Miami Greentech

Poetry to me!

2011-10-17T08:42:00.000-07:00

Nancy Pfund: Solyndra notwithstanding, energy subsidies are as old as the Republic - San Jose Mercury News

The bankruptcy filing by solar panel manufacturer Solyndra is grist for many controversies. While some of them are narrowly political, others involve legitimate policy questions that deserve a full airing. It's fair to ask, for example, why the government is subsidizing alternate energy sources in the first place. Shouldn't that be better left to the free market?

As it happens, the Obama administration is not the first to have the idea of giving the economy a boost by helping out a promising new energy source. To the contrary, energy subsidies have been a constant in American history, literally going back to the country's earliest days, and have been crucial in America's overall economic development.

Nancy Pfund: Solyndra notwithstanding, energy subsidies are as old as the Republic - San Jose Mercury News

This is the model of the future

2010-09-30T21:01:00.001-07:00

In a recent NY Times article I found the description of what the near future looks like... And, by the way, for all you doubters out there: it's profitable!

"Ancient Italian Town Has Wind at Its Back" (http://www.nytimes.com/2010/09/29/science/earth/29fossil.html) talks about Tocco Da Casauria a small town that has developed enough alternative energy power to sell electricity back to the grid and make a profit.

Something to admire and replicate

Until next time...Shalom!

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The Personality of an Entrepeneur

2010-09-20T13:53:00.001-07:00

Hello again!
I'm taking advice from friends and returning to my blog in an attempt to keep it alive, in order to do so, I will also post shorter articles. So enjoy:

Even though not specific to Greentech, a lot of my work as a Greentech fund manager pertains to entrepreneurs and their ability to perform.

In the Sunday Business section of the NY Times I found two interesting articles.

The first one describes the "obsessive compulsive" personality that an entrepreneur should have to be successful. And, even though I don't subscribe 100% to this profile, there are a lot of interesting elements described in the article:

"Just Manic Enough: seeking the perfect entrepreneur"
http://dealbook.blogs.nytimes.com/2010/09/20/just-manic-enough-seeking-perfect-entrepreneurs/

The second article is a short interview with Kevin O'Connor, he is a serial entrepreneur famous for founding DoubleClick. This short Q&A reflects the unique mentality that an entrepreneur has to have in order to come up with a unique product or service and to be able to execute on this idea.

http://www.nytimes.com/2010/09/19/business/19corner.html

Until next time, shalom!

- Posted using BlogPress from my iPad

Israel G-Tek adds three exceptional companies to its portfolio

2010-06-23T16:16:00.000-07:00

US based Israel G-Tek LLC - a private equity fund investing in early stage greentech companies - has added three companies to its portfolio: Bloom Energy, Fisker Automotive and Serious Materials.

The recent investment brings the number of portfolio companies to four - IQwind (www.iqwind.com) being the first one. Uri Benhamron and Sami Shiro are very excited to break the news. "This adds alternative power generation, electric hybrid vehicles and green building materials to our portfolio, and it starts to bring to life our investment strategy" Mr Benhamron said.

Furthermore, these companies are on a solid path towards growth, with strong possibilities of IPO or a large M&A deal. Here are some details on the three companies:

Bloom Energy

Bloom Energy builds solid oxide fuel cells: Bloom Energy Server™ is a new class of distributed power generator, producing clean, reliable, affordable electricity at the customer site.

Fuel cells are devices that convert fuel into electricity through a clean electro-chemical process rather than dirty combustion. They are like batteries except that they always run. Our particular type of fuel cell technology is different than legacy "hydrogen" fuel cells in four main ways:
1 - Low cost materials – their cells use a common sand-like powder instead of precious metals like platinum or corrosive materials like acids.
2 - High electrical efficiency – they can convert fuel into electricity at nearly twice the rate of some legacy technologies
3 - Fuel flexibility – their systems are capable of using either renewable or fossil fuels
4 - Reversible – their technology is capable of both energy generation and storage

For more information on Bloom, please watch the following 60 Minutes clip: http://www.cbsnews.com/stories/2010/02/18/60minutes/main6221135.shtml

Fisker Automotive

Fisker Automotive is a green American premium sports car company with a mission to create a range of beautiful environmentally friendly cars that make environmental sense without compromise.

They are in the early stages of their product launch, a four door sports sedan with “series plug-in electric” engine (which uses an engine only to recharge the battery – as opposed to the Prius which is a “Parallel Hybrid” and alternates power to the wheels from both engine and battery)
Sales expected to start in 2011 and ramp up to several billion in 2014, including the launching of NINA their second, lower priced model.

Recent activity in this arena includes a partnership announcement of Toyota with Tesla (http://www.msnbc.msn.com/id/37358614/ns/business-us_business/), and the tremendous success of the Nissan Leaf full electric vehicle (http://www.theatlantic.com/business/archive/2010/05/nissan-sells-out-all-electric-leaf-in-35-days/57292/). In addition Tesla has filed for an IPO of $100MM in January (http://www.reuters.com/article/idUSN0120624820100201)

This car is a higher class competitor to GM’s Volt, which has similar technology and will probably be in the market late in 2010 after much noise and speculation

The Karma:

Serious Materials

Serious Materials develops and manufactures sustainable green building materials that dramatically reduce the impact of the “built environment” on the climate

The company’s slogan of “.. aiming for breakthroughs in product performance, without requiring changes in customer behavior or in how products are used – thus speeding market adoption.”, combined with the market tide and regulatory incentives and reforms that will propel green construction standards as well as retrofitting is the key for the success of this company.

Currently they offer the following products to the market:

EcoRock: 5x Environmentally friendly than Gypsum

QuietRock: The most reliable soundproofing drywall

Serious Windows: Saves more energy than any other window, period.

QuietCoat: noise-reduction compounds. These are used in millions of personal computers, in cars, and more.

Serious Materials provided the windows for the retrofitting of the Empire State Building (http://www.seriouswindows.com/empire-state-building/home.html)

Israel G-Tek LLC contact info:
Sami Shiro sami@ig-tek.com
Uri Benhamron uri@ig-tek.com

Mia Green Presentation Feb-2010

2010-03-22T15:47:00.001-07:00

Kleiner Perkins’ Greentech Portfolio

2010-01-08T13:17:00.001-08:00

I have been playing with this idea for some time and I finally decided to give it a go.

The idea is to try and learn from the “big guys”. Even though Kleiner Perkins (KPCB) has different investment objectives and methods than Israel G-Tek LLC or ABA Greentech Fund PLC they are definitely at the forefront of VC investing.

I want to try and learn the status of the KPCB Greentech portfolio. To do this I will refer to the companies listed in their website (if other companies exist under the radar – too bad)

Let’s start!:

Altarock Energy Inc:

What is it? AltaRock has filed patent applications for a portfolio of patents in the geothermal energy area and holds exclusive licenses for related intellectual property.

News:

December 11, 2009: Geothermal Project in California Is Shut Down (NY Times)

November 16, 2009: AltaRock Geothermal Gets New Boost. The DOE will sink $25 million into an “engineered” geothermal demonstration project in Oregon being developed in part by AltaRock Energy (Green Inc)

Amyris Biotechnologies:

What is it? Amyris has very fuzzy description of itself. The short story is this: they make Renewable Fuels (Diesel and Jet Fuel from sugar cane using synthetic microorganisms), Malaria Treatment (bioengineered process to obtain the vaccine) and other Chemicals (???)

News:

December 21, 2009: Changes in management: New COO and new Chief Commercial Officer (is there trouble or is it just growth?)

December 08, 2009: Letters of intent with 3 sugar and ethanol companies in Brazil. Amyris will distribute their product and also experiment to enhance production.

December 3, 2009: Amyris Biotechnologies, Inc., announced that it intends to acquire a 40% stake in the Boa Vista mill, an ethanol-producing mill owned and operated by the São Martinho Group, one of the largest and most efficient sugar and ethanol producers in Brazil. The parties will work together to convert this mill to produce Amyris renewable products with first production targeted for the 2011-2012 harvest season

August 21, 2009: Amyris, which makes biofuels from synthetic microorganisms, said today it edged a little closer to the finish line, acknowledging a $24.7 million first close of a potential $62 million Series C to ramp up its synthetic biology platform.

Ausra:

What is it? Ausra designs, manufactures and installs solar steam generators (solar thermal energy)

News:

January 29, 2009: Ausra announced that it no longer plans to build massive solar thermal plants across the southwest and California desert due to poor economic conditions, shifting its focus to smaller-scale power generation plants. Ausra’s new strategy came with its share of layoffs — about a dozen of its 108 employees have been trimmed from the staff since December. Several executives have also chosen to depart.

November 17, 2009: Ausra Solar Looking for a Buyer

November 5, 2009: First Solar will not build the 1,000 megawatts Carrizo project, and the deal has resulted in the cancellation of Ausra’s contract to provide 177 megawatts to P.G.& E

Bloom Energy:

What is it? (no information on the website) Bloom boxes, when hooked up to a renewable power source such as a wind turbine or solar panel, makes and stores hydrogen and oxygen. And at night or when the wind dies down, it changes direction and uses the stored gases to make electricity.(Bloom's system relies primarily on oxygen rather than hydrogen)

From LinkedIn:Bloom Energy, Inc. provides solid oxide fuel cell technology and products for distributed electricity and hydrogen generation. Bloom Energy, Inc. was founded as Ion America, Inc. and changed its name to Bloom Energy, Inc. in September 2006. The company is based in Sunnyvale, California

News:

December 7, 2009: The company won't comment on reports that the city of San Jose recently granted online auction giant eBay (EBAY) permission to install five fuel cells from Bloom Energy that will generate up to 500 kilowatts of power, nor that search giant Google (GOOG) is separately testing the system. But Bloom Energy does confirm it's aiming its initial systems at business customers that want to explore whether they can get reliable green energy at the same price or less than they now pay the electric company.

October 8th, 2009:Bloom is targeting the transportation industry in the company’s grand vision “Our device can either produce the electricity that will charge the car or provide you hydrogen if the transportation becomes a hydrogen based. So we’ve sort of become the gas station for the transportation industry.”

Fisker Automotive:

What is it? Premium sports car company with a mission to create a range of beautiful environmentally friendly cars (mostly Hybrid and electric – for now)

News:

December 4th 2009: What does Joe Biden have to do with Fisker Automotive? On the surface, the answer would seem to be nothing at all.. or at least it did until the Vice President himself revealed the startup automaker's plans to introduce a new series of electric vehicles under the Project Nina banner. Not only that, Fisker just so happens to have decided to build cars in Biden's home state of Delaware. Coincidence?

December 3rd 2009: No one but the hopelessly naive will be surprised to learn that production of Fisker’s Karma will not be hitting customers hands by the end of this month (as once promised). For a company that was only founded two years ago, to get an all-new design engineered and produced in 18 months is a near impossibility. The new target for the for the Karma sedan to hit dealers in the U.S. is September of 2010. Fisker has lined up 42 dealers in the U.S. to sell and service the Karma, along with three European distributors that will provide cars to about 100 dealers there

GreatPoint Energy:

What is it? GreatPoint Energy, Inc. engages in commercializing a process for converting coal into natural gas. The company’s product, bluegas converts feedstock into natural gas

News:

August 13, 2009: GreatPoint Energy Inc., which built a 200-foot-tall coal-to-natural-gas test facility in Somerset, Ma on the campus of the Brayton Point Power Station, will take the results of its testing and build a full-sized conversion facility in Texas. Building a full-scale production facility will probably take three or four years

April 27, 2009: GreatPoint Energy Inc. and Dow Chemical Co. announced the signing of an agreement giving Dow Chemical Co. the option to purchase natural gas from GreatPoint Energy-developed facilities

Hara Software:

What is it? Hara provides environmental and energy management solutions which help organizations grow and profit while optimizing natural resource consumption and reducing environmental impact

News:

May 31, 2009: If Congress passes legislation that puts a price on carbon emissions, companies will need to track and report the waste from their operations. Hara, a start-up that on Monday will start selling software to help businesses measure and reduce their greenhouse gas emissions.

November 19, 2009: Hara Software Inc. announced that News Corporation has selected Hara to help reduce energy consumption and carbon emissions

Kotak Urja:

What is it? (website was down!) India's leading Solar Photovoltaic and Solar Thermal Energy Solutions provider. Kotak Urja Pvt. Ltd. engages in the design, manufacture, and installation of solar based equipments in lighting and heating systems

News:

June 9, 2009: First 'Green' Commonwealth games, the commite decided to install Solar Water Heater in the Commonwealth Village in Delhi. Kotak Urja Pvt Ltd, Banglore has been awarded the contract to install solar water heaters.

October 31 2008: Kleiner Perkins Caufield & Byers (KPCB), Sherpalo Ventures and a US company have invested $8 million in renewable energy company Kotak Urja Pvt Ltd

Lehigh Technologies:

What is it? Lehigh Technologies recycles tire rubber into fine, engineered powders with performance and cost advantages to rubber and specialty chemicals. Its powders can be used to extend the availability of rubber, improve existing product performance, create new specialty products and inspire innovation in sustainability.

News:

April 16, 2009: Lehigh Technologies, LLC announced the appointment of Kedar Murthy, Vice President and General Manager of Tire and Rubber, and Frank Papp, Technical Manager of Tire and Rubber

(No news is good news?!)

