Will Crystalline Solar Kill Thin Film? A Conversation with Applied Material’s Solar Head Charlie Gay

By Neal Dikeman

I had a chance to chat today with Dr. Charlie Gay, the President of Applied Material’s solar division.  You may recall, we broke the story in the blogosphere 5 years ago about Applied’s entry into solar, which was anchored with a highly touted and very aggressive strategy for turnkey large format amorphous silicon and tandem cell plants called SunFab.

Charlie reminded me that when they began 5 years ago, they did so along two major thrusts:  The acquisition of Applied Films in June 2006 getting an inline coating system for deposition of silicon nitride passivation layers on crystalline and in parallel an internal project to adapt their large flat panel display manufacturing technology for photovoltaics.

They still like the large module format, for a simple reason, cost in the field for large scale solar farms is heavily about getting area costs down relative to power output.  I was excited for another simple reason, when major capital equipment developers get involved, manufacturing maturity is not far behind, it forces everyone to rethink scale in different ways.

After a huge initial splash outselling everyone’s expectations in that SunFab concept, many industry analysts later kind of wrote them off as flash in the pan when they were reported having problems as implementations came in slower and smaller and harder than expected on their SunFab lines a couple of years ago, and a saw a major restructuring in 2009. But they’ve had success with that product anyways, EVERYONE saw a major restructuring in 2009, and more importantly the original vision of leading solar into mass manufacturing is still going strong, now across a range of products and technologies in thin film and crystalline manufacturing equipment.  Let’s put it this way, in their annual report they call themselves the largest equipment manufacturer to the solar sector, they have $1.5 Billion in annual revenues in the Energy & Environmental division, which is heavily PV, and there are like 120 mentions of the word solar in their annual report, almost once per page.

So what I really wanted to talk to Charlie about was the future of PV manufacturing. He frames the future by drawing a mirrored parallel between photovoltaics and integrated circuit manufacturing, beyond just semiconductors:

  • In IC, dozens to hundreds of device architectures exist, but basically one material, silicon.
  • In PV, there is essentially one architecture: the diode, but dozens to hundreds of material choices.

But silicon has been the mainstay material of PV for a number of reasons.  So we got into one of my favorite topics, the manufacturing improvement potential in crystalline silicon.

His version of Moore’s law for solar runs like this:  the thickness of the solar cell decreases by half every 10 years.  Today it’s 180 microns thick.  The practical possibility exists to get down to about 40 microns, with some performance improvement by making it thinner, but we can’t go much below 40 without being too thin to absorb enough light.  This fits with other conversations I’ve had suggesting that over the past couple of years most of the major crystalline solar manufacturers were working on paths to take an order of magnitude out of cell thickness.

If this comes to fruition, crystalline can literally wipe the floor with the existing thin film technologies.  Basically think sub $1 per watt modules with the performance of high grade crystalline modules today.  And as cost per watt equalizes, that higher efficiency starts to really tell, as since Balance of Systems costs have fallen at 10-12% per doubling of installed fleet, compared to module costs falling at 18-20%, in a world where BOS increasingly matters, the old saw about lower area cost per unit of power installed starts to actually bite for once.  Think ultra thin high performance low cost large format x-Si modules with fancy anti reflective coatings and snazzy high grade modules with on module inverters or DC optimizers mounted on highly automated, low cost durable trackers.  Think solar farms approaching effective relative capacity factors of 2.5-3 mm kW Hours per year per MW on 25 year systems at $2-3 per Watt installed.  Possibly the only thing on the planet that could match shale gas.

In fact, the entire thesis of thin film as a business and venture capital prospect has been built on the premise that crystalline material costs were just too high to get to grid parity. I’ve got scads of early thin film business plans touting that.  That thesis is under extreme pressure these days. I’d submit that if the industry 7 years ago had really understood how much improvement could be had, we’d have saved billions in potentially stranded thin film development.

