5 step Cleantech Program by GE
Wind - In 2002, GE bought Enron Wind out of Enron's bankruptcy for about $300 mm, making GE one of the top 5 wind players overnight (it's now well in excess of a billion in revenue). It was their first cleantech steal, right before the wind industry got amazingly tight (and huge).
Power - In 2003, GE acquired one of the leading gas engine manufacturers in Jenbacher, making GE an overnight leader in small, clean power systems, and powering their way into everything from distributed generation to landfill gas markets.
Solar - In 2004, just before the solar boom, GE acquired Astropower, one of the top 5 solar energy companies in the US, for less than $20 million out of bankrupcty, after the company was delisted following accounting irregularities. You cannot even build a single solar manufacturing line for $20 mm. Only the subsequent silicon supply shortages, and a lack of the needed investment in the business and next generation technology kept GE from making a homerun out of it. But despite that, there will never be another steal in solar quite like this.
Water - In 2005, GE acquired one of the largest water technology businesses in the US, Ionics, to complement its previous acqusitions in the water sector. Paying a full price of $1.1 Billion, it virtually guaranteed GE a top 5 position in the reverse osmosis, desalination, and water purification markets going forwrad, right after Ionics was shored up through a merger with Ecolochem.
Ecomagination Brand - Then on the back of these deals, in 2005 GE launched its Ecomagination initiative, and anchored the entire company's image around its new cleantech empire.
That, my friends, is the way you make money in cleantech venture capital. I would venture to guess that GE has made 10x its money, no matter how you spin it. Or put another way, an IPO of the GE cleantech business would be the hottest thing in years.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of Cleantech.org, and a blogger for CNET's Cleantech blog.
In the meantime, the cost of solar on a per kwh basis has continued to improve, primarily on the back of unsexy work on the integration and installation side, as well as the growing size of the average photovoltaic installation. This is despite the increase in average module prices in recent years, driven by the silicon shortage.
Cleantech Blog has written about the concern that the real make or break for solar economics is how much power you get out of the system, not just the cost per watt of the panels. We believe that installation and design decisions are the make or break for that variable, not the technology choice. We have also written on the topic of integration and installation, and the need for better data and monitoring on the back end, like our friends at Fat Spaniel are improving, to inform the analysis.
But what about the analysis on the front end of the installation process? Everyone in the industry knows that installation is a large portion of the upfront costs, and everyone knows that how well you design your solar system has large implications for the economics of your installation.
So how do we actually streamline solar from the front end? Well, it's happening. The solar decision making software tools are slowly developing. There are a number of products available now to streamline the modeling and estimation of solar installation costs and performance, and make the end user and installer's life easier: including products like CPF Tools, OnGrid, and PVOptimize, which range from spreadsheets to on demand services. My favorite is CPF Tools, by Clean Power Finance, and I had a chance to meet with a couple of their executives, including Joseph Brakohiapa, the other day to discuss what they are doing. For one, they have married solar estimation and modeling tools with an on-demand MRP system for solar installers. I certainly believe in on demand software, and it's hard to see how modeling tools without links into your inventory and proposal systems can actually take much cost out. And second, they are working to integrate those tools into the financing model for small scale solar loans. When coupled with backend monitoring like Fat Spaniel's, I can see the path for real progress - and possibly more importantly, I can see a way for both the installer and the end customer to finally begin to manage risk and cut costs.
From monitoring, to ERP, to decision support and business intelligence. No industry in today's world can scale without it. It's time the solar sector grows up.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, a blogger for CNET's Cleantech blog, and the Chairman of Cleantech.org.
Americans and the U.S. have a reputation of flaunting their wealth. Today, however, they are starting to proudly (sometimes loudly) show off their greenness. There's a debate over whether this is just a fad or the start of a nationwide trend to support sustainable practices.
Companies around the world are now racing to establish their credibility in green production. But they must also be careful of not being perceived as greenwashing.
On the other hand, being too inconspicuous in their efforts could hurt a company. With public awareness and demand for products that have smaller impacts on the government, companies are forced to let the public know what they've been doing.
Joel Makower writes:
Companies are being pressed to talk about what they're doing--and not doing--by customers, employees, investors, activists, and others. Previously reclusive companies are rethinking their taciturn strategies.
With the hype building up for greenness in corporate America, it may be a while until the public can properly discern the genuine stuff from noise.
Pedaling for water
Bikes have many uses including generating electricity and powering the Internet in rural villages. Some people even use it for transportation.