Lilliputian Systems:

What is it? Miniature fuel cells for portable electronic devices and wireless applications. No formal products yet

News:

April 2, 2009: Lilliputian Systems secured $28 million in new funding from new and existing investors. Returning investors include Atlas Venture of Waltham, Fairhaven Capital of Cambridge, Rockport Capital of Boston and Kleiner Perkins Caufield Byers of California

Mascoma Corporation:

What is it? Biofuel company that produces cellulosic ethanol made from wood and switchgrass (warm season grass native to North America). (Still in research stage)

News:

January 7, 2010: Mascoma Corporation today announced the appointment of William J. Brady as the new Chief Executive Officer, effective immediately (trouble in paradise?)

October 5, 2009: Mascoma Corporation today announced that the company has made major research advances in consolidated bioprocessing, or CBP, a low-cost processing strategy for production of biofuels from cellulosic biomass

Miasole:

What is it? MiaSolé is a pioneer in the development of Copper Indium Gallium Selenide (CIGS) thin film photovoltaic products. Our goal is to enable grid parity solar energy by 2012 through high volume manufacturing of low cost solar modules

News:

Company History (from Wikipedia): Miasolé was founded by veterans of the hard disk industry who leveraged their expertise in hard disk manufacturing to introduce new manufacturing processes into the thin-film solar industry. [3] In December 2006, the company's CEO announced that 50MW of manufacturing capacity as well as an IPO is imminent but the company failed to deliver on the milestone. In September 2007, semiconductor equipment executive Joseph Laia was brought in as CEO to move the company to volume production. [4] The company has 40 MW of production capacity at its Santa Clara facility, and claims that as of May 2008 it was making modules at 9% to 10% efficiencies on those production tools. The US National Renewable Energy Laboratory has since independently verified two 10% Miasolé CIGS modules.[5] At this time, none of the company's founders is with the company any longer. Kannan Ramanathan, who served as chief research officer at Miasolé from 2006 to 2008 has left the company in November 2008.Dave Pearce stepped down as CEO and helped hire Joseph Laia. Mr. Pearce then left the company to startup another solar company called Nuvosun

December 16, 2009: MiaSolé Breaks the silence, moves into production. The Santa Clara, Calif.-based company – which has maintained a low profile in the market for the last year and a half – started to send its solar panels to customers for them to check out the products' performance in June this year. The company now has a factory with an annual production capacity of 60 megawatts, and is in the process of expanding that to 140 megawatts. MiaSolé has raised at least $300 million in venture capital since its inception in 2001

RecycleBank:

What is it? RecycleBank partners with cities and haulers to reward households for recycling (offices in New York City and Philadelphia). Households earn RecycleBank Points that can be used to shop at over 1,500 local and national businesses.

News:

December 02, 2009: Philadelphia will unveil its latest ambitious recycling initiative Thursday, an incentive-based program that city officials say could reward households $240 a year for their participation and save the city millions of dollars in landfill fees.

November 16, 2009: Waste Connections of Kansas and RecycleBank Team Up with the City of Derby to Increase Recycling Volumes

RPX Corporation:

What is it? RPX Corporation is a member-based Defensive Patent Aggregation service that mitigates members’ risk against litigation from non-practicing entities (NPEs) -- also called patent trolls -- which acquire patents for the sole purpose of licensing and asserting their patent rights (WHY IS THIS IN THE GREENTECH PORTFOLIO??)

Silver Spring Networks, Inc.:

What is it? Building the smart grid will require the products and services of multiple technology providers. The Silver Spring Smart Energy Platform provides the network, software, and services needed as the foundation

News:

DECEMBER 15, 2009: Silver Spring Networks Inc. secured $100 million in a new round of financing to help the company expand its smart-grid business in the U.S. and abroad

September 9, 2009: Silver Spring Network CEO says considering IPO, but not this year .Says they have not discussed any acquisition with Cisco. Sees 2010 as strong year for bookings

December 8, 2009: AT&T Announces Teaming Agreement With Silver Spring Networks. Agreement Simplifies 3G Wireless Connectivity for Silver Spring's Solutions for U.S. Electric Utilities

Verdiem:

What is it? Verdiem Corporation develops and sells power management software for PC networks in North America. Its products include SURVEYOR, an enterprise PC energy management solution that allows organizations to manage and measure energy consumption on PC networks; Edison, an energy monitoring application, which enables consumers to control PC's energy consumption and household's carbon dioxide emissions; and Computer Energy Consumption Analysis that assesses the current energy consumption of networked PCs. The company serves school districts, colleges, universities, government agencies, and corporations

News:

January 4th, 2010: Verdiem has raised $4.71 million of a $5.93 million round from investors including Kleiner Perkins and Catamount Ventures, according to a filing with the SEC. The Seattle-based company was founded in 2001 and as of 2007 had raised a total of $15 million.

December 30, 2009: Marshall & Ilsley Corporation Partners with Verdiem and Reduces PC Energy Consumption

December 18, 2009: Verdiem Corporation announced that John Scumniotales has joined Verdiem as Vice President of Engineering to lead the company's product development organization

January 27, 2009: Cisco Systems announced today the release of software developed in partnership with Seattle-based Verdiem to automatically save energy in idling computers, phones, networked devices, and eventually, whole buildings

On the next opportunity I will try to analyze this porfolio to draw some conclusions. Until then, SHALOM and Happy New Year!

Greentech business and climate change

2009-12-09T09:03:00.001-08:00

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

2009-11-11T09:53:00.001-08:00

“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”

2009-10-14T07:53:00.001-07:00

“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

2009-08-20T08:09:00.001-07:00

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

2009-07-29T15:36:00.001-07:00

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?

2009-07-20T13:18:00.001-07:00

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

2009-07-08T12:00:00.001-07:00

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

2009-06-22T08:16:00.001-07:00

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!

2009-06-15T08:26:00.001-07:00

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?

2009-06-08T10:12:00.001-07:00

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?

2009-05-26T12:44:00.001-07:00

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?

2009-05-11T12:39:00.001-07:00

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...

2009-04-29T13:45:00.001-07:00

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?

2009-04-22T09:39:00.001-07:00

"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

2009-04-09T09:28:00.001-07:00

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?

2009-03-12T10:07:00.001-07:00

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

2009-03-03T12:51:00.001-08:00

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?

2009-02-23T13:41:00.001-08:00

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

2009-02-12T15:58:00.001-08:00

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!

The Electric Grid. Questions?

2009-02-04T15:23:00.001-08:00

I come here before you to seek for answers!

Now that the words “Smart Grid” is in our everyday lives. I would like to better understand how the current “Dumb Grid” works. In this world full of information I have not been able to find satisfactory answers to the following questions regarding the Electricity Grid. Excuse my ignorance!

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?

What I have learned recently is that the existing network of power plants works under a demand / cost of production basis. The power plant that is cheapest to run is producing 24/7 (Base Load Power Plant); as the demand grows during the day (or the week) additional plants start generating to produce the needed electricity. Therefore creating a different (cost and) price for electricity at different times of the day (or the week).

Will this complex network be needed if (and when) we obtain electricity from the sun or the wind (or any other renewable source)?

The real core of the matter is whereas new alternative energy technologies will flourish in the home or neighborhood scale, or will they replace existing power plants in the power grid? In other words, who will be the pioneer of renewable energy? Will it be the average Joe or the big utility companies?

Regarding the capacity of the power plants:

This question seems simple, but I have found is not as straightforward as it seems.

According to me, there are two "measurements" of electricity in your home, commerce, office or factory: the installed capacity and the actual electricity being consumed.

When you build a house and install the main electricity "box" you have to do so according to a calculation of the power needs for that house. This calculation is based on the number of outlets, appliances, lights and other power consuming devices the house has built into it (or may be able to support). The breaker box in the house reflects the need of each room or appliance for the power capacity (voltage).

The question is: does the power plant need to generate according to the installed capacity of the aforementioned house, or can the power plant generate based on the actual use of electricity in the house? In other words, if we reduce the installed capacity of all the houses in a city, but these houses consume the same amount of electricity as before; will we save any power?

Finally, I am puzzled by the lack of DC alternatives in today’s wind, and solar power generation world. I am aware of the “War of Currents” between AC and DC (won by AC). But I wonder what would happen if today’s technological advances were applied to a DC network with alternative energy as a power source and DC applications everywhere.

I want to apologize for the time gap between my previous posting and this one. It turns out that having a third child, traveling and keeping up with three different types of businesses in three different countries does take time!

Until next week: SHALOM!

Is your car plugged? or do you have a dinosaur?

2009-01-16T08:43:00.001-08:00

The Toyota Prius is, without a doubt, the current standard for the future of the automobile industry.

The following video is from one of my favorite TV shows "Top Gear". In the clip from this BBC show they demonstrate the disadvantages of the Toyota Prius . The video only takes 2min and 40sec, and in that time they completely debunk the Prius from its high throne. (the only disadvantage they fail to mention is one that claims that hybrids are too quiet!)

Say what you will, the Prius is the starting point. The important question is "where do we go from here?"

If the Prius is the starting point, then let's see what the future Prius will look like:

On January 2008 Toyota announced that the 2010 Prius will be a Plug-in Hybrid version of the current model (this makes a lot of sense!). Suddenly a year goes by and in January 2009 Toyota previews the 2010 Prius. SURPRISE! This Prius is NOT a plug-in hybrid, its a regular Prius with a bit more room and 4 more MPG of efficiency. Wait, there is more! On the same January 2010 Toyota announces the introduction of a plug-in vehicle by late 2009 (go figure!)

Well, it seems Toyota is unsure if it wants to let others take the lead. Let's see who will launch electric or hybrid cars on 2009 and 2010.

- Ford (clumsy and late as always) is announcing a new Fusion Hybrid. This vehicle will be less efficient than the Prius, but it will be roomier (it will do 3 more MPG than the Camry)

- Honda is going in the opposite direction. It will launch the Insight Hybrid. This vehicle will be LESS efficient than the Prius (7 MPG as compared to the 2010 Prius - 3 MPG compared to the current one), but it will cost about $4,000 LESS than the Prius too!

- Chevrolet's Volt is not expected until late 2010. Given Detroit's history on new design and reliability, and with a price tag of $40k I doubt it will create any wave in the market.

- BMW through its Mini brand will launch a fully electric car. This will happen in the upcoming months, but it will only entail 500 customers in California (at $800 lease price per month)

- Something similar is happening with Mercedes and it's Smart brand

- Nissan-Renault is entering the race with an entirely electric car by 2010

- There are rumors of a totally electric car from Ford (project M). This car will appear in the market in 2011

- There are many smaller competitors with cars already in the market or ready to launch: Tesla, Aptera, ZAP, ZENN, Th!nk, and Fisker

If we look further than 2010 we start seeing plans to introduce Hydrogen cars from Toyota and Honda.

At the end of the day, the consumer will have the last word. As explained by Andrew Revkin "consumers are the biggest threat to the rise of electric vehicles"

If you want to enjoy a bit more from "Top Gear" here is the link to the full review of the Prius. Otherwise, until next week: SHALOM!

My perspective on Obama's Green Economy

2009-01-07T15:25:00.001-08:00

Well, here we are in 2009! Will this be the year the "Green economy" gets a jump start?

The US is in bad financial shape. Globalized as we are nowadays, everybody is affected. Let’s follow the money to see what the options in this economy are. Keep in mind I am NOT an economist, this is just my personal view of things.

Who has cash?

Cash is the king of economic downturns, whoever holds cash is able to buy assets at a discounted price and will benefit from the eventual up-turn of the economy (if we ever get there!).

China is loaded with cash; it has accumulated cash by becoming the manufacturing center of the world and maintaining their consumption per capita at low levels.

The Oil producing countries have cash. They have been benefited by the absurd surge in oil prices.

Lets assume for one moment that Obama takes on the task of building the "Green Economy" he has promised head-on (I believe he will, because this is his answer to the economic downturn). Obama (or the US) will need MONEY (Obama: "Strategically invest $150 billion over 10 years in green initiatives") to get this "Green Economy" up and running. So, who will fund this endeavor?

There are two options:

A- Get funds directly from the Chinese or the Saudis into "Green Economy" initiatives (very unlikely). The US will not allow these countries to become the direct engine of the new economy. Therefore we are left with only one option:

B- Print more US dollars and sell the T-bills to the Chinese and the Saudis.

Clarification 1: If a country prints more money it either has to create more wealth or find buyers to support the "fresh" money, otherwise it would trigger an hyper-inflation

Clarification 2: I use T-bills as a general term, there may be other financial instruments used by the government to raise money, I am not sure

Now that we have some idea of where the money will come from, let's take some time and run a simulation of how will the "Green Economy" will be developed.

As an example we will use Obama's initiative of pushing for 10% renewable energy by 1012. Let's say that wind farms will help US energy get to that 10% (most probably they will).

Company XYZWind is going to build a 200 Mega Watt wind farm. They are going to purchase land (good for the US). Then, they will have to buy wind turbines. If they buy from a US supplier is beneficial to the US, if they buy foreign technology is not so good. Either way, the components will be most likely manufactured (where else?) in China!

Company XYZWind will require $350 Million to develop this project. Where will the money come from (again, same question)? Here are some options:

1- From government funds: either by way of subsidy or by way of loan. As we mentioned before, the "fresh" money from the US government will have to come from whoever holds cash to buy T-Bills (China and the Saudis)

2- From private funds: most US investors as well as big corporations got hurt in the recent economic downturn, it will be interesting to see if they have the guts to undertake this type of ventures.

Finally, the wind is blowing and the turbines start rotating. Electricity is sent to the grid. But as we all know, the cost of generating a Kilo Watt with wind turbines is more expensive than the price we currently pay per Kilo Watt from the utility (or in the best case is too close to generate enough profit). The government has to provide an incentive. Where is the money from the incentive coming from? You guessed right! China and the Saudis through Treasury Notes!

