Whereas diesel engines have made great strides in the European auto markets, here in the U.S., gasoline still dominates. Apparently, the prospect of much higher fuel mileage and lower CO2 emissions from diesels doesn't overcome the objections of U.S. environmental regulatory authorities concerned mainly about local air quality issues. I suspect that, even if (when?) these objections are overcome by continued refinement, diesels will still find it difficult to win market share in the U.S., largely because of the wider availability of gasoline.
A possible win-win solution may be forthcoming. A California firm named Transonic Combustion is working on technology that would allow gasoline engines to work at high compression ratios, thus enabling much better energy conversion ratios comparable to what is achieved in the typical diesel engine. Sounds like a great idea to me; hope it works. I wonder, though, if it will provide the throaty sound of those big-block V-8's that Americans seem to love so much.
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.
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.
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.
In the future, utilities will pay you to plug in your vehicle. Millions will plug in their electric vehicles (EVs), plug-in hybrids (PHEVs), and fuel cell vehicles (FCVs) at night when electricity is cheap, then during the day when energy is expensive, sell those extra electrons at a profit. Vehicle-to-Grid (V2G) technology is a bi-directional electric grid interface that allows a plug-in to take energy from the grid or put it back on the grid. V2G helps solve the major problem that demand for electricity is high during the day when everything from industrial plants to air conditioning is running full blast and then excess electricity is wasted at night.
Several early models of passenger vehicles have enough energy stored in advanced batteries to power several homes for hours. Hybrid electric buses and heavy trucks could power many homes or a school or hospital in an emergency. Recent announcements demonstrate that electric utilities and some automakers want to make V2G a reality.
The Smart Grid Consortium, established in December 2007 by Xcel Energy, will select a community of approximately 100,000 residents to become a Smart Grid City using V2G. Potential benefits include lower utility bills for residents, smarter energy management, better grid reliability, improved energy efficiency, and support for EVs and PHEVs.
Current consortium members include Accenture, Current Group, Schweitzer Engineering Laboratories, and Ventyx. Smart Grid City will use real-time, high-speed two-way communication throughout the distribution grid. Smart meters and substations will be integral. Installation will be made of thousands of in-home control devices and the necessary systems to fully automate home energy use.
The current electrical grid is poorly designed for distributed generation of power. Individuals and businesses lose months and connect fees when they add solar and other forms of renewable energy to the grid. Smart Grid City will easily support up to 1,000 easily dispatched distributed generation technologies including PHEVs, distributed batteries, solar, and wind.
In addition to Smart Grid City, another major EV/V2G initiative is unfolding.
The Renault-Nissan Alliance and Project Better Place have signed a memorandum of understanding to create a mass market for electric vehicles in Israel, which is an excellent target market: it has a sales tax exceeding 60 percent for gasoline vehicles, gasoline costs over $6 per gallon, most driving fits the range of electric vehicles, and the government strongly supports energy independence.
Project Better Place plans to deploy a massive network of battery-charging spots. Driving range will no longer be an obstacle, because customers will be able to plug their cars into charging units in any of the 500,000 charging spots in Israel. An onboard computer system will indicate to the driver the remaining power supply and the nearest charging spot. Nissan, through its joint venture with NEC, has created a battery pack that meets the requirements of the electric vehicle and will produce it in mass volume. The entire framework will go through a series of tests starting this year.
The Israeli model is different than the rapid battery swap model that Better Place has promoted as better than "dangerous" fast charging. For the future, Renault is working on developing exchangeable batteries for continuous mobility.
As part of the solution framework, the Israeli government will provide tax incentives to customers, Renault will supply the electric vehicles, and Project Better Place will construct and operate an electric recharge grid across the entire country. Electric vehicles will be available for customers in 2011.
Just as wireless service providers offer smartphones at discounted prices, Project Better Place will offer discounted electric vehicles with usage pricing plans. Prepaid 600 kilometer cards are one approach that is suggested. A free car on a four-year plan in France is another idea mentioned by Shai Agassi, CEO of Project Better Place. Annual use of an EV should be less than the average cost of $8,000 per year for using a gasoline vehicle in many countries including the U.S.
Shai Agassi predicts that Israel will have more than 100,000 electric vehicles in use by 2010. This will be 5 percent of the nation's vehicle population. The number represents a significant step toward energy independence.
