BOSTON--If you attached a cost to putting greenhouse gases into the atmosphere, how would the energy business change?
Steven Koonin, the undersecretary for science at the Department of Energy and former chief scientist of BP, has thought this question over. Koonin was the keynote speaker Thursday at the Fifth Annual Conference on Clean Energy here, where he offered a big-picture analysis of how the U.S. should convert to low-carbon energies.
Steven Koonin, undersecretary for science in the U.S. Department of Energy (DOE).
(Credit: DOE)The main drivers toward cleaner energy are efforts to improve the country's energy security and to cut greenhouse gas emissions. But there are many paths to that destination and we won't get there by only putting a price on carbon, Koonin said.
"Now the economists will tell you that all you need to do (is put a price on carbon emissions) and the market will take care of itself after that," Koonin said. "And that may be true, but as a technologist I have the ability and in fact the responsibility to look ahead and ask what the likely responses will be if there is a carbon price."
Establishing a significant, long-lasting, and universal carbon price would act as a "supply side" signal to the energy industry and favor certain technologies, he said.
One clear implication for the U.S. would be a greater shift toward natural gas, which is significantly less-polluting than coal for making electricity. Recent drilling improvements allow for capturing large amounts of natural gas from shale in the U.S., Koonin said.
Onshore wind is economically competitive in many areas in the U.S. and has the potential to supply 20 percent of the country's electricity by 2030. Another clean source of power is small and medium-size hydro power, which can supply tens of gigawatts from small dams.
Nuclear fission, which now supplies about 20 percent of the electricity in the U.S., is also poised to expand in an economy with a carbon price because there are no emissions during power generation. Carbon capture and storage facilities attached to coal-power plants, too, are needed because existing coal plants will continue to operate, he said.
Finally, increased conservation and efficiency are required in both the transportation field and for heating and power, he said.
Not just about technology
Koonin favors a cap-and-trade system to regulate carbon emissions, a system proposed in the energy and climate legislation now being debated in the Senate. Under cap and trade, heavy polluters such as utilities are given pollution permits and can buy additional permits to stay under a government-set limit on carbon.
But other policies are required, in part because the energy industry by its nature changes very slowly. Koonin specifically mentioned portfolio standards, where utilities need to get a portion of their electricity supply from renewable sources or a "low carbon" portfolio standard.
"One of the most important things we need to do beyond technology is to accelerate energy change," he said. "It takes decades to affect significant changes in the energy system."
It's a mistake to look at the IT industry as a model for how quickly energy can change, Koonin said. Whereas digital technologies evolve very quickly, energy changes slowly because power plants and buildings last decades and even cars last 15 years.
The first hybrid passenger car came to the U.S. in 2001, and even now, eight years later, there are fewer than 1 million sold, out of a total 150 million cars, he noted.
The scale and investments required to adopt different energy technologies is much bigger in than IT, and the energy industry is dominated by incumbents with well-optimized processes, he added.
To accelerate changes in energy, the DOE has established different types of research centers. This year, there will be $25 million a year to fund three "innovation hubs" at universities focused on specific problems, such as advances in nuclear. The DOE also recently awarded grants for ARPA-E, research aimed at breakthrough technologies.
The U.S. electricity grid will get a 21st century upgrade, including installation of millions of smart meters, through a government-led program.
The Obama administration is scheduled to announce Tuesday where it is spending $3.4 billion of stimulus money on 100 smart-grid projects in 49 states. As part of the funding, utilities are contributing $4.7 billion to the projects, pushing the total spending to $8.1 billion.
The injection of capital in the grid will make electricity delivery more reliable and help consumers use energy more efficiently, Carol Browner, the president's assistant on energy and climate change, said during a call with the media Monday night. Improving the infrastructure will also allow the country to use more solar and wind power, she said.
President Obama is scheduled to detail the smart-grid program awards in Arcadia, Fla., the location of one of the largest solar farms in the U.S.
The smart grid covers a range of digital devices and software. The bulk of the smart-grid stimulus grants will be spent on installing new hardware, including 18 million smart meters that have two-way communications to convey information between a home or business and the utility.
Smart meters can be used to shift the electricity load, such as running clothes driers or dishwashers, to off-peak times, which means that expensive and polluting auxiliary power plants may not need to be turned on.
