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29–353PS 2006

RENEWABLE ENERGY TECHNOLOGIES—

RESEARCH DIRECTIONS, INVESTMENT

OPPORTUNITIES, AND CHALLENGES TO

COMMERCIAL APPLICATION IN THE

UNITED STATES AND THE DEVELOPING WORLD

FIELD HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY

COMMITTEE ON SCIENCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

AUGUST 2, 2006

Serial No. 109–59

Printed for the use of the Committee on Science

(

Available via the World Wide Web: http://www.house.gov/science

(II)

COMMITTEE ON SCIENCE

HON. SHERWOOD L. BOEHLERT, New York, Chairman

RALPH M. HALL, Texas

LAMAR S. SMITH, Texas

CURT WELDON, Pennsylvania

DANA ROHRABACHER, California

KEN CALVERT, California

ROSCOE G. BARTLETT, Maryland

VERNON J. EHLERS, Michigan

GIL GUTKNECHT, Minnesota

FRANK D. LUCAS, Oklahoma

JUDY BIGGERT, Illinois

WAYNE T. GILCHREST, Maryland

W. TODD AKIN, Missouri

TIMOTHY V. JOHNSON, Illinois

J. RANDY FORBES, Virginia

JO BONNER, Alabama

TOM FEENEY, Florida

RANDY NEUGEBAUER, Texas

BOB INGLIS, South Carolina

DAVE G. REICHERT, Washington

MICHAEL E. SODREL, Indiana

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

MICHAEL T. MCCAUL, Texas

MARIO DIAZ-BALART, Florida

BART GORDON, Tennessee

JERRY F. COSTELLO, Illinois

EDDIE BERNICE JOHNSON, Texas

LYNN C. WOOLSEY, California

DARLENE HOOLEY, Oregon

MARK UDALL, Colorado

DAVID WU, Oregon

MICHAEL M. HONDA, California

BRAD MILLER, North Carolina

LINCOLN DAVIS, Tennessee

DANIEL LIPINSKI, Illinois

SHEILA JACKSON LEE, Texas

BRAD SHERMAN, California

BRIAN BAIRD, Washington

JIM MATHESON, Utah

JIM COSTA, California

AL GREEN, Texas

CHARLIE MELANCON, Louisiana

DENNIS MOORE, Kansas

DORIS MATSUI, California

SUBCOMMITTEE ON ENERGY

JUDY BIGGERT, Illinois, Chair

RALPH M. HALL, Texas

CURT WELDON, Pennsylvania

ROSCOE G. BARTLETT, Maryland

VERNON J. EHLERS, Michigan

W. TODD AKIN, Missouri

JO BONNER, Alabama

RANDY NEUGEBAUER, Texas

BOB INGLIS, South Carolina

DAVE G. REICHERT, Washington

MICHAEL E. SODREL, Indiana

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

SHERWOOD L. BOEHLERT, New York

MICHAEL M. HONDA, California

LYNN C. WOOLSEY, California

LINCOLN DAVIS, Tennessee

JERRY F. COSTELLO, Illinois

EDDIE BERNICE JOHNSON, Texas

DANIEL LIPINSKI, Illinois

JIM MATHESON, Utah

SHEILA JACKSON LEE, Texas

BRAD SHERMAN, California

AL GREEN, Texas

BART GORDON, Tennessee

KEVIN CARROLL Subcommittee Staff Director

DAHLIA SOKOLOV Republican Professional Staff Member

CHRISTOPHER KING Democratic Professional Staff Member

MIKE HOLLAND Chairman’s Designee ́

COLIN HUBBELL Staff Assistant

(III)

C O N T E N T S

August 2, 2006

Page

Witness List ............................................................................................................. 2

Hearing Charter ...................................................................................................... 3

Opening Statements

Statement by Representative Judy Biggert, Chairman, Subcommittee on Energy, Committee on Science, U.S. House of Representatives ........................... 10

Written Statement ............................................................................................ 11

Statement by Representative Michael M. Honda, Ranking Minority Member,

Subcommittee on Energy, Committee on Science, U.S. House of Representatives ....................................................................................................................... 12

Written Statement ............................................................................................ 14

Witnesses:

Dr. Steven Chu, Director, Lawrence Berkeley National Laboratory; 1997

Nobel Prize in Physics

Oral Statement ................................................................................................. 16

Written Statement ............................................................................................ 19

Biography .......................................................................................................... 23

Dr. Arno A. Penzias, Venture Partner, New Enterprise Associates, Palo Alto,

California; 1978 Nobel Prize in Physics

Oral Statement ................................................................................................. 24

Written Statement ............................................................................................ 26

Biography .......................................................................................................... 28

Mr. Christian B. Larsen, Vice President for Generation, Electric Power Research Institute, Palo Alto, California

Oral Statement ................................................................................................. 29

Written Statement ............................................................................................ 30

Biography .......................................................................................................... 40

Financial Disclosure ......................................................................................... 41

Mr. David Pearce, President and CEO, Miasole ́, Santa Clara, California

Oral Statement ................................................................................................. 42

Written Statement ............................................................................................ 44

Biography .......................................................................................................... 56

Mr. Ron Swenson, Co-founder, ElectroRoof

Oral Statement ................................................................................................. 56

Written Statement ............................................................................................ 58

Discussion ................................................................................................................. 78

(1)

RENEWABLE ENERGY TECHNOLOGIES—RESEARCH DIRECTIONS, INVESTMENT OPPORTUNITIES, AND CHALLENGES TO COMMERCIAL APPLICATION IN THE UNITED STATES

AND THE DEVELOPING WORLD

WEDNESDAY, AUGUST 2, 2006

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY, COMMITTEE ON SCIENCE, Washington, DC.

The Subcommittee met, pursuant to call, at 12:30 p.m., in the

Council Chambers, San Jose City Hall, 200 East Santa Clara

Street, San Jose, California, Hon. Judy Biggert [Chairman of the

Subcommittee] presiding.

2

3

FIELD HEARING CHARTER

SUBCOMMITTEE ENERGY

COMMITTEE ON SCIENCE

U.S. HOUSE OF REPRESENTATIVES

Renewable Energy Technologies—

Research Directions, Investment

Opportunities, and Challenges to

Commercial Application in the

United States and the Developing World

WEDNESDAY, AUGUST 2, 2006

12:30 P.M.–2:30 P.M.

SAN JOSE CITY HALL

200 EAST SANTA CLARA STREET

SAN JOSE, CALIFORNIA 95113

1. Purpose

On August 2, 2006, the Subcommittee on Energy of the House Committee on

Science will hold a field hearing on renewable energy technologies.

2. Witnesses

• Dr. Steven Chu is the Director of the Lawrence Berkeley National Laboratory and a 1997 Nobel Prize winner in Physics. He is currently spearheading

a new Laboratory research initiative focused on solar energy.

• Dr. Arno Penzias is a Venture Partner with New Enterprise Associates in

Palo Alto, CA. While at Bell Laboratories, he won the Nobel Prize for Physics

in 1978. Today he is a venture capitalist with interests in renewable energy

technologies.

• Mr. Christian Larsen is Vice President for Generation for the Electric

Power Research Institute in Palo Alto, CA. His division provides data on cost

and performance analyses and for renewable, distributed, and hydropower energy generation technologies to the electricity industry.

• Mr. David Pearce is President and CEO of Miasole ́, a Santa Clara, CA

based company that manufactures industrial-scale solar products using thin

film solar cell technology developed in Department of Energy national laboratories.

• Mr. Ron Swenson is co-founder of ElectroRoof, a solar equipment installation company, and EcoSage, an educational services company developing a

program to build solar-powered satellite teaching centers in remote areas of

the world in conjunction with solar education programs in schools.

3. Overarching Questions

The hearing will address the following questions:

1. What is the current state of adoption of renewable energy technologies in the

United States? What factors are limiting the rate of adoption of renewable

energy technologies?

2. What is the outlook for potential improvement in market penetration of renewable energy technologies? What are the main research efforts that could

improve that outlook?

3. What should the Federal Government be doing (or not doing) to encourage

the commercialization of, and demand for, new renewable energy technologies? How well aligned are the Department of Energy’s activities with

what the investment community is doing?

4

1See http://www.eia.doe.gov/cneaf/electricity/epa/figes2.html 2Solar Energy Industries Association: Our Solar Power Future—The U.S. Photovoltaics Industry Roadmap Through 2030 and Beyond. Peak wattage is the output of energy when sunlight

conditions are favorable; most solar devices can operate during cloudy conditions at reduced output.

4. What opportunities and challenges exist for the sale and use of renewable

energy generation in developing countries? How do these opportunities and

challenges differ from those in developed countries?

4. Brief Overview

Renewable energy could significantly reduce the environmental impact of energy

production, and in most cases it is produced domestically (although some of the related technology may be imported). The United States has only two percent of the

world’s oil reserves and three percent of the world’s natural gas reserves, while U.S.

renewable energy resources are vast and largely untapped. Renewable energy can

reduce the demand for imported energy, reducing costs and decreasing the variability of energy prices.

In addition, some renewable energy technologies have other unique advantages.

For example, solar energy, while difficult to store, generally follows the changes in

demand during the day: its peak output is in the middle of the day, about when

air conditioning and other demands also peak. Because utilities tend to use their

least efficient (and often most polluting) plants at peak load (they want to run them

as little as possible), energy market experts say that small reductions in peak demand can result in very large reductions in price and emissions.

5. Background

Current State of Renewable Energy

In 2004, the United States consumed nearly four trillion kilowatt hours (KWh) of

electricity.1 Of that total, 6.5 percent came from hydroelectric power plants and only

2.3 percent came from all other renewable energy resources combined, including

geothermal, solar thermal, photovoltaic, wind, ethanol and other biomass sources.

Given the large number of resources that are added to reach this value of 2.3 percent, the total installation of each type is quite small. The total U.S. installation

of solar electric generation, for example, was only 340 MW peak,2 and the output

of that capacity was a negligible fraction of the total electricity consumed nationwide that year. (See Figure 1.)

5

3 Energy Information Administration: Annual Energy Outlook 2006

4This is true of other industries as well. The nuclear industry also believes that EIA’s forecasts do not reflect the prospects for nuclear. However, it is worth noting that EIA has little

choice but to assume current policy will continue.

Renewable energy sources also play a small role when compared to the overall

U.S. domestic energy consumption, including transportation. Energy from renewable

sources constituted six percent of all energy used in the U.S. in 2004, with biomass

and hydroelectric power making up the bulk of that total. Wind energy accounted

for two percent and solar energy accounted for just one percent of all renewable energy used that year. (See Figure 2.)

Projected Growth in Total Energy Usage by 2030

According to the Energy Information Administration (EIA), total U.S. energy use

will increase by about 27 percent from 2004 to 2025, or about 1.2 percent per year.

Oil demand is projected to grow at about the same rate, by 26 percent, or around

1.1 percent per year; but natural gas use is expected to grow by only 20 percent,

or around 0.7 percent per year. Electricity demand is forecast to grow faster than

overall energy demand, by 1.6 percent per year, or a growth of 40 percent to 2025.

Broken down, electricity demand is expected to grow by 75 percent by 2030 in the

commercial sector (due to rapid growth in the service industries), by 47 percent in

the residential sector, and by 24 percent in the industrial sector. These growth rates

assume that some efficiency gains will be realized in both the residential and commercial sectors as a result of new standards in the Energy Policy Act of 2005 and

higher energy prices that prompt more investment in energy-efficient equipment.3

In electricity generation, the natural gas share of total production is projected to

increase from 18 percent in 2004 to 22 percent around 2020, before falling to 17 percent in 2030. The coal share is projected to decline slightly, from 50 percent in 2004

to 49 percent in 2020, before increasing to 57 percent in 2030. Nuclear electricity

is projected go grow by 10 percent over the period, or about one-half percent per

year. (Very little oil is used for electricity production.) Under this scenario, emissions of carbon dioxide are projected to rise by 29 percent.

Projected growth rates for renewable energy, in contrast, are relatively high, but

because renewable energy is a small part of the mix, the high growth rates projected

still result in a relatively small contribution to the mix. Ethanol demand is projected

to rise over 300 percent, or about five percent per year; after this increase ethanol

will constitute about five percent of the total gasoline demand. Photovoltaic solar

generation is projected to rise 26 percent per year in the utility sector, and 10 percent for electricity that is not sold into the grid; however, EIA projects that the percentage of solar photovoltaic power supplied to the grid would still be far less than

one percent of the total supply by 2025.

Potential for Renewable Energy

Renewable energy industry representatives and other advocates, unsurprisingly,

argue that the potential is much greater and the prospects much better for renewable energy than EIA predicts.4 Critics of EIA forecasts point out that EIA is limited

by its assumptions: EIA forecasts assume no changes in current policy and a rate

6

5Op cit., Our Solar Power Future 6http://nsl.caltech.edu/energy.ppt

of technological improvement that is unaffected by the level of research and development (R&D) investment. Critics note that changes to these assumptions would

produce different results. They also note that EIA’s models do not allow for market

penetration of technology if its output price is not competitive, even if other attributes are more important in niche markets. For example, solar energy has made

inroads in applications where tying to the grid is costly, such as remote or portable

power supplies.

Given these limitations and their perspective on the current state of the technology, the Solar Energy Industries Association’s U.S. Photovoltaic Industry Roadmap projects that installed peak solar electric generation can increase to 200,000

megawatts (MW) by 2030, up from only 340 MW in 2004, with the industry installing 19,000 MW of new generation per year.5 In this case, solar power would be a

substantial share of U.S. peak generating capacity. (For comparison, 2004 installed

capacity for coal was about 335,000 MW; however, solar needs a larger capacity to

achieve the same total annual output of kilowatt hours, since its output is only during the day.)

Others analysts depict the need to ramp up solar energy use as a matter of physical necessity if the U.S. is to meet overall demand. For example, Dr. Nathan Lewis,

of the California Institute of Technology, has performed an analysis of the potential

generating capacity that different renewable energy sources could supply in hopes

of meeting the worldwide demand of 28 terawatts (TW) expected by 2050 and 40

TW by the end of the century.6 (A terawatt equals one billion kilowatts.) According

to his findings, hydroelectric power has a technically feasible potential of 1.5 TW,

onshore geothermal power could produce approximately 11 TW per year until the

wells ‘‘run out of steam,’’ (projected to be five years for the average well.) U.S. landbased wind production could produce about 0.5 TW, and biomass may produce five

to seven TW. He concludes that solar energy, with a potential of 120,000 TW and

a practical capacity of around 600 TW worldwide, is the only renewable resource

that could single-handedly meet not just U.S. electricity needs, but could power the

entire globe. Lewis emphasizes that his analysis is an accounting of technical potential, not necessarily what is practical based on price without significant breakthroughs in technology and deployment patterns.

U.S. Actions in International Perspective

Renewable energy is a growth industry around the world. However, the United

States has not been investing as heavily as other countries, and has been losing

market share in many renewable industries, especially in the solar power industry.

Since 1996, the U.S. market share in the solar industry dropped from 44 percent

of the world market to 13 percent in 2003. In 2003, the U.S. Government spent $139

million for research, development, demonstration, and commercial application and

other incentives; in the same year Japan spent more than $200 million and Germany provided more than $750 million in low-cost financing for solar photovoltaic

projects. Germany and Japan each had domestic photovoltaic industries that employed more than 10,000 people in 2003, while in the same year the United States

photovoltaics industry employed only 2,000 people.

Current Federal Activities in Energy Efficiency and Renewable Energy R&D

In the State of the Union address, the President announced the Advanced Energy

Initiative, which calls for greater federal investment in research on coal, nuclear

and renewable energy and in energy efficiency. For renewable energy, the initiative

includes increases for R&D on biomass, solar and wind energy, and batteries for energy storage (especially targeted at high-mileage plug-in hybrid electric cars). The

President also asked for large increases in hydrogen research, a fuel that must be

derived from other sources, including potentially from renewable energy sources.

House and Senate appropriations bills for fiscal year (FY07 have included most

of the requested funds for key renewable energy programs, including solar energy

and biomass. The House-passed bill includes the requested increases of 65 percent

for biomass R&D and 79 percent for solar energy R&D. The full Senate has not yet

voted on FY07 appropriations, but the Senate Appropriations Committee also approved large increases for biomass (more than doubling funding to $213 million),

and solar energy (up 79 percent to $148 million). In addition, the Senate Committee

mark would preserve the geothermal R&D and hydropower R&D programs ($23 million and $4 million, respectively), which the Administration and the House have

proposed to eliminate. The Senate mark would also sustain the wind energy program at the FY06 funding level of $39 million. (See table below.)

7

How Will Solar Energy Achieve Greater Adoption?

There are several barriers to the adoption of solar energy systems—primarily cost,

efficiency, and the intermittent nature of sunlight. The energy crisis of the 1970’s

saw the beginning of major interest in using solar cells for power, but prohibitive

prices (approximately 30 times current prices) made most applications unfeasible.

These prices have declined to the point where electricity from solar energy is about

double the cost of retail rates for electricity. For a number of reasons, solar prices

are expected to continue to decline. First, manufacturing efficiencies should allow

improved prices, that is, as production volume increases, cost will continue to decrease. This economy of scale benefit may be limited periodically by short-term

shortages of materials used in photovoltaic technologies. For example, the availability of single-crystal silicon is currently a concern to the industry. Industry projections indicate that market growth coupled with the adoption of favorable public

policies could result in electricity costs of 5.7 cents per KWh by 2015, a cost that

is lower than current retail rates for many customers.

In addition to driving down costs, advances in materials will increase the efficiency of photovoltaic systems. New technologies such as plastic solar cells,

nanostructured materials, and dye-sensitized solar cells offer the potential to move

well beyond the efficiency of current materials systems, dramatically lower cost and

raise performance. The Photovoltaic Industry Roadmap projects a doubling of conversion efficiency for individual solar cells, of modules made up of multiple cells,

and for systems as a whole by 2030.

Improvements in battery technologies for electricity storage are helping to deal

with intermittency—an ever present problem for solar energy. Early generation

solar systems were only useful during the daytime, but advanced batteries can store

electricity generated by the sun for later use, thus making photovoltaics a more reliable energy source.

The Role Renewable Energy Can Play in the Developing World

Much of the increased demand for energy worldwide is anticipated to come from

developing nations, as economic growth drives energy consumption toward levels in

the developed countries. EIA estimates project the developing world’s energy consumption to almost double in the next 20 years, driven largely by economic growth

in China and India. Cost-effective renewable energy sources such as solar and wind

may present a cleaner way to bring electricity to the poorest regions of the world,

and meet the demands of rapid economic expansion of others. World Bank figures

indicate that approximately 1.6 billion people worldwide are ‘‘energy poor,’’ having

no access to electricity (70 percent of Sub-Saharan African and 59 percent of South

Asian populations are in this category), with hundreds of millions more using only

intermittent, unreliable or heavily polluting sources of energy.

Greater adoption of renewable energy technology in the developing world can benefit developed countries as well. U.S. companies can reap the rewards of manufacturing and exporting technologies. If rapidly growing economies can offset growing

thirst for fossil fuels with renewable technologies, they will help to reduce global

competition for-and therefore prices of-fossil fuels. Furthermore, renewable technology adoption in developing countries can avoid increases in carbon dioxide emissions.

8

6. Witness Questions

Dr. Steven Chu

1. What are the limitations of current renewable energy technologies? Are these

limitations inherent to the kind of technologies that are being used? What

types of technologies can overcome these limitations?

2. What is the long-term potential for renewable energy technologies? What research and development work needs to be performed to lay the groundwork

for the commercial application of a new generation of renewable energy

sources?

3. What is the appropriate division of labor for this work among government,

industry, and academia? How much money do you estimate these efforts will

cost?

4. What steps is your lab taking to improve its ability to move technologies

from concept through development and to the marketplace?

Dr. Arno Penzias

1. Are companies that are developing advanced renewable energy technologies

generally viewed as good investment opportunities by the venture capital

community?

2. What kinds of technologies are seen as good short-term investments and as

good long-term investments by venture investors?

3. What role do you think the Federal Government can play to encourage

growth in this sector?

Mr. Christian Larsen

1. What is the electric utility industry’s perspective on renewable energy generation? Which renewable technologies have been most widely adopted by the

industry to date?

2. What is the utility industry’s plan for the future adoption of renewable energy sources? Does that plan depend on any changes in current policies, perhaps such as the regulation of greenhouse gas emissions? If it does, please

explain the policy changes you are taking into consideration in your planning.

3. What is the electric utility industry’s view of distributed generation, either

as a business model or as a means to provide stability to the grid and avoid

transmission bottlenecks?

Mr. David Pearce

1. What are the limitations of today’s renewable energy technologies? Are these

limitations inherent to the kind of technologies that are being used?

