A new article in Fortune Magazine cites the report “Rising Tigers, Sleeping Giant,” which was co-authored by LeadEnergy staff, and emphasizes the need for greater federal investment in clean energy R&D and education programs:

(Fortune Magazine) — Quick: which nation builds the most wind turbines? If you guessed America, with its blustery Great Plains dotted with whirring GE blades, you’d be wrong. In 2009, China became the planet’s largest producer.

What’s going on here? While America was digging itself out of its financial crisis, China quietly positioned itself to become a leader in what promises to be the largest emerging industry of the 21st century: green tech.

A new report by the Breakthrough Institute, a progressive think tank in Oakland, argues that China, along with Japan and Korea, will dominate the clean-energy race by out-investing America.

Asia’s clean-tech tigers are already launching massive government investment programs to dominate this industry and, according to the report, have surpassed the U.S. in virtually all clean-energy areas, including wind, solar, and electric-car batteries.

America, however, shouldn’t despair. But, says Alan Salzman, CEO of Vantage Point Venture Partners, a Silicon Valley VC firm, “We must ensure that our industrial policy — including laws, regulations, access to capital, and incentives — enables the big industries of the 21st century. It should not,” he continues, “preserve and entrench 19th-century ways of generating electricity, powering transportation, and consuming our natural resources.”

And those changes can’t come too soon.

How to become clean-tech competitive

Prime the pump
Washington should boost investment. Yes, Obama has agreed to spend $80 billion of the stimulus package on things green, but that pales next to the $217 billion the Chinese government plans to dole out over the next five years. Some experts are now calling for the feds to pump another $15 billion a year into basic research for solar, clean coal, and alternative fuels.

Retrain engineers
BYD, an electric-car company in China (Warren Buffett is an investor), has 10,000 engineers working on, among other things, making affordable batteries. With Detroit downsizing, the U.S. has plenty of engineers, but many need to be brought up to speed. One promising sign: A growing number of schools, including Purdue and Colorado State, are offering graduate-level degrees in electric energy systems.

Slash red tape
China just launched its GreenGen project, a $1 billion super-efficient coal plant that emits less greenhouse gas than traditional ones. America’s Duke Energy (DUK, Fortune 500) signed a pact with the utility building GreenGen to share clean-coal technology. Why? Because of bureaucratic delays it could take eight years to build such a plant in the U.S. — vs. three in China.

Breakthrough Institute has the story here:

A new Clean Energy Deployment Administration (CEDA) is critical to “position the U.S. as the global leader in the development and deployment of clean energy technologies for years to come,” according to a letter written by the country’s leading clean tech entrepreneurs, investors, and stakeholders.

Thirteen leading clean tech companies, including Google, GE, and Kleiner Perkins, wrote to President Obama last week urging him to expedite the creation of a Clean Energy Deployment Administration along the parameters outlined by the Senate’s American Clean Energy Leadership Act of 2009 (ACELA).

According to ACELA, a bipartisan product of the Senate ENR committee under the leadership of Senator Jeff Bingaman (D-NM), CEDA would be a new autonomous agency staffed with project financing experts and its own Administrator but maintain affiliation with the Department of Energy in order to benefit from DOE’s considerable energy expertise. CEDA would provide financial enhancement, much like a bank, through a flexible suite of credit augmentation tools, including loan guarantees, securitization, insurance, that would reduce risk for investors in clean energy innovation. CEDA’s financial support packages will thus help innovative new clean technologies secure private-sector financing, greatly increasing investment in this critical sector with limited risk to taxpayers.

For the full post, continue reading here.

A Senate Special Report released by Senator Wyden’s (D-OR) office provides a scoreboard check in the clean-energy race and makes the case for the United States to step up its efforts.  By highlighting rising international demand and growth in renewable energy markets, Wyden builds a strong case for the U.S. to capture this potential rather than allow itself to continue slipping in competitiveness. Secretary of Energy, Steven Chu testified to Congress in support of Wyden’s report, calling the clean-energy race “the challenge of our time.”