The funding will also result in the installation of 200,000 more reliable advanced transformers and 700 automated substations that will be converted to digital controls, Matt Rogers, senior adviser for Recovery Act implementation at the Department of Energy, said Monday.
In addition to smart meters, over 1 million consumers will get in-home displays to provide information on electricity usage in real time and allow them to program their big appliances. The projects are expected to lead to over 130,000 network-connected thermostats as well, according to the DOE.
The DOE anticipates that the initial 18 million smart meters, which will cover 13 percent of homes, will allow utilities to use the grid more efficiently. That will lead to a higher penetration of advanced meters--as many as 40 million in the next few years, Rogers said.
The giant digital upgrade--anticipated for months--was applauded by companies trying to capitalize on grid modernization efforts, such as Cisco Systems, meter manufacturers, and a raft of start-ups that sell software or devices for the smart grid.
"These grants are an important down payment on building a smarter grid and will certainly jump-start both industry and state regulators to deploy smart-grid technologies," Katherine Hamilton, president of industry advocacy group GridWise Alliance, said in a statement.
The largest grants are $200 million while the smallest are less than $10 million. Altogether, there are 25 large-scale projects and 75 smaller ones, officials said. There were 400 applications for funding.
A list of projects by category can be found here and by state here. A map of the awarded projects can be found here.
Google CEO Eric Schmidt (left) and U.S. Secretary of Energy Steven Chu at Google headquarters Monday.
(Credit: James Martin/CNET)MOUNTAIN VIEW, Calif.--For a bunch of search engineers, Google employees care an awful lot about energy and the environment.
Google hosted an event for employees Monday featuring Steven Chu, the U.S. secretary of energy under President Obama and a man Chief Executive Eric Schmidt said "may become one of the most influential scientists of our generation, if he isn't already." Chu took about an hour to speak to a packed room of Google employees following his announcement of $151 million in funding for new energy-related projects as part of the ARPA-E program.
Chu found a friendly audience of some of the most science-and-technology-obsessed individuals in a region known for science and technology obsession. He called the need to invest in alternative fuels and energy systems "the engineering and science challenge of our time" that will demand contributions from young scientists and technologists like the ones in Mountain View.
Several employees asked Chu to opine on the viability of various alternatives to fossil fuels, such as nuclear and geothermal, and the need to reduce carbon through a cap-and-trade system and carbon sequestration. Here Chu jostled a bit with Schmidt, who said he is skeptical about cap-and-trade systems and the ability of the nuclear industry to solve thorny problems like waste disposal and safety.
Congress is considering cap-and-trade legislation at the moment, and Chu is scheduled to testify before Congress on Tuesday about the need for such legislation. Schmidt isn't sure a global system can work because of the tendency for "rogue nations" to do as they please, but Chu thinks if carbon measurement systems are improved, hard data will make it easier to encourage those who are overproducing carbon to get their act together.
And on nuclear, Schmidt bemoaned the lack of standards in nuclear plant construction, saying "the human factors are a disaster" with every plant a little different than its counterparts and the waste issue still unsolved. Chu didn't debate the point, but said the nuclear industry is moving more toward solving those problems and improving safety.
Those were minor policy disagreements, however: Google and the current Department of Energy are definitely friends. Schmidt called Chu one of his heroes, and Chu praised Google's work on reducing the energy consumption of its servers and assuming a "leadership position" in reducing the carbon footprint of its operation.
Schmidt, who serves as an adviser to the administration on President Obama's Council of Advisers on Science and Technology, asked Chu what it's like being the senior scientist in the government. He's actually the first scientist to hold the secretary of energy position, and won the Nobel Prize in Physics in 1997.
"It's funny in a macabre sort of way. I don't think Congress treats me like your average cabinet member," Chu said with a wry chuckle. He said he's spent much of his first year on the job talking to Congress about the problems with energy use and the environment, and that legislators are receptive, for the most part.
"I think the president has made it very clear that science plays such an integral role in the decisions we have to make," Chu said. He was preaching to the choir at the Googleplex.
The Fisker Karma at the Mazda Raceway Laguna Seca in August.
(Credit: Fisker Automotive)Fisker Automotive has been awarded $528.7 million in U.S. Department of Energy loans to develop a more affordable plug-in hybrid for U.S. production.