2. What types of technologies can overcome these limitations? How soon do you

expect to see the widespread commercial application of the next generation

of renewable energy technologies?

3. What challenges do companies like yours face in bringing a new technology

from the laboratory stage to manufacturing? Are there particular challenges

inherent in locating your manufacturing in the United States, specifically the

Bay Area?

4. Is there additional research and development work that should be performed

to expand the range of technology options for renewable energy sources?

What is the appropriate division of labor for this work among government,

industry, and academia? How much money do you estimate these efforts will

cost?

Mr. Ron Swenson

1. What kinds of projects have you been involved with to deploy renewable energy in developing economies? Which renewable energy technologies did

these projects use?

2. Are there challenges to widespread application of renewable energy technologies in developing economies that do not exist in the U.S.? How have

government agencies, non-governmental organizations, industry, and academia here and abroad been involved in these projects? What role do you feel

9

these sectors have to play in encouraging the greater use of renewable energy sources?

3. How important is education in expanding the use of renewable energy? How

do you think these efforts should be structured and undertaken?

4. Does the distributed nature of renewable energy electricity technology have

any particular advantage in developing economies? What impact might this

have on the political and socioeconomic systems of those countries? How

might this affect the willingness of governments and industry to encourage

the use of renewable energy? How might this affect export opportunities?

10

Chairwoman BIGGERT. The hearing of the Energy Subcommittee

of the Science Committee will come to order. I’ll recognize myself

for five minutes for an opening statement.

I want to welcome everybody here to this hearing of the Energy

Subcommittee, the House Science Committee, on the status of efforts to develop renewable energy technologies and expand their

use in the United States and around the world.

It’s an honor for me to be here in California, in the district of

my friend and colleague, and the Ranking Member of this subcommittee, Mr. Honda, and I hope we make life a little easier by

bringing this hearing across the continent to you, rather than making you come to Washington today where the temperature is expected to be 102.

There’s no better place to explore the contributions of renewable

energy research than here in the Golden State of California. California has made extensive use of hydro, geothermal, solar and wind

resources, which supply over 10 percent of the state’s electricity,

compared to just two percent nationally. In other words, we still

have a long way to go. But, California is fortunate to have an abundance of each of these renewable resources. I can’t say that the

same is true in my home State of Illinois. It’s too flat to make significant use of hydro power. It has no geothermal resources, unless

you count some of the steam tunnels that run under the City of

Chicago, and the sun when it shines just doesn’t shine enough; and

while the windy city has one renewable resource that is its namesake only recently has technology enabled us to capture the strong

and volatile winds in Chicago and in other parts of the state.

When you say renewable energy in Illinois, most people think of

corn, and ethanol, and soy beans, and biodiesel. Renewable energy

is a growing global industry, and our international competitors are

taking renewable energy R&D very seriously. Government investments in renewable energy in Europe and Japan have meant growing market shares for the world and solar generation equipment for

those countries, while the U.S. market share is declining. As a nation, we can’t afford to sit on the sidelines.

That’s why I introduced H.R. 5656, a bill that focuses federal research efforts on some of the greatest challenges to expand our use

of renewable energy. Among other things, the bill directs researchers to focus their efforts on making solar electricity cost competitive

by 2015. In addition, the bill would establish a program to demonstrate advanced solar technologies in every state. In this way, we

may actually learn to capture the power of the sun, even in places

like Illinois in the wintertime.

In addition to targeting federal research efforts at improving the

efficiency of turbines and the cost-effectiveness of wind power, the

bill also supports the development of the genetic and biological

technologies to make ethanol from feedstock other than corn.

I’m happy to say that the Science Committee approved the bill

unanimously, and it now awaits action in the Full House when we

go back in September.

As we discuss our investments in this kind of renewable energy

research, the challenge is to ensure that we not forget the demand

side of the equation. Energy use of all kinds has environmental

consequences. We should be aware of them, understand the tradeVerDate 11-MAY-2000 09:34 Dec 22, 2006 Jkt 029353 PO 00000 Frm 00014 Fmt 6633 Sfmt 6601 C:\WORKD\ENER06\080206\29353 SCIENCE1 PsN: SCIENCE1
11

offs and make decisions that are fully informed by the facts. That

is why renewable energy R&D, the topic of our hearing today, is

so timely.

Americans want affordable energy and a clean and safe environment, and yet, because we’ve under valued renewable energy research we act as the two are mutually exclusive. This is not true

of the witnesses we will hear from today. They understand the potential of renewable energy technologies. They invested in the necessary renewable energy R&D, some independently and some in

partnership with the Federal Government. But, in all cases they

have success stories. I want to thank this remarkably accomplished

panel for sharing their insights with us as we assess the challenges

and opportunities associated with the development of renewable

energy generation both domestically and in developing countries.

Before I introduce our panel, I’d like to turn to the Subcommittee’s distinguished Ranking Member, Mr. Honda, for his opening

statement.

[The prepared statement of Chairman Biggert follows:]

PREPARED STATEMENT OF CHAIRMAN JUDY BIGGERT

I want to welcome everyone to this hearing of the Energy Subcommittee of the

House Science Committee on the status of efforts to develop renewable energy technologies and expand their use in the United States and around the world.

It’s an honor for me to be here in California today in the district of my friend,

colleague, and the Ranking Member of this subcommittee, Mr. Honda. I hope we

made life a little easier by bringing this hearing across the continent to you, rather

than making you come to us in Washington, where the temperature is expected to

top 102 today.

There’s no better place to explore the contributions of renewable energy research

than here in the Golden State. California has made extensive use of hydro, geothermal, solar and wind resources, which supply over ten percent of the state’s electricity compared to just two percent nationally. In other words, we still have a long

way to go.

California is fortunate to have an abundance of each of these renewable resources.

I can’t say that the same is true of my home State of Illinois. It’s too flat to make

significant use of hydro power. It has no geothermal resources unless you count

some of the steam tunnels that run under the city of Chicago. And the sun, when

it shines, just doesn’t shine enough. And while the Windy City has one renewable

resource that is its namesake, only recently has technology enabled us to capture

the strong yet volatile winds in Chicago and in other parts of the State. When you

say ‘‘renewable energy’’ in Illinois, most people think of corn and ethanol and soybeans and biodiesel.

Renewable energy is a growing, global industry, and our international competitors

are taking renewable energy R&D very seriously. Government investments in renewable energy technologies in Europe and Japan have meant growing market

shares for wind and solar power generation equipment for those countries, while the

U.S. market share is declining. As a nation, we can’t afford to sit on the sidelines.

That’s why I introduced H.R. 5656, a bill that focuses federal research efforts on

some of the greatest challenges to expanding our use of renewable energy. Among

other things, the bill directs researchers to focus their efforts on making solar electricity cost competitive by 2015. In addition, the bill would establish a program to

demonstrate advanced solar technologies in every state. In this way, we may actually learn to capture the power of the sun even in places like Illinois in the wintertime.

In addition to targeting federal research efforts at improving the efficiency turbines and the cost competitiveness of wind power, the bill also supports the development of the genetic and biological technologies to make ethanol from feedstocks

other than corn. I’m happy to say that the Science Committee approved the bill

unanimously, and it now awaits action in the full House.

As we discuss our investments in this kind of renewable energy research, the

challenge is to ensure that we not forget the demand side of the equation. Energy

use of all kinds has environmental consequences. We should be aware of them, understand the tradeoffs, and make decisions that are fully informed by the facts.

12

That is why renewable energy R&D, the topic of our hearing today, is so timely.

If we are to be successful in addressing the threat of climate change, we have to

reduce emissions of greenhouse gases. That means not only improving energy efficiency, but also greatly expanding our use of renewable and non-greenhouse gasemitting energy technologies such as nuclear power. And because of population

growth and economic expansion, we must expand our use of renewable energy and

energy efficiency technologies faster than the growth in our consumption of energy.

As you can see, making progress on the development of renewable energy is every

bit as important as making progress in increasing energy efficiency.

We also should keep in mind that energy efficiency improvements do not automatically lead to reduced energy use. In 1900, a light bulb cost roughly $20 in today’s money; today it costs 40 cents, lasts at least 10 times longer and uses a fraction of the electricity to generate the same amount of candlepower.

As the price of light—that is fixtures, the bulbs and the power to operate them

dropped—over time, we have figured out ways to use more light—and more energy.

Think of just how many new sources of lights there are in the home: recess lighting,

task lighting, lighting in and under cabinets in the kitchen, lights on appliances,

lights in the yard. You should see Chicago from the top of the Sears Tower: there

are lights as far as the eye can see in every direction except Lake Michigan. Only

a century ago, the term ‘‘light pollution’’ would have been laughed at.

That brings us back to why we are here today. Americans want affordable energy

and a clean and safe environment, and yet, because we’ve undervalued renewable

energy research, we act as though the two are mutually exclusive. That’s not true

of the witnesses we will hear from today. They understand the potential of renewable energy technologies. They invested in the necessary renewable energy R&D—

some independently, and some in partnership with the Federal Government. But in

all cases, they have success stories. I want to thank this remarkably accomplished

panel for sharing their insights with us as we assess the challenges and opportunities associated with the deployment of renewable energy generation both domestically and in developing countries.

But before I introduce our panel, I’d like to turn to the Subcommittee’s distinguished Ranking Member, Mr. Honda, for his opening statement.

Chairwoman BIGGERT. The gentleman is recognized for five minutes.

Mr. HONDA. Thank you, Madam Chair, and welcome to San Jose,

and also welcome back to close to the site of your alma mater,

Stanford University. And, I know that you are enjoying our wonderful weather, and maybe we can talk a little bit more about that

as we listen to our witnesses.

I’d like to thank everyone in attendance for being here today for

this hearing about a topic that I believe is essential to the future

of our nation, our world, which is renewable energy.

Chairwoman Biggert, I thank you for traveling out to Silicon Valley to join us and to hear what folks from this region have to contribute to this important endeavor.

I extend my warmest thanks and welcome to Cindy Chavez, Vice

Mayor of the city of San Jose, who made it possible for us to hold

this hearing in this wonderful space today. Cindy, would you stand

up and please be recognized, and I want to thank you and your

Council for receiving us here today. It’s a wonderful, friendly, natural lit chamber.

I also wanted to thank all the witnesses for agreeing to testify

before us today. I think that we have assembled an eminently

qualified panel that represents the spirit and breadth of expertise

and experience that makes Silicon Valley and the whole Bay area

the special place that it is.

I’m the kind of person who drives a hybrid car and wants to keep

the battery charged with a solar cell when I don’t drive it for a

while. I’m also in the process of doing some work on my house, and

my plans involve installing solar photovoltaics on the roof. Sadly,

13

the rest of the Nation is not doing the same. The United States

was once leader in solar technologies. The first solar cell that produced a useful amount of electricity was invented here, but last

year only 11 percent of the photovoltaic generating capacity was

manufactured here.

Our track record at installing solar generation is equally poor. By

the end of 2004, the United States’ total installed photovoltaic generating capacity was only about equal to what a standard coal-fired

power plant produces, or approximately 400ths of one percent of

U.S. electricity produced. We have fallen behind other nations,

such as Germany and Japan, which saw solar installation increase

as a result of meaningful government incentive programs. But, all

is not lost, because nature gives us an advantage. The United

States has far greater potential for solar power than Germany, and

this means that the U.S. has tremendous growth potential for solar

energy.

Here in California, we are taking a lead with over 100

megawatts of installed grid capacity to date. It took a commitment

to get to this point; and because a typical home photovoltaic system

is not cheap to purchase and install, to succeed and advance in

solar technology cost must be reduced.

Fortunately, as more cells are manufactured, the cost has decreased five to seven percent per year. As more consumers install

these systems, with the help of federal and State incentives, prices

will continue to fall and the cost of power will become comparable

to other sources.

Research and development can help to increase the efficiency and

decrease the cost of renewable energy. For example, in the areas

of biofuels, research can help develop dedicated energy crops that

are cost effective, easy to sustain, and produce greater energy

yields.

In the area of photovoltaics, new fields such as nano technology

offer the opportunity to develop solar cells that can generate electricity using more wave lengths of the sun’s light and collect all

light more efficiently.

With the right resources, the global scientific and engineering

community can continue down the path to progress. It needs to be

a global effort, because developing countries don’t have the luxury

of thinking about expensive energy solutions. For the poorest countries, energy is a source of their poverty. Thirty eight of the poorest

countries are net importers of oil, and 25 of them import all of their

oil. At oil prices at over $70 per barrel, these countries are being

disproportionately impacted.

Renewable energy in its various forms has many characteristics

that make it particularly useful in the developing world, as well

here in the U.S. Using the distributed renewable resources of electricity that generate power where it is needed means that large investments in infrastructure can be avoided. In developing countries, this distributed generation is essential to rapid success, and

that’s where infrastructure links between rural communities or remote settlements are not well developed.

Photovoltaics and small wind generation are well suited to the

distributed generation approach, because they can be installed simVerDate 11-MAY-2000 09:34 Dec 22, 2006 Jkt 029353 PO 00000 Frm 00017 Fmt 6633 Sfmt 6601 C:\WORKD\ENER06\080206\29353 SCIENCE1 PsN: SCIENCE1
14

ply and unobtrusively in remote locations, and they can be scaled

to whatever the local energy needs are.

Biofuels can capitalize on agricultural strengths of developing

countries, providing a cleaner, more sustainable alternative to oil,

while improving the situation of small farmers who cannot compete

in the global market as it exists today.

Brazil is a great example of how nations can use our approach

to make energy a source of opportunity, rather than a source of oppression.

When I was there last year, I learned how Brazilian Government

has provided the necessary support to make ethanol, derived from

sugar cane, a common source of fuel. By the end of last year, 70

percent of new cars sold in Brazil were flexfuel vehicles, like the

ones that the Chairwoman and I saw in her field hearing in

Naperville, Illinois in June, that vehicle can use ethanol as well as

gasoline.

In our job, one of the things that we have to worry about is international relations. Both energy and climate change are pieces of

this bigger picture. Fortunately, renewable energy offers opportunities to make the big picture a little bit less complicated. When developing nations depend on other countries’ natural resources, they

are unable to invest in improvements within, leading to humanitarian crisis which require international responses and human suffering. Using renewable energy, developing countries could instead

use their own live-in resources to power their development and enhance their economies.

Throughout history, wars have been fought over non-renewable

natural resources. In a world focused on using renewable energy,

these conflicts could be avoided and greater stability achieved. But,

we need to convince consumers here and in developing countries to

choose to adopt renewable energy, and to do so we need to make

renewables cost effective and improve their performance.

So, I look forward to hearing the insights our witnesses will provide today, about what the future holds for renewable energy, and

to a lively discussion following their testimony.

Thanks again to everyone who is here today, and I yield back my

time.

[The prepared statement of Mr. Honda follows:]

PREPARED STATEMENT OF REPRESENTATIVE MICHAEL M. HONDA

I’d like to everyone in attendance for being here today for this hearing about a

topic that I believe is essential to the future of our nation and our world, renewable

energy. Chairwoman Biggert, I thank you traveling out to Silicon Valley to join us

and to hear what folks from this region have to contribute to this important endeavor.I extend my warmest thanks and welcome to Cindy Chavez, Vice Mayor of the

City of San Jose, who made it possible for us to hold this hearing in this wonderful

space today. Cindy, please stand up and be recognized. Thank you so much for reserving the Council Chambers for us.

I also want to thank all of the witnesses for agreeing to testify before us today.

I think we have assembled an eminently qualified panel that represents the spirit

and breadth of expertise and experience that makes Silicon Valley and the whole

Bay Area the special place that it is.

I’m the kind of person who drives a hybrid car and wants to keep the battery

charged with a solar cell when I don’t drive it for a while. I’m also in the process

of doing some work on my house, and my plans involve installing solar photovoltaics

on the roof. Sadly, the rest of the Nation is not doing the same. The United States

was once the leader in solar technologies. The first solar cell that produced a useful

15

amount of electricity was invented here, but last year, only 11 percent of the photovoltaic generating capacity was manufactured here.

Our track record at installing solar generation is equally poor. By the end of 2004,

the United States installed photovoltaic generating capacity was only about equal

to what a standard coal-fired power plant produces, or approximately 0.04 percent

of U.S. electricity production. We have fallen behind other nations, such as Germany

and Japan, which saw solar installation increase as a result of meaningful incentive

programs.

But all is not lost, because nature gives us an advantage—the United States has

far greater potential for solar power than Germany. This means that the U.S. has

tremendous growth potential for solar energy. Here in California, we are taking the

lead, with over 100 megawatts of installed grid capacity to date. It has taken a commitment to get to this point, because a typical home photovoltaic system is not

cheap to purchase and install.

To succeed in advancing solar technology, cost must be reduced. Fortunately, as

more cells are manufactured, the cost has decreased five to seven percent per year.

As more consumers install these systems with the help of federal and State incentives, prices will continue to fall and the cost of power will become comparable to

other sources.

Research and development can help to increase the efficiency and decrease the

cost of renewable energy. For example, in the area of biofuels, research can help develop dedicated energy crops that are cost-effective, easy to sustain, and produce

greater energy yields. In the area of photovoltaics, new fields such as

nanotechnology offer the opportunity to develop solar cells that can generate electricity using more wavelengths of the sun’s light and collect all light more efficiently. With the right resources, the global scientific and engineering community

can continue down the path to progress.

It needs to be a global effort, because developing countries don’t have the luxury

of thinking about expensive energy solutions. For the poorest countries, energy is

a source of their poverty. Thirty-eight of the poorest countries are net importers of

oil, and 25 of them import all of their oil. At oil prices of over $70 per barrel, these

countries are being disproportionately impacted.

Renewable energy in its various forms has many characteristics that make it particularly useful in the developing world, as well as here in the U.S. Using distributed renewable sources of electricity that generate power where it is needed means

that large investments in infrastructure can be avoided. In developing nations,

where infrastructure links between rural communities or remote settlements are not

well developed, this is essential to rapid success.

Photovoltaics and small wind generation are well suited to the distributed generation approach, because they can be installed simply and unobtrusively in remote locations, and they can be scaled to whatever the local energy needs are. Biofuels can

capitalize on the agricultural strengths of developing countries, providing a cleaner,

more sustainable alternative to oil while improving the situation of small farmers

who cannot compete in the global market as it exists today.

Brazil is a great example of how nations can use agriculture to make energy a

source of opportunity rather than a source of oppression. When I was there last

year, I learned how the Brazilian government has provided the necessary support

to make ethanol derived from sugar cane a common source of fuel. By the end of

last year, 70 percent of the new cars sold in Brazil were Flex Fuel Vehicles like the

one that the Chairwoman and I saw at her field hearing in Naperville, Illinois in

June that can use ethanol as well as gasoline.

In our job, one of the things that we have to worry about is international relations. Both energy and climate change are pieces of this bigger picture. Fortunately,

renewable energy offers opportunities to make this big picture a little bit less complicated. When developing nations depend on other countries’ natural resources,

they are unable to invest in improvements within, leading to humanitarian crises

which require international responses and human suffering. Using renewable energy, developing countries could instead use their own living resources to power

their development and enhance their economies.

Throughout history, wars have been fought over non-renewable natural resources.

In a world focused on using renewable energy, these conflicts could be avoided and

greater stability achieved. But we need to convince consumers here and in developing countries to choose to adopt renewable energy, and to do so, we need to make

renewables cost effective and improve their performance.

So I look forward to hearing the insights our witnesses will provide today about

what the future holds for renewable energy and to a lively discussion following the

testimony. Thanks again to everyone for being here today.

16

Chairwoman BIGGERT. Thank you very much, Mr. Honda. Any

extension of remarks may be added to the record.

At this time I’d like to introduce all of our witnesses. Thank you

for coming to join us today. Let’s start with Dr. Steven Chu, who

is the Director of Lawrence Berkeley National Laboratory and a

1997 Nobel Prize winner in Physics. He is currently spearheading

a new laboratory research initiative focused on solar energy. We

have Dr. Arno Penzias, who is a Venture Partner with New Enterprise Associates in Palo Alto. While at Bell Laboratories, he won

the Nobel Prize for Physics in 1978. Today, he’s a venture capitalist

with interests in renewable energy technology. Mr. Christian

Larsen is Vice President for Generation for the Electric Power Research Institute in Palo Alto. His division provides data on cost and

performance analyses for renewable distributed and hydro power

energy generation technologies to the electricity industry. Mr.

David Pierce is President and CEO of Miasole ́, I hope I’m close, a

Santa Clara-based company that manufactures industrial scale

solar products using thin film solar cell technology developed in the

Department of Energy National Laboratories. And finally, Mr. Ron

Swenson is co-owner of ElectroRoof, a solar equipment installation

company, and EcoSage, an educational service company developing

a program to build solar-powered satellite teaching centers in remote areas of the world in conjunction with solar education programs in schools.

