Cleantech Blog

The Colorado Cleantech Opportunity

2009-07-02T15:48:00.000-07:00

By Joel Serface – July 2, 2009

In June, I took a great camping trip to a truly unique feature that many outside the state of Colorado know little about. It was the Great Sand Dunes National Park – the tallest sand dunes in North America with the backdrop of the Sangre de Cristo Mountains. I arrived at the perfect time of the year when the temperature was warm enough to simulate a beach environment (small waves included), but before the snowmelt ceased over the course of the summer. It was a fantastic experience, but few other than Coloradans knew about this well-kept secret nestled in the interior of a beautiful state.

I found this a good analogy for the Colorado cleantech opportunity. While I have been in Colorado for only a year, I feel that I arrived at that perfect time when all the conditions were right for a unique experience that could only happen here and that few outside of the state know about. Could it be the perfect time for everything to converge in Colorado allowing it to become the leading cleantech state?

When I arrived to Austin in 2006, I conducted an inventory of local cleantech companies. I found around 20 of what I considered viable cleantech start-ups in Austin and over the time I was there helped grow this to around 40 through starting, recruiting, or coaching companies into the community. When I arrived to Colorado, I found a very surprising thing. In the Front Range – the area stretching from Colorado Springs to Fort Collins – alone, I was able to inventory almost 200 cleantech companies (not including the many services companies that comprise almost 1,778 reported by the Pew Center / Cleantech Group in Colorado). After meeting with many of these companies and delving deeper, I found that there was an incredibly fertile environment for these companies in Colorado with only a few key limitations.

Let’s start with the strengths of Colorado that created this environment…

Research – Colorado boasts among the highest renewable energy research budget per capita in the United States. This primarily comes to the National Renewable Energy Laboratory (NREL), but also to several cooperative national labs including the National Institute of Standards and Technology (NIST), National Oceanic and Atmospheric Administration (NOAA), National Center for Atmospheric Research (NCAR), and several defense laboratories. In addition, three major research universities in the state collaborate with NREL including the University of Colorado, Colorado State University, and Colorado School of Mines. Each of these institutions works closely with one another through the Colorado Collaboratory and the Alliance for Sustainable Energy, NREL’s management company.

Energy and technology industry expertise – The Colorado Front Range boasts something that no other major population center does… A location where the technology industry and traditional energy industry coexist. This translates into one of the few centers where both talent for cleantech company development and project development can both be executed.

Ease of recruitment / low cost of doing business – Colorado is a state that carries significantly lower costs than other tech states such as California and Colorado. Colorado also boasts among the of the most highly-educated workforces. Because of the low cost of living, highly-educated workforce, and an environmentally-friendly culture that values outdoors and quality of life, it is not difficult to recruit people from all over the United States to move here.

State leadership – Colorado has had strong leadership at the state and national level for a number of years around renewable energy. By setting a 20% Renewable Portfolio Standard and a statewide solar rebate, the state has signaled that it is open for clean energy business. Bill Ritter, the Governor of Colorado, is one of the most progressive governors on renewable energy issues that I have met and has an excellent supporting executive team in its Governor's Energy Office and Office of Economic Development. Because of their leadership and other factors above, Colorado has attracted major new renewable energy companies including Vestas, Siemens, ConocoPhillips, Abengoa Solar, and others to the state. They have also been successful in this despite the lack of other tools (see below) that other states have in place.

Thought leadership – In addition to research and state leadership, Colorado has a legacy of thought leadership in a number of areas such as green building, energy efficiency, smart grid, and energy analysis. Most already know the great work of Amory and Hunter Lovins and the Rocky Mountain Institute, but several other leading analyst firms exist. eSource, IDC Energy Insights, and Architectural Energy Corporation are all located in Boulder. NREL also maintains one of the largest renewable energy and energy efficiency analysts corps in the world in its Energy Analysis group.

City / community leadership – Boulder and several other communities have taken on leadership in vital areas such as its Smart Grid City efforts with Xcel Energy and in building efficiency standards and protection of open space. It is community and city leadership that are going to provide test beds for the integration of larger technologies at the city level. Denver, Fort Collins, Colorado Springs, and many smaller communities (including mountain communities that are seemingly off grid) each have their respective efforts around energy and environmental leadership.

It’s not all rosy in Colorado. One of the major complaints at the state level are that they have limited economic development funds to help attract or re-locate companies. In my conversations with leaders in the state, I have expressed that their leadership is much more important in creating markets for clean technologies than in providing cash incentives. Leadership, markets, and environment all combine to attract companies to the state; having a little bit more economic development funding could be helpful in rounding out that portfolio, but not a requirement in moving major companies to the state.

A further weakness in building early stage companies in the state is its lack of “domestic” venture capital. Given the ideaflow, creativity, and talent here, it is disappointing that there are no cleantech-focused investing professionals on the ground here to help build early-stage companies providing the coaching and governance necessary to move them to their next stage of development. Several local generalist firms have tipped their feet in the water, but have not made this a large portion of their portfolios. A leading energy technology fund in the state makes very few investments in the state and even fewer in early-stage clean technology companies. There is a robust angel community of former entrepreneurs in Colorado, and a few of them are ramping up their cleantech investments. But still, most of the cleantech venture capital in the state today still comes from coastal VCs.

Like Great Sand Dunes National Park, Colorado is a relatively unknown commodity in cleantech. Many investors on both coasts suspect it has tremendous potential and will occasionally make it to the state to look at opportunities. Unfortunately, unless the investor is on the ground or has native ties here, many of these opportunities will be overlooked.

After a year here, I can attest that this will become one of the best places to build clean technology companies in the United States as all the above conditions converge and successful role model companies emerge.

Joel Serface served as NREL’s first Entrepreneur in Residence with Kleiner Perkins Caufield & Byers. As an investor and entrepreneur, Joel has planted cleantech seeds in Massachusetts, California, Texas, and now Colorado. Since 2000, Joel has started or invested into more than 20 cleantech companies with 5 liquidity events so far and has catalyzed the formation of numerous supporting cleantech institutions and regional and national policy initiatives.

Clean Energy and Climate Protection Bill Accelerates Electric Vehicles and Renewable Energy

2009-06-30T07:56:00.000-07:00

For the first time, the U.S. House of Representatives passed legislation regulating greenhouse gases. Due to intense lobbying by industries that would incur added cost, such as coal powered utilities, HR 2454 barely was approved by a vote of 219 to 212. New battles are ahead in the Senate for the Waxman-Markey Bill.

HR 2454 encourages more electric vehicles, plug-in hybrids, and advanced batteries to be developed and commercialized in the United States. Should HR 2454 become law, cities will more rapidly roll-out convenient electric charging stations. If you want to buy a car with better mileage you will even get more cash for your clunker - $3,500 to $4,500 until March 31, 2010.

The bill is also a win for United States energy security. HR 2454 explicitly states, “The status of oil as a strategic commodity, which derives from its domination of the transportation sector, presents a clear and present danger to the United States…Fuel competition and consumer choice would similarly serve to end oil’s monopoly in the transportation sector.”

The bill has something for everyone. Cleantech innovators get the free luxury health spa; while fossil fuel curmudgeons, a free colonoscopy.

The Waxman-Market Bill puts a limit (“cap”) on greenhouse gas emissions. Overtime industry must pay for permits to pollution. Innovation will be rewarded because clean organizations can sell their carbon credits to help polluters meet their limits.

The market place will work with cap-and-trade. Some of the pollution permit fees will be reinvested in our future. Clean innovators will flourish and create more green jobs. To help automakers retool plants for these advanced vehicles and/or drive system components, the $25 billion of funding in the Energy Independence and Security Act of 2007 will double in HR 2454 to $50 billion.

Automakers are more likely to succeed with their electric vehicle and plug-in plans for 2010 through 2012. For example, Ford (F) will start selling electric cars, vans, and a plug-in Escape. GM will start selling the plug-in Volt and now has 80 to demonstrate; Toyota (TM) will start selling its plug-in Prius and is putting 500 into fleet demonstration; Chrysler with Fiat as a key partner will sell everything from plug-in Jeeps to minivans; Nissan is partnering with electric utilities to sell more electric vehicles than the rest of the automakers put together.

Electric utilities are asked in HR 2454 to develop infrastructure plans that can optionally include fast charging, a nice win for companies such as AeroVironment (AVAV) and Better Place. Smart charging and smart grid infrastructure plans are requested from state regulators. An intelligent network will develop so that you can plug-in anywhere, be able to remotely view your state of charge and check your billing – a nice win for firms such as Coulomb Technologies. If the bill becomes law, look for utility-local government-NGO consortiums to apply for funding to implement smart-grid solutions that include smart charging stations.

Financial incentives are envisioned for commercial and federal fleets, car sharing firms, and others who can accelerate the deployment of these electric zero-emission and ultra low emission vehicles.

From cars to electric-rail in public transportation, we are beginning to shift from running on engines that burn petroleum fuels to running on efficient electric motors. Thanks to HR 2454, that electricity will be increasingly renewable. Wind, solar, geothermal, small hydro, renewable biomass, and other renewable energy produced in the United States will all be encouraged by the incentives inherent in carbon cap-and-trade.

The Waxman-Markey Bill, of course, is about much more than electric vehicles and renewable energy. It provides a major step towards greater energy security, energy efficiency, and climate solutions of which clean transportation is a component.

The close vote shows that the bill has opponents. Many question whether we even have an environmental problem. As Dan Quayle once observed, “”It isn’t pollution that’s harming the environment. It’s the impurities in our air and water that are doing it.” Others are opposed to putting a cap on emissions. As George W. Bush put it, “What I am against is quotas. I am against hard quotas, quotas they basically delineate based upon whatever. However they delineate, quotas, I think, vulcanize society. So I don’t know how that fits into what everybody else is saying, their relative positions, but that’s my position.”

Environmental groups offered a mixed reaction due to the many compromises and addendums that were necessary to secure a majority vote. The Environmental Defense Fund President Fred Krupp stated, “”The bill that emerged from the House has the fundamental structure we need to significantly reduce carbon pollution while growing the economy. It puts a strong cap on emissions and reorients our energy market to make low-carbon power the goal. It ensures that utility rates will stay affordable and a competitive playing field for U.S. companies.”

Greenpeace opposes the compromised bill, “President Obama vowed to ‘restore science to its rightful place’ in his inaugural address….The Waxman-Markey climate legislation, however, will not do what the science says is necessary to avert the worst effects of climate change. In fact, House Democrats have worked extensively with the coal industry to edit the bill, which has translated into weakened emissions targets.”

Other groups supported the bill in the hopes that it would be strengthened. Frances Beinecke, President of the Natural Resources Defense Council stated, “But the work is far from over. Now, the bill will move to the Senate where it needs to be strengthened, so we can reach the full potential of our clean energy future and avoid the worst impacts of climate change. We can achieve this by strengthening the targets for carbon pollution.”

What all nations put in the sky and the oceans affects all of us and all of our children. Given the United States long history of being the world’s biggest emitter of greenhouse gases, nations have hoped that we would reduce emissions 40 percent by 2020. They will be lucky to see 17 percent. The new bill puts us in a weak position as we pursue a global climate solution treaty that involves all nations, but it takes us out of the category of obstruction as Copenhagen meetings continue.

Yet, reality is that with all the competing interests in our nation of 300 million people, we will not go directly to the energy and climate solution that is needed. We cannot kill the good in search of the perfect. As Jane Goodall observed, “Lasting change is a series of compromises. And compromise is all right, as long your values don’t change.”

When we get past all industry scare tactics, we may end up spending an extra $20 per month for cleaner electricity until we finally replace those old light bulbs. We may also save $200 per month by running cleaner cars and save another $200 per month avoiding doctor and hospital bills to deal with damaged lungs. Clean Energy and Climate Protection are not expenses, they are investment in our future - a future that includes our riding on sunlight.

By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book - Save Gas, Save the Planet - now selling at Amazon and other booksellers.

Talking Trash

2009-06-29T03:48:00.000-07:00

by Richard T. Stuebi

Ever wonder whether recycling really works? Or, how it's done? Last week, I found out -- by touring a material recovery facility (MRF) operated by Waste Management (NYSE: WMI).

The process in an MRF is pretty straightforward. The recyclable materials accumulated from various end-user disposal points -- for households, this would be curbside bins -- are trucked into the facility and then dumped. The materials travel along a maze of conveyor belts, along the way being sorted by various means -- mechanical shaking, blowers, magnets, and even some manual labor -- into an increasing number of streams: paper, cardboard, clear plastics (e.g., water bottles), colored plastics (e.g., milk bottles), clear glass, colored glass, aluminum, other metals, and general refuse.

General refuse is then trucked to landfill (f.k.a. dump) for disposal. The other items are each quality-checked checked (97+% purity) and then compressed, for sale and delivery to processors to convert the material back to a state in which it can be reused.

I always wondered why phone books aren't usually recycled, and now I know why: their bindings often jam the machinery, which causes lots of downtime and equipment repair expense. Apparently, newer equipment is being made today that can handle phone books. (A better answer is for phone books to stop being printed. Tell me, when you need to find a company to buy a product or service, would you rather use the Yellow Pages, or the Internet?)

The important point here is that, with an MRF of this type, the citizen isn't required to separate out recyclable materials into different baskets depending on the material. All recyclables can be dumped into one bucket, and the recycler will take care of sorting it out. To me, this eliminates one of the key obstacles to recycling: the burden/hassle of having to maintain and manage multiple containers of recyclable material.

Something in excess of 40% of all disposed material can be recycled, so if you or your community isn't recycling, this is unnecessarily contributing to landfills, while also taking prime resources out of the pool of future supplies, needlessly accelerating depletion rates.

The tour I took is one that every citizen, and especially every schoolchild, should take. Upon entering the MRF, I was greeted with an odor I hadn't encountered since handling weekend trash duty in my college dormitory. By no means is it a pleasant smell. And, it's not very pretty to see the incredible volumes of refuse being sorted.

But, I think it's important that responsible citizens know what happens to the stuff they buy, consume and dispose. To paraphrase one of Bill McDonough's zingers in his speeches, "When you throw something out, where is the 'out'? It's gotta end up here, on the planet, somewhere."

Well, an MRF or a landfill is the "out". The sights and smells are powerful reminders of the hidden but very real costs of a materialistic lifestyle.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director at Early Stage Partners.

Biomethane for Energy and Fuel

2009-06-25T09:32:00.000-07:00

OK. I admit it. I am writing this article from a Summit about cow poop. No, this isn’t a joke to get 8-year olds rolling on the floor with laughter. This is serious.