The hybrid car start-up company is indeed developing a $39,000 plug-in hybrid electric car, as CNET News predicted last week.
Fisker currently refers to the mystery car as "Project Nina."
The majority of the funds, which were awarded from the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program, will be put toward developing and building production facilities for the Nina car in the U.S.
Nina's development and production will employ an estimated 5,000 U.S. workers counting indirect jobs from suppliers as well as direct Fisker employment, the company said Tuesday.
Fisker recently introduced the Karma, a luxury hybrid sedan that sells for about $87,900. A small portion of the Department of Energy funds will go toward further developing production facilities for the Karma in the U.S.
The Nina plug-in electric hybrid price of $39,000, is the estimate after government rebates are factored in to the price. While that price point would not be considered "affordable" to the average U.S. car buyer, it is an affordable price for plug-in hybrids and electric cars, which are not yet produced in large volume. Tesla's Model S electric sedan, in comparison, costs an estimated $50,000 to $56,400 after rebates. Tesla was awarded $465 million in loans from the same Department of Energy fund in June to build production facilities for the Model S.
Using the federal loans, Fisker hopes to produce 100,000 "Nina" cars annually in the U.S. starting in 2012. And while the cars will carry made-in-the-U.S.A. bragging rights, Fisker hopes to sell many of the cars elsewhere too.
"A significant percentage will be exported, helping to balance the U.S. trade deficit," Fisker said.
The Senate is expected to vote on a bill on Thursday to extend the Cash for Clunkers car trade-in program, but experts contend there are more cost-effective ways to get environmental benefits.
The government-funded program, where people can get up to $4,500 for trading in a car for a new, more fuel-efficient model, has been so popular that it may run out of funding by the end of the week. The House passed a bill to extend the program with an additional $2 billion which, if the Senate passes its version, would give consumers until Labor Day to trade in cars, according to an Associated Press report.
The program has spurred vehicle sales in the ailing auto industry for both U.S. and foreign suppliers. But the program has its detractors, with some warning that the sales spike is temporary and that there are less costly ways to promote green technologies.
"As a carbon dioxide policy, this is a terribly wasteful thing to do," Henry Jacoby, the co-director of the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology told the Associated Press for an article that analyzes the environmental benefits. "The amount of carbon you are saving per federal expenditure is very, very small."
The cars that are being bought are on average 18 percent more fuel efficient than the cars they are replacing, according to the Department of Transportation.
But the overall impact from the program in reducing greenhouse gas emissions is about saving one hour of the U.S.'s carbon dioxide emissions, according to the AP analysis written by Seth Borenstein.
"It's not that it's a bad idea; just don't sell it as a cost-effective energy savings method," Michael Gerrard, director of the Center for Climate Change Law at Columbia University said in an academic journal. "From an economic standpoint it seems to be a roaring success. From an environment and energy perspective, it's not where you would put your first dollar."
Also, the additional $2 billion in funding to extend the program would come from a loan guarantee program for deploying renewable energy projects, such as solar and wind farms. In the current financially constrained funding environment, renewable energy company executives say that the Department of Energy loan guarantee program is very effective.
"Redirecting one-third of the monies allotted to the loan guarantee program to reseed the Cash for Clunkers program--which has already taken an estimated 250,000 pollution-heavy cars and trucks off the road--appears to be a politically advantageous, though economically short-sided, move," wrote analyst Nadav Enbar in an IDC Energy Insights paper.
He calculated that the $6 billion originally allocated for the DOE loan guarantee program could result in over $100 billion in economic activity in the U.S.
See CNET Car Tech's choice of six cars that get the full trade-in value of the Cash for Clunkers program and meet the maximum price requirement.
The Department of Energy on Wednesday announced which U.S. companies have been awarded grants to build manufacturing plants for electric vehicle batteries.
The $2.4 billion program, established as part of the stimulus plan, sets aside funds for auto battery manufacturing and related components, such as electric motors. (Click here for a PDF to see the full list and for a map of the awards).
President Obama, appearing in Elkhart, Ind., and Vice President Joe Biden, in Detroit, were scheduled to announce the recipients and specific amounts. Energy Secretary Steven Chu is scheduled to speak Wednesday in Charlotte, N.C., and visit a battery supplier.
