Gates on energy innovation
First, there are profound public interests in having more energy options. Our national security, economic health and environment are at issue. These are not primary motivations for private-sector investments, but they merit a public commitment.Second, the nature of the energy business requires a public commitment. A new generation of television technology might cost $10 million to develop. Because those TVs can be built on existing assembly lines, that risk-reward calculus makes business sense. But a new electric power source can cost several billion dollars to develop and still carry the risk of failure. That investment does not compute for most companies.
Third, the turnover in our power system is very slow. Power plants last 50 years or more, and they are very cheap to run once built, meaning there is little market for new models.
It is understandable, then, why private-sector investments in clean energy technology are so small. Yet, while it may make sense for individual companies to make these choices, accepting the status quo would condemn our country to very bad options.
Gates has been talking a lot about reshaping energy policy. I find that pretty refreshing. I wonder if he intends on backing any particular initiatives himself. He definitely has the funds.
I find his argument for why companies haven't embraced R&D for new energy technologies rather convincing. A lot of those same arguments applied, at one time, to the current technologies behind modern computers and the Internet itself. Without government intervention we might not have the transistor (much less the iPad) or the Internet. Perhaps we need an energy policy similar to the telecommunications policy that put a telephone line in every home.
