TR: When might those loan guarantees become available?
SC: Well, sooner rather than later. I’m hoping within a year, but that’s just a wild guess. We’re pushing ahead. As you know, we’ve become very aggressive about trying to accelerate the loan process by a considerable amount. A factor of 5 to 10 is about the right amount. When I first came, I was told that the first loans would go out mid-2010. So they’ve now gone out, and there’s going to be another tranche of them that we’ll be vetting.
TR: No loan guarantees yet for nuclear plants.
TR: Are you referring to the loan guarantee to Solyndra? [Editor’s note: Solyndra is a solar company that received approval for a loan guarantee earlier this year.]
SC: Solyndra, for example. That means that there’s a commitment: if you can get the 20 percent financing, the thing’s yours. And there will be more announced this month.
TR: The hydrogen fuel-cell program has been scaled back in the proposed budget, and the emphasis has been changed from transportation to buildings.
SC: That’s right.
TR: It used to be thought, five to eight years ago, that hydrogen was the great answer for the future of transportation. The mood has shifted. What have we learned from this?
SC: I think, well, among some people it hasn’t really shifted [laughs]. I think there was great enthusiasm in some quarters, but I always was somewhat skeptical of it because, right now, the way we get hydrogen primarily is from reforming [natural] gas. That’s not an ideal source of hydrogen. You’re giving away some of the energy content of natural gas, which is a very valuable fuel. So that’s one problem. The other problem is, if it’s for transportation, we don’t have a good storage mechanism yet. Compressed hydrogen is the best mechanism [but it requires] a large volume. We haven’t figured out how to store it with high density. What else? The fuel cells aren’t there yet, and the distribution infrastructure isn’t there yet. So you have four things that have to happen all at once. And so it always looked like it was going to be [a technology for] the distant future. In order to get significant deployment, you need four significant technological breakthroughs. That makes it unlikely.
TR: So this is an example, perhaps, of picking a technology prematurely. Is there anything we’ve learned from that in terms of future policy?
SC: I wasn’t there when they started making this [decision]. I’m not sure it was deeply understood what was required. Now, having said that, I think that hydrogen could be effectively a “battery” in the sense that suppose you had a way of using excess electricity–let’s say a nuclear plant at night, or solar or wind excess capacity, and there was an efficient electrolysis way of turning that into hydrogen, and then we have stationary fuel cells. It could effectively be a battery of sorts. You take a certain form of energy and convert it to hydrogen, and then convert it back [into electricity]. You don’t have the distribution problem, you don’t have the weight problem. [Editor’s note: Storage tanks can be heavy.] In certain applications, you don’t need as many miracles for it to happen. If you need four miracles, that’s unlikely: saints only need three miracles [laughs].
TR: This application of fuel cells–is this a way, then, of addressing the variability of wind and solar power?
SC: Perhaps. I think the process we do have now that could work is pumped storage. If you have excess wind capacity, you pump water up the hill, and when the wind isn’t blowing, you could let it down into a small holding pond [using it to turn a generator]. Now, that’s only in places where you have hydroelectric facilities, so let’s say in the northern great plains, South Dakota and North Dakota, compressed air storage is something we should be looking at. The excess air is used to pump air down into a sealed cave. You use that, plus natural gas, to spin a turbine. The round trip efficiency of both of these technologies is between 60 and 70 percent of overall conversion. That’s very good for this massive-scale technology. If we’re going to go over 10, 20, 30 percent renewables that are variable, you need some storage mechanism.