Project Better Place has already received more than $200 million of venture capital investment. Shai Agassi presented its new business model at Davos. Agassi was an executive at SAP who led the software company to being the enterprise software leader ahead of Oracle, IBM, and all others. (Read Agassi's Davos insights here.)
Success with V2G would be a double win for electric utilities. Millions of EVs and PHEVs would expand the sale of electricity as an alternative to oil. Utilities could avoid building more dirty-peaking power plants. Instead they could buy back electricity at peak hours from vehicle drivers. It would be a financial win-win for all.
As has become my custom, with the year drawing to a close, I now look in the rear-view mirror and try to distill what I see. In no particular order, here are my top ten reflections on 2007:
1. Popping of the ethanol bubble. Not long ago, it seemed like anyone could get an ethanol plant financed. Now, no-one will touch them. Why? Corn prices have roughly doubled, and producers can't make money selling ethanol into the fuel markets when having to pay so much for feedstock. Along with the increasing realization that public policies so far to build ethanol markets has largely been for the financial benefit of big agri-businesses such as Arthur Daniels Midland (NYSE: ADM), ethanol has now become a dirty word to many. Progress on cellulosic ethanol technologies may not happen fast enough to redeem seriously diminished public perceptions about ethanol generally.
2. Continuing photovoltaics bubble. For illustration of this phenomenon, let's take a look at First Solar (NASDAQ: FSLR). Nothing whatsoever against the company; indeed, they make a very fine product. It's just that their share price has increased by a factor of 10 -- from $27 to nearly $280 -- in one year. At current levels, the company's market cap is $20 billion, at a P/E ratio of over 200. I know the solar market is hot, but geez, c'mon. A 10x return in one year on a publicly-traded stock is simply not supposed to happen.
3. Increasing costs for wind energy. For many years, wind energy has become more competitive, as the industry matured and production efficiencies were tained. However, with increasing prices for virtually all commodities (e.g., steel, copper, plastics) and a weakening dollar against the Euro (note that most turbines are made in Europe), the economics of wind are unfortunately moving in the wrong direction right now.
4. Gore as rock star. First, an Oscar for An Inconvenient Truth. Then, the Nobel Peace Prize. To top it off, becoming a partner at top-notch venture capital firm Kleiner Perkins. What next for the what-could-have-been 43rd President? Whatever it is, at least the cleantech sector now has its iconic poster-child.
5. Cheers to Google. Google (NASDAQ: GOOG) has gotten into the cleantech game in a big way by creating an initiative with the mission to develop and launch renewable energy technologies that produce electricity more cheaply than coal. Once that aim is achieved, renewable energy will rapidly become ubiquitous, and we really will start getting on a path of serious carbon emission reductions.
6. Death of the incandescent lightbulb. Early in 2007, Australia led the way to ban incandescents, to force a shift to more energy efficient lighting technologies (fluorescents for now, perhaps eventually LEDs). Amazingly quickly, the U.S. followed suit, passing an energy bill by year-end that effectively phases out incandescents by 2014. This should have a major energy efficiency impact, and yield a big cut in greenhouse gas emissions, in a relatively short amount of time.
7. Tightening CAFE -- finally! After decades without change, the U.S. Congress finally acted to impose more stringent corporate average fuel economy (CAFE) standards for auto/truck manufacturers. The main milestone is a 35 mpg combined car/light-truck standard by 2020. For the first time, trucks are now part of the CAFE equation, closing the loophole that helped propel SUVs to prominence. Strengthening CAFE is probably the most important thing that American politicians could do to actually make a meaningful dent in reducing dependence on Middle Eastern oil.
8. Uncertain future for coal. On the one hand, MIT released a major study entitled "The Future of Coal" that compels a radical R&D push to commercialize technologies for carbon capture and sequestration (CCS), underscoring the reality that coal-fired electricity generation is going to be a major factor for a long time. On the other hand, I don't see any such coal R&D push actually happening, nor even that much progress on CCS. A recent statement by the U.S. Department of Energy concerning its oft-touted FutureGen program for piloting CCS technology indicates a possible retrenchment. Meanwhile, Pacificorp -- which is owned by Warren Buffett's legendary holding company Berkshire Hathaway (NYSE: BRKA and BRKB) -- recently cancelled a coal CCS project in Wyoming, with a spokesman quoted as saying that "coal projects are no longer viable." Ouch.