But a group of students in California have just developed a new use. Actually it's for a tricycle, but the idea is a foot-powered water filtration device-vehicle hybrid. Called the Aquaduct Mobile Filtration Device, the vehicle sucks water from reservoir in a rear tank and cleans it through a filtration system. The purified water is stored in a reservoir in the front.
Joshua Liberles writes in Carectomy:
Five California-based design students built the Aquaduct for rural, third-world countries where many people either walk for miles or use a motorized vehicle to retrieve water, and then use up time and energy to boil the water. The Aquaduct provides the transportation sans fossil fuel, eliminates the need for wood or other fuels to heat the water, and is emissions free.
U.S. solar check
It's been said that each of the renewable-energy sources could theoretically power the U.S. many times over if they were exploited to their full technical potential.
But how reliable are these figures? For instance, can the U.S. really get all of its electricity from the sun?
Robert Rapier, in the R-Squared Energy Blog in Green Tech Media, did a quick calculation:
Peak U.S. demand, according to the EIA, is almost 800,000 megawatts. Actual available capacity is 900,000 megawatts. So let's make our solar capacity equal to today's total installed electrical generating capacity.Assuming the entire 1,900 acres is needed for the plant (maybe not a good assumption, but all I have), then this breaks down to 280 megawatts/1,900 acres, or 0.147 megawatts per acre. This of course includes all of the land associated with support functions, and it may include area for future expansions. So the calculation may be conservative.
The second assumption is that the areas where our plants will be put will be as productive as this one in Arizona. That is not a conservative assumption, and will somewhat offset the previous conservative calculations.
Then to get 900,000 megawatts is going to take 900,000 megawatts/0.147 megawatts per acre, or 6.1 million acres. How large of an area is this? I don't know. I have to get out my calculator.
My calculator indicates that 6.1 million acres is an area of 9,531 square miles, which is equivalent to a square of just under 100 miles by 100 miles (which would be 10,000 square miles).
Of course, this doesn't take into account transmission losses and the fact that the sun is not around 24 hours a day. Still, that is a lot of energy coming from the sun.
Just how many square miles would Las Vegas need? :)
Frank Ling is a postdoctoral fellow at the Renewable and Appropriate Energy Laboratory (RAEL) at UC Berkeley. He is also a producer of the Berkeley Groks Science Show.
But if we wanted to actually do it, where could we actually save energy without impacting GDP growth, make a serious difference in our power bill, and do it in a big way - targeting say, 50% of our total power usage on a per capita basis?
CFLs & LEDs - We are already moving aggressively towards compact flourescent light bulbs, and the penetration rates are still low. As that trend continues, and LEDs come into the mix for more and more applications, our lighting bills should trend straight downward for the next decade. Now if we can just stop cringing at the thought of a $3 lightbulb!
Heating and Air Conditioning - I know whenever my power bill goes higher than I like, I just watch how often I turn the heater on, and adjust the thermoset a bit. The answer here has always been some combination of improved technology, smart metering and more transparency in billing and usage, and energy prices rising high enough for consumers to feel the pinch. Oh, and did I mention insulation, California?
Hotwater heaters - Can anybody say, "tankless"?
Power generation -If every power plant was upgraded to the latest generation of technology - in the power generation world - newer tends to equal more efficient all else being equal - the impact could be staggering. But bottom line, this means our regulators would have to approve the increase in utility capital expenditures and pass those costs on through to us in the short term. That's about as likely as George W announcing a plan to tax every SUV Detroit makes and give the money to the poor to buy solar systems.
Solar - As for solar - which is typically sold on a "reduce your energy bill" pitch, not a chance. At $0.15 to $1.00/kwh (depending on who's counting and how they count), if we actually reduced a significant amount of our building load with solar power we'd likely send our GDP plummeting. There are lots of reasons to love solar, but decreasing energy usage per unit of GDP is not one of them. At least, not yet.
These aren't new ideas. But definitely worth repeating until we learn the lesson.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, Chairman of Cleantech.org and a blogger for CNET's Cleantech blog.
"Powering the Planet" is the title of an extraordinary speech that is regularly given by Nate Lewis, Professor of Chemistry at CalTech. It is a bit long and detailed, but very much worth reading, as it elegantly frames the scale of the worldwide energy/environmental challenges to be faced in the coming decades.
The gist of the presentation is that aggressive pursuit of energy efficiency is critical -- but we still need to supply the remaining human energy requirement in some carbon-free fashion, which leaves us relatively few viable options:
Nuclear power, which concerns Lewis not for safety/security reasons but because of inability to expand nuclear utilization quickly/sufficiently to meet the world's needs.
Carbon sequestration of fossil fuel burning, which Lewis says may not be available in time or at the volumes necessary to have significant beneficial impact on climate change.
