3 Gurus of Green Ponder Energy’s Future

Todd Rodgers

American energy use will change more in the next two decades than it has in the past five. U.S. News spoke with three top executives already helping shape that future.

T. J. Rodgers, chairman of SunPower and founder of Cypress Semiconductor, is the driving force behind a star in today's solar market.

Vinod Khosla, a founder of Sun Microsystems, runs an influential green venture capital fund, Khosla Ventures.

Donald Felsinger, CEO and chairman of Sempra Energy, runs a more traditional energy company, including a utility, San Diego Gas & Electric, plus natural-gas pipeline networks and a liquefied natural-gas terminal.

In separate interviews, the three offered their visions of where American energy is headed. Excerpts:

Where will we get energy in 20 years?
Rodgers: [In 20 years], oil is way down because we've used it. Natural gas is declining but still prevalent. It will be used not only in conventional turbines but also in fuel cells. Nuclear is the primary backbone of our energy infrastructure. Then we have renewable energy sources. Obviously, solar and wind [and] geothermal. Then, the more speculative ones—scavenging where we would take energy from waves, vibrations, and waste heat.

Felsinger: In the United States today, 2 percent of the energy we consume comes from renewables. In a few years, I expect that the number will increase to something like 10 percent. That's very doable. Coal, which provides about half the energy we use, will stay flat and decline. Natural gas will stay flat or slightly increase. The market share of nuclear will go up to the mid-20s. If we find a way to clean coal up and sequester the carbon, that will determine whether it goes into decline.

Khosla: Coal can be cleaned up; oil has to be replaced. Almost certainly, the replacement for oil will come from biofuels. Cellulosic fuels will be so much cheaper in the next five to 10 years. Power generation is a little more complex. I don't believe [underground] carbon sequestration, which everybody is hanging their hat on, will work. I believe nuclear will be way too expensive unless it's subsidized. That leaves wind as a nice technology, but it's a niche. [Solar] photovoltaics will grow robustly and do well as a market and as an investment. But I don't believe they'll scale. Solar thermal is very quickly getting cost competitive. In the next five years, it'll be the cheapest source of electric power that's independent of carbon emissions.

Will there be a dot-com-like "green" bubble?
Rodgers: [In solar], I think there will be. Right now, we have a bunch of venture capitalists spending $50 million a pop times 20 different start-ups all making the better solar cell. When that money gets tired, you're going to see a bunch of start-ups going belly up. It's a commodity, mass-manufacturing business. There's going to be enough room at the table for three or four companies on every continent after the shakeout.

Khosla: Yes and no. First, let me claim there was no Internet bubble. In stock prices there was, but if you look at Internet traffic, you didn't see a slowdown. You have to distinguish between real life and how Wall Street might perceive it. There will probably be a stock price bubble in green technologies at some point. I suspect we won't see a real-life bubble.

Which technology will alter the market?
Khosla: We will get surprised by some technology nobody sees today. Carbon sequestration in the form of cement, which we're working on with a company called Calera, would almost overnight solve the problem. We'll know in the next 12 months whether it works or not.

Felsinger: The real opportunity is solar photovoltaics, unlike solar thermal, which requires water for the steam cycle and for cooling the condensed vapor in turbines. Water is becoming more of an issue. The nice thing about photovoltaics is no water requirement. It's the one technology that has the most promise.

How important (and likely) are national energy plans like a cap-and-trade system?
Khosla: These technologies will get to unsubsidized market competitiveness within 10 years with or without a carbon cap-and-trade system. The risk goes down very substantially with a cap-and-trade system, and the amount of investment goes up dramatically because it shows serious intent to transition away from coal and dirty power.