DESERTEC COMMENTARY:
The Coming "Long Boom" in Clean Energy

Solving climate change is no longer about technology. It's about economic reform.

Renewables now present a better long-term deal than fossil fuel and nuclear. The reason is -- quite simply -- that "next-generation" nuclear and carbon capture and storage just aren't available. Renewables are. By 2015 and 2020, when carbon capture and nuclear "might" be ready, renewables will be much cheaper.

The low-cost pathway to greenhouse gas emission reductions is clear. Between now and 2010, greenhouse gas abatement can be implemented through demand management techniques like raising base electricity prices and passing along peak power prices to consumers and encouraging replacement of high energy use lightbulbs with low energy lightbulbs. These days, such huge inefficiencies bedevil the energy industry that merely curbing these will produce huge energy and greenhouse gas savings.

By 2010 additional renewable energy resources like wind, geothermal and concentrating solar power can come on line. Already, investment is flowing into these and all government need do is get out of the way. Once online, these new sources of electricity will enable many of Australia's fleet of aging and dirty coal plants to be relegated to standby status.

By 2015, if carbon capture and storage and next generation nuclear are ready and proven, Australia can consider deployments -- ideally after a national referendum. That will allow voters to make the decisions, not industry-captured politicians.

Following the timetable above will create a virtuous cycle. Proper market prices will shift investment toward renewables. And as more renewables are brought on line, the need for national security and military spending will be reduced because wind, sun, geothermal and biomass are easier to protect than oil and gas from politically inhospitable suppliers. Renewables will also make use of the brains Australia has instead of draining resource rents to unstable and corrupt Middle Eastern monarchies that don't necessarily share Western values.

The next 30-50 years will see the largest largest replacement and expansion of electricity generation capacity since electricity was invented. The smart money is betting on renewables. Venture capital is flowing into concentrating solar power and geothermal. These are following investments already made in wind and solar PV. These will be joined, presumably, by venture capital investments in things like tidal power, wave power and new other technologies yet to pop out of the brains of smart Australians, smart Europeans and smart Americans.

Renewables are clearly cheaper, more durable, cleaner and better for economic growth than coal or nuclear when viewed over long time periods. But coal need not be knocked out of the equation. Aging coal-fired power plants should be kept online, but on the sidelines. That way, they can supply peak power if needed. But new coal-fired capacity should not be built.

Reformed energy prices, transparently costed energy alternatives and eliminated legacy subsidies for coal are enough to solve Australia's energy problem. Fixing climate change isn't about technology anymore. It's about economic reform. Australia just needs to take off the cement shoes placed around renewable energy technology during the Howard government years.

Huge amounts of new capacity in concentrating solar power -- a potentially massive energy resource -- is under construction in the United States and Spain. It won't be long before more concentrating solar power projects are under construction in Australia. The same can be said for geothermal, and the same can be said for wind. We're all going to be pleasantly surprised by the upside in these new deployments, and they are going to change the way we think about energy.

Together, wind, geothermal and concentrating solar -- not to mention other clean energy sources we haven't even heard of yet -- will be able to meet all our energy needs before unproven, untested and still fictitious "clean coal" and "safe nuclear" are even off the drawing boards.