CONCLUSION: We can have a new Green Economy that will help improve the current financial crisis. If the US (and the rest of the countries that wish to jump into this strategy) follow the Green Economy development plan there will be a big debt to pay. But if these countries play the cards correctly, eventually the debt will be paid and the benefits will remain at home. Otherwise, we will be in the hands of the Chinese and the Saudis.

What do you think?

I would like to send a special SHALOM to my friend in Israel who are going through rough times. In war there are no winners, I hope this conflict gets resolved as soon as possible with the least amounts of deaths (from either side!).

Who can figure Oil out?

2008-12-24T08:04:00.001-08:00

First of all I would like to apologize to my readers for missing last week's post. I was out of the country in a business trip. I would also like to inform you this will be the last post of the year, since I will be, again, out of the country for the next week. So, to all of my (millions and millions of!) readers I would like to wish a happy new year, happy Hanukah, merry Christmas, happy Kwanzaa, and all the good stuff!

Now, let’s get down to business: Oil is Greentech’s biggest allied and its biggest enemy too!

On one hand its price becomes an incentive or disincentive to new alternative energy technology development. If the price goes up it’s an incentive for greentech.

On the other, it shapes the world economic outlook in a way that it frees or strangles resources flowing into greentech. If the price goes down more resources are available for greentech development (notwithstanding the global crisis).

Are you confused yet? Wait there is more:

What drives the price of Oil? Well this is also a complex answer.

Any traditional product follows the supply-demand curve. As the amounts of supplied product increase and demand diminishes, the price drops. On the opposite end, if supply is low and demand is high the price escalates.

Oil has a couple of added ingredients that make the supply-demand curve bend in different directions.

HIGHER PRICE, HIGHER SUPPLY: Oil has a very particular characteristic. Its supply sources become more abundant as the price goes up. Many heavy oil production fields, as well as other, less profitable sources, become feasible only after oil hits certain price targets. That is the case of the Athabasca Oil Sands a large deposit of heavy crude in northeastern Canada, where “despite the large reserves, the cost of extracting the oil from bituminous sands has historically made production of the oil sands unprofitable” (additional info can be found here)

LIMITED SUPPLY: Oil, as we al very well know, is a non-renewable natural resource. Therefore, its Supply quantity is a finite number. Many different estimates exist as to “how finite” oil is (i.e. when will it run out?), but there is a general consensus that IT WILL in fact run out some day.

As we get closer to the day Oil runs out, the price will skyrocket to levels never seen before. As any other scarce resource it will become a luxury.

SPECULATION AND CRISIS: This is a factor that has altered oil prices recently, it relates to the “market perception” of the above mentioned factors.

When the economy was booming and oil prices escalated, investors started getting into oil to make big profits, pushing the price further up.

Now, the economy has slowed down and demand has decreased and oil is at 30% the price that it was 6 months ago, investors have shun away from oil.

I will not attempt to include this factor into the supply-demand graph, as it is a very volatile and subjective variable.

The reality is that we are facing uncertain times, and as such people are going back and reconsidering their strategies. Will this affect Greentech?

In one sense it will, because the people that were unconvinced will tend to tilt more towards non-green as the price of oil gets lower and resources for greentech gets scarcer.

On the other hand this will be the big trial for greentech because it will test weather the critical mass of believers in a greentech future exists. And, if this critical mass will be able to propel Greentech to the next level (the mass market or mass implementation of green technologies).

I personally believe that people are aware that whereas oil goes up or down we need to do something to get off the “Oil rollercoaster”. Furthermore, people have also realized that oil dependency has very serious political consequences and they are more willing to do something about it. And, last but not least, oil has an environmental impact that many people are aware should be changed before we destroy our planet, and with it: ourselves.

Again, HAPPY HOLLIDAYS and SHALOM! See you in 2009!

Are we there yet?

2008-12-08T07:33:00.001-08:00

Depends who you ask.

According to the Saudis, Oil will be the primary source of energy for many years to come (see the interview with Ali Al-Naimi, the Saudi oil minister, in CBS "60 minutes"). In the segment, the reporter shows the new petroleum facilities being developed in Saudi Arabia. They claim they will find DOUBLE the amount of oil they already have in the near future. It makes you wonder weather we are overreacting to the "end of times" for the oil sources.

In addition to the oil conundrum we are facing a challenge in the renewable energy front, and according to the NY Times here in the US we are not doing too good (read "Energy Goals a Moving Target for States").

A mere 10 to 15% goal of renewable sources of energy is an uphill battle for many states to achieve. According to the article: "Nationwide, the hard numbers provide a sobering counterpoint to the green-energy enthusiasm sweeping Washington".

On the other hand

The US will soon have a new president. The general expectation (based on his own words) is that the "Green Economy" will be a priority. This effort towards renewable energy and clean technologies is one of the tools Mr. Obama proposed as a strategy to overcome the current financial crisis (see Obama’s entire plan at Elections and Greentech, are they related?)

Additionally, the same NY Times, did a whole section on the "Business of Green" in September (featured in one of our entries "NY Times Week-in-review"). I believe they were responding to a trend, therefore being optimistic about the growth of the Green Business.

So which one is it? Are we reading too far into the energy and pollution crisis, or are we in the verge of major changes towards the "Green Wave".

Until next week, SHALOM!

This will make it happen!... will it?

2008-12-03T06:52:00.001-08:00

I was listening to the radio and they were talking about a controversial law in Norway that mandates all companies to have at least 40% women in their executive board. Then I realized this could be the solution to better legislation for a green world.

If you have read my past entries you would have noticed that I am for free market and against too much regulation. Well, this simple law they introduced in Norway has accomplished what many other laws in other countries have failed to do. It has given women equal rights in the workplace. Whereas you are pro or against women's equal rights, you would have to acknowledge that implementing a single law to modify a trend as strong as that is remarkable.

The key element of this law (and what I think is applicable to greentech legislation) is that it modifies only the ultimate consequence of a desired trend, leaving the process to sort itself out. In other words, the law only regulates percentage of women in executive boards, the law forces companies to create their own process to groom women into the board room and to ensure that 40% of their employees that will be eligible for board positions are women. The law does not bother with employment or compensation factors.

If we translate this type of legislation into greentech we may start thinking about the ultimate consequence of living in harmony with our environment. Then we may suggest the following legislation to be applied:

All companies and all households should become progressively carbon neutral every year until reaching 100% neutral by 2020.
Water recycling should have a similar goal. 75% recycled water usage by 2020.

Then we should start talking about the consequences of non-compliance.

What if the company or the individual does not comply? Then we shall be as drastic as the Norwegians: they shut down the company. We may want to say: "pay us for the cost and installation of the best technology available, plus a penalty and we will install it for you"

What do you think? Will this work? Will it create the mindset to have a greener world? Will it promote the right technologies to the consumers? Intriguing questions!

Until next week, SHALOM!

An Ideal Greentech Portfolio - Part II

2008-11-24T15:29:00.001-08:00

Following last week's post (An Ideal Greentech Portfolio - Part I), we will continue to explore the basis for an Ideal Greentech Investment Portfolio.

Last week we mentioned three criteria to ensure a balanced portfolio: Technological innovation, Business maturity and Market. What now?

First of all, let’s talk about dollar amount of investment. It is always preferable to be either a strong investor (owning substantial equity and voting rights) or to be in good company (i.e. follow the big investors). The saying: "money attracts money" is very applicable in this kind of investments, if investors start joining in a particular technology; then results are bound to improve.

By now we have taken a holistic approach to our portfolio. We know we need to look into diverse enough opportunities. We need to have a money strategy. We should have diverse stages of maturity in our companies. Now, let’s assume we are face to face with the CEO of one of our investment targets. What are the things we should look into?

First of all we need to understand the product. What is it for? How does it work? For this step it would be wise to freshen up on basic physics and chemistry knowledge (mostly in thermodynamics principles). Many companies out there are offering the "perpetual motion" machine. Be aware of false promises and the pot of gold at the end of the rainbow.

Next, we need to understand the Competitive Advantage:

(a) Is the product competitive? What is the advantage of this technology? Who would be interested in this product and why? What are the potential savings for end users?

(b) Are there barriers to entry for competitors? What is the cost of production? How complex is the technology to produce? How difficult is it to imitate? Are there any bigger players that may become our competitor?

(c) How does the product fit within the Green spectrum? Is it a technology that is ready for the public? Do we need to wait for further advancements in a specific field to have a market? Is this product an application for the short term or for the long run?

Finally, and certainly not of least importance we need to asses if the company has Strong Management. When you are seating at the table with any member of this company, do they know the basic numbers up and down? Are they well organized? Do they have a positive attitude? Are they open to your questions? Do they seem too enamored with their product to take criticism?

It is important to have “the gut feeling” for the company and for their product. If you feel the product is not good enough, but the management gives you a “good vibe”, then perhaps you should go for it. I always refer to the example of a company in Silicon Valley that set up with a weak product, but their attitude was “we are here to succeed”. They ended up becoming a great success with a different product (I believe it was Hotmail)

I know there are several books out there that talk about investment strategy and about VC investment. I am sure in these couple of entries I have only scratched the surface of this subject. The idea is to keep me and whoever reads this Blog on our toes and to be able to generate a conversation. Its always good to keep these concepts fresh. Feel free to add or comment on the available space.

Until next week, SHALOM!

An Ideal Greentech Portfolio - Part I

2008-11-18T09:01:00.001-08:00

If you believe the Greentech wave is being formed; then you would agree that whoever invests in the future of Greentech should do well.

Following this train of thought I would like to propose, what I think, is an ideal portfolio for Greentech investments.

Greentech is a very wide term. To be more specific we will break it down into three areas: (a) Alternative energy; (b) Water;and (c) Waste Management. But, before we dig deeper into these three areas we need to define the investment criteria.

Criteria I - Technological innovation

It would be wise to invest in both, radical innovations, as well as in existing, proven technologies. The key for the success of greentech is based on "change". We need to change our power sources; change the way we use water; change the way we create and dispose of waste. This change will not come fast, it will be gradual. Therefore we need to bet on existing technologies for the short and mid term and radical, new technologies for the future. Be aware that betting on new technology is riskier than placing your money in proven technology, but the returns are inversely proportional.

Criteria II - Business maturity

Many people say that, when you invest in a business you really invest in the people that manage that business. Since we want to have a balanced portfolio, we should look into both companies that have a well established commercialization plan and an organizational structure to manage it, as well as in companies that are basically "newborn" (probably just a scientist and an idea).

Criteria III - Market

Last, but not least, we want to be as diversified as possible in the areas that (we believe) have an opportunity, within greentech to grow. This criteria has many levels of depth. Not only do we want to invest in the aforementioned three main areas of greentech (alternative energy, water and waste management), we also want to invest in different technologies within each one (i.e. within alternative energy: solar, wind, geothermal, etc). If the size of the investment allows for further diversification I suggest to take it one step deeper and invest, within each area in different technologies (i.e. within solar: PV and thermal; silicon cells and alternative light absorbing material cells; thin film and concentrated solar, etc)

Now we are able to place any greentech investment into our "diversified criteria map".

Let’s take two investments as examples:

Investment A - Capital injection to set up a new wind farm in Europe.

Investment B - Seed money for a new technology to create Hydrogen from water that requires less energy than current methods.

According to our criteria I - Technological Innovation: Investment A is a proven technology (as long as the turbines proposed for this new wind farm are already in use somewhere else). Investment B is a new technology. The ability to forecast the return on the investment (ROI) is much easier for Investment A than for B, but Investment B has a potential for higher ROI than A. As mentioned before this criterion is closely related to risk and return levels.

Criteria II: Obviously the wind farm has a more mature business model, it probably also has a management team in place. Depending on the stage the wind farm is in, it should also have permits and a thorough study of power generation forecasts and an appealing deal with the power company to sell the power injected back into the grid. On the other side, Investment B is only a concept from a highly regarded scientist in a recognized university. Investment B needs to go through many stages and overcome different obstacles to become a profitable business, but if it ever gets there... just imagine! This criterion is closely related to the required amount of investment. Investment B requires probably 100 times less investment than investment A for 50% ownership of the business (something like $100k versus $10MM).

Note that, when you analyze business A and B under the criteria of maturity, a different analysis is required for each one. For the wind farm is important to trust the team and the business numbers that are already in place. For investment B the questions are a lot harder, who is the scientist?, has he any proof of the concept?, what are his previous experiences launching a product?, who has seen this technology before?, do any competing technologies exist?.

Finally, under criteria III, we have looked at two investments in two different areas of greentech. Although both are under "alternative energy", one is related to power generation and the other one is related to power storage with multiple application possibilities.

Next week well continue building our portfolio. Until then, SHALOM!

Shifting the Market Balance - The Initiative

2008-11-12T09:40:00.001-08:00

People are like water, they follow the easiest path downstream. If you want to introduce a new product in the market you better make it VERY EASY for the customer to acquire. Otherwise you will find yourself soon out of business.

Perhaps it would be useful to make sure that greentech, as a product, covers the basic principles of commercialization.

How do you make a product “easy to acquire”?

First of all, there should be a group of people which you recognize as your “target market” and they should have a real (or created) need for your product. Second, you have to design a very easy path for their money to reach your account and for the product to reach their house or office (or whatever other place they will need it). Whereas you accomplish this by placing your product in the most visible shelves of the top retailers or by having a super well designed website with a full feature checkout process that accepts all sorts of payment methods. The customer needs to feel at ease spending that amount of money in exchange for that product.