9. Oil at $100/barrel. Starting the year at about $60/barrel and then promptly falling to near $50, oil prices increased steadily from February to November, reaching the high-90's. I suspect we'll see $100/barrel sometime in 2008; I don't suspect we'll see oil below $40/barrel very much anymore. Even at prices not long ago considered absolutely stratospheric, it appears that there's been very little customer/political backlash so far: the world doesn't seem to be ending for most Americans.
10. Serious dollars betting on energy technology. There's been a lot written about the big surge in venture capital invested in new energy deals. I find even more intriguing the increasing amount of corporate and public sector investment in new energy R&D. As perhaps the most prominent example, in the U.K., the government has pledged up to $1 billion over the next 10 years in matching support to private investments in the Energy Technologies Institute, which includes the participation of such leading corporate lights as BP (NYSE: BP), Shell (NYSE: RDS.A and RDS.B), Caterpillar (NYSE: CAT), Electricite de France (Euronext: EDF), E.ON (Frankfurt: E.ON), and Rolls-Royce (London: RR.L). That's a lot of money and corporate weight in the mix. I can't imagine that such an initiative will produce nothing of use.
Best wishes to you and yours for 2008. Let's hope it's a good year, even better than the one wrapping up.
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.
Most Americans now agree that something needs to be done to reduce our greenhouse gas emissions. Hopefully most Americans now appreciate that this is not a small, but even more so, not a simple problem. I am a big believer that the playing field for our low carbon future should start level, and the market should be structured to allow our major power and energy companies a chance to lead the way, instead of simply dishing out punishment for our combined historical choices. Carrots and sticks work well together, but sticks alone are not going to solve our global carbon problem. I think it is also important to ensure that our carbon legislation does not result in a higher cost to consumers in middle America, just because the Midwest happens to have been historically coal fired, than the cost to those of us living on the coasts. Jim Rogers of Duke Energy puts this much more eloquently than I do.
Duke Energy (NYSE:DUK), one of the largest power companies in the U.S., has been a long supporter of energy efficiency, and known for being forward looking when it comes to a low carbon future, smart metering, and advanced energy technologies, despite having a generation fleet that is 70 percent coal fired. Cleantech Blog is delighted to welcome Jim Rogers, CEO of Duke Energy, to give us his thoughts on the devil in the details from their perspective. It is heartening to see a major power company take on the carbon issue full force, and like Duke has done, push energy efficiency in a big way.
- Neal Dikeman, Cleantechblog.com
By Jim Rogers Chairman, President and CEO of Duke Energy
As we debate our differences on how to address the challenge of global climate change, surely we can agree on the end-goal--a secure, sustainable and affordable supply of energy now, and for future generations.
Most Americans also agree that we must act now--and begin building a bridge to an energy-efficient, low-carbon economy.
As the third-largest coal consumer in the United States, and one of the largest greenhouse-gas emitters, Duke Energy has a responsibility to be part of the solution. That means looking at not only how climate change affects our business today, but also the implications for the future.
We support federal legislation to address global climate change by putting a cap-and-trade system in place. The U.S. Senate is in the process of vetting a cap-and-trade bill introduced by Senators Lieberman and Warner in October. This bill is well-intended, contains some good points, and appears to have bipartisan support.
But on closer examination, questions arise. Who really stands to gain, and who stands to lose? What are the real costs to average Americans?
You would expect the bridge to a low-carbon economy to have a cost, just as you might pay a toll to cross any bridge. But should some of us have to pay twice? With the Lieberman/Warner approach, that's exactly what would happen.
Lieberman/Warner proposes to auction a large number of emissions allowances to the highest bidder. In effect, an auction becomes a carbon tax, levied on consumers in the 25 states that depend on coal for electric power--primarily the Midwest, the Great Plains, and the Southeast.
Electric power customers in those regions would have to pay for the auctioned allowances upfront, and then pay again later to upgrade power plants, or build new ones, as carbon-control technologies become available.
A better approach is to allocate allowances at no cost to generators who emit greenhouse gases--and reduce the number of allowances over time, while new carbon-control technologies are being developed and put in place.