And, with that, I would turn over to our Ranking Member, Mr.

Honda, for introductions.

Mr. HONDA. Thank you, Madam Chair.

Just very quickly I’d like to acknowledge that we have Scarlett

Li Lam; Forrest Williams, who is a Council Member for the city of

San Jose; a Council Member from Sunnyvale, Chris Moylan, who

is also a high-tech guy; and we have Bern Beecham from the Palo

Alto City Council, the home site of Stanford University; and we

have our Vice Chair, Cindy Chavez, who secured this place for us.

Thank you, Madam Chair.

Chairwoman BIGGERT. Thank you.

Spoken testimony of the witnesses will be limited to five minutes

each, after which the Members will have five minutes each to ask

questions in rotation, and we will begin with Dr. Chu.

STATEMENT OF DR. STEVEN CHU, DIRECTOR, LAWRENCE

BERKELEY NATIONAL LABORATORY; ACCOMPANIED BY DR.

ARNO PENZIAS, VENTURE PARTNER, NEW ENTERPRISE ASSOCIATES, PALO ALTO, CALIFORNIA

Dr. CHU. Thank you, Chairman Biggert, thank you, Member

Honda, and Members of the Committee. It’s a great pleasure that

I’m here again to testify before the House Science Committee on

this issue of critical importance. The last time I was here, I was

testifying on behalf of the National Academy of Sciences Report,

chaired by Norm Augustine that’s known as ‘‘Rising Above the

Gathering Storm,’’ and in that hearing I was advocating that we

consider very seriously starting an energy initiative research program.

You should also know that, because it does have some bearing

on this hearing, that I’m also currently co-chairing an InterVerDate 11-MAY-2000 09:34 Dec 22, 2006 Jkt 029353 PO 00000 Frm 00020 Fmt 6633 Sfmt 6601 C:\WORKD\ENER06\080206\29353 SCIENCE1 PsN: SCIENCE1
17

Academy Council study on, the title is, ‘‘Transitions to Sustainable

Energy.’’ The InterAcademy Council represents over 60 national

academies around the world. The other co-chair is Jose

Goldemberg, who was formerly the Secretary of Science and Technology of Brazil, and is currently now the Secretary of Environment for the State of Sao Paulo. He was a major architect in the

Brazilian cane story pertaining to the ‘85 ethanol for Brazil that is

now selling for less than commercial gasoline without any subsidy.

It is also important I should point out that that event happened

in an environmentally responsible way, so that these are really

truly long-term sustainable sugar cane plantations. They are not in

there for ten years and the soil is depleted.

In my remaining few minutes I would want to race through the

slides, and so if I could first have the second slide, oh, I have total

control, good, I’m the Director of Lawrence Berkeley Lab, which is

a national laboratory adjacent to U.C.’s Berkeley Campus, and

it’s—I don’t have total control, okay, there’s a next—good enough,

it’s, okay, let me—although this isn’t about this I just wanted to

remind us why we are here. There are some dire predictions of climate change that could have very serious consequences, not only

to the health of the Nation but the health of the world. The probability that these predictions are, is it a certainty, no, is it half,

two-thirds, three-fourths, we can debate that, but the predictions

are so serious that if someone told you there is an 80 percent

chance you will die in 10 years if you didn’t stop smoking you

might think about stopping smoking. So, whether it’s an 80 percent, or 90 percent, or 60 percent, these are the questions.

So, going to that, I think that a dual strategy has to be adopted

very aggressively by the United States, by both conserving and also

developing new sources of clean energy.

On the conservation side, that is energy efficiency, the Lawrence

Berkeley Lab has really led the way, starting with the movement

of a high-energy physicist named Art Rosenfeld, and in the middle

of 1970 he gave up his career in high energy physics to devote to

energy efficiency. He did a number of things that really dramatically turned around, first the State of California, and the United

States, but to remind you, the State of California, since the middle

1970s, has been held constant in terms of the average amounts of

electricity used per citizen in California, while the rest of the

United States went up by six percent.

One of the things that Rosenfeld did was, he instituted refrigerator standards. That brown curve is the size of refrigerators that

went from 18 to 22 cubic feet. The standards marked the way of

increasing efficiencies by four and a half times. During that time,

the inflation adjusted cost of refrigerators had gone down by more

than a factor of two. How much electricity did this save? Well, if

you look at this bar, we would have used close to three billion kilowatts per year, and we are using about one-fourth of that. That

compares to all the conventional hydro in the United States and

about a third of the nuclear power which is 20 percent of all electrical generation.

But, this is actually misleading. It’s better than that. If you consider what is delivered in value to the home, the end-user, and you

look in terms of money, the dollars saved from just refrigerators

18

was nearly double all of the U.S. hydro, and is now becoming comparable to all of U.S. nuclear, just refrigerators.

And so, efficiency remains the lowest hanging fruit. This is the

stuff we can do best and we should aggressively do this.

Now, on the supply side, I want to focus on what we at Berkeley

Lab think we can do, and it lends to our expertise, and it has to

do with harnessing solar energy in various forms. So, we started

this program called Helios, which includes several pathways, and

I’m just going to talk about two. One is plants to cellulose, and

then cellulose to chemical fuels that can replace oil. I’m going back

and talking about the management.

So, the idea here is that in the last several billion years nature

has found a way to convert sunlight, carbon dioxide, water and nutrients into chemical energy. When you take that closed synthetic

product, turn it into a chemical fuel and burn it, you then release

the carbon dioxide, but in principle it can be as good as 95 percent

CO2 neutral, in the sense that if you include all the energy you

need to invest in terms of distribution, transportation, the growing

of the crop, and what you then release as CO2, it will be at least

90 percent, probably 95 percent, CO2. So, that’s the idea.

Is there enough land in the world to do this, because, after all,

we have to feed people. So, between 1950 and 1995, the world went

from about two billion to six billion people. Had there not been any

agricultural improvements we would have followed that red line,

but instead we followed the blue line. The amount of land put

under agriculture production to increase the number—feeding the

number of people by a factor of three, was only 10 percent.

So, there are further agricultural things. We haven’t really

worked at all at raising crops to produce energy, and so there now

lies within rapidly developing science the ability to transfer a set

of genes to make plants self-fertilizing, which is very energy intensive to make fertilizer, drought-resistant pest-resistant, and then

once you have those plants how do you convert it much more efficiently into chemical fuels for transportation.

If you—here is an estimate, you can argue by about a factor of

two, but let’s take a certain plant, miscanthus, the record is 45

dried tons per acre in Nebraska, in a field test, so we can take 30,

you can be very conservative and take 15, 100 gallons of ethanol

per dried ton is what is commercially available today. If you take

100 million acres out of the roughly 400 to 450 million acres that

we either have under cultivation or we pay farmers not to plant,

that corresponds to 300 billion gallons of ethanol a year, which

when compared to the total U.S. gasoline consumption is actually

more than that.

So, there is the potential for replacing minimally half of the gasoline, and all of the gasoline imports, with biomass. And, as said,

you can be very conservative, divide by a factor of two, it’s still a

very compelling number.

Where are the great gains? Well, one of the biggest gains is that

right now the conversion of cellulose material into biofuels is very

energy intensive, and one can do much better. There is a new field

called synthetic biology, which imports a whole set of genes. One

of the poster examples, poster child examples of this synthetic biology, was something one of our laboratory scientists did, Jay

19

Keasling, he took an active ingredient of a plant, which was a miracle malaria cure, and he’s taught e. coli bacteria how to make this

plant. It’s been very successful. It’s now being commercialized and

it will soon be distributed to Third World countries at a cost of .20

cents a cure.

That same technology can be used to engineer organisms to

produce ethanol, methanol, butanol, or other hydrocarbon fuels.

There are other technologies, micro interface technologies, where

you can use these to have, essentially, an accelerated directed evolution for the microbes and for the genetic plants, but mostly for

the microbes, so again, this is a very rapidly changing area of technology.

And finally, one can think of, and we are, and others are beginning to think about, algaes that naturally occur, but to engineer

them so that they grow suitable biofuels at much higher efficiency

than we think—that we know are possible today, and we think

compares by a factor of ten.

So, let me close and say that national and international concerns,

as we all know, national security ranks very high, but national security is intimately tied to energy security. There is the economic

prosperity of getting out of our dependency on foreign oil, but also

having energy that’s affordable, and finally, environmental issues,

local and global.

[The prepared statement of Dr. Chu follows:]

PREPARED STATEMENT OF STEVEN CHU

Chairman Biggert, Ranking Member Honda, and Members of the Committee,

I am Steve Chu, Director of Lawrence Berkeley National Laboratory, and it is

again my pleasure to testify before the House Science Committee on an issue of

such critical importance to the United States and to the world. The last time I appeared before your committee I was privileged to represent the National Academy

of Sciences, National Academy of Engineering, and Institute of Medicine’s Committee on Prospering in the 21st Century and to discuss the recommendations of

the committee’s report Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.

Because of its direct bearing on this Hearing, I wanted to let you know that I am

currently serving as Co-Chair of the InterAcademy Council’s study panel on Transitions to Sustainable Energy. The InterAcademy Council was created by the world’s

academies of sciences to bring together the best scientists and engineers worldwide

to provide high quality advice to international governmental and non-governmental

organizations. It is the charge of the Transitions to Sustainable Energy panel to provide scientific advice to policy-makers on moving toward adequately affordable, sustainable and clean energy supplies. My Co-Chair is Jose Goldemberg, formerly the

Secretary of Science and Technology and the Secretary of the Environment for

Brazil, and an expert in sustainable energy technologies who helped to shepherd

Brazil’s sugar cane-based energy phenomenon. The panel has given me a broad and

varied view of the many energy challenges and opportunities facing our world. Our

final report should be completed by early 2007 and I will make sure that a copy

is transmitted to the Committee once available.

Today, I’m excited to share with you developments in science, particularly at

Berkeley Lab, that I believe hold great promise for addressing the world’s energy

and environmental challenges. My comments or written testimony are not intended

to represent the policies or positions of the Department of Energy.

The Challenge and the Opportunity

There is now general consensus that humanity faces an energy and environmental

crisis. Global energy use has grown to the point where the by-products of man’s energy consumption are significantly influencing the atmosphere and climate, with

costly and potentially disastrous consequences. Experts forecast that the ability to

locate viable sources of energy will increasingly determine the degree of economic

20

and technological development. Motivated by a strong desire to provide solutions to

these problems, and encouraged by the findings of the Gathering Storm report, the

President’s American Competitiveness and Advanced Energy Initiatives, and new

research funding opportunities within the Department of Energy, concerned scientists and engineers from across a diverse range of disciplines and institutions are

developing new and innovative approaches to energy research. This is what we are

also doing at Berkeley Lab.

There has been an ongoing effort for decades on the part of the scientific community to find a solution to the renewable energy problem. So is there any reason to

believe that the problem is more amenable to solution now? The answer is yes.

Major recent advances in science and technology have dramatically improved the

prospects for finding a technical solution. The multi-billion dollar investment in the

National Nanotechnology Initiative that was so ardently proposed and supported by

Congressman Honda and this committee has led to dramatic advances in the synthesis and control of materials that are crucial to the problem. Large scale advances

in genomics have led to whole genome sequencing, as well as to the new field of

synthetic biology, a new scientific discipline in which Berkeley Lab is a pioneer.

The Helios Project

Answering the call of the Congress and the Administration to discover new and

cleaner energy sources, we at Berkeley Lab are embarking on an exciting new initiative called the Helios Project. Hoping to do for the supply-side of the equation what

we’ve done at Berkeley Lab on the demand-side, the objective of Helios is to accelerate the development of renewable and sustainable sources of energy using sunlight. We are approaching this goal with a clear commitment, intent on developing

solutions from basic science through to practical uses.

Although there is currently no ‘‘magic bullet’’ to solve the energy problem, we believe that utilization of the sun holds significant untapped promise for reducing the

need for fossil fuels. Using Helios as an example, my testimony will describe exciting new scientific and technological opportunities that are available to researchers

to address the fundamental barriers to developing sustainable energy alternatives.

The ultimate goal of Helios, simply stated, is to use sunlight to manufacture a

transportation fuel. Transportation fuels would be the most costly form, but the

most valuable form, of solar energy. Helios recognizes that there are several routes

to accomplish this goal, and various approaches require materials and techniques

that will have significant impact in other solar applications. For example, one approach is to use photovoltaics to capture sunlight that then can be used with photoelectric cells to convert carbon dioxide and water into liquid fuels or hydrogen. Scientists and engineers will collaborate to make more efficient and less-costly photovoltaic systems and electrochemical systems. Either of these new systems will have

vast implications for other clean energy routes and stand-alone processes.

A comprehensive and accelerated program of basic science and technology development, such as Helios, can make great strides. Much like the development of the

transistor at Bell Laboratories, Helios will be managed in a way that ensures

progress toward its applied technology goals. Because of the ability to marshal resources, focus scientific research and build broad teams of multi-disciplinary expertise, a national laboratory is uniquely organized to attack big scientific challenges

like the present energy crisis. Berkeley Lab is well suited for this task because of

our long history in biological and chemical systems research such as photosynthesis,

as well as our world-leading and pioneering work in nanotechnology and synthetic

biology.

Even so, the scientific problems to solve and the technological barriers to overcome are huge and other Labs and research universities, along with an engaged and

proactive commercial sector, will be required to ensure the successful translation of

science and technological achievement into the marketplace.

The Four Pathways

The overarching goal of the Helios Project is to revolutionize the means by which

we harvest the energy of sunlight, so that this source will satisfy a majority of our

energy needs. Figure 1 illustrates the four major pathways for going from sunlight

to fuel that Helios will explore: two based on living systems, and two based on artificial systems. A great advantage of the Helios Project is that all programs and research pathways will be closely integrated. We have analyzed each of the four pathways, to determine the present status, the requirements, the major roadblocks, and

the benefits that may arise as each roadblock in each path is solved.

21

Path I: Sunlight to Fuel via Biomass

Biomass is the most abundant renewable carbon source on the planet and has

long been a major combustible fuel for mankind. While biomass has the potential

to meet most, if not all, of the transportation fuel needs, there are several difficulties in using biomass for production of fuels. The first problem is that current biomass crops are far from optimal for energy- and water-efficient production. The second problem is the expense and inefficiency of the process for converting biomass

to fuels. Helios will address both problems.

Currently ethanol for transportation is produced primarily from sugar cane and

corn. Possibly we can find a way to create new plants that will ‘‘grow energy’’ by

incorporating genes that will make the plants self-fertilizing, and drought- and pestresistant. The creation of crops efficiently raised for energy will also take full advantage of our great American agricultural capacity. Also, by designing microbes which

will behave in new ways, our scientists hope to convert cellulose into chemical fuel

more efficiently, so that biomass fuel can be obtained at a cost-effective price, and

to keep the overall cycle as carbon-neutral as possible.

Path II: Microbial synthesis of biofuels using photosynthesis

Another approach is to skip production of the intermediate biomass and produce

the fuels directly from sunlight using photosynthetic microorganisms. This model

will use nature’s mechanism as the refinery. While there are microbes and plants

that utilize sunlight directly to produce oils and alcohols, they are not efficient

enough to supply a significant fraction of U.S. energy need. They need to be optimized for their fuel production role. Berkeley Lab’s strengths in photosynthesis

since the early discoveries by Nobel Laureate Chemist Melvin Calvin will be put to

use to increase photosynthetic efficiencies. DOE’s Joint Genome Institute (JGI) and

the Berkeley Lab Genomics Division will also play integral roles in this endeavor.

Path III: Sunlight to Electricity: Nanotechnology enabled solar cells

There are many possible routes to achieve solar energy utilization. However, all

known potential routes are limited now by two types of serious roadblocks: one is

the need for fundamentally new and optimized materials for use in solar collectors,

efficient processing steps, and energy handling. The other is that because of daily,

seasonal, and other variations, the use of solar energy must involve the development

of efficient storage strategies. The Helios Project is devoted to developing the basic

science needed to overcome these roadblocks.

Because the elementary steps of conversion of sunlight to electricity in either biological or non-biological pathways takes place on the nanometer scale, the advent

of new methods to control and pattern matter on the nanoscale has created tremendous new opportunities for solar cell design. Two broad areas of activity will be pursued: with new nanotechnology based solar cells, it is possible to explore concepts

for how to dramatically increase the power efficiency of solar cells; second, low cost

high volume solar cell fabrication techniques will be enabled. By controlling the size,

shape, dimensions, and connectivity of nanoscale building blocks, it is possible to

control the basic energy levels of a system, allowing for the design a new type of

solar cell.

22

Path IV: Direct Photochemical or Photoelectrochemical Solar to Fuel Conversion

Finally, nature’s photosynthetic machinery constitutes proof of principle that solar

fuels can be generated by direct chemical conversion in a single device. However,

there are energy costs in the production and handling of huge amounts of biomass.

The goal of this research is to develop single devices that mimic the pathways of

natural plants in producing fuel from water and sunlight but which are stable and

have significantly greater efficiency. The recent progress in the understanding of the

design principles of natural photosynthesis coupled with the rapid emergence of new

nanostructured inorganic, organic and biological/non-biological hybrid materials has

opened up opportunities to develop engineered solar to fuel systems that will meet

the efficiency and durability requirements of a practical system. In many ways this

path may hold the greatest long term promise, but is consequently probably the

most difficult research objective.

Cross-Cutting Areas

In addition to the four pathways, we have identified cross-cutting areas of fundamental science and engineering which will be further developed for the Helios

Project to succeed. Breakthroughs in these crosscutting areas will have a positive

impact on more than one of the four paths. The cross-cutting areas are: Catalysis,

Separations, Theory, Synthetic Biology, and Manufacturing.

As an example, synthetic biology is an emerging field that will play a tremendous

role in the success of the Helios Project and other alternative fuel research initiatives. In July 2003, Berkeley Lab established the world’s first Synthetic Biology Department, which seeks to understand and design biological systems and their components to address a host of problems that cannot be solved using naturally-occurring entities. University of California at Berkeley Professor and Lab Scientist Jay

Keasling heads this department and is one of the pioneers of synthetic biology. He

is also one of the leaders of the Helios Project.

The overarching role of the cross-cutting synthetic biology component of Helios is

to create biological components that can be used across the whole spectrum of Helios

activities. For example, this approach will enable us to rapidly and reproducibly engineer cells to convert renewable resources (sunlight, cellulose, starch, and lignin)

into fuels.

The discipline’s specific aims are 1) to develop the foundational understanding

and standard, interchangeable, biological components (parts, devices, and chassis)

that will allow us to routinely build large numbers of useful biological systems; 2)

to develop mathematical models and computing methods to organize and analyze

data, predict the behavior of biological components, and design new biological components and large integrated systems; and 3) to utilize state-of-the-art molecular

profiling technologies to better understand biological systems and to optimize their

function.

When will the Helios Project produce results?

Helios is focused on revolutionary research to accomplish significant advances.

The risk for any individual project is substantial, but with all approaches taken together the probability of making significant advances in the overall goal of developing sustainable energy alternatives is high. We cannot know in advance which approach or research area will be most valuable, and which will pay off earliest. So

we have given great thought to our management plan, and have built in the flexibility to respond to new results and the freedom to veer toward something new,

away from the current approach, if that seems to be the more promising route.

We realize that timeliness is essential. To ensure the timely success of the Helios

Project, we have adopted an active management strategy. The technical requirements for each path have been clearly defined, as are the known major bottlenecks.

These will be re-examined twice yearly. Helios investigators will be required to develop core research areas but also to directly contribute to advancing at least one

of the four paths. As the project advances, it will be necessary to focus the effort

into those directions that appear most promising. With a tightly managed program,

the Helios Project will produce a range of advances in specific sectors (like improved

photovoltaics or a better way to break down cellulose) within five years, with the

goal of a major breakthrough within ten years.

Conclusion

The mission of the Department of Energy is to advance basic science and to explore energy solutions and promote environmental stewardship. Because of increased funding scheduled for basic sciences and energy research at DOE and with

23

the public’s growing awareness of the energy crisis and the environmental consequences of inaction, we believe that now is the right time for Helios.

Over the past three decades, Berkeley Lab has been a leader in developing energy

efficient technologies, standards and practices that have a significant impact on the

demand side of the energy equation. Technologies developed at Berkeley Lab have

saved the U.S. economy tens of billions of dollars in energy costs—these technologies

include the development of dual-paned, gas-filled energy-efficient windows; the now

ubiquitous energy-efficient electronic ballasts for lighting; software tools for better

building design; and the development of appliance standards to save energy and

water.

I strongly believe that the most immediate and substantive gains in addressing

the energy challenge are available through energy efficiency and conservation.