Charlie says there are about a dozen different paths for enabling 40 micron cells.  The most interesting approach to him is an epitaxial growth process on reusable silicon templates.  A process which grows a thin layer of silicon on top of a reusable layer of silicon, using perhaps one mm thick silicon templates, etching the surface, and directly depositing silicon from trichlorosilane gas.  The idea would be to rack templates into a module array, grow the cells in an oven to your 40 micron level, then glue the glass module to the back side, and then separate it off to form a “ready to go assemble” module.  The challenge is basically oven and materials handling designs that get it cost efficient in high volume.

In essence, all you’d be doing is integrating a silicon ingot growth process directly into a module. Instead of growing ingots, cutting thick wafers, forming cells, then building modules from them, you grow cells racked into their own module personally instead of growing ingots first.

Hella cool.  A process like that means using fairly manageable capital equipment and materials handling technology development in known device and module technologies we could literally rip the ever living guts out of crystalline manufacturing costs.  And there are 11 more paths to play with???

The way he thinks about it, on a broader perspective more people are working in photovoltaic solar R&D today, by his estimate some 70,000 researchers and $3 billion per year, than in all of the prior PV history.   And that means whereas perhaps five main innovations over 35 years drove almost all of crystalline PV manufacturing costs (screen printing, glass tedlar modules, adapting steel from tires for cutting wafers, silicon nitride processes, and fast metrology tools), in today’s world, Charlie thinks we see 5 equivalent innovations in PV manufacturing technology every 2 years.

So I asked him to comment on whether there were parallel cost-down opportunities for thin films or whether it is an also ran waiting to happen.  He thinks there are.  He mentioned organics.  I pushed back hard, as organics have been written off by almost everyone for never seeing yield or performance, so where does he see the opportunity?  He responded that he picked organics to keep me from narrowing the materials field prematurely to just A-Si, CdTe, CIGS, and GaAS.  Silicon just like carbon can surprise us, e.g. bucky balls, carbon nanotubes, and just because early materials had stability and process issues, doesn’t mean we’ve exhausted the opportunities.

He says what he wants us to recall is that we are currently operating in PV manufacturing today with the materials that were on the radar in the energy crisis from 1974-1980.  That is changing in the lab and universities these days.  And given time the results will surprise us.

He draws a parallel between photography and photovoltaics, both invented in 1839, both rely on sunlight acting on materials. In photography, people started off putting films on glass, then putting films on mylar, and running things continuously.  Implying that in solar, we’re still on glass c. 1890.

He said to think about the original Ovonics/Unisolar vision in thinking about how you get to high speed continuous processing with thin film (think paper manufacturing, where done roll to roll it’s far more consistent than one-offs can be done).  If that is still our ultimate thin film paradigm (got to love the chance to use the word “paradigm”), the stars are still in front of us with what thin film COULD do.  And while roll to roll has had significant materials technology and process control challenges for the current class of materials, let’s go back to the mirror parallel to integrated circuits, in photovoltaics, one main device, scads of material options.  Just a matter of R&D hours and time.

He markedly did NOT suppose that the current state of thin film devices could beat 40 micron crystalline silicon by themselves.  It’s worth considering that we may look back and find that thin film, CdTe and First Solar were the stepping stones to 40 micron crystalline, not the other way around.  Maybe my next question to Charlie is whether he and I should set up Neal and Charlie’s 40 Micron Solar Company of America yet. 😉


China Plans 220,000 EV Charge Points and 2,351 Battery Switch Stations

China leads the world with over 100 million riding e-scooters, e-bikes, and light-electric vehicles. By December 2015, China plans to have 500,000 electric vehicles that can travel slow streets to fast highways. Those EV will be supported with 220,000 charge points and 2,351 battery swap stations in the nation’s latest plans. China’s 12th Five Year Plan is summarized in a new Deutsche Bank (DB) report.

China will move to a more efficient lower carbon economy not only with electric cars and electric scooters. China is expanding electric transit and rail. For example, electric high-speed rail is targeted to expand by 29,000 miles between now and 2015. China high-speed rail is already more extensive than the mid-speed U.S. Acela system that supports daily riders in New York, Boston, Philadelphia, Washington DC and other Eastern cities.