The thesis of the report is summed up here:

“As the global community pursues policies to reduce greenhouse gas emissions, mitigate climate change, and protect the environment, the appetite for goods and services that are needed to sup-port these policies is growing. This is a welcome development for the U.S. manufacturers of EG and the overall American economy. However, it appears that the U.S. is not fully seizing the economic opportunities that this situation provides. The available trade data demonstrate that U.S. producers have not kept pace with increasing domestic demand for EG, revealing lost opportunities for job creation and economic growth.”

The report backs this assertion up with a plethora of data, beginning with the 200% growth to $215 billion from 2004-2008 in exports of “environmental products,” 70% of which are associated with renewable energy.  While the United States did contribute $7.7 billion in export growth, this figure was greatly overshadowed by China’s $22.7 billion and Germany’s $19.6 billion increases.

This graph provides a salient image of the comparative stagnation of U.S. growth in relation to China and Germany:

Aside from comparisons to other countries, a key note about U.S. export markets is the significant potential they have shown with exports of PV products and wind turbines growing by $2.1 billion and $1.5 billion respectively.  Also noteworthy is the location of these improvements – primarily in states with strong government incentives like California and Texas.

Unfortunately, however, the increase in U.S. exports has not been enough to maintain its share of global markets.  U.S. market share of world exports dropped from 10.6% to 8.6% from 2004-2008, with declining shares of exports to every region of the world except Latin America.  Taking into account the considerable increases in demand that are likely to continue, the foregone economic opportunities are difficult to understate.

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In an important development within the federal energy and climate policy debate, Bill Gates and Senator Bingaman have spoken out in support of Secretary Chu’s push for major increases in clean energy R&D. Breakthrough Institute has the story:

After receiving no help from the White House to secure the $15 billion in annual energy R&D investment Obama promised during the campaign, Energy Secretary Steven Chu is speaking out for R&D — with the help of Sen. Jeff Bingaman and high tech billionaire Bill Gates.

The push by these three powerful figures comes in the wake of Republican Senator Scott Brown’s upset victory for Edward Kennedy’s seat and a series of high profile Democratic Senators, most recently Diane Feinstein, saying cap and trade can’t be passed this year.

Gates’s writings appear a week before the release of his “Annual Letter” as the head of the Bill and Melinda Gates Foundation, a letter which in past years has generated national controversy and news. The 2010 Letter, Gates says, will be about innovation.

The message from all three men is that R&D has gotten short shrift for too long from those pushing cap and trade and other regulations to reduce carbon emissions. And it comes a few days after Chu leaked a public letter to OMB head Peter Orzag, who was seeking to cut the DOE’s budget even further.

Chu, Bingaman, and Gates all say that cap and trade climate legislation (Waxman-Markey in the House, Kerry-Boxer in the Senate) would invest far too little in R&D, just $1.5 billion annually as compared to the $5 billion currently invested, and the $15 billion Obama has called for.

Read the full coverage here.

Over seventy major American corporations have united to urge Congress to pass energy and climate legislation as soon as possible, taking out a full-page ad in the Wall Street Journal to deliver the message. The slew of companies included names like Alcoa, BP, Duke Energy, Dow Chemical, GE, General Motors, HP, Johnson & Johnson, Rio Tinto and Shell, ranging from energy companies to manufacturers.

As a press release from one company, Alstom (the world’s largest supplier of electric power generation equipment), noted, American business can “contribute to and benefit from greater clarity around how climate change will be addressed.” They and many other leading businesses are joining hands with “environmental organizations, national security experts, veterans’ organizations, labor unions and faith-based groups” to push for a climate bill.

Text of the Ad (with list of companies available at climatead.org):

A Question of American Leadership
How will America take back control of its energy future while enhancing our national security?

When will the U.S. economy regain its competitive edge instead of letting other countries corner the emerging global clean energy market?