However, addressing the demand side alone will not fully provide the solutions

necessary to address the energy and environmental crisis we face today. You must

also address the supply side.

It has been my pleasure to describe our initiative to you today, and I look forward

to keeping you updated as we work to build a systematic and well-focused program

of transformational energy technologies development.

Chairman Biggert, Ranking Member Honda, and Members of the Committee,

thank you for the opportunity to provide testimony on this critical topic.

I would be glad to respond to any questions.

BIOGRAPHY FOR STEVEN CHU

Steve Chu, 57, became Berkeley Lab’s sixth Director on August 1, 2004. A Nobel

Prizewinning scholar and international expert in atomic physics, laser spectroscopy,

biophysics and polymer physics, Dr. Chu oversees the oldest and most varied of the

Department of Energy’s multi-program research laboratories. Berkeley Lab has an

annual budget of more than $520 million and a workforce of about 4,000.

His distinguished career in laboratory research began as a postdoctoral fellow in

physics at the University of California’s Berkeley campus from 1976–78, during

which time he also utilized the facilities of Berkeley Lab. His first career appointment was as a member of the technical staff at AT&T Bell Laboratories in Murray

Hill, N.J. where, from 1978–87, his achievements with laser spectroscopy and quantum physics became widely recognized. During the last four years there he was

Head of the Quantum Electronics Research Department, during which time he

began his ground-breaking work in cooling and trapping atoms by using laser light.

In 1987, he became a Professor in the Physics and Applied Physics Departments at

Stanford University, where he continued his laser cooling and trapping work.

This work eventually led to the Nobel Prize in Physics in 1997, an honor he

shared with Claude Cohen-Tannoudji of France and United States colleague William

D. Phillips. Their discoveries, focusing on the so-called ‘‘optical tweezers’’ laser trap,

were instrumental in the study of fundamental phenomena and in measuring important physical quantities with unprecedented precision.

At the time, Dr. Chu was the Theodore and Francis Geballe Professor of Physics

and Applied Physics at Stanford University, where he remained for 17 years as

highly decorated scientist, teacher and administrator. While at Stanford, he chaired

the Physics Department from 1990–93 and from 1999–2001.

He is a member of the National Academy of Sciences, American Philosophical Society, American Academy of Arts and Sciences, Academia Sinica, and Honorary Lifetime member, Optical Society of America. He is also a foreign member of the Chinese Academy of Sciences and the Korean Academy of Sciences and Technology.

Dr. Chu has won dozens of awards in addition to the Nobel Prize, including the

Science for Art Prize, Herbert Broida Prize for Spectroscopy, Richtmeyer Memorial

Prize Lecturer, King Faisal International Prize for Science, Arthur Schawlow Prize

for Laser Science, and William Meggers Award for Laser Spectroscopy. He was a

Humboldt Senior Scientist and a Guggenheim Fellow and has received six honorary

degrees.

Born in St. Louis and raised in New York, Dr. Chu earned an A.B. in mathematics and a B.S. in physics at the University of Rochester, and a Ph.D in physics

at UC–Berkeley. He maintains a vigorous research program and directly supervises

a team of graduate students and postdoctoral fellows. He is author or co-author of

more than 160 articles and professional papers, and over two dozen former members

of his group are now professors at leading research universities around the world.

Chairwoman BIGGERT. Thank you very much.

Dr. Penzias, you are recognized for five minutes.

24

DR. ARNO A. PENZIAS, VENTURE PARTNER, NEW ENTERPRISE

ASSOCIATES, PALO ALTO, CALIFORNIA

Dr. PENZIAS. Thank you for allowing me to speak today. Again,

I’m going to leap on the side of shortness, so I keep in the five minutes, and then it can be added into the stuff I gave you.

I framed my testimony in response to the questions that were

sent the witnesses. The first question, what is the current state of

adoption of renewable energy in the United States? And, what’s

limiting that rate of adoption?

Right now, I think it’s high cost and limited supply. High cost,

and to me dollars—this is why I have mixed feelings about subsidies, they were right as an interim step, but dollars are probably

the best test of whether something works or not. And so, you don’t

have to do any calculations to know that there’s less energy going

into the ethanol in Brazil, because it costs less. You know that nobody is wasting energy there, there’s no subsidy, so it’s a great

thing. We don’t always want to do that, but that’s what happens

in that case.

And, I think right now it’s fair to say that that really is the problem. But, what’s the outlook, and what research or innovation

could prove that outlook? For me, I think the outlook is extraordinarily positive. I have been an alternative energy skeptic for decades. I started in alternative energy some 30 years ago, about the

same time as that same little hook with the first Arab oil boycott

in the early 1970s. That’s just about 30 years ago. And, during that

time, that period, I was frustrated by the lack of progress, and not

for want of resource, not for want of will, not for want of bright

people, it just takes time, the surprises come, in my experience,

from other areas. It isn’t the people that are looking at alternative

energy.

The thing I will show you later is made from an automobile

headlight, and nobody would have thought that that was going to

be a way of cutting the price of silicon, not by five or seven percent,

but by 70 percent. That’s dramatic, and that’s the kind of thing

that happens when creative people get together. It’s what we do

here in Silicon Valley wonderfully; and this is, you know, I’m a zeal

of a convert. I worked for the largest corporation in the world, and

the world’s best research laboratory for 37 years, and when I got

out here, one reason I came was because I knew too many things

that didn’t work. And, boy, have I been surprised since I’ve been

here.

Now, so let me move on to some examples of where I think these

opportunities are. Silicon was the one I spoke about, silicon I just

mentioned, and here by the way is the automobile headlight. This

is one piece of a much larger solar concentrator. At the back of it,

and we can look at that later, at the back of it there is a very

small, very efficient, extremely expensive, solar cell, smaller than

the tip of my finger. On an area basis, there would be no way of

using it. This thing, for a tiny area you have to pay $6. But, because you are able to use this automobile headlight shaped glass

technology, you get a 500 to one improvement. So, it looks to the

sun as if it’s 500 times bigger.

So, it’s private enterprise together with the folks that built this,

which by the way was a government laboratory, NREL, this triple

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junction solar cell, which is by the way fueling a whole new generation of solar concentrators, not just the company.

And then, there is a research component as well, as I find in almost every company, which comes from the university, Professor

Roland Winston at the University of California at Merced, who invented something called non-imaging optics. As a physicist, I was

shocked that you really can fool Mother Nature into collecting more

light than I would have expected as an astronomer. You can have

both broad field of view and enormous magnification, as long as

you don’t have to see what’s there. The solar cell doesn’t care what

it sees, it doesn’t matter where the light is coming from, it still converts it. So, this thing here by the way has only eight parts, which

is only one more than the .89 cent nail clippers you can buy on a

key chain at WalMart. So, the cost would be $6 on here, which works out to about .50

cents a watt, is the biggest single cost, and I need hardly remind

you, silicon is like $4 or $5 a watt, if you can get it. So, this is a

big advance, this is a big advance, and it’s coming, just a simple

example at Silicon Valley. There are lots of other examples, I can

give you examples in fuel cells, you know about some of those and

others, but I thought that was one example, we are not talking

about details here today.

So finally, what should the government do? First and foremost

in my judgment, and I can’t mention this strongly enough, and that

is to continue the tradition of supporting our country’s research

universities. I’m old enough to have benefitted from the Korean

War GI Bill, and that started the whole post war boom, from which

the United States had an acceleration which has kept us way

ahead of the rest of the world. The universities are at the heart of

all this, and just as mentioned, Stanford, they mention Berkeley as

well, everybody wants a Silicon Valley, and every Silicon Valley,

wherever they are in the world, has a great university at heart.

Another thing, the subsidies, there’s a wide variety of them. I

really like variety. Some come from the states, some come from all

sorts of other places. They spur demand. They get people interested, but the interesting thing, while some people think that is

needless duplication, what it does is it encourages exactly the kind

of exploration and opportunistic advances that have made our

country’s venture a buzzword, you know, essentially, the unmatched model for progress in the entire world.

I’ve gone to many countries. Everybody says, how do we get our

own Silicon Valley, or how do we make ours like the one there?

And, one size fits all buzzwords are great, because they lead people

into the future, but you don’t want to lead people too fast unless

you really know where you are going, things like hydrogen economy

for example, you know, I think we ought to be moving past some

of those things, and I think we are.

Now, another thing, there’s the vast and diverse needs of the

Federal Government, those triple junction solar cells were spurred

by the high prices of them. They are used for aerospace, for defense, other purposes, they weren’t ready for commercialization,

but they are available now, because all this stuff from the Federal

Government that comes, those needs generate a very important demand. And, some of that demand is going to renewable energy, for

26

more efficient, lighter weight, lower consumption, even for diverse

sources of diesel oil for the U.S. Navy through, perhaps, biodiesel—

all sorts of things that are moving this ahead.

And then, so it’s great that federally-funded sales sometimes

showcase energetic products as well.

And so, the last thing is the partnering between the federal labs

and the private industry. I think in some cases it’s very good. One

of my companies, for example, has a very nice CRADA, and I now

understand what Cooperative Research and Development Agreement, you know, what it stands for, with the National Renewable

Energy Laboratory; and that’s worked wonderfully to get this company jump started. So, that’s a nice thing.

And finally, you mentioned the developing countries, there are

opportunities and challenges there, and for me the opportunities in

developing countries for us to sell to them, we have the inter-company partnering. We have local manufacturing, local distribution,

local support, and as those—and as unit costs drop, because they

can’t afford subsidies for that stuff, that will continue.

But, it isn’t just colonialism, it is the other side of that. Because

other countries have lower levels of infrastructure, it may not be

that the centralized manufacturing and distribution models, I

mean, Dr. Chu showed this fantastic ethanol plant, you know, cellulosic ethanol plant, in other places you may want to go with

something which is more labor intensive and could be done locally.

By example, in a country like India, the southern half, which has

heavy rainfall, would be very good to produce ethanol through

sugar cane. You don’t need a microbe, you just have local people

cut it up, because ethanol can be made very quickly from sugar in

local areas, transportation costs are saved, and there is labor for

the farmers who then make their own fuel on the spot. And so,

there’s a lot of opportunity there. The transportation cost is terrible

in some of these remote areas, so, it helps.

In the northern area, you probably would go with Jatropha, one

of the species in the Genus Jatropha, which makes an inedible nut,

which can be squeezed and used directly as biodiesel, and so you

would find on that end the local—just a simple calculation that

shows that a farmer, an unusable acre can give a farmer about

$1,000 a year of cash income in a Third World area for a part-time

job, just harvesting nuts, hiring somebody in a pick-up truck to

take them to the local little processing plant, which doesn’t have

to be much bigger than something that can be fit in a container.

So, that kind of thing is wonderful in the Third World, not something we are going to use here, but we can export that technology

and folks in India are really moving very fast with it anyway, we

don’t have to teach—they have places like IIT, you don’t have to

worry that they understand those things.

Chairwoman BIGGERT. Doctor, would you sum up, please?

Dr. PENZIAS. I’m done. Thank you.

[The prepared statement of Dr. Penzias follows:]

PREPARED STATEMENT OF ARNO A. PENZIAS

Thank you for allowing me to contribute to this important hearing. I have framed

my prepared testimony to respond to the four questions posed in the Charter for

this hearing.

27

1. What is the current state of adoption of renewable energy sources in the

United States? What factors are limiting the rate of adoption of renewable energy technologies?

Right now, I think it’s fair to say that relatively high cost and current supply constraints associated with currently-available renewable energy technologies are limiting adoption.

2. What is the outlook for potential improvement in market penetration of

renewable energy technologies? What are the main research efforts that

could improve that outlook?

Based upon what is currently happening in this technology area, I see the outlook

for dramatic improvements in market penetration as being very positive. As an active venture investor and advisor for the past ten years, I can recall few investment

areas which have engendered a degree of investment interest comparable to what

we now see in the renewable energy arena. Speaking personally, I very much share

this point of view, so much so, that I now devote the major portion of my efforts

to investments in this area.

I have been concerned about energy issues for some thirty years, and have worked

to seek and perfect alternatives to our country’s dependence upon fossil fuels, but

felt frustrated by the lack of viable alternative approaches to this vexing problem.

It wasn’t a question of resources or interest. Even given the best intentions, talent

and resources, program after program yielded little in the way of concrete results.

In the last few years, however, this situation has taken a dramatic turn for the better, thanks to a growing array of novel ways is which advances in a wide variety

of seemingly-unrelated technology areas—as well as in several areas of applied

science—are being employed to overcome my earlier concerns about conventional approaches to green energy.

Silicon solar cells, for example, work well but cost too much to produce and install. Despite some incremental progress in silicon device costs, I see other photovoltaic technologies poised to grow far more rapidly—notably large-area PV modules

based upon thin crystalline films and organic materials, as well as novel approaches

to even higher efficiencies through a combination of emerging advances in sunlight

concentration, with small but extremely efficient multi-junction devices.

I can illustrate this last point in detail, by citing three key elements of a solar

concentrator recently completed by SolFocus—our firm’s most recent energy investment. These innovations should give you the flavor of what went into their design.

First: the use of an innovative imaging geometry called non-imaging optics (created

and perfected by Professor Roland Winston of the University of California, Merced)

allows each module to capture more solar energy per square inch of area than the

most perfect conventional magnifier one can buy. Second: the precision optics necessary to implement this minor miracle can be formed and assembled out of a total

of only eight parts per module, including the detector, at a manufacturing cost comparable to that achieved by the makers of today’s sealed automotive headlights (the

enabling technology in this instance). Third: The concentrated light is converted into

electricity with unsurpassed efficiency by a unique triple-junction solar cell invented

at the National Renewable Energy Laboratory (far more expensive per unit area

than other types of solar cells, a tiny device serves a surface area some five hundred

times larger).

3. What should the Federal Government be doing (or not doing) to encourage the commercialization of, and demand for, new renewable energy

technologies? How well aligned are the Department of Energy’s activities with what the investment community is doing?

First and most important, in my judgment, the Federal Government can encourage the commercialization of new renewable technologies through continued support

for our country’s universities, the source of America’s innovation edge, a tradition

of support that traces back to the land grant colleges of the 19th century and the

GI Bill that fueled our country’s emergence as the world’s unquestioned leader in

science and technology. There is hardly a place on the face of this Earth that doesn’t

hope to have its own ‘‘Silicon Valley,’’ rooted in the presence of a great university.

With the demise of vertical integration as the economic base for corporately supported long-term applied research, the task of fueling continued innovation has fallen upon our university system.

The wide variety of mandates, subsidies and other incentives for the creation and

use of alternative energy, enacted at the federal and State level, serve to spur demand for new technologies of various kinds, thereby spurring innovation, investment, market testing and further innovation, in virtuous circles. The great virtue

28

of what some might see as needless duplication encourages exactly the kind of exploration and opportunistic advances that has made our country’s venture capital

system the unmatched model for progress in the global economy. One-size-fits-all

buzzwords, such as ‘‘hydrogen economy’’ can help focus attention, as long as they

don’t constrain behavior.

The vast and diverse needs of federal agencies and suppliers frequently offer ideal

early test beds for new solutions to under-solved problems. Given the necessarily

complex nature of federal procurement regulations, I’m pleased that federally-funded sales of innovative products have often proven to be an early means of show-casing new alternative-energy ideas and products.

At Bell Labs, I encouraged active partnerships between efforts in my research organization with those business-oriented organizations, by making sure that both

sides had skin in each game. In the same way, I now see successful examples of

alignment between DOE Labs and the investment community, in the increasing use

of CRADA’s, particularly at NREL.

4. What opportunities and challenges exist for the sale and use of renewable energy generation in developing countries? How do these opportunities and challenges differ from those in developed countries?

Opportunities include inter-company partnering, particularly in the case of local

manufacture, distribution and support, for energy technology developed in the U.S.

These opportunities should grow dramatically as unit costs drop to more attractive

levels Challenges include difficulty in applying common business practices and the

protection of intellectual property.

Given the lower levels of infrastructure in the developing world, the centralized

manufacture and distribution models favored in our country may not apply as universally. On the other hand, labor intensive installation costs ought to prove less

of a barrier to adoption in developing economies.

In biofuels, for example, short term opportunities in the U.S. would include using

existing feed stocks—such as corn for ethanol, and waste grease and edible seed oils

for biodiesel, possibly followed later by cellulosic ethanol. In the developing world,

we are more likely to see special plants (especially Jatropha) in arid areas such as

northern India, and sugar cane in areas of abundant rainfall. These crops appear

especially useful in the developing world, where transportation favors local processing on small scales, with the work of harvesting done by local farmers as an additional source of income.

BIOGRAPHY FOR ARNO A. PENZIAS

Arno Penzias is a Venture Partner at New Enterprise Associates. In this role, he

prowls Silicon Valley and similar places, seeking out promising technology futures

and catalyzing their applications. His present Board memberships include Glacier

Bay, Ion America, and Konarka. In addition to helping NEA portfolio companies on

an as-needed basis, in areas such as technology, strategy, and intellectual property,

Arno serves on—and frequently chairs—Technical Advisory Boards for a number of

NEA companies such as Alien Technology, Heliovolt, Hillcrest Labs, Luxtera, Motion Computing, SolFocus, Spreadtrum Communications, Telegent Systems, and

Teneros. A long-time skeptic on the commercial viability of ‘‘alternative energy’’

technologies, he now finds his earlier conclusions outdated by the advances made

in number of seemingly-unrelated technologies, and their exploitation by a relatively-small handful of entrepreneurs. Having found a few already, he earnestly

hopes to find—and help finance—more of them.

Dr. Penzias began his scientific career in 1961 when he joined Bell Laboratories

as a Member of Technical Staff. He conducted research in radio communication and

took part in the pioneering Echo and Telstar communications satellite experiments. As a scientist, he is best known for his work in radio astronomy—most notably, the discovery of Cosmic Background Radiation, which earned him the Nobel

Prize for Physics, in 1978, together with Robert Wilson—as well as his pioneering

work in the detection and study of a rich variety interstellar molecules, thought to

be a possible basis for the development of life.

He left Bell Laboratories in 1998, having led its world famous research organization, and then serving as its Chief Scientist.

The author of over one hundred scientific and technical papers, he is also a

sought-after speaker on emerging trends, and has written a number of articles on

information technology, especially its impact on business and society. His highly acclaimed book on the subject, ‘‘Ideas and Information’’ was published by W.W. Norton. A second book, entitled ‘‘Digital Harmony: Business, Technology, and Life After

29

Paperwork’’ published by Harper Collins, charts the course of the Information Revolution and its demands for higher levels of system integration.

A member of both The National Academy of Sciences, and The National Academy

of Engineering, Dr. Penzias received a Bachelor of Science degree from the City College of New York, after serving in the U.S. Army Signal Corps he attended Columbia University where he received his Master’s and doctorate degrees. He has also

received a number of honorary degrees, as well as other awards for his contributions

to science, R&D management, and public service.

Chairwoman BIGGERT. Okay, thank you.

Mr. Larsen, you are recognized.

STATEMENT OF MR. CHRISTIAN B. LARSEN, VICE PRESIDENT

FOR GENERATION, ELECTRIC POWER RESEARCH INSTITUTE, PALO ALTO, CALIFORNIA

Mr. LARSEN. Chairman Biggert, Mr. Honda, I represent the Electric Power Research Institute, which is a non-profit collaborative

R&D organization conducting electricity-related research in the

public interest. Our public and private members account for about

90 percent of the kilowatt-hours sold in the U.S., and we now serve

over 1000 electricity and governmental organizations worldwide, in

about 40 countries.

EPRI appreciates the opportunity to address the future prospects

for renewable energy, and I really appreciate the invite.

I’d like to make several key points. The U.S. must keep all of its

energy options open to meet the uncertainties of the future. For

electricity, this means improving the economics, the integration

and utilization of renewables and energy efficiency as well as building and sustaining a robust portfolio of affordable generating options for the future, and this means also ensuring the continued

use of coal, nuclear and natural gas.

EPRI believes that prudent investment decisions for power

plants in the future need to include considerations associated with

generating power in a carbon constrained future. Whether decisionmakers assume the future cost of CO2 to be zero as it is today in

the U.S., or $30/ton, or $50/ton, this all dramatically changes the

relative cost of the various supply options. A carbon-constrained future could and would make renewable energy more economically

competitive and more important.

Currently renewable generation, excluding large hydro, contributes less than two percent of the Nation’s electricity supply. Until

recently, the expected future role of renewable energy in the U.S.,

based on projections from the Energy Information Agency using the

NEMS model and other models, has not been significant. Longterm estimates for contribution of renewables to total electric energy remain around two percent.