A123 Systems' battery platform is being used for power tools, transportation, and power grid energy storage.
(Credit: Martin LaMonica/CNET)The grants, which will be matched by $2.4 billion in private investment, will go to battery and component suppliers as well as the big U.S. automakers--General Motors, Ford, and Chrysler--which will receive over $400 million for manufacturing and to test the performance of electric vehicles, such as the Chevy Volt.
In all, there will be 48 funded projects, with many--18 out of the total--located in the traditional auto manufacturing states of Michigan and Indiana.The grants are meant to jump-start the U.S. industry for auto batteries, which is now dominated by Asian suppliers. The Obama administration has set a goal of putting 1 million plug-in electric vehicles on the road by 2015.
Of the total, $1.5 billion is available for U.S. battery manufacturing and $500 million for related technology, such as electric motors. Another $400 million is dedicated for federal agencies to purchase fleet plug-in electric vehicles and to develop the infrastructure needed for plug-in electric vehicles, such as charging stations and training for technicians in electric vehicles.
The White House said that the companies were chosen in a "highly competitive process" where applications were evaluated by the DOE.
Battery makers
For the individual companies involved, the grants can be a lifeline to bigger things, such as volume production. The credit crisis on Wall Street has made it difficult to secure the significant amount of money needed for constructing new manufacturing facilities, particularly for new battery technology.
The top recipient is Johnson Controls, which will receive $299 million to produce nickel cobalt metal battery cells and packs. A123 Systems will get $249.1 million to go ahead with plans to build a factory in Michigan for its lithium ion battery packs and related components.
Dow Koman is set to receive $161 million for its batteries, and Compact Power, on behalf of Korean company LG Chem, will produce the lithium ion battery cells that will be used with General Motors' Chevy Volt electric car.
EnerDel's battery pack for the Think City electric car.
(Credit: Martin LaMonica/CNET)Another recipient is EnerDel, which received $118.5 million that it intends to match with the same amount to expand lithium ion battery manufacturing in its home state of Indiana. EnerDel has supply agreements with Fisker Automotive and Think. Saft America will receive $95.5 million to produce lithium ion cells and batteries for industrial, agricultural, and defense vehicles.
EnerDel CEO Charles Gassenheimer said that the grant will allow the company to double the volume at its existing auto battery plant in Indiana. "What this money does is accelerate our business plan tremendously," he said.
The company has also applied for a $480 million loan under the Advanced Technology Vehicles Manufacturing Loan Program, which is expected to be announced in the coming weeks. Without the grant or loan, the company projected revenue of $700 million by 2015, but if it receives both it expects it can get to $2.25 billion.
Having a domestic auto battery supply chain will allow auto battery makers to lower the cost by as much as 40 percent in that time frame, EnerDel projects.
"The U.S. taxpayer can expect the United States, which is playing second seat to Asia and Europe in electric drive trains, (to produce) cheaper, more fuel-efficient cars faster," Gassenheimer said. "We strongly believe that on a total cost of ownership basis, electric cars can be significantly cheaper today than gasoline cars."
Charging stations
Hybrid vehicles now use nickel metal hydride batteries but many new models of electric cars set to come to market over the next two years will use lithium ion batteries, which are already widely used in consumer electronics. Although there are different types, lithium batteries are preferred because they are lighter and allow for higher energy density.
But there were two battery companies--East Penn Manufacturing and Exide Technologies with Axion Power--in the program that received funds to advance lead acid batteries for "micro and mild hybrid applications."
The largest grant for developing a charging infrastructure went to eTec, a subsidiary of Ecotality, and Nissan which will test a network of fast-charging stations in cities in Arizona, California, Oregon, Washington, and Tennessee.
The DOE will invest $99.9 million, which will be matched by participating companies, to test the performance of 5,000 of Nissan's all-electric Leaf sedan with eTec's charging stations, in different climates and use patterns.
The DOE's goal is to have 70 percent of funds spent by the end of September next year and have nearly all the money spent by the following year, Energy Department senior adviser Matt Rogers told reporters on Tuesday, according to Environment & Energy Daily.