How can we get the U.S. back on track by creating American jobs in the new low-carbon economy?

How can we protect our natural resources and future generations from climate change?

These are the questions we’re asking our policy makers as America faces a once-in-a-century opportunity to lower greenhouse gas emissions and become the world’s leader in a burgeoning clean energy economy.

We are a broad and diverse group of leading businesses, environmental organizations, national security experts, veterans’ organizations, labor unions and faith-based groups.

We believe it’s time for Democrats and Republicans to unite behind bi-partisan, national energy and climate legislation that increases our security and limits emissions, as it preserves and creates jobs.

It’s a question of American leadership.

A major report released last week by the National Science Board concludes that U.S. global leadership in science and technology is declining as foreign nations – especially China and other Asian countries – rapidly develop their national innovation systems.

“U.S. dominance has eroded significantly… The data begin to tell a worrisome story,” stated Kei Koizumi, assistant director for federal research and development in President Obama’s Office of Science and Technology Policy (OSTP).  The Director of the National Science Foundation, Arden Bement, noted that “China is achieving a dramatic amount of synergy by increasing its investment in science and engineering education, in research, and in infrastructure, which is attracting scientists from all over the world.”

The report, “Science and Engineering Indicators 2010,” is published every two years by the National Science Board, a 25-member expert council that advises the National Science Foundation, President, and Congress on science and technology policy, education, and research.  Koizumi called it a “State of the Union on science, technology, engineering, and mathematics.”

This “state of the union” for science and technology comes amidst growing concern that Asia is out-competing the U.S. in the burgeoning global clean-tech sector.  According to the “Rising Tigers, Sleeping Giant” report I recently co-authored with the Breakthrough Institute and Information Technology & Innovation Foundation, China, Japan, and South Korea have already surpassed the U.S. in the production of nearly all clean energy technologies, and these governments are expected to out-invest the U.S. three-to-one in this industry over the next five years.  As U.S. Secretary of Energy Steven Chu recently said, “The world is passing us by. We are falling behind in the clean energy race.”

“Asia’s rapid ascent as a major world science and technology (S&T) center—beyond Japan—is driven by developments in China and several other Asian economies,” states the introduction to the report.   “Governments [in Asia] have implemented a host of policies to boost S&T capabilities as a means to ensuring their economies’ competitive edge… the United States continues to maintain a position of leadership but has experienced a gradual erosion of its position in many specific areas.”  According to Jose-Marie Griffiths, a member of the National Science Board, “While the US is the largest R&D performing nation — representing one-third of total world investment — Asia has narrowed the gap due to the sustained annual increases by China.”

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Cross-posted from Applied Materials

by Toru Watanabe on 01/13/10

The Japanese government has a long history of promoting new energy sources – from supporting research and development, to creating programs that drive adoption. Early last year, the Japanese government unveiled its action plan for achieving a low-carbon society: with its largest-ever economic stimulus program – dedicating $55 billion over the next 5 years. The plan, which includes a huge boost for solar photovoltaic (PV) systems, is aimed at making Japan a global leader in the development and implementation of core clean energy technologies like solar energy and electric cars.

Year 2010 is considered by many to be potentially a boom year for the Japanese solar market due to the government subsidies and the New Purchase System for Solar Power-Generated Electricity, started on November 1, 2009. The program is a net feed-in-tariff; paying generators of electricity from solar power systems a premium rate for excess energy fed into the grid. It requires utilities to purchase all solar electricity rather than just surplus electricity.

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Last summer, India announced an ambitious new National Solar Mission to transform the rapidly developing nation into a world leader in solar power. The government announced a sweeping plan that included $100 billion in government investment over the next twenty years to support the nation’s drive to become a world solar leader and install 20 gigawatts of solar power by 2020.

In my latest column at theEnergyCollective.com, I present an interview with the President of Applied Materials India (AMat is the world’s largest producer of the equipment used to manufacture solar cells) and discuss the latest on India’s sweeping solar plans.

Read the full post here.