On April 25 and 26, I had the good fortune to participate in parts of the third annual Clean Energy Ministerial (known informally as the CEM), a forum launched by U.S. Energy Secretary Steve Chu in 2010. The initiative brings together energy ministers from most G20 countries, along with a handful of others, to learn lessons from each others’ clean energy efforts, and, critically, to identify places where intergovernmental initiatives could boost the odds of success. One thing that distinguishes the forum from other international initiatives is the integral role that the private sector has played from day one. The first afternoon of the CEM was spent in a series of small public-private dialogues that brought together ministers, regulators, operators, investors, and experts in science and technology to discuss areas ranging from smart financing tools to support energy efficiency investment to integration of variable renewable sources in the grid.
I had the privilege of chairing the public-private session on solar photovoltaic (PV) energy yesterday afternoon, and summarized highlights of our deliberations for the collected ministers this morning. The session itself was held under the Chatham House Rule, but the readout to ministers wasn’t. Here’s what I told them:
- The PV industry is maturing. People are slowly shifting from a mentality where their goal is to sell solar cells to one where they are thinking about providing solutions to specific consumer needs. This recognition that there is no such thing as “the solar market” should help promote innovation in multiple directions. It should also inform policymaking: there is no one-size-fits-all scheme that government should use to give solar the chance to thrive.
- People understand that government support for solar will not be “stable” – falling solar costs and tight government budgets both point toward a shift in the government role. What people do want – and need – is that support be “predictable”. This is different from stability and should be easier to achieve.
- Everyone is in agreement that the solar PV market is currently oversupplied. But most people don’t seem to see a need for supply-side policy to rectify the situation. Instead, they’re focused on getting the demand side right.
- When we talk about innovation, we’re too focused on widgets. Solar panels themselves are improving. It’s the balance of the system – including installation and innovative financing – where we may need the biggest gains. These are also areas where innovations tend to spread slowly across borders, simply because the firms pioneering them often operate in limited markets. There’s an opportunity here for policy to help speed up diffusion.
- Quality assurance is critical. We’re at a point where solar PV is becoming widespread enough that significant quality problems will have broad and lasting consequences for consumer confidence. Quality control and related standards are a perfect area for international coordination – without it, markets get fragmented, pushing up costs for everyone.
- Integration of large-scale variable renewables with the grid is no longer just a theoretical question to debate – it’s becoming a real challenge in several countries. (Did you know that Germany recently experienced peak electricity prices below off-peak ones? Think about that.) We should all be learning lessons, technical and regulatory, from how different countries are handling the challenge, so that others can deal with it as effectively as possible.
I also want to add a broader reflection. I was struck by the quality of the discussions, and, in particular, by the connections (intellectual and personal) that I saw made. Indeed in many ways this sort of event is, or at least should be, a big part of the future of global governance. It doesn’t make headlines when ministers agree, for example, on efforts to boost super-efficient appliances (I know, you’re already asleep). But these sorts of steps help multiply the power of individual markets, innovators, and governments to help drive down costs and improve performance, helping consumers and the environment in the process. Ultimately, of course, they’re no substitute for solid economy-wide policy. But to focus on that misses the point. And, of course, I’ll be most impressed if, come the next CEM, some of the lessons that have emerged from this one are reflected in new or intensified initiatives. Regardless, though, what I saw over the last couple days struck me as considerably more productive than what goes on at most global gatherings that claim to be solving our climate and energy problems.