Some say that an auction is the only way to take action to reduce emissions, but history tells us otherwise. Allowances were not auctioned under the 1990 Clean Air Act Amendments; nearly 97 percent of them were allocated at no cost. Since then, new technologies to reduce sulfur dioxide and nitrogen oxide emissions have been developed and implemented. Those environmental controls have reduced emissions by more than 40 percent since 1990, and they continue to decrease, without dramatic rate hikes. In fact, the nation's average electric rates have declined.
In contrast, some estimates put the Lieberman/Warner bill's cost to the average family at more than $1,000 per year, while emissions traders would stand to profit greatly from a volatile market for carbon allowances. According to Bloomberg, the Lieberman/Warner bill would create a potential $300 billion annual carbon-trading market by 2020.
So the question comes down to this--are we interested in protecting consumers or enriching emissions traders?
Customers who live in the Midwest, the Great Plains, and the Southeast did not choose to get a large portion of their electricity from coal--it was a matter of economics, geography, and geology. They should not be punished for decisions made decades ago, in good faith, using the best and lowest-cost technology of the time, with regulatory approval--and long before anyone knew about the impact of carbon emissions on climate change.
And before we dismiss coal as a viable energy source for the future, consider this: The U.S. is sitting on more than 250 years of coal reserves, more than any other nation in the world. This rich natural resource has untapped potential for ensuring our country's energy security. The challenge is primarily technological--to find smarter and cleaner ways to use it, such as carbon capture and storage. Until those technologies are available, we must continue to use our existing coal resources and protect the interests of consumers who rely on coal.
The goal for carbon legislation should not be to punish utilities for building coal plants to keep the lights on in the past. It should be to create the incentives to put new clean technologies in place for the future--not just clean coal, but also nuclear and renewable energy, natural gas and the fifth fuel--energy efficiency.
Under the Lieberman/Warner approach, electric power customers in half of our states will carry a disproportionate share of the burden. We need to pass climate legislation that is fair to all consumers and protects the economic interests of all states and regions. Our climate is at stake, and so is our economy. By allocating most allowances, following the precedent set by the successful Clean Air Act, we believe both can be protected.
Jim Rogers is the CEO of Duke Energy, writing as a guest columnist on the Cleantech Blog.
Is Microsoft Vista global warming friendly? Could Vista be the best-selling clean-tech product in the world? I was thinking about this question the other day, and started e-mailing the Microsoft press relations folks looking for an answer.
The Microsoft answer--yes, it is. They have a recent release titled "Windows Vista Power Management Features Can Help U.K. Companies Reduce Their Carbon Footprint" on some independent research they had done by PC Pro Labs in the U.K.
Here's their quote:
"Windows Vista is Microsoft's most energy efficient operating system to date with its power management system, functionality, reliability and default settings focused on helping to reduce overall PC energy consumption. The key areas where the Sleep mode in Windows Vista has been improved compared to the equivalent Standby mode in Windows XP include:
• Enter Sleep mode after being inactive for 60 minutes
• In Windows Vista, it is much easier for users to change the power management settings themselves
• The Sleep mode is more reliable than Windows XP's Standby mode, both in terms of entering the mode and safely resuming back into Windows
• Windows Vista is much quicker at resuming from Sleep, now taking two to three seconds compared to five seconds for Windows XP."
They also published a white paper titled "Windows Vista Energy Conservation". Reading through it all, Vista does seem to be an energy efficiency masterpiece.
But I wonder--the description of these tests seemed to quite fairly compare the XP and Vista operating systems running through a series of different scenarios--but it's not a survey of real world conditions.
So I'm probably convinced that if you run the same computer post-Vista the exact same way you ran it on XP, that you'd use less power. Vista itself may actually be the best-selling clean-tech product in the world. But in the real world, we don't work that way. Each year we add a whole lot of new features and programs that suck down power, and buy more powerful PCs to run them on with every upgrade. And part of the promise of Vista is to enable even more such goodies--possibly offsetting the energy savings.
So are Windows users who have upgraded to Vista running the same programs in the same way, and the same (or more energy efficient PCs) and therefore using less power? Or are they actually using more or different features, or on a more powerful energy hog PC, and despite Microsoft's energy efficiency efforts, using more power on a daily basis anyway after the upgrade? That might not be something Microsoft could control--but I'm sure curious as to the answer from a carbon standpoint.
