Greentech business and climate change

First of all I would like to apologize to my “audience” for being absent since August (I can’t believe it’s been that long!).

The truth is we have been very busy in Israel G-Tek; we have executed our first investment in a wind turbine technology company IQWind which was recently named top 100 cleantech company of the world; we are also in the process of negotiating other deals.

Since August I attended the Boston Cleantech forum, went on a business trip to San Diego and then went on to Israel to, amongst other things, be part of Watech (one of the largest water and alternative energy conferences).

Also, since August the book Start-Up Nation came out, becoming an unintended marketing campaign for our fund.

So, let’s get right to the point: WHAT IS CLIMATE CHANGE’S ROLE IN GREENTECH BUSINESS?

First of all I want to disclose that I don’t consider myself a “tree-hugger”; my business associate is even less of a believer than me, he is into Greentech because he wants to stop oil dollars from going to countries such as Iran and Venezuela.

Regardless of your beliefs in climate change, there is a direct correlation between the truth of climate change and the future of greentech. More specifically, the relation is between people’s perception of climate change and the future of greentech (like my marketing expert wife says “perception is reality”)

Recent scandals in the scientific community have placed a black veil over climate change, bringing more people into the “doubters” side of the equation. But, what if I told you that we are in an almost irreversible path to wipe out humanity from the face of the earth?

If there was undeniable proof of extremely negative consequences, then people’s actions and business decisions would be very different. Perhaps CNN’s show will shed some light into this issue (Dec 9 CNN 8pm EST “Global Warming: Trick or Truth”).

The ugly truth is that the cards have already been played. We are not changing fast enough to prevent a global catastrophe (remember: we need to counter carbon emissions and pollution at a faster rate than they grow PLUS revert the existing damage already affecting the globe; in other words: the counter action has to be many times greater than the existing trend). Therefore we are set in a path to possible human annihilation (I am not exaggerating), our only hope is that we would be able to partially save ourselves with “last minute measures” or that the whole thing of climate change is a scam. What do you think?

GERMAN GIANT SIEMENS BUYS SOLEL FOR $418 MM

“Siemens and Solel are a perfect match. Solel enriches Siemens’ capacities… Israeli companies are very successful, backed by years of experience, development and production of field equipment for the creation of solar energy,” – Peter Loescher, president and chief executive of Siemens.

German industrial conglomerate Siemens is buying Israel’s Solel Solar Systems Ltd. for about $418 million so as to expand its business with solar thermal power plants.

It is Siemens second solar power acquisition in Israel. Two months ago Siemens bought 40% of Arava Power for $15 million.

Solel’s products optimally complete Siemens’ current offering. With the acquisition of Solel, Siemens significantly expands its access to the product technology necessary for the establishment of solar thermal power plants, enabling it to offer about 70% of the components to its clients

“In the future, we’ll be able to offer the key components for the construction of parabolic trough power plants from a single source and to further enhance the efficiency of these plants,” Siemens’ Renewable Energy division head Rene Umlauft said.

Unlike photovoltaic solar panels, which use the sunlight to create electricity, solar thermal power plants use the sun to heat water which then creates the steam required to power a turbine generator which produces electricity to the grid.

Solel is one of the world’s two leading suppliers of solar receivers, – key components of parabolic trough power plants. The company has been active in Spain since 2006, supplying key components for 15 solar thermal power plants with a combined capacity of 750 megawatts. The firm is also active in the US.

Israel ranked #5 on “The top 10 cleantech countries of 2009”

“Israel, the 'Silicon Valley' of water technology, is fast becoming the cleantech incubator to the world (see Israel to export $2.5B in water technologies by 2011). Israel recycles 75 percent of its wastewater, invented drip irrigation, and is home to the world's largest reverse osmosis desalination plant (see Israel plans largest desal plant in $513M deal). Israel certainly isn't the world's biggest cleantech market, but it might just be one of the world's most important centers of cleantech innovation and R&D, with innovative companies such as CellEra, Aqwise, and Emefcy. Better Place is also making Israel the first test-market for a nationwide electric vehicle recharge network (see Electric cars are coming to Israel). Leading Israeli VCs include Israel Cleantech, Aqua Argo Fund and Terra Ventures.”

Read about full ranking at http://cleantech.com/news/5127/top-10-cleantech-countries-2009

Electric vehicle strategy

Today’s article in the NY Times about electric vehicles (Toyota, Hybrid Innovator, Holds Back in Race to Go Electric) pulled me out of my summer vacation mode and inspired me to share my insights about the electric vehicle race to market.

When in college I was a big fan of “Game Theory” (According to Wikipedia: “Game theory attempts to mathematically capture behavior in strategic situations, in which an individual's success in making choices depends on the choices of others”).

During that time I also became an admirer of Toyota, their “just in time” inventory process and their ability to bring quality to market in a fast and efficient way impressed me as I was becoming an MS in Manufacturing Systems Engineering.

And here we are today, they lead the market of Hybrid vehicles. Their Prius is the flagship of alternative fuel cars (although it’s not much of a change from gas powered cars).

But, wait a minute! Are you telling me that since 1997 when the first Prius was launched to the market Toyota has been unable to improve on their original product by making a plug-in hybrid or a full electric vehicle???? WHY?

Could this be a case of Game Theory being played out?

Mitsubishi is launching an electric vehicle (the i-MiEV). The city of Berlin is setting a goal of a million electric vehicles by the year 2020. Tesla is starting to show signs of success with their all electric vehicle product line. The famous Project Better Place intends to reshape the vehicle market with their battery swapping and city-wide recharging stations.

So why is Toyota letting their leadership slip away?

Scenario A: most of these electric vehicle companies will build their products around the first generation of batteries. A new generation of more efficient batteries will be developed and Toyota will leap over their competitors to take the lead again

Scenario B: Toyota is miscalculating the power of the electric vehicle market and will be left behind with an obsolete plug-in Hybrid Prius

Which scenario do you think will prevail?

Comments from “Things that make sense”:

First of al I want to add another thing that does NOT make sense (and I forgot to mention). Allowing people to drive while talking on the cell phone. It is inconceivable that some states like Florida are still  allowing drivers to talk while they drive, even though it has been proven more dangerous than drinking and driving.

“I'm confused at your stand on plug-in hybrids. Are you for or against? I agree that the standard hybrid gets 100% of its energy from fossil fuel. I consider that, however, its biggest short-coming. Perhaps because I just spent the last 40 years in the electric utility industry, I'm partial to using electricity as a transfer fuel. It can be generated cleanly and renewably (although it often is not). It can be shipped across the country and directly to the consumer without a lot of loss and with no additional fuel. And, can be used cleanly and with no pollution or byproducts at its ending destination.
I'm also confused (although not by you) at the hybrid vehicle concept. Large railroad diesel locomotives get 100% of their motive power from batteries which are constantly recharged by the big diesel engine running a generator. The diesel has no direct connection to the wheels. Is this less efficient than the auto hybrid that connects the small gasoline engine both to the wheels and to the generator and uses the electric motor only to boost acceleration? “

“all good points, of course. (perfectly designed waterless/odorless/attractive toilets have been around for decades). the bottled water thing is criminal and non-sustainable. 99.8% of all "information/news" in print, online, & TV & radio comes from 6 worldwide media companies whose board members interlock with boards of all, or most other corporations. all "news", is corporate news. all "making sense" is corporate centered. “

“You are so right ...it is really frustrating”

“I had the same feeling commissioning one of my project this year, but after 16 years in engineering design, I know that common sense(knowledge) is not common practice”

“Sami,
I posted my idea on your link but for those that may not venture to a great story you have told, here it is:
Dryer Sheets - They are thrown away by the thousands every day and I have found them to be a really good cleaning tool. They have just enough grit to take crud off of mirrors, doors, walls, jewelry, CHROME, and I am sure a myriad of other things”

“Interesting article. For the toilet perspective, dual flush toilets have done their bit towards minimizing the amount of water that is used for flushing purposes. More emphasis should be made on their use (if not to say imposing an eco-tax on those not having a dual flush system) and retrofitting existing cisterns with water bags or something which reduced flushed volumes.
The argument related to bottled water can also be extended to the impact of soft drinks which are canned or bottled in plastic. What is the energy that is recovered from these packaging. Interestingly in Malta we had a law which obliged soft drinks to be bottled in reusable glass bottles. Ironically with Malta's accession to the EU this law had to be removed as it was perceived as a barrier to trade”

Until next time: SHALOM!