Recently, some new EPRI modeling shows that the role of renewables, as well as other low and non-emitting resources, could be expected to increase substantially. In one base case scenario in an

EPRI model, the estimates showed the contribution for renewables

by 2050 in the range of five to six percent. Now, this represents

700 to 800 percent increase over today’s megawatt hours, and this

should be noted that this was not taken into account in the introduction of a disruptive technology that could significantly decrease

the cost of these renewables.

30

Various distributed generation technologies, which include renewable energy sources, such as roof-top solar, are being developed

and they will enhance the current distribution system. These will

add power system flexibility, increase end-use efficiency. Distributed generation and central station generation are not either/or alternatives; EPRI believes that they will have to complement each

other in the future power delivery system.

There also needs to be recognition that future renewable technologies as solar, wind and, eventually, ocean energy are not

dispatchable, i.e., controllable, resources and that there will be a

cost associated with the integration of these resources into the system. This cost is small today, when the significant portion of available generation, such as nuclear hydro or gas turbines, is

dispatchable. However, as the percentage of renewable generation

increases, so will the cost of grid integration.

Finally, technology breakthroughs will undoubtedly enable renewable energy to meet the electricity demand in new and better

ways. Economic roof-top solar, clean fuels from biomass, effective

energy storage with hydrogen, or advanced batteries, would help

diversify U.S. energy resources and bring new opportunities to the

electricity industry.

In summary, given the expected growth and demand for electricity and the many uncertainties in our energy future, we believe

that developing diversity in electric generation is critical as an objective for the country, also striving for cleaner and more sustainable resources will bring more renewable energy into the mix, and

future breakthroughs in cleaner fuels, photovoltaics, and energy

storage will change the nature of the electric grid. These will not

replace the need for the electric grid, but they will increase its

flexibility and value to the country.

Thank you for the opportunity to speak today.

[The prepared statement of Mr. Larsen follows:]

PREPARED STATEMENT OF CHRISTIAN B. LARSEN

Chairman Biggert and Members of the Committee:

I represent the Electric Power Research Institute, which is a non-profit collaborative R&D organization conducting electricity-related research in the public interest. EPRI has been supported voluntarily by the electricity industry since our founding in 1973. Our public and private members account for more than 90 percent of

the kilowatt-hours sold in the U.S., and we now serve more than 1,000 energy and

governmental organizations in more than 40 countries.

EPRI appreciates the opportunity to address the future prospects for renewable

energy. I would like to make several key points in my testimony.

Key Points

1. The U.S. must keep all of its energy options open to meet the uncertainties

of the future. For electricity, this means improving the economics, integration and utilization of renewables and energy efficiency as well as building

and sustaining a robust portfolio of clean, affordable generating options for

the future—ensuring the continued use of coal, nuclear and natural gas.

2. EPRI believes that prudent investment decisions for power plants in the future need to include considerations of the economies associated with generating power in a carbon constrained future. Whether decision makers assume

the future cost of CO2 to be zero as it is today in the U.S., or $30/ton, or

$50/ton, dramatically changes the relative cost of the various supply options.

A carbon-constrained future could make renewable energy more economically

competitive and more important.

31

3. Currently renewable generation, excluding large hydropower, contributes

less than two percent to the Nation’s electricity supply. In 2005 the majority

of global renewable installed capacity (excluding hydropower) came from

wind, biomass combustion, and photovoltaic solar. The remainder of the global renewable installed capacity includes some biomass gasification, thermal

solar and ocean energy demonstrations. Until recently the expected future

role of renewable energy in the U.S.—based on projections from Energy Information Agency (EIA), the National Energy Modeling System (NEMS), and

other models—has not been significant. Long-term estimates for the contribution of renewables to total electric energy have remained around two

percent. Even when the current renewable portfolio standards adopted in 23

states are applied through 2017, the contribution of renewable resources

would not likely exceed three percent of the total electric energy that will

be needed in 2017.

4. However, recent EPRI modeling shows that the role of renewable, as well as

all other low and non-emitting resources, could be expected to increase substantially. New renewable energy resources, primarily wind, solar and biomass, are expected to exceed the current portfolio standard requirements. In

a base case scenario EPRI estimates renewable contribution to electric energy by 2050 in the range of five to six percent. This represents a 700-800

percent increase over today’s contribution of 100 MMW–Hs, reaching roughly

750 MMW–Hs by 2050.

5. Various distributed generation technologies which include renewable energy

sources, such as roof-top solar, are being developed that will enhance the current distribution system. These will add power system flexibility, increase

end-use efficiency with technologies such as combined heat and power, and

reduce power delivery losses. Distributed generation and central station generation are not either/or alternatives; EPRI believes they will complement

one another in the future power delivery system.

6. There needs to be recognition that future renewable technologies as solar,

wind and, eventually, ocean energy are not dispatchable resources and that

there will be a cost to integrate these resources into the electricity system.

The cost is for the supporting generation that will be needed to match supply

and demand instantaneously, to follow energy demand ramping, and to provide the reserves required to maintain grid reliability. This cost is small

when a significant portion of available generation resources are dispatchable,

32

such as hydro and gas turbines. However, as the percentage of renewable

generation increases so will the cost of grid integration.

7. Technology breakthroughs will undoubtedly enable renewable energy to meet

electricity demand in new and better ways. For example, economic roof top

solar, clean fuels from biomass, effective energy storage with hydrogen, or

advanced batteries, would help diversify U.S. energy resources and bring

new opportunities to the electric industry.

Summary

Given expected growth in the demand for electricity and the many uncertainties

in our energy future, we believe that developing diversity in electric generation is

a critical objective for the country. Also, striving for cleaner and more sustainable

resources will bring more renewable energy into the mix. Future breakthroughs in

cleaner fuels, photovoltaics, and energy storage will change the nature of the electric

grid. These will not replace the need for the electric grid but will increase its flexibility and value to the country.

Thank you for the opportunity to provide these comments to the Subcommittee.

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BIOGRAPHY FOR CHRISTIAN B. LARSEN

Chris Larsen is Vice President of Generation at the Electric Power Research Institute. He joined EPRI in November 2004 as President and Managing Director of

EPRI International, Inc., a wholly owned subsidiary and transitioned into his current role in January, 2006.

Prior to joining EPRI, Larsen spent the majority of his career with GE Energy

working in the nuclear energy division. Larsen started his career as an applications

project manager, servicing nuclear power plants at customer sites internationally.

Larsen then transitioned into the GE corporate Six Sigma initiative as a Master

Black Belt focused on the process improvement for the new and refurbished parts

services business. Larsen’s last role prior to joining EPRI was General Manager of

the Reactor Services business unit which was responsible for providing Inspections,

Outage Services and Reactor Modifications for nuclear utilities worldwide.

Larsen received a Bachelor’s degree in Mechanical Engineering from Georgia

Tech.

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Chairwoman BIGGERT. Thank you very much.

Mr. Pearce, you are recognized for five minutes.

STATEMENT OF DAVID PEARCE, PRESIDENT AND CEO,

MIASOLE ́ , SANTA CLARA, CALIFORNIA

Mr. PEARCE. Thank you for the opportunity to present here

today. Madam Chair, you did get the name correct, it’s Miasole ́,

which loosely translates into my sun.

I’m here to talk about solar electricity. If I could have the next

slide, please, but just a quick overview on Miasole ́, we are a Santa

Clara-based California manufacturer of thin-film solar cells, a bit

unique in that we are trying to bring manufacturing jobs back to

the Silicon Valley, with an 80,000 square foot facility. We expect

to be in volume commercial production later this year.

Myself and my team have a very long history of high volume

thin-film component manufacturing, going back to the ‘80s where

we made the hard disk drives for data storage applications, more

recently, optical components for fiber optic communication, seeing

the same core technology to produce thin-film solar cells.

We are backed by several leading venture capitalists, the most

significant of which are Kleiner Perkins and VantagePoint Venture

Partners.

Next slide, please.

So, a little background on the solar industry. One, the industry

has been experiencing a 43 percent compounded growth rate for

the last five years, so it’s caught a lot of attention of the investment community, and is certainly making great strides. There is

increasing adoption worldwide of incentives and subsidies to support the growth of the solar industry. Just last week, the country

of France introduced some major incentives, very close to those

being implemented right now by Germany. And certainly, the State

of California leads in the U.S., in terms of the size of its total electric program.

The very high demand, though, for solar has created shortages

for one of the key feedstocks, the basic silicon material that is used

to make the dominant form of solar cells, this is based on crystalline silicon technology. This is a 50-year-old technology that

today represents 94 percent of the market.

We believe at Miasole ́, and as do many of our competitive startups, that there is an emerging class of thin films that hold tremendous potential to dramatically lower the cost of solar. In particular,

the thin-film technology allows the capability of building flexible

solar cells, flexible modules, opens up the opportunity for a great

number of new applications, easing of installation processes, and,

basically, opportunities to attack the entire value of solar.

Miasole ́’s thin-film technology, we believe, will be capable of supporting a 60 to 70 percent reduction in the price of solar, and generating a reasonable profit margin for the company in the process.

At that point, solar is competitive with grid generated electricity

from conventional sources, in the range of .8 to .10 cents a kilowatt

hour, and we believe this goal will be reached well within the time

frame of the U.S. Department of Energy’s Solar American Initiative, which has set a goal to achieve price parity by 2015.

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And, I mentioned we are not alone, we have several, you know,

very strong venture-backed entrepreneurial companies that have

also entered this market. We think the entire industry is on the

cusp of some major changes, and it’s exciting to see the investment

coming in, it’s exciting to see the attraction of very senior management that bring with them a breadth of manufacturing and highvolume experience. So, I think the stage is very much ripe for disruptive change.

So, I’ll speak a minute now about thin films. Thin films represent

a class of semiconductor material that by its very name it’s very

thin film, of approximately 1/100th the thickness of standard silicon solar cells. There’s no dependence from the silicon feedstock

that are currently in limited supply.

In our case, it’s a continued deposition process. We literally take

a meter-wide coil of stainless steel, about two miles in length, and

continuously coat all the solar films on it, at a rate of two linear

feet a minute. We are currently building two of these very high-volume roll coaters in Santa Clara, and expect to populate our factory

with eight of the systems by the end of 2007. If we achieve those

ambitious goals, it would make Miasole ́ the largest producer of thin

film solar cells in the world.

Laboratory efficiencies for the material we are working with,

which is, the acronym is CIG, of the elements in the semiconductor,

very high efficiency, 19c percent achieved in the government lab,

very close to that of a polycrystalline silicon. The issue has been

while the laboratories have done tremendous research work, it

hasn’t really translated in a significant way into the commercial

marketplace. What the commercial market has lacked is high-volume manufacturing technology, and that’s what is starting to happen with companies like Miasole ́ and some of our competitors. We

are all taking slightly different angles, but we are trying to leverage other industries to bring high-volume manufacturing technologies to what’s been proven in the government lab, and that is

a tremendous stepping stone to have all that fundamental research

done and behind us.

The flexible solar cell in our case from this very thin stainless

coil allows for flexible modules, again, easy to install, lower the cost

throughout this valued thing, and I think the most important thing

that is going to happen to solar over the next five years is, we are

going to see a major move to improve building integrated

photovoltaics, where PV becomes the ubiquitous with the installation of a new roof on a new home or a new commercial building.

Right now, the vast majority of the market is retrofit, and we need

to have a paradigm shift there.

And, here’s the final slide, what can Congress do to help? Well,

I think already some big steps are being made. There is currently

out for solicitation the Solar America Initiative, which is virtually

a doubling in funding for solar research, about $148 million a year.

A major portion of that would be granted to the most promising

private companies to accelerate research activities.

I believe there’s an opportunity with the Department of Energy’s

Building Program. This is a program that to a large extent is focused on efficiency and zero energy homes, with a goal of achieving

by 2020 a zero energy new residential construction.

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Well, with the shift in population in the U.S., to the south, the

west, and the desert southwest, they have tremendous new residential developments. I visited one just a month go in Albuquerque, that’s proposing 37,000 new homes. That’s a tremendous

opportunity to put solar on every one of those roofs, and if we miss

that opportunity it’s 20 years before we get another shot at it, because that roof is not going to be replaced for 20 years.

So, I think maybe a closer look at the Building Program and how

we could marry that up closer with the Solar American Initiative.

Last year, the Energy Bill included a provision for 30 percent in- vestment tax credit for solar installation. It was capped at $2,000

for residential. First, it’s very impressive that we got that level of

investment tax credit through, but I’d like to see it expanded

through 2015 as presently proposed, and also an expansion of the

residential credit, because $2,000 is insufficient to cover the typical

electrical needs of residential homes.

And finally, at the commercial building level, I think there’s opportunities for a federal loan guarantee program. We have such facilities for large power plants, but if we could down size that and

make it available to commercial buildings to large-scale distributed

solar generation I think there’s a significant opportunity.

Right now, as a business owner, and I look at opportunities to

spend my capital budget, I, like most of my brethren, look at a two

or three-year payback. You just can’t get that with solar, because

you are really buying an asset that generates free electricity for 25

years. So, if there was some financial facility that made it possible

for the commercial building owner, be it the big-box retailer, or the

big warehouse, to put solar on in a mechanism to kind of get that

off their balance sheet so they could justify the financial investment. I think that would go a long way to making commercial installation much bigger.

Thank you.

[The prepared statement of Mr. Pearce follows:]

PREPARED STATEMENT OF DAVID PEARCE

Thank you for the opportunity to testify before the distinguished Committee on

Science. By way of background I am the CEO of Miasole ́, a Santa Clara, California

based manufacturer of thin-film solar cells. Miasole ́ has been in operation since late

2001 and exclusively focused on thin-film solar cells since early 2003. Miasole ́ occupies an 80,000 square foot manufacturing facility in Santa Clara and expects to

commence high volume commercial production in the forth quarter of this year. The

company’s employment has grown from 16 employees this time last year to 58 in

Santa Clara today. We expect to have over 100 local employees by year-end.

Miasole ́ is backed by several leading Bay Area venture capital firms including

Kleiner Perkins Caulfield and Byers and VantagePoint Venture Partners, both of

whom have a significant focus on alternative energy investments. Floyd Kvamme,

a Kleiner partner, serves as co-Chairman of the Presidents Counsel of Advisors for

Science and Technology. I have had the honor of speaking before this distinguished

group regarding the potential for thin-film solar and have also met with Samuel

Bodman, Secretary of Energy and Under Secretary, David Garman. There is wide

spread support for Miasole ́’s activities and for the potential for thin-film technologies to significantly reduce the cost of solar generated electricity.

Miasole ́’s technology is highly disruptive and is expected to result in a 60–70 percent reduction in the cost of installed PV systems within five years, thus allowing

PV to be competitive with conventional fossil fuel sources of electricity without the

continuing need for subsidies. Our technology is based on thin-film solar cells incorporating 1/100th the amount of expensive semiconductor material used in conventional crystalline silicon solar cells. Miasole ́’s PV modules will be made of flexible

laminates, eliminating heavy glass encasements and frames required for today’s silVerDate 11-MAY-2000 09:34 Dec 22, 2006 Jkt 029353 PO 00000 Frm 00048 Fmt 6633 Sfmt 6621 C:\WORKD\ENER06\080206\29353 SCIENCE1 PsN: SCIENCE1
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icon technology. We expect to integrate electronic functions into the PV module, further reducing costs and simplifying installation. Finally the form factor for Miasole ́’s

solar material is highly flexible enabling truly building integrated photovoltaics

ranging from residential roofing shingles that have the appearance of composition

shingles to membrane roofing systems for commercial applications.

Solar Industry Background

The Department of Energy has funded solar research for more than 30 years with a total investment approaching $3 billion. Unfortunately the U.S. does not have

much to show for its investment. After discovering the photovoltaic effect at Bell

Labs 51 years ago, the U.S. enjoys only limited market penetration and a small

share of global production. Last year Japan represented approximately half of all

global production and Germany more than half of all PV installations.

The U.S. has the potential to regain manufacturing and market leadership with

a new class of photoactive materials characterized as ‘‘thin-films.’’ Thin-films have

been well researched and have been widely viewed as having the potential for dramatic reductions in costs. What the industry has lacked is high volume manufacturing technology to leverage the achievements of government funded research.

Miasole ́ believes the age of thin-films has arrived and that the industry is on the

verge of major disruptive changes. Miasole ́ is one of several venture capital funded

startups that are bringing high volume manufacturing technologies to bear on this

market opportunity.

The early days of photovoltaics served primarily off-grid applications. In recent

years the on-grid market has dominated driven by high subsidies and favorable legislation such as net metering which provides a credit mechanism for excess electricity fed back into the grid. The on-grid market is dominated by the retrofit market where PV systems are installed on existing roofs. For truly cost effective solar

technology PV needs to become ubiquitous with new construction. This will eliminate retrofit labor and materials and a labyrinth of distributor markups while producing an aesthetically pleasing product that can be more easily financed.

Cost effective building integrated photovoltaics (BIPV) is a challenge with conventional crystalline silicon based solar cells since they must be encapsulated with tempered glass to protect the fragile silicon wafer. The resulting PV modules are heavy

and therefore limited in size. Thin-films can be manufacturing on thin flexible substrates and encapsulated with flexible materials. Form factors can be easily adapted

to different building requirements with the substantially lighter weight allowing for

larger modules and simplified installation.

Ninety-four percent (94 percent) of the photovoltaics market is based on crystalline silicon technology, a fifty year old technology. Another five percent is based

on amorphous silicon technology, a more than thirty-year-old thin-film technology

that suffers from inherently low efficiency. Two emerging classes of thin-film technologies have demonstrated high conversion efficiencies in government labs approaching that of polycrystalline silicon. These are cadmium-telluride and copperindium-gallium-selenide (CIGS). Of these two technologies CIGS is the most efficient and is the technology of choice for most new entrepreneurial startups.

Compounded PV system growth rates exceeding 40 percent per year for the last

five years have resulted in a significant shortage of polysilicon, the basic feedstock

for crystalline silicon solar cells. This shortage has resulted in a doubling in feedstock prices and price increases at the PV module level of approximately 50 percent.

Subsidies which were intended to stimulate the market by allowing economies of

scale are having the opposite effect. The Senate recently requested a study of the

impacts of supply constraints in the polysilicon feedstock industry with the understanding that polysilicon availability posed both a limitation to the growth of the

PV industry and a floor to how low prices could go. There is growing concern that

crystalline silicon based PV technologies will not be able to achieve the Department

of Energy’s goal for solar generated electricity achieving price parity with the grid

by 2015. A disruptive change is required with both the Senate and DOE providing

indications that they view thin films as a very strong solution to the polysilicon

shortage.

The solar industry has recently attracted substantial private financing. Venture

capitalists have been very active financing new management teams and the public

financial markets have been quite receptive to initial public offerings and follow-on

offerings. Equally important the opportunities in alternative energy and solar in

particular are attracting a new class of highly experience management teams, some

of which are steeped in high volume, low cost manufacturing. Most of these new entrants are focusing on thin-film technology. With the accomplishments of federally

funded thin-film research, significant inflows of private capital and the attraction

of experienced management teams, the stage is set for disruptive change.

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It is important to note that most major technical innovations or disruptive business models have not come from venerable established corporations, but from entrepreneurial startups. Examples of industry changing startups that displaced mature

organizations include Google, Cisco Systems, Apple, Genentech and Southwest Airlines, to name a few.

What can Congress do?

Congress should support the Solar America Initiative by fully funding the request

of the Department of Energy. The current request for solar research, including funding national laboratories is $148 million per year, a substantial increase from prior

funding levels. Awards should be granted to the most promising cost effective high

volume technologies. A byproduct of this is expected to be strong support for disruptive thin-film technologies and a favoring of entrepreneurial companies over mature

industry incumbents focused on 50-year-old crystalline silicon technology.

Congress should reevaluate the funding level of the Department of Energy’s

Building Program currently slated to receive $19.7 million of funding in fiscal 2007.

This program focuses on energy efficiency with a goal of providing energy and technology programs needed to achieve ‘‘Zero Energy Homes’’ (ZEH) by 2020. With a

shift in population to the south, west and desert southwest where solar irradiance

is high there is a tremendous opportunity to adapt BIPV in new residential construction, however, there appears to be a disconnect between the technology goals

of the Solar America Initiative and the level of emphasis in the Building Program.

Every new major residential development without PV represents a lost opportunity

as it will be twenty years before a roof replacement is needed. PV retrofits are not

nearly as cost effective as new construction. Congress should consider a step increase in the Building Program with the incremental funds dedicated to BIPV applications for new large scale residential development.

Congress should approve the extension of the investment tax credit for PV systems and lift the cap on the size of residential systems which at the current two

KW limit is insufficient to meet the electrical needs of most residential housing.

Congress should consider a more aggressive funding level in support of solar installations on new residential buildings, perhaps a direct buy down of the builder’s cost

of PV systems in new construction.

