California Tradable RECs – Will They Ever Materialize? August 4, 2010
Posted by cleantechorg in California, cleantech, RECs, renewable energy.add a comment
by David Niebauer
California has led the nation in solar development on many fronts for a number of years, but there is one area where California has lagged significantly – the implementation of tradable renewable energy certificates (or TRECs).
As of this writing, there are five regional renewable energy tracking systems operating in North America, one national registry and three state systems. As early as June 2007, the California Energy Commission launched the Western Renewable Energy Generation Information System (WREGIS), which was designed to track renewable energy generation and create and track renewable energy certificates (RECs) for that generation. TRECs are an important tool for utilities in other states striving to meet their renewable portfolio standard (RPS) goals and help developers finance renewable energy projects in other parts of the country where TRECs are available. So why not in California?
The Basics
In California RECs are not yet tradable – all electric utility renewable energy purchases are “bundled” transactions. That is, the environmental attributes (e.g., RECs) are tied to, or bundled with, the energy itself. Therefore, the only way for utilities to comply with RPS requirements is to purchase renewable energy in bundled transactions from a qualifying renewable energy facility.
In States with unbundled or tradable RECs, electric utilities have two ways to meet with RPS goals: purchase renewable energy in bundled transactions (like in California) or purchase RECs on the open market. In States with TRECs the REC has been “striped” from the energy and is traded separately. The energy is sold separately and is still supplied to the grid. The utility purchasing the REC may be and likely is completely different that the purchaser of the energy. Only the REC purchaser can count that energy toward its RPS goals.
Proponents of tradable RECs point out that the scheme will assist the State in achieving its RPS goal by balancing out geographical and transmission constraint differences from utility to utility. In California, for example, the State as a whole has considerable renewable resources, from geothermal to wind to solar – but these resources are not evenly distributed geographically throughout the State. Further, some areas with strong renewable resources have significant transmission constraints, making grid connection prohibitively expensive. A tradable REC regime would allow resources to be developed where cost and fit are most appropriate, and allow the environmental attributes (the RECs) to be traded among the utilities (and through intermediaries) to balance out these geographical and transmission constraint issues. As stated in the April 2006 California Public Utilities Commission (CPUC) Staff White Paper: “Importantly, under an unbundled and/or tradable REC framework, [a utility] can purchase RECs from renewable facilities largely irrespective of where those facilities are located or where the energy is ultimately delivered.”
From the energy developer’s perspective, RECs can provide an advantage for developing renewable energy sources. The ability to sell RECs in an unbundled transaction would mean that a developer would be able to negotiate with any utility or other buyer of RECs, rather than negotiating with only one utility in a bundled transaction. In states with TREC developers contract with one utility to provide energy at a relatively low cost and then sell the RECs to another utility or other buyer to enable his project to be economically viable. Where the developers must sell the energy and the REC to the same utility, the price of the energy might be too low to justify development. For this reason, tradable RECs can be a way to speed the development of renewable generation.
The California Log Jam
California has been taking slow, halting strides in the direction of permitting tradable RECs. In 2006 the California legislature passed Senate Bill (SB) 107, which gave the CPUC express authority to allow the use of tradable RECs for RPS compliance.
Three and half years later on March 11 2010 the CPUC issued a decision authorizing TRECs for RPS compliance in California (Decision10-030-021). The proposed scheme had a number of limitations but appeared to be a workable model. Most notable of the limitations was a maximum cap for IOUs of 25% of RPS compliance targets that could be met with TRECs. This limitation was to last only until the end of 2011 and was intended as a way to monitor the program before allowing unfettered use of TRECs. The other significant limitation was a price cap of $50 per REC. Again, this limitation was scheduled to expire at the end of 2011 unless the CPUC determined to extend the cap at that time based on further market studies.
The CPUC decision was made after conducting numerous workshops and receiving comments from interested parties. However, the entities that would have been most impacted by the Decision were not at all happy with the final outcome. Notably, the State’s IOUs and the Independent Energy Producers Association (IEP), whose members make up most of the merchant power producers in the State, filed objections and forceful motions to stay the decision. Prior to its implementation on May 6, only a few weeks after issuing the Decision, the CPUC granted an indefinite stay of Decision 10-03-021. This stay in still in effect.
The reasons for the stay, and the larger implications, are not at all clear. On its face, the stay was implemented in order to resolve objections raised by the IOUs and the IEP. Neither party liked the 25% limitation on use of TRECs to meet RPS requirements. Further, the IOUs, in particular, argued that the CPUC’s definition of a REC-only transaction would limit access to most out-of-state renewable resources, making implementation the TREC scheme unworkable.
Commissioner Grueneich’s Dissent
Commissioner Dian M. Grueneich filed a dissent to the stay that may shed some light on what is really going on. Commissioner Grueneich focused on the motion by the IOUs and claimed that the modifications urged by the IOUs would cause the “outsourcing of California’s renewable economy.” She points out that nothing had changed in the 60 days or so between the Decision and the Stay other than “the relentless lobbying by the utilities at this Commission and in Sacramento to overturn a decision they dislike.”
She continues:
“Since the RPS mandate was first signed into law, one message that has been repeated again and again from developers, from investors and from members of this Commission itself, is that market players need certainty and consistency in decision making in … order to make long term investments in California. This decision will disrupt renewable energy markets, threaten financing for existing and future projects, and compromise the careful work of the Governor’s office to ensure that renewable energy projects obtain their CEC permits and break ground expediently.”
Conclusion
Perhaps this is the (cynical) goal of the IOUs: to entangle the entire RPS movement in delay and uncertainty so that their own foot-dragging can be explained away and excused. Without clear guidance on a TREC program, the argument might go, how can they be expected to meet the State’s aggressive RPS goals? The IOUs have a long way to go to even comply with the 2010 RPS requirement of 25% renewable generation. In 2009, the IOUs collectively served 15.4% of their load with renewable energy. The CPUC estimates that the IOUs are expected to be at about 18% in 2010 and 21% in 2011 – assuming that existing contracts can be converted into operating facilities within that timeframe.