Over the next five years, China will reduce its percentage of transportation that requires foreign oil for gasoline and diesel. China will also reduce the percentage of electricity generated by coal. By 2015, China will add:

  • 70 GW wind
  • 120 GW hydro
  • 5 GW solar
  • 40 GW nuclear

China plans to lead the world in using renewable energy. Although the Japanese nuclear disaster occurred as the 12th Plan was being drafted, China appears to be moving ahead with Generation IV nuclear which it views as safer than the Japanese plants built over 30 years ago. For example, Huaneng, China, is proceeding with the construction of a 200MW high-temperature gas-cooled reactor according to the DB report. More cost-effective natural gas plants, however, may yet be substituted for half of the planned nuclear expansion.

China Wind 150x150 China Plans 220,000 EV Charge Points and 2,351 Battery Switch StationsChina is likely to easily meet its 70GW wind 5-year target. It installed 25GW of new wind power in 2010, in comparison to only 5GW in the U.S. China’s wind installations grew faster than grid connection, with 10 percent of new wind not being grid connected. China Wind Renewable Energy World Report

$76.7 billion will be invested in new ultra high-voltage grid transmission to support the added capacity of new power according to the 12th Plan.

These investments will directly benefit China and support Chinese ambitions for Chinese global leadership in technology of the future. The 12th Plan identifies 7 Strategic Emerging Industries:

  • Clean Energy Vehicles
  • Energy Conservation and Environmental Projection
  • New Energy
  • New Materials
  • Biotech
  • High-end manufacturing equipment
  • Next-gen IT

Free DB Report

Disclosure: author owns stock in Chinese wind, solar, and HSR companies Trina Solar (TSL), Goldwind (2208.HK), Ming Yang Power (MY), CSR Corp (1766.HK), China High Speed Transmission (CHSTY), and Zhuzhou CSR Times Electric (3898.HK).

Smart Power – Our Future Whether You Like it or Not

I had a chance to meet Peter Fox-Penner, the Chairman Emeritus of the Brattle Group the other day, when he was announcing the launch of his new book, Smart PowerBrattle Group is a long time economic consulting group to the power industry.  Smart Power is about the emergence and issues around the smart grid.  I’m a huge proponent of intelligent energy systems, having cofounded one company building superconducting fault current limiters, and recently cofounded another one still in stealth commercializing distributed power flow controls for transmission lines.  Rather than just hammer out a book review, I’ve asked Peter to opine on a number of questions about electric power, and share some of his thoughts.  Hope you enjoy!

Peter, exactly where do you think the trillion dollar need laid out in your book is going to come from?  How much higher is it than our current spend?  What is the source of capital- IOU or private financial investors? New Entrants? Munis?

In 2008 The Brattle Group studied investment challenges for the utility industry and found that between $1.5 and $2.0 trillion was needed from 2010 to 2030 to maintain current levels of reliable energy service.  Several other sources have independently projected a similar level, most recently Credit Suisse.  For more information, see slide 4 here:

In our Brattle study, the majority of the investments were in generation and distribution.  Without taking carbon prices into account, around $500 billion dollars of investments were needed in both generation and distribution, while transmission investments came in at almost $300 billion.  The remaining investments were needed to implement advanced metering, energy efficiency, and demand response.

These are significant increases compared to our current levels of spending.  Investments in the utility industry have been steadily declining since the 1970s. What will be particularly challenging for the industry is that investments must be made as the electricity sales trend line goes flat.  Consequently, we can expect the financial health of utilities and the price of power to suffer if we don’t plan for these conditions. While the industry is seeing an influx of new entrants, especially in the smart grid area, utilities are still going to provide the capital for these investments and will have to ultimately pass the costs onto ratepayers through higher prices.

Our T&D grid has been underinvested for a long time.  We all know it, but still it’s underinvested.  What will make that change?

The transmission side of the grid is one of the industry’s areas experiencing rapid increases in investment.  In the 1990s we were investing $2 billion a year and now investments are around $8 billion a year. Looking forward, these investments are expected to triple to support the development of 3,000 miles of lines per year through 2017, compared to about 1,000 miles of lines per year over the last decade.[1] Many of these investments center on reliability projects and future transmission investments will yield more projects that support public policy goals. (For example, RPS will require new lines to reach renewable resources).