I am reporting from the inaugural National Biomethane Summit, in Sacramento, California, where over 300 attendees including elected officials, government agencies, farmers, ranchers, landfill owners, facility owners and operators, technology leaders, researchers, regional planners, and carbon trading experts.

Biomethane is renewable natural gas because it is from biological sources. In some areas, biomethane is called renewable gas. Biomethane is a low carbon fuel – CH4. John Boesel, President of CALSTART, calls biomethane “Our lowest carbon fuel.” Just like the fossil fuel version of natural gas, biomethane can be converted into electricity or fuel.

Making money from meadow muffins is helping dairy farmers stay in business. Among the Western United Dairymen, 18 projects that capture biomethane from manure are generating 4.425 MW of electricity. Hilarides Dairy also converts enough biomethane into fuel to power two of its heavy-duty and five pick-up trucks. Michael Marsh, CEO of the Western United Dairymen quipped, “This smells like an opportunity.”

Dallas Tonsager, Undersecretary, U.S. Department of Agriculture (USDA), is a former dairyman who sees big economic opportunity in methane from manure. Since 2003, USDA has helped 121 projects with co-funding and/or loan guarantees. These projects have generated 449 GW hours/year of electricity, reducing emissions 384,664 metric tons of CO2e and displacing 8 million gallons of oil.

The 121 projects include WI 24, PA 18, CA 14, NY 14, and VT 7. There are opportunities in every state. USDA is encouraging the growth of biomethane for energy and fuel. This is definitely a “shovel ready” opportunity to create green jobs.

Across the nation, ranchers, farmers, landfill operators, and all that generate agricultural waste, forest residue, and municipal waste can increasingly become energy independent. Through anaerobic digestion much of their biological waste can be converted into biogas which can run electrical generators, turbines, or fuel cells to generate electricity. Biogas can also be converted to cleaner biomethane for cleaner electricity and renewable fuel. These operations can generate their own electricity and fuel their own vehicles. Increasingly, excess electricity and fuel can be sold as added revenue streams.

A growing number of our nation’s buses, refuse trucks, delivery vans, airport and port equipment has been converted from diesel to natural gas. Michael Gallagher, CEO of Westport Innovations (WPRT), has already sold 20,000 engines for such applications. He estimates that 20 percent of our nation’s diesel vehicles could be running on biomethane produced in the United States.

Nations like Russia and Iran that control the largest reserves of natural gas may not like this trend of making our own natural gas, but if we want energy independence then we need to follow W.C. Field’s advice, “Take the bull by the tail and face the situation.”

Before our growing population with its output of waste puts us hip deep in this slop, we want to do something useful like make money converting all this waste into energy and fuel. Currently, as the waste decomposes, a greenhouse gas twenty times more destructive than carbon dioxide – methane – goes into the stratosphere, putting our future in a pressure cooker. The whole thing stinks.

There is a climate payoff as well as help with energy independence. California with its Low Carbon Fuel Standard (LCFS) has put teams of scientists to work calculating well-to-wheels, or in this case waste-to-wheels, lifecycle emissions using the newly developed GREET 1.8 model. Biomethane has 4 times less lifecycle emissions than gasoline in the LCFS analysis. Because biomethane avoids release of the destructive greenhouse gas, biomethane into an internal combustion engine vehicle shows fewer emissions than electricity into a far more efficient electric vehicle.

In transportation, we will see the growing use of renewable electricity powering everything from city light-rail to city cars. We will also see the growing use of biomethane powering buses and the vehicles used by the biomethane producers. In Orange Country, California, where thousands of electric vehicles are used, there are also several hundred refuse trucks and public transit buses using biomethane from the nearby Bowerman Landfill where biogas is converted into liquid natural gas (LNG).

The Orange County Sanitation District is bringing online a combined heat and power plant developed by Air Products (APD) and Fuel Cell Energy (FCEL) that converts municipal waste into electricity, heat, and hydrogen fuel. In the county, hydrogen vehicles are in use by city fleets such as Santa Ana, the University of California, Irvine, the South Coast Air Quality Management District, and even individuals that drive Honda (HMC) Clarities and GM Fuel Cell Equinoxes. This breakthrough innovation results in record toilet-to-tank efficiency. Orange County Register Article

Texas, of course, thinks bigger than California. In Dallas, the McCommas Bluff Landfill will achieve 95 percent methane recovery from 30 million tons of waste. Output will scale from 35,000 gasoline gallon equivalents (GGE) per day to 122,500 GGE. Using a novel leachate recirculation process for early capture of biomethane would shrink the landfill growth by 3 feet per day, adding years of life to the landfill.

Summit attendees had mixed reactions about the idea of using biomethane as a vehicle fuel instead of the more common approach of making electricity by running biogas in large ICE gensets. Renewable electricity is in big demand as utilities across the nation struggle to meet renewable portfolio standards (RPS). Natural gas prices, however, are down 70 percent from their peak, making biomethane for fuel a losing proposition unless there is government funding or carbon credits to sell at a significant price.

But new ICE gensets increasingly cannot be permitted. Regulators have greatly tightened standards on emission of health damaging criteria pollutants and greenhouse gases. In California, air quality regulations are forcing farmers, landfill, and waste operators to spend more on clean-up of biogas. Turbines, fuel cells, and conversion to fuel are becoming more promising options. Regulators are also helping with selective co-funding of some projects.

Biofuels have gathered significant opposition in much of the world. Biomethane has avoided the food for fuels controversy associated with ethanol from corn and biodiesel from soy and palm oil. Biomethane is normally processed from waste. Biomethane has over four times the energy production than corn ethanol from an acre of land. Clean Fleet Biofuels Reports

These challenges are also opportunities for Waste Management Inc (WMI). Of their 370 landfills, 33 percent already produce methane for energy, the rest flare the gas due to economics or regulatory difficulty in using ICE gensets to produce electricity. About 1,000 of Waste Management’s fleet of trucks run on either LNG or CNG creating the opportunity to produce their own fuel. 2,500 trucks run on diesel with WMI plans to hybridize.

Waste Management landfills contain significant organic waste which is suited for anaerobic digestion. WMI also captures significant waste that is lignin which is appropriate for its waste-to-energy plants. In the long-term it may be economical to convert the lignin to biofuel in a gasification process.

Can biomethane scale to a size that will impact United States needs for energy and fuel? Yes. Sweden has been an early leader in using biomethane. Over half of their natural gas for transportation vehicles such as buses and cars comes from biomethane sources such as municipal waste and agricultural waste. Biomethane is part of Sweden’s strategy to be petroleum free.

In 1970, 77 percent of Sweden’s energy came from oil, but by 2003 that figure had fallen to 32 percent. In 2006, about 40 million cubic meters of renewable biomethane, “enough to support 1,000 buses and refuse trucks and 9,000 light duty vehicles.” In Sweden, light-duty vehicles cost an average of 70 percent of the cost of a petrol fueled vehicle. The opposite occurs in the United States, with the Honda Civic CNG being the only available CNG passenger car.

Biomethane is also important to Sweden being energy independent. Russia has famously flexed its political muscle by temporarily cutting-off the natural gas pipeline supply that is critical to Europe’s energy and heating. Sweden already has 230 biomethane plants build including 138 from sewage waste water and 60 from landfills. Some Swedish dairy farmers are making more money from manure than from milk.

A decade from now, cost effective large-scale plants have the potential to produce multiple outputs include electricity, heat, natural gas transportation fuel, algal fuel utilizing CO2, biofuels from lignin, biomaterials, and fertilizer. Production could be accelerated if cap-and-trade carbon credits are produced.

This potential is part of the reason that Summit attendance is double what was expected and that this became an international summit with delegates from Sweden, UK, Spain, Canada and other countries. We do not need to dispose ever increasing quantities of waste. We do not need bigger landfills. The vision is a zero-waste society where anything no longer used is converted into something valuable, be it recycled paper, building materials, electricity, heat, fuel, etc.

We can achieve energy independence and avoid a climate crisis with a portfolio of solutions leading us to a near zero-emission future. Yes, the Prius, solar power, and eating tofu make a difference. Energy efficient buildings, transportation, and sustainable living make bigger differences. Now, we must put on our boots and roll-up our sleeves and give a whole new meaning to the mantra “reduce, reuse, and recycle.”

By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book - Save Gas, Save the Planet - now selling at Amazon and other booksellers.

Announcing Our Cleantech Blog Space Biodiesel Project

2009-06-23T14:59:00.000-07:00

After the recent announcements about space solar projects, Cleantech Blog is announcing our Space Biodiesel project. "We are excited about space solar, it's like a moon shot - huge and available. Suprisingly enough, the near earth orbit biodiesel development rights have not yet been locked up." - SBP cofounder Alexandra Tesla, great granddaughter of the famed inventor of the same name.

So we are launching Space Biodiesel Project, Inc. The program will use solar thermal collectors in orbit and the massive heat sink of space to drive our heat engine providing electricity and processing biodiesel. "The heat differential is so great the cost difference will be game changing and allow us to produce electricity to supply wholesale to other space solar programs as a co-product of producing our all-renewable, carbon negative biodiesel products. To us, "spacepower" is just a matter of scaling up engineering and procuring equipment launch slots." - SBP CEO, Jimmy Watt, great great great grandson of the coiner of the term "horsepower".

The SBP is still evaluating feedstocks, and whether a closed loop anaerobic algal process scavenging CO2 from the upper atmosphere can be effective. We are also evaluating whether coproduction of H2 from the algal growth waste O2 through an electrolysis process can provide a space based fuel source to offset the costs of shipping.

Patents filings are in process. Tests to begin in our lab soon. Looking for CEO, engineers, investors, and technology and engineering partners. Pre-money valuation to be based on a DCF of our 1,150 MW PPA and 85,000 bopd fuel offtake agreement with Sealand, which we believe is the largest solar PPA and largest take or pay biodiesel offtake on record. This agreement is expected to make our Series A the largest Series A venture capital deal in the cleantech sector to date. We anticipate, based on the numbers, our Series A pre-money will surpass the Series C and D valuations of even the 3 biggest thin film solar investments of 2008 combined. "Sealand is fully on board, though they have committed they will only pay for MWH and gallons delivered, as they are constrained by a need to protect their ratepayers, that's why we're looking to the venture capital markets to finance the first project, now that the technology is proven." - Alexandra Madoff, SBP VP of Finance, and long time money manager.

- The Management

Water & Energy - crisis and opportunity

2009-06-23T07:33:00.000-07:00

‘Any plan to switch from gasoline to electricity or biofuels is a strategic decision to switch our dependence from foreign oil to domestic water’.

So says Dr. Michael Webber of the University of Texas at Austin in an interview with Steven Lacey on the Inside Renewable Energy Podcast this week. Webber comments on the links between water and energy, the potential conflicts, but also about the potential opportunities which arise when you start to understand these links and realize that saving water, saves energy, and saving energy saves water.

The Podcast picks up on some of the issues I wrote about in ‘Energy Vs Water’. Ironically the water footprint of driving your electric car, if the electricity is generated at a thermal power plant, is much greater than the water footprint if you were using conventional gasoline.
Wind and photo-voltaic generated electricity has a far lower water footprint than either fossil fuel of nuclear generated electricity. Biofuels such as corn ethanol and sugar cane, require an inordinate amount of water to produce a litre of fuel. (Check out Water Implications of Biofuels Production in the United States)

Brazil happens to get a lot of rain, so they have an ideal climate for growing a thirsty crop like sugar cane. Jatropha, which has been heralded as a ‘super biofuel’ – high yield and capable of growing on marginal land, recently came under fire as it came to light that it is a very thirsty plant. There are on-going efforts to genetically engineer it to use less water.

A few months ago, I wrote a piece on lawns and how in California, certain municipalities are now ‘buying back’ lawns from homeowners to try and reduce water use. Michael Webber describes the water-energy paradox excellently when he says we are ‘using blue gold (water) to grow the grass, and then using black gold (oil) as a fuel to cut it back down again, with a zero net gain in many cases for society’.

There is however an opportunity in all of this. Saved water equals saved energy, and saved energy equals saved water. I have been looking at this closely in a new book on water technologies, “Water Technology Markets – key opportunities and emerging trends". I looked at a range of technologies which can generate energy from wastewater and also at technologies which can reduce the energy required to desalinate seawater. Microbial Fuel cells are a very good example of this. A microbial fuel cell can purify wastewater and, at the same time, generate electricity. Its early days for this, but if successful could turn wastewater treatment plants, which are currently power hungry, into net producers of power. The company EMEFCY, came 4th in the Artemis Project Water Top 50 competition for its MEGAWATTER™ microbial fuel cell technology. There is a vision emerging for a smarter, more efficient, water system and creating the technologies which can make that system a reality, is where the BlueTech opportunity lies.

Paul O’ Callaghan is the founding CEO of the Clean Tech development consultancy O2 Environmental. Paul lectures on Sustainable Energy at the British Columbia Institute of Technology, is a Director with Ionic Water Technologies and an industry expert reviewer for Sustainable Development Technology Canada.

Just Say No: Climate Skeptics and Deniers

2009-06-22T03:18:00.000-07:00

by Richard T. Stuebi

The community against taking action on climate change -- skeptics who honestly or otherwise question the science, and deniers who have already concluded it's all a bunch of bunk -- seems particularly strident these days. For instance, check out the harsh comments underneath this blog post reviewing the recent release of a report from the U.S. Global Climate Change Research Program detailing the climatic changes that are already in evidence.

I'm somewhat knowledgeable about technologies to address climate change, but I'm less knowledgeable about climate science per se, and therefore less able to separate the wheat from the chaff in the climate debates. So, I was very pleased to when the Cleveland office of URS Corporation (NYSE: URS) and Ideastream recently hosted a presentation by someone who understands the issues very well: Peter Adams, Associate Professor at Carnegie Mellon University.

Prof. Adams offered a very cogent and non-hyperbolic synopsis of what is known and what is unknown about climate science. In his view, it can be stated with confidence that climate change is happening, and is being at least somewhat driven by human activities, though the degree/pace of future changes are highly uncertain.

I particularly appreciated the way he carefully and non-disparagingly handled the issue of climate skeptics and deniers. Prof. Adams noted that some of the skeptics have seemingly impressive credentials, but illustrated how nefarious their tactics can be by using a powerful analogy involving the statue of Venus de Milo:

"The scientist would say that the Venus de Milo is a statue of a woman, whereas the skeptic would say 'A woman has arms, and this statue has no arms; therefore, it's not certain that this is a statue of a woman, and it can't be proven as such until the arms are found.'"