Things that make sense

Sometimes I look at certain things that, to me, obviously don’t make sense. The solution is so obvious that I get frustrated just thinking about it!

Case in point when I see a motorcycle rider without a helmet! (although this example is not Greentech related, I wanted to include it to illustrate the point). Why would any government that punishes suicide attempts and that has such a bitter discussion about a 3 week fetus being an individual, allow these people to roam around 70 MPH without any headgear? Same issue with cyclists, who foolishly think they look faster by avoiding the helmet.

Another example is using over ONE FULL GALLON of perfect tap water to wash down a man’s or a woman’s single “serving” of pee (a typical adult initiates bladder reflex contraction with 0.1 Gallon of urine). How hard can it be to mandate a water container that stores rain water and upon availability is used to flush toilets? or simply to create a toilet that does not require water for urine (and does for “other” uses)?

A third case for general non-rationalization is allowing plastic bottles for drinking water, or even worse allowing “imported bottled water”. With the world water situation as it is (very bad, if you have not heard!) why would no one step up and prohibit companies from shipping bottled water from halfway around the globe just to create a “premium” market. Even worse, why don’t we wake up and recognize that plastic bottles are killing our environment and start using another material for our water containers (how hard can that be?).

“In the U.S., more than 30 billion
plastic water bottles end up as garbage or litter
each year”

When the cost of plastic became more attractive than glass all  bottling companies jumped into the new technology! With a little cooperation between government and industry a big difference can be achieved. Here is a NY Times article related to this issue (An Environmental Group’s Campaign of Wry Lies Against Bottled Water)

My forth and final example of “obvious irrationality” is the case for plug-in-hybrids. Here, I admit, there may be other factors unknown to me. But, as far as I can tell, the step from transforming a regular hybrid car into a plug-in hybrid is very straightforward. Granted, the battery pack in a plug-in may be a bit bigger (and heavier). But, the biggest difference is that energy will come from an OUTSIDE SOURCE into the car, as opposed to the minimal optimization achieved by regular hybrids (where energy is recuperated from the gasoline engine in two forms: directly and through the inertia of the car while breaking). Some smaller companies offer kits to transform regular hybrids into plug-ins. Why can’t big car companies do this transformation from the inception of the car???

Makes no sense!!… Do you agree, disagree or do you have any other examples of things that make no sense??

Here are some comments from Do you have the drive to be in Greentech?:

“I watched the Warren Buffet special last night on CNBC and he made it clear, "if you don't invest now, you will not come out on top". Most people don't understand that now is the time to get involved. Products are cheaper, and you can usually work out some great deals for services.”

“While there has been a bit of a shift of mindframe away from Greentech, due to the economy, I believe that there has been enough momentum and drive built up that it will push through the downturn. It also helps that the downturn seems to be hitting bottom instead of getting more severe...”

“I wanted to say I fully agree with you, despite the overall mindset. I myself have been in the industry for quite sometime now both on the investment side and the entrepreneurial”

“You are right, yet I think that comparing Greentech to the Internet Bubble is somewhat of a stretch because this is more tangible, it is more of the "Old Economy". People can calculate real ROIs and this is where I see the main challenge to industries worldwide.
Without Governments' support and incentives, the current ROI on a PV system (as an example) is completely uneconomical. Greentech has to succeed - we have no other choice so industry will come up with viable and affordable solutions that make sense”

“Personally... I think its pretty straight forward: The greentech companies that can actually make money (not just promises) will thrive and get funding. The ones that simply "paint pictures for the future" will likely not make it through the tough economy”

“The U.S. government doesn't have the drive to be in Greentech. It may talk a big game, but there's little investment for new ideas. Venture capital (at least outside of California) doesn't appear to have the drive to be in Greentech. The investors we speak to can't articulate how you generate ROI”

Until next time: SHALOM!

Do you have the drive to be in Greentech?

I say: Greentech will become a major force in world economics; it will be a huge industry.

Right now, though, there is a lot of skepticism. People are focusing on the state of the economy, the safety of their investments, the availability of credit and the state of their mortgages.

So, what will it take to come on top of the Greentech wave?

We will need determined entrepreneurs. People who are determined to succeed, who will be able to balance a vision with a solid day to day operation.

Greentech entrepreneurs have to grow (just like the internet entrepreneurs did) into successful businesses people. First of all they have to overcome the image internet entrepreneurs left on their wave. Investors and fellow industry leaders will look at them with suspicion. They have to prove they are capable of running a serious business; they have to prove that money will be managed and put to good use.

Investors also have a challenge. They have to overcome the fear that the recent downfall of the economy left on their heads (and their balance sheets). Investors will also need to brush up on their science knowledge. It’s not the same to analyze a business opportunity of selling shoes online versus a business opportunity of generating energy from solar rays.

Last, but not least, government and banks will have to shift gears as well. Regulation will be the vehicle to bring this industry to life and banks will have to understand the risks involved, and have capital ready to be put to good use.

So, do YOU have the drive to be in Greentech?

I got a lot of comments from “A couple of VERY interesting videos”:

“Shai Agassi and his scalable model for the car 2.0 make diffusion of his innovation plausible. Yes, a good deal of infrastructure still needs to be put in place to make his idea work, but the story he is telling makes sense.
Saul Griffith's idea seems more of a novelty than a future reality”

"I like Agassi's talk, although I disagree strongly with his premise that one can apply Moore's Law of semiconductor electronics evolution to batteries. The world has needed a better battery since the dawn of the previous century, when Baker and other electric cars lost out to steam and ultimately to internal combustion”

“Agreed, although there is room for significant improvement in batteries, certainly from commercializing a range of nano materials, probably 2x-5x increase in power and energy density in next decade, possibly to 10x. I am aware of several projects in commercial testing that can deliver 20%-40% more than current”

“If you plot the evolution of any figure of merit related to batteries (energy density, recharging cycles, etc.), you will notice only a linear improvement over the years, if any. Certainly not a Moore-like exponential growth”

“For the second idea, I think desertec is more realistic
www.desertec.org”

“If demand for electricity increases due to charging car batteries all this would mean is more coal "base-load" powered stations. There are also many inefficiencies in the transmission of energy, conversion and also in use. Plus you have the issues of short range limits. I believe at this point perhaps the idea of natural gas approach may win over in the short term. For sure in the long term the car engine will transform from combustion engine to electricity driven”

“300M vehicles / 8M vehicles per year = 37.5 years. It doesn’t sound short-term to me, and that’s not counting growth, upon which the entire economy is predicated. Further math, 300M vehicles x $50K per vehicle = $15T, plus whatever new infrastructure will be necessary, and in perspective the US GDP is $13.8T”

“One thought I have is that, even with the investment in a strategically placed network of feasible and convenient battery swapping infrastructure, before investing $20,000 in an all electric vehicle, there would have to be a critical mass of electric vehicles on the road for people to believe that it is a stable technology and here to stay. Sort of a chicken and the egg syndrome”

“1. We need to move away from driving everywhere and build societies where we can walk.
2. Private transport must be replaced by communal public transport, which is far more efficient - less traffic, less congestion, less manufacturing and therefore waste”

“It sounds as if Shai Agassi's idea is already out of the gate. India and China are ahead of the curve on Electric Vehicles. There is incredible new technology with electric motors that is going to continue to progress this model forward where you get tremendous torque with less amp draw. Thanks for the videos”

“As for wind turbines on kites, they can work to produce power. Sadly, every NIMBY group in the nation will find problems with them. They are ugly. They kill birds. The cause epileptic fits in fieldmice. If it is visible, some group will fight it until the bitter end. The legal fees alone will prevent it from ever being financially viable”

Until next time: SHALOM!

A couple of VERY interesting videos

Will this two ideas power the world in the near future?

http://www.ted.com/talks/shai_agassi_on_electric_cars.html

http://www.ted.com/talks/saul_griffith_on_kites_as_the_future_of_renewable_energy.html

What do YOU think?

Until next time: SHALOM!

Mia Green Expo & Conference

This past week in Miami I attended the Mia Green Expo & Conference. It was a two day event held at the Miami Beach Convention Center. The event had an exhibit hall with 118 exhibitors and four different parallel Conference sessions, the choices were: (1) Designing and Building greener Americas; (2) How to be Green & Profitable; (3) Green Policies & Benefits; and (4) LEED 2009 Update & Special programs.