There is a tremendous opportunity to install PV systems on commercial roofs, particularly with new thin-film technology that allows PV modules to be built into

membrane roofing systems. Membrane roofs represent a $10 billion a year industry

in the U.S. The challenge with commercial roofs is capital. For example consider a

big box retailer with acres of roof space. Senior executives of these companies often

have a myriad of capital projects and make funding decisions only for projects with

two to three years payback. Solar is akin to buying a new car and prepaying the

gas for the next ten years even with cost parity to the grid. The PV system goes

on to produce essentially free electricity for twenty-five years or more but virtually

the entire cost must be paid up front. Businesses would have far more incentive to

install PV systems if additional financing options were available such as third party

financing backed by federal loan guarantees. The Federal Government already provides loan guarantees for large scale utility plant construction. Congress should give

consideration to a financing program that encourages smaller scale distributed PV

systems on commercial rooftops. Consideration should also be given to a funding

mechanism for manufacturing assets for PV manufacturers that operate in the U.S.

This would allow the U.S. to compete for PV manufacturing jobs that are now going

to Europe and Asia due to very large capital grants and/or heavily subsidized income tax rates.

Thank you for the opportunity to voice my opinions on behalf of Miasole ́ and the

solar industry.

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Addendum

Additional Detail on the Solar Industry

and Emerging Thin-film Technologies

The crystalline silicon PV industry

The photovoltaics industry has grown in excess of 40 percent per year for the past

five years, largely stimulated by government incentives. These subsidies were expected to lead to an increase in the rate of market adoption which in turn would

lead to economies of scale and lower installed system prices. Unfortunately high demand has had the opposite effect of increasing costs and increasing industry profit

margins. During the past two years a significant shortage of polysilicon feedstock,

the basic material for making a silicon solar cell, has emerged causing a major runup in the price of the feedstock, silicon wafers, solar cells and PV modules. A significant reduction in the cost of installed PV systems is required to realize the potential

of solar technology and to make significant inroads in reducing our dependence on

fossil fuel sources for electricity generation.

Silicon PV suppliers are trying to bring down their costs through several means

which include greater economies of scale (plants are already of significant size), reduced wafer thickness to lessen the use of expensive polysilicon feedstock (with increased manufacturing complexity and higher losses due to breakage), improved

photovoltaic conversion efficiencies (a relatively mature 50-year-old technology) and

more efficient manufacturing processes, offshore manufacturing, etc. Compounding

the problem is that the polysilicon feedstock industry, which supports both solar and

semiconductor industries, is demanding and getting higher prices while also requiring long term commitments to insure supply. Polysilicon feedstock costs have more

than doubled in the last three years and represent a significant portion of the cost

of a completed silicon PV module. Polysilicon feedstock shortages are expected to be

address by 2008/9 but high costs are being locked in for five years or longer under

long-term supply agreements.

Before the advent of the polysilicon feedstock shortage, the solar industry historically realized four to five percent per year price declines. In order for PV systems

to be competitive with conventional sources of electricity without subsidies PV modules prices need to decline from the prevailing rate of approximately $4.00 per peak

Watt to the range of $1.00–$1.50 per peak Watt. The goal of the Solar America Initiative is to achieve price parity with the grid by 2015. This will require a compounded price decrease of more than 10 percent per year for the next nine years.

Many doubt that crystalline silicon technology can reach this goal.

Besides the expense of making crystalline silicon cells there is considerable added

expense associated with silicon technology. First, silicon based PV manufacturing

plants are staggeringly capital intensive, on the order of $2–$3 million for each

megawatt of annual capacity with factories needing several hundred million dollars

of fixed assets to achieve scale. Second, the rigid and fragile silicon wafer must be

protected with a tempered sheet of glass. This requirement limits module size due

to weight considerations, requires aluminum frames for mounting, bulky mounting

hardware, poor aesthetics and high installation costs. Thin-films offer a disruptive

path to significantly lower manufacturing costs, simplified and light weight module

packaging, ease of installation and the potential for truly ‘‘building integrated’’

photovoltaics (BIPV) where solar becomes ubiquitous with installing a roof during

new construction.

To summarize:

• Crystalline silicon solar cells are a 50-year-old technology representing 94

percent of solar industry sales

• Crystalline silicon manufacturing processes are relatively mature; significant

economies of scale have already been achieved

• Manufacturing costs have been rising due to polysilicon feedstock shortages;

new supply is coming on line in two to three years but at high contracted

long-term prices

• Market based subsidies have created high demand which in turn have caused

escalating costs and have enabled expanding margins

• Crystalline silicon costs aren’t likely to decline fast enough to meet the goals

of the Solar America Initiative. . .i.e. price parity with the grid by 2015.

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Thin-film photovoltaics

Thin-film photovoltaics involves the deposition of a thin film of photoactive semiconductor material on a low cost substrate. The amount of semiconductor material

in a thin-film solar cell is approximately 1/100th that of a crystalline silicon cell.

In addition, thin-film solar cells can be manufactured over large areas, including

roll-to-roll continuous deposition processes. To put this in perspective, crystalline silicon cells are nominally six inches by six inches in size and are manufactured in

discrete, batch oriented processes. Contrast this to Miasole ́’s process which continuously deposits thin films on meter wide rolls of stainless steel foil two miles or

longer in length moving at two feet per minute.

Thin-film solar materials have been researched for more than 30 years and have

been in modest volume production for the past ten years for both commercial and

residential use. The most mature thin-film technology is amorphous silicon. The

first significant markets for amorphous silicon were hand-held calculators. Today

amorphous silicon represents about five percent of the rooftop solar market. The

principal draw back to amorphous silicon is its inherently low conversion efficiency

equal to about half that of crystalline silicon. Amorphous silicon deposited on thin

flexible metal substrates and encapsulated with flexible laminates yields a PV module that is light weight, flexible and easy to install. It is this unique flexible module

capability that has generated most of the demand for amorphous silicon rooftop applications.

There are two other classes of thin-film technologies currently in commercial scale

production which together represent about one percent of the world market: Cadmium-Telluride and Copper Indium-Gallium di-Selenide (CIGS). The U.S. has long

led the world in thin-film solar research holding the world records for high efficiency

cad-telluride and CIGS solar cells. What the market has lacked is a high volume

manufacturing process to leverage the progress made at the laboratory level for

these technologies. Entrepreneurs have seized the opportunity in the past several

years with the formation of several new startups funded by the venture capital industry all with the intent of pursuing high volume, low cost manufacturing technologies. The majority of these startups are pursuing CIGS solar cell technology

since CIGS has demonstrated the highest conversion efficiencies of any thin-film

technology, very close to that of polycrystalline silicon (19.5 percent for CIGS vs.

20.3 percent for polycrystalline silicon).

Production processes for cadmium-telluride and CIGS thin-films remain relatively

immature. This situation is expected to change rapidly as volumes increase and

manufacturing learning curves improve product performance, production yields and

lower costs. Equally important, thin-film processes typically require dramatically

lower fixed asset expenditures for a given level of production.

Unisolar, a division of Energy Conversion Devises, is the world leader in amorphous silicon and First Solar is the world leader in Cadmium-Telluride. Miasole ́ believes it will quickly become the world leader in high volume, low cost CIGS production.

Thin-films represent the opportunity for the U.S. to regain the lead in solar technology, cost competitiveness, volume production and market penetration. With these

goals achieved, widespread market adoption becomes possible without the need for

continued subsidies.

To summarize:

• Thin-film solar technologies have been widely researched and have achieved

laboratory conversion efficiencies closely matching polycrystalline silicon technology

• The industry has lacked a high volume manufacturing platform to leverage

the discoveries made in a laboratory environment

• Entrepreneurs and investors are aggressively pursing the high volume manufacturer of thin-film solar with CIGS based solar cells the technology of choice

amongst most startups

• Thin-films offer the potential for substantially lower costs per peak Watt, up

to a 70 percent cost reduction from crystalline silicon for installed systems.

Challenges to commercializing thin-film technologies

Challenges associated with scaling laboratory technology demonstrations:

Most government and university thin-film research has focused on optimizing the

efficiency of thin-film solar cells and improving the understanding and characterization of these films. Unfortunately most of the laboratory processes are not easily

scaled. Little effort has gone into researching large scale production platforms.

Miasole ́ is leveraging the core experience developed by NREL but is using a difVerDate 11-MAY-2000 09:34 Dec 22, 2006 Jkt 029353 PO 00000 Frm 00052 Fmt 6633 Sfmt 6621 C:\WORKD\ENER06\080206\29353 SCIENCE1 PsN: SCIENCE1
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ferent vacuum deposition process known as ‘‘sputtering.’’ Sputtering is widely used

in the architectural glass industry (sheets of glass 12’ x 20’ in size) and the data

storage industry for making hard disks. In Miasole ́’s case a significant portion of

the Company’s technical team came from the data storage industry augmented with

engineers from the glass coating industry and engineers and scientist with specific

CIGS experience.

One of the challenges to the high volume production of thin film solar cells is that

commercial production equipment does not exist. The industry is similar to the early

days of the semiconductor industry where companies developed their own manufacturing tools. Today there is a discrete and separate semiconductor capital equipment

industry. Fortunately Miasole ́ has years of experience designing and manufacturing

high volume vacuum deposition systems with several core patents covering major

elements of its technology.

Challenges associated with the time to develop high volume processes:

A second challenge is that each high volume process has its unique properties

that are different than laboratory processes. It frequently takes several years to develop a production tool and an equal amount of time to perfect a production process.

Government funded research offers an excellent platform for getting started, but

substantial additional process and system development is required. Historically

most of the solar startups were founded by scientist out of government and university research programs. While these scientists had a core understanding of the technology, they lacked volume manufacturing and general business experience. Venture

capitalists tend to back experienced management teams and had difficultly backing

early scientist turned entrepreneurs. All of this is changing with the advent of a

large scale solar industry and more plentiful investment dollars. The industry is

now attracting experienced management teams, several of which have deep domain

experience in high volume manufacturing, and significant private equity.

Challenges to locating manufacturing in the U.S.:

There are challenges to locating factories in the U.S. and California in particular.

Silicon based PV cells and modules are relatively labor intensive favoring overseas

production in low labor cost countries. Thin-film processes, if properly executed, are

less people intensive but labor costs remain an issue in a highly cost sensitive marketplace. Many countries offer significant financial incentives for establishing PV

manufacturing plants. Several European countries offer capital grants equal to 50

percent of the cost of a factory. With large scale PV factories costing hundreds of

millions of dollars, these subsidies are very substantial from both a unit cost standpoint and the amount of capital required. Asian countries favor tax holidays with

some countries offering five year income tax holidays, another five years at 7.5 percent tax rates and permanent long-term income tax rates of 15 percent. Often countries that subsidize factories also offer some of the highest market incentives and

thus represent large domestic outlets for production.

At the state level, California not only has inherently high labor, facility and utility costs, but it also is one of only eight states in the U.S. to tax manufacturing

assets. Miasole ́ anticipates spending approximately $30 million for fixed assets next

year for installation at its Santa Clara facility plus an additional $2.5 million for

use tax that the Company would not incur if operating in most other states. California talks about wanting high paying manufacturing jobs but does little to encourage industry to expand, particularly those that are fixed asset intensive. On the plus

side, California’s PV market incentives are among the best in the country.

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BIOGRAPHY FOR DAVID PEARCE

Mr. Pearce serves as President and Chief Executive Officer of Miasole ́, a Santa

Clara, California venture backed solar photovoltaics company he founded in 2001.

Mr. Pearce has served at the President/CEO level of both private and public hightechnology companies for the past 20 years. He is a serial entrepreneur, having

founded four venture-backed companies and accomplished two IPOs.

Mr. Pearce’s accomplishments include major breakthroughs in the production of

hard disks for the data storage industry, low cost optical filters for fiber optic communications and now, thin-film solar cells that dramatically lower the cost of solar

generated electricity. Mr. Pearce holds a BS in Industrial Management from Georgia

Tech and an MBA from the University of Texas.

Mr. Pearce’s employment history over the past twenty years is as follows:

2001–present—Founder, President & CEO of Miasole ́

1999–2001—Founder, President & CEO of OptCom, an optical components manufacturer of thin-film filters for fiber optic communications

1997–2001—Founder, President & CEO of SciVac, a manufacturer of precision thinfilm vacuum deposition equipment

1994–1997—President, Exclusive Design Corporation, a manufacturer of capital

equipment serving the hard disk industry

1992–1994—Founder and President of JTS Corporation, a manufacturer of hard

disk drives

1990–1992—President & CEO, Kalok Corporation, a manufacturer of hard disk

drives

1985–1990—President & CEO, Domain Technology, a manufacturer of thin-film

media for the data storage industry

Chairwoman BIGGERT. Thank you very much.

Mr. Swenson.

STATEMENT OF MR. RON SWENSON, CO-FOUNDER,

ELECTROROOF

Mr. SWENSON. Thank you very much. I appreciate the opportunity to speak today about international renewable energy education, and I especially appreciate the thoughtful questions that

were raised by yourselves and the staff.

It’s appropriate that we are holding this meeting in California.

Since the ‘49ers gold rush mystique spread far and wide, California

has changed the world several times. Hollywood and Silicon Valley

symbolize these dramatic changes. And, Dr. Rosenfeld, as Dr. Chu

showed, is leading in that direction still.

Now, Silicon Valley is rising to a new challenge to save the world

from global warming produced by carbon energy to global sustainability produced by silicon energy.

Since 1992, I’ve been involved in renewable energy education

projects, primarily applications of solar electricity, in Mexico,

Uganda, Bolivia, South Africa, Ecuador, Butan in the Himalayas

and Peru.

Coincidentally, just yesterday in Quito, Ecuador, the United Nations Development Programme announced that SolarQuest, which

is our non-profit arm, has been given responsibility for planning a

Renewable Energy Applications Laboratory in the Galapagos Islands. We call this the ‘‘REAL-Lab’’ by the acronym. Since 2002,

we’ve been providing human capacity building, that is to say, training with young people and the staff of the electric utility there, in

renewable energy, installing wireless internet first of all, then assessing energy conservation options for the community, installing

solar with hands-on training, and monitoring the performance of

the solar and the diesel generators which were in place before we

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arrived. Young people there have jumped on board enthusiastically

and intelligently, and we call what we do ‘‘productivity-centered

service learning,’’ learning by doing in simpler terms.

In the next phase of our work, we are integrating these international initiatives to transform energy in the islands to renewables, in order to reduce the risk of oil spills that would threaten

the endemic wildlife there. With guidance from the UNDP, Ecuador’s Ministry of Energy, and industry sponsors, we are teaming up

with American universities as capacity partners. Each university

here in the States brings unique skill-sets to bear on renewable energy research and renewable energy education, and they will in

turn partner with the universities in Ecuador, and when we open

the lab to broader membership, other nations will also enjoy these

benefits.

Renewables face many of the same obstacles in developing countries as we do, but there are some differences. In developing countries, the market is eager but capital is more scarce. In remote

parts of the world, modern skills are lacking, and you can’t just

jump from the three Rs immediately to science and physics.

Another thing is that fossil fuel subsidies penalize the economics

of renewable energy there as it does here. In the Galapagos Islands, a National Fairness Doctrine means that electricity is the

same price as on the Mainland, and yet, the electricity costs twice

as much to produce from diesel there. According to the International Energy Agency, energy subsidies add up to about $200 billion worldwide each year. What if we were to invest that money to

build lasting solutions instead of propping up the fossil fuel infrastructure which is failing us?

You’ve also asked how we structure our renewable energy education programs. I’ve already hinted at it, but to say a little bit

more, just the same way that Apple Computer developed a loyal

following by supporting computers in schools, so we are matching

up universities in the U.S. with universities in the REAL-Lab countries. Taking this one step further, consider what it might be like

if we looked at the 100,000 schools in Latin America that still have

no electricity. The U.S. Government could sponsor solar systems installed in every one of these schools. Even $100 million for a small

solar system on each of these impoverished schools would be a

huge improvement.

Government Industry Education Partnership would bring huge

benefits to the U.S. economy and our political welfare.

Renewable energy for developing economies has the advantage of

being bite size, ubiquitous and grid independent. Solar can be

started on a small scale and grown as resources become available.

Coal or nuclear power requires a huge investment, but one family

or a village can start with solar on a very modest scale. For example, we installed a two kilowatt system in a village school in Bolivia, only four watts per capita, that’s less than a night light per

capita, and yet, it made a huge difference in that community.

The political and economic implications for renewable energy in

the international arena are enormous. Renewables are carbon neutral, and they are nuclear free. The threats of developing nations

from nuclear-based energy are as foreboding as climate change.

The day may come when all political regimes are sufficiently orVerDate 11-MAY-2000 09:34 Dec 22, 2006 Jkt 029353 PO 00000 Frm 00061 Fmt 6633 Sfmt 6601 C:\WORKD\ENER06\080206\29353 SCIENCE1 PsN: SCIENCE1
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derly and stable to control weapons-grade nuclear materials, but

humanity has not mastered this talent yet. Small nations use valid

concerns for their energy future to justify the nuclear alternative,

and they get persistent encouragement from the ambitious nuclear

power industry, and if not from the United States, then from Russia, France, or others.

If the U.S. and its responsible G8 partners were to offer these

nations a large-scale and lasting renewable energy solution, the energy efficiency argument for nuclear power would fall aside and the

world would be a far safer place.

In light of all these concerns, renewable energy is the unique,

unifying principle for rational energy export. We have a mandate

ourselves to repower the Galapagos with renewables. Through education, we are exploiting bridges of understanding packaged with

U.S. energy solutions.

So, imagine a $100 million scholarship from the National Science

Foundation to train foreign students in solar energy at U.S. universities. We would create partners in development, not just consumer

markets.

Renewable energies are mature. Coal and nuclear power may be

valid as measures of last resort, but they are just temporary measures. The sun is delivering 120,000 Terawatts for us as we speak

to meet our existing 13 Terrawatts of demand. We have a lot of

margin to work with.

So, I would invite you to join us in the Galapagos Islands to see

the REAL-Lab and our productivity centered service learning, and

I would say further that if people want to look at more detail of

some of my comments, you can go to SiliconEnergy.org, where I

posted some other remarks.

[The prepared statement of Mr. Swenson follows:]

PREPARED STATEMENT OF RON SWENSON

I appreciate the opportunity to speak today about international renewable energy

education. I especially appreciate the thoughtful questions which have been raised

by yourselves and your staff.

1. My Renewable Energy Projects in Developing Countries

Since 1992, I have been involved in renewable energy education projects, primarily applications of solar electricity, in Mexico, Uganda, Bolivia, Ecuador, Bhutan

and Peru. (I am providing a list as Attachment 1.) Coincidentally, just yesterday in

Quito, Ecuador, the United Nations Development Programme announced that

SolarQuest (our non-profit arm) has been given responsibility for planning a Renewable Energy Applications Laboratory in the Galapagos Islands. We call it the

‘‘REAL-Lab.’’ Since 2002 we have been providing human capacity building for renewable energy in the Islands—installing wireless Internet, working with secondary

school students to assess energy conservation, install solar with hands-on training,

and monitor the performance of solar and diesel generators there.

In the next phase of our work, we are integrating international initiatives to

transform energy in the islands to renewables, reducing the risk of oil spills that

threaten the unique endemic wildlife there. With guidance from the UNDP, Ecuador’s Ministry of Energy, the Galapagos National Institute, and the e8 Network, we

are teaming with universities in the U.S. to serve as our capacity partners. Each

university will bring unique skill-sets in renewable energy research and education

into partnership with universities in Ecuador. When we open the lab to broader

membership, other nations will also enjoy these benefits.

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2. Unique Challenges for Renewable Energy in Developing Countries Renewables face many of the same obstacles in developing countries

as in the USA and other OECD countries. Some differences come

into play:

• Money: In the USA there is capital but the market has been slow to embrace

the technology. In developing countries the market is eager but capital is

scarce. Ironies persist in our complex world!

• Skills: In all large cities around the world, it is possible to find skilled technicians, engineers and scientists. Cities can’t work without commercial forms of

energy and personnel trained in the field. Throughout the remote parts of the

world, however, understandably there are few people with significant education in modern science or engineering.

Nor can core competencies (e.g., the three R’s) be taken for granted. En route

to building capacity in solar energy, a student can’t leap from reading simple

hand-me-down texts to understanding physics and engineering concepts.

Blending education in core competencies with specific skill-sets applicable to

renewables, our students excel. Not surprisingly, when offered access to tools

and tangible opportunities to serve their communities, young people respond

intelligently and enthusiastically to our initiatives. We call this productivity

centered service learning.

• Subsidies: Fossil fuel subsidies penalize the economics of renewable energy.

