve got to have a cross-functional department.”
Lampe-Onnerud: “In addition to creating financial incentives and disincentives, creating public awareness would be extremely important. People want to do the right thing, if they know how.”
Aulet gave himself the last word, paraphrasing Thomas Friedman’s new book, Hot, Flat, and Crowded: “What we should want are 100,000 people doing 100,000 different things in 100,000 different labs and schools. Anything we can do to promote that innovation ecosystem worldwide—not just in Boston, or just in the U.S.—would be the greatest thing the new president could do.”