Perhaps you think the aforementioned concepts are very simple and easy to follow, but many greentech initiatives lack these principles (at least according to me!)

Look at “alternative energy” as a product. Is it “easy to acquire”? The short answer is: NO. Is there a group of people that want to “buy” it (target market): YES, count me in! Is it affordable? Right now, NO. Can it reach your home or office easily? Right now, NO.

So, can we change the commercialization strategy for “alternative energy” to make it VERY EASY to acquire? YES, I believe so.

The biggest hurdle for alternative energy is competitive pricing. Neither I nor thousands of others are willing to pay more for our electricity than what we are paying right now. So, should we wait for the technology to become more cost efficient or is there something that can be done now?

IF WE INCLUDE THE CONSEQUENCE OF STAYING WITH OIL AND COAL (THE ENVIRONMENTAL IMPACT, PUBLIC HEALTH, AND PERHAPS A FUTURE ENERGY CRISIS) INTO THE EQUATION, THEN WE SHOULD BE ABLE TO MAKE ALTERNATIVE ENERGY COST COMPETITIVE.

One way to achieve this is by implementing the “cap and trade” system. A central authority (usually government) sets a limit or “cap” on the amount of a pollutant that can be emitted. Companies that need to increase their emission allowance must buy credits from those who pollute less (or “trade” with pollution off setters).

By taxing the pollution and giving incentives to the “problem solvers” we could shift the market balance towards alternative energy, making it easier to acquire.

There are BIG RISKS when the balance of the market is pushed artificially. For example, what will happen if, after implementing the “cap and trade” system, a new more efficient source of energy becomes available? The capital available for new power plants is limited, if most of it is captured by the less efficient method, just because it was available before the other one and it leveraged on the “cap and trade” advantage, then we would have created “false demand”. Eventually, the company with the more efficient product could disappear and the company with the less efficient, but sooner to market, product could become the market leader.

On the other hand, it could be a very long road to mainstream for alternative energy if we don’t put some incentives in place. The possible consequences of this scenario are VERY FRIGHTENING. If we wait for alternative energy to become competitive by itself we could risk a worldwide energy crisis or even worst consequences (depending to which scientist you want to believe).

Like everything in life, there should be a balance. Regulators will need to be very smart and flexible and individuals will have to accommodate certain changes in their “consumer patterns”.

Aside from “alternative energy” there are thousands of products and services in the greentech universe that need help to make them “easy to acquire”. It could be argued that money is always the problem solver. But, greentech (unlike Internet, for the “dot com” boom) is not distributed across the world instantly. Most greentech products are born out of an idea, then they require a proof of concept, then it needs to be tested in the field, eventually it should have market acceptance and finally it needs to develop a distribution network to become accessible worldwide. And, although, this process takes considerable amounts of money, they also require “connections”. The inventor needs to connect with strong management; the company needs to connect with an ideal testing site; then the company needs to connect with the best initial market that will help launch its product; many times the company needs to connect with the available incentives for its product; and finally the company has to connect with the best fitted distributors for its product.

Here in Miami we are launching an initiative, which I hope will tap into this opportunity. Our intentions are to help companies “connect” with management, test sites, market, incentives, and distributors as well as finding available sources of funding for promising greentech products and companies. This initiative is in its VERY EARLY stages, but I have the hope that it will become a model of the types of initiatives that can be undertaken by the private sector in each city.

I will keep you posted of future developments in this area.Until next week, SHALOM!

Elections and Greentech, are they related?

2008-11-04T13:50:00.001-08:00

As we head to vote here in the US and elect a new president (hopefully, at the end of the week we shall know the results), I wonder what is at stake for Greentech.

Originally, one of my opening arguments for Greentech investment was the great performance of Greentech when compared to regular stocks (see chart below)

Even though the index is bouncing back faster than the S&P500, this argument is not as powerful as it used to be (in September when the Cleantech Index was 20% to 40% above S&P500).

So, why invest on Greentech?. I believe that, in spite of Wall Street's valuation of Greentech, there is still an undeniable wave towards alternative energy, water purification and irrigation, as well as waste management optimization. Because enough people have come to realize we need to get off oil and start finding alternatives. They have also realized we need to treat our environment with respect in order to have a place where to live.

Looking at the hard facts, in today's economy, governments have become the largest corporations. As times get harder for the private sector, the governments (in theory) can print as much money as necessary to keep them afloat. Here in the US, one of the key points of the campaign was "Alternative Energy". Therefore: The largest corporation in the world has promised to pour money into Greentech

Moreover, when both candidates were asked to name plans that will get cut and plans that will remain under the new economic reality; both, Obama and McCain specifically named their Energy Policy plan as being a priority.

So, what is their plan? I will try to be as neutral as possible and list (directly from their website) their Energy and Environmental initiatives:

McCAIN

ENERGY:

Will Commit Our Country To Expanding Domestic Oil Exploration
Promoting And Expanding The Use Of Our Domestic Supplies Of Natural Gas
The Nation Cannot Reduce Its Dependency On Oil Unless We Change How We Power Our Transportation Sector

Clean Car Challenge: $5,000 tax credit for each and every customer who buys a zero carbon emission car
A $300 Million Prize To Improve Battery Technology
Flex-Fuel Vehicles (FFVs): calls on automakers to make a more rapid and complete switch to FFVs (automakers have committed to make 50 percent of their cars FFVs by 2012)
Alcohol-Based Fuels Hold Great Promise As Both An Alternative To Gasoline And As A Means of Expanding Consumers' Choices
Today, Isolationist Tariffs And Wasteful Special Interest Subsidies Are Not Moving Us Toward An Energy Solution
Will Effectively Enforce Existing CAFE Standards (CAFE standards - the mileage requirements that automobile manufacturers' cars must meet)

The U.S. Must Become A Leader In A New International Green Economy. Green jobs and green technology will be vital to our economic future
Will Commit $2 Billion Annually To Advancing Clean Coal Technologies
Will Put His Administration On Track To Construct 45 New Nuclear Power Plants By 2030 With The Ultimate Goal Of Eventually Constructing 100 New Plants
Will Establish A Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D
Will Encourage The Market For Alternative, Low Carbon Fuels Such As Wind, Hydro And Solar Power
Proposes A Cap-And-Trade System That Would Set Limits On Greenhouse Gas Emissions While Encouraging The Development Of Low-Cost Compliance Options
Greenhouse Gas Emission Targets And Timetables:
2012: To 2005 Levels (18% Above* 1990 Levels)
2020: To 1990 Levels (15% Below 2005 Levels)
2030: 22 Percent Below 1990 Levels (34% Below 2005 Levels)
2050: 60% Below 1990 Levels (66% Below 2005 Levels)
Will Make Greening The Federal Government A Priority Of His Administration
Will Move The United States Toward Electricity Grid And Metering Improvements To Save Energy
Believes We Must Understand The Role Speculation Is Playing In Our Soaring Energy Prices
Does Not Support A Windfall Profits Tax. A windfall profits tax on the oil companies will ultimately result in increasing our dependence on foreign oil

CLIMATE CHANGE

Climate Policy Should Be Built On Scientifically-Sound, Mandatory Emission Reduction Targets And Timetables
Climate Policy Should Utilize A Market-Based Cap And Trade System
Climate Policy Must Include Mechanisms To Minimize Costs And Work Effectively With Other Markets
Climate Policy Must Spur The Development And Deployment Of Advanced Technology
Climate Policy Must Facilitate International Efforts To Solve The Problem

OBAMA

SHORT TERM SOLUTIONS: IMMEDIATE RELIEF FROM PAIN AT THE PUMP

Emergency Energy Rebate. Will require oil companies to take a reasonable share of their record‐breaking windfall profits and use it to provide direct relief worth $500 for an individual and $1,000 for a married couple
Crack Down on Excessive Energy Speculation
Swap Light and Heavy Crude, Release Oil from Strategic Petroleum Reserve to Cut Prices

MID TO LONGTERM SOLUTIONS: NEW ENERGY FOR AMERICA

Tackle Climate Change

Implement Cap and Trade Program to Reduce Greenhouse Gas Emissions - 80 percent below 1990 levels by 2050
Make the U.S. a Leader on Climate Change

Invest in Our Secure Energy Future and Create 5 Million New Jobs

Strategically invest $150 billion over 10 years to accelerate the commercialization of plug‐in hybrids, promote development of commercial scale renewable energy, encourage energy efficiency, invest in low emissions coal plants, advance the next generation of biofuels and fuel infrastructure, and begin transition to a new digital electricity grid
“Green Vet Initiative”: more of our veterans can enter the new energy economy
Convert our Manufacturing Centers into Clean Technology Leaders
Create New Job Training Programs for Clean Technologies

Make our Cars, Trucks and SUV’s Fuel Efficient

Increase Fuel Economy Standards: 4 percent per each year
Invest in Developing Advanced Vehicles and Put 1 Million Plugin Electric Vehicles on the Road by 2015.

Within one year of becoming President, the entire White House fleet will be converted to plug‐ins as security permits; and
Half of all cars purchased by the federal government will be plug‐in hybrids or all‐electric by 2012

Partner with Domestic Automakers: $4 billion retooling tax credits and loan guarantees for domestic auto plants
Mandate All New Vehicles are Flexible Fuel Vehicles
Develop the Next Generation of Sustainable Biofuels and Infrastructure: 60 billion gallons of advanced biofuels by 2030
Establish a National Low Carbon Fuel Standard: fuel suppliers in 2010 to begin reducing the carbon of their fuel by 5 percent within 5 years and 10 percent within 10 years

Promote the Supply of Domestic Energy

“Use it or Lose It” Approach to Existing Leases: Oil companies have access to 68 million acres of land, over 40 million offshore, which they are not drilling on
Promote the Responsible Domestic Production of Oil and Natural Gas

Bakken Shale in Montana and North Dakota which could have as much as 4 billion recoverable barrels of oil according to the U.S. Geological Survey
Unconventional natural gas supplies in the Barnett Shale formation in Texas and the Fayetteville Shale in Arkansas
National Petroleum Reserve‐Alaska (NPR‐A) which comprises 23.5 million acres of federal land set aside by President Harding to secure the nation's petroleum reserves for national security purposes

Facilitate the construction of the Alaska Natural Gas Pipeline
Getting More from our Existing Oil Fields: experts believe that up to 85 billion barrels of technically recoverable oil remains stranded in existing fields

Diversify Our Energy Sources

Require 10 Percent of Electricity to Come from Renewable Sources by 2012
Develop and Deploy Clean Coal Technology
Safe and Secure Nuclear Energy

Commitment to Efficiency to Reduce Energy Use and Lower Costs

Deploy the Cheapest, Cleanest, Fastest Energy Source -Energy Efficiency: reduce electricity demand 15 percent from projected levels by 2020
Set National Building Efficiency Goals: all new buildings carbon neutral, or produce zero emissions, by 2030
Overhaul Federal Efficiency Standards
Reduce Federal Energy Consumption: achieve a 15 percent reduction in federal energy consumption by 2015
Flip Incentives to Energy Utilities: measures will benefit utilities for improving energy efficiency
Invest in a Smart Grid
Weatherize One Million Homes Annually
Weatherize One Million Homes Annually

On a final note I would like to mention the smart effort that Pickens is doing by linking his plan to politics, by signing up people to create political pressure. Regardless of my liking or disliking the Pickens Plan, the idea deserves kudos (details here)

Until next week... SHALOM!

* Not a typo! It is what is written at the website

What is your plan?

2008-10-28T08:32:00.001-07:00

The economy is going down the drains, oil prices are also coming down. Does this mean the end for alternative energy? Are people going to be so submerged in survival mode that they will forget what got them there in the first place? Perhaps.

I do believe in the next 5 years we will see fundamental changes in the way we live. I am not sure what those changes will be, I have a feeling the transition is going to be a painful one. The market values will shift from the more superfluous goods and services (i.e. electronic gadgets and fashion) to others more basic ones (i.e. food and energy).

So, if energy becomes a more precious good then we will certainly shift into renewable energy, right? Not so fast, there is a "Tipping Point" to make the shift from fossil fuels into alternative energy, and the odds are against us.

When resources are scarce it is more difficult to decide on a strategy that requires an up front payment even if this strategy is more convenient over time.

If you offer two plans for certain service: plan "A" consist of monthly payments of $10 (for one year total $120); under plan "B" you just make a single $102 payment at the beginning of the year (a 15% discount!). I am sure people with fewer resources will select the monthly plan more times than the "B" plan, simply because it is easier to deliver $10 each month that it is to come up with the full $102. Only if you have the $102 easily available and you are smart enough to calculate the 15% difference (which is more than what most investments return on capital in today's market!), then you will chose plan "B".

Alternative energy requires an up front "investment" to develop new technology, to create new infrastructure and to change certain patterns in the market and in consumer behavior. The current oil thirsty system needs no change in the short term, only when oil becomes scarce enough, then we shall see the high cost of staying in this path. Its like having plan "A" with the last month's payment at $200 (rather than $10) and no right to renew!

For the time being the oil barrel has dropped from the $140 level to the $60 level. Oil, as any other product, follows the laws of supply and demand (as demand dwindles, the price drops). What some people don't realize is that supply and demand work for infinite availability products (subject to cost of production), oil has a very clear limit (when the end of oil is near, even if demand is low, prices will soar). Another peculiarity about oil is that, as the price decreases, oil supply decreases as well. Some sources of oil are too expensive to operate at $50 a barrel. This works against the cause for alternatives, as the supply diminishes, new sources become cost effective and reduce the impact of the diminishing supply.

