Lessons From Europe

While the U.S. can learn much from European strategies to promote renewable energy, it must also be cautious. The International Energy Agency (IEA) review says that a major failure of the European Union's green-energy policy is a dearth of investment in research and development of new green technologies, which, the agency says, will be crucial in providing abundant and inexpensive clean energy.

Just a few promising new technologies include wave buoys that convert sea-wave energy into electricity, cellulosic biofuels, dye-sensitized solar cells, and even third-generation photovoltaic (PV) modules that could bring the price of solar energy down to less than 20 cents per watt.

Because the EU is still too reliant on a narrow range of relatively inefficient technologies, the proportion of renewable energy used in Europe today is only marginally higher than in the United States and Australia, which have not implemented any renewable-energy policy. Moreover, most of the green energy in Europe still comes from hydropower, which has been around for centuries.

To maximize the United States' chances of creating a thriving, clean-energy economy by finding green innovations, Washington should make it a priority to pour money into its country's strong civilian and military research institutions. Thanks to a deep pool of technical and scientific knowledge, the U.S. is in a good position to find the next generation of solar- and other renewable-energy technologies that could allow not just it but the entire world to switch over to clean energy inexpensively and efficiently.

The mainstay of Europe's renewable-energy policy continues to be the feed-in tariff system, which guarantees payment for anyone feeding solar PV, wind, or hydro energy into the national grid. The feed-in tariff has been credited with developing a large manufacturing base for the solar industry. However, critics say that the wafer-based solar-cell technology being produced is out of date, inefficient, and expensive. As a result, Germany's solar industry produces only about 1 percent or 2 percent of the nation's electricity but costs billions of euros every year.

Because the German solar industry spends only about 200 million euros a year on research into new technology, there is little prospect of a future PV-export hit coming from Germany that is able to compete with expected breakthroughs from the generously funded research programs in China or the United Arab Emirates.

The IEA review also criticized the EU as a whole for spending as little as 200 million euros a year on green research and development in its research program. Because the EU's FP7 research framework program runs until 2013, substantially more money for vital green-technology research and development is unlikely for four years, by which time Europe could have fallen so far behind that it will have to import the next generation of clean technology from countries that have invested in innovation, the IEA warns in its review.

In addition, the IEA criticized the European Union's failure to make energy -- saving measures mandatory and therefore put a brake on the runaway carbon emissions coming from the lightly regulated transport sector, which contributed to the overall increase in greenhouse gases in the EU last year.

The European Union's recent push to tighten its controversial "cap and trade" carbon scheme to reduce greenhouse gases also suffered a setback in December when most of Germany's heavy industries were exempted from the obligation to pay for permits until 2013. Indeed, some critics argue that the current system might even allow polluting industries to make an additional profit even if they do not undertake any steps to reduce their greenhouse gas emissions simply by trading the free permits handed to them by the European Union, paid for by the taxpayer, for real cash.

On the plus side, the European Union has a highly interconnected electricity grid, with the United Kingdom and Spain among the few remaining "electrical islands." Plans are currently underway to extend the grid to the sun-rich desert regions of North Africa, allowing Europe to potentially access solar-thermal energy produced there in the future. The continent's vast grid also acts as a storage facility for renewable energy, allowing it to overcome difficulties that arise from the intermittent nature of green-energy production.

The United States' national electrical grid, on the other hand, needs a great deal of investment before it can absorb large amounts of renewable energy and still supply baseload power. President Barack Obama's recent announcement of substantial investment in a new "smart" grid as part of a stimulus package could be a first step.

The bottom line is that the U.S. should focus on research to bring the next generation of renewable energy, particularly solar, to market rather than overinvesting in soon-to-be outdated technology; it also needs to push ahead with the most viable current renewable-energy projects to reduce pressure on the environment.