 

Here is my analysis of this event:

Is Miami the new capital of the world for Greentech? Well, the short answer is…no. Furthermore this conference was fairly small and a bit disorganized.

In spite of the above I have to admit that in this growing field of Greentech there are always new things to learn and new people to meet. But, most importantly I enjoy attending these conferences because it reminds me of the HUGE OPPORTUNITY we are facing by being part of this group of early adopters of the green wave.

Some day we will look back at these events and say something like this: “remember those days when we were trying to convince the rest of the world that the green wave was coming and that greentech was going to become a huge industry?”

Most of the people in the event were from state or city government, from the various utilities and from academia. The business people (aside from the utilities) were from the construction arena. This is a good example of how Greentech is still flying under the radar.

Many people don’t realize yet the impact Greentech is going to have in our everyday lives and businesses. Just to give you an example: If the US government sticks to their plan and implement the cap and trade law, every business will have to start thinking in terms of carbon emissions. This means that the corner ice cream shop will have to pay or compensate for the carbon emissions of their ice cream machines (and their blenders, and their delivery truck, and their a/c)! The greentech world will have a demand never seen before, instead of companies pushing for their greentech products, people will demand greentech applications in their businesses, their transport and their homes.

Here are some comments from last week’s IT’S ALL GOOD... GOOD NEWS!:

“We are all happy you said it.
If you remember how it started, we can say now: Bad times R.I.P.”

“I concur. I am beginning to see an improvement in the hiring market. And green jobs are going to lead the way”

“Thanks... Most of us need this kind of news.
Everything but the global Climate Change which goes beyond the Koyoto Protocol is fairly good news.. All that will do is boost my 100% Carbon Tax exempt product automobile mfg company sales”

“Some interesting thoughts here. however the incentives currently on offer for 'green' technologies are skewed towards what the lobbyists want rather than what is practical and effective technology. For my proof I offer wind power which is probably the most unreliable erratic supply available and undeserving (in my opinion) of the massive subsidies it is getting in the UK. I would be more interested if power from waste was getting the same level of subsidy and planning application help. The nimby effect (not in my back yard) prevents good waste to energy gasifiers and combusters from getting off the ground in the UK and this just has to change-recovers energy from waste and reduces landfill - both required for our sustainability. For the UK in situ coal gasification with CO2 capture is a way to supply all of our gas and chemical industry supplies for 200 years plus! By producing synthesis gas we can revert all households to towns gas as we knew it and use syngas to make ammonia and hence fertiliser and plastics - basically replace the petro industry with gasification products as SASOL”

“I certainly hope so. These however are just a few of the green giants out there. If the rest of the economy picks up on their regular way of doing business again, we might be back in the financial slumps before you know it”

“1. the last depression-recovery was based on investment in military and road building. this one is green.
2. it smells like the internet age in c.1994
3. the market is not natural. nice feelings around social conscience did not cut it. economic drivers are being created by government. as such, it is so disruptive! And neat stuff can be done until the old fashioned laws of supply and demand
.
So I do not see there being a return to a premature slump as we have started the next cycle. between now and then I believe we will see another massive transfer of wealth from investors to consultants and marketeers via entrepreneurs as we saw in late 1990's. As the zietgiest is based on long term >25 years for a big return, I hope we are seeing another long growth run; then again energy deficits may derail us”

Until next time: SHALOM!

IT’S ALL GOOD... GOOD NEWS!

It seems the world is getting back in track. After some uncertain months of rollercoaster economic forecasts, bailouts and bankruptcies it seems the future is looking brighter than ever. Here are some news that are sure to lift your spirits (that is, if you are in the green wagon)

- This article talks about the new Prius which has factories working overtime. While the rest of the car manufacturers are shutting down Toyota is selling more Priuses than it can produce.To read full article click here

- A public-private coal plant previously discarded because of high cost will be built in Mattoon, Ill. This plant will store nearly all of its emissions underground. The decision change was based on a cost calculation error that turned the project’s cost from $1.8bn into $1.3bn. To read full article click here

- Taiwan Semiconductor Manufacturing (TSMC) one of the largest semi-conductor producers in the world is jumping into the solar cell and LED light arena. This compatibility between semi-conductors and solar cells first identified in Israel will open new markets for this industry giant. But, more importantly, it will call the attention of other competitors and therefore reduce solar cell and LED costs for the consumers. To read full article click here 

- Bonneville Power Administration, whose power lines carry much of the electricity in the US Pacific Northwest is ramping up their capacity using wind power. The article talks about the demand of some groups to shut down some of the company’s hydropower to protect wild salmon. But, from my perspective, the article brings good news regarding substitution of dirty sources of power generation with clean power. The fact that this creates some conflicts with other groups is just part of the process. To read full article click here

- Climate Change Treaty, to Go Beyond the Kyoto Protocol, Is Expected by the Year’s End. More than 100 nations are negotiating a new treaty that will push the agenda further into cutting emissions of heat-trapping gases and preventing deforestation. To read full article click here

Any thoughts?

Here are some comments from last week’s Why incentives work, and don’t work? (some are VERY INTERESTING. Thanks!)

“In my experience good people tend to attract money rather than money attracting good people”

“Tell me how you reward people and I will tell you how they will act. If you reward people in an illogical inconsistent manner, that's exactly how they will act. Now, if they also get the best administration who understands how to motivate people to giving students a better education with above average teachers in the classrooms I think it will be an amazing system”

“The problem isn't the incentive it is the accountability. The inflated pay is not the reason why good teachers would be found in this new school. It is the accountability that comes with the high pay that weeds out the lesser candidates”

“My thoughts were to have a top school who charges zero tuition but gets paid a percentage of the students earnings for the first 20 years of work. From that, the teachers receive a "dividend" from each child they taught. This way their retirement fund grows from those they taught. It would be a great incentive for the teacher to see that the student is truly able to succeed in life, as their retirement directly depends on the success of the children they taught.
Also, while teaching have bonus pay based on the number of students actually retaining what was taught. This would require the elimination of all multiple-choice tests and every test would have only one question, regardless of subject matter. The question would be "What have you learned this semester from this teacher and show with examples". This would foster critical thinking skills rather than memorization and regurgitation. The percentage of subject matter that the students learned would directly relate to the bonus given.
This would create accountability and a co-dependency relationship between teacher and students”

“All incentives have the challenge of hitting the sweet spot of their intended and invoking the desired response. This one sounds off-target. Did teachers become teachers to make big money? Only if they were misguided and misjudged the teaching space”

“I think in your article you are ignoring that we as society have a very big interest that energy be cheap. Energy is one of the major taxes that everybody has to pay on their lives, so if we are worried over the long-term development of our industries and their competitiveness over time, energy, over time, needs to be low-cost (also, btw, communications and finance).
We should have an interest in developing 50mpg cars and such other technologies. Apart of having lower pollution, such machines are cheaper to operate and provide real advantages. But is making energy expensive the right way? Although it is a good incentive, it goes against other, more important goals”

Until next time: SHALOM!

Why incentives work, and don’t work?

Recently an article in the NY Times was talking about a new school being assembled. The particular thing about this school is the salaries teachers will receive; around $125,000 a year “two and a half times as much as the national average for teacher salaries”.

The idea is to have the best teachers available and the means to do it is by offering a big incentive: 2.5 TIMES THE AVERAGE SALARY OF OTHER TEACHERS!

So, will this guarantee success? Who knows, but certainly they have managed to get VERY good teachers, who knows if this really will translate into top notch education.

That is precisely the point about incentives. Human systems are complex structures and when you create an incentive you disrupt the “natural order” of things and create sometimes unpredictable outcomes. Here is an example:

I believe the US society has a plethora of negative role models from professional sports (as exemplified in the List of professional sportspeople convicted of crimes). Some football, basketball and baseball players earn immense sums of money, they have big houses and luxurious cars, but they also have encounters with the law, they lack education, and some are bound to self destroy. It all traces back to incentives!

A kid from high school gets selected for a top school based on their athletic ability, not their level of education (first incentive). They have lower requirements from the school and eventually get drafted into a professional team. The first round pick in NFL for this year will get “$41.7 million in guarantees” for a six year contract. What is a 21 year old kid supposed to do with over $40 when he turns 27? Furthermore what kind of example is he setting for other kids who look up to him? Is he prepared to be a role model?

