Increasing Coal's Efficiency By 1% Creates 30X The Energy Of All Solar

While there’s plenty of hype and hope around improving solar technology, it would be better for the environment, and consumer, to improve the use of coal, says Paul Maeder, general partner focused on clean tech at Highland Capital.

“Increase the efficiency of coal by 1% and you replace all the power from solar by a factor of 30,” Maeder said while speaking about clean tech on a panel at the annual National Venture Capital Association meeting in Boston, yesterday.

The reason the efficiency hasn’t been improved is that the coal/power industry is not incented to do so. Maeder says people in the industry have said they’re told: “Whatever you do, don’t touch the knobs” that control energy, because, “if you cause a brownout, it follows you for the rest of your career.”

He adds that he’s talked to coal business workers who still have 15 years before they retire and all they want is to protect their job and pensions, says Maeder.

In other words, the risk of trying to make things better doesn’t stack up to the reward for maintaining the status quo. While there’s a healthy debate going on now about the merits of cleaning coal, and improving the technology, it’s been held back for too long by this mentality.

To get around this problem he thinks we need a cultural change in the utility industry to foster an environment of innovation. To do that, Maeder, like many other VCs we talked to, wants to decouple the utilities. That is, make profits not related to how much energy is pushed out, but how efficient the company’s performance is. Open up the utilities to competition. It’s already happening in Houston, and Maeder says that its a boon for consumers. (Is this true, commenters?)

It won’t make coal plants cleaner or more efficient overnight, but it could lead to a cleaner planet more quickly than dumping billions of dollars into more solar projects.

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