In other words, skeptics are having some successes undermining the consensus on climate science and reinforcing the vigor of the denier blogosphere by weaving intricate arguments in which each of their statements is factually or technically correct but completely lacking in context. Unfortunately, because much of the public is so poorly-informed on energy and environmental issues, and on technical matters generally, many of our masses are unable to see how the "true" statements made by credentialed skeptics lead to a "false" (or at best, highly misleading) conclusion.

One such misled soul was in the audience for Prof. Adams' talk: a member of the public who was apparently quite certain that climate change wasn't happening, based presumably on readings of skeptic publications and web-sites. In the post-presentation Q&A session, our in-audience denier was sufficiently bold to offer a sequence of rebuttals to Prof. Adams' talk, disguised in the form of awkwardly-phrased questions to Prof. Adams. It was actually a bit humorous to watch Prof. Adams cordially but definitively dissect the denier's parries -- kinda like the scene in "Monty Python and the Holy Grail" in which the Black Knight stubbornly fights King Arthur and is sequentially severed of all his limbs, until as a bloody stump he cheerfully announces from the ground "OK, we'll call it a draw."

If I were a denier such as our misguided fellow audience member, I wouldn't have been so stupid to take on Prof. Adams -- an obviously intelligent researcher who studies this stuff every day for hours, and who is clearly not an extremist prone to overstatement. Actually, because he seemed to be such a thoughtful observer of the skeptic/denier universe, I asked Prof. Adams two questions related to climate skepticism that were puzzling me of late. While he responded verbally at the presentation, he did some follow-up research and subsequently emailed me more detailed commentary, which I've included below (with his permission):

1. Given that climate science and meterology are related in some important ways, why do some meterologists (such as ours here in Cleveland) have the opinion that climate change is NOT happening?

Adams' response:

"[Reporters] interviewed the head of the American Meteorological Society (AMS) and asked him why so many meteorologists do publicly disagree with the Intergovernmental Panel on Climate Change (IPCC) consensus. His comments are insightful, and he even admits to being a former skeptic. He personally accepts the IPCC position now as does the AMS as an institution. Basically, he points to some cultural factors in [the meteorologist] community: they have an inherent distrust of models, natural variability is their major focus, and long-term drivers of climate such as CO2 levels are not part of their world view (they are completely irrelevant to tomorrow’s forecast)....The danger is that [meteorologists] are not really climate experts although the average person perceives them to be. They are Bachelor’s level scientists, not researchers. Most probably have not read much of the climate change literature and, as even the AMS head points out, weather forecasting is different than climate science in significant ways."

2. What has changed since the 1970's, when many scientists were concerned about "global cooling", not global warming?

Adams' response:

"[It appears that] the discussion of 'global cooling' was exaggerated in the popular press [in the 1970s] compared to scientific circles and the scientists were much more tentative about it than they are today about global warming. Moreover, the 'global cooling' vs. 'global warming' apparent contradiction really is not a contradiction at all. Global cooling scientists were mostly concerned about the cooling effects of atmospheric haze particles, but there were already concerns about global warming from CO2. Of course, today, climate scientists still recognize the important cooling effects of haze particles that have partly offset global warming (the 'air pollution that has saved us from global warming' that I mentioned [in my talk]). So, the major change between now and then is not a different physical understanding per se but rather a reappraisal of the relative importance of these two factors. Moreover, there are very good reasons why this shift/reappraisal has taken place. First, with the advent of the Clean Air Act [of 1970], our greenhouse gas emissions have continued to increase at the same time that we have reduced haze significantly. It is probably not a coincidence that the post-WWII cooling ended in the 70s (circa Clean Air Act). In fact, climate models that include greenhouse gases and haze particles tend to predict the observed flat temperatures or cooling from 1945 to the 70s and then accelerated warming thereafter. Second, science tells us that greenhouse gases will always tend to win in the end. This is because haze particles are short-lived (atmospheric lifetime is about one week) whereas CO2 is long-lived (about 100 years). So, even if your mix of CO2 and haze emissions cancel each other out in the short term, the haze goes away and the greenhouse gases continue to build up. We would eventually have flipped from cooling to warming even without the Clean Air Act."

Prof. Adams closed his email to me with the final thought about climate skepticism/denial among the public:

"As long as enough of the public is predisposed towards believing in climate change, trusts the IPCC and/or simply acquiesces when CO2 caps come along, we can solve the problem. Witness how many areas of public policy there are (e.g., some subsidy) where the majority of people think it’s a bad idea but don’t care enough to override the efforts of a determined special interest group. Climate change policy may end up being like that, except in this case, [the special interest] helps to save the world. The idealist in me would prefer for everyone to buy into the science and the need for CO2 regulation. But acquiescence might be the 'least bad' of the possible solutions."

I'd accept acquiescence too -- if we could even achieve that. But it's hard to make progress on responsible climate legislation when the deniers are shouting so loudly, absolutely unwilling to entertain any views other than what they positively know to be the case, and drowning out discussion on the items where reasonable people can disagree reasonably.

I see this as a highly unfortunate development: climate science has become a "hot button" moral issue, akin to abortion, wherein parties hold non-negotiable positions based on fundamental beliefs rather than any set of facts.

At least a little bit of the blame for this must accrue to Al Gore and others of his ilk who make claims that are likely to be overly dramatic, from a lecturing and too-certain stance, that the planet is heading to certain/imminent climate disaster.

But the problem is more fundamental across our society. As long as we live in a point/counterpoint world of people convinced of their rectitude and shouting past each other in insulting fashion -- "Jane, you ignorant slut" -- constructive dialogue will be near-impossible, and progress (much less resolution) on any important and complex social problem like the climate issue seems beyond grasp.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director of Early Stage Partners.

Bela Legosi in the House

2009-06-15T04:16:00.000-07:00

by Richard T. Stuebi

In a world where people are both tightening their fiscal belts and aiming to reduce their environmental footprint, the topic of standby power -- sometimes called "vampire loads" -- has gained increasing attention.

Vampire loads surround you all the time, from just about anything with digital intelligence. These appliances suck surprising amounts of power all the time they are plugged in, even when they're not actually being used.

A recent post on the Yahoo! Green blog provided some very interesting statistics, developed by Lawrence Berkeley National Laboratory and the American Council for an Energy-Efficient Economy. For someone paying 11 cents/kwh (pretty typical for the average American), a household can easily blow hundreds of dollars per year on vampire loads. The big culprits are computers, cable boxes and video game players.

According to the post, on a national basis, these silent killers could account for perhaps $4 billion of wasted money in aggregate. Ouch! A sizable market opportunity for entrepreneurs to develop products or services that can put a stake through the heart of these vampires.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director at Early Stage Partners.

Addressing Cost Concerns in the Climate Debate -- Focus on Offsets

2009-06-10T15:23:00.000-07:00

By Lisa Jacobson

After hundreds of Congressional hearings and over a dozen legislative proposals, the House of Representatives took historic and concrete action last month to advance federal climate change legislation. Through a largely collegial and efficient committee “mark-up” of the American Climate and Security Act of 2009 (ACES), a deal was reached that earned the support of several conservative Democrats and one Republican. The bill establishes a national cap-and-trade program -- with opportunities for domestic and international offsets to help meet compliance obligations while containing costs -- as well as incorporating critical complementary energy policies.

The House is now poised to move the bill through other key committees with jurisdiction in June and could take floor action on the legislation as early as July.

Given the current state of the economy, the issue of cost was understandably central to the committee’s debate. Concerns were raised that businesses and consumers would face higher electricity bills or incur other costs associated with the cap-and-trade program. In rebuttal, proponents of the bill spoke about of the economic opportunities presented by transitioning towards a low-carbon and clean energy economy. Clear and sustained market signals that result from the cap on emissions will drive capital investments into existing technology solutions – such as renewable energy, energy efficiency and other clean generation options. This new investment will make our economy more efficient and secure, while creating high-quality jobs in the US. As this transition takes time, offsets provide an important balancing mechanism in the face of economic downturn, for containing program costs while new technologies are developed and implemented.

Another refute to this argument was the flexibility at the heart of the cap-and-trade model. The bill’s cap sets emissions limits that ramp down over time, and the ability to trade results in lower cost compliance costs. The cost-containment benefit of this market-based approach is further enhanced with the inclusion of a robust and high integrity offset program.

Offsets have an important role to play in the coming debates over ACES, both because they provide one of the best rebuttals to anti-cap and trade arguments about cost concerns, but also because they truly have a role to play in moderating the blow of energy cost increases in the short term while still promoting emission reductions outside of the cap. Furthermore, the combination of emissions trading and offsets drives over-performance and technology innovation and deployment, especially when a broad set of offset projects are eligible.

Ensuring the environmental integrity of offset credits is essential to meet desired emission reduction levels and ensure a well functioning cap and trade system. Real and additional offsets must be the standard for program integrity, and independent, third-party monitoring and verification requirements are essential to ensuring that greenhouse gas emission reductions are delivered. The offset provisions in ACES provide a foundation for quality domestic and international offsets to help achieve the proposed US emission reduction targets more cost-effectively. However, leading up to possible floor action, improvements to the bill should be considered that expand opportunities for both domestic and international offsets.

Currently, ACES allows up to 2 billion tons of offsets to be used for compliance purposes. Of this, 50 percent can be offsets generated in the United States and 50 percent can be generated outside the U.S. If, in any given year, the EPA determines that the domestic limit will not be reached, the international limit can be increased to 1.5 billion tons per year, which offers important added cost savings.

A key change from previous draft proposals is the removal of a 25 percent discount on domestic offsets. According to a preliminary analysis by US EPA, this change will result in an 11 percent increase in the use of offsets and lowers allowance prices by 7 percent in each year.

International offsets are subject to discounting starting in 2018, however, which dampens their cost containment benefits. In addition to discounting provisions, international offsets face additional limitations, such as restrictions on the countries where offsets can be generated. Under ACES, only offsets that are generated in a country that has entered into an agreement with the US can qualify. US EPA has the ability to accept offsets issued under the United Nations Framework Convention on Climate Change, such as the Clean Development Mechanism, but the current language leaves considerable uncertainty. Because a domestic offsets program will likely take a few years to operationalize, international offsets will be critical bridge to filling the supply gap left by domestic offsets, and providing cost containment in the early years of the program.

As a start, discounting of international offsets should be removed, and clarity is needed on the role of international offset eligibility, especially for CDM projects. Increasing the eligibility of high quality offsets – inside and outside the US -- reduces the cost of the program to consumers and businesses, while advancing the objectives of the program – greenhouse gas emission reductions. If the political opposition continues to raise cost concerns in order to question the legitimacy of climate change legislation, offsets certainly provide one crucial component of the answer.

Lisa Jacobson is the President of the Business Council for Sustainable Energy, a coalition of business and trade associations representing the energy efficiency, renewable energy and natural gas industries in the United States.

Peter Huber: Low-Confidence in Low-Carbon

2009-06-08T23:58:00.000-07:00

by Richard T. Stuebi

A few weeks ago, I wrote here that it is often a good thing to read and reflect upon intelligently-crafted opinions that differ from those you hold.

A good example is offered by the essay “Bound to Burn” by Peter Huber, a Senior Fellow at the Manhattan Institute. In this thought-provoking piece, Huber makes the following interesting statements about the challenges to be faced in moving to a lower-carbon economy:

· “We rich people can’t stop the world’s 5 billion poor people from burning the couple of trillion tons of cheap carbon that they have within easy reach….We don’t control the global supply of carbon.”

· “We no longer control the demand for carbon, either. The 5 billion poor – the other 80 percent – are already the main problem, no us. Collectively, they emit 20 percent more greenhouse gas than we do. We burn a lot more carbon individually, but they have a lot more children. Their fecundity has eclipsed our gluttony, and the gap is now widening fast.”

· “Might we instead manage to give the world something cheaper than carbon?....For the very poorest, this would mean beating the price of the free rain forest that they burn down to clear land to plant a subsistence crop. For the slightly less poor, it would mean beating the price of coal used to generate electricity at under 3 cents per kilowatt-hour.”

· “Fossil fuels are extremely cheap because geological forces happen to have created large deposits of these dense forms of energy in accessible places. Find a mountain of coal, and you can just shovel gargantuan amounts of energy into the boxcars. Shoveling wind and sun is much, much harder.”

· “Another argument commonly advanced is that getting over carbon will, nevertheless, be comparatively cheap, because it will get us over oil, too….But uranium aside, the most economical substitute for oil is, in fact, electricity generated with coal….By sharply boosting the cost of coal electricity, the war on carbon will make us more dependent on oil, not less.”

· “By pouring money into anything-but-carbon fuels, we will lower demand for carbon, making it even cheaper for the rest of the world to buy and burn. The rest will use cheaper energy to accelerate their own economic growth. Jobs will go where energy is cheap, just as they go where labor is cheap.”

· “If we’re truly worried about carbon, we must instead approach it as if the emissions originated in an annual eruption of Mount Krakatoa. Don’t try to persuade the volcano to sign a treaty promising to stop. Focus instead on what might be done to protect and promote the planet’s carbon sinks.”

· “Carbon zealots despise carbon-sinking schemes because, they insist, nobody can be sure that the sunk carbon will stay sunk. Yet everything they propose hinges on the assumption that carbon already sunk by nature in what are now hugely valuable deposits of oil and coal can be kept sunk by treaty and imaginary cheaper-than-carbon alternatives.”

By no means is Huber’s writing perfect: the essay is too long by half, runs a too-circuitous path with considerable redundancies, and doesn’t lead to a very satisfying or forceful conclusion.

Along the way, some of Huber’s snide asides are too pessimistic. As an example, he claims “there is no serious prospect of costs plummeting and performance soaring” for solar and wind energy, but there is ample evidence (and lots of activity funded by prominent venture capitalists) to dispute this assertion.

And, Huber’s clearly got some facts wrong. For instance, he talks of $500/ton carbon offsets and 15 cent/kwh wind energy. If you believe these far-too-high numbers, no wonder you reach conclusions that aren’t very favorable to low-carbon energy sources.

Huber has been wrong before. About ten years ago, he and Mark Mills launched the Digital Power Report, which was touting the emergence of advanced technologies in distributed generation and energy storage to revolutionize electricity supply. Although quite compelling and seemingly well-supported, the perspectives they put forth in their periodical were at best far premature – and less charitably, inaccurate or incorrect. After a run of a few years, Huber and Mills wound down the Digital Power Report, presumably because the world wasn’t turning out the way they were predicting.

But, I still think this latest work by Huber is a worthy contribution to the discussion. Most notably, Huber’s concluding call for much more focus on carbon sinks as a no-regrets approach is hard to dispute.

