Google's philanthropy Google.org today released an analysis on the impact of clean-energy innovation that is at once optimistic and sobering.

The Internet company has made it a corporate goal to be carbon neutral and promote green technologies, putting some of its employees on the forefront of thinking on how to speed clean-energy technology development.

Presented on a company blog and in graphics, its study found that technology breakthroughs, coupled with policies to encourage clean energy, will have a positive economic and environmental impact, more so than policies alone. It also found speed is a key lever in delivering benefits.

"Our model found a mere five-year delay (2010-2015) in accelerating technology innovation led to $2.3 trillion to $3.2 trillion in unrealized GDP, an aggregate 1.2-1.4 million net unrealized jobs, and 8-28 more gigatons of potential GHG (greenhouse gas) emissions by 2050," wrote Google's green energy czar Bill Weihl and Charles Baron from Google.org's Clean Energy Team.

Google

The analysis, based on economic models from consulting company McKinsey, highlights the potential of clean-energy technologies to affect multiple societal problems. For example, its summary states that "breakthrough innovations in clean energy added $155 billion per year in GDP, creating 1.1 million net jobs, while reducing household energy costs by $942 per year, oil consumption by 1.1 billion barrels per year, and carbon emissions 13% by 2030 vs. BAU (business as usual)."

The full report (PDF) delves into specific areas--electric vehicles, power from renewable sources, grid storage, and natural gas--to estimate when cleaner alternatives to oil and coal can compete based on price alone. For example, it projects that a breakthrough in electric-vehicle battery cost by 2018 would make the total cost of ownership for EVs with a 125-mile range lower than gasoline cars.

But the study's authors, by their own admission, make some optimistic assumptions regarding new technology adoption. They assume that the infrastructure for charging electric vehicles will follow consumer demand and that transmission lines for large-scale renewable-energy projects will be built, though that is a challenging siting and regulatory issue.

Although the study underscores the role technology can play, it shows policies are critically important because they can favor one approach over another. For example, better EV batteries can create a tipping point that will drive mass adoption, but cheap natural gas could stall EV adoption. "In a sustained era of cheap gas ($3/MMBTU), if EV breakthroughs do not happen quickly, CNGs (compressed natural gas) will dominate the market (for transportation) and make it much harder for EVs to reach scale," the study said.

On the power generation side, fully amortized coal plants are very tough to compete with on the cost per kilowatt-hour alone, it noted. The study projects that even with technical breakthroughs, renewable-power generation would not compete with the marginal cost of coal until after 2030.