All this brings us back to the incentives on Greentech. Are they well designed? will we get the consequences we desire from these “disruptions”?

Greentech needs a hand to compete with existing technologies, energy sources and to change consumer behaviors. But we must be very wary of the potential outcomes of the incentives we propose.

Here are some responses from last week’s Are these environmental goals any good?:

“I am disappointed in the new standards. My VW Jetta 2000, gives about 30.x mpg during summer and 28.5+mpg during Winters in the metro Boston area. My Toyota Corolla 2007 gives about 34mpg.
If the SUVs and Trucks had say, 35mpg in 2016 and sedans to have a minimum of 50mpg, then that would have been a better goal to push for true innovation and energy use reductions by 2025. It would take atleast 8-9yrs. after the 2016 standard to have replaced a majority of vehicles on the road”

“After reading your blog, I have to admit that the "tough rules and regs" doesn't make a lot of sense. If we already have the technology for 50mpg, and Obama's only pushing for 35.5mpg, that takes away from the drive to go for better mpg than 35.5”

“I think like much policy that comes from Washington, it's flawed, but a step in the right direction”

“The best, and in my opinion, only effective way to promote alternate technologies is to ensure gasoline is priced in the range of $5.00 per gallon. That, in my opinion is the way to go. Legislating fuel economy standards may help, but think about it - for every new 35 or even 45 MPG car on the road - how many dozens are out there (think older cars or SUVs)at 20 MPG or less. Then lets think about diesels”

“If oil companies have their way it will become another reason for higher fuel and oil prices. In my view, the Feds have to take seriously the task of forcing automakers to switch over to hydrogen engines and other clean tech, along with forcing the grid energy suppliers to do the same. “

“What 'O' bases his assumptions on are Al Gore's global warming scandal of man-made C02, and other gas emmissions, so we started off wrong to begin with. With the banking crisis killing most other industries, esp the automotive industry, I believe this is a bad time to further destroy the industry”

“Give people something that is better and they will buy it. We can discuss the pros and cons of global warming and political agendas "until the cows come home" yet from where I sit on the other side of the world to you; I see a strategy that should galvanise the community to embrace change”

“I think they should be much tougher.... It is ridiculous that Americans continue to drive gas guzzling cars at 55 mph. The management of American car makers have failed to respond to the energy crisis, produce terrible cars and then want bail outs when they can't sell them”

“Considering the concept of sustainability, I think that 35.5 MPG is definitely high enough. Remember, this is CAFE, the average fuel economy for all of the vehicles a company manufactures, up to 10,000 lbs GVWR. So, while we may have the capability of manufacturing vehicles that will perform at 50+ MPG, there would still be a need for work trucks and vans that simply would not be useful with such a high fuel mileage.”

“I agree with you that the goals are unambitious but if the political pragmatism is that it is a modest goal that passes to law versus no change, then it is better to get the ball rolling.
By the way the US National Academy of Science has just published a free book that illustrates to the US what is happening in its own backyard. Copy available at http://tinyurl.com/qdfwyd”

“I predict that in 2 years we'll all be in agreement that it would have been better to just let Chrysler and GM go out of business”

“Obama so called tough rules are only decades too last due to the Big Three in the past always claiming excuses so that they did not have to upgrade CAFE mileage. They sure used lobbyists' a lot back then.”

“The new standard for cars efficiency by President Obama was long awaited and it is a great news. However, cars in many parts of the world (including China) are more efficient.”

Until next time: SHALOM!

Are these environmental goals any good?

On a recent press conference Obama announced a new standard for cars and trucks emissions (Obama to Toughen Rules on Emissions and Mileage). I wonder if this is the right move?

It was in college while studying Computer Simulation that I learned about retro-feeding cycles. These are cycles where several factors contribute to the growth (positive cycle) or shrinkage (negative cycle) of a specific variable. A retro-feeding cycle occurs for people who gain weight (that is why its so difficult to lose weight). As the person starts to eat more and more, he or she feels less and less energy to exercise (or even walk), also the stomach grows bigger and bigger providing for more space for food as well as preventing the person from feeling satisfied from eating. There are probably other physiological and psychological factors that also contribute to the weight gain of these specific person. Here is a graph that illustrates this retro-feeding cycle:

The environmental damage we are causing to planet earth is a very complex retro-feeding cycle that is further enlarged by other retro-feeding cycles. Population growth is a retro-feeding cycle  that contributes to the "environmental damage" cycle (the more people, the more growth), so is the "energy needs" retro-feeding cycle (more energy creates more progress and more need for additional energy).

So, is 35.5 miles per gallon by 2016 enough to change the negative retro-feeding cycle of carbon emissions?

The only way to neutralize a retro-feeding cycle is to create a counter-cycle that grows at equal or higher rate than the cycle we are trying to overcome.

I have read that when Kennedy proposed the lunar landing goal before the end of the decade (1960's), the US was very far from achieving this goal. Furthermore, Kennedy did not know if that goal was achievable at all!

In the world of Greentech, 35 MPG does not sound very impressing. There are many vehicles out there that can easily achieve that mileage today (click here to see some of them)! Are we selling ourselves short? If we have the technology to achieve 50MPG today, is setting 35MPG by 2016 going to help or to hinder the development of that technology?

So I ask you again: Are these environmental goals any good?

Comments from Why Greentech in Israel?:

First of all I want to share an article closely related to this post Israel's Clean Technology Pioneers

“Sami, exactly my sentiments. Israel also has it's own environmental challenges which desperately need Greentech solutions. In some ways Israel is an island and needs find new ways to harvest renewable energy, and recycle water and upcycle raw materials.”

“I agree with you in general terms, in specific I would ad that in some cases Israel needs some expertises to be imported for example in the windfarms development. But even here there are a lot of candidates ready to cooperate with companies from Israel provided they are invited”

“My only thought is on the following: "Because it’s easier and cheaper to continue with our current behaviors." It is easier, but not cheaper, to behave unsustainably. True, the greedy don't always pay now, but longer term the costs to society will be far higher to have ignored our planet's well-being”

“Why is that? Following the great success in the IT sector?
Do you believe "Silicon valleys" are the best place to start green start-ups?
Israel is where most of solar nergy concepts and ideas were born and rose up to become products and technologies. Do you believe that this background is another good reason for Israel being a good place to do greentech? “

Until next time: SHALOM!

Why Greentech in Israel?

I hereby declare that Greentech and Israel is a perfect match!

The more I put my head into it, the more I get convinced that Israel and Greentech are a great combination.

Let’s start with my assumptions:

Assumption #1: Greentech is the future. As I have explained in the past I strongly believe that Greentech is the Wave of the future (The Greentech Wave July-2008). Whereas you believe the planet is in need of help or you want to reduce your electric bill, the future lays in alternative energy sources, changes in waste management and improving our water supply.

Assumption #2: Greentech needs to push technology boundaries to substitute existing technologies and current behaviors. The world is still running of fossil fuels, waste (liquid and solid) keeps piling up and getting dumped in the wrong places and water sources are diminishing as water needs are rising. Why? Because it’s easier and cheaper to continue with our current behaviors. Therefore, greentech needs to “step it up” and start competing in cost and ease of use.

Therefore:

We need the fastest and best technology developers.

How about using the country that has the biggest concentration of scientist per capita? or The country that has delivered many of the technologies we use today, like the key drives and the messenger? The country that invests the most of its GDP in R&D? The country that has the most Nasdaq listed companies after the US?

The answer to all those questions: Israel

Last, but not least. Israel has the personality (as a country) to develop technology. People are natural entrepreneurs, scientist are “commercial application” oriented (as opposed to “pure research” oriented).

Here are some comments from the previous post “To Tree..”:

“I personally appreciate the yin and the yang of the tree hugging continuum. The extremists on both sides are the ones that come up with the ideas and questions no one has ever thought about before. Though it usually the more moderate parties that actually end up utilizing these new ideas and addressing the questions.”

“"The cost of solar power has to match the cost of coal power". - Coal is subsidized which is why it is so cheap. Wind and solar power are subsidized to a smaller extent through renewable energy credits purchased by individuals and some corporations, but do not receive the large amounts of funding given to coal.”

