In the past several decades, there is no question that the opportunity for investment in the clean energy economy has increased exponentially. In fact, the Pew Environment Group predicts that, if legislative policies are initiated by G-20 countries as expected, more than $2.3 trillion will be invested in clean power assets over the next 10 years. This will, no doubt, provide companies enormous opportunities to compete for investments, jobs and export markets.

In 2010, for the first time in decades, the renewable energy sector surpassed the nuclear energy sector worldwide. Global investments in wind energy reached $79 billion, a record level. Much of this growth has been credited to financial incentives for companies that adopt renewable energy sources from countries such as Germany and Italy.

The most current clean energy race numbers available are from 2010. As is to be expected, every type of clean energy, including solar photovoltaic (PV) and wind, saw an increase in usage from the G-20 countries. In total, the global investment in clean energy rose 30 percent in 2010, to a total of $243 billion. Conversely, the use of biofuels dropped significantly in 2010, with G-20 countries showing the lowest investment in the biofuel sector since 2005.

So, globally speaking, who’s winning the race to be the cleanest – energy wise?

Extending its continuing lead among the G-20, China increased its clean energy usage significantly. The total investment in clean energies made by the country increased 39 percent in 2010. Phyllis Cuttino, director of Pew’s Clean Energy Program in Washington, called this increase “remarkable,” noting that the changes in China’s clean energy usage came mainly in the areas of wind turbines. In fact, China is now a world’s leader in the area of wind turbine and solar module production, surprising few experts in the field.

In a surprising turn of events, however, Germany overtook the United States in 2010 to become the second largest clean energy market in the world.

Whereas China’s goal is to establishing 20,000 megawatts of solar energy by 2020, and the European Union has set the goal of generating 20 percent of its power from renewable resources by the same year, the U.S. lacks a similarly concrete goal. In 2009, President Barack Obama’s plan for producing 25 percent of the country’s electricity with renewable resources was nullified by Congress.

The president more recently turned his sights inward, announcing the Better Buildings Initiative with a goal of seeing a 20 percent improvement in energy efficiency by 2020 in the U.S. If this exciting, yet perhaps lofty, goal is achieved, the country’s collective corporate energy bills would decrease by approximately $40 billion.

The country’s focus on saving green duly noted, the U.S. is still lagging behind in efforts to go green, while the rest of the G-20 speeds ahead in the race.

The irony of the U.S. being behind with its renewable energy goals lies in the fact that they are home to some of the best producers of clean energy technologies in the world.

Article by Bari Faye Siegel, a technology writer and marketing consultant at Noveda Technologies, an innovative leader in real-time, web-based energy management, solar PV monitoring and water management. Noveda also offers real-time collaboration tools that leverage social media to educate and empower stakeholder communities and make the smart grid a reality today. For more information, visit www.noveda.com.

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This week’s energy news looks bad for the United States – at first glance. The nation has slipped to second behind China in clean energy investment. Moreover, five of the G-20 nations have surpassed the US for clean energy investment relative to size of economy.

But look a little deeper into the report, “Who’s Winning the Clean Energy Race,” and you’ll see that the US did not slide in all forms of clean energy. In fact, its level of energy efficiency investment tops others worldwide in two of three investment categories analyzed in the report.

The US stood out as the strongest among the G-20 nations for public market financing of energy efficiency and related low carbon dioxide technologies and services in 2009, the year studied. And it dramatically surpassed all of the other countries when it came to venture capital for these resources.

In fact, the report found that the US “remained the overwhelming leader in venture capital investment” with energy efficiency and smart grid among the top resources attracting investors. VC investment totaled $3.9 billion in the US, far exceeding the second place country, Brazil, with $0.7 billion. China had only “negligible” VC activity.

“The United States remained the enduring leader in venture capital investment, reflecting its strong foundation of technology innovation,” the report said.

There are some good arguments to be made for the US’ pursuit of energy efficiency. Energy prices reverberate throughout the economy, pushing up the cost of goods and services when they rise. Efficiency advocates like to say that the megawatt never generated is the cheapest one, so it’s best to pursue all cost effective efficiency before building new energy infrastructure.

After reading the Pew report, it’s easy to see why the Obama administration is pushing so hard to build the energy efficiency industry in the United States, one positioned to export its innovations to the world. Obama reiterated his commitment March 30 in a speech to students at Georgetown University:

And by the way – we also know that ushering in a clean energy economy has the potential to create an untold number of new jobs and new businesses – jobs that we want right here in America. Part of this change comes from wasting less energy. Today, our homes and businesses consume 40 percent of the energy we use, costing us billions in energy bills. Manufacturers that require large amounts of energy to make their products are challenged by rising energy costs. That’s why we’ve proposed new programs to help Americans upgrade their homes and businesses and plants with new, energy-efficient building materials like lighting, windows, heating and cooling – investments that will save consumers and business owners tens of billions of dollars a year, free up money for investment and hiring, and create jobs for workers and contractors.

Of course, the Pew report relies on figures that are now a few years old. Have we maintained our position? Will we build the energy efficiency export industry that is just getting off the ground? It’s hard to say. But the bigger question in energy is always: What will be the game changer? Who will come up with the light bulb of the Internet age? Call me an optimist, but I’ll bet on the country of innovators.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

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Does that headline grab you? If not, these numbers should:

If that has not grabbed your attention yet, consider that in January of this year, Continental Airlines completed a test flight using a biofuel mixture, which included fuel derived from algae. The test flight yielded a 1.1 percent increase in fuel efficiency compared to a jet engine using traditional jet fuel.

That isn’t exactly a great leap forward, but achieving incremental increases in fuel efficiency coupled with the latest engine technology, as well as use of new materials in aircraft production, such as the Boeing 787, could signal a dynamic shift for the airline industry.Leaders of the G-20 agreed in Pittsburgh to commit to phase out inefficient fossil fuel subsidies in the medium-term. While no specifics were mentioned on how this policy will be implemented or how long “medium-term” actually means, this commitment signals a recognition by the G-20 that such subsidies inhibit the growth of clean tech industries.

In addition to the massive investment that Exxon and similarly situated companies have thrown into the algae arena and the policy shift by the G-20, there is growing desire by Congress to stimulate investment in algae.

Senate Bill 1250, currently in the Senate Finance Committee, proposes to add a tax credit for producers of algae-based biofuels. The language of the Algae-based Renewable Fuel Promotion Act of 2009 seeks to add algae-based biofuel as part of the cellulosic biofuel producer tax credit (Internal Revenue Code 40). Under this section, if the legislation were to pass, producers of algae-based biofuels would be entitled to a tax credit of $1.01 for each gallon of qualified algae-based biofuel production.

For purposes of the tax credit, “qualified algae-based biofuel production’ means any algae-based biofuel produced by the taxpayer which is sold to another person or used by the producer: (1) for use in the production of a qualified algae based biofuel mixture (in that other person’s trade or business); (2) for use by the buyer as a fuel in that person’s trade or business; or (3) who sells the algae based biofuel at retail.

The Senate bill also provides producers of algae-based biofuels with bonus depreciation for property which is used in the United State to produce algae-based biofuels.

It seems clear that without the massive capital investment of big oil companies, pilot projects and test facilities to determine whether algae-based biofuels can scaled up would be very difficult to construct. It may also take Big Oil’s lobbying efforts to obtain tax credits for the algae-based biofuel industry.

Moreover, the ultimate success of algae-based biofuels may largely depend on the vast distribution networks of big oil companies. In other words, algae and Big Oil are inextricably linked, for better or for worse.

[photo credit: Flickr]

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