In the Galapagos Islands, a national fairness doctrine makes electricity the

same price as on the mainland, even though diesel-electric costs twice as

much. According to the International Energy Agency, energy subsidies add up

to $200 billion per year. What if we invested that much to build lasting solutions instead of propping up the failing fossil fuel infrastructure?

3. Renewable Energy Education in Developing Economies

As warnings of global warming are increasingly validated by catastrophic events,

human capacity building in the energy sector is becoming essential for the rapid

substitution from carbon-based energy to carbon-neutral sources. If banks, industry

and governments continue to favor carbon-based energy over carbon-neutral solutions, it may ultimately fall upon youth to educate their elders. It’s like, if your computer isn’t working, get your teenager to fix it for you!

How to Structure Renewable Energy Education in Developing Economies

Structuring renewable energy education in developing countries could make a crucial impact on international relationships for the USA Government.

• Markets Lost: The potential for USA industry to capture renewable energy

markets worldwide is enormous. But time is against us: even though most renewable technology has been developed in the USA, our advantage has been

lost. Europe and Japan took the lead by encouraging commercialization in

their own domestic markets, and that prepared them for dominance in the

international markets.

• Creating Market Potential: Just as Apple Computer developed a loyal following by supporting computers in schools, we are matching up universities

in the USA with universities in the REAL-Lab member countries. The member nations joining our Renewable Energy Applications Laboratory will designate their own universities to partner with our U.S. university capacity

partners. Markets for U.S. solar energy products will accelerate when ten universities in the USA are matched with ten universities in ten member countries. Their intellectual strengths will be coupled with American strengths to

develop robust human capacity.

• Hands-on: In the USA, because of liability issues, it has been very difficult

for us to provide opportunities for young people to learn by doing. On the

other hand, in developing countries we have been able to bring together

teams of young people with little experience and teach them the basics of

electricity, solar energy, satellites and computers in short order. Hands-on experience has been the key to motivation and knowledge retention.

• Large-Scale: Taking this one step further, consider the 100,000 schools in

Latin America with no electricity. The U.S. Government could sponsor solar

systems to be installed on every one of those schools. Even $100 million for

a small solar system on each of these impoverished schools would be a huge

improvement over nothing. We would motivate future scientists and engiVerDate 11-MAY-2000 09:34 Dec 22, 2006 Jkt 029353 PO 00000 Frm 00063 Fmt 6633 Sfmt 6621 C:\WORKD\ENER06\080206\29353 SCIENCE1 PsN: SCIENCE1
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neers who appreciate Americans when we combine this hardware investment

with curriculum delivered by our University capacity partners. A governmentindustry-education partnership would bring huge benefits to the U.S. economy and our political welfare.

4. Advantages of Distributed Renewable Energy in Developing Economies

• Bite-Sized and Ubiquitous: Solar can be started on a small scale and

grown as resources become available. Coal or nuclear power requires a huge

investment, but one family or village can start with solar on a very modest

scale. We installed two kW at a village school in Bolivia—only four watts per

capita for 500 people. It made a huge difference. Anywhere in the world, a

family with one solar panel can have basic communications and lighting.

• Grid Independent: Renewable energy can be installed where no grid exists.

In the USA and other developed economies, copper was mined and laid out

in wires across the entire landscape many decades ago. In less developed nations the electricity grid is far weaker—where it even exists. The grid is nonexistent for roughly a third of the human population. With more pressing priorities and limited buying power, less developed nations are unlikely to be

able to mimic our sophisticated grid infrastructure in the foreseeable future.

Political and Economic Impacts

Political and economic implications for renewable energy in the international

arena are enormous.

• Solar facilitates fairness; Oil breeds conflict: Coal, oil and natural gas

are unevenly distributed but solar energy can be distributed equitably to the

entire human population.

• Carbon Neutral: As demand for electricity and transport grows around the

world, the threats to developing nations from carbon-based energy sources are

unfathomable. My flight to Bhutan in 2002 landed in Dhaka, the capital of

Bangladesh. I was shocked to find myself in a Water World. Already surviving

on a thin margin between land and ocean, Bangladesh and many other countries will suffer massive dislocations if the pace of global warming isn’t

stopped soon. While the USA has so far suffered the highest profile losses

from global warming, there are numerous developing countries that have suffered as well. Hurricane Mitch devastated Honduras when the role of global

warming was less obvious. Ironically, Chinese and Indian energy policies

threaten their own highly developed low-lying coastal regions as they engage

in the madness of coal-fired economic growth.

• Nuclear Free: The threats to developing nations from nuclear-based energy

are as foreboding as climate change. The day may come when political regimes are sufficiently orderly and stable to control weapons-grade nuclear

materials, but humanity has not mastered this talent yet. Small nations use

valid concern for their energy future to justify nuclear, and they get persistent encouragement from the ambitious nuclear power industry (if not from

the U.S., then from Russia, France and others). If the USA and its responsible G8 partners were to offer these nations a large-scale and lasting renewable energy solution, the energy deficiency argument for nuclear would fail

and the world would be a far safer place.

Government and Industry Willingness to Encourage Renewables

We hear talk of energy independence, and of course people are increasingly concerned about the high price of gasoline. But there are serious implications if responses to these concerns ignore other concurrent challenges.

• Peak Oil and Carbon Intensive Responses: Do rising oil prices derive

from political instability and economic challenges or do they represent early

signs of reaching the intrinsic limits to physical oil supplies? There are ominous signs that natural limits are contributing to the challenge to find more

oil. Extraction is declining rapidly from the North Sea and from Cantarell,

Mexico’s largest field. Indonesia recently became a net importer of oil. New

discoveries replace only a fraction of annual consumption. While it is a laudable goal, the quest for energy independence so far has led to policies that

encourage carbon-intensive forms of energy, including coal-to-liquids, tar

sands, oil shale, corn ethanol and nuclear power. (Some of these energy forms

are erroneously represented as carbon-neutral, which further complicates the

debate. www.energycrisis.com/nuclear)

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• Global Warming: There are credible warnings that glaciers in Greenland

and the Antarctic will continue melting, leading to a significant rise in sea

level, even if we act quickly. In the face of this and other climate catastrophes, we can only hope to minimize impacts by immediately exploiting alternatives to carbon-based energy sources. We also need to understand the

potential costs and environmental impacts that such catastrophic events may

impose on the global economy and to compare those costs against profound

investments in carbon-neutral renewable technologies.

The challenge is acute in China, where coal-fired power plants are coming online at an alarming rate and renewable energy, especially solar water heaters

and solar electricity, are also growing rapidly.

Export Opportunities

• Exporting bridges of understanding: In light of all these concerns, renewable

energy is the unique unifying principle for rational energy exports. We have

a mandate to re-power the Galapagos with renewables. Through education,

we are exporting bridges of understanding, packaged with energy solutions.

• Linked to Energy Efficiency: An integrated approach to energy is a key

strategy to differentiate U.S. solar initiatives from those of competing interests. With low energy appliances—skipping light bulbs altogether in villages

getting electricity for the first time and going directly to LEDs, for example—

literally could make all the difference. Electricity alone doesn’t do the job; it’s

the foundation for services that need to be integrated from the start. We can

point to all kinds of failures—tractors that can’t be repaired for lack of parts

inventories, refrigerators delivered to places with no electricity. Electricity in

combination with efficiency can build strong markets for a broad array of

American products.

• Rapid Deployment: We need rapid deployment of renewables to meet the

environmental challenges we face. We need to stimulate the renewable energy

business in every sector, from finance to manufacturing to operations and

maintenance, to intensive capacity building.

My team has a mandate to re-power the Galapagos with renewables. What

if the National Science Foundation were to invest $100 million in education

to re-power developing nations worldwide? The USA would get an enormous

return.

• Renewables are mature: Coal and nuclear power may be valid as measures

of last resort but they are at best temporary measures with potentially dire

consequences. The sun is delivering 120,000 Terawatts for us to meet 13

Terawatts of demand. We have a lot of margin to work with.

I invite you to join us in the Galapagos Islands to see the REAL-Lab and productivity centered service learning in action.

For additional information, visit my website at http://www.SiliconEnergy.org/us/

.

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DISCUSSION

Chairwoman BIGGERT. Thank you very much. Maybe we can organize a science trip to go and see what you are doing down there.

Mr. HONDA. I’m there.

Mr. SWENSON. Love to have you.

Mr. HONDA. Madam Chair, you may want to also notify the audience and our witnesses that we have a very tight schedule.

Chairwoman BIGGERT. Yes.

Mr. HONDA. We need to leave at 2:30 sharp.

Chairwoman BIGGERT. We’ll proceed now with the questions, and

we will each take five minutes and then rotate. So, if we can have

short questions and short answers that would help to get through

all that we have.

This past year, we had a—there was a demonstration on the

Mall in Washington of solar houses that were built under a competition from DOE and sponsored by numerous corporations. And,

the university students participated, and they came and put up

850-foot houses, and put them all together to demonstrate how you

could have an all solar powered house.

Now, they happened to pick a week in Washington that it rained

the whole week, absolutely the whole week. Now, that reminded

me, you know, and I live outside of Chicago, in the wintertime, particularly, I think January and February, we seem to be able to go

for weeks and weeks without ever seeing the sun.

So, and being here in this beautiful California all the time, is

there—is it practical to use solar energy in the higher latitudes

with more diverse climates, like in Chicago, or where you have a

lot of rain?

Mr. Pearce?

Mr. PEARCE. Yes. The world’s biggest market for solar is Germany, that was 57 percent of all installations last year worldwide,

and they have a climate that is as bad, if not worse, than Chicago.

Chairwoman BIGGERT. Yes.

Mr. PEARCE. So, even in the rain solar systems are going to be

producing electricity. Obviously, it’s going to be not as much like

the sun shining brightly, but definitely it may drop there.

Chairwoman BIGGERT. Thank you.

Then, Mr. Larsen, you say that EPRI has different projections for

the market for renewable energy than the Energy Information Administration. This Subcommittee sponsored a forum on energy

modeling last year, and talked about how important assumptions

are to the modeling results.

Why do you think your models and those assumptions differ from

EIA?

Mr. LARSEN. I believe part of the answer is that, well, the basis

for the model that we created was the NEMS model, so we took the

output from that model and then introduced regional differences,

the renewable portfolio standards, and other economic inputs into

our model to try and shape an output for a 2050 outcome.

So, really, we took in regional differences across the country,

across the states, to really start drilling down into what was different with various RPS inputs and assumptions, as well as various

assumptions on the cost of electricity.

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And again, there was no assumption on a dramatic change in the

technology or any disruptive input that would significantly reduce

that cost.

Chairwoman BIGGERT. Do you see anything adding to that, with

the changed technology that we seem to be moving forward on so

many of these things that we haven’t in the past?

Mr. LARSEN. Oh, absolutely. It’s a—for us, when we create a

model, it’s difficult for us to take a good snapshot, since often times

the technology is moving so quickly, as it is today.

The model that we generated was based on 2005 data, and, I

mean, six months ago, that’s a long time ago with respect to what’s

happening in the industry and what we are seeing at the Valley

today, with respect to solar technology development.

Chairwoman BIGGERT. Well, if we say an over supply of only one

to two percent of the oil demand if sustained can cause prices to

drop dramatically, like in the late 1990s, what happens to all of

those renewable energy investments if the price of conventional energy drops in two or three years, whether or not this is a deliberate

OPEC tactic?

Would anybody like to answer that? Doctor?

Mr. SWENSON. Yes, I can speak to that.

Dr. PENZIAS. I thought——

Mr. SWENSON. Oh, excuse me, go ahead.

Chairwoman BIGGERT. You both can, first Dr. Penzias.

Dr. PENZIAS. The simple answer is price. The price of coal is a

price in human lives, in railroads, you can’t just drop the price of

coal, and coal is what generates our electricity in this country.

There isn’t, natural gas is not controlled by—if we talk about electricity only, then that isn’t the problem. But, the issue is still price,

and a dramatic change in the cost of electricity generation will

make a huge difference. And so, I think it’s beyond on that side.

On the petroleum side, that’s a somewhat different story, and we

can get into that, but if we talk about just electricity generation,

I think it’s almost—I think it’s, essentially, independent of demand,

because there’s almost no petroleum used to generate electricity, if

I remember from the chart.

Chairwoman BIGGERT. Mr. Swenson.

Mr. SWENSON. Yes. The largest oil field in Mexico, Cantarell, is

on the verge of dropping dramatically to maybe a quarter of what

it was doing before within the next couple of years. The North Sea

is declining, and I believe that there could easily be a reversal

where the price of oil could go down for a short period of time, but

we are seeing an inextricable change in the availability of oil, and

it’s not yet hit other than with price, but we are close to that point

where the rubber band is stretched very tight, and a little perturbation could mean gas lines again and serious disruption.

So, while there may be some temporary reversals, the trend is

distinctly for higher prices in oil.

Chairwoman BIGGERT. Thank you.

Dr. Chu.

Dr. CHU. Yes, going specifically to your question, we have an example in Europe, Danes actually were very successful in encouraging a wind power development, and the way they were able to

do that is, they would guarantee some return on investment, so

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they would stabilize things. So, just in case the bottom does drop

out, they would have a floor that said, okay, you can make a certain amount of money.

A similar thing has to be done, if and when we ever go to let’s

say a carbon tax trade, if the price of carbon trading goes too far

down that could snuff out a lot of investments, and so there should

be concern about a minimum floor, otherwise because many of the

things that you have heard you are talking about a three, five,

even ten year investment. So, you have to be very conscious about

guaranteeing some sort of investment over a stable period of time.

Chairwoman BIGGERT. Thank you. I think that’s what concerns

me, I think we really have to move ahead, and we have in all kinds

of renewable technology right. We really have the opportunity to do

it, because people are concerned about not having enough of the

conventional fuels that we have, and we have to move ahead, you

know, the long-term to nuclear, the long-term to hydrogen, and ethanol and all those things in between, and solar can be a longterm—the development that needs to take place, but we have to be

moving now to make sure of that. I think, people understand that

it is a process that takes a while.

Mr. Honda.

Mr. HONDA. Thank you, Madam Chair, and before I start my

question I would just like to recognize four gentlemen up there in

the red tee shirts, they are the Santa Clara University solar decathlon team, and we want to welcome you. This is not only solar

energy we tap into, it’s youth energy, too. So, welcome, thank you

for being here.

Mr. Larsen, could you discuss further the issue of grid integration of renewables and how they arrive at the projection that costs

will go up, could you integrate us as to the percentage or the numbers of renewables in Brazil? I think I heard you say that, and I

was curious about what they are thinking.

Mr. LARSEN. Yes, Mr. Honda. The issue with renewables in the

state of the technology today is one related to dispatching and controlling that resource. So, for instance, we have wind or solar,

which the wind blows certain times of day, the sun is out certain

times of day, and we still have not fundamentally solved the bulk

of large energy or electricity storage count from a technology standpoint.

So, for instance, if you look at the peak coincidence, so the peak

load versus peak demand, if you compare demand versus what we

are dispatching with wind, the peak coincidence is probably in the

single digit percentage points. So, when we have peak demand during our hot days or hot times, such as we did in the state a week

or two ago, the wind may not be blowing at all times for us to be

able to dispatch that wind power to support that demand.

So, that presents a significant integration challenge to the grid.

So if we don’t have—if we are relying solely on a non-controllable

resource, then we are going to have to get that energy somewhere

else, and with today’s state that would come from, in the State of

California, most likely natural gas, or combusted turbines, or other

dispatchable assets.

The other issue with respect to wind would be just the ramp

rates that we are seeing when the wind does blow, and when we

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are able to dispatch that energy. The ramp rate or the increase

from zero to 100 percent on a lot of these wind farms is significant,

that’s a significant integration count to the grid.

So, where we are today with two percent across the country, or

less than two percent of renewable as a part of our generating portfolio, we have the capacity to make up for a situation where we

can’t dispatch wind, or we don’t have that resource available. If

that percentage increases significantly, then we will have to either

achieve that gap, close that gap that we are going to have by enduse efficiency or other storage means in order to make up that lost

demand or demand that we can’t meet.

Mr. HONDA. So, it’s really a juggling of the different sources, and

I guess in terms of what you can control immediately with your

grid.

Mr. LARSEN. Absolutely.

Mr. HONDA. That sounds like the back-up, so your peaks would

reverse probably from a management perspective.

Dr. CHU. Well, most of the grid decisions are made, we don’t

transfer electricity very far distances. If you look at how it is generated and where it’s used, there is very little research being done

in the United States on very high voltage DC transmission. The

cost of DC transmission is very—is high. It’s scaled $1 million a

mile, but once you can think about transmitting electricity over

2,000 miles, a lot of the issues that you just heard about are greatly diminished.

And so, one of the things is that renewables, wind, you know, it

blows somewhere in the United States quite often, and so once you

have very efficient long distance transmission this opens up so that

renewables can be a larger part of the portfolio of our energy. This

is something that’s rarely discussed.

Mr. HONDA. Okay.

Dr. PENZIAS. The northeast blackout, the way the present grid

transits energy from one place to another is that everything has to

stay 60 cycles, and that—when something gets a little out of

whack, and one cycle is going up the other one down, all of a sudden the northeast United States becomes the darkest spot on the

planet.

So, a national security issue could be to separate pieces of the

grid, even if you don’t get the DC across the country, if you just

put DC in the next area, instead of having all DC—all AC connect

others, there is technology there and, perhaps, EPRI can talk about

that, but we don’t stabilize the present grid because of the private

enterprise, and they can’t afford it.

But, it may be, if you folks want to look into the possibility of

making our grid more secure, and then also when it is more secure

that also allows it, it can respond to the loss of energy in some way,

and also respond to the loss of renewables. So, you get both at the

same time, national security and the robustness display as well.

That’s another possibility.

Mr. HONDA. Thank you.

Mr. Pearce, you said that the government labs did good fundamental research, but that the problem has been scaling it up to

manufacturing scale. Do you think that DOE could work differently

to address these areas, and then because DOE does not focus on

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this how does industry really look at the Department of Energy as

compared to relying on internal labs or universities?

Mr. PEARCE. Well, I think DOE is starting to make some

changes. In the last few weeks, there was a new major laboratory

opened at the National Renewable Energy Lab, specifically designed for manufacturers to bring in their equipment, place it in

the facility, and operate it there with NREL personnel. And,

Miasole ́ intends to put a system in that facility, just for the purposes of accelerating our process development for high-volume

manufacturing technology.

You know, so I think the DOE and, particularly, the NREL team

is absolutely on the right track to make that happen.

Mr. HONDA. Mr. Pearce, on a personal basis, I’m thinking of

doing my roof all over again, I heard you say that, you better do

it when you are doing it then, so how do thin-film photovoltaics

perform compared to silicon, and in terms of durability, long-term

efficiency, average daily energy outputs and so on?

Mr. PEARCE. Well, right now most of the thin films are less efficient than the crystalline silicon, but, you know, you are comparing

50 years of technology maturity versus relatively new.

The thin films are reported to do better in low light conditions,

early in the morning.

Mr. HONDA. I see.

Mr. PEARCE. Late in the evening. So, some of that washes out.

In most applications, you are not constrained by the amount of roof

space. In fact, an area of about 400 square feet, about the size of

a two-car garage roof, would be adequate to power the needs of

most residential applications, even at 10 percent efficiency.

I myself am holding out for Miasole ́ solar panels on my roof. I

hope you can hold out also.

Mr. HONDA. Well, I need my roof before the rainy season, and

this is not the Gulf State.

Dr. Chu, the Helios Project is a dramatic example of potential

revolutionary technology advances in energy, and it may help to

have a better understanding of the time frame of true market penetration of such revolutionary disruptive technology. So, do you have

any idea what that is, five, ten, 15 years?

Dr. CHU. Well, we are hoping for something on the scale of ten

years. If you think of, look at the Brazil experience of how it had

to scale up its ethanol production using the existing technology, it

still took more than a decade.

Mr. HONDA. Yes.

Dr. CHU. So, I think one would think that right now most of our

ethanol production in the United States is via corn, although in the

long run that is not sensible. It can be viewed as a means of transition, so you get ethanol in the pipeline, you get it in the service

stations, you get all that infrastructure going, in the meantime you

develop very aggressively better plants and better means of converting that feedstock, bio feedstock, into fuel, which ethanol again

is only a temporary stop measure.

Dupont and DP are partnering saying butanol is much more desirable than ethanol. But you get it going. When it becomes a 20,

30, 50 percent replacement for gasoline, this is of scale which will

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literally take a decade, maybe a decade and a half, even if it’s aggressively pushed. If it’s not aggressively pushed, it takes longer.

Mr. HONDA. One of the things that I’m concerned about is: I hear

all the time the concern about other countries graduating 300,000

engineers and scientists. My sense is that they are not all in the

area of technology that we are discussing right now, it’s probably

more in the infrastructure science for the developing countries.