Or it may just be a bureaucratic quagmire that still requires time to work out. After all, the IOU’s fundamental argument in support of the stay, that out of state bundled transactions should not be defined as REC-only transactions and counted toward the 25% cap, makes sense.
California needs to get this right. Whatever system gets developed in California will be followed by other states, especially those in the WREGIS System, so a region-wide system must be supported by the final CPUC decision. We need a workable final decision soon so that we can move forward on the larger goal of lowering greenhouse gas emissions and building a truly sustainable energy infrastructure.
David Niebauer is a corporate and transaction attorney, located in San Francisco, whose practice is focused on clean energy and environmental technologies. www.niebauer.net.
Nissan LEAF and Chevrolet Volt Test Drive Comparisons August 3, 2010
Posted by cleantechorg in Chevy Volt, electric cars, GMGMQ.PK, Nissan (NSANY), plug-in hybrids, test drive.2 comments
By John Addison (8/3/10)
Chevrolet Volt – Test Drive of an Extended Range Electric Vehicle
My test drive of the Volt demonstrates that Chevy is ready to take orders. I settle behind the steering wheel, feel comfortable in the bucket seat, and am impressed with the display behind the wheel, and the 7-inch navigation screen. The Volt looks and feels high-tech.
In 4 laps around a mile test drive loop that included sharp turns and straightaway. While driving, I was able to try the three modes of the car with a push of the button. In Normal mode, the Volt always stayed in the quiet electric mode that gives this 4-door sedan a 40 mile electric range before engaging its 1 liter gasoline engine to provide 300 extra miles of range, depending on driving conditions.
In Sport mode the Volt accelerated faster than I would need to enter any freeway, or pass another car on a country rode. In Sport, the Volt accelerates zero to 60 in about 8 seconds; not as fast as the 4 seconds when I was in a Tesla, but faster than my Nissan LEAF test drive. The Volt had a sporty feel navigating tight corners.
My drive is with Tony Posawatz, Vehicle Line Director for the Chevrolet Volt and GE Global Electric Vehicle Development. Tony has over 100 Volts around the road across the country being put through final paces by GM engineers, and a few out being driven by everyone from President Obama, to big fleet managers, to tech journalists like me.
Chevrolet dealers are now taking orders for the Volt, starting at $350 per month, or $41,000 purchase. Thousands of orders are being made with Chevrolet dealers in launch markets for the 2011 Chevrolet Volt in California, New York, Michigan, Connecticut, Texas, New Jersey and the Washington D.C. area. Tony Posawatz said that he expects over 10,000 Volts to be delivered by the fall of 2011. Mr. Posawatz explained that by 2012, the Volt will also be available with a flexfuel engine that can support E85 ethanol blends, and an AT-PZEV.
Volt Test Drive and Vehicle Details
Nissan LEAF Test Drive of Pure Battery Electric Car
I shift the 2011 Nissan LEAF into its normal drive mode, touch the accelerator and start driving down the San Jose streets. The electric car is always silent. It only has an electric motor, therefore I never hear the sound of a gasoline engine.
The 5-door, 5-seat compact hatchback has plenty of room. Sitting behind me is an electric utility executive who is 6″5″. I did not need to move the driver seat forward; his legs are not pressing against my seat. If the car had 4 people his size, it would be a 4-seater, not 5. On our both of the split back seats can be lowered to carry lots of cargo, be it luggage, work equipment, or everything for your favorite sport.
Driving the car was a no brainer. The friendly joy-stick knob gives me the choices of P (park), R (reverse), N (neutral) and D (drive). Touch ECO for the electricity saving mode.
Nissan engineers have been working hard to get all the software controls ready for market. Acceleration, steering, and braking are smooth. Having driving two early prototypes, this time the LEAF felt ready for the average driver who wants the car to respond just like a conventional gasoline powered car. The car feels ready for delivery to the 17,000 who have made $99 deposits with Nissan.
The LEAF is designed for an average range of 100 miles on a full charge (LA4 drive cycle). Carlos Tavares, Executive Vice President of Nissan Motor explained that the LEAF range estimate varies widely with type of driving. When not running air conditioning or heating, 138 mile range is expected in leisurely driving with slow acceleration and slow stopping. Drive on the highway while running the AC during summer heat, and only expect 70 miles. Blast the heat during cold winter expressway driving, and only expect 60 miles per charge. Sustain 80 miles per hour uphill, and the range is even less.
I put the LEAF in ECO mode which provides about 10 percent more electrical range. Push the accelerator to the floor and I automatically leave ECO mode. To encourage electron-efficient driving, the dash board provides encouraging driving feedback. My telematics display grew lots of trees when I drove with careful acceleration and deceleration. Ford was the first with this type of display, growing leaves on cars like the Fusion Hybrid. So in a LEAF, you grow trees.
While driving, visibility was good in the front, side mirrors, and rear view. The LEAF has two large LCD displays, one behind the steering wheel, the other central on the dashboard.
LEAF Test Drive and Vehicle Details
Chevrolet Volt or Nissan LEAF
I am impressed with my recent test drives of the Chevrolet Volt and of the Nissan LEAF. The Volt can be leased for $350 per month; the LEAF for $349. If you buy, you can save over $8,000 with the LEAF which starts at $32,780; the Volt, $41,000. Buyers can benefit from a $7,500 federal tax credit, and tax credits in many states, the result of growing concerns about a nation damaged from oil spills, health problems, and energy security. Currently 95 percent of U.S. transportation is fueled by oil that is refined into gasoline, diesel, and jet fuel.
I would buy the Volt if I were still in previous position at Sun Microsystems covering several states. The Volt’s 40-mile electric range would be perfect for most days, and the plug-in hybrid would allow me to travel hundreds of miles when necessary, filling-up at the nearest gas station.
Now, however, the LEAF is a great fit for my wife and me. The LEAF’s 100 mile electric range exceeds our 40 mile range need. Living in a city, we are also two blocks from transit which connects to rail, and we are two blocks from car sharing. We are planning to save the $8,000 and buy the LEAF.