“Did you see the article about the Inuit village in western Alaska having to move inland because of flooding/rising seawater levels. I think there is ample empirical evidence that we are in the midst of climate change globally and that can be seen by studying the past and present. If we wait until the future...Nonetheless, I see a great global movement unlike anything we have seen in recent history”

“There are more trees in the US today than there were 100 years ago. The state of Texas has more trees than any state in the lower 48.”

“Saving the Planet...And it may be too late; I get your point! But Tree Huggers be damn! It is not "Global Warming" that is going to cause the destruction of life, It is the acidification of the Oceans. And, It needs to stop and reversed”

“Green tech for green tech's sake is a non-issue. The more pressing concern is overall US energy independence and green tech certainly has a place in that”

“Setting aside climate change skepticism (and there are reasonable physical scientists and engineers who are skeptical and have essentially been shouted down), it is too limiting to think only of energy production. We need to look at all aspects of human activity. For instance, intensive farming has done more environmental damage than all industry and transportation. Modern diets consisting of more meat result in significantly higher consumption of energy, water and other natural resources; and all that live stock means more green house gases”

“It is very difficult to tell someone he can't have a car, a refrigerator or an air conditioner because of added pollution and climate concerns. Specially when the "developed" part of our planet consumes most of the energy produced and generates most of the pollution”

To Tree Hug or not to Tree Hug? That is the question...

Sometimes we run into situations in life where its too late to undo what has been done and the only thing left is to chose between the "lesser evil" option.

If you are at a friends house and accidentally run into a large ceramic vase and the vase breaks. You can't undo what you did, the options left are: 1- to compensate for the loss by buying or paying for a substitute or 2- to piece the vase back together and somehow glue it back into shape. Either choice yields a bad result, but sadly, there is no way to go back in time and undo the damage.

I have talked to people across the "tree hugger" spectrum. People who believe "mother earth" is hurting and "she" needs our love and caring attention. And people who say that climate change is nonsense and that we are not impacting nature in any way by just going on with our lives.

We will only know the reality of today's status when we see the consequences in the future, and by then, it will be too late to change the result.

So let's try to make sense out of what we have today. Does Greentech stand a chance to help us avoid running into a unwanted "point-of-no-return" scenario?

I have said it many times: Greentech has to have economic feasibility. The cost of solar power has to match the cost of coal power. But, who says the cost should only represent materials plus labor. What about cost of public health. What about the cost of losing our bees (read this article Group Sounds Alarm on European Bee Industry)

The other factors we need to take into account when we compare Greentech to existing sources of Energy, Water and Waste Management are (a) the Economies of Scale and (b) the Research & Development amortization.

For example: A coal burning plant has several choices of vendors for their equipment (the risk of building a plant and getting it wrong are minimal); the sources of coal are well established and we know how to exploit them; the electric grid is designed to receive electricity from this type of source, etc. Today's entire world is set-up to generate energy from carbon. On top of all this, the majority of the cost of R&D for coal energy has been already paid for (as well as the cost of R&D for cars that run on oil, classical waste treatment methods, etc.).

Greentech will need a "boost" to achieve a competitive level with the existing technologies. Not only do we need to artificially create Economies of Scale for the replacement of coal plants, but we will also have to find a way to offset the cost R&D. That is why the CEO of Duke Energy agrees that coal is very bad for the environment and we need to substitute it, but he is not taking concrete steps to achieve that. Watch this:

Perhaps we are taking the correct steps to avoid running into a point-of-no-return situation (see Clinton Says U.S. Is Ready to Lead on Climate). I just want to leave you with the following thought: even though many people disagree on what happens after you die, few are willing to take the step to find out.

Here are some interesting comments I received for Who is holding Greentech back?:

"I don't believe it is who but what.
Any investment unless it is an emotional decision comes down to payback. Many green investments don't payback within many financial investor's needed timeframe.
With that said, I believe many are getting close."

"The banks or investors must check the results… that's why, good scientific consultants are required in financial business!!!!"

"So much for the great American Capitalistic system. This kind of environment is no more no less than the same economic mine field that was created around the sub prime mortgage fiasco and no one even wants to discuss it.
What has to happen is that a completely new means of funding has to be created to support viable technologies that are waiting in the wings. This could be done on the same level as what was done in the oil and gas industry with the “Royalty Trust Agreements” or some other financial instrument along those lines that reward the investors based on “PRODUCTION” derived from the process output and the effectiveness of the product in the market place"

"Wow, you really hit the nail on the head. Entrepreneurs like me who have risked so much to create a new technology are being hung out to dry by the more comfortably situated. Real entrepreneurs who risk their own money and careers (not the cushy kind who step right into a paid position with a startup) are treated as irresponsible and reckless"

"Of course oil companies are going to try to stomp out greentech... it is very much hitting them where it hurts...their money. The greentech companies have to infiltrate by really selling themselves with the saving money pitch. I know this may sound like it goes against what greentech is about but you need to speak in the language of big business. If you can go into a hotel chain and tell them your innovation will save them big bucks they will listen and in fact they just might invest in your greentech company"

"Cheap fossil fuels"

"You are correct the decision makers do not have enough information to define what is green or what is brown...they have a lot of hype...and perceptions that are incorrect"

"The Greentech bank is an interesting idea. The US has the resources to become a world leader in the alternative energy space"

"I love it. And it’s even worse if you are not developing a widget. My Energy Credit Card has a business method patent. My customers will be electric utilities and the closer I get to those "decision makers" the more entrenched they are and/or just plain scared of the simplicity of the Energy Credit Card.
For the curious, here is a short video: http://www.youtube.com/watch?v=rBDZUQQLRBs"

"It is not just the credit markets that are holding Greentech back. Two other candidates are government and the consulting engineering industry"

"Maybe the answer is to learn to do a better job of educating the current crop of money people about the value of taking risks in such areas and/or doing a better job of demonstrating long-term benefits"

Until next time: SHALOM!

Who is holding Greentech back?

"He who is firmly seated in authority soon learns to think security, and not progress, the highest lesson of statecraft" James Russell Lowell

If you want to know what else is wrong about today's economic model, you have to talk to any entrepreneur who is trying to implement a new Greentech initiative in a commercial scale.

The logical general path of a new product or service towards market implementation is the following:(1) An idea is conceived;(2) The concept is proven;(3) The product or service is launched to the market. Generally speaking, almost any new product that addresses a big enough market requires a big capital injection at the time of launch to market. Most of the companies seek this capital from banks and financial institutions.

The problem with this sources of capital is that they are very risk averse (now, even more that before!). Therefore, the decision maker for lending money towards a new Greentech product or service will be intrinsically against taking a risk on a new technology, even if that technology represents higher margins, and more so if that technology "only" represents lower carbon emissions.

Think about a new solar cell that is able to generate 5 times more electricity than classical cells being used nowadays. Lets assume that the product has been tested and proven worthy of initial investment. When this product is proposed for a large solar field to generate electricity for an entire town the project is presented to the banks. The bank's loan committee will look at this loan and will try to asses their risk. Someone will ask "has anyone proven these cells for a lifespan of 20 years, which is the loan period we are considering?". A long silence will follow until someone answers "we are not sure how these cells will behave past their first year of life, which is what was tested so far". What do you think the outcome of the loan committee will be?

A similar problem occurs with regulators. When a new greentech product is trying to get into the market is up to the regulators to provide a permit for this product to be commercially feasible. These regulators are also risk averse, at the end of the day they don't get any reward for approving better technologies, but they get punished for approving faulty ones!

To summarize, the lending committees of the world and the regulators are setting the limits to the type of technology we can access. This severely skews the outcome of the technologies being developed and presented to solve today's energy, water and waste management problems. I PROPOSE THE FOLLOWING: LET'S BUILD THE GREENTECH BANK, hire experts in each field to really asses the possible risks of each technology and let's give financial backing to the technologies that deserve to be launched (and hope regulators will follow suit).

Here are some comments I received from The Good News, the Bad News and the Ugly News:

I am sorry, your point escapes me, even after reading your blog. What are you trying to say here? We need to be thinking in terms of substantial changes in the supply of types of energies and the methods of delivering those supplies that are economic and feasible. Man, that is a life-altering experience. Greentech is still a pipe-dream with wet diapers.

