At this year’s MIT Energy Summit, the centered on how to mainstream new energy technologies. This will depend on one of two economic changes: 1. Lowering the prices of new technologies or 2. Raising the price of current technologies by adding a price on the pollution associated it them. While the first option will take years of investment for economies of scale to take place, different policy mechanisms have been discussed for the second. These include the carbon tax and the cap-and-trade program to put a price on the greenhouse gas pollution from the the use of fossil fuels. Due to the complexity of the mechanism and competition between developed and developing countries, there is broad sentiment that at the international level, a price of carbon will not be established for the foreseeable future.
Rather than relying on an international framework to drive the development and deployment of low carbon, efficient energy technologies, the key to success lies in local implementation.
The key message coming out of the MIT summit was whether if low natural gas prices will have an impact on investing in alternative energy technologies. While the wind market in the US has added significant capacity in the last few years, the availability of cheap natural gas has made them less competitive.
The impacts will not only be felt in producing power but also across all sectors. Electric vehicles, which have received tremendous resources for investment, may no longer have long term support if natural gas prices stay low. In addition, cheap natural gas will disincentive heavy and chemical industries from improving the efficiencies of their plants.
While big energy companies have traditionally based their strategy on fossil fuels and have been resistant to new energy technologies, some companies have a more progressive outlook and are actively working with both early technology companies and policymakers to help facilitate their implementation.
In his keynote, David Crane, the chair of NRG Energy came to talk about his company’s efforts to develop clean power and provide choices for consumers to switch. He emphasizes the need for public-private partnerships (PPPs), which will be crucial in integrating new technologies into the existing energy infrastructure.