What the Future Holds

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

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

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

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

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

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

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!