A "public-private partnership" is required to speed the transition to new auto technology, said Brian Wynne the president of the Electric Drive Transportation Association industry group. Pumping money into the sector will help auto makers meet demand for electric cars over the next two years and lessen the premium consumers need to pay for the new technology, he said.
"There's the immediate impact of jobs--it's all about green jobs--and we want to invest in a sector that will pull us into a new era. That's what essentially investing in here," said Wynne.
This article was updated at 9 a.m. PDT with more details, and the corrected amount of EnerDel's grant and the number of awards in Michigan and Indiana.
The money to fund an extended Cash for Clunkers program could come at the expense of renewable energy companies.
The House on Friday overwhelmingly passed a bill to extend the program which gives consumers up to $4,500 for trading in old cars for new, fuel-efficient ones with an additional $2 billion. The initial $1 billion set aside is said to be already or nearly exhausted.
The program has been popular with consumers as well as politicians who see it as a way to revive bleak auto sales. However, the House proposed paying for the extension by using $2 billion approved in the stimulus package for loan guarantees for renewable energy, which may not sit well with energy project developers.
Altogether $6 billion was provided for Department of Energy loan guarantees. Those loan guarantees would be made available to finance construction of large solar or biofuels projects. Project financing has become particularly difficult because of the credit crunch.
The Renewable Fuels Association, the main lobbying organization for the ethanol industry, put out a statement on Friday to indicate it is "concerned to see the program paid for by depleting the renewable energy loan guarantee program."
Senate Energy Committee chairman Jeff Bingaman said on Friday that he opposed using the Department of Energy's loan guarantee program to fund the Cash for Clunkers program. The Senate is expected to take up the measure next week.
"If Congress decides to extend this initiative, I believe we must not rob from the loan guarantees we provided through the recovery package that, in the long term, will shift our country to home-grown, renewable energy while creating good 'green collar' jobs," Bingaman said, according to a Reuters report.
Speaking on the House floor, Speaker Nancy Pelosi also voiced her concern and said that she hoped those renewable energy loan guarantee funds would be restored.
At a press conference, President Obama on Friday said that the he expects Congress and the White House to work to return funding the loan guarantee program "down the road."
The Department of Energy on Wednesday detailed $30 billion in loan guarantees available to promote renewable energy and grid upgrades.
The DOE is soliciting applications for projects in renewable energy and added electricity transmission. This phase of loan guarantees also makes loans available for "cutting edge" biofuels projects.
The solicitations for applications are the sixth and seventh step in the DOE's loan guarantee program, funded by the stimulus act. Billions of dollars of loans and loan guarantees had been authorized before the stimulus but few had been awarded until earlier this year.
Awards for projects to promote domestic car and auto battery manufacturing--the Advanced Technology Vehicles Manufacturing Loan Program (ATVM) and Advanced Battery Manufacturing grants--are expected to be announced as early as this week.
Ford, Tesla Motors, and Nissan were the first awarded loans from the $25 billion ATVM program in June.
The U.S. Bureau of Land Management, in conjunction with the Department of Energy, this week released six maps that could help determine the location of the next big push in solar energy.
The BLM maps cover areas within the six U.S. states most suitable for solar energy generation and transmission as judged by the U.S. government: Arizona (PDF and below), California (PDF), Colorado (PDF), Nevada (PDF), New Mexico (PDF) and Utah (PDF).
"Only lands with excellent solar resources, suitable slope, proximity to roads and transmission lines or designated corridors, and containing at least 2,000 acres of BLM-administered public lands were considered for solar energy study areas. Sensitive lands, wilderness and other high-conservation-value lands as well as lands with conflicting uses were excluded," according to a BLM statement released with the maps.
Arizona has two areas, Brenda and Bullard Wash, currently under in-depth study for solar energy generation use.
(Credit: U.S. Department of the Interior/U.S. Department of Energy)The maps were release in conjunction with announcements from Secretary of the Interior Ken Salazar and U.S. Senator Harry Reid (D-Nev.) that the U.S. government has decided to let public lands possibly be used for solar energy development. (The BLM is part of the U.S. Department of the Interior.)
As part of that push, the U.S. government is beginning several environmental impact studies, opening solar energy permitting offices, and overhauling the application and review process for utilities looking to develop land for solar energy generation.