Huber is no dummy. Many of the points he makes along the way are logically sound, and ought to be factored into any strategy for moving towards a lower-carbon economy. As unpleasant as some of the concerns raised by Huber may be, they are nevertheless important to hear to develop a more compelling story that overcomes the objections to thereby mobilize more real movement (rather than just talk) towards a low-carbon world.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director of Early Stage Partners.

Fusion, Lasers, and Cleantech Research on a Grand Scale

2009-06-08T07:50:00.000-07:00

Thanks to a friend who is an engineer at Livermore, last weekend I had a chance to visit Livermore Labs and the National Ignition Facility when LLNL had a once in 7 years family and friends day. All in all and amazing experience.

The highlight of the show was a tour of NIF, "the world's largest and highest energy laser". As far as I can wrap my head around, it's a massive building consisting of one single, tremendous piece of test equipment, hereby known as "that big fusion tester in Livermore". Which of course has its own mascot, Niffy, a replica of the baby mammoth whose remains were unearthed during the construction.

Essentially the entirety of NIF exists to hold and direct 192 lasers that after being pumped to full power can be directed at a single millimeter sized target (holding deuterium and tritium) triggering a tiny fusion reaction inside a 30 foot chamber, consisting of the target and a set of extremely intense cameras.

The basic goals of the facility, which is many times larger than Livermore's previous largest laser, are to enable testing and simulations for fusion bombs with out having to conduct underground tests, and provide a platform for basic research on inertial fusion energy for power, which they are set to begin experiments on in 2010. The construction on the facility is now complete, and they are taking it through full commissioning this year and next.

And speaking of swords to plowshares, who says basic research in the US is dead?

Neal Dikeman is a partner at merchant bank Jane Capital Partners LLC, and Chairman of Carbonflow and Cleantech.org, and a the founding blogger of Cleantech Blog.com. He previously cofounded superconductor firm Zenergy Power, and is a Texas Aggie.

Auto-psy

2009-06-01T03:21:00.000-07:00

by Richard T. Stuebi

as published to Huffington Post

Lately, I’ve been listening a lot on my iPod to a number of pop songs from the late 1960’s: “Wichita Lineman”, “Love Is Blue”, “Everybody’s Talkin’”, “To Sir With Love”, “Classical Gas” and so on. These are some of the AM radio songs of my youth, sitting in the back seat of the car while watching the scenery go by.

My parents’ cars were always big and always American – Detroit steel. Although we did own a few Ford cars, my dad generally favored General Motors products: typically Chevy Impalas in my earliest memories, escalating to Cadillacs by the end of his too-short life.

In addition to the music from forty years ago, I remember most of those long-ago cars very well. For some reason, circa 1968, I vividly recall the first time I saw a seat belt, whose buckle was ornamented with the blue rectagonal GM logo, and its motto “Mark of Excellence”.

At the time, partly because of my dad’s loyalty to their cars (how could he be wrong?), I assumed that GM indeed did make superior automobiles. But as the 1960’s gave way to the 1970’s, as I grew from child to adolescence, it became clear to me that Detroit autos – and GM cars in particular – were generally of very poor quality and design.

During that lamentable decade (remember leisure suits, everyone?), between the cars my family owned and the cars we rented on trips, we experienced innumerable lemons during the 1970's. These cars sometimes didn’t start, they would often sputter and stall, their bodies would rust through, trim pieces would be mismatched or fall off, and electronics wouldn’t work. My brother’s 1971 Chevy Vega was particularly laughable: it died an early death after but a couple of years and maybe 30,000 miles – the cylinder head blowing up one morning when he tried to start the engine.

As a senior in high school in 1979, my parents gifted me with a rust-colored 1975 Toyota Corolla with 75,000 miles on it (a lot of miles for a car in those days). It was butt ugly, and had no carpeting. It couldn’t outrun a tortoise off the line, nor outcorner a garbage truck. It was by no means a chick-magnet (or perhaps that was my problem?).

But, that car didn’t pretend to be anything it wasn’t. It had no stupid gimmicks or features. It got pretty good gas mileage (~25 mpg), was cheap to keep running, and it was damned reliable – as hard as I tried to make it unreliable, with misguided attempts to do my own maintenance (why did I even think about rebuilding the carburetor?)

As utterly unexciting as even that old beater Toyota Corolla was, I much preferred driving it to my parents’ 1979 Cadillac Sedan DeVille, which had the most god-awful bordello velour bench seats and a hideous vinyl roof that started peeling off within months. That awful land yacht clinched it: I had come to intensely dislike GM products, and vowed never to own one. And, I never have, and probably never will. I even avoid renting cars from Avis and National, because their fleets are heavily populated by GM vehicles.

I speak of my personal experience, but I think it is the experience of a significant segment of my generation: we walked away -- no, ran away -- from Detroit, by our choice. And even though American cars have improved dramatically, imported cars seized the opportunity of the 1970’s and have consistently stolen market share for decades. The brands were broken; Detroit couldn’t win us back.

A radical rethink is happening now across the U.S. auto industry, pushed in large part by the Obama Administration’s policy proposals, but it seems to be all too late for GM. The day of reckoning is now at hand.

The talk today is of the imminent bankruptcy of GM, with outpourings of grief throughout the Midwest, as if the company were dying just now. But, in my view, the company became terminal long ago, when a whole chunk of the U.S. population turned away from American to imported cars. And, the autopsy offers interesting lessons for the future industrial economy of the U.S.

Management was at fault, for designing and offering lousy products in which style trumped substance, and for dragging their feet on advancements in safety and efficiency. Labor was at fault too, for setting unreasonable wage rates, benefits packages and work rules, and for being so inattentive to the quality of the product coming off the line.

It’s impossible to date exactly when both management and labor started travelling down the slippery slopes, and when the decline became irreversible. However, something tells me that the late 1960’s represents something of a turning point -- when U.S. industrial hegemony was seemingly permanent, and big American beasts powered by thirsty V-8's roamed the newly-opened highways across our seemingly endless landscapes.

And while it's embarrassing to reflect on the outright arrogance of thinking and feeling as if we ruled the world, it’s nevertheless still seductive to remember those sepia-toned days. Today’s economic difficulties, and the possible death (and certain major restructuring) of GM, intensify the bittersweetness of those 1960’s tunes, as we look backward in the rearview mirror to naively happier – though patently unsustainable – days.

In life, I have learned to find more satisfaction when looking through the windshield, to the future. In moving forward – rebuilding the U.S. auto industry, and growing the cleantech and green energy industry at large – we need to bear in mind the sobering lessons of the demise of GM, so as not to plant the seeds of future collapse.

Management teams cannot consistently insult the intelligence of their customers by offering crappy products with poor value. Labor must also keep the customer in mind, by not demanding unreasonable agreements that inflate prices or by producing inferior products. Management and labor must work together in much better harmony – and the unifying theme must be technological leadership to produce customer satisfaction.

If we want to build a sustainable economy, it means we need both economic and environmental sustainability. We need sustainable businesses, producing environmentally sustainable products with an economically sustainable business model – and economic sustainability only comes when management and labor work together to serve the customer well by superior product innovation.

Interestingly, many of today’s behemoth energy corporations – electric utilities and oil companies – are in a situation similar to GM’s 40 years ago. With little competition from alternative supply sources, token efforts to portray their meager technological diversification as leadership, and sometimes haughty disdain for their customers, their brands are weak: customers can’t wait to leave once a compelling option is presented to them.

When that day comes, many of today’s gargantuan energy companies may follow the same fate as we’re seeing now with GM.

Will the U.S. public care then? Will Houston follow Detroit? Will today’s kids be yearning for the songs of “American Idol”?

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director of Early Stage Partners.

Top Utilities Grow Solar Power Despite Recession

2009-05-28T13:29:00.000-07:00

By John Addison. Today, the Solar Electric Power Association (SEPA) whose membership includes 110 utilities issued a new report - “2008 Top Ten Utility Solar Integration Rankings” - which identifies the utilities in the U.S. that have the most solar electricity integrated into their portfolio.
The report demonstrates that the utility segment is making a major investment to increase the amount of solar energy in power portfolios, with many utilities doubling the amount of solar power in their portfolio in just one year. The installed solar capacity of the top ten ranked utilities rose 25 percent in a tough economy, from 711 megawatts to 882 megawatts.
The Top 10 Utilities in cumulative megawatts installed represent six states stretching from California to New York:

#1 Southern California Edison (EIX) – CA (441.4MW)
#2 Pacific Gas & Electric (PCG) – CA (229.5)
#3 NV Energy – NV (77.9)
#4 San Diego Gas & Electric (SRE) – CA (49.3)
#5 Public Service of Colorado (Xcel Energy - XEL) – CO (28.5)
#6 LA Department of Water & Power – CA (13.6)
#7 Public Service Electric & Gas Co. – NJ (13.2)
#8 Arizona Public Service Co. – AZ (10.6)
#9 Sacramento Municipal Utility District – CA (10.2)
#10 Long Island Power Authority – NY (7.7)

Although the sunny West Coast dominates this year’s list, other states are coming on strong including Florida, North Carolina, and Florida. Yes, the availability of sunlight is one driver in the expanded use of solar. Other drivers include the retail price of electricity, state government initiatives such as RPS, and cap-and-trade of emission credits.
There are two primary solar technologies, photovoltaic and concentrating solar power. Photovoltaic (PV) technologies utilize a photosensitive material to generate electricity direct from sunlight. PV can also be magnified using mirrors or lenses in low- or high-concentrations known as concentrating photovoltaic technology or CPV. Concentrating solar power (CSP) technologies utilize mirrors or lenses to concentrate sunlight on a point or line and generate high-temperature heat, which is captured to generate electricity in a later process.
Julia Hamm, Executive Director of SEPA, sees strong growth in both PV and CSP. For example, Southern California Edison is planning a massive 1.3GW of CSP with BrightSource. Arizona Power is planning 125MW of PV. Medium- and utility-scale photovoltaic and concentrating solar thermal power projects are adding around 20 billion of dollars worth of investment.
Some European nations that aggressively use wind power, such as Spain and Denmark, have demonstrated that intermittency is quite manageable when renewable energy is less than 20% of the mix. CSP can take the mix much higher by storing energy in liquids like molten salt for delivery when demand peaks.
#5 on the list, Public Service of Colorado (Xcel Energy), is already experimenting with vehicle-to-grid (V2G Report), which will allow the growing population of electric vehicles to provide power to the grid during peak hours. Utilities are experimenting with several forms of large scale grid-storage which will be promising if significant costs are achieved.
Some 30 years ago, solar was dismissed as impractical. Now that PV manufacturing cost is 100 times less than in early days, utilities are taking the lead in the growing demand for solar power.

John Addison writes about clean transportation and renewable energy. He is the author of the new book - Save Gas, Save the Planet – which includes details of the growing use of renewable energy in powering cars, public transportation, and high-speed rail.

California Needs Texas for Cleantech Success

2009-05-28T08:11:00.000-07:00

By Joel Serface - May 28, 2009

When I moved from Silicon Valley to Austin in 2006, many of my VC friends were left scratching their heads… Why would someone who has been leading the cleantech charge in California want to move to Texas? After all, there was conventional thinking in California that there was no hope for Texas and that only the California-way would lead to cleantech success.

I had many motivations including helping Texas become a renewable energy state. The rationale was this…. If you want the greatest leverage in mitigating carbon emissions, start with the most carbon-polluting state in the most carbon-polluting country in the world (this was before China surpassed the US in carbon emissions). If you make progress in Texas, then other states and countries would understand they could make the transition as well. If you don’t show up, engage, and get the state (more importantly its people, investors, and industry) to buy in, then you cannot expedite progress or bridge the necessary gaps to accelerate the cleantech industry in Texas.

The fact was that Texas has always been a leader in energy including renewables. Much of the early work in solar happened in Texas at Texas Instruments under the leadership of Jack Kilby in the 1960’s and 1970’s (remember those early solar calculators?). Like California, Texas had its share of early “successes”, but many of those disappeared in the 1980’s as federal support for renewables waned. It wasn’t until many leaders in Texas got together to push wind energy in the late 1990’s that renewables appeared as a scalable and reasonable technology. While California had invested into several generations of wind technologies covering its valuable lands with poorly performing wind turbines, Texas didn’t develop a policy until around the same time 1.5 MW wind turbines became commercially viable. With the combination of a good wind policy (first-come, first serve REC availability), competitive asset pricing, and low land lease rates, the wind industry in Texas took hold.

Since then, Texas has developed around 8 GW of wind energy with more than 15 GW planned. To support this, Texas became a leader in transmission policy developing Competitive Renewable Energy Zones (CREZ), which are now being copied in Western states and other parts of the country. It has also led in transmission development to renewables with 18.5 GW of new capacity approved to be developed to strong wind and solar areas of the state. Texas will also go live in its own transmission grid, the Electric Reliability Council of Texas (ERCOT), with the most advanced “nodal” market allowing more entry points for renewables, storage, and ancillary services. In short, Texas has had its own renewable successes even though they are not as sexy or as publicized as what has been done in California.

California’s strengths are well-known and publicized. There is no better-experienced region in the world in taking ideas from laboratories and technology entrepreneurs and turning them into products. California has also been an energy policy innovator historically in clean air and energy efficiency, and more recently in policies for carbon (AB 32), transportation (AB 1493), fuels, and cleantech investment (Greenwave Initiative). The scope of the technology and policy innovation in the state has allowed it to be a thought leader while seeing some of the early returns from its efforts. California’s strengths come from its researchers, entrepreneurs, and investors that all think they can change the world. In short, there are no limits to what Californians think they can accomplish and therefore no limits in its scope of innovation.

Texas’ strength in energy runs deep in the veins of its people. It starts with a “can-do” or “wildcatting” nature of its people, extends to land development, project development, industrial scalability, and energy trading. Texans have always taken energy risks and developed core competencies in scaling and optimizing massive processes for chemical and petroleum production. They have also developed critical technologies for extracting and transporting energy from its origin across vast areas to deliver it where it is needed. Most of this experience is in extracting, refining, and converting hydrocarbons, but it can also be applied to all aspects of cleantech. In short, Texas knows how to scale energy technologies and once it is given a price or incentive will become the leader in delivering new forms of energy.

If California represents scope and Texas represents scale, then we need both to transition cleantech ideas from lab to market at an ever-increasing pace. So what needs to happen to achieve the scope of California and the scale of Texas?

First, new interfaces need to be built. If they are, we can accelerate the early and the late to more broadly deploy renewables. Both Texas and California need to dismiss their pre-conceived notions that their respective approach is best. The nation needs policy and technology innovators as well as deployment and market innovators. In the middle is the need for a new dialog and new interfaces especially around how to tie ideas from California into projects in Texas. There also has to be acknowledgement that California isn’t the only place ideas come from or can be built into companies. It might actually be better to develop these technologies closer to the points of adoption or at least understand customer and integration needs from the outset.