Interesting and relevant news. Consistent with what I am seeing. The economy has certainly slowed (but not stopped)

Provide more capital to small start ups - there are thousands of people out there in garages - we do not need the big to protect the markets and have it their way - at one point there were 200 car companies - same here - protect the small and help them grow

Comments from The obstacles to Alternative Energy implementation are in our heads. Are they?:

That's only part of the problem. The other problem is that we are too rich, so we don't give a damn, and can throw away hundreds of dollars per month without even knowing it. The conscious people are satisfied with talking the talk and walking the walk for themselves

The barriers to entry in the Energy Market are in your mind in this respect -- Don't allow anyone person, company & entity to impede your progress. If you provide smart business answers, the volume will follow

I do not think you are wrong, but is the green or alternative energy infrastructure large enough to be part of the mainstream?

Why don't we spend time and money coming up with ideas to use wisely the energy supplied by renewable energies. If we do not have electricity for one hour or a couple of hours, do we die? No, so many millions in the world do not have and they live every day. Mr Shiro is completely right. It is our own brain, which is creating the problem

Really big obstacles exist, I am currently making suggestions to my local Politician to asses and draw up protective outlines to govern the hapless new wave of installers and dealers of this new technology. Residential involvement seems to want more guidelines on how new dealers with almost no experience can suddenly appear out of nowhere and work on your home or office for a high dollar price. Where will this lead? Homeowners dealing with a nightmare of no set rules and guidelines orchestrating the professional as these newbies call themselves without getting proper identification, certification, licensing and insurance to facilitate these constituents of our local, state, or even federal areas. New dealers are not the only problem; New manufacturers are also popping up and claiming remarkable and physical science impossibility with these products. These New Manufacturers also need to make sure that they express that there systems only work at these outputs, and that the material has been reviewed by either DOE or NREL and certified by UL or consumer reports. We set up rules and guidelines to safe guard our peoples vehicles they ride in in the United States. If you build a car that does not meet the DOT crash standards for instance; it will not be sold to the people. This same concept is what I am proposing to the renewable energy field

Until next time: SHALOM!

The Good News, the Bad News and the Ugly News

As I flip the pages of the New York times in days past I have encountered the following articles:

Article #1

Not So Green After All (Oil Giants Loath to Follow Obama’s Green Lead)

The Obama administration wants to reduce oil consumption, increase renewable energy supplies and cut carbon dioxide emissions in the most ambitious transformation of energy policy in a generation.

But the world’s oil giants are not convinced that it will work. Even as Washington goes into a frenzy over energy, many of the oil companies are staying on the sidelines, balking at investing in new technologies favored by the president, or even straying from commitments they had already made.

Comment

The UGLY NEWS: is that greentech is finding it's toughest obstacles. Traditional businesses are protecting their ground and many big players are reducing their exposure to new technologies. It is only logical that many companies, having to reduce costs and to concentrate on their existing operations lose sight of potential opportunities in the future.

Article #2

Cost Works Against Alternative and Renewable Energy Sources in Time of Recession

Windmills and solar panel arrays have become symbols of America’s growing interest in alternative energy. Yet as Congress begins debating new rules to restrict carbon dioxide emissions and promote electricity produced from renewable sources, an underlying question is how much more Americans will be willing to pay to harness the wind and the sun.

Comment

The BAD NEWS: is that Greentech will have to become more cost competitive in the near future. Declining world consumption and energy prices will act as a much stronger filter of Greentech products and services. Only the very competitive and the ones that have the soundest commercialization plans will be able to survive in this economy.

Article #3

A Tiny Camcorder Has a Big Payday

SAN FRANCISCO, Calif. — Pure Digital Technologies thought small and simple, and it paid off big time.

The tiny, eight-year-old start-up famed for its inexpensive and easy to use Flip video cameras has defeated a down economy. On Thursday, the 100-person company was bought by Cisco Systems, a technology infrastructure giant, for $590 million in stock. The deal caps off a bumpy and unpredictable rise for Pure Digital, which bested the Asian companies that dominate the camera industry from an office located above the Gump’s department store in the heart of San Francisco.

“At a time when everybody has just been hammered with stories of misery, this is a really fabulous tale of what is possible against all odds,” said Michael Moritz, a venture capitalist at Sequoia Capital, which invested in Pure Digital.

Comment

The GOOD NEWS: There are still winners out there! If Pure Digital can make it big so can others in the Greentech sector. The path towards greentech implementation has become steeper, but the finish line is still achievable.

Article #4

At U.N. Talks on Climate, Plans by U.S. Raise Qualms

BONN, Germany — At the start of the United Nations climate talks here 12 days ago, the Obama administration’s chief climate negotiator, Todd Stern, received a round of rowdy applause. It was the first appearance of the new negotiating team at any global meeting.

But by Wednesday, as the meetings drew to a close, some delegates — and even some United Nations officials — were grumbling that the United States was not moving fast enough to take action on global warming.

Comment

More GOOD NEWS: Unlike the experience of the 80's when price of Oil went back down (after a tremendous increase) and all greentech initiatives were thrown out the window, this time around there is a strong commitment towards climate change and clean technologies. The conversation has turned from "are we doing something?" into "are we doing enough?"

Until next time: SHALOM! (for those of you who celebrate: Happy Passover)

The obstacles to Alternative Energy implementation are in our heads. Are they?

Everybody is talking about how the economy is affecting the inertia of Greentech by (a) limiting investment and (b) having to compete with lower fuel costs

I believe that we are closer to implementable solutions than what most people think and I will try to make the calculations to prove this point. Please feel free to correct me wherever you think I might be wrong (I am no expert on this specific subject).

The average home in the US consumed 936 kWh per month in 2007 (according to the US Department of Energy), that represents $99.70 spent per month in electricity ($1,196.40 per year).

If we were to buy an alternative energy technology we could spend in that technology the equivalent capital for which annual payments equal $1,196.40 (for interest and principal – mortgage style)

Let’s assume we can get a loan at 4% for 20 years. The capital for annual payments of $1,196.40 at 4% over 20 years is $16,259.47 (at the end of 20 years the debt will be zero).

Now, let's see what we can afford with this money!

Perhaps we could buy a wind turbine. In order to calculate the capacity (and the cost) of a turbine able to cover 100% of our energy needs we need to bring the monthly kWh into a 10 hour day wind energy production. Therefore, 936 kWh divided by 30 days gives us 31.2 kWh per day. We then divide by 10 hours and obtain 3.12 kWh (per hour). In short, we need to generate 3.12 kWh for 10 hours every day to cover 100% of our electricity needs (this is achievable in almost any state with wind turbines that have a 5 m/s or 11MPH minimum wind capacity)

After a lot of web searching I found that the cost of a 3.5 kW wind turbine runs around the $12,000 mark (installed). There are additional charges for maintenance, but the "extra" $4,259.47 (remember we had $16,259.47 as total capital available) should more than suffice for those expenses.

An alternative for the wind turbine is solar power. In this case we need to convert the 31.2 kWh per day into 5 hour days of sun. Therefore, we need 6.24 kW solar panels tied to the grid (31.2 kWh per day divided by 5). According to my research these will run for around $40,000 ($23,740.53 over our budget)

But wait! We have not counted the rebates and incentives we could get from state and federal entities. I do not have enough time or energy to calculate the applicable rebates, because each county and each state and each technology has a different rebate quantity and procedure. I will risk saying that the available rebates range between 20% to 50% (perhaps making the solar panels affordable!)

Can the same principle be applied to water? Could we start by calculating the cost of water and sewer in a typical house and then find technologies that could replace either the water sourcing or the waste water removal service? The answer: I don’t know (perhaps I will explore this in a future article)

Some of the comments I got from last week's Energy Storage:

"I believe pumped-storage hydroelectric has and is being used. I remember Northfield Mountain in Massachusetts being the first that I had ever seen. Here's a Wikipedia link describing the technology and current sites using it: click"

"The gravity part is the easy part, I suspect. You will need to either find a natural land formation where you can store the water, OR, you will have to build a vessel. Perhaps that is the hidden cost. Also, you have to consider the efficiency of the system... First the primary renewable energy source cost and efficiency, then the pumping uphill efficiency, and finally, your hydro-electric generator efficiency -- that is a lot of steps and the overall efficiency, which is multiplicative, perhaps turns out to be dishearteningly low."

"This approach was implemented in Bath County, Virginia back in the 70's. It apparently worked quite well. However, it was implemented to utilize the electricity produced by coal fired turbine plants who produce a steady stream of power by day and by night, but where consumption was lower at night. So, they kept the plant at the same production level at night and used the electricity to pump the water back up the mountain above the hydro electric plant."

