Comment by danielharan | Hacker News Reader

Comment by danielharan | Hacker News Reader

There's a lesson here for startup folks.

Years ago, people said renewables wouldn't ever amount to much. Sure, it's growing exponentially, but look at how small it is! And yes, costs keep going down but it will take forever before it's competitive with coal and nuclear.

Forever's come and gone. Oil and gas went up in price. Exponential growth generated a nice experience curve http://en.wikipedia.org/wiki/Experience_curve_effects

Now some critics and skeptics will go around saying no one could have predicted how quickly wind and solar took over. They'll say it was due to the rapid increase in oil prices (no one saw that coming either) or subsidies (German feed-in tariffs were very generous, though not as much as tax breaks for oil co's).

So the lesson: humans are really bad at forecasting the results exponential growth. If you can find one that people are ignoring and time it well, you can entrench yourself in a market before most people even realize it exists.

As someone else said here a while back "The current alternative energies are linear solutions to an exponential problem."

I have another lesson.

15 years ago before anyone knew it existed. Denmark invested heavily in wind. It created one of the biggest windmill companies in the world.

It did all the right things. Took it to the stock market allowed normal people to invest in it, created lots of new jobs and the stock surged in the early zeros.

Today stock is struggling and most of the jobs have been outsourced to other countries much less expensive to produce in.

The windmill technology in itself is not hi-tech but "low-tech" so there isn't even som IP that the Danes benefit from.

The only customers worth talking about is countries and there is no revolution in efficiency happening.

My guess is that wind will be surpassed by other more beneficial technologies.

So the lesson: Alternative energy as we know it right now is far from being a solution to the problems we have. The politicians should not pick the winners but instead set goals that can be won.

linear solution? Please explain. Wind and solar are growing double digits per year... how is that not exponential?

If you're taking about Vestas, it's still worth $5 Billion, going up or down depending on the results of big sales. That share price was worth 20X more is a disappointment to investors, but it does not prove that no one can make it in that sector.

That's only because the investment are going up in the same curve.

Exponential means you get much more out of it than you invest.

I.e. Nuclear, Thorium etc.

"My guess is that wind will be surpassed by other more beneficial technologies."

Care to say which ones you have in mind? Are any ready for large-scale deployment so we can avoid climate chaos?

Alternative energy is not 25% of German production because it is competitive. They are forcing it through, in spite of the fact that it is not competitive.

The tax breaks were set to go down on a schedule. It would be nice if the same were true for oil and gas. Right now, those subsidies for renewables are only creating a more even playing field.

Could you quantify that? I don't believe the subsidy per megawatt for fossil fuels is anything like what it is for renewables.

The ignored externalities are massive, more than comparable to the current price.

Can you quantify that?

"A 2009 study by the Environmental Law Institute[5] assessed the size and structure of U.S. energy subsidies over the 2002–2008 period. The study estimated that subsidies to fossil-fuel based sources amounted to approximately $72 billion over this period and subsidies to renewable fuel sources totaled $29 billion." They give a breakdown of why some aren't true subsidies here: http://en.wikipedia.org/wiki/Energy_subsidies

Counting per megawatt avoids looking at the subsidies that have been amassing to fossil fuels over decades, and completely avoids the issue of externalities.

Deepwater Horizon is but the most recent example of a catastrophic spill. We never hear of a wind spill. In any case, the big externality is being allowed to dump so much CO2 in our shared atmosphere.

As has happened in other countries, the subsidies have gone down over time. With increased growth we get faster drops in price (that experience curve, again). Compare this to the regulatory capture from oil and gas that has led to ever higher subsidies.

I haven't seen a credible economic analysis showing alternative energy isn't competitive that doesn't hand-wave away externalized costs or use ridiculous temporal discounting of future environmental harms.

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