As a matter of full disclosure, I run XP at the office, Vista at home, own a small amount of Microsoft stock (and am a very big fan) and have a very bad habit of leaving my computer and monitor on--but I'm working on that.
I heard an interesting debate the other day on the topic of cities and skyscrapers. In a nutshell, when it comes to cities and buildings, is taller greener or is smaller better? In other words, should environmentally minded people like or dislike skyscrapers?
The Taller Greeners:
• Building up, rather than out, combats urban sprawl, means more concentration of people, means better for mass transit which equals fewer cars and lower emissions.
• Building bigger means more opportunity to use technologies like distributed generation, advanced energy efficiency, lighting and monitoring, which typically are more economic in larger projects.
The Smaller Betters:
• Smaller means more sustainable buildings and lifestyle, more trees and green space.
• Smaller means more neighborhood connectivity for all of us.
• Taller often means more nonsustainable steel, and lots of AC load, which we could avoid with smaller buildings.
• Smaller means less concrete and steel, which are often associated with the increased temperatures in cities.
Perhaps some of the environmentally friendly buildings in progress in places like Dubai or New York can bridge the debate, and make skyscrapers ultra green and ultra cool.
What do you think?
In the interests of full disclosure, I am writing this blog from the second floor of a skyscraper in my office in downtown San Francisco, and because of the lack of good public transport access where I live, I have to drive in to work every day.
CNET HDTV reviews now include power consumption data and ratings.
(Credit: CNET)At CNET, we've been publishing information about HDTV power consumption for a year and a half in our Quick Guide, which currently lists the results of our tests of more than 50 televisions. Until now, this data has been restricted to the Guide, but it really belongs in each individual HDTV review. That's why we're pleased to announce the "Juice box," a new chart that summarizes the television's power consumption and scores it against other models.
You can check out an example here. Clicking the phrase "Juice box" takes you to an explanation of the terms, numbers and scores in the box, but we'll include a quick rundown here. First off, since calibration of a TV's picture settings for a dark room usually reduces power consumption, simply because the picture becomes less bright, we include measurements of average watts consumed for Default and Calibrated picture settings, as well as for when the TV's Power Save mode (if any) is engaged. We also include measurements of standby power -- how much juice the set sips when turned off -- and estimate the average yearly impact on your electric bill. Finally, we score the particular TV's power consumption compared to others we've tested according to both watts per square inch and overall watts consumed.
In addition to including the Juice box in all forthcoming HDTV reviews, we've added it to the following recent reviews (links go to the box at the bottom):
Current Juice box reviews
- Sharp LC-32D43U
- Samsung LN-T4661F
- Panasonic TH-42PZ700U
- Sony KDL-46S3000
- Vizio VP50HDTV
- Samsung LN-T5064
- LG 47LB5D
- Viewsonic N3235w
- HP LC4776N
- Samsung LN-T4665F
In case you're wondering, we do not incorporate power consumption ratings into our overall numeric ratings for HDTVs, which are still based strictly on design, features and picture quality. For environmentally-conscious shoppers and penny-pinchers alike, however, the energy efficiency of an HDTV can be a factor in deciding which model to buy, so we felt that presenting and contextualizing this information would be a valuable addition to our HDTV reviews. Please let us know what you think of the Juice box, and for the full scoop on HDTVs and energy, including more general info and power-saving tips, check out the Quick Guide.
You're not the only one paying more of your paycheck to energy bills.
Energy bills as a percentage of income in the U.S. are at their highest point since 1987, according to a report in the Christian Science Monitor. Overall, they are still below the levels seen in the 70s and early 870s, but energy bills in some low income households is approaching 10 percent.
Polls show Americans believe energy prices will continue to rise.
"If it rises much more, it will become a significant problem, particularly for lower-income households," Mark Zandi, chief economist at Moody's Economy.com, told the newspaper.
While this is bad for the average consumer, high energy prices have been driving demand for solar energy and high mileage cars. Side note: gas costs more on hot days because of expansion. Congress is looking into the so-called hot gas phenomenon.
It's something to think about while filing up on the 4th of July holiday.