What shall we do (we = humanity)??. We should have a plan!

Only by having a plan we can counter the INERTIA of the masses (and right now the inertia points towards more oil dependency).

Mr. T. Boone Pickens has a plan (recently featured in CBS's "60 minutes"), to generate wind power and use natural gas for vehicles (for pros and cons on The Pickens Plan go to Wind Energy).

In Israel and now in Australia, Shai Agassi has a plan to deliver electric cars, coordinating between government, car manufacturers, battery manufacturers and creating a "plug in" infrastructure (for more on this go to The Electric Car).

My plan is to find investment opportunities in Greentech. Opportunities with the best technology, the best management and the best business plan I can find. And hope they will make it big and create a better environment and at the same time give me a hefty return on my investment.

What is your plan?!

Until next week, SHALOM!

My Greentech Questions

2008-10-21T13:30:00.001-07:00

"I only know that I know nothing", Socrates.

This week I am exploring questions that I have about greentech. Some questions may have a simple answer and some may be just rhetorical questions. Perhaps by next week you (the reader) will provide some answers and shine some light into this darkness. So here it is:

When I heard the debate last week, as well as in previous debates, the subject about alternative energy was present. Both candidates agree that new sources of energy are needed (I don't want to start a political discussion, so let's focus on the big picture) with some differences here and there. Both candidates talk about Nuclear power, but NEITHER CANDIDATE ADDRESSES THE DANGERS of this kind of energy source.

It is my understanding that the biggest problem with Nuclear power is the use and disposal of the radioactive fuel. I have heard (and here is my first question) that nuclear plants use less than 5% of the radioactive material power, is this true? And then, we are left with highly dangerous waste that takes over 10,000 years to become safe? To make things more complicated I have also heard that if we increase the percentage of world power generated by nuclear plants we will have no space left to safely store this radioactive material, could this be?

Why is Belgium, a country that generates 54% of its electricity through Nuclear plants, trying to stop construction of new plants and setting additional tax to existing nuclear power generation. Belgium, as well as Germany, the Netherlands and Sweden have all pledged to phase out existing plants. Why?

I would very much like to know the answers to these questions before we embark on a journey that may lead us into a global disaster!

Let's forget about Nuclear power for a second, let’s focus on a wider subject. How are we going to find a way to generate energy without draining the resources that we have in Planet Earth and without polluting our environment?

I guess most of us agree that the current way we generate energy and dispose our waste is dangerous for our future (please note I said: "most of us". "Why is this so?" is a question I will not ask here, for now).

In order to search for an answer on energy efficiency we need to look at the laws of thermodynamics. The first law states that "Energy can neither be created nor destroyed. It can only change forms". Therefore, we will be better off if we try to use energy that comes from outside our planet: Solar energy. Right?

Well Solar energy is the direct consequence of the power of the sun that enters the earth. But waves, wind and tides (I'm not sure about geothermal) are also partly or wholly a consequence of the sun's effect. So, if we choose wind over solar power, are we selecting an indirect source of power and therefore sacrificing efficiency?

In evaluating an energy source we need to look at two factors: (1) how much energy can we "capture"? And (2) How much energy are we going to waste in the conversion process to its "final destination". And finally compare these numbers to the associated costs in order to find the best solution.

(1) Energy "capture": Solar energy is hard to capture, current solar cells can only attain around 8% efficiency. Other cells are able to convert up to over 40% of the sun’s power, but the cost of the materials used in such cells is prohibitive. Never mind that solar cells depend on the exposure to the sun and therefore are useless at night or with minimum light conditions. Why can’t we have both efficiency and low cost? Is 40% the best we can do?

Wind power has a theoretical limit of 59%. This means that the best wind and the best turbine in the world can only obtain 59% of the energy contained in wind (which already is a factor of the energy coming from the sun!). Can we have wind as our main source of energy with a ceiling of 59% efficiency?

(2) Conversion process: It's not enough that solar cells are inefficient within themselves, the process to convert direct current (DC) obtained with the cells into alternative current (AC) requires inverters which eat up between 5 and 50% of the electricity generated. Wind has a similar problem; the rotation generated by the wind has to be converted into a faster rotation speed to match the frequency on the electricity in the grid. This conversion lowers the efficiency of the turbine. Can we find a system that minimizes the loss of power in the conversion process?

Cost: No alternative energy source up to date has an associated cost that can compete with fossil fuels. Right? These sources depend on government subsidies; the idea is to promote economies of scale until they become competitive. Is there ever going to come a day when alternative, sustainable energy is less expensive than coal?

Wind and sun are variable sources; storage needs to be added to the system to make it work. Supposedly one of the most efficient ways to store energy is by pumping water into a high level storage, and later using the water's falling energy to regain the stored energy (this system achieves about 75% efficiency). Can we use such a system in a large scale alternative power generator?

As for Wave and Tide power generation technologies we have yet a long way to go, those areas are far behind wind and solar. Are we doomed to use fossil fuels until they run out?

In the alternative fuel vehicle arena, the argument of many proponents includes the following statement: "We use less than 25% of the gas in the car to generate forward motion" (the rest of the fuel is spent on noise, electric gadgets, pollution, etc). Can this be?

If the efficiency of current vehicles is so low, how come we have not been able to create a more efficient car in a shorter timeframe?

Finally (I am running out of space), I have trouble understanding the logic behind Hydrogen. Why are some people proposing hydrogen as a fuel? Supposedly hydrogen is a great storage media for electricity. The simplified principle is as follows: add electricity to water and you get hydrogen; turn the system around and release the electricity and obtain water back. Well, using the second law of thermodynamics the amount of electricity released from the hydrogen can only be the as much as the electricity injected in the water. This is power storage not fuel!?

I know that many of you will disagree with some of the ideas explained above, please give me your point of view! I also know that some concepts are explained superfluously, unfortunately I have limited time for this blog, and if I get enough requests I may write a book in the future (just kidding!).

Before leaving, I have to announce this week’s big news: I am father of a baby girl, Dana! (my third child).

Until next week: SHALOM!

What the Future Holds

2008-10-13T14:15:00.001-07:00

Last year I read a book called "Now, Discover Your Strengths" (by Marcus Buckingham). Together with the book there is an online assessment tool that finds your top 5 strengths. It turns out that my first strength is Strategic. In the results report Strategic Strength is explained as follows:

"The Strategic theme enables you to sort through the clutter and find the best route. It is not a skill that can be taught. It is a distinct way of thinking, a special perspective on the world at large. This perspective allows you to see patterns where others simply see complexity"

Now, I don't pretend to be a visionary extraordinaire or a Warren Buffet. But, sometimes (only some, few times) I am able to recognize future patterns, based on past events, where others don't see it as clear. I call this exercise "Connecting the Dots" after the beautiful Stanford Commencement speech of Steve Jobs (I strongly recommend watching it, if you have not seen it yet - click here)

OK, after this long disclaimer let's get into the main subject of this week: THE FUTURE.

Dot #1: Last month my sister sent me the link to this website called The Story of Stuff (http://www.storyofstuff.com/). Even though I don’t subscribe to ALL the content in the video (which is a bit long, but interesting), I found it very illuminating.

Dot #2: I went to Europe this summer and observed some key differences between them and the US in consumption habits. The Europeans are more moderate than their counterparts in the US. They drive smaller cars, restaurant portions are smaller, live in smaller houses or apartments, etc. If you ask for a glass with ice in Europe they bring you a glass a quarter full of ice; whereas here in the US the glass almost always is 100% full of ice and the glass itself is probably bigger (not to mention the "free refill").

Dot #3: The markets collapsed last week. The economy is facing a terrible crisis and even the very core of capitalism is being tested.

Dot #4: In several magazine and newspaper articles that I have read, as well as in many lectures that I have attended about the Environmental impact of the human activity, I have heard the following hypothesis: “If we don’t correct the damage we are causing the earth today. Then we will cause a major irreversible damage to the earth with unimaginable consequences”. Furthermore, we need to correct at a much higher pace than the pace of damage, because we are increasing pollution and natural resources consumption at an exponential rate and therefore we need to “catch-up” with the exponential curve in order to reverse its effects.

What is the connection between these dots? In my opinion we are about to enter into a new era. It is not something that is going to be announced and recognized right away, it may be a very subtle transition that will take several years. But the end result will be a major shift in consumption patterns.

Let me explain further (before you call me a nut job!).

The Story of Stuff tries to explain the mentality of the capitalist model we have working right now (both in Europe and in the US). True, it is analyzed from the environmentalist perspective and it may have some arguments that are inaccurate. But the fact of the matter is that we have been living in a “consumption based system” where inventory rotation is important and companies are valued based on sales volume (and not on product durability).

The comparison with Europe is important because it shows that we can live with less. I am not saying we SHOULD live with less, but, I am saying that: IF WE ARE UNABLE TO PRODUCE LESS THEN WE CAN SUBSIST.

Dot #3 about the economy is what gives me the impression we WILL need to learn to live with less than we have right now.

And, finally, the last dot in this line. The #4 about correcting the damage to the earth is what makes the line split in two. This hypothesis, if it holds true, may mean that we have two possible outcomes: (1) We will either reach the critical point of “undoing” the damage we have caused Earth, or (2) we will irreversibly damage our environment and therefore damage ourselves (I will let you use your imagination to visualize what this means).

So, in conclusion the new era we are entering into will be one of redefining the way the system works (it could be based less on consumption and more on basic needs). It will be an era of changes in our “standards”, where some of the things we take for granted today (like a glass full of ice) will no longer be. It will also be an era of financial shift, the value of things will change, perhaps a diamond will no longer be as precious and expensive, and water will no longer cost less than wine. And perhaps, it will be an era of becoming more conscious of our Spaceship called Earth, and what its needs are and what do we need to do to keep it in working order.

I CERTAINLY DON’T HAVE THE CRYSTAL BALL THAT TELLS THE FUTURE, BUT I HOPE YOU ENJOYED THIS MIND EXERCISE AS MUCH AS I DID.

Until next week (when I will hopefully be a Dad for the 3^rd time), Shalom!

The Race for The Electric Car

2008-10-07T08:46:00.001-07:00

As I was relaxing at home after a busy weekend (my wife, who is 9 months pregnant, had a false alarm Saturday afternoon) I channel surfed my TV until I found an interesting program: "60 Minutes" (CBS 7pm). The lineup for this week's stories: "A Look At Wall Street's Shadow Market" (Trying to explain Wall Street's financial crisis), "Elite Officer Recalls Bin Laden Hunt" (an ex-Delta Force tells the story of how close the US was to killing Mr. Terror himself) AND "THE RACE FOR THE ELECTRIC CAR" (don't watch the segment now, read first, then watch. I provide a link at the bottom of this entry. Thanks!).

I can imagine the editorial meeting for this week's "60 Minutes". "We can't have a full hour of such depressing news!"; "Let's find something people can look forward to" ; "here it is! let's talk about the electric car!". So, in spite of the falling economy and the disaster of the war on terror, The Electric Car takes the stage!

Two things came to mind watching this story:

1- How is the new economic reality going to impact Greentech economics?

On one side, I suppose, the general belief is that Greentech will suffer as the rest of the economy will. Although this may be true, I also believe investments are going to look for new markets and they are going to find that Greentech has gained attractiveness if compared to Real Estate, to Wall Street and to many other current-day options. Therefore, I would not call this downturn "a blessing in disguise" for Greentech, but I would call it a "potential opportunity"

2- Silicon valley vs Detroit. GM's Volt and the Electric Car Business Model

In the "60 minutes" segment the main story is about Tesla Motors. The narrator talks about this company from Silicon Valley that is challenging old-school car manufacturers like Detroit's GM. The story begins with Elon Musk the CEO of Tesla who is a co-founder of PayPal, the reporter asks bluntly who will pay a fortune for these cars ($110,000), Elon response: "It's a deal!". The story then turns to Tesla finally yielding to Detroit. The company that started by challenging Detroit is now massively hiring traditional motor-heads.

[Tesla Roadster]

Something that really caught my eye was the part where they interviewed GM's Vice Chairman of Global Product Development Bob Lutz. My impression of Mr. Lutz was of the Plant Manager recently promoted, with his hands still dirty from the grease and his attitude of constantly dealing with Union workers. Nothing wrong with this, except, if you want to have a radical new product and break away from old vices, then Mr. Lutz may be a liability. He goes as far as to say that global warming is a "Pile of Horse Sh--". His product reflects his personality. The Volt is a car that has been promoted as an electric car for over two years now, and it is supposed to come out to market in 2010. It has a 25 mile range with pure electric charge and a small Engine to charge the battery for longer trips. The design of the Volt is nothing that will turn heads (at least not in my opinion). Just as a comparison point take the much less promoted Mitsubishi i MiEV this car is expected to arrive to market at the end of 2009 and has 100 miles of travel with electric power (four times that of the Volt!). Not to mention that the i MiEV is expected to cost around $28k whereas the Volt had a price of $30 and it was recently announced that it will be more like $35k. If you ask me, GM is no competitor in this race.