Both the Volt and LEAF will meet all the needs of millions as their sole car, and millions more as a second car in 2-car households. Both are roomy compacts, seating 4 and 5 in comfort. Both have backseats that can drop for comfort. Both offer the latest in safety, navigation, smart apps, and entertainment.
The best electric car choice depends on your needs. Investigate each and look for upcoming auto shows and tours in your city.
By John Addison, Publisher of the Clean Fleet Report and conference speaker. (c) Copyright John Addison. Permission to repost up to a 200 word summary if a link is included to the original article at Clean Fleet Report.
More Charge for Grid Storage August 2, 2010
Posted by cleantechorg in Batteries, energy storage, grid storage, smart grid.2 comments
by Richard T. Stuebi
While battery technology has been the subject of intensive focus for vehicular applications since the emergence of hybrid electric vehicles over the past few years, much less attention has been paid to batteries for the electric grid.
Although energy storage for the power grid offers great promise to augment the smart grid, facilitate more application of intermittent solar and wind generation and improve power quality, the costs of such technologies have generally been prohibitive relative to the economic benefits that they enable. Accordingly, grid storage has been relegated to a relatively small niche in the cleantech community.
That may be about to change.
In July’s issue of Intelligent Utility, Kate Rowland wrote an article entitled “No More Foot Dragging for Energy Storage?”, which begins with the following grabber: “Grid storage. You’re going to be hearing those words with increasing frequence in the weeks and months to come.”
In part, this is because Senators Jeff Bingaman (D-NM), Ron Wyden (D-OR), and Jeanne Shaheen (D-NH) in mid-July introduced the Storage Technology of Renewable and Green Energy Act of 2010 (S.3617), or more pithily known as the STORAGE Act.
The gist of the STORAGE Act is to make available $1.5 billion in tax credits to storage projects connected to the U.S. power grid, with each utility-based project eligible for a 20% investment tax credit (capped at $30 million) and each customer-sited project (with minimum 80% “round-trip” efficiency, “energy out” vs. “energy in”) eligible for a 30% ITC (capped at $1 million).
In her article, Rowland interviews David Nemtzow of Ice Energy, a developer of thermal energy storage units. Nemtzow was optimistic about the effectiveness of this policy approach, noting that “tax credits are a time-honored and pretty successful way to stimulate investment,” using the wind, solar and energy efficiency industries as examples.
It will be interesting to see if the STORAGE Act passes in something like its current form. If it does, it could well signal the breakout of a new frontier in the cleantech space. If not, like so many things in the cleantech realm, grid storage may be an idea whose time has not yet quite come.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
Why Smaller Venture Funds Do Better July 30, 2010
Posted by cleantechorg in cleantech, cleantech venture capital.2 comments
Guest Blog – Max Branzburg, Clean Pacific Ventures
Despite cries to the contrary, the venture capital industry is not broken. The poor performance over the past decade leading critics to write VC off as “fun while it lasted” has been driven by an isolated segment of the industry: large funds. The red flags are ubiquitous, but LPs today insist on investing in underperforming, oversized funds. Small VC funds – as they have throughout the industry’s existence – continue to deliver superior returns to their investors. The successful small-fund model has been readopted by some VCs, but too many LPs, VCs, and entrepreneurs remain unaware of its historically exceptional performance and its present advantages.
Today’s best-known top tier VCs – Kleiner Perkins, Accel, Sequoia, Venrock – began their careers with double- and single-digit fund sizes (Gupta, Done Deals). Limited partners – impressed by those funds’ returns – sought to invest more in the asset class, and fund sizes grew. The average venture fund grew from $54M in the 1980s to $95M in the 1990s and to $180 in the 2000s. Today, there are more than 400 funds of $250M or more (Thomson Reuters). Limited partners – perhaps ignorant of discrepancies in fund performances – have driven up demand for large funds, and VCs have happily complied, earning hefty management fees on excessively large pools of capital.
Excluding Internet bubble-effected funds, the historical increase in fund size has been accompanied by a highly correlated decline in returns.
Figure 1: Historical VC performance as a function of fund size (funds raised in 1990s excluded)
While exogenous factors may have played a role in the asset class’s decaying performance, a closer look reveals that a shifting dynamic within the VC industry towards large funds is a leading culprit.
By recognizing the important differences between small-fund ($50M – $150M) and large-fund (>$150M) investment patterns, we can better discern which segment of the venture industry is broken. As it turns out, only 7% of the large funds raised between 1981 and 2003 achieved returns for their investors at or greater than 3x. By contrast, 24% of the small funds raised during that time achieved >3x returns. More than three times as many small funds as large funds achieved those successful multiples. Four times as many small funds as large funds achieved multiples at or greater than 5x (Preqin, as reported by SVB Capital). The portion of returns achieved by each fund size from 1981 to 2003 is shown below:
Figure 2: Distribution of VC performance by fund size (data from Preqin, as reported by SVB Capital; chart by author)
As large funds become more common, the advantages of the small-fund model become more overt. Smaller funds – like those upon which the industry was initially built – are inherently better positioned to achieve superior returns. Some reasons why:
1. Smaller exits can return the fund
The smallest “large fund” ($150M) that owns 10% of its portfolio companies and charges 20% carry must generate $5.4B of market cap to achieve a 3x fund-level net return.
If that portfolio includes 10 companies, each company must generate, on average, $540M. Consider that from 2000 to 2008, 83% of the venture-backed exits were M&As, at an average valuation of $110M (the 17% of exits that were IPOs averaged $407.1M). Every portfolio would need to be populated by a handful of YouTubes and Facebooks to make the math work.
Smaller funds make more capital efficient deals, own larger equity stakes, and are able to return their funds with more modest exits.
2. GPs profit by performing
A typical $500M fund charging 2% management fees earns $10M/year before making a single deal. Carry from a couple of successful exits might sweeten the pot, but management fees already do significantly more than just keep the lights on for large funds.
Smaller funds cannot survive on 2% management fees; their livelihood depends upon making good deals and taking a piece of what is returned to the investor. Their incentives are better aligned with those of their LPs, and exceptional performance is the mutual goal.
