A recent International Energy Agency (IEA) report titled the Clean Energy Progress Report reviews the global energy situation.  The IEA has a policy advisory role to 28 member countries, including the USA, for balanced energy policy making, energy security, economic development, and environmental protection.  One of the summary points made in this inaugural report is that “an increased level of systems thinking is needed to integrate the broad range of individual clean energy technologies into the energy system. Increased attention and resources are required to expand smart grid pilot projects on a regional level.” 

What does this mean?  Business as usual won’t work to address the severe challenges facing every country in the world struggling to deliver reliable, clean and secure fuel sources and electricity to their citizens.  For instance, integration of clean domestic renewables into the grid provides energy security and helps build local economies without environmental degradation of air or water quality.  Many startups are promoting technologies that improve energy harvestability and reduce cost curves to compete with the current energy mix of heavily subsidized fossil fuels like oil and coal.  New Smart Grid products and services will help integrate these renewable energy sources into a distributed energy infrastructure that transforms today’s inefficient centralized systems into more efficient, clean, and proactive operations.  

Systems level thinking considers the entire value chain from production to consumption and understands the impacts that a change in one technology or model will have to remaining links in the chain.  This is why the Smart Grid covers a broad range of subjects – because it is a combination of innovative technologies, services, and even new business models.   An event in Silicon Valley called Smart Grid@Plug and Play will highlight a number of Smart Grid startups with solutions focused in energy management, field area networks, renewable energy, cyber security, and energy storage software platforms.  These are encouraging signs of progress to encourage innovative systems thinking, but there’s a large obstacle to successful transformations to secure a sustainable energy future.  It’s the business as usual thinking amongst some members of the US Congress. 

We need to eliminate the tax credits, royalty forgiveness, and R&D funding for fossil fuels – taxpayer giveaways that were preserved in the 2011 budget settled on April 9.  We need to invest a percentage of the saved revenues into promising solar and wind technologies and Smart Grid infrastructure projects.  Just 10% of the estimated $70B in taxpayer generosity now going to hugely profitable oil companies could have profound strategic implications for the US economy and our innovation leadership if it were shifted to renewables and Smart Grid businesses.  That would be a radical change in systems thinking for some people.  Watch this video of Joe Barton, R-Texas as he defends the taxpayer subsidies to profitable, multinational oil companies.  This is the same Congressman who apologized to BP executives during Congressional hearings into their Deepwater blowout fiasco. 

Then there’s the new 2012 federal budget proposed by Paul Ryan, R-Wisconsin.  This proposal also preserves the subsidies to multinational oil companies so they can stay fat and happy, while cutting subsidies to build domestic renewable energy industries in this country.  The only thing missing is his apology to BP.  Business as usual thinking, which means protecting fossil fuels like oil at the expense of everyone and everything else, fails to deliver the energy security we need.  We need innovations in technology, services, business models, financing, regulatory controls, and thinking to create a secure energy future.