Hydro, geothermal, wind and ocean energy, which are all fine in Lewis' view, but inadequate in scope to supply global energy demands
Bio-based energy, which Lewis finds to be highly inefficient and therefore unlikely to be able to provide more than a small fraction of worldwide energy requirements
This leaves solar energy, which Lewis concludes is the best hope for the planet -- technologically known to work, scalable with no binding supply limitations, at potentially reasonable economics with continued advancement. Then Lewis closes with the clincher: if we're going to succeed with solar energy, our priorities need to change:
"In the United States, we spend $28 billion on health, but only about $28 million on basic solar research. Currently, we spend more money buying gas at the pump in one hour than we spend funding basic solar research in our country over an entire year. Yet, in that same hour, more energy from the sun is hitting the Earth than all of the energy consumed on our planet in that year. The same cannot be said of any other energy source."
'Nuf sed.
Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.
I'm a big fan of solar power. But as with anything, I like to know exactly what I'm getting. One of the big unspoken issues in the solar sector is the difference between the rated or estimated potential output of a solar system--and the actual production of kilowatt-hours. A range of factors from the margin of error in the modules, to temperature, dust and losses from wiring, conversion to AC power and any batteries all can contribute to as much as 30 percent lower actual power production--even in the first year.
Compounding this problem in my mind is that in California only about a third to half of our solar installations are actually independently monitored, according to one of my friends at Fat Spaniel, one of the leading monitors of solar systems.
The California Energy Commission did some good thumbnail analysis of solar in the real world several years ago.
Here's the punch line from their analysis:
"So the '100-watt module' output, reduced by production tolerance, heat, dust, wiring, AC conversion and other losses will translate into about 68 watts of AC power delivered to the house panel during the middle of a clear day (100 watts x 0.95 x 0.89 x 0.93 x 0.95 x 0.90 = 68 watts)." From A Guide to Photovoltaic System Design and Installation (PDF) by the California Energy Commission. If you are interested in solar, you need to read their report.
But this 68 watts is only part of the story. If you have battery storage on the system they say it could reduce the power another 6-10 percent. They then stated that poor installation layout problems--including shading can take an additional toll. Another big issue is the angle of the roof and the direction it faces (in California, where your roof faces can affect the power output up to another 15 percent for many roofs). And interesting enough, for all the talk about making windows out of solar in what is typically described as Building Integrated Photovoltaics (BIPV), a vertical installation can reduce the power output up to about half all by itself!
Their bottom line: if the system is perfectly installed under perfect conditions the best case scenario for San Francisco would be 1,724 kwh, or electricity per year for each kilowatt installed and for Los Angeles would be about 1,758. But that's before all the "real-world" adjustments. When you make all those real-world adjustments--take another 25-30 percent or more off the top, even for a well designed system. This fits with our best San Francisco benchmark, our major 675 kW rooftop solar facility in the San Francisco at Moscone Center, which produces around 1,200 kilowatt-hours per year per rated kilowatt installed.
So when it comes to solar, let's make the right choice for solar power, but make it with our eyes open to the real world.
In 1899 economist/sociologist Thorstein Veblen introduced the term Conspicuous Consumption to describe what he believed to be the evils of wealth accumulation in the nouveau riche upper class of the Gilded Age (Veblen was not exactly a "right wing" economist). You can best think of Conspicuous Consumption today as the notion that consumerism and "keeping up with the Joneses" drives economics.
One of my friends, Helen Priest from Meridian Energy, coined a new version of the term this week--conspicuous sustainability. She is here from New Zealand's largest (and all green) power company visiting Silicon Valley, and she's watching the torrent of activity around everything green and clean. It struck her that we are reinventing Conspicuous Consumption--keeping up with the Joneses in all things green. You have to wonder if solar panels or a LEEDs rating on a McMansion somehow doesn't miss the point.
So let's think: Al Gore's son gets arrested for doing 100 mph with marijuana in the car--in a Prius! (As I told one my friends, I didn't know they could go that fast.) Nouveau riche tech execs out here in Silicon Valley put ultraclean, and even more, ultraexpensive, solar power on their roofs. Buckingham Palace offsets the carbon footprint of the Queen's recent trip to the United States. Dell has Plant a Tree for Me Program, which I used when I bought a new Dell last month. There is an exponentially increasing number of examples of consumerism driving green.
But to be fair--conspicuous sustainability is pushing everything from the rapid growth in solar to the greening of corporate strategies like General Electric's Ecomagination, BP's Beyond Petroleum and General Motor's Live Green, Go Yellow. It's pushing hybrid electric sales, fuel cells to power our PDAs and carbon offsets--all good things for the environment.