3. Specialized sector knowledge
Smaller funds tend to focus on particular industry sectors. A small cleantech fund might have 3 GPs with expertise in 6 different cleantech segments. A larger fund is less likely to have multiple GPs with similar or overlapping specialties and, consequently, more likely to make bad deals. Small, sector-focused funds can make better investment decisions and add more value as board members.
4. Flexible follow-on financing
Large funds like to control the financing of the companies they invest in. One way to attain control is to seed a company alone, essentially taking that company off the market for future financing rounds. Large funds may also make small (proportionate to the fund) investments in the seed round within a syndicate led by another firm, and – as a company matures – add much more capital, thus taking a much larger equity stake. By getting involved early, they essentially buy an option to load up on equity later. LPs can consult historical performance data to discover that this strategy has not given large funds an advantage over small funds.
Small funds are happy (and well-positioned) to lead deals, but they tend to invest alongside other funds, and they offer market valuations. The ensuing flexibility is highly desirable by entrepreneurs. Capital efficient companies can avoid the “load up” problem; by requiring less capital, they are less susceptible to large funds’ equity-grab.
The recent increase in fund sizes is likely attributable to an information lag in the wake of the Internet bubble, and we should expect funds to downsize as historical performance discrepancies become evident. While the advantages of the small-fund model seem especially applicable to the clean technology sector (in which too many companies are capital inefficient), a dearth of realized returns leaves LPs unsure of how to allocate their funds. Many of the most visible clean technologies require significant capital to reach profitability and do not fit into the venture model; those technologies will play an important role in our future, but they will not offer high quality venture performance. It seems clear that small cleantech funds are better situated to deliver exceptional returns to their investors.
Max Branzburg is an Analyst at Clean Pacific Ventures, a pure play venture capital fund focused on capital efficient cleantech companies.
Solar Energy’s 33 Percent Annual Growth will Accelerate July 26, 2010
Posted by cleantechorg in cleantech, concentrated solar power, First Solar, solar transportation, SunPower, suntech.add a comment
By John Addison (7/26/10)
Solar energy growth continues its strong growth. For the 30 years from 1979 to 2009, solar energy has grown 33 % CAGR (compound average growth rate). For this decade, over 40 percent is forecast. Although 2009 was hurt by a sever recession and difficulty in financing large projects, most additional power brought online in the United States, Europe, and much of Asia was renewables. 32 GW of solar power is installed globally; 7.2 GW was installed last year.
Yes, it is discouraging that U.S. electricity generation is dominated by coal and natural gas, and 97 percent of our transportation is from petroleum. The U.S. continues to spend over a trillion dollars of tax payer money each year subsidizing fossil fuels, covering health bills from pollution, and fighting wars to secure our oil supply. We suffer from our policies that support flattening mountains for coal, dangerously drilling our oceans for oil, and expanding highways instead of public transportation. Yet help is on the way as renewable energy continues to cleanly power more homes, workplaces, and rail transit. Public Transportation Renewable Energy Report
I joined 2,500 conference attendees at Intersolar North America, a premier exhibition for solar professionals. The co-located Intersolar North America and SEMICON West events, which took place this week in San Francisco, presented over 700 solar exhibitors to more than 20,000 trade visitors.
The exhibition took place at the Moscone Center, LEED certified conference center with 675 kW of solar on the roof (yes, I climbed on the roof and saw the acres of Sanyo and Shell solar panels). Equally impressive is the 80% improvement in energy efficient lighting at the conference center.
The Future is Europe buying U.S. innovation manufactured in Asia
Germany leads the world in buying most of each year’s solar production. German businesses and homeowners make money installing solar and then selling excess kilowatts with guaranteed feed-in tariffs (FIT). Although Germany is now reducing FIT rates, the cost of installing solar is dropping even faster. Germany will continue to lead in adding solar. With help from Italy and other countries, Europe will buy over 80% of solar PV in 2010. Only 6% of solar will be installed in the U.S., even though we have enough sunlight to power the entire nation.
An excellent summary of the solar market is Renewable Energy World’s Solar PV Market Analysis by Paula Mints, Navigant Consulting.
U.S. innovation has been a key driver for solar. First Solar’s CdTe thin film has brought manufacturing cost below $1.00 per watt. SunPower has achieved record 24% commercial efficiency. Key inventions of PV and semiconductors are from the U.S. Innovation continues everywhere from universities to venture backed start-ups. Optimistic presenters predicted that their technology would reach 50 cents per watt to make. Balance of system and installation costs could double or triple that number. A major issue for start-ups is difficulty in getting projects financed. Risk aversive lenders often prefer established companies who can back 20-year warranties, to start-ups with the perceived risk of staying in business 20 months. Installed PV is expected to drop from around $3 per watt today to $2 per watt in 2014.
Despite all the innovation taking place in the U.S., it is less expensive to manufacture in Asia. Navigant estimated that 77% of solar PV is made in Asia; only 5% in the U.S. Asia’s lead is likely to grow, with companies with integrated supply chains like Suntech and Sharp playing major roles.
PV growth is likely to be over 40% annually this decade. Solar is now 100X less than in the 1970s. The learning curve continues with costs falling 20% each time volume doubles. Industry leaders are squeezing out costs in everything from panels to paperwork, from inverters to mounting. Now, 95% of PV is grid connected, by 2014 it will be 97 to 99%.
By 2015, several researchers expect thin-film solar to reach about 30% of the market, but they expect silicon to continue to dominate. c-SI costs more per watt to make, but it is less expensive to install. Importantly, more efficient SI takes less space on roofs and in open areas. GTM also offers free summaries of a number of excellent solar research reports about silicon and thin-film PV. http://www.gtmresearch.com/list
Solar Growth Accelerates in Middle Markets
Several conference presenters examined the solar market in 4 categories:
- Residential
- C&I (commercial, industrial) 100 kW to 2MW
- Utility DG (distributed e.g. commercial rooftops) 500 kW to 20 MW
- Utility CG (central) > 20MW
Several forecast that the highest U.S. growth in the middle categories of 100 kW to 20 MW. These segments appeal to electric utilities that face RPS requirements in 30 states. Commercial distributed solar is often well matched with the location of electricity demand, minimizing transmission and distribution investment. Transit operators including LA Metro, New Jersey Transit, and MARTA are among the dozens of agencies heavily investing in solar in the 100kW to MW category. Public Transportation Renewable Energy Report
Smaller residential solar in the U.S. has been seriously injured by the wonderful companies in the middle of the recent mortgage crisis, namely Fannie Mae and Freddie Mac, who have stopped city PACE programs around the country that made residential solar affordable. If you want to laugh or cry about how the U.S. is giving the solar industry to Asia, take a look at PACE NOW.