On the distribution side, new end-use technologies, including advanced metering and plug-in hybrid electric vehicles (PHEVs), will require new investments.  While the costs of smart meters are relatively small compared to the total industry investment needed, smart meters are the building blocks of smarter grid systems and an important trend to watch.  Policy goals, such as the administration’s target to deploy 40 million smart meters and recent ARRA funding, have been instrumental in supporting these investments.

California botched deregulation badly, and despite successes like Texas, that debacle chilled the deregulation push for a long time.  Without a new drive, can we really get the capital mobilized into new generation and T&D?

There isn’t a clear relationship between the two – deregulation on the retail side doesn’t necessarily equate with investment.  Utilities in California, which is still integrated, are investing; so is Texas, which is deintegrated.  In Smart Power I explain the complex interplay between vertical integration, deregulation, and the future regulation of the industry.

It is worth noting that historically large amounts of transmission investment are underway and planned – over $100 billion of new projects, by Brattle’s estimates, in North American.  The FERC is already creating “a new drive” for this investment.

As to distribution (i.e. low voltage grid) capital, the constraint on investment is mainly the financial health of state-regulated utilities.  This is not looking very good and this is a primary concern in Smart Power.  Note that deregulation of either transmission or distribution wires is unrealistic and unwise for the foreseeable future.

Do you see AMI rolling out faster in IOUs or in Municipals?  Domestic vs. overseas?

The amount of AMI investment is greater for IOUs than municipal utilities only due to scale. The actual percentage of customers with AMI is higher among smaller municipal utilities, public utility districts, and electricity cooperatives.  The FERC’s 2008 Assessment of Demand Response and Advanced Metering reported that cooperatives had reached an AMI penetration rate of 16.4 percent in 2008 while IOUs were at 2.7 percent.[2]

Smart meter deployment recently reached a high of 25 percent of U.S. residential accounts.[3] AMI deployment in the U.S. has seen a surge due to ARRA funding, but EU countries may deploy faster by enacting regulations that make smart meters mandatory.  The UK government plans to put smart meters in every household by 2020.  France, Ireland, the Netherlands, Norway, and Spain are projected to have close to 100 percent smart meter installation by 2020 as well.   Generally, the EU is not ahead of the U.S. today and may not be for some time.

For more information on AMI and dynamic pricing potential see:

What do you think are the top 3 business cases that will make smart grid/AMI fly?

At the moment there aren’t three business cases that have made Smart Grid or AMI “fly”- in every case so far there have been elements in proposed plans that experience pushback from either regulators or customer groups.  The best smart grid business cases incorporate robust pilots and show clear evidence of substantial favorable bill impacts.

Without fundamental changes in the lines, switch gear, transformers, et al that actually make up the grid, how much good can better two way communications with the meter actually do?  What is really needed underneath?

First of all, when utilities implement smart grid systems they typically upgrade more components than just the meters and their communication system.  The transformers, switches, etc., are all being gradually upgraded to be “smarter” incrementally at most utilities — it is a question of how quickly the old gear is turned over.  But more importantly, many of the direct customer benefits of the smart grid do not require substantial change-outs of the distribution system hardware you allude to — not at all.  These benefits come from much more customer and utility control over customer energy use, including dynamic pricing, and this doesn’t rely on the hardware items you mention.

We’ve been talking about wind and DG causing problems on the grid for a long time.  Are they really?  Where in the world can we point to examples and the solutions of that?

The intermittency of large wind and photovoltaic resources continue to provide operational challenges.  One example occurred in Texas where a combination of events caused a disruptive decline in the system frequency.  Wind production dropped from over 1,700 MW to 300 MW over three hours and emergency procedures were activated.  At the time of emergency procedures, non-wind resources were under-producing by about 300 MW.  To further complicate matters, demand was at a high that day and exceeded the day-ahead forecast.  Wind intermittency has also been known to disrupt energy prices (creating negative electricity prices in places like Texas and New York) but this is a far smaller issue than reliability of generation.  Having noted this, the variability of renewable is not a huge, impenetrable road block – – it is steadily being addressed.

Since we already have an effective carbon price embedded in supporting our wind power markets of c. $40-80/ton, what price of carbon do you see being needed to make the difference?