[GM's Volt]

[Mitsubishi i MiEV]

At the end of the day, the conclusion that I draw from this segment, is that the next breakthrough vehicle will have to come from a traditional car maker using technologies from smaller specialized hi-tech companies. The large car maker has the muscle to assemble and market the vehicle, there are too many barriers to entry to be competitive in that arena. But, they will have to buy or pay royalties to smaller (more agile) companies that will bring the innovation. Mitsubishi partnered with GS Yuasa for their batteries (a young Japanese company established in 2004). The other conclusion (and this one I feel much more confident in) is that the Japanese are better suited for these innovations than Detroit. I am yet unsure about what the Europeans are doing to stay on top of this race (I think they are waiting to see where the market leads, except that they may be running the risk of being too late into the race). Below you may now watch the "60 Minutes" segment. For now I say "SHALOM"

Watch now "60 Minutes"... THE RACE FOR THE ELECTRIC CAR

NY Times Week-in-review

2008-10-01T09:50:00.001-07:00

Dear Miami Greentech readers:

This week I took the liberty of compiling all the articles (that I could find) related to Greentech that appeared in the NY Times in the last week (from the 23^rd to the 29^th). I also included one piece of publicity that I found interesting.

Please browse them and let me know if you can find a pattern in this multidimensional web of information, or at least if you think we are moving forward towards a cleaner environment.

One interesting note about this week's articles is that there was a Special Section on "The Business of Green" on Sept 24th.

So without further ado. Here are the articles:

September 23

Chrysler Enters the Race to Introduce Electric Models

After seeming to fall behind in the race for alternative-fuel vehicles, Chrysler said on Tuesday that it would produce an electric car for sale in 2010 and follow it up with a broad lineup of battery-powered vehicles.

September 24

Amid Boom, Concerns at Small Solar Firms

Solar power is in the midst of a boom in the United States. High energy costs are one reason. But what may be more important are generous state and power company incentives and rebates, as well as tax credits that make solar systems affordable to many more people and businesses.

Solar Panels Are Vanishing, Only to Reappear on the Internet

Solar power, with its promise of emissions-free renewable energy, boasts a growing number of fans. Some of them, it turns out, are thieves.

How Powerful Is Your Workout?

THE four stationary bikes look almost like any others, except that they are fitted with an arm crank and are hooked up to a generator. As riders pedal and turn the lever, the movement creates a current that flows to a battery pack. They generate an average of 200 watts, enough to run the stereo, a 37-inch L.C.D. television and a laptop for an hour at this new gym in Portland, Ore.

Saving the Earth, One Road Race at a Time

Race organizers are working to reduce the amount of waste produced at their races.

While competing in a half Ironman triathlon two years ago, Bruce Raynor had an epiphany: this event, so rooted in strength and good health, was actually polluting the planet. This led Mr. Raynor to create Athletes for a Fit Planet, which helps races become a bit greener by installing recycling bins, ridding themselves of plastic bags and offsetting carbon emissions

A Building That Blooms and Grows, Balancing Nature and Civilization

In the California Academy of Sciences an exhibit of architecture under the motto: “humanity is only one part of an endlessly complex universal system”

SPECIAL SECTION: BUSINESS OF GREEN - Sep 24

Pumping Hydrogen

On Santa Monica Boulevard in Los Angeles, a futuristic experiment posing as an ordinary fuel station may be bringing the world one step closer to the hydrogen age.

What should come first — the fuel-cell car or the hydrogen pump? Automakers and oil companies answer is to introduce both cars and new fuel stations, clustering them in urban centers like Los Angeles, Berlin and Tokyo.

Shell’s Santa Monica Boulevard station is part of this strategy. So is Honda’s decision to lease about 200 of its newly developed FCX Clarity cars over the next three years to selected customers in Southern California.

Coal, a Tough Habit to Kick

Coal, the “dark fuel,” may be the most visible villain of global warming, but its use is up and projected to go higher. In fact, the demand for coal is rising faster than the supply. So is the demand for oil.

Cleaner sources of fuel remain more expensive, less available and in shorter supply than an old standby.

Solar Projects Draw New Opposition

WHAT’S not to like about solar power? Sunlight is clean, quiet and abundant. If enough of it were harnessed and turned into electricity, it could be the solution to the energy crisis. But surprisingly, solar power projects are running into mounting opposition — and not from hard-nosed, coal-fired naysayers, but from environmentalists.

The opposition is particularly strong in Southern California. Aside from abundant sunshine and virtually cloudless skies, the California desert has altitude, so there is less atmospheric interference for the sun’s rays, as well as broad swaths of level land for installing equipment, and proximity to large, electricity-hungry cities. But it is also home to the Mojave ground squirrel, the desert tortoise and the burrowing owl, and to human residents who describe themselves as desert survivors

The Alliance for Responsible Energy Policy, an environmental group in Joshua Tree, said: “Our position is that none of this is needed. We support renewable energy, and we support California’s renewable energy targets, but we think it can be done through rooftop solar.”

Reclaiming His Place in the Sun

Arnold J. Goldman, once the world’s undisputed sun king, is back in business with a new company focusing on more efficient solar energy plants.

In 1989, Arnold J. Goldman was the world’s undisputed sun king. His realm was a desolate patch of the Mojave Desert north of Los Angeles, where his company, Luz International, created the world’s largest solar energy installation. At the time, Luz’s plants generated roughly 90 percent of the solar energy on the planet.

Two years later, his reign was over, done in by an uninterested public. While the solar field that Luz built for Southern California Edison still runs today, the company went kaput, unable to compete profitably with the lower costs of companies producing electricity from traditional sources.

After 20 years wandering outside the desert, he is back, with a reconstituted company and a contract from Pacific Gas and Electric Company to purchase up to 900 megawatts of power while creating more efficient solar plants at Ivanpah, Calif., on the Nevada border.

A Cautious Approach to Nuclear Power

Nuclear power plants might seem like part of the solution to global warming, but few reactors are likely to be built soon.

With the federal government offering the nuclear industry $18.5 billion in loan guarantees and billions more in production tax credits and insurance against bureaucratic delays, at least a few new reactors seem certain to be built.

But reactors, it turns out, are not at the top of the list for stopping global warming, at least in the United States, at least not any time soon.

Among the issues are the cost of nuclear power, fears about safety and questions about how to dispose of waste.

Electricity From What Cows Leave Behind

For years, the cows at Green Mountain Dairy here produced only milk and manure. But recently they have generated something else: electricity.

The farm is part of a growing alternative energy program that converts the methane gas from cow manure into electricity that is sold to the power utility’s grid.

The Home Energy Audit Gets an Upgrade

Fuel costs and a drop in the price of special cameras that show where heat escapes from buildings have created a new market for energy auditors.

Kept Out of Landfills and Reborn as a Bag

TerraCycle makes tote bags, pencil cases and other products from juice boxes and candy wrappers, then sells them at some of the country’s biggest retailers.

Founded in 2001, TerraCycle is aiming to make billions by collecting used plastic bags, juice pouches, cookie wrappers and other items that cannot be recycled and fusing them into everyday items like tote bags, pencil cases and messenger bags to be sold at some of the country’s biggest retailers.

September 25

General Motors’ New Plant Will Build Smaller, Fuel-Sipping Engines

General Motors said Thursday that it intended to double its production of gas-sipping, four-cylinder engines by 2011.

To do so, G.M. said that it would invest $370 million in a plant to build its most fuel-efficient engines ever. The factory will open in 2010 and make 1.4-liter engines for two compact cars scheduled to go on sale late that year: the Chevrolet Cruze, which is expected to get about 45 miles a gallon in highway driving, and the Chevrolet Volt, a plug-in vehicle whose engine will start after the battery is depleted.

Europe Toughens Its Auto Emissions Plan

European Union lawmakers proposed tougher-than-expected emissions goals for car makers, dealing a blow to the German automobile industry.

The bill would be the first legally binding carbon emission standard ever for new cars in Europe.

September 26

Nothing to report

September 27

Nothing to report

September 28

Nothing to report

September 29

One More Chance on Energy

Last December, Congress passed a useful energy bill that ratcheted up fuel economy standards for the first time in decades. That seems a long, long time ago. Since then, Congress has gone steadily and sadly backward on energy policy.

Progress on fuel economy standards will remain stalled unless the Senate overcomes its partisan divide over the issue.

PUBLICITY

AFS Trinity Power has developed patent-pending technology that makes it possible for plug-in hybrid electric vehicles to achieve 150 MPG, go 40 miles in all-electric mode, and use gasoline for additional unlimited miles in hybrid mode.

To those of you who celebrated the new year this week:

SHANA TOVAH!

A Dialogue

2008-09-23T09:59:00.001-07:00

Two friends meet at a coffee shop somewhere in the US and start talking:

Person A: Have you heard all this nonsense about becoming green?

Person B: Yes I have. I don't believe it is nonsense

A: With all this financial turmoil, do you think someone is going to invest some minute of their time or a dollar from their pocket in "saving the planet"?

B: I believe its necessary. Otherwise the window of opportunity to change the fate of the environment will pass and we will have to deal with unimaginable consequences

A: Pleeeeeassseee! Don't tell me you believe in that "global warming" myth!

B: Let's assume I don't. Would you say we are damaging the environment by creating bigger and bigger cities, by dumping more and more stuff into the ground and into our oceans, and by exploiting the resources of nature without any means of regenerating those resources?

A: So?! I believe there are still many more resources available for exploitation, and the more we advance, the more we will be able to make those resources last.

B: And where does it end? How much more can we "stretch the fabric"?

A: Are you telling me I will have to give up my SUV?

B: I believe some changes will be necessary in our day to day routines. But, other countries have started to embrace those changes.

A: Yes sure!. I will NOT sort my garbage into four different containers! I will NOT live with half a glass of ice instead of my full 16oz plastic cup full to the top! I will NOT install those ugly panels in my house's roof nor will I have any type of propeller to generate wind power!

B: Would you buy an electric car if it costs the same (purchase price plus operating costs) as your SUV and has similar features? Would you move your office to a building that costs one third in electricity than your current one, and on top of that uses 75% less water?

A: Perhaps... But those things are not available yet, and if they are the cost is prohibitive

B: In many cases its a "Catch 22" dilemma. The cost is higher than existing technologies simply because the market is smaller and the economies of scale give an unfair advantage to the existing product. That is where I hope government will intervene (he sighs)

A: Don't tell me you also believe in those stories about the shortage of drinking water?!

B: According to The World Bank 80 countries have water shortages, and 40 percent of the world (more than 2 billion people) has no access to clean water or sanitation. Do you think this is a fairy tale?

A: Perhaps not, but what do I care about some forsaken country thousands of miles away?

B: So, you don’t care about the events in 9/11? Or perhaps you don’t give a damn that we are allowing immense amounts of money to escape from our hands and get to oil producing countries, those same countries that finance hatred against the western world?

A: We will overcome those countries using our military strength and I believe McCain is the man for the job!

B: I don’t want to spoil your plans, but I think Obama will be the next president

And so the conversation carries on….

What will happen at the end? Who is right and who is wrong? Only time will tell

Until next week. SHALOM!

Fluff vs Substance

2008-09-16T08:40:00.001-07:00

What is Fluff?

According to the dictionary: Fluff [fluhf] - noun 1.light, downy particles, as of cotton. 2.a soft, light, downy mass: a fluff of summer clouds. 3.something of no consequence: The book is pure fluff, but fun to read. 4.an error or blunder, esp. an actor's memory lapse in the delivery of lines.

So, why do I want to talk about Fluff as related to Greentech?

Because in this MEGA trend called Greentech there is a lot of Fluff (as it relates to the definition #3).

We see it every day. A commercial of ANY product has to have a "green" edge. IBM is not just selling computers and servers, they sell "greener business solutions", they have a website to prove it IBM.com/green and hundreds of thousands of dollars in a TV ad campaign that shows the "green" side of doing businesses with IBM.

Like IBM there are thousands of other companies pushing their products with a green "excuse". I see no substance on this adds (only energy savings for more efficient computers), I would rather see an IBM campaign to recycle all their computer cases (collecting and paying for them) and the safe disposal of the mercury of old electronic equipment.

People and institutions are adding to the "Fluff agenda". Governments, universities and non-profit organizations all around the world have spent millions of dollars in brochures and info on how to be more green (use fluorescent bulbs, regulate the a/c in your house and office, take advantage of the carpool, plant a tree, conserve water, etc etc etc.) And even though all these advice would really be helpful for our environment I suspect the driving force behind these initiatives is more to follow the trend rather than to search for a REAL impact on the environment issue. At the end of the day more money is spent on "telling" you how to be more green than the money spent on more efficient a/c or changing all the bulbs of that same institution to fluorescent.

An example of Fluff vs Substance is the extra push Hotels are offering for the guest to be more "green" by not sending their towels to the laundry everyday and instead using them over and over. I call this Fluff because its a "moral trap". If you send the towels everyday to the laundry, then you are a mean earth polluting person. But, if you use the same towel three days in a row then you are a contributor to a "greener" planet and OH! BY THE WAY, WE (THE HOTEL CHAIN) HAVE JUST SAVED $20 ON YOUR ROOM'S COSTS AND THAT PROFIT GOES DIRECTLY TO OUR POCKETS! YOHOO!! I wonder if there is a Hotel somewhere that offers a cost incentive for guests that re-use their towels and actually INVEST money on THEIR green initiative?!

Where is this leading us?

I foresee two possible scenarios:

Scenario A- If the Fluff movement wins, then green initiative will become a fashion. And like all fashions it will die! People will get fed up with this trend and three years down the road no one will want to buy something that is "green" or because is environmentally friendly. Therefore the chance that we have today of changing the course of our planet will be lost because of "over exposure". We have a real possibility of this scenario if we factor the current financial crisis of the world. In hard times like these is about survival and not about "change to become green"

Scenario B- Substance wins, people are able to look beyond the fluff. New technologies get implemented and people change their habits to become TRUE GREEN CITIZENS. And as a consequence greentech becomes a major industry. (i.e. IBM starts building computers that control the a/c temperature and that communicate with other households to plan the ideal carpool for all IBM users, all at a competitive price of a regular computer with components that are recyclable and not harmful for the environment!)