Utilities will also continue to invest in large scale solar PV and concentrating solar power. In much of the U.S. large solar cannot compete with large-scale wind. There is 20 times as much wind power installed in the U.S. Utility-scale projects also face years of delays due to NIMBY (not-in-my-backyard) opposition to the renewable projects and the high-voltage lines needed to transmit power to major residential and industrial centers.
Intersolar Exhibitions and Conferences will take place in several locations over the next 12 months and return to San Francisco next July. In 2011, we are likely to see that solar grew strongly from rooftops to utility scale projects.
Truly impressive is solar energy’s decades of growth that exceeds 30 percent annually. Efficiency continues to improve and cost continues to fall. Energy is more secure as generation moves closer to consumption in homes, commercial centers, and transportation.
By John Addison. Publisher of the Clean Fleet Report and conference speaker.
Resource Recovery from wastewater – the new paradigm July 26, 2010
Posted by cleantechorg in bioelectrochemical systems, bluetech tracker, bluetech webinar, calera, castion, microbial fuel cell, O2 Environmental, oberonfmr, ostara, paul o callaghan, resource recovery, wastewater.add a comment
Everywhere you look people are trying to do more with less. Reduce costs, increase efficiency, reduce energy use, recover resources. There are strong economic drivers to do all of these things, they also happen to be sustainable.
Last Thursday (July 22nd 2010) I moderated the first in the BlueTech Tracker(TM) Webinar series: Mineral & Resource Recovery from Wastewater. We featured four companies with innovative technologies, and perhaps even more importantly, innovative business models. The companies were Ostara Nutrient Recovery Technologies, Calera, CASTion and Oberon. Ostara produces a slow release fertilizer product, Crystal Green(TM) from wastewater, Calera, a Khosla Ventures backed company whose technology is part of a new infrastructure designed to view carbon, not as a pollutant, but as a resource. Calera might be accused of having a Superman complex in the cleantech sector, in that their technology simultaneously contributes to solving two of the most pressing environmental issues of our time: climate change and water scarcity. Calera sequesters carbon from power plants, produces a low carbon cement and helps to desalinate water. The CASTion Corporation has an Ammonia Recovery Process (ARP) which can produce an ammonia fertilizer product from wastewater and recently won a $27.1M contract with the City of New York to provide a cost effective method for the City to achieve compliance at its 26th Ward Wastewater Treatment plant.
Concluding the quartet, was Oberon FMR. Oberon takes wastewater from the food processing industry, and through the application of some clever biotechnology (single cell protein synthesis), produces a value added, high protein, fish meal replacement for use in the aquaculture industry.
A few key take-aways:
1. This is about Costs
To get out of the starting gate with wastewater technologies in this area, you have to have a compelling value proposition. Resource recovery can enable a technology provider to off-set operational and capital costs and thereby provide a cost effective solution to their clients.
Ahren Britton, CTO with Ostara put it very succintly with the observation, ‘as a standalone wastewater treatment technology, we wont always be the cheapest way to remove phosphorus; as a fertilizer production company, we might not compete with current ore prices, but put the two together, and that’s what makes for the winning proposition’.
David Delasanta, President of CASTion noted that the decision by the City of New York to go with their ARP system on a new project was driven by economics. The City had a regulatory requirement to remove ammonia and the ARP system represented the lowest cost option occupying the smallest footprint. The City in fact sole-sourced this option from CASTion.
The Sustainability and political angle can help to push these projects over the line, as the person who finally signs off on expenditure is likely to be a political animal. However, to get this far in the process, you first have to convince the people on the ground that this is a good idea, and their concerns tend to be less politically motivated and more related to ‘will this work and how much will it cost?‘.
Seth Terry, Oberon VP of Operations said they have found that the Corporate Sustainability angle of their approach to turn food processing wastewater into a feedstock for fish meal replacement production, has peaked the interest of a number of major Corporations and was one of the factors which helped them to secure a contract with Miller Coors to construct a full-scale demonstration facility at their site. 
Certain resources such as phosphorus are becoming a geo-political issue. China has recently put an export tax on phosphorus to discourage the export of this valuable commodity, to preseve it and keep it a home to enable food production. China is known for its ability to take a long term view on things and this is an early indicator of how important this resource may become. It is worth noting, that like oil, phosphorus resources are found in a number of unstable regions of the world.
3. Companies which succeed in this area need to know two markets
The flip side of producing a product while treating a waste, is that you need to simultaneously build an outlet and channels to market for your product, at the same time as you are developing the infrastructure to produce it. This is challenging when working with a variable feedstock (wastewater) and when the quantities you produce, initially, do not make a dent in the larger market for that commodity.
To succeed, companies need to understand the wastewater treatment market and also, understand the market for the commodity they are producing.
In the case of Calera, this means they have to know the concrete and aggregate business. In the case of Oberon, they have to know the fish-meal business. Ostara and CASTion both have to understand the dynamics of the fertilizer industry. When you hear Calera CEO, Brent Constanz speak about the nuances of the concrete and aggregate market, and then switch back to the importance of piloting on different wastewater streams, you get a feel for the level and depth of understanding required to succeed in straddling these divergent worlds.
At least a part of the sustainable business advantage these companies have, is their ability to understand and create a business model which meets customers needs on both sides of the fence. Companies that can do this are pulling away from the herd. When you combine this with technical know-how, continued innovation and a strong IP position, you have a sustainable first mover advantage which will be difficult for a ‘me-too’ to catch up with in the short term.