The carbon price needed to make wind comparable to other generation types (gas CC, coal, etc.) after all of the subsidies/incentives for wind generation would depend greatly on the region. There is also quite a bit of range depending on your options on projected gas prices, plant costs, and wind capacity factors.

How big a deal is it /how much does it cost to actually roll out AMI?  It seems as if every project takes forever and gets huge flack.

I don’t agree with the premise of your question.  Many utilities have rolled out AMI systems and they are working extremely well.   There is a lot of press lately about a few smart meter installations that have had problems, but the actual technical problems with these rollouts (as opposed to the PR problems) have actually been extremely small.

Credit Suisse has estimated utilities will need to invest approximately $22 billion in AMI equipment – which is only about 1 percent of total industry revenues. While this sounds like a small investment, the average all-in cost of a smart meter in the U.S. is approximately $200.

If we see more linkage with power and transport fuels through increased natural gas and EVs, what do you think the future and role of OPEC is in this debate?

Charles Ebinger, Director of the Brookings Institution Energy Program, who is an OPEC expert, believes that OPEC is very aware of EVs and will respond to them somehow.  However, it may be a long time before EVs put a large enough dent in global oil demand to cause OPEC to worry a lot about them in terms of contemporaneous actions.  The demand for oil from Asia is still rising rapidly, and oil is trading in a range OPEC claims to be very happy with.

Shale gas vs. wind vs. nuclear – where will our key coal power replacement come from?

I think replacement power for any potential coal retirements would mostly come from gas natural gas plants. With the current low expectations for gas prices, wind and nuclear do not have much chance to compete even with new gas plants.

How concerned should we be that low cost dirty coal power in China gives them a fundamental advantage in trade that leaves us playing catch-up?

I would argue that China’s recent clean energy investments pose a greater threat to our global competitiveness going forward.  China is becoming one of the biggest wind markets in the world, with 40 GW of capacity and expected growth of 150-300 GW by 2020.  Chinese companies are seeking to expand abroad and their wind and solar exports to the United States have increased dramatically.  Many argue that this exponential growth has come at the expense of the U.S., whose exports of wind turbine sets and gears fell by 67 percent in 2009.  China’s strength in clean energy surpasses just these wind power examples- China’s total clean energy investments increased 50 percent last year to $35 billion.  This is twice our current level of investment.[4] There has also been a steep decline in U.S. wind and solar technology exports to Europe, illustrating our clean tech competitiveness is at stake on a global scale.[5]

DR. PETER FOX-PENNER is a principal and chairman emeritus of The Brattle Group and author of Smart Power: Climate Change, the Smart Grid and the Future of Electric Utilities (  The views expressed in this article are strictly those of the author.

Interviewer Neal Dikeman is the longtime chief blogger behind and a partner at cleantech and alternative energy merchant bank Jane Capital Partners, Chairman of ecommerce company, and previously cofounder of Zenergy Power and founding CEO of Carbonflow.

[1] For more information on transmission investment and planning, see:


[2] 2008 Assessment of Demand Response and Advanced Metering, FERC, 2008.

[3] Peter Fox-Penner, “The Smart Meter Backslide,” Harvard Business Review Insight Center, October 4, 2010,

[4] Judith B. Warrick, The Power of an Idea, Morgan Stanley, Energy Insights, October 27, 2010.

[5] Worldwide: USTR Initiates Section 301 Investigation into China’s Subsidies and Restrictive Practices on Green Technology Sector, October 19, 2010.

African Sunrise for Cleantech?

This week I’m going to break one of my self-imposed ‘blog’ rules and dip into last week’s news. My reasoning will become clear.

On Thursday I attended Envirolink North West’s Developing New Technologies for off Shore Wind event at the Met in Leeds. Apart from gaining a new respect for gearboxes (not to mention the humble bearing), I was struck by a presentation delivered by Dr. Mike Barnes of the University of Manchester and Siemens Transmission and Distribution arm.