I put the term to my friend, green business guru Joel Makower, and he quickly agreed that conspicuous sustainability is exactly the term for our age (We didn't discuss whether it was good or bad). Joel's response was, "I think the quintessential symbol for the conspicuous sustainability age would be the carbon-neutral Hummer." Or maybe Gore's carbon-neutral 10,000 (square foot) San Francisco home. He also said "And then there's Moskito, Richard Branson's privately owned Caribbean island, which he wants to be carbon neutral..."
In Veblen's mind, Conspicuous Consumption was a very bad thing, but for green tech and the environmental movement, is conspicuous sustainability a good one?
. . .
Give up? They are all among the largest producers of solar modules. And recently Honda and Applied Materials have entered the solar business as well.
If you are a renewable energy fan, you have to get excited when large semiconductor equipment experts like Applied Materials get in the game.
But the most recent prospective entrant (which I have blogged about) is IBM. Big Blue's program is still under wraps, but it has worked on solar technology in its research arm since the 1970s and has massive expertise in semiconductors, material science and other related technologies to bring to bear.
As more and more major companies from the semiconductor sector enter the business, you can bet that costs will come down fast, and the currently sky high price for solar power will fall--and that's good for all of us.
The green-tech sector is getting hot for stock investments these days, in part because of some very hot recent solar IPOs, such as that of First Solar. As with everything, personal investors need to do their homework. Here's a few places to get started.
I follow three Web sites (and have occasionally written for or been interviewed by each of them) catering to investors in the energy and green-tech sector.
RenewableEnergyStocks.com is a content-rich site run by financial public-relations firm Investor Ideas, a subsidiary of Econ Corporate Services. Since the company is typically paid by the companies, you should be wary of its stock advice, though it is an excellent resource for related content and news.
EnergyTechStocks.com is a new content-rich media site tracking energy technology stocks. Its founders are former reporters of The Wall Street Journal.
AltEnergyStocks features blog-style editorials, interviews and opinions on alternative-energy stocks written by a team that actively plays the market in this sector. It also maintains a paper portfolio. (I am a contributing editor.)
For those interested in benchmarking their favorite stocks, there are now several indices to track a favorite stock against.
The Clean Edge U.S. Index covers five major subsectors: renewable-electricity generation, renewable fuels, energy storage and conversion, energy intelligence, and advanced energy-related materials.
WilderShares has the WilderHill New Energy Global Innovation Index and the WilderHill Clean Energy Index, the latter of which has an exchange-traded fund designed to track it as well.
Finally, the Cleantech Index tracks a basket of leading clean-tech stocks.
I know the folks responsible for organizing most of these indices, and while each group has a different perspective on the sector, they are all serious about the future of next-generation energy investing.
Hope this helps, and as always, caveat emptor.
As described on News.com just two months ago:
"One of the more ambitious related projects in the Mideast is Masdar, a $250 million clean-tech investment fund unfurled last year. The government of Abu Dhabi (through Abu Dhabi Future Energy) has put $100 million into Masdar, while Credit Suisse and the Consensus Business Group have put in $100 million and $50 million, respectively. Masdar, which means "source" in Arabic, also plans to set up a think tank with the national water and oil companies."
I had a chance to listen to Alex O'cinneide, one of their investment executives, speak at GreenVest 2007, the recent greentech investing conference I chaired in San Francisco. Speaking to a room of venture capitalists, startups, and industry executives, there were a number of lessons for the rest of us.
In a simple equation:
Oil $ = solar + low carbon + hydrogen
Abu Dhabi is investing in energy innovation and sustainability through the Abu Dhabi Future Energy Company, which Masdar is the $250 million technology investment arm.
Among some of the more exciting initiatives, Masdar is developing a 100 MW solar thermal plant using parabolic troughs, expecting to build expertise and capabilities for export of this type of technology, not just as a showcase. I am a big fan of the future of large scale solar thermal technology. But Abu Dhabi is also looking at silicon photovoltaics and thin film as well, in a big way.
They are studying a 1 GW hydrogen plant, and tieing that in with carbon credits under Kyoto, and enhanced oil recovery using CO2 injection.
Of keen note, Abu Dhabi is not just doing this for today's energy consumption, they are investing across the spectrum in research, venture capital, and large demonstration as a way to build expertise and gain technology to help underpin a post oil economy - and perhaps be a major exporter of the next generation of energy, too. Hence, their Future Energy company.
I say more power to them . . . and we in the US better not fall behind.