The next Webinar in our BlueTech Tracker(TM) Series is on Thursday July 29th at 12 noon PST and will put the spotlight on Microbial Fuel Cells and Bioelectrochemical systems. This group of technologies has the potential to generate electricity from wastewater and produce fuels and chemicals which can be sold. Again the approach is the same, how to squeeze some value out of that wastewater.
Keeping Cool July 26, 2010
Posted by cleantechorg in air conditioning, geothermal heat pumps.2 comments
Richard T. Stuebi
As pretty much everyone knows, it’s been a hot summer — here in the Northeastern U.S. and across the globe — as 2010 is shaping up to be the hottest year on record. This weekend was brutally so, and to capitalize on it, the Plain-Dealer here in Cleveland ran a couple of articles on air conditioning in yesterday’s paper.
The more interesting article (which obviously was syndicated nationally, as here is the version from the Los Angeles Times) was a piece by Stan Cox entitled “AC: It’s Not as Cool as You Think”. Cox is promoting his new book Losing Our Cool, which profiles the utterly pivotal role of air conditioning in shaping today’s world.
Cox points out some staggering numbers. Only 50 years ago, just 12% of U.S. homes were air conditioned; today, that’s up to 85%. Of course, AC enabled the massive migration from the U.S. Northeast to the South and the Southwest — which would be pretty uninhabitable without air conditioning — and the development of suburbs and commuting patterns that will prevail for a long time to come. According to statistics cited by Cox, air conditioning in the U.S. is responsible for half a billion metric tons of carbon emissions annually — more than the total emissions of Australia, France, Brazil or Indonesia.
To the extent there’s good news here, it’s that substantial opportunities exist for improving air conditioning technologies. For instance, geothermal heat pump systems have long been proven to be a far more efficient method of cooling buildings than conventional AC — if only more architects, engineers and building owners would become aware of this option and consider making a modest additional investment to reduce their future energy bills. And, as noted in the article “Keeping Cool and Green” in the July 17 issue of the Economist, a plethora of innovative approaches on the drawing board promise the potential for further reducing energy consumption requirements associated with air conditioning.
Given that about 40% of U.S. energy requirements are associated with buildings, and about 40% of building energy consumption is associated with climate control, it behooves us to get much more serious about getting cool. Especially if climate change over the next few decades makes summers like this one seem mild.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
GE Bets 10 Billion on Digital Energy July 20, 2010
Posted by cleantechorg in 3rd generation solar cell, cleantech, ecomagination, smart charging, smart grid, smart meter.1 comment so far
By John Addison
GE Smart Charging Stations for Electric Cars
General Electric intends to be the leader in smart grid charging of electric vehicles. GE’s Watt Station EV Charger was personally unveiled today by CEO Jeff Immelt. Globally, GE already helps thousands of electric utilities be more efficient in generating power and in distributing power. With a growing family of smart grid solutions including smart charging of vehicles, GE will help utilities lead in the intelligent generation, management, distribution, and use of energy. Mr. Immelt refers to this as Digital Energy.
After attending the presentation by Jeff Immelt and other luminaries, I was able to talk with Michael Mahan, GE’s Global Product Manager of EVSE.
The GE Watt Station is the first in a family of vehicle smart charging products and services from GE. It will be piloted this year at commercial sites and universities such as Purdue and the University of California San Diego. Within a couple of months we will see the announcement of a GE home plug-in car charger. These products will be made available commercially in 2011 simultaneously in all markets including the Americas, Europe, and Asia.
Although GE’s press release positioned the Watt Station as having a faster charging rate than some competitive offerings, this Level 2 220 volt / 32 amp smart charger delivers electrons at the same speed as other Level 2 chargers such as Coulomb Technologies, Aerovironment, and Ecotality. These competitors have the early lead in installing 15,000 charging stations in the United States. GE is taking a fast-follower strategy with the intent of being the market leader.
The Watt Station complies with J1772 smart charging standards. Its attractive design will appeal to consumers, with a simply friendly interface and retractable cord protected inside the supporting pole. The Watt Station is modular and upgradeable. It can be purchased with an optional credit card reader, or that can be added later. Watt Stations also have optional smart suite communications to utilize smart metering and wireless AMI.
Where GE does have competitive advantage is in its long-term relationship with utilities, its family of end-to-end system solutions, its partnerships, and its financial prowess. Communities littered with last decades charging stations, some no longer working from bankrupt companies will find comfort in the GE brand.
GE Provides Digital Energy End-to-End
As global electric utilities modernize and embrace the added opportunity of transportation that depends less of petroleum and inefficient engines, and more on electricity and efficient electric drive systems, GE can be a major partner. Electric vehicles can be smart charged with GE charging stations, managed with GE software services. Areas with high concentration of electric vehicles can turn to GE for new substations and distribution equipment. Power plants can be upgraded with the latest GE turbines, and supplemented with GE wind turbines, solar power, and grid storage. With a digital energy demand can be shaped off-peak.
GE Unveils Nucleus™ and Brillion Home Energy Management
GE also unveiled Nucleus™, an affordable, innovative communication and data storage device that provides consumers with secure information about their household electricity use and costs so they can make more informed choices about how and when to use power. Nucleus is expected to be available for consumer purchase in early 2011 at an estimated retail price of $149-$199.
GE’s Nucleus brings the promise of the smart grid into consumers’ homes. As utilities deploy smart meters, the Nucleus will collect and store a consumer’s household electricity use and cost data for up to three years and present it to consumers in real-time using simple, intuitive PC and smart phone applications, helping consumers monitor and control their energy use.
Nucleus is the first product in GE’s Brillion™ suite of smart home energy management solutions that will help consumers control their energy use and costs. In addition to Nucleus, GE’s Brillion suite will include a programmable thermostat, in-home display, a smart phone application and smart appliances for the entire home.
By 2012, US utilities are expected to install more than 40 million smart meters. These digital meters enable utilities to charge “time-of-use” rates for electricity throughout the day. When demand is low, electricity will cost less, and when demand is at its “peak,” utilities will charge more to encourage off-peak consumption.
Future Brillion options will also include alerts to assist consumers with daily tasks, such as when to change the refrigerator’s water filter or when the dryer cycle ends. Software upgrades will further enable Nucleus to monitor water, natural gas, and renewable energy sources, as well as plug-in electric vehicle charging.