In particular, he highlighted a ‘desertec’ vision for future energy generation, whereby huge swathes of African and Middle Eastern deserts are used for the generation of solar and wind energy. Drawing on commentary delivered by Matthias Ruchser and Stefan Gaenzle of the German Development Institute (Deutsches Institut für Entwicklungspolitik DIE) on Deutsche Welle, Dr Barnes outlined that, once technology and cost allows, Africa could become a major source of energy.

The Desertec project aims to feed solar power from Africa and the Middle East to the EU Thursday night brought a counter perspective at EcoConnect’s Green in the City Event: ‘Future of Solar’ at the London HQ of City law firm SNR Denton. Although heavily slanted towards the investment and banking community, these events always deliver a valuable and informed insight.

Expert panel member Paul McCartie of Investec Capital Markets dismissed ‘desertec’ as unworkable. Sighting “energy security” as the primary issue, he commented: “Following the recent problems caused by a dependency on Russian gas supplies, I can’t see Europe relying on energy generated in African and Middle Eastern nations.”

Good point. Would folks in Milton Keynes rely on a light switch powered by electricity generated in the Sudan?

Last week, Environment writers Louise Gray in the Telegraph and John Vidal in Guardian offered a hint as to what the future may hold.

Both reported on a controversial announcement from International Development Secretary Andrew Mitchell MP that the Coalition Government was committing taxpayers’ money: “To encourage private investors to put their funds towards ‘green’ development projects in Africa and Asia.”  Mr Mitchell said: “In Africa, a potential new fund could see up to 500MW of renewable energy per year from 2015 – enough to provide for over 4 million rural households. In Asia the project could generate 5GW of new renewable energy and create 60,000 jobs.” he said.

Aid agencies greeted the news with immediate skepticism: Would private investors be doing this just to bring light and jobs to some of the most energy deficient and impoverished places on earth? Of course not, and Government wouldn’t expect them to.

So what’s going on here? Well, if the near ‘third-world’ is to be explored as a potential source of energy then this could be a sensible way to go – encourage investment under the guise of aid.  As for security, Matthias Ruchser and Dr. Stefan Gaenzle are of the opinion that: “renewable energy sources promote development, and development promotes security.”

So what leads us to believe that the development of African renewable energy will not be just an extension of the model followed by other large extractors of raw materials from the continent? The Angola and Nigerian oil fields are by no means models of security and progressive regional development.
Does renewable energy offer an opportunity for a new, fairer approach to international development, or will the same energy security problems prevail?

Guest Submission by David Innes-Edwards of Green Frontiers

RPAG – Renewable Power at Scale = Scotland?

Comments by Alex Salmond, Scotland’s First Minister, were a highlight of my fascinating introduction to RPAG – Renewable Power at Scale, this week.  With 206 GW of offshore renewable energy potential (wind and marine), despite it’s small size, Scotland has 25% of Europe’s wind power potential and 25% of its tidal resource potential.

Keep in mind, this is place with an average total demand of 6 GW of power, and already has almost that much in wind power under consent or in development, primarily offshore.  Part of a targeted 7,000 offshore wind turbine rollout in process around the British Isles over the next decade.  These are numbers that both in aggregate and relative size to their grid dwarf the last decade of renewables.  Already a net exporter of power, Scotland is basically planning on meeting the UK renewables requirements all by its lonesome, and export power across the Continent as well, if the proposed North Sea SuperGrid ever gets built.

This renewables push anchors the Scotland and UK climate change planning, with Scotland targeting 80% renewables by 2020, 31% by 2011 (11% hydro, the rest offshore wind). It was at 25% in 2008.  This compares to UK overall 32% renewable by 2020, currently at 6%.

The next couple offshore wind development licensing rounds in the UK and Scotland total numbers in the like 50 GW range.  It took me several presentations on the subject before I was comfortable typing a number that large, as it boggles the mind.

However, and it’s a big however – the industry has a long way to go.  Three key challenges, which will not be a surprise to any renewables industry aficionado:

  1. There currently isn’t anywhere near the grid required: either in offshore infrastructure to reach the locations, nor in modern onshore grid capable of accepting and exporting power from offshore.
  2. Once T&D is solved, the industry to deliver this scale needs to go to deeper waters, bigger and lighter turbines, and a