Which scenario will we see? I can't wait to find out!, but for now I say "SHALOM!"

The Complexities of Wind Energy

2008-09-09T09:23:00.001-07:00

Last week we commented on some of the potential problems of implementing Wind Energy. The idea is to illustrate the complexities behind developing and implementing these new technologies (Greentech).

This week we will try to illustrate the challenges of building an efficient wind turbine. THE POINT IS TO SHOW WHAT IS BEHIND THESE TECHNOLOGIES THAT SEEM SIMPLE, BUT ARE MUCH MORE COMPLEX ONCE YOU START DIGGING INTO THE DETAILS.

Before we start talking about the challenges of each component and type of turbine, the first issue pertains to the wind.

The efficiency for a single turbine or for a wind farm (multiple turbines) is a combination between turbine design and wind "quality". The wind quality is measured in terms of speed, air density, roughness (air flow affected by earth's surface or obstacles). All these factors have to me monitored throughout at least one year before deciding on turbine type and design. The reason is that the power obtained by a turbine is measured according to this formula:

(source http://ftexploring.com/energy/wind-enrgy.html)

Where (as you can see) the wind velocity affects the power output by a power of 3 (double the wind = eight times more energy output)

Furthermore, each turbine is designed to work under a specific wind speed. If the speed does not match the target for the design, the efficiency of the systems drops.

These are wind maps of Europe (red is strongest wind):

and USA:

Assuming we find a great spot for our turbine and that the conditions will not change much from one year to the next. Now we have to decide on the type of turbine we would like to install.

As shown in the picture (for in-depth knowledge go to http://www.windpower.org) the basic elements of a turbine are: the rotor blades, the gearbox and the generator. These three components are at the top of the tower that has a rotating base (or yaw) to allow the blades to follow the wind's direction and the electronic equipment to control and monitor the turbine.

The rotor blades are a key component because their diameter affects the power output by the power of two (see power formula above). Also, the blades are the main element on the aerodynamics of the turbine. If the blades have poor design, the turbine will work only under a short range of wind speeds and types and it will reduce the force transmitted to the gearbox and therefore reduce the electric output. One of the biggest challenges of today's turbine design is the minimum speed at which they can generate power, the lower the speed the more these turbines will be generating electricity non-stop and the more sites will become feasible for wind farms.

The electric output of these turbines has to be compatible with the electricity we use at home (the one coming from the grid). This electricity has a frequency of 60Hz (50Hz in Europe). This means that the generator shaft has to rotate at approximately 1500 rpm, whereas the blades of the turbine rotate at around 30 rpm.

To solve this issue all turbines have a gearbox. The gearbox converts the slow rotation of the blades into a constant and faster rotation speed for the generator. Otherwise, the generator should have a mechanism to "smooth" the power peaks and therefore lose power in the process.

Finally we get to the generator which converts the mechanical force into electrical output. There are several options for these generators, from the number of coils (or magnets), their capacity to the option of having synchronicity or asynchrony between the shaft and the poles.

After all this is studied and budgeted we still need to add the size of the tower and its foundation strength as well as the weight of the whole system as it relates to the "yaw" (the mechanism that allows the turbine to rotate 180 degrees over its horizontal axis to follow the direction of the wind)

(rotor size vs power)

And to finalize our assembly we need to have all the components monitored by electronics. Some components (depending on the design) need to be adjusted according to the monitoring system. The output has to be measured as compared to the wind measurements to account for the efficiency of the turbine. And safety mechanisms (such as mechanical brakes) have to be provided for extreme winds, electric peaks, and component failure.

At the end of the day the most efficient turbine is the one that provides most electricity per cost of its components times their working life. Keep in mind that wind is free, the cost comes from turbine components and their replacement cost (and perhaps also the land where they sit).

As you can see these technologies that seem straightforward at the beginning are much more complex when you get to the "nitty-gritty". The good news is that we are on a steep learning curve and sooner rather than latter we will get to a point where most hurdles will be left behind.

Until next week! SHALOM

Wind Energy

2008-09-02T13:56:00.001-07:00

We can't talk about Wing Energy (also known as Eolic Energy) nowadays without talking about T. Boone Pickens and his plan.

The Pickens Plan (http://www.pickensplan.com/ - watch the video presentation) is an energy policy proposal announced July 8, 2008. Pickens' intention is to reduce American dependency on foreign oil imports by investing approximately US$1 trillion to build vast wind turbine farms for power generation, and then shifting the natural gas used for power generation to fuel automobiles.

This is a great move by Pickens, but it has some potential (and very critical) problems, which follow:

1- Problems with the grid (for more on this see the NY Times article). It turns out that all this electricity generated by wind turbines needs power lines to get distributed to the places that need it. The power lines (or power grid) in the US are getting old and have not had an overhaul in quite a while, and like any other equipment that is old and has not been renovated is facing serious breakdowns.

2- Mr. Pickens plan to substitute natural gas for vehicle imported fuel has some downfalls too. Natural gas is better used to provide backup to wind power, not to power cars. Natural gas is burned far more efficiently in power plants than in internal combustion engines. It would be more efficient to generate electricity from natural gas and then power electric cars. Also keep in mind that Natural Gas in non-renewable and is not 100% clean.

3- The plan also has possible ethics dilemma. According to an article in Popular Mechanics, if the plan is accepted, Pickens stands to reap a significant profit by building pipelines to pump billions of gallons of water from an aquifer under the Texas Panhandle, which he has bought the water rights to. The pipeline would follow the same 250-mile corridor that the wind farm would be on, which would be seized from private owners through eminent domain and granted to him.Pickens owns more water than anyone else in the U.S.However, according to Pickens, "I'm 80 years old and have $4 billion. I don't need any more money."

4- Subsidies, government funds… same old. Is there ever a true business model (without having to involve government money)? The CATO Institute (an organization co-founded by Charles Koch, a co-owner of Koch Industries which is the largest privately held oil company in the U.S, and funded by companies including Chevron, ExxonMobil, Shell Oil, Tenneco Gas and Amoco) claims that instead of allowing the market to work, Pickens wants government to limit imports of foreign oil along with installing the wind plants so that he can become richer at the expense of consumers. He also says that if wind power were a sensible economic investment, then it would not require the "lavish federal and state subsidies already in place or the additional largesse sought after by Mr. Pickens."

On the other hand…maybe these are Lobbyist acting on behalf of Big Oil, to protect their turf!

ASSUMING ALL OF THE ABOVE IS DISMISSED OR RESOLVED

There are some serious technical challenges for today's wind turbines.

Even though wind turbines (or wind generators) are widely used around the globe (more so in Europe than in America). The existing turbines are far from efficient and some wind farm profitability models are based on government funds. The promise for a next generation of turbines is the solution to increased profitability and lower barrier to entry into the Wind farm market.

How efficient are Wind Turbines?

There are several ways in which a turbine loses its efficiency.

1- There is a fundamental law of physics (Betz Law) which states that the best that could be achieved by a wind turbine is around 59% efficiency. This is due to the fact that if you take ALL the energy from the wind coming into the turbine you should have zero wind speed exiting from the turbine, which is an impossibility (there has to be a FLOW of wind to keep the propellers rotating)

2- Wind Speed: Wind Turbines are designed to be most efficient at certain wind speeds. As we all know (especially here in Florida) wind is very unpredictable. Therefore, today’s turbines lose efficiency because of changes in wind speed.

3- To generate power that can be used by today’s appliances or injected into the electric grid, the turbine has to generate electricity at a constant frequency (60 hertz in the US – 50Hz in Europe) and certain voltage (120 Volts in US – 230V in Europe). In order to achieve this rotor speed has to be “converted” to a constant speed (1500 rpm) and maintained this way throughout the operation of the turbine. This causes loss of efficiency in the speed conversion process as well as in the “monitoring” process (to ensure constant speed).

When all these losses are figured in, you might, if you are lucky, be getting 35% or so of the wind's energy actually delivered as useful electrical energy to the end user in the very best conditions. The average might only be in the twenties.

In the future we will talk about the different types of wind turbines and how each one takes a step closer to maximize efficiency. Until then, SHALOM!

The Gold at the end of the Rainbow

2008-08-27T08:44:00.001-07:00

What makes Greentech such an obvious opportunity for me is (a)knowing that the solutions for today's energy, water and waste management problems are within reach, and (b) a lack of worldwide effort to reach for those solutions. In other words, we could (as citizens of the world) decide that regular (incandescent) bulbs should be phased out and use fluorescent bulbs instead. The numbers make an overwhelming point, using a fluorescent 60 watt bulb would save you:

10 light bulb changes
$40.50 in electricity costs
$1.50 in bulb replacement costs
$42.00 in total
Reduce greenhouse gas produced by power plants by: 691 pounds of carbon dioxide

(source http://www.ajdesigner.com/fl_light_bulb/light_bulb.php)

So why are we not doing this obvious things?. Why are governments not taking steps to regulate towards these solutions?

The answer lies within the business opportunity of greentech. People follow the laws of Newton Physics "Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it". Its easier to keep buying the same bulbs, its also easier NOT to make the calculation and decide on the cheaper bulb vs the more expensive one ($0.50 for the regular bulb vs $3.50 for the fluorescent). Another factor is the slow reaction of governments, it takes too much time for them to "enforce" the elimination of incandescent bulbs, perhaps there are many powerful interests involved or its not a law that would generate enough popularity. Either way, my "bet" is that in the near future ALL light bulbs will be fluorescent or some other new technology, because a trend with strong "external forces" is causing the "uniform motion" to change.

We already discussed some of these "external forces" that are bringing greentech about in The Greentech Wave (1-People are changing their attitude, 2-Companies are channeling resources to greentech, 3-Major economic players are influencing the market). All of these are responses to economic or sociopolitical trends that are causing the scales to tip towards greentech. In the case of the light bulb: the cost of electricity has jumped - in the US - by 33% since the year 2000, and is expected to raise even more as fuel costs climb and the electric infrastructure gets older. When those variables become a stronger "external force" then whoever is better positioned to provide these new technology bulbs to the market will benefit immensely. AND THAT IS THE GREENTECH OPPORTUNITY!

In the case of the light bulb, General Electric has already taken the steps to ensure they are also THE manufacturer of fluorescent bulbs. But there are many other areas of greentech where the market leadership is up for grabs. We will talk about these areas of opportunity in the near future. For now, as always I bid you farewell with a cordial "Shalom!".

No Perfect Solution

2008-08-20T09:00:00.001-07:00

“The more I learn, the less I know”, I believe that’s how the saying goes. Well in the Greentech world this saying holds very true. As new technologies are presented to me and as I discover more and more facts about alternative energy, about water purification, about waste recycling, the more I am convinced we have not reached a perfect solution yet.

Let me start from the beginning, and let’s take the automotive industry as an example.

A “perfect” solution according to my book would be one that (A) would not contaminate the environment, (B) would make economic sense (make a profit) and (C) could be implemented without disrupting the existing industry so much as to destroy it (i.e. putting thousands and thousands of auto workers out of jobs)

So, let’s analyze the existing alternatives:

- Diesel fuels generate toxic gases (at lower levels than Gasoline!) and therefore are far from being a “perfect” solution

- Hybrid cars: they are great because they can increase the mileage of a regular car. But, they consume gas, they cost more than regular cars and we are uncertain about how to dispose the batteries these cars carry which may damage the environment even more than the gas they save.

- Plug-In Hybrids: These cars have the capacity to run longer distances on battery and therefore save even more gas. Like the plain Hybrid car these cars also have the battery contamination factor and the additional problem of the source of electricity they require. Is that source a “clean” source of electricity?

If the electricity comes from coal or any other fossil fuel, then we are just redistributing the contamination (perhaps the contamination level will be lower, but certainly not a perfect solution)
If the electricity comes from Nuclear power then we have the problem of nuclear waste. Nuclear fuel is only utilized on 10% of its energy content in modern day nuclear plants. This leaves behind a large mass of radioactive material that takes hundreds of years to become non-threatening to human beings.
We are still very far from achieving a substantial amount of power from wind (Denmark is the leader with less than 20% of their electricity from wind, I believe in the US the number is closer to 2%)
Solar Photo Voltaic cells are also a very small portion of today’s power generation percentage and that responds to the high cost of manufacturing of these cells. Each cell uses silicon which is very costly (and also non-renewable!) or some other substitute which has not been 100% proven yet. The other problem with Solar PV is the “conversion” factor, these cells are only converting up to 30% of the solar energy they receive (very inefficient!)
Solar Thermo Electric requires large spaces for the reflectors and is also very poor converting the solar power in to energy (I believe its even less efficient than PV)

- Another option for car fuel is the Hydrogen Fuel Cell. The car is loaded with hydrogen and a “fuel cell” converts hydrogen into electricity with water as byproduct. The electricity generated powers the car and the water can be disposed (or used!). Two issues with this solution are: the high cost of building fuel cells and the energy needs to generate Hydrogen. In my opinion Hydrogen is more a means of storage than a “fuel”. To obtain hydrogen you inject an electric current into water and break the H2O particle into its components. The amount of energy needed to obtain Hydrogen is less than the amount the hydrogen can release through a fuel cell. Hydrogen can also be obtained using chemical reactions, but the cost and the energy consumption for this process is equally high.