Second, Texas needs to learn from California and develop policies that support more renewables and energy efficiency. In the Texas wind case, the state waited to develop a policy just ahead of the time when asset performance of wind turbines was about to achieve price parity with traditional electrical generation. We are on the precipice of this with solar and other technologies. If Texas doesn’t adopt policies in this legislative session, it will be left on the “solar sidelines” while other states and countries continue to develop their solar industries, achieve economies of scale, and geographic advantage. This would lead Texas down the path of possibly importing solar panels as opposed to developing its own domestic solar industry. If Texas indeed learns from other states and adopts policies more aggressively, then the scaled industries will take hold in Texas and grow faster.

Third, California needs to recognize the potential in developing projects in Texas. Texas has created a favorable environment for the energy business and has been ahead of the curve in market transformation in order to do so. This coupled with their demonstrated success in delivering large energy projects gives them a tremendous lead in deploying new energy technologies at a massive scale. In fact, many of the incentive approaches for wind, transmission, and transmission grid management for renewables should be examined at a national level.

Fourth, Texas cannot sit on the sidelines on carbon pricing. It is in Texas’ best interest to have a predictable carbon target and therefore price. This will mobilize many of the traditional energy companies and utilities to get off the sidelines and begin investing into the future energy industry and building their future business models (new financial, trading, and integration models are likely where Texas will succeed).

Finally, new investing models need to be attempted combining early and late stage investing. A great deal of attention needs to be paid to the “valley of death” between development of new energy technologies and their delivery in large scale to integrated projects. While Federal loan guarantees and Federal test and integration centers will be useful here, it will require experienced investors, developers, and corporations to step in, provide financing, and minimizing risk ultimately accelerating these implementations to market. Texas could become the large-scale test-bed for these implementations.

To make this all work, Texas needs to step forward in this legislative session to begin embracing solar energy and other forms of renewables as well as energy efficiency. The state’s leadership also needs to announce their support for renewable energy and endorse its associated economic opportunities for the state. If a pragmatic and immediate approach is developed in working together with industry and California (and other states), the results will be a healthy, high-growth new energy economy, increased numbers of jobs, greater global competitiveness, and enhanced energy and economic security for the United States (and Texas and California).

Joel Serface served as NREL’s first Entrepreneur in Residence with Kleiner Perkins Caufield & Byers. As an investor and entrepreneur, Joel has planted cleantech seeds in Massachusetts, California, Texas, and now Colorado. Since 2000, Joel has started or invested into more than 20 cleantech companies with 5 liquidity events so far and has catalyzed the formation of numerous supporting cleantech institutions and regional and national policy initiatives.

Feed-In Tariff = Feeding at Trough?

2009-05-25T18:04:00.000-07:00

by Richard T. Stuebi

One of the more popular policy prescriptions often made by ardent renewable energy advocates is the adoption of a “feed-in tariff” (FIT).

With a FIT, the government sets a price for electricity supplied by a qualifying renewable energy source, and the price is usually sufficiently high to produce a good return for the investor to install the renewable energy project. This, in turn, provides a substantial economic motivation for the growth of the renewable energy sector.

Supporters love the fact that a FIT policy provides a long-term, stable, predictable, and lucrative return on renewable energy investment. Naturally, this leads to booming markets for renewable energy where FITs are in place.

FITs are in wide use in many parts of the world – mainly in Europe, but increasingly in Canada as well. Correspondingly, these markets are experiencing exploding growth for renewables.

However, to date, traction has been slow to come for FITs in the U.S. because the policy mechanism is innately at odds with the prevailing philosophy of the American economy: to let market forces sort things out.

In the U.S., the renewable portfolio standard (RPS) has been the preferred policy mechanism to promote the penetration of renewable energy (along with the predictable potpourri of incentives and subsidies buried in the piles of the tax codes). In an RPS, the government sets a target for a quantity of renewables to be adopted by a certain date – and then lets market forces dictate what mix of renewables will supply the requirement, as well as the price implications of that mix.

By contrast, a FIT explicitly puts the government in the position of price-setter, and picks technological winners by placing prices as a function of the renewable energy technology in question.

If the price of the FIT is set too high, unquestionably this pushes renewable energy adoption, but tramples competitive forces in doing so: bad (meaning, to me, highly-uneconomic) projects get done, and/or companies or investors make outrageous profits. On the other hand, if the price of the FIT is set too low, then the policy won’t have any impact at all: no incremental investment in the desired renewables will occur.

In other words, the government has to be able to set the price at exactly the right level to induce a lot of investment – but no higher so as to provide a free wealth grab, and no lower so as to discourage the market from happening at all. No government is that smart to be able to perfectly set the price of a FIT. So, in practice, FIT prices are very high – and the renewable energy interests profit immensely from it.

Although FIT policy has historically gone nowhere in the U.S., that may be changing, as FITs are starting to get more serious consideration. In early 2008, the California Public Utilities Commission adopted the first FIT in the U.S., to promote up to a maximum of 480 megawatts installed. Earlier this year, the city of Gainesville, Florida enacted a feed-in tariff for its municipal utility. Even in Michigan, not considered one of the leading states in pro-renewables policies, the Public Service Commission is considering a pilot feed-in tariff.

I am not sold on the FIT mechanism as good policy, because it is so heavy-handed and arbitrary. However, as the rest of the world adopts FIT policies, they extend their leadership over the U.S. – and the leadership is not just in market size, but also in technological advancement. If the U.S. doesn’t maintain technological leadership, then we’ve lost arguably our best asset. If a FIT policy is necessary to be leaders in renewable energy, then maybe it’s a necessary evil.

It wouldn’t be the first time I’d have had to swallow hard in lukewarmly supporting a policy that otherwise I find fundamentally challenging.

Some have argued that the aggregate economic subsidy associated with a national FIT policy is outweighed by the faster reduction in costs associated with renewable energy advancement promoted by the FIT, plus the avoided expenditures on fossil fuels displaced by the increased renewable energy production caused by the FIT. It’s an interesting argument, but counter-intuitive to me, and I’d like to see some quantitative support for this line of reasoning.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director of Early Stage Partners.

The Efficacy of Biofuels from Algae on Cleantech.org

2009-05-23T13:05:00.000-07:00

I usually don't do this, but a couple of days ago we had a post on Cleantech.org's Linked In group around algal processes, feedstocks, and the recent DOE solicitation, that engendered a lively discussion, in part taking off from the recent demise of Green Fuels.

While many of you know I am not personally a fan of algal fuels, I have posted it en masse, unedited, so enjoy, as the discussion ranges across a decent chunk of the issues facing algae processes and provides some food for thought.

Urgent - Algae Oil Production or Algae Methane Production Needed!
We are completing a DOE grant application design to meet our Notice of Intent by next Friday and need to find one or two companies with a process to make Algae Oil or Algae Methane, or either, for our process. Please email any information or contacts as our time line is running short for this grant. We believe we have lined up most all other pieces for this proposed biorefinery!

Posted 2 days ago Reply Privately Make featured Delete discussion

Walter Breidenstein
Professional Entrepreneur

See all Walter’s discussions »

Comments (24)
Poly Endrasik Jr.
Video/Web Conferencing & Teleworking Consultant
Hi Walter, Maybe you could pick up this technology for a song and take it somewhere:

http://www.greentechmedia.com/articles/read/greenfuel-technologies-closing-down-4670/

http://www.ecogeek.org/content/view/2747/70/ - both these are the same story!

Good Luck and God bless
Posted 2 days ago Reply Privately Delete comment
Walter Breidenstein
Professional Entrepreneur
Hi Poly,

That is why we turn down all VC investments into our company. They are best left to Universities and University students who manage a lot of deals that once one folds they can jump to the next one without a lot of pain. Where I come from we don't throw other people's money at deals...unless those investors who came in early can support those who come in later. Most VC deals are so ugly after the first and second round that who would ever want to support a technology with those types of "investors". Not me!

Walt.
Posted 2 days ago Reply Privately Delete comment
Neil Farbstein
President of Vulvox Nanobiotechnology Corporation
Algae have several problems that make them untenable. Algal production systems use so much water that they will damage the environment,competing with city municipal reservoirs, agricultural water and they will drain rivers that support wildlife. CSP solar thermal uses a lot less water and some designs use no water to generate clean cheap electricity.
Posted 2 days ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
Neil - I would suggest that is myopic. There are many alternatives and many end products. Saying that electricity is the only solution is impractical since electricity does not give us any near term solutions for the vast network of spark and compression based ignition systems.

Walter asked for support on algae, stick to the topic. Walter, I dropped you a parrallel note... As one of the areas I am working on is a non-proprietary solution to put algae farming in the hands of who better? Farmers. My part in the process is the development of a low cost photo bioreactor and trying to engage the agricultual extension service in the mix. If that is a help to you or others, please connect.

There are still realistic challenges like best lipid extraction mechanism. Final protocols for maximizing lipid production are also in order. Some parrallel gadgets to be built include the PBR, a low cost easy operation lipid fraction meter, an oil/lipid extraction gizmo, etc.

The more we share the more likely we are to win/win...

Leif
Posted 2 days ago Reply Privately Delete comment
Walter Breidenstein
Professional Entrepreneur
Leif/Neil,

Our process produces water from the production of the methane. We could use that excess water for the algae systems if that would be helpful. We also produce near pure CO2 and we understand this could also be helpful. At this stage we just want methane sources without the algae oil if feasible. My background is oil & gas so I know methane, ethane and propane down the chain. I am not, nor my engineers, familiar with the bio/algae world as experts. We have lots of engineering firms contacting us to help us, but we really are just looking for designers who understand the algae space to complete this DOE grant. We have until next Friday for the Intent and our budget is around $25 million. We think we have a very strong chance to win this grant...but we need the CO2-algae-methane piece...or part of it to be proven. I know, contact Bill Gates and Sapphire Energy but it appears DOE grants are not going to impact their $100 million last funding round! :)

Walt.
Posted 2 days ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
Not sure I follow the direction of your need. I am not clear whether you are making methane, or consuming methane. I take it is making... I would assume you could decompose the algae to create a methane source, but like most methane sources, it wouldn't be clear. Temp conversion/pyrolysis could be an option but certainly you know that.

Given that I am not tracking where you are heading, I am unlikely to be of help.

And I thought that while DOE expected to award some large, the easy high end was $5M and 24 months...

Leif
Posted 2 days ago Reply Privately Delete comment
Walter Breidenstein
Professional Entrepreneur
Lief,

Sorry I was not clear. We need methane for our process to make methanol.

Walt.
Posted 2 days ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
Yep I am of no help to you. I don't have a good way for a clean source of methane. Lots out there, but not sure of metabolic pathway from the algae I work with.

Good luck.

Leif
Posted 2 days ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
I assume you are doing this against ARPA-E - did you catch the updated amendment on that?

Leif
Posted 1 day ago Reply Privately Delete comment
Lubo Morhac
Technology Management Consultant
Hi Walter,

I have several links for you to research relating to algae to fuel. I don't think the following outfits have algae cultures that are capable of CH4 production, but fatty acids for sure:
This one is my favourite in terms of equipment:
http://www.algaelink.com/

also check these:
http://www.solixbiofuels.com/html/company.html
http://www.petroalgae.com/
http://www.greenfuelonline.com/
http://www.livefuels.com/

Landfill sites are an excellent source of CH4.
Some gasification systems may be of interest with Methanization back end.
but of course, best of luck with algae,

Lubo
Posted 1 day ago Reply Privately Delete comment
Lubo Morhac
Technology Management Consultant
Walter, I re-read the thread and I think this may be of interest as an alternative for turning CO2 into energy:
http://www.uafsunstar.com/20090317/sandia-technology-turns-sunshine-petrol
http://www.carbonsciences.com/

L.
Posted 1 day ago Reply Privately Delete comment
Walter Breidenstein
Professional Entrepreneur
Wow, thanks for the information guys. We need methane...that is what we need. We can work with Algae oil to make biodiesel since methanol is used in the biodiesel, but right now we want the most simple system. CO2-Algae-Methane-Methanol...we will recycle our water and CO2 nicely.

Poly, I spoke to my licensing friend at MIT and article you posted, "GreenFuel Technologies Closing Down" was just searched and there is no reference to that project at MIT. He called Harvard for me and they have no mention of it, but they have heard of it. They believe it was something a student started on the roof, and MIT says that any student who develops anything at their University is the owner of the IP. Thus, the article says it is an MIT-Harvard algae project that crashed, but my friend said there is no record of the project he could find, nor at Harvard...so maybe the author was mistaken...

Yes, finding Algae to Methane is not so easy!
Posted 1 day ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
The problem in part is that your target their is "swamp gas" from algae rather than the oil output. My challenge is that is a different species, in fact I have no clue what species that might be, vs the standard oil rich species e.g. chlorella ...
Posted 1 day ago Reply Privately Delete comment
Walter Breidenstein
Professional Entrepreneur
Leif,

Here is the acceptable feedstocks from the grant...consider we need methane:

"Using the definitions of “renewable biomass” as stated in the Energy Policy Act of 2005 (EPAct 2005), the Energy Independence and Security Act of 2007 (EISA 2007), and the Food, Conservation, and Energy Act of 2008, Title IX, Sec. 9001, as guidance, for the purpose of this FOA, the acceptable feedstocks will be those listed below:
(A) materials, pre-commercial thinnings, or invasive species from National Forest System land and public lands (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) that –
(i) are byproducts of preventive treatments that are removed –
(I) to reduce hazardous fuels;
(II) to reduce or contain disease or insect infestation; or
(III) to restore ecosystem health;
(ii) would not otherwise be used for higher-value products; and
(iii) are harvested in accordance with –
(I) applicable law and land management plans; and
(II) the requirements for
i. old-growth maintenance, restoration, and management direction of paragraphs (2), (3), and (4) of subsection (e) of section 102 of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512); and
ii. large-tree retention of subsection (f) of that section; or
(B) organic matter that is available on a renewable or recurring basis from non-Federal land or land belonging to an Indian or Indian tribe that is held in trust by the United States or subject to a restriction against alienation imposed by the United States, including –
(i) renewable plant material, including –
(I) organic material grown for the purposes of being converted to energy; and
(II) algae; and
(ii) waste material, including –
(I) crop residue (including cobs, stover, bagasse and other residues);
(II) other vegetative waste material (including wood waste and wood residues);
(III) food waste and yard waste.

No plant based material that is generally intended for use as food can be employed as a feedstock except as noted below under “Additional Feedstocks Acceptable For Topic Areas 5 and 6.” Hence, sugars derived from sugarcane or beets and oils derived from soy, canola, sunflower, peanut, etc. normally recovered using conventional food processing methods will be excluded from eligibility for this FOA. The determining factor will be the typical use of the material in commerce. Use of excess oil production of food-grade oil also does not constitute an acceptable feedstock. Distillers Dried Grains with Soluble (DDGS) is also excluded. Additional information regarding the use of algae as a feedstock is included in Appendix J.

Municipal Solid Waste (MSW) is not an acceptable feedstock. However, biomass as defined in EPAct 2005 (Public Law 109-58) Section 932(a)(1-2) that is segregated from the MSW as a separate stream, could be employed as a feedstock with appropriate considerations for the costs of such segregation, collection, processing, and transportation. Hence, post-sorted MSW, where all recyclables and non-biomass components have been removed, would qualify, but only the remaining dry material that meets the above requirements would qualify as a feedstock for purposes of this FOA. Allowable costs include processing (such as, chipping or grinding) the feedstock into a form that can be fed into the reactor. Processing costs for MSW are restricted to post-sorted materials."

That is not an easy list to find methane...except here:

"A new method for converting algae into natural gas for use in pipelines and power generation has been transferred to the marketplace under a license between Genifuel Corp. and Battelle. Genefuel is based in Salt Lake City, and has an exclusive license for the technology."

http://www.genifuel.com/ - maybe this is the only one?
Posted 1 day ago Reply Privately Delete comment
Karel Beelaerts van Blokland
Dutchmen Absolute Return F: 07-37% /08-100% /09- 5,4% - dutchmencapital.web-log.nl / kacobeelaerts@zonnet.nl
AlgaeLink N.V. is a Dutch Company that designs and manufactures algae growing equipment. Algaelink are building a world-wide supply chain and network that is sustainable and delivers value to our global customers . Our operations cover algae production, equipment, consultancy, installation support and training.

Fuel Green energy, biodiesel, bio-ethanol, bio-gas, bio-oil, and jet fuel (JV with AirFrance-KLM).
www.algaeLink.com
Posted 1 day ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
Walt - my point is in part to explain the tangential answers. Most of us (with all the negative broad brush implications that implies) are focused on the extraction of the large lipid fraction from algea and therefore area focused on microalgae - commonly Chlorella, and other variants of the small motile buggers since lipid fractions can reach 50% in some claims. That oil then become the feedstock for a biodiesel process.

The algae you are after are just different. You are looking for a swamp/march algae (or pnd scum), likely long strain clumpy stuff most people try to kill. A source would be https://ccmp.bigelow.org/ which is a national repository for many such things.

My issue is I just haven't focused on it. You might be able to find help and support in the reverse from your local agricultural extension agent.

I think I had misread the feedstocks grant to assume it precluded algae - not 100% which one you are pursuing.

Given the time and the inclination, you or I could come up with the right kind of algae and the people involved. You are looking for the swamp biology professor - not anyone talking about algae for biofuels. Not a bad thing, just a different thing.

You are welcome to call me if it would help - 540 847 5343.

Leif
Posted 1 day ago Reply Privately Delete comment
Walter Breidenstein
Professional Entrepreneur
Leif,
I will see if I can get my engineer to call you as he is just now getting started on all these calculations. We know how much methane we need to produce methanol. We know how much methanol is needed to produce biodiesel. We know how much oil is needed to produce biodiesel. We will likely need 5-10 times more oil-algae than methane-algae to have a tight, packaged CO2-to-biodiesel system. We wonder if that amount exists already in stable systems (i.e. before they go in and kill off the "bad" algae)? Interesting dilemma...I'm sure the answer is out there at some of these Universities and DOE labs who get all the "fun money" to do the R&D.
Walt.
Posted 1 day ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
That is part of the dilemma - there is much talk and speculation, but other than a haxane oil extraction standard, the only thing that is talked about is pyrolysis to derive a clean oil residue and that is a piss awful waste of energy. Ultimately that is why I think that is why some folks are tanking, because without extraction mechanisms, algae is a tough nut.

The one I am holding out for is algae 'milking" to extract the oil while the algae is still alive. But I fear that may turn our processes from open to proprietary.

To be fair from your earlier post, you can decompose algae, food, and other wastes that aren't muni solid - so you should be able to leverage sewage or other feedstocks. I think those folks are really your targets and the organisms in the Archaea group are the metanogens you seek...

Leif
Posted 1 day ago Reply Privately Delete comment
Matt Sloustcher
Account Executive at Peppercom Strategic Communications
Walter,

Nobody has mentioned the heterotrophic "in the dark" method of algae oil production Solazyme employs. I suggest you review the following blog post, and check out Greentech Media's analysis of the industry.

http://www.oilgae.com/blog/2009/02/advantages-of-heterotropic-algae-for.html
Posted 1 day ago Reply Privately Delete comment
Christine Harmel
PR
I would suggest OriginOil http://www.originoil.com/
Posted 22 hours ago Reply Privately Delete comment

Comments (24)
Walter Breidenstein
Professional Entrepreneur
Has anyone studied the cost accuracy associated with this Algae-methane process? Everything boils down to CAPEX and OPEX in these models, and this looks interesting.

http://www.unh.edu/p2/biodiesel/pdf/algae_salton_sea.pdf
Posted 20 hours ago Reply Privately Delete comment
Leif Johnston
Technology Consultant and Serial Entrepreneur
Big picture you are still decomposing the algal as the methane creation process with techniques not 100% clear to me and combine with complicating compounds in the decomposition gases, sulpher containing mercaptans etc. Which still leaves you with the need for a decomposition specialist...
Posted 17 hours ago Reply Privately Delete comment
Frédéric Vogel
Research group leader at Paul Scherrer Institut
Dear Walter,

I know that I'm too late for your grant application. Nevertheless, you might be interested to know that we are developing a process similar to the one Genifuel has licensed from PNNL. The strong feature of our process is the recovery of all nutrients in a concentrated brine, besides the efficient production of methane. We have recently published a paper accessible to anyone:

http://www.rsc.org/Publishing/Journals/EE/article.asp?doi=b819874h

Feel free to connect if you think some further discussion might be of interest.

Frédéric
Posted 1 hour ago Reply Privately Delete comment
Walter Breidenstein
Professional Entrepreneur
Frederic,
Thank you for the very interesting information. We have not reached any agreement with Genifuel yet, but I have had one brief discussion and a couple email exchanges. I get the feeling they are at the top of their game and have their own uses for methane from their website. I'm not convinced as I know the methane markets extremely well and not a day passes that I don't hear of another methane technology that will be "easily converted to liquids". I've traveled the world on researching and studying methane conversion, and it just is not as easy as some would have you believe. Therefore, I would be most interested in your technology. We remain open and ready to do business with anyone that can integrate their value chain into ours. Further, the grant is not due until June 30 (so you are not too late) while the Notice of Intent is due by next Friday. We remain committed to find some help in Algae to Methane technologies. We think we can add value to whatever is the methane source.
Walt.
Posted 42 minutes ago Reply Privately Delete comment

Neal Dikeman is a partner at cleantech merchant bank Jane Capital Partners and Chairman of Carbonflow, Inc. and Cleantech.org.

New Cars that Already Meet 2016 Fuel Economy Standards

2009-05-21T10:44:00.000-07:00

By John Addison. President Barack Obama announced that automakers must meet average U.S. fuel-economy standards of 35.5 miles per gallon by 2016. This will be an exciting opportunity for automakers that already deliver vehicles that beat 35.5 mpg such as the Ford (F) Fusion Hybrid, Mercury Milan Hybrid, Toyota (TM) Prius, Honda (HMC) Insight, Honda Civic Hybrid, and the Mercedes Smart Fortwo. You can buy these gas misers today. A number of other vehicles offered in the U.S. now come close to the 2016 standard, and will see mileage improvements next year.

In Europe, over 100 models can be purchased that meet the 2016 standards, thanks to the popularity of cars that are smaller, lighter weight, and often use efficient turbo diesel engines.

Over the next three years, dozens of exciting cars will be introduced in the United States. Here are some offerings that we are likely to see in the next one to three years from major auto makers.

Ford (F) will extend its current hybrid success with added models. During my recent test-drive of several vehicles that meet the 2016 requirement the midsized Ford Fusion Hybrid demonstrates that you can enjoy fuel economy in a larger car with comfort and safety. The Ford Fusion Hybrid has an EPA certified rating of 41 mpg in the city and 36 mpg on the highway. The car can be driven up to 47 mph in electric mode with no gasoline being consumed. Ford will start selling pure battery electric vehicles next year that will lower its fleet mileage average.

The best mileage SUV on the market is the Ford Escape Hybrid with 32 mpg. In 2012, Ford will also offer a plug-in version of the Escape Hybrid that will blow-away the 35.5 mile standard. Bringing the popular Fiesta to the U.S. with a 1.6L gasoline engine will also attract budget minded buyers looking for good mileage.

In discussing the new standards, Ford CEO Alan Mulally stated, “We are pleased President Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will benefit the environment and the economy.”

General Motors (GM) plans to be the leader in plug-in hybrids starting with the Chevy Volt. It has a major opportunity to extend its E-Flex architecture to SUVs and trucks by 2016. For the price conscious buyer, the Chevy Spark hatchback with a 1.2L gasoline engine should deliver over 40 mpg.

There are almost 40,000 Chrysler GEM electric vehicles in use today. The GEM 25 mph speed limits them to only being popular in fleets, university towns, and retirement communities. Chrysler will extend its early U.S. electric vehicle leadership in 2010 with new freeway speed plug-in hybrids that can be driven 40 miles in electric mode, before engaging the gasoline engine – the Jeep Wrangler, an SUV, and the Town and Country Minivan. Over time, Chrysler can expand its ENVI family. Chrysler’s new stockholder Fiat will bring in exciting smaller cars and help expand the EV success.

Toyota (TM) will expand on the success of the Prius with more new hybrids. Since 2002, I have been driving a Prius that has averaged 41 mpg in real world driving that has included climbing hills with bikes on a roof rack and driving through snow with skis on the roof rack. The Prius will also be made available as a plug-in hybrid – hundreds of these PHEVs are now being tested by fleets. The modestly priced Yaris, which gets 32 mpg, is likely to also be offered as a hybrid that delivers over 40 mpg.

Honda (HMC) is likely to be the first maker to meet 2016 CAFÉ requirements, building on its historical leadership in fuel economy. My mother has easily achieved over 45 mpg with her Honda Civic Hybrid. Now Honda is going after the Toyota Prius with the Honda Insight. The popular Fit, which gets 31 mpg, is likely to also be offered as a hybrid offering over 40 mpg. Look for more high mileage offerings from both Honda and Toyota as they compete for hybrid leadership.

Nissan’s (NSANY) Altima Hybrid delivers an impressive 34 mpg. Beyond hybrids, Nissan is determined to be the leader in battery electric vehicles. Working with fleet consortiums and major electric utilities, next year Nissan may seed the market with thousands of freeway speed electric vehicles. The Nissan EVs have ranges of at least 100 miles per charge. Clean Fleet Report EV Test Drive

This article does not pretend to be a complete review of what is coming, rather a taste of what is here and what will soon be here from six major automakers. Given economic challenges, not all forecasts will happen. There will be surprises, more new models, and new model names. Not all plans will be executed as Chrysler deals with bankruptcy reorganization and as GM considers one.

Meeting the CAFÉ standards by 2016 will not be a slam dunk for all of the automakers, but they will make it. Historically, CAFE standards have not aligned with the EPA fuel economy determinations used in this article. For better and worse, flexfuel vehicles get artificially high numbers, making it easier for GM, Ford, and Chrysler to meet CAFE targets. Plug-in hybrid and EV ratings need to be finalized. To meet fleet average requirements, cars will need to average higher than 35.5; light-trucks and SUVs lower.

Trends to more efficient drive systems are a certainty. With oil prices now close to double the recent lows of earlier this year, these new vehicles bring important relief to every driver who wants to save at the pump.

John Addison publishes the Clean Fleet Report and details the future of transportation in his new book Save Gas, Save the Planet.

If Larry King Wrote My Column....

2009-05-18T13:06:00.000-07:00

by Richard T. Stuebi

You heard it here first: the energy consultancy Douglas-Westwood is claiming in a May 11 white paper that “peak oil” may have already happened, as far back as October 2004, and that the oil price boom followed by economic collapse is indicative of how things will play out over the decades to come as oil supplies are unable to expand in the face of increasing demands. Stay tuned....

The American Wind Energy Association (AWEA) exposition WINDPOWER 2009 attracted 23,000 attendees to Chicago earlier this month. Glad AWEA didn’t ask me to do the headcount!....

Your stock portfolio isn’t the only thing that’s plummeted. According to a snippet in the March 2009 issue of Power, so too have PV prices fallen, by an estimated 10% since last October, with a further 15-20% decline expected in the coming year. Seems that, after several years of tight supplies, there’s now a glut in the market, due to collapsing demand in Europe....

Lots happening in DC these days. Looks like cap-and-trade requirements for carbon dioxide emissions are making real progress, embodied in the grandiosely called “The American Clean Energy and Security Act” (H.R. 2454) -- better known as the Waxman-Markey bill. Cap-and-trade might even pass the House sometime this summer. Don’t think it’s going to be so easy in the Senate, though....

The U.S. Department of Energy (DOE) has created ARPA-E, to fund the initial evaluation of new whiz-bang ideas for energy, just like DARPA’s been doing for out-of-the-box defense gizmos for decades. One can only imagine what's going to come out of that shop in years to come....

It also appears that the e-DII concept floated by Brookings earlier this year, to create Clean Energy Innovation Centers mainly affiliated with universities, is gaining traction, now having been tucked into the Waxman-Markey bill. Wonder what the national research labs, such as NREL, NETL, ORNL, LBNL and other alphabet soupers, think of this?....

Speaking of NREL, hats off to Joel Serface, who just completed a year’s residence there on behalf of uber-VC firm Kleiner Perkins to help accelerate technology commercialization and spin-outs from the lab. A year in Golden/Boulder is hardly hardship duty, but as Joel indicates in a recent post at this very CleanTechBlog site, it wasn’t enough time to make much of a dent in the bureaucracy....

Congratulations to my former colleague Cathy Zoi, who’s been tabbed by President Obama to lead the Office of Energy Efficiency and Renewable Energy at DOE. Wish her good luck: she’ll need it!....

Let’s hear it for Joseph Romm, now a Senior Fellow at the Center for American Progress. He calls ‘em like he sees ‘em. In a note in the May/June Technology Review, Romm claims “it’s not possible to have a sustained economic recovery that isn’t green” and calls our economic system a “global Ponzi scheme: investors (i.e., current generations) are paying themselves (i.e., you and me) by taking from future generations.” Whew!....