But, the way I think that we can stay ahead is the way we teach,

and looking at those who are creative and innovative in the industries; and you look at each company, you look at their employees,

a handful have, if you did a bar thing you’d see maybe a handful

of engineers and scientists having a lot of patents and the rest are

less.

Looking at these folks, and trying to understand how they think

and how they perceive things, my question to you is, do you think

that it’s possible to look at these individuals and extract from them

the skill-sets and be able to do that and teach those skill-sets from

pre-kindergarten to post-graduate?

I’ll just start with Mr. Swenson.

Mr. SWENSON. Are you saying here in the United States, or are

you thinking in terms of the international, or both?

Mr. HONDA. Whomever that we would identify as, you know,

folks that we’d like to study in terms of looking at those skill-sets.

Mr. SWENSON. Well, in the developing world, the people have

maybe the ability to do basic reading, and they have hand-me-down

tech and so forth. So, there’s a huge gap to raise up the level where

you have the background in math and so forth, to be able to start

getting into science and technology.

There are others here who could speak more effectively to the domestic circumstance, but I think that, as I said earlier, if there

were some opportunity for the U.S. to encourage education in other

countries, and to bring people here, send people there, that what

would happen for the students here in this country is, they would

be stimulated because you learn by teaching and you learn by

doing, and I think that could make a big difference.

Mr. HONDA. I’ll come back to that question again, if the Chair

would like to go through another round.

Chairwoman BIGGERT. Okay, thank you.

Mr. Swenson, do you think it’s possible that some developing nations will just leap frog the U.S. and other developed countries in

using fossil fuels and go straight to economies based on renewable

energy? If they could do that, why do we see, you know, China and

India turning to fossil fuels and really having such a need for

those?

Mr. SWENSON. Well, I hope that we can turn that situation

around very quickly. I think that the debate is pretty well over

about whether the use of coal is creating a hazard that is untenable.

And so, to the extent that we can set an example here in this

country, by doing an about face and ramping up in a big way our

renewable technology, that will become possible in other countries.

And, our experience is that these technologies are embraced, and

when you consider that there’s about two billion people who have

no electricity at all, and the rural environments in which they live

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are very hard to provide infrastructure. I think that a small

amount of solar could be a huge benefit. And as I mentioned it’s

ubiquitous; it can be put anywhere on the face of the Earth and

you are ready to go.

So, I think that it may be true that China is heading in that direction and India to some extent, but my hope is that their political

leadership will join with ours in recognizing that we have to start

protecting our atmosphere and ramp this up.

And, I guess the other question is, can renewables be ramped up?

And, my answer is very distinctly yes. It can be ramped up, and

it has to be ramped up, I feel, at something in excess of 50 percent

a year. We did that in the .com era, we pushed very hard and

growth rates were enormous. I think we can do the same thing,

particularly, with thin film PV as Mr. Pearce has suggested.

Chairwoman BIGGERT. Well, we certainly, I think we are a very

competitive country, and with the super computers, when Japan

moved ahead with the largest computer or simulator I think then,

that Microsoft came in and brought it back to the country as having the biggest computers. So, I’m sure we don’t want to let anybody get ahead of us in the renewable energy either.

I’d like to go back to wind just for a minute. Illinois has put on

hold the windmills that they were planning on doing, talking

about, it was going to affect the radar and the air flight over that

area. Has California had any trouble with that, have they had to

change patterns or anything?

Mr. LARSEN. I’ll try first with the answer. I’m not aware of any

issues like that in the State of California. I do think that there

were issues or concerns about avian migration paths, but I’m not

aware about that issue in the State of California.

Dr. CHU. I had a discussion with John Roe, who is the CEO of

Exxon, which does that, he actually—I heard a different story from

him, and he said that the regulatory would not allow him to raise

the rates by a quarter or less than a cent per kilowatt hour. They

see themselves as consumer advocates.

Chairwoman BIGGERT. I see.

Dr. CHU. So, it was really people who set the rates and said ‘‘no,

let’s increase the cost.’’

Chairwoman BIGGERT. Maybe that was an excuse then. I must

say that I have an article that was written in May about putting

rooftop turbines on city hall in Chicago, to generate wind power,

and they say that already installed was one atop a hill in a museum courtyard in San Francisco, one in the Chicago suburb of

Round Lake and one in Taos, New Mexico, and in East Troy, Wisconsin, I haven’t heard much about them, but they said that safety

was the big issue. The Aerotech Customer Relations Director said,

‘‘The most important thing is to ensure that the turbines don’t

come loose and fly off,’’ especially when you are in a downtown city,

but I wondered if you’d heard anything about those turbines. I’ve

not seen them in the cities, so I don’t think that’s there yet.

While we are introducing people, I would like to note that Dr.

Percy Drell, the Director of Research at the Stanford Linear Accelerator Center, is here, and her group from SLAC. We’d like to welcome all of you.

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Mr. Pearce mentioned some very specific policy options, including

incremental funding for building integrated solar third-party financing, loan guarantees, federal purchase requirements, et cetera.

If we had $10 billion to spend on these kind of policies, and I don’t

mean to imply that we do, I’m only an authorizer, not an appropriator, how do you think we should divide the spending up among

the options? Which is likely to get us the most for our investment

and why? Maybe we could do that, I’ll start with you, Dr. Chu.

Dr. CHU. That’s actually a tough one, because I mean you, for example, heard today discussions about solar, and there were three

approaches to solar, and so I would go back on the basic philosophy

I and many others advocate, it’s don’t really pick one winner, but

adjust the boundary conditions to spur the investment of industry.

I’ll go back to the, you know, have a guaranteed stabilization of

what long-term investments will be.

And again, it comes back to starting to put in the real costs of

emitting carbon, and once you do something like that, then all sorts

of things will build, and then industry, coupled with science, with

national labs, with all the rest, will develop winners, and they’ll

find their way.

Chairwoman BIGGERT. Good answer, thank you.

Doctor?

Dr. PENZIAS. Thank you. Again, I would echo what he said, and

again, with the idea of creating a climate rather than picking any

one thing. And so, the climate in which it is possible to put wind

power, but wind power, to answer your earlier question, is most effective the larger the windmill becomes. And so, right now, the biggest windmill, the rotor size is now getting to be the size of a football field for a single machine. But, this is probably the best solar

energy that your state can get, because after all wind is a way of

converting solar energy into mechanical energy for you there.

So, it’s that general climate of not subsidies, but encouragement,

so that we level this playing field in things like these other alternatives. It isn’t just solar, there are a number of others, but again,

and please continue your fine efforts on this.

Chairwoman BIGGERT. Mr. Larsen.

Mr. LARSEN. We at EPRI firmly believe in investing in R&D, and

we also firmly believe that we need to work to keep our options

open. There are uncertainty in both the cost of the various fuels,

there is uncertainty for the electricity industry today in carbon legislation, so keeping technology options open to generate economic

power is important. So, picking a winner might constrain us or

limit our ability to address an alternate future.

That having been said, I think there is obviously investments

that need to be made into the various renewable technologies, but

we also can’t lose sight of the grid issues and the integration into

the grid of those technologies, because a lot of these do change the

make-up and the operations of the system.

Chairwoman BIGGERT. Thank you.

Mr. Pearce.

Mr. PEARCE. Well, I would say ultimately, you know, the funding

will come out of private enterprise, that the focus of government

programs should be to stimulate the market conditions, to stimulate the early research, but there’s nothing that is going to compare

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to the success of a very healthy alternative energy market as far

as generating research dollars from private industry.

Chairwoman BIGGERT. Thank you.

Mr. Swenson.

Mr. SWENSON. Well, as I travel through the developing countries,

I bump into Germans all the time, and then I was doing a project

here in Salinas, a solar project, and one of the American companies

told me, well, we have to consult our engineers in Germany to figure out how to do this, because I presented them with a tough

issue.

So, I think that what that shows you is that the subsidizing, I

know Dr. Penzias is objecting to the subsidies, but the fact of the

matter is round the world we have huge subsidies. In Egypt electricity is practically given away, in Venezuela, you know, gasoline

is practically given away, and so when you compare these existing

conditions, and then see what one country, Germany, has done

with a lousy solar resource to augment the market, it wasn’t about

the cost of putting electricity together for Germany that in the final

analysis mattered. What matters is that they have the high ground

now in the market. Because they pushed it so aggressively domestically, now they have the expertise to go around, and they’ve got

solar companies here in the United States. They are treating the

United States as a Third World country, because we do not have

the expertise that they do anymore. It’s incredible how quickly it’s

happening.

And, Mr. Pearce and his colleagues in this field of thin film have

the potential for a huge leap, and if we gave them a boost it would

give us a chance to get back, recapture that lead we once had in

solar.

But, the Germans are offering him and his people in the same

business huge opportunities: discounts, and free space, and here,

‘‘Come to our place and we’ll put up a factory for you, and, you

know, give you five years free rent, no taxes,’’ and we are just not

doing that.

So, I think that the opportunity here exists. If we cover our domestic need, we will begin to have the ability to export again.

Chairwoman BIGGERT. Thank you very much, point well taken.

Mr. Honda.

Mr. HONDA. Thank you, Madam Chair.

Starting out with Dr. Penzias, and then others, the idea that no

area of this country felt the impact of the .com boom and the bust

more than Silicon Valley, and there’s a similar market frenzy developing around renewables, especially ethanol.

How do lessons learned in the .com era apply to energy tech, and

are we heading down that path already, and if we are, how do we

avoid this phenomena we have experienced at that time?

Dr. PENZIAS. I think there are two ways, two things to avoiding

it. One is, again, this idea of not picking winners. I think in the

.com bubble there was a focus on certain things, like consumer behavior which didn’t happen, in a number of other cases the, what

was it called, the deregulation of telephone companies is going to

change the world, all kinds of stuff like that.

So, here we have a huge market, which is not going to go away.

There is a huge market in energy. It almost, the sun never shines

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in Denmark, and they are getting almost, they are getting 20 percent of their electricity today from solar in the form of wind. And,

the solar that they are putting in today is the machines which are

being put in today, talking about these football fields, they are getting bigger than that.

The technology of something as old fashioned as a windmill has

gone at an unbelievable pace in the last ten years. Look at all the

dead stuff in Altamont Pass, it doesn’t work, but today, this huge

change in technology has made these things happen.

So, I see this power of technology, plus the huge need for energy.

I don’t think the people in China are waiting for a cue from the

United States, they desperately understand, they can’t breath in

Beijing. Sometimes their factories are turned off, they don’t have

enough electricity. They would use solar if it worked, and it will

work, but not yet, and that’s where we are going. So, stay tuned

on solar, a number of other areas, there are enormous opportunities also in conservation, which we didn’t mention. I can speak to

some of those later, fuel cells, there are a great number of others.

We have kept our eye on solar today, but the story is a march of

technology coming to America, the diversity, and, oh, yes, in one of

my solar companies we do partner with the Germans, for instance,

but the innovation edge is still in the United States, and I think

we are moving there.

The only—and I think we are doing a lot of the right things, and

we will learn from mistakes.

Mr. HONDA. Thank you.

Dr. Chu.

Dr. CHU. I think if you over subsidize you can do a real danger,

just as if you don’t do any subsidies in order to get it started.

The idea of a subsidy, in whatever form, is to give long-term stability and encouragement, but where a plan is in sight. So, take

wind in California, in the ‘70s and ‘80s it was, quite frankly, it

might have been over subsidized, and so a lot of inappropriate technology was just stuck up there, because you are going to get money

even if you stick up something that doesn’t work.

So, Denmark did it right in the long term, and then that sustained the technological improvement that’s leading to these huge

windmills that are extraordinarily efficient.

So, I think that’s a very good question, you can’t just do a huge

subsidy, because that will possibly lead to a boom bust.

Mr. SWENSON. Well, I could speak to this a little further. I think

that because of the subsidies that are now in place, that we have

already picked ethanol as the winner, and the truth be known, because of the way it’s produced it has high carbon content, that is

to say that the power plants that run the mill use coal, that a lot

of natural gas is used in the heating process, and so pretty much

80 to 90 percent of ethanol is fossil fuel, the way it’s currently

being fabricated.

So, I think that therein lies the danger, and if we look at the example of ethanol in Brazil, if truth be known there, only if this

were happening in the United States, it would be equal to about

four percent of the energy that we use here, because they use vehicles about 10 percent as much as we do. Their transportation per

capita is about 10 percent of ours.

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So, these lessons don’t necessarily translate just by multiplying

their success with ours, because our circumstances are very different.

And, I’m quite concerned about the over emphasis on ethanol. If

you put solar over every square foot of paved land in the United

States, you could produce five times as much as you could from all

of the cultivated lands of the United States, because, after all, it

has something to do with our being able to eat. So, you have to balance food with fuel.

Mr. HONDA. Thank you.

Let me get back to that question of innovation, teach innovation,

unless, Mr. Larsen, you have another comment to the last question.

Mr. LARSEN. Just a quick comment on the pitfalls of the boom

bust, and avoiding making past mistakes. I think we need to keep

the options open, but we also need to focus on the cost of generating electricity on a cents per kilowatt hour, in comparison to

where we are today, and also in the future and to keep that in

mind in evaluating all renewable technologies as we move forward,

with the goal in mind to develop technology that is cost effective,

economic and competitive with other technologies.

Mr. PEARCE. With respect to your question on education, I think

Miasole ́’s experience is pretty typical here of Silicon Valley. We

have 58 people, a significant portion of those are engineers and scientists, and I would guess 40 to 50 percent of them were born in

some other country and trained here in the U.S.

I think the whole education issue really goes back to middle

school. We have to get more boys and girls interested in science

and math, because if we lose them there we lose them in high

school, and they don’t go on to engineering programs.

Mr. HONDA. What I was driving at was taking the phenomena

of being innovative and creative that’s embodied in a person who

is creative and innovative, and being able to extract that—what is

it about that person that makes that person innovative and creative—and be able to extract that and teach those skills to children, from preschool to post-graduate. The idea of being able to

teach that skill, so that it doesn’t matter whether they go into

science, or math, that they have different insights and different

ways of looking at things that are equal to music, or to performing

arts, or to social studies, that it’s a different way of thinking and

looking. And, I was just curious whether you thought that those

are teachable, that’s possible, number one, and, number two, teachable.

Mr. PEARCE. Well, I think that is possible, and I think, in fact,

the U.S. does a pretty good job in that area. I mean, particularly,

our institutions on higher learning, we generate a lot of people that

are, you know, creative, and you don’t get that to the same extent

in other countries.

Mr. HONDA. But, is it a conscious process of teaching innovation

and creativity?

Mr. SWENSON. In our case in the Galapagos Islands, we gave students meters to measure the performance of the refrigerators in

their homes, and students showed their electricity bill next to the

graph that showed the performance of their refrigerator. They were

quickly galvanized and motivated because one kid’s family had

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twice the electricity bill as the other, and that was like 10 percent

of their income, you know, living a different lifestyle than we have.

It was a lot of money for them.

So, there was a motivation, and I think that service learning,

which is productive, so I go back to that term productivity-centered

service learning, that galvanizes young people into being aware

that they can make an impact in their community.

The Ministry of Energy came from the Mainland and interviewed

our students, because they had a conservation program that wasn’t

working, and they wanted to see how our kids did it. And, it all

had to do with the fact that we gave them something productive,

something meaningful in their community, to work with.

Mr. HONDA. Yes, Dr. Penzias.

Dr. PENZIAS. I have two ways for innovation. One of them would

work here in the United States very well, I think, which is diversity. I wasn’t born in the United States, a lot of other people

weren’t, but I think the fact that having a mix of ages, I mean, one

of the nice things about Silicon Valley is, it’s not youth oriented,

age agnostic. I mean, many of the CEOs I work with could date my

granddaughter and nobody would know it, but they don’t care because it’s age agnostic. So, if we can go age agnostic, race agnostic,

ethnicity agnostic, that’s one good thing.

The thing about school, I would say, which is quite the opposite,

I’m sorry to be a grouchy old guy in this, I think we have to get

the school out of the way of undermining creativity. Kids, we have,

I’m blessed with 12 grandchildren, they drive you nuts with their

questions until they get to school and learn to stop asking questions.

We are, and there’s a very simple thing, and I think we really

ought to encourage teachers. We are, I think, the only country in

the world that spends more money on bureaucrats in the education

budget than the people actually going to the classroom.

And then, we decide, okay, let’s put in, and let’s fix that by putting in a testing program which gets yet another level of conformity. So, you know, if we could somehow get all these folks out

of the way of teachers, I think by itself that would be—it would

make a difference, and the better teachers, and, in fact, one of the

things we’ve learned is, of course, and I’ve seen studies on this, the

classes, any school, whether it’s inner city, large, rural, urban, better teachers make for better kids. I don’t think we have to impose

anything on them, I think we can get rid of this upper structure.

Now, as far as taxes, maybe you could put a tax on bureaucrats,

any educational—stop encouraging, stop subsidizing the administrators and put the money into the classroom and out of that.

Change that balance to where it is in other countries.

Mr. HONDA. Right.

I know Dr. Chu’s family is full of innovative, creative thinkers.

What goes on in there?

Dr. CHU. Well, I was born into a family, and me and my siblings

always questioned authority, but in sort of taking where Arno

Penzias left off, I think the United States in higher education does

it better than any other country, but I would agree with him that

when you look at kids preschool, they are full of curiosity, and even

in science class that’s stamped out of them. Other countries do it

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much worse, or much better, they are much more effective at

stamping out of this natural curiosity.

The greatest thing in the United States school system, because

I get asked this question when I go to Asia all the time, why

doesn’t China have home grown Nobel Prize winners? Or, Japan

has some, but, you know, Taiwan, you know, and think about it,

I think it’s because teachers in those countries aren’t questioned by

their students. It’s considered disrespectful, they are punished for

it, but you can question your teacher in a very respectful way, and

that’s the way it should be.

So, the United States is actually quite good at it, what is it that

we have done better? In science it actually goes back to when we

were in first, second, third grade, when we were asked to give book

reports, and it was a different thing. What do you think about

what you just read—very different than in many European countries, and certainly Asian countries. You are not asked what you

think. So, we have to encourage more of that.

Chairwoman BIGGERT. Would you like to say a few words in closing, Mr. Honda?

Mr. HONDA. I have a list here that I want to comment on, let me

find my notes.

Chairwoman BIGGERT. Let me just say we could spend a whole

hearing talking about education in the science field, and I agree

with you, I go out to the schools, and, particularly, middle school,

and I find particularly the young girls say, boys do math and

science, girls don’t, and that’s a real shame, and I try to encourage

them that this is a field wide open to them.

Mr. HONDA. Thank you, Madam Chair.

Before we close, in this area we put together a group called the

Blue Ribbon Task Force on Nanotechnology, and there are some of

the folks that helped us move that whole effort forward, Delilah

Brambot is here, Carry Yang, Bell Wade, she left already, Bern

Beecham, he’s left, was introduced earlier, and our selection committee, I just wanted them to be recognized and thanked for their

efforts in making the Silicon Valley the kind of place that it is.

And, I guess I would close with this thought, that the Federal

Government has been a major player in innovation and technology,

and moving technology forward. I guess my question in terms of,

and the thought that I want to leave with people is that, we still

have to impact more people and individuals, citizens and consumers if you will, and I guess we might want to also look at, what

is the role of city government, county government, in changing

some of our attitudes and creating some demand on alternative energy? Because cities and counties, and states if you will, also bear

the brunt of that burden in many different ways.

So, I would beseech all of us to start thinking about another way

of moving this agenda forward in terms of promoting alternative

energy and having us think outside the box in a new paradigm.

And, to the witnesses, thank you, I thank the Chair for her willingness to bring the Committee out here, having this great discipline.

Thank you.

Chairwoman BIGGERT. Well, thank you, Mr. Honda, and I want

to thank you for your participation, and he’s a great Member of the

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Science Committee and really knows his stuff, and we are happy

to have you on that committee.

I would like to thank all of you. I hope that we will have a successful transformation of our energy system in time to avoid the

harmful effects of global climate change, and we will be having a

hearing on global climate change in the near future when we go

back in September. So, I would like to thank both of our staffs, the

Majority staff and the Minority staff, for all their hard work in putting this hearing together, it takes a lot of work, and you did a

great job.

And, I want to thank our panelists for testifying before the Subcommittee today. If there’s no objection the record will remain open

for Members to add any follow-up questions that the Subcommittee

may ask of the panelists. Without objection, so ordered.

This hearing is now adjourned.

Mr. HONDA. Thank you, Madam Chair, and to the audience, you

have an evaluation form, please turn them in. If you parked in the

garage here, we will validate your parking.

Chairwoman BIGGERT. All right, thank you.

[Whereupon, the Subcommittee was adjourned at 2:26 p.m.]

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