"The pumped hydro system suffers when you increase the scale. As the volume of water increases, the system becomes more expensive"

"That is what is being planned for Norway where there is a large hydro power industry - they are looking at having offshore wind turbines working continuously to drive pumps to release the power for peak shaving in Europe thru interconnectors."

"Last weekend I heared about a Spanish project were they haul up on a slope an 80 ton heavy concrete block when the wind was blowing, letting it make electricity when there was no wind! It is like the old clocks were you wind up the weight every day"

" It only makes sense when there are significant elevation changes, and most solar and wind farms are in the flat lands"

"1 cubic meter at the top of a 100 meter tower has a potential energy of about 0.272 kW·h for example lead-acid has power density around 100W/liter"

"A number of companies are looking at this, as well as compressed gas storage, flow batteries, etc. It looks like the maximum efficiency for pumped hydro is between 70% and 80%. Initial capital outlay for building the facility is high. It all depends on the price of fossil fuels and carbon credits..."

"Pumped hydro is severely limited in further deployment (we already have 20 GW of it in the US alone). Here's why: *Locations that have the requisite topography are very rare. *Safety issues regarding the construction of an upper aquifer at height are very real and, for the most part, insurmountable. *The politics of water make it almost completely impossible for new projects to launch. *The efficiency of pumped hydro is, at best, 78%. Batteries can achieve 85% efficiency. Right now the capital costs of batteries are far higher than pumped hydro. But placing a bet on battery prices falling due to economies of scale is smarter than placing a bet that some community somewhere will allow its water system to be interfered with."

"When I worked for an electric utility we had two pumped storage facilities that worked well but had the many of the problems indicated in previous posts. Another promising storage medium is compressed air energy storage (CAES) where air is pumped into an old salt mine (like the ones under several Great Lakes cities) and released to generate power. Like pumped hydro, the pumps turn into turbines and the motors turn into generators"

"Moving water from one place to the other in the wild raises all sorts of environmental questions. Better not done"

Until next week: SHALOM!

Energy storage

The best way to store energy is gravity.

You heard right! The best way to store energy is perhaps by pumping water upstream (or up to a large container) and letting Potential Energy take over.

If this is the case then, why are we not setting up renewable energy plants next to water sources and pumping water upstream? to then have hydro-electric generation to recuperate the stored energy?

Is it that we are not yet producing enough renewable energy to have to store it? or perhaps its the fact that no one has been able to coordinate power source, high storage and water source?

I have heard a million times that the biggest obstacle to renewable energy was power storage. Everyone points to the battery to be the "next big thing" in clean energy. Why is gravity and potential energy left in the dark?

In the previous weeks I wrote about the electric grid, one of the biggest dilemmas on power generation is weather to have local or centralized power. Many people responded to my post and the more I heard the more I am leaning towards distributed power generation. With distributed power it will be more feasible to have a "full renewable system" in place.

In a "full renewable system" energy generation is not a stand alone solution. We could have power generated from wind (for a small group of houses) and a reservoir to pump water up when the wind provides more than the necessary power. In change, we could use the water reservoir to generate power in low wind conditions and also as a receptacle of recycled water from the same community. This way we will link water recycling with power generation: True Sustainability!

 

Perhaps this is not the right combination of green technologies, perhaps there is a better formula using solar power and water heating solutions. The point is that we are very limited if with think of solutions in a one dimensional aspect (e.g. power generation) versus thinking on multi dimensional levels (e.g. the "full renewable system").

Here are some interesting comments from last week's question regarding the power grid:

"The growth of micro-wind turbines built as vertical axis turbines and mounted onto roof tops of commercial office blocks will do a lot for distributed power"

"Interestingly there have been some recent developments in high voltage dc systems - to ship power between different countries - but so far it's still not a proven technology as far as I can tell."

"The driver for sizing a power plant is the historic consumption and projected consumption for the future. Really it is based on the power markets in the area and pricing. Another large driver is transmission availability"

"I think that the crux of the problem is that you can't have a generator without a load, you can't put power into the grid that no one is going to consume, you must have always a load, that is the reason for having a smart grid that switch on more generators when the power requested from the grid increase and switch off the generators when the requested power decrease."

"Electric grid operators and power plants try to meet the demand of a given region but the real factor is cost and time to bring on new power plants and resources"

"Perhaps DC is the answer to all who are concerned with the fact that you can generate wind power, but you cannot get it to where the heavy electric load is located"

"There is actually a high-voltage, high-power DC line running from the Bonneville Power Authority in the Columbia Gorge to California"

"Generally, there are two types of power plants. Baseload and Peaking. Baseload plants, as you would expect, tend to run at full or nearly full capacity all the time. They tend to be designed for steady efficient power output, like a diesel truck engine. The peakers tend to be less efficient, sometimes much less, but can start up quickly and operate over a wide range of output levels. The respective capacities reflect the somewhat local needs for each type of power. Big transmission can modify that, but only within limits unless you go to.... DC transmission. This IS in use around the world, including the US. The limitations tend to be in the costs of converting from AC to DC and back to AC for final delivery so you only want to use it (generally) for long haul applications"

"Capacity of a power plant to produce power is defined by the total of the MCR (Maximum Continuous Rating) of each of the generators installed at specific conditions. The capacity needs of the power plant in the old regulated days was the capacity required to exceed the predicted load plus an allowance for the shutdown of one or more of the largest generators. This typically meant that 5 to 10 % of reserve capacity was to be available on the peak day to meet the peak load. This peak load is much smaller than the total of all potential loads installed by the various users including homes, businesses, and industry. For example a typical home will only use 10 to 15 % of all the capacity installed within the home on average. The peak demand might be larger and will coincide with other users peak demands on very hot days in the summer. The challenge with matching the electrical production with demand is that the transportation system does not store the electrical energy. Fossil fuel transport systems including natural gas pipelines or even the fuel tank in your car have considerable capacity to buffer difference in production and demand"

"The amount of power generated must exactly match the amount of power being consumed (used or wasted) or the mismatch will increase or decrease the system frequency. The frequency difference is usually very very small but still everyone tries very hard to prevent it. The utility or Independent System Operators (ISO) power dispatchers have a good idea (from historical data and from weather forecasts, etc.) how much power they will need and the time of day they will need it. Then they go to great lengths to measure how much power is going into their bulk power stations, how much is flowing in or out of their interconnection lines and how much is being generated at each plant and by each generator connected to their part of the grid. All of this is fed into a system modeling program in a computer which determines how much power should be generated for the next few seconds and which generator in which plant can generate it most economically"

"Actually, there are quite a few DC grids in the world. Most are found in Europe. On the distribution loss side, DC does not suffer skin effect loss so it does have an advantage there. With the advent of modern DC conversion technology, the argument that it is "harder" to convert DC levels has lost some of it's basis. Finally, after all of the conversion, distributions, and storage - the critical loads are always DC."

Well, I believe this is enough reading for one week. Until next week: SHALOM!

The Electric Grid. Answering question #2: What determines the capacity of power plants and #3: Why not a DC grid?

Again this week I would like to thank everyone for responding to my Electric Grid Questions. This week I will address the other two questions:

2- What determines the capacity needs of the power plant? Is it the installed capacity in the network (each appliance and circuit in each house, office and factory) or is it the historic average consumption of electricity?

3- Why can’t we have a direct current (DC) grid? Many alternative energy technologies struggle with the conversion from DC to AC (alternative current). Why do we need to use AC everywhere?

First of all, about the capacity. This question was difficult to formulate and it was also misunderstood on several responses. The reason for this question is to find out if there is something that can be done regarding Watts and Amperes of new appliances and alternative power sources to minimize the required capacity of new power generation.

At the end of the day my understanding is that even with the most efficient appliances in the grid, power generation and distribution is still a statistical game, and this is EXACTLY where the so called "smart" grid will contribute to energy savings. Power plants generate at constant preset levels and additional capacity is turned on or off based on "peak demand"

Regarding DC vs AC I gather that the big problem of DC is the inefficiency of transporting this current from the source to the user. But, I definitely see an opportunity in generating locally DC power and using it in DC appliances without wasting electricity in DC to AC conversion.