$10 Billion Ecomagination R&D
GE is driving a global energy transformation with a focus on innovation and R&D investment to accelerate the development and deployment of clean energy technology. Since its inception in 2005, 92 ecomagination products have been brought to market with revenues reaching $18 billion in 2009. With $5 billion invested in R&D its first five years, GE committed to doubling its ecomagination investment and collaborate with partners to accelerate a new era of energy innovation. The company will invest $10 billion in R&D over five years and double operational energy efficiency while reducing greenhouse gas emissions and water consumption.
CEO Immelt expects over 30 new ecoimagination product announcements in the next 24 months, including the GE Watt Station EV charger.
Electric Car Charging and Smart Grid Reports
By John Addison. Publisher of the Clean Fleet Report and conference speaker.
Nuclear Energy: Threat or Opportunity? July 19, 2010
Posted by cleantechorg in climate change, nuclear, nuclear waste.8 comments
by Richard T. Stuebi
Several months ago, I was asked by the Chagrin Foundation for Arts & Culture, in my lovely home town of Chagrin Falls OH, to speak on the topic of nuclear energy at their Chautauqua-at-Chagrin lecture series this summer.
I agreed, and proposed the title of my talk “Nuclear Energy: Threat or Opportunity?” I thought that it would be kinda catchy, and that I could figure out something interesting to say under that heading.
Well, the talk is tomorrow (Tuesday July 20 at 6 pm ET), so this past weekend, I forced myself to organize my thoughts on what to say. It was more challenging than I had anticipated.
This is because the title of my talk actually turned out to be truly apt: nuclear energy is both a threat and opportunity. There are huge advantages and substantial risks associated with nuclear energy. It’s easy to see one side of the coin or the other, but it’s hard to see and accept both sides of the coin at the same time.
Among the points I intend to make in my lecture:
There is no easy, cheap, one-size-fits-all answer for powering our economy in a way that provides the standards of living we’re accustomed to, at the costs we’re accustomed to paying, in avoiding the bad future to which continued status quo will drive us. Nuclear energy can be a major part of the total solution, but only if we’re willing to accept the costs and risks.
Many people tend to think that nuclear powerplants are inherently dangerous, thinking of Chernobyl. Chernobyl was truly an aberration – all safety systems were intentionally disabled and the plant was pushed to limits as an experiment. (Hey, that’s a really good idea!) Three Mile Island was a more plausible worst-case scenario — and its environmental impact of was/is small relative to the long-term impact of coal mining or burning, or petroleum extraction or refining. The BP Gulf oil spill is far worse of an ecological catastrophe than Three Mile Island, but no-one’s talking about banning oil. Instead of environmental risks, the real risks of nuclear energy are about fuel security and fuel disposal.
The U.S. taxpayer has long heavily subsidized, and continues to subsidize, nuclear energy. With maybe a hundred billion dollars of cumulative R&D funding over the decades, plus substantial tax credits and loan guarantees, the U.S. government has been and remains the biggest benefactor of the nuclear industry. Private industry sure isn’t: there hasn’t been an order for a new nuclear reactor in over 30 years. When opponents discredit renewable energy due to subsidies (which they admittedly do receive), it’s pretty hypocritical: nuclear (and fossil) energy has gotten and still gets far more subsidy dollars than renewable energy has and does.
If we shut down all the nuclear powerplants in operation today, the risk associated with spent fuels would still exist, and emissions would likely go up – at least unless/until enormous amounts of new wind/solar installation were to backfill nuclear retirements. For the time being, the economics of new wind and solar energy (indeed, any new powerplants) are considerably higher than the costs of running existing nuclear plants, so electricity prices would go up if nuclear were to go away. So, shutting down operating nuclear plants doesn’t seem like a promising strategy from either an economic or environmental perspective.
The costs of new nuclear are completely unknown. There hasn’t been a new nuke completed in the U.S. since the 1980’s, and no new orders since the late 1970’s. New designs are on the drawing board, but none have been implemented. Including earning a fair return on investment in new plants, costs could be as low as 8 cents/kwh or as high as 15 cents/kwh. The range is so wide because it could take 5 years or 15 years to complete a new plant – based upon uncertainties about licensing, approval and permitting processes. The cost of new nuclear is generally more than new wind, and while less than new solar today, the costs of new solar should become competitive with technological advancements in the coming years. So, it would seem that this argues for massive wind and solar installation, rather than new nuclear (or new fossil powerplants).
But, it’s not so easy. Wind and solar are not “round-the-clock” – at least unless/until there’s cost-effective energy storage for the power grid (don’t hold your breath). And other options aren’t so appealing either.
New gas-fired powerplants have fairly low emissions and can be approved/built quickly, but price/supply of natural gas is uncertain and highly volatile. New coal powerplants would be an even riskier bet.
Using conventional technology and ignoring greenhouse gas emissions, the cost of energy from new coal powerplants is probably on the order of 6-8 cents/kwh. However, if the U.S. ever becomes serious about dealing with climate change via a carbon policy, then the economics of coal power will deteriorate significantly — either to capture carbon (largely untested and expensive technology) or to pay for the costs of emissions. In a carbon-constrained world, it’s easy to project the costs of new coal power at > 10 cents/kwh. So, if we don’t care about climate change, coal is likely to be the dominant answer, and few new nukes will be built in the U.S.
On the other hand, if climate change matters, then there’s a potential role for new nuclear in the U.S. This role is amplified if we want to deal seriously with the other energy imperative we face: eliminating our reliance on petroleum for transportation. Clearly, we won’t see nuclear powered vehicles. But, with improvements in battery technologies, we can (and likely will) see more electrification of transportation – through plug-in hybrids and even pure-electric vehicles. If/as that happens, we’ll need much more power generation capability — especially if a lot of old coal plants are retired in response to climate legislation. But, where will that new power come from? If we want it to be from zero-carbon sources, and if we’ve already installed as much wind/solar as we plausibly can (assuming no effective grid storage technology), nuclear will be a very interesting option.