"Currently BLM has received about 470 renewable energy project applications. Those include 158 active solar applications, covering 1.8 million acres, with a projected capacity to generate 97,000 megawatts of electricity. That's enough to power 29 million homes, the equivalent of 29 percent of the nation's household electrical consumption," according to the statement released Monday by the U.S. Department of the Interior.
The maps show Solar Energy Study Areas, 24 separate tracts of BLM-administered lands totaling 670,000 acres that the government sees as prime for development pending study results (dark blue stripe area on maps), as well as areas under review for Solar PEIS (Programmatic Environmental Impact Statement to Develop and Implement Agency-Specific Programs for Solar Energy Development).
Maps have been rolled out before in an effort to encourage alternative energy utility infrastructure and set-up.
In April, the NRDC--in conjunction with Google and the National Audobon Society--also offered a set of maps for to guide energy developers of both solar and wind. The Path to Green Energy maps, which cover the Western U.S. and the Dakotas, indicate areas where developers would likely be welcome to set up shop, and which areas the NRDC saw as controversial or arguably inappropriate for development.
At the time, they, too, said their maps were an effort to expedite alternative energy development. In the U.S.
A group of energy industry associations has warned President Obama that bureaucratic delays could sink large-scale projects and derail Obama's goal of doubling renewable-energy supply in the next three years.
In a letter dated Tuesday, seven industry groups urged Obama to intercede so that already-authorized loans are made available quickly. The letter was signed by the heads of the American Wind Energy Association, the Solar Energy Industries Association, the Biomass Power Association, the United States Clean Heat & Power Association, the Nuclear Energy Institute, the Geothermal Energy Association, and the National Hydropower Association. (Click for PDF)
The credit crisis has made financing large-scale renewable-energy projects, such as wind and solar farms, far more difficult than one year ago. The stimulus act passed earlier this year changed the subsidy so renewable-energy companies can finance projects with loans from the U.S. Department of Energy.
Another loan guarantee program, established in 2005, is designed to give young green-technology companies expansion funds. Solar start-up Solyndra in March received a $535 million loan to build a larger factory and many others, including Tesla Motors, have applied for loans.
However, despite the Department of Energy's stated plans to move quickly, the loan money from either program is not yet flowing, the industry associations complained. Creation of the loan guarantee program called for in this year's stimulus plan, officially called the American Recovery and Reinvestment Act (ARRA), is blocked by the Office of Management and Budget, they said.
"Three months have passed since enactment of ARRA, and we have little confidence that ongoing discussions between DOE (Department of Energy) and the Office of Management and Budget over these regulations will produce a satisfactory result in a timely manner," the letter said.
The industry associations said that if the authorized funds are not made available quickly, some projects, such as a large wind farm, will be delayed or canceled.
"Further delay endangers the planned role of the green energy economy in the nation's economic recovery and undermines the effort to meet your Administration's energy policy goals, including the doubling of renewable energy supply in three years," the letter said.
No visibility?
The letter reflects the complaints about loan programs from company executives in industry. The CEO of Schott Solar North America, Gerald Fine, said earlier this month that since the stimulus plan loan guarantee program is not yet operating, projects are on hold while project developers and manufacturers await "clarity."
In a conference call with investors in late April, the CEO of panel maker First Solar, Michael Ahearn, said that the loan guarantee program is "subjective" and not available to the market in general.
"The rules and criteria aren't even developed let alone published and so when companies like us start thinking about how you put project finance in place to facilitate a large project, due late 2010 or beyond, we can't rely on that program. There's no visibility around it. No assurance, we will be entitled to participate," he said.
"I think we speak for a number of companies on these points and would like to deploy big volumes here. We just need a few of these pieces to be in place," Ahearn said.
Energy Secretary Steven Chu established a special board within the DOE in an effort to streamline the loan guarantee process. Chu said last week that the DOE will be asking academics to take a leave of absence to help with loan vetting.
"This is a huge load on the system and we need the best help we can get," Chu said after giving a speech at MIT. "The quality of reviews has to go up. It's very important we get it right."
Some entrepreneurs, meanwhile, have complained that local officials simply aren't aware of the changes to the loan programs. "Obama says, 'OK, we're going to cut through all the red tape.' In the actual environment, it ain't happening," said a person seeking loans for a biofuel project.