- Bio fuels where all the rage a couple of years ago, until the calculation was made for the impact of using edible corn, sugar cane and other potential food sources to fuel our energy appetite. New sources of Bio-Fuels are on the horizon (like fuel generated from algae) but none have been tested successfully yet.

So, what is the answer? Where is the “golden rainbow” at the end of this energy and natural resources crisis?

I don’t have the answer for that. I do know that it helps to look at the past to attempt to predict the future. I look into other similar situations the world has faced and try to extrapolate from those.

What could be a good parallel to this situation? (please send me suggestions if you have a good parallel situation)

Perhaps the development of modern medicine is a good parallel? In older times people looked for their religions to provide answers to their illnesses. Little by little people started to develop the science of medicine, as positive results increased more people turned to “doctors” to find cures. This created a snowball effect because it also allowed “doctors” to gain more experience and also experiment more and more to find their answers. The modern health system is not “perfect” either, but the medical results, compared to those of religious rituals, is certainly more effective!

The parallelism: as we adopt more alternative technologies we also give those technologies a chance to develop into something closer to the "perfect" solution.

Another good example could be the industry of personal computers; In the 80’s personal computers were awkward and hard to use. Little by little this industry has grown and has learned very basic lessons on the way. Nowadays we are only starting to see applications where the personal computer is “transparent”. In other word, the application is so “user friendly” and so well fitted to its purpose that the user never has to think about what goes on in the background (unlike managing Windows XP or Vista!!!!)

Perhaps we, as habitants of Planet Earth, will struggle to find a “perfect” solution to our energy, water and waste reduction needs. But we have started a path towards what will be called in the future “modern” energy, water and waste systems. The path to “perfect” solutions is rarely a straight line.

I apologize for my three week absence, from now on please expect our usual weekly entry into this blog. Best regards and SHALOM!

The Electric Car

2008-07-22T09:57:00.000-07:00

Some years ago a movie called "who killed the electric car" came out. This movie exposed the failed attempt of General Motors in their 1996 release of an electric car (the EV-1). In the movie / documentary frustrated customers (who fell in love with their test product) made extraordinary efforts to prevent GM from retrieving the car from the market.Now, 12 years later we face a different reality. Oil prices are up and the market consensus is that they will stay up. People are more "enviro-conscious". And battery technology has come a long way.Since I am writing from Israel I thought it would be appropriate to present the highest profile greentech project in this land (and perhaps one of the most ambitious greentech projects in the world). Shay Agassi is a well respected entrepreneur who was involved in the software giant SAP. He presented (and leads) this project to the Israeli government and to Renault-Nissan and "Project Better Place" was born.

This project intends to build a network to allow for electric cars to charge in public places as well as special stations to interchange batteries. Project Better Place coordinates efforts between government, car manufacturer and battery OEM to establish the first big scale market test for electric cars.

The best way to understand this innovative business model is to "hear it from the horse's mouth". Here is Shay Agassy presenting his "baby' in Washington...

It takes guts to jump into this kind of venture. I don't know if Project Better Place is going to succeed, it certainly has its great obstacles to overcome before we see concrete results.

One thing is certain, whoever allows the world to significantly reduce its oil dependency and the political and economical consequences that this implies will be paraded as a savior and a hero (for most nations).

Reporting directly from the holy land I sign out for now and say "SHALOM" !

Two Great Proofs

2008-07-15T10:12:00.000-07:00

Dear friends:

If you are ever going to take 17 minutes to watch a video on the internet, I encourage you to see this one. It is the most compelling call to embrace greentech and a view into the potential business oportunity that it represents.

If you have problems starting the video go to this link http://www.ted.com/index.php/talks/john_doerr_sees_salvation_and_profit_in_greentech.html

The other interesting piece of information is an article I found on the main page of Yahoo! this very morning. While 99.9% of the news about the economy are grim, this is what Yahoo! jobs reports:

http://hotjobs.yahoo.com/career-articles-the_new_power_jobs-449

Are you convinced yet!?

As always I say SHALOM !

The Greentech Wave

2008-07-08T09:08:00.001-07:00

If you open any major newspaper on any given day you will find the signs of the Greentech Wave. Let's take today's NY Times as an example.

On the main section of the newspaper there are two advertisements, one full page each.

The first one is for Sharp Solar Systems, in which Sharp claims to be responsible for 1/4 of the solar world production. I believe six months ago this same advertisement space was used to promote Sharp's flat panel TVs!.

The other advertisement is from The Pickens Plan. This is a very famous Texas Oil Entrepreneur who established a fund with $4 billion under management and is proposing a 10 year roadmap to replace one third of foreign oil imports with local wind energy and natural gas.

Today's NY Times also has two very telling articles. It is important to note that both articles are in the Business section (not under technology, or science).

The first one is entitled "Europeans Reconsider Biofuel Goal" and talks about the disadvantages of biofuels and how this alternative may be contributing to deforestation, which speeds climate change, and helping force up food prices.

The other article talks about a "Large Solar Energy Array Set for G.M. in Spain". It announces the installation of the largest rooftop array of solar panels which will generate 12 megawatts of power.

So? you say. Why should we consider this important?.

I believe this are the signs of a major trend. This trend is reflected at several arenas.

(1) People are concerned on a personal level. A growing number of people are considering a change in their consumption habits in order to respond to the growing cost of fuels or just because they became more environmentally aware. Therefore, you have a waiting list of 3 months to buy a Toyota Prius (the most fuel efficient car in the market today).

(2) Companies are shifting their image and channeling resources to greentech. No major company is willing to risk the possibility of being left behind in this new market. Same as Sharp is boosting their solar business, GE is very concerned to stay on top of any and all developments in energy generation to keep their lead. Even the traditional oil companies are making big noise about their greentech efforts. Take BP Oil as an example, they say in their website that "BP Alternative Energy is giving the world a choice of low-carbon power solutions"

(3) Major economic players are creating their vehicles to jump into the greentech wave. Like Mr. Pickens there are other major players looking for opportunities. Sir Richard Branson the famous serial entrepreneur has launched Virgin Green Fund. If this efforts are intended to help "mother earth" or they are purely business opportunities is impossible to tell, the end result is the same: a major wave is being created.

Conclusion: I see a major change that will create a whole new industry. Like in the early stages of Internet there are several players that will be filtered out. But, overall the field is green (in both senses) and the crop is yet to be harvested. Those who jump into this trend early enough will have the better chances to profit from its energy. Finally I leave you with a cordial "Shalom"

The Climate Change Summit

2008-07-01T11:30:00.001-07:00

Breaking news!... A big Climate Change Summit took place here in Miami last Wednesday June 25 and Thursday the 26th. This week Miami Greentech reports on the Summit...

I am happy to report that the Green wave is growing stronger by the day, it was an impossible task to register for this event two weeks in advance. Even if you had contacts in the Florida government there simply was no way to get registered!

To start, we have to clarify that this summit is an initiative from the Florida's Governor Charlie Christ's Office, as such it had it's load of political content. But, overall it was an eye opener. I saw things about the state's green industry that I never expected to see.

So, who was there and what was the content?

The summit was comprised of three components (1) an exhibitors floor with around fifty different stands (2) a series of talks about different aspects of climate change with one moderator and four panelists each and (3) breakfast, lunch and dinner banquets with a key note speaker each. If you need to have the exact information this is the link to the AGENDA

(1) Exhibitors. Some non-profit organizations where there (such as the Environmental Defense Fund), as well as attorney's firms (trying to position themselves as greentech specialists), some consulates (for political reasons I suppose), all the Florida major Universities (FSU, FIU, FAU, UF, UCF, USF), and a very interesting group of Greentech companies, many of which (I am happy to report) are based in Florida! Companies such as Blue Earth Solutions (styrofoam recycling), Carbon Solution America (carbon consulting firm), and Volcano Energy Group (energy optimization products); Big companies such as FPL, Chevron and GE were also part of the mix.

(2) Talks. Some were a waste of time (from a business perspective), like the one entitled "Preserving God’s Creation" with a panel conformed of two reverends and one rabbi. Some, on the other hand, were extremely interesting. There was "Going Green Makes Economic Sense" part 1 and 2, in which panelists came from businesses such as Mitsubishi, Honeywell, IBM, Kyocera and Wachovia and the conversation was about the different ways each player was getting into the green industry. Also on the panel where representatives from Greentech companies. we heard about Solarsa a Florida based company that focuses on "solar cooling", and about T3 Motion, a company that developed an electric personal vehicle that has zero gas emissions used mainly for law enforcement (and perhaps soon to be used here in South Florida).

The highlight of these talks was the "International Leadership Roundtable" where the governor himself was a panelist together with the consul general of UK, Israel, France and Japan, as well as a parliament member from Germany who is an eminence in solar power (and could not stop talking). Each country was very proud to mention how they are "world leaders" in Greentech. Germany and Spain are leading in solar power generation, the UK is tapping into extracting energy from ocean waves and currents, France is lagging behind in comparison to Europe but was glad to point they are ahead of the US and Japan is even implementing different dress codes for summer and winter while setting the temperature in government buildings to 82^o in summer to save on energy spending for a/c (to learn more click here). Last, but certainly not least Israel is leading in technology development with more brain power than any other country per capita, as well as leading in water initiatives (they have the biggest desalination plant in the world, and are number one in recycling water at 75% with a far second Spain with 12%).

(3) Keynote Speakers. The CEO of FPL Lew Hay spoke very poorly and it was easy to catch that he was reading his speech for the first time while addressing the audience. We heard from Ray Anderson Founder of Interface Inc. the world largest manufacturer of carpet based in Atlanta, Georgia and how they are aiming to become carbon neutral in 2020 (to learn more click here). And the big ending with the "governator" Arnold Schwarzenegger who did his Hollywood style speech with humor and politics but little content.

Overall the experience was interesting and I am looking forward to next year's event to get a sense of the growth that this wave achieves in 365 days

For now I say... SHALOM!

Opportunities in Greentech

2008-06-24T15:13:00.001-07:00

Since we already took the first step for this Blog, it is now time to dig dipper. Many people have responded to my invitation to read the blog with a question mark and I realize that, to some, Greentech sounds like a strange word.

According to Wikipedia: "Environmental technology or green technology (abbreviated as GreenTech) or clean technology (abbreviated as CleanTech) is the application of environmental sciences to conserve the natural environment and resources, and to curb the negative impacts of human involvement."

To me Greentech represents a conjunction of three things. (1) An initiative to minimize the negative impact of humans on nature. (2) An opportunity to shift geopolitical injustices. (3) A business opportunity. I emphasize on this third point because none of the other advantages is sustainable without this third one.

In this blog I would like to open a conversation about different business opportunities in Greentech. Mainly, Greentech has three branches: 1-Alternative Energy, 2-Water and 3-Waste Management.

Opportunities in Alternative Energy range from Fuel Cells (that transform hydrogen to electricity with water as byproduct) to Wind, Solar or Geothermal power generation. Immense rewards are in sight for the person or company that is able to substitute existing methods of power generation and storage with cleaner and sustainable alternatives and competitive pricing (emphasis in competitive pricing to ensure business sustainability)

Water greentech opportunities range from desalinization and purification to water analysis and irrigation systems. More and more water is becoming a valuable resource and any method that provides water savings or additional sources while upholding our quality of life is a probable winner. Water is also one of the biggest equalizers for global social injustice. If the technology has the added feature of providing water to those who needed the most then its a win-win-win situation.

Waste Management encompasses collection, transport, processing and recycling of byproducts of human activity. Many creative solutions are being developed to reduce the impact of waste. Some solutions include gas, biofuel and power generation from sludge and waste water. Development of new materials that minimize impact on nature. As well as new construction methods and urban designs to reduce the volume of waste or route it in a way that the waste becomes a reusable resource.

In the next entries I will be giving specific examples of companies that are trying achieve some of these tasks. Until then I say unto you "Shalom" (Hebrew word that translates into either hello, goodbye or peace)

How it all started

2008-06-18T15:22:00.001-07:00

A wave is being formed... It's the wave of GREENTECH

As we become more conscious of the impact of the "human footprint" in nature; as energy prices keep increasing; as the geopolitics of the world are shifting because of availability of natural resources (such as oil, minerals and even food and water). We are all helping in the formation of this wave.

This is not just a dream of some "tree huggers". This is becoming an economic reality, it's a clear business opportunity. Today's world capitals are looking for the next area of opportunity. The stock market is becoming too volatile. The Real Estate market bubble is deflating and investors worldwide are withdrawing their equity and looking for a place to reinvest it. We, as residents of this world have to realize some changes need to be made in order to keep our house clean and in working order (regardless of the temperature the thermostat is displaying).

In 2007 I realized there was an opportunity to bring potential Greentech start ups from Israel and present them to investors in the West (US and Lat Am). Since then I have been working on both sides of the equation: on one hand talking to investors to gauge their interest in the subject; and on the other, researching the Israel Greentech market (and the Greentech market in general) to search for the best investment opportunities.

As a result, I realized there is a tremendous opportunity in creating a network of business people, entrepreneurs, scientists and students to come together and share our knowledge and interest in Greentech, and in doing so, generating real business opportunities for the development and implementation of such technologies.

As part of my efforts I have also created a "Meetup Group" called Miami Greentech to allow for face to face meetings and occasional presentations of experts in the different fields of green technology. Feel free to sign up at the following address: Miami Greentech

I hope you enjoy this blog as much as I will and that you will find useful information here for whatever green initiative you intend to take. Feel free to contact me with your questions and comments.

Sincerely,

Sami Shiro