The other problem of the DC power is that many appliances relay on the frequency of the AC electricity to work properly. Many people also mentioned the fact that DC components are much more expensive than AC components. I believe the answer to both this issues relies on the fact that AC has been mainstream while DC has been kept in the dark. If we inject new force in the DC solution then we will find that the market will generate new ideas and better pricing for DC applications.

Some of the answers received:

"2. The capacity needs of the power plant should be based on total load installed [maximum consumption] + some allowance for VAR correction + anticipated or estimated future augmentation [load additions]
3. DC generation & distribution equipments are far more expensive than the AC equipments like generator, transformers, safety devices etc. Its comparatively cheaper to convert it at user end [the converter modules with the chord would not be more than $30 each"

"Dumb Grid allows double digit percentages of electricity to escape and a new Smart Grid would not.
The U.S. will need to install a new Smart Grid system if there is any chance of going to electric cars.
AC vs DC: AC technology is much more flexible and has a strong economic advantage as DC requires very thick copper."

"...why is there no DC? First, there are increasing uses of DC power in parts of the grid that consumers don't see. DC power can be used now for relatively long distance power transmission. But to switch the entire grid and each and every device that uses electricity from AC to DC would clearly be impossible. There may be room for DC in some applications; but not on a widespread basis."

"#2 - I think plant size is governed by politics, dollars available and demand.
#3 DC does not travel well. over distances the voltage drops. not true with ac. ac losses are in current - not volts."

"We could have a DC grid, and yes it would be much more efficient, but it is highly unlikely to happen in our lifetime because no one will accept going without power long enough to switch the system around and highly unlikely investors or the government would pay to do it."

"2) Make the consumer more mindful of their power usage by forcing them to look at the data in the power distribution console/display or connected smart appliances designed to take advantage of data communications technologies built into both appliances, devices and the smart meter interface"

"2)There are additional needs to consider, including extra reserve capacity, based on rules from NERC/FERC. No one wants to experience a blackout or brownout, so the generators/systems/transmission lines all have extra capacity designed in

3)There are several examples of HVDC in North America. When it is most economically feasible, HVDC is used"

"2.There are no ideal figures for per capita electricity consumption as the same can be open ended.At the household level,one could consume as much electricity as one wants depending on availability.At the industry level,one could keep setting up newer manufacturing units once again depending upon availability of electricity.The best way is to link it to nominal and per capita GDP growth rate which the government plans to achieve.Growth in electricity generation must lead GDP growth by a factor of about 1.4 to 1.5.
3.This goes back to epic debate of AC vc DC between Nikola Tesla and Edison.AC won over DC and hence AC grids were set up.A DC grid needs inversion equipment which adds to the cost. However there is a realization that DC is more economical with lesser losses than AC over distances longer than 800 kms.There are now quite a few HVDC grids being set up."

"I believe that as alternative energy evolves, as more and more end users are using solar power, as LED lighting becomes the norm, that AC will eventually become extinct. The "grid" concept will be redundant"

"Transmission losses are the big dirty secret of centralized power."

Until next week... SHALOM!

The Electric Grid. Answering question #1: Centralized vs Distributed power

First of all I would like to thank everyone for responding to my Electric Grid Questions and throwing light into this subject which I find fascinating. Here is the compiled version of the answers I received for the first of the three questions plus some research of my own (the other two questions I hope to address in the upcoming weeks):

1- What is the best strategy for the future of power? Is it to generate electricity in each home, or neighborhood, or community; or to maintain the current system where a series of big power plants inject their product into a complex network that distributes the electricity to large geographic areas?

To help me answer this question I turned to Amory B. Lovins' newest article "Does a Big Economy Need Big Power Plants?" (it turns out we both wrote about this particular subject at the same time, therefore proving that great minds think alike!)
Amory is 100% for distributed power: “Central thermal stations have become like Victorian steam locomotives: magnificent technological achievements that served us well until something better came along.”

Some interesting facts mentioned in Amory's article: "The U.S. lags with only about 6 percent micropower: its special rules favor incumbents and gigantism. Yet micropower provides from one-sixth to more than half of all electricity in a dozen other industrial countries. Micropower in 2006 (the last full data available) delivered a sixth of the world’s total electricity (more than nuclear power) and a third of the world’s new electricity. Micropower plus “negawatts” — electricity saved by more efficient or timely use — now provide upwards of half the world’s new electrical services. The supposedly indispensable central thermal plants provide only the minority, because they cost too much and bear too much financial risk to win much private investment, whereas distributed renewables got $91 billion of new private capital in 2007 alone"

Even though I would also prefer to see a distributed power system I am not as optimistic as Mr Lovins (and neither were some of the people who responded). There are some important efficiency and market issues with distributed energy generation that we have to face right now. Take wind power for example: the newer generation of wind farms has more and bigger turbines than their predecessors. I credit this to several factors:

• Turbines become more efficient as they grow in size - bigger turbines (this is true up to certain limits)
• Wind farms benefit from economies of scale as they become larger (more turbines)
• As wind farm owners become more comfortable with the investment, higher capacity plants are being proposed and funded.
• Most important of all: Selling and installing ONE wind farm that produces a Mega Watt per hour is easier (and more commercially viable) than selling thousands of smaller kilo watt turbines. This point in particular affects the whole chain of development of power plants:
• 1. Developers of new technologies aim towards bigger pockets (centralized plants). Therefore, creating newer and more efficient generators for the centralized system and neglecting the distributed option.
• 2. Investors, distributors and installers aim to reduce their risk by concentrating their investment and effort into more focused and less mass market trend-changing technologies. When we talk about creating a new wind power plant, we understand the limits and the risks better than if we would talk about selling wind turbines door to door.

The same efficiency and market issues hold true for other renewable energy generation methods (with perhaps the exception of solar PV, being the one with the most distributed systems to date). Furthermore we are leaving hydro and nuclear out of the equation. Forget the impossibility of having distributed hydro power and the danger of having distributed nuclear power!

Finally, I am including some answers I received via email or LinkedIn (I am reserving the names of the authors awaiting for their approval):

· "we need to break away from centralized power...and as it happens - while that's not a common opinion with the big power companies - it is the common opinion of electrical generation engineers"

· "technology and wisdom will dictate the answers...Now that science is finally focusing on the problem of sustainability and innovation, breakthroughs will be coming within a few years based on existing "future-tech" inventions and unimagined ones"

· "With the move to wind and solar power it will be necessary to maintain a large grid system because of the instability of the energy production"

· “I think the "smart grid" has the potential in the 2010s to duplicate the same type of transformation of our everyday lives as did the Internet in the 1990s… New technologies are making small generating facilities (solar, wind, biomass, even natural gas) sufficiently economic that they can compete with the large central station generators… The smart grid can help here also. It will be able to control the micro generating device you install at your house. When you are away or not otherwise using your full capacity for your own house, the smart grid will pump your electricity into the grid for others to use. This lets your system operate on a useful basis closer to 100% of the time with the resulting efficiency gain”

· “the best strategy isn't a single approach. By combining efficiency at the demand end of the grid (homes, business, etc) and allow the demand to sell the ability to reduce further during peak periods we can avoid building some amount of new generation. This alone isn't enough. Technology on the supply side with newer more efficient means of generation also play a role”

· “Imagine rental properties or tightly packed suburban neighborhoods. These folks would find it difficult if not impossible to erect a wind turbine or solar panel. Also, many consumers would not be able to generate enough alternate source power individually to run their homes and most businesses would not either”

· “Think how consumption is accomplished - locally in homes and local businesses, and there are some large energy intensive industries that require huge amounts of energy, like metal foundries and smelting, and they need the massive generation power of wind farms and solar farms and hydro dams (for overnight storage, and base load power)”

· “Part of the problem with local generation is that no one wants to live next to a power plant”

· “Electricity tends to be a natural monopoly. Established industrial groups especially the utilities owning and operating generating stations on fossil fuels and large dumb grids and super highways supplying energy at low tariffs were hitherto getting away with murder by not paying for externalities (carbon footprint increase).”

· “for most sources local generation is impractical, and you still need a grid to even out supply and demand even for solar”

· “The moving of energy from point A to B, and often back again, is a huge drain on efficiency. Keeping it all close by to where it was generated and will be used would be great. However are there good options for the consumer and/or the business that want to store the power? I've read about some custom hydrogen fuel cell methods. There is always batteries I guess”

Until next week…SHALOM!