The U.S. Chamber of Commerce just released a study performed by Charles River Associates estimating 3 million jobs to lost in the U.S. by 2030 as a result of climate change legislation. Last year, the Chamber commissioned a similar study announcing a similar doom-and-gloom result. I’m not saying there won’t be job losses as a result of cap-and-trade – there certainly will – but I don’t think it’s going to be apocalyptic either....

Gotta hand it to Bob Galvin, former Chairman of Motorola. Not content to be retired, he has launched the Galvin Electricity Initiative to promote a “Perfect Power System” to help prevent future blackouts. In a sense, he’s trying to Galvinize the grid....

Last Wednesday evening, the Cleveland Chapter of the American Jewish Committee honored The Cleveland Foundation for its advanced energy initiative. Accepting the award on behalf of the Foundation was President and CEO Ronn Richard. A good time was had by all....

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director of Early Stage Partners.

Biofuel Industry Hopes to Recover with Next Generation Fuels

2009-05-15T08:41:00.000-07:00

By John Addison. Scientists know how to make fuel from prairie grasses growing on marginal land. They know how to make fuel from fast growing trees with root systems that extend 25 feet into the ground, sequestering carbon emissions and enriching the soil. They even know how to make fuel from algae. They do all this in their labs every day. The problem is making cellulosic and algal fuel in large quantities at costs that compete with fuels from petroleum such as gasoline, diesel, and jet fuel.

This is my second article (previous article) from the 31st Symposium on Biotechnology for Fuels and Chemicals sponsored by NREL. 800 global bioscientists gathered in San Francisco to share their research and showcase their progress.

Their progress with biofuels from cellulosic sources is important. Some corn ethanol plants have closed. Once promising corporations, such as VeraSun, are now bankrupt. Lifecycle greenhouse gas emissions for fuel-from-food are being scrutinized. Industry would benefit from biomass that can be grown at much higher yields per acre than corn. Industries such as agriculture, wood, and paper would benefit from making money from waste and from having added revenue sources.

At the conference, Verenium (VRNM) shared their progress. In Jennings, Louisiana, they are producing 1.4 million gallons per year of cellulosic ethanol. The fuel can be mixed up to 10 percent with our current gasoline, saving us from needing almost 1.4 million gallons of foreign oil each year. Some might be delivered as E85. Instead of using corn, which requires high inputs of energy, nitrogen, fertilizer, and water to produce, Verenium is using a crop that produces eight times the energy required to process it – energy cane, a hybrid of sugar cane optimized as a fuel source not a food source.

Sugarcane and energy cane are part of Brazil’s energy independence, being the source of over 40 percent of their fuel. Now energy cane is being grown in some of the more tropical places in the United States. At a time when project financing is difficult, major partners are critical to financing larger commercial plants. In a joint-venture with BP, Verenium plans to build a 36 million gallon per year plant in Florida.

Dr. Stuart Thomas with DuPont Danisco Cellulosic Ethanol (DD, DNSCY.PK) outlined their plans to bring a 20 million gallon per year plant on line in 2012. They are evaluating non-food feedstocks with much higher yields per acre than corn, including switchgrass and sorghum. DuPont Danisco anticipates reaching parity with $60 to $100/barrel oil by 2015. The pilot plant will be in Tennessee which is providing $70 million of funding for ethanol from switchgrass.

The long-term potential for biofuels may not be in ethanol, but in renewable gasoline, biodiesel, bio-jet fuel, and biocrude. All contain more energy than ethanol, which only delivers 84,000 BTU/gallon. Gasoline delivers 114,000; biodiesel 120,000.

With better microbes and fewer process steps, Chief scientist Dr. Steve del Cardayre with LS9, presented plans to produce industry standard biodiesel from energy cane. The plant should be able to compete with oil at today’s prices by also producing other valuable outputs, such as chemicals which can be used to make detergents. Synthetic biology competitor, Amyris, is moving even faster in building process plants to convert energy cane into renewable hydrocarbons and bio-jet fuel.

Indeed, creating multiple products from a process plant is likely to be critical to having a profitable industry. Oil refining is profitable because fractional distillation creates many valuable products at one refiner:

· Naphtha which can be processed into chemicals and plastics
· Gasoline
· Jet fuel
· Diesel
· Heavy oils which can be processed into lubricants and asphalt

Gevo will build plants with mass efficiency of over 40 percent that can produce multiple products including:
· Bio-jet fuel
· Bio-diesel
· Isobutanol for other products

Gevo sees opportunities to buy existing moth-balled ethanol plants and retrofit for $30 million per plant, a fraction of building a cellulosic plant from scratch. Gevo’s yeast fermentation process produces heat and steam which would be valuable if co-located with industrial processes that benefit from combined heat and power.

By converting wood waste to next generation fuel, Mascoma has a significant potential to co-locate with existing paper mills and wood processing operations. The same is true for Range Fuels.

Enerkem is being paid to covert municipal solid waste into fuel as it targets 2011 to bring live a 9.6 million gallon per year plant in Edmonton, Canada, and a 20 million gallon per year plant in Pontotoc, Mississippi.

Beyond the cellulosic sources for fuel, covered in this article, is the potential for fuel from algae. A future article will examine the near-term challenges and long-term potential of algal fuel.

As this Symposium took place in California, in Copenhagen, Greenpeace protesters stopped all buses because they use biofuel from food sources. In the future, they may welcome biofuel from wood and waste sources as an alternative to gasoline from tar sands and jet fuel from coal.

This December, the leaders of the world will gather in Copenhagen, Denmark, to develop a framework for a more promising sustainable future. In Denmark they will be able to visit a new cellulosic ethanol plant developed by Inbicon. The feedstock will be an agricultural waste product - wheat straw. The plant will process 24 metric tons per day of wheat straw, ten times more than a demonstration plant that Inbicon only a few years ago. The plant will be more efficient and come closer to competing with refined oil because the operation will have three products creating three revenue streams:

1. 5.4 million liters ethanol year
2. 8,250 MT biofuel which will displace some coal used by a power plant
3. 11,250 MT of molasses which will be used to feed cattle

Can such operations displace all our need for petroleum? No, but in five years we will see commercial scale next generation biofuel operations. If oil is selling for $100 dollar per barrel, then cellulosic biofuels may lower our cost of fuel. In ten years, all such operations could displace 20 percent of our petroleum use and represent an important step towards energy independence.

Cellulosic ethanol is not the only sustainable solution that world leaders will see in Copenhagen. They will see at least 40 percent of the population commuting on bicycles, demonstrating an immediate and very cost-effective way to reduce our need for oil. Many delegates will ride on electric light-rail from the airport and notice the wind farms that deliver the electricity. Some will ride in electric cars that further demonstrate transportation that uses renewable energy.

Next generation biofuels promise to be part of a portfolio of solutions to our current climate and energy problems.

John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book - Save Gas, Save the Planet - now selling at Amazon and other booksellers.

My Year as NREL’s Entrepreneur in Residence

2009-05-14T11:59:00.000-07:00

by Joel Serface

I just spent an amazing year at the National Renewable Energy Laboratory (NREL), but have no start-ups to show for it (yet).

A year ago, I was asked by Kleiner Perkins to be the first Entrepreneur in Residence (EIR) at NREL. As a person who has been into energy and environmental technologies since gradeschool and as an early cleantech investor, it was an opportunity of a lifetime to become the first NREL EIR. It was a fantastic time spent with some of the best cleantech researchers in the world. I felt like a kid in a candy store. I tremendously added to my depth and breadth of cleantech history and knowledge.

The program itself was a grand experiment that I commend the Department of Energy for attempting. DOE’s calculus was that if they inserted a serial entrepreneur/investor backed by a brand-named VC firm into a lab that magic would happen and that an innovation would turn immediately into a company. At worst, DOE would learn a lot about what it and its labs need to do better to in order to accelerate ideas to market.

In the 11 months that I had the privilege to work inside NREL, I met with more than 300 researchers, identified around 30 promising technologies that I thought could reach commercial potential over the next several years, and honed in on 3 technologies that showed imminent promise. Unfortunately, the EIR program was timed too short to reach its full potential and to get the first one of these ideas set up as a company.

When building a new program into a research institution, timing is critically important. Based on my experience running the Austin Clean Energy Incubator at The University of Texas, it took almost 11 months to start my first company. In 18 months, I had helped start 5 companies. In total, these companies raised more than $200 million, but none surpassed KP’s investment hurdle.

When I agreed to become NREL’s EIR, I set the expectation with DOE, NREL, and KP that starting a company that KP would back within one year should not be expected. While there are a tremendous number of opportunities for commercialization at NREL, they need to temporally match a VC firm’s thesis, meet its perceived portfolio needs, or surpass its hurdle for innovation. Given enough time, many of the 30 technologies described above could be built into companies, but not necessarily into ones KP would fund over the period of the EIR Program.

A more reasonable expectation for all was to use this program to begin developing long-term relationships with VCs and start-ups that helped the lab and DOE develop better tools and processes. If successful, this could help NREL deliver more companies or successful collaborations for the entire industry. With this approach in mind, there were many things learned by all parties that could benefit the entire venture capital and start-up industry. Here is what I learned…

First, NREL truly is “The National Renewable Energy Lab”. There is more breadth and depth of renewable energy and energy efficiency knowledge at NREL than any other institution on the planet. This alone is worth the price of admission. Unfortunately, the admission price has never been posted and there have only been secret alley entrances with secured doors to gain access to the lab. The lesson here is that new interfaces need to be developed by the lab to better expose its collective knowledge and translate it to the marketplace more effectively (thus EIR and other programs).

Second, the value in NREL is not just in its innovation, but more importantly in the value it can deliver across the life cycle of a technology…

Innovation – Yes, NREL has a great pool of researchers and ideas. They also have a network of other labs and universities they collaborate with (MIT, Stanford, University of Colorado, etc.). They will also soon be the hub of all DOE renewable energy intellectual property by managing DOE’s IP Portal.

Acceleration – NREL’s experience allows them to solve critical issues for external technologies and companies. Success stories abound from NREL helping First Solar, Uni-Solar, Clipper Wind, and many others. Identifying new ways to open up NREL to solve critical issues in start-ups is critical to the VC industry.

Analysis – NREL has a large division that does market, techno-economic, scaling, integration, policy, and plant design analysis. This primarily is developed for DOE and Congress (which really does not take advantage of this tremendous asset), but needs to be exposed to the financial services and venture capital sectors. I would encourage any thesis-driven VC firm or investment bank to review the work that has already been delivered by NREL.

Testing / Validation – NREL provides the service of testing all flavors or renewable energy, storage, transportation, building, and energy efficiency technologies. They even integrate multiple technologies as systems and perform accelerated testing. NREL’s validation not only helps get products designed into projects, it also provides critical feedback for future development.

Deployment – NREL has a cities and states program that helps advise on local policies, design parameters, and integrated solutions. NREL will increasingly be involved in regional test and implementation centers that will help scale technologies into cities and integrated pilot facilities.

Finally, NREL will only get better; now is the time to begin forging long-term relationships with them. With additional funding, increased DOE support, stronger linkage to national priorities, and new management focused on commercialization and market needs, NREL will deliver increasing value to the cleantech community. By becoming more intertwined with our imminent national priorities and community needs, the lab will increase its “NRELevance” in our nation’s day-to-day existence.

So, what next’s next for the NREL EIR? Over the short run, I will help deliver a national energy efficiency initiative focused on schools with the help of NREL. I will also continue supporting NREL as an entrepreneur/investor and as an advocate of the lab’s potential. I will also continue nurturing the many wonderful relationships I began forging through this program. And, yes, there will be start-ups forthcoming, unfortunately not within the short period of the EIR Program.

Thanks again to DOE, NREL, and KP for inviting me into this unique and invaluable experience. I hope that my time at NREL has made a difference there. If NREL is successful with its new management team and tools, then the entire cleantech community and nation will benefit.

Joel Serface served as NREL’s first Entrepreneur in Residence with Kleiner Perkins Caufield & Byers. As an investor and entrepreneur, Joel has planted cleantech seeds in Massachusetts, California, Texas, and now Colorado. Since 2000, Joel has started or invested into more than 20 cleantech companies with 5 liquidity events so far and has catalyzed the formation of numerous supporting cleantech institutions and regional and national policy initiatives.

Thank Goodness for Contrarians

2009-05-11T12:22:00.000-07:00

by Richard T. Stuebi

One of my favorite bumper-stickers of all-time reads "My Karma Ran Over Your Dogma".

In addition to being a wonderful word-play, the one-liner reflects my deep disdain for those who are far-too-certain of their positions -- whatever their positions may be. I haven't done any statistical analysis, but I often find that the strength of people's opinions is inversely correlated with their knowledge of the subject.

So, it's actually a service to be reminded by intelligent people offering alternative views with substantial supporting evidence that what we think we really know may not actually be truth.

In the energy realm, I've encountered a number of articles by or about very accomplished and expert individuals who don't subscribe to conventional wisdom.

For instance, in late March, the Sunday New York Times Magazine ran a provocative article called "The Civil Heretic", profiling the Princeton mathematician Freeman Dyson, who has been the subject of significant and hostile criticism for suggesting (as has Bjorn Lomborg, author of The Skeptical Environmentalist) that too much concern is being paid to the phenomenon of climate change.

On the oil front, Ruchir Sharma, the head of emerging market research at Morgan Stanley (NYSE: MS) wrote an article in the April 20 Newsweek entitled "If It's In the Ground, It Can Only Go Down". Sharma doesn't buy the peak oil theory, and argues that the long-term trend of declining oil prices will re-emerge.

Even if you disagree with their positions, you can't say that they are stupid people. There are grains of truth in their arguments that we are all well-served to recognize and embrace.

As stated so beautifully in The Tree of Knowledge by Humberto Maturana and Francisco Varela:

"The knowledge of knowledge compels. It compels us to adopt an attitude of permanent vigilance against the temptation of certainty. It compels us to recognize that certainty is not a proof of truth. It compels us to realize that the world everyone sees is not the world but a world."

We must be honest with ourselves in admitting that the future is not knowable with certainty in advance, and that all projections can at best be only grounded speculations. Being confronted by obviously smart and wise people who hold different views than ours about the future is a good exercise in humility for all of us. If we respond thoughtfully to considerate alternative views, we are driven to re-examine our own thinking and logic, and strengthen or alter it accordingly.

Biofuel Industry – No Money, No Respect

2009-05-11T09:35:00.000-07:00

For the moment, the price at the pump is reasonable. A spike in demand or a terrorist disruption, however, will quickly remind us that we are desperately dependent on oil as we continue to consume 140 billion gallons of gasoline per year. Even in these recessionary times of moderate demand, we are running out of easy to extract oil from dessert sands. We are turning to sources of unconventional oil, such as tar sands in Canada, to produce oil with ever increasing greenhouse gas emissions.

For a while corn ethanol looked like a promising way to end our addiction to oil. Now we are like the character in a Woody Allen comedy who explains, “I used to be a heroin addict; now I’m a methadone addict.” At a time when a billion people go hungry, many as a result of disappearing water on this heating planet, fuel from food is not the answer.

Needed is fuel from wood and waste, not food and haste. Some of the world’s best minds are focused on fuel from cellulosic and waste sources, in some cases from biological sources that remove CO2 from the air and enrich depleted soil. I am writing this article from the 31st Symposium on Biotechnology for Fuels and Chemicals sponsored by NREL. 800 global bioscientists have gathered in San Francisco to share their research and showcase their progress.

Many at the conference expressed concern and discouragement. Companies that were once darlings of Wall Street have gone bankrupt. Dozens of ethanol plants have closed as oil prices dropped. Many promising second generation plants cannot get built due to lack of project financing. People with the money see the risk as too high.

There continue to be zero commercial scale (20-million gallon per year and bigger) cellulosic ethanol plants, despite past glowing press releases that declared that they would now be running.

The biofuels industry is also under attack due to food-from-fuel and land use issues. Over one billion people are hungry or starving. Agricultural expert Lester Brown reports, “The grain required to fill an SUV’s 25-gallon tank with ethanol just once will feed one person for a whole year.” Scientific American: Could Food Shortages Bring Down Civilization?

Europe, now California, and soon many U.S. states, now insist that land use must be considered in evaluating biofuels.

During the middle of the conference, a workshop for the media was held. The theme of the workshop quickly became clear - the industry problems were the fault of regulators and we the press.

Professor Bruce Dale, Michigan State University, dismissed corn/soy land use change as an “emotional issue.” He continued, “The California Low Carbon Fuel Standard is intellectually bankrupt.” To demonstrate the flaw of land use, he stated that replacing a gasoline powered vehicle with an electric vehicle would only increase the demand for coal power and therefore do nothing to reduce greenhouse gases.

The example is quite flawed. Automakers consistently tell me that their gasoline powered vehicles are about 15 percent efficient and their electric vehicles are 60 to 70 percent efficient. EVs need much less energy. Even if you could find an EV powered purely with coal, it would produce less lifecycle emissions than a comparable gasoline or corn ethanol fueled vehicle. According to the latest figures published by the U.S. Energy Information Administration (EIA), non-hydro renewable sources of electricity enjoyed double-digit growth during the past year while coal was down by 1.1 percent. Incremental demand for electricity is bringing more renewable energy on-line.

In fact, the California Low Carbon Fuel Standard (LCFS) is based on the peer-reviewed work of scientists using Argonne National Labs GREET model. The work, industry comments, and findings are all available at http://www.arb.ca.gov/fuels/lcfs/lcfs.htm

The LCFS encourages the reduction of greenhouse gas emissions per unit of energy delivered to the wheels of vehicles. The scientific analysis behind the LCFS includes these examples of grams of CO2e emissions per mega joule of energy:

Ø Gasoline Oil Refined 92
Ø Diesel ULSD Refined 71
Ø Diesel Coal-to-Liquid 167
Ø Biodiesel Midwest Soy 30
Ø Ethanol Corn with Coal Electricity 114
Ø Ethanol Cellulosic from Poplar Trees -12
Ø Electricity California Average 27

If the biofuels industry sees a future in biodiesel and cellulosic ethanol, the industry should be encouraged by the findings of the scientists contributing to the LCFS. On the other hand, if the industry is only betting its future on corn ethanol, then the regulation is a threat.

LCFS will not help the expansion of E85 stations for flexfuel vehicles. For the 2009 model year, the best rated car running on E85 in the United States was the Chevrolet HHR, with a United States EPA gasoline mileage rating of 26 miles per gallon, and an E85 rating of only 19 miles per gallon – and that’s the best from Detroit with mileage on all other U.S. flexfuel vehicles being worse. In other words, if you passed on using E85 and drove a hybrid with good mileage, you would double miles per gallon and produce far less greenhouse gas emissions than any U.S. flexfuel offering. Top 10 Low Carbon Footprint Four-Door Sedans for 2009

While the press was being scolded and air regulators were being metaphorically burned at the stake, most conference attendees had an afternoon to enjoy San Francisco. Many traveled using electric-powered buses and the hydro powered BART rapid transit system that carriers 100 million riders annually. So much for the press conference dismissing electric powered transportation as not being feasible.

Although attacking regulators, environmentalists, and advocates for the hungry will not save the biofuel industry, the federal government may save it. As the conference unfolded in California, a major announcement was made in Washington, DC, by U.S. Secretary of Energy Steven Chu when he announced that $786.5 million would be made available to accelerate advanced biofuels research and to help fund commercial-scale biorefinery demonstration projects.

One irony for the biofuel industry is that as oil prices increase, their economic model improves, but consumer demand for fuel moderates as consumers drive fewer miles, use more public transportation, and soon switch in growing numbers to electric vehicles. For decades, however, fuel will be in demand for many passenger vehicles, heavy-vehicles, long-distance goods movement, ships and airplanes. The opportunity is ripe for delivering fuel with lower lifecycle emissions. Promising cellulosic biofuel companies will be covered in my next article.

John Addison publishes the Clean Fleet Report. He is the author of a new book about the future of transportation – Save Gas, Save the Planet.

Director of Congressional Bugdet Office on Cap and Trade

2009-05-11T08:10:00.000-07:00

A couple of days ago the Congressional Budget Office Director Douglas Elmendorf wrote about his Senate testimony on cap and trade revenue redistribution on his blog late last week. Worth a quick read, the main text below. The full 28 page testimony is linked in his note. It's worth noting that the homepage of the CBO has a climate temperature chart on in front and center this week.

"Testimony: The Distribution of Revenues from a Cap-and-Trade Program for Carbon Dioxide Emissions

I testified this morning before the Senate Finance Committee on the distribution of revenues from a cap-and-trade program for carbon dioxide emissions. My comments emphasized these points:

A cap-and-trade program would lead to higher prices for energy and energy-intensive goods, which would provide incentives for households and businesses to use less energy and to develop energy sources that emit less carbon dioxide. Higher relative prices for energy would also shift income among households at different points in the income distribution and across industries and regions of the country. Policymakers could counteract those income shifts by using the revenues from selling emission allowances to compensate certain households or businesses, or by giving allowances away.

In distributing the value of the allowances, policymakers have a wide range of options but face trade-offs. For example:

If allowances were auctioned, some of the revenue could be used to fund climate-related research and development. This approach might reduce the cost of transitioning from a high carbon emissions economy, but it would not provide any immediate help to affected industries or households.
Instead, auction revenue could be used to reduce existing taxes on capital or labor. This could lessen the overall economic cost of restricting emissions but would do little to offset the burden that higher prices would impose on certain industries or households.
A different approach is to use the revenue to give rebates to low-income households, perhaps using the tax system. This would lessen the burden on these households but not trim economy-wide costs.
Alternatively, allowances could be given away for free to certain industries. Giving away allowances is generally equivalent to auctioning the allowances and giving the proceeds to the same firms. Giving allowances to energy-intensive manufacturers would not, by itself, hold down the price of their output, which would rise to reflect the private market value of the allowances. The result could be windfall profits for these firms, which would tend to benefit higher-income households who own most stocks. However, if receipt of free allowances was tied to future production or employment, then prices would not rise as much as otherwise. At the same time, because these firms would not reduce emissions as much as they would have without free allowances, other sectors of the economy would have to reduce emissions by a larger amount to meet the overall cap."

Neal Dikeman is a partner at cleantech merchant bank Jane Capital Partners and Chairman of Carbonflow, Inc. and Cleantech.org.

REDD – The Basis of a “Carbon Federal Reserve”?

2009-05-08T15:16:00.001-07:00

Avoiding tropical deforestation - or REDD (Reducing Emissions from Deforestation and Degradation) in the parlance of the emerging policy dynamic - is the most mind twistingly complex endeavor in the carbon game. The fact is that REDD involves scientific uncertainties, technical challenges, heterogeneous non-contiguous asset classes, multi-decade performance guarantees, local land tenure issues, brutal potential for gaming and the fact that getting it wrong means that scam artists will get unimaginably rich while emissions don’t change a bit. You can understand why back in 1997 in Kyoto everybody threw their hands up and just decided this was too hard to try.

But the unfortunate failure to ascribe any economic value to living carbon storage means that forests – mainly tropical – still account for 20% of the world’s emissions annually, about the same as either the US or China. In other words, since Kyoto, tropical forests have fully contributed 2.5 years total of global emissions. That’s a tragedy of unspeakable dimension – and right now it seems the only thing that will slow it is when we actually run out of trees to cut down. Which is apparently not out of the question.

I’vehad the opportunity to think about REDD a lot in the last week. Last weekend, I got invited to the UN to participate in the Forest Dialogue’s (http://research.yale.edu/gisf/tfd) two-day session on REDD financing mechanisms, together with the breadth of interests that define the immensely complex issues around tropical forest resources. Sitting around a table with everybody from indigenous peoples groups, the World Bank, industrial foresters, Conservation International to some governments gives you a good view of how complex the issues and different perspectives really are.

At the Tribeca Film Festival a day later, I saw “The Burning Season” -www.theburningseasonmovie.com - a documentary that followed my friend Dorjee Sun and his start-up company Carbon Conservation on his year-long quixotic journey around an endless planet of boardrooms, plane rides and hotel banquets. All to save crucial forestlands in Aceh, Indonesia, through the sale of avoided deforestation carbon credits, which are currently unrecognized by the Kyoto world. It’s a moving and challenging piece juxtaposed against scenes from an orangutan rescue center overwhelmed with orphans from the forest carnage and the struggles of a local farmer seeking to feed and educate his family at ground zero of the controversy– I highly recommend it.

And then in Washington on Thursday, I was invited to celebrate the 10 year anniversary of one of the most effective and under the radar organizations you’ll ever come across – Forest Trends (www.forest-trends.org). If you don’t know who they are – you should. When Jonathan Lash and Al Gore drop by to give the keynote of thanks of your celebration dinner, you’re certainly doing something right.

When you look at the McKinsey climate wedges or the Stern Report on the needed forward curve for atmospheric stabilization, its blindingly obvious that REDD’s 20% of current GHG emissions has to be part of the solution. And the sooner the better- it’s an asset that is diminishing right in front of our eyes. At the same time, despite its immediate potential, REDD is not a panacea to the climate issue, getting to the required 80% global emissions reduction by 2050 is going to take multiple technology step-downs of heroic proportions. We need to transition major chunks of the global economy to CCS, hydrogen, plug-in hybrids running on next generation biofuels, hyper efficiency, new waves of renewables, nuclear and maybe even fusion. Who knows – but no matter what, it’s a big nut to crack. At best, REDD is only a fraction of that need. Which means we have to weigh our desire for immediate REDD and its ancillary benefits against our desire to accelerate technology development and uptake.

This is where REDD is potentially problematic. Given REDD’s 7 billion ton per year current emission baseline, a one percent shift in REDD emissions per year potentially puts 70M tones of emission credits into the system. To give some perspective, in the current supply and demand balance driven by the EU Trading scheme, that 70M tones per year alone would have dramatically impacted the price for a ton of emission rights. Approximately 4% per year of REDD would have equaled the entire production of the CDM in the Kyoto period. Now contrast against the goals of the Stern Report which sets out a target of reducing REDD by 50% within a decade.

If we were even fractionally successful with that goal, an enormous supply of emission rights might enter the market. If demand were not precisely calibrated to absorb that supply at the right time, the value of emissions would plummet, meaning that a fundamental driver for developing and implementing crucial low carbon technology would disappear.

The problem is that while there are long term aspiration goals for emission reduction (80% reduction by 2050 being a generally accepted target), the transition to that point involves a continually complex calculus of political will and gamesmanship. And with REDD’s potential range of supply ranging from zero to 3.5B tones per year, setting the short term demand curve exactly right is virtually impossible. Set it too high and if REDD underdelivers, we crater the economy. Set it too low and if REDD performs – we set back the economic drivers for emission technologies a decade or two.

Now, admittedly, that kind of runaway success is unlikely and if we truly succeed in rapidly halting deforestation’s advance, well, that is not a bad problem to have. However, one must always beware of policies with unintended consequences and this is one where I certainly see that potential, whatever its likelihood may be.

So, the irony is, we can neither afford to do - or not do - REDD under current thinking and parameters. But we need to be thinking about the future. Even after the US joins the carbon constrained world, emissions will be managed across fewer than 1 billion people. By 2050, it needs to be managed across virtually the entire global economy. Those transitions to greater carbon engagement will be an immense challenge. Every time a new country agrees to be capped - or a capped country ratchets its commitment downward - there is potential for market demand dislocation.

And that’s where I think near-term REDD may play a role. What if industrial governments and the private sector aggregated TARP-like funds – tens or hundreds of billions of dollars - to compensate developing countries and/or private groups within them for immediate and sustainable REDD on a cost-plus basis, as derived by the tonnage of carbon kept out of the atmosphere. We’ll pay a fixed, below market rate today but rather than dropping all that tonnage into the market immediately, it will be held in a global reserve that would enter the market at various points in the future (via a Board of Governors?) when demand/price for emission rights is undergoing a spike, due to new emitters join the cap or when major emission step downs occur (say when the US goes from 20% to 30% reductions). Private investors in such a fund would get a bond-like return – preferably tax free - and the differential between the price paid to the developing country per ton at the outset and its eventual price at release (after interest) into the market would be split in some fashion between the providers of the carbon and the providers of the capital. Seller countries might even get some kind of preferential access to their own credits, to incent them to come under a cap sooner rather than later.

The challenges around executing this are immense and it’s clearly not necessary if REDD only achieves a fraction of its potential. If it does not achieve that potential rapidly, we will have almost certainly lost the remainder of the world forests. It does seem to me that a “Federal Reserve” is one way to solve the conundrum of keeping as much forest carbon on the ground as possible while not allowing its potential market overhang to disincentivize technology development and implementation. But having started fifteen years ago in the forest carbon space and after seeing the same arguments reiterated again and again while the forests of the world have been felled and burned, the honest truth is that we have no time to waste.

Marc Stuart is the Co-Founder and Director of New Business Development for EcoSecurities, a global carbon trading firm. the views expressed in this blog are his own and do not necessarily represent the views of EcoSecurities