Summarizing, the more we try to deal with climate change and oil dependence, the more appealing nuclear becomes. Environmentalists are torn: many oppose nuclear on philosophical grounds based on their perceived risks, while other thought-leaders (e.g., James Lovelock) are nuclear proponents based on the practical realities. Which risks are more pressing: climate change and energy insecurity, or radioactive wastes and weapons materials for terrorists? Those are the tradeoffs upon which tilts the balance for nuclear energy. Americans don’t seem to like that answer: they want no risk and low cost, and whine when they don’t/can’t get it.
On balance, I think the risks associated with climate and oil outweigh the nuclear waste and weapons risks. Accordingly, I tend to think that nuclear needs to be a bigger part of the energy toolkit of the future – at least until ocean-based power generation and/or grid-scale energy storage become economically viable. If nuclear is not to be part of the energy solution of the future, then there will be other costs/risks to bear — some of which could be very dramatic.
If we get it badly wrong, either way, the future of life on this planet may be seriously jeopardized.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
Toyota Prius PHV Fights Chevy Volt July 12, 2010
Posted by cleantechorg in electric vehicles, general motors, Tesla Motors, Toyota (TM).1 comment so far
By John Addison (from original post in the Clean Fleet Report 7/6/10)
As the world leader in hybrid cars, Toyota is fighting to extend that leadership in both plug-in hybrids and battery electric cars. In plug-in hybrids, GM plans on first mover advantage with the Chevy Volt. In electric cars, the Nissan LEAF has a sizable lead over the Toyota FT-EV. But Toyota has more cars on the road with electric motors, advanced batteries, and electric drive systems than all competitors put together. Toyota does not like second place.
In talking today with Toyota’s Cindy Knight, she assures me that Toyota is on track on all fronts. A number of U.S. fleets are already driving the new 2010 Toyota Prius PHV including the following:
San Diego Gas and Electric
Zipcar Washington DC
Ports of New York and New Jersey
Silicon Valley Leadership Group
Portland State University
Qualcomm
Southern California Air Quality Management District
By year-end, 600 Prius PHV will be on the road including 150 in the United States. A number will be in 18 month lease programs. In one prefecture in Japan, the Prius PHV can be rented by the hour. Ten of the Prius PHV will be part of Xcel Energy’s SmartGridCity program in Boulder, CO. Boulder residents will participate in an interdisciplinary research project coordinated by the University of Colorado at Boulder Renewable and Sustainable Energy Institute (RASEI), a new joint venture between the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) and the University of Colorado at Boulder.
During the test of 600 plug-in hybrids, Toyota will be receiving extensive wireless data from each vehicle, giving a near realtime profile of electric range, frequency and speed of charge, mileage, use, and reliability of the cars. Aggregated data will be posted on Toyota’s EQS Website
By 2012, Toyota will offer customers with a wide-range of vehicles with fuel efficient drive systems. The Prius will be the best seller, but the 2012 Toyota Prius PHV will be in demand from those who want to be greener with a 14 mile electric range. A compact hybrid will help the more price conscious buyers. The Toyota Camry Hybrid will continue to be offered. Lexus hybrids will continue to deliver at least 35 mpg along with their host of luxury appointments.
Ford will also offer customers a wide-range of fuel efficient and electric cars, starting with a Ford Focus that customers can buy as with ecoboost fuel economy, or as a hybrid, or as a plug-in hybrid, or as a pure battery electric. Ford will expand this range of offerings to other lines in the years past 2012.
Toyota’s Transition to Lithium Batteries
The 2010 Prius PHV has three lithium-ion battery packs, one main and two additional packs (pack one and pack two) with a combined weight of 330 pounds. In contrast, the Prius NiMH battery pack weighs 110 pounds. Each battery pack contains 96 individual 3.6 V cells wired in series with a nominal voltage of 345.6 V DC.
When the PHV is fully charged the two additional battery packs supply power to the electric motor. Pack one and pack two operate in tandem with main battery pack but only one at a time on the individual circuit. When pack one’s battery’s charge is depleted, it will disconnect from the circuit and pack two will engage and supply electrical energy to the drive line. When pack two has depleted it will disconnect from the circuit and the vehicle will operate like a regular hybrid. Pack one and pack two will not reengage in tandem with the main battery pack until the vehicle is plugged in and charged.
The Prius PHV’s larger HV battery assembly requires additional cooling. The vehicle is equipped with three battery-cooling blowers, one for each of the three battery packs. Each battery pack also has an exclusive intake air duct. One cooling blower cools the DC/DC converter.
Like all Toyota hybrids, the lithium-ion batteries are built to last for the life of the vehicle. Toyota is using lithium not NiMH batteries in its Auris hybrid. Mercedes, Nissan, Ford and others have announced hybrid plans using lithium. Will 2012 be the year that Toyota offers a hybrid Prius with lithium batteries? Toyota is not yet ready to say.
Toyota has a number of advanced battery R&D programs with nickel-metal, lithium-ion and “beyond lithium” for a wide variety of applications in conventional hybrids, PHVs, BEVs and FCHVs. Toyota uses Panasonic and Sanyo battery cells. When Panasonic acquired Sanyo, Toyota increased its ownership to over 80 percent in the Panasonic EV Energy Company which makes prismatic module nickel metal hydride and lithium-ion battery packs. Toyota also owns about 2 percent of Tesla, a major Panasonic partner.
Toyota FT-EV an Urban Electric Car
In 2012, city drivers will have fun with the Toyota FT-EV, a pure battery-electric car. Currently Smart car drivers are saving $20 per day squeezing into parking spaces too big for other cars. By 2012 Smart will have competition from the Toyota FT-EV which is over 4.5 feet shorter than the Prius. For the microcompact space, Smart is introducing an electric version, as is Mitsubishi with the iMiEV. All these cars can squeeze in four people with skinny waists.
Toyota’s FT-EV is an electric vehicle with a 50-mile range and a maximum speed of 70 mpg. The lithium battery pack can be charged in 2.5 hours with a 220/240 volt charge and in less time if not fully discharged.
By John Addison. Publisher of the Clean Fleet Report and conference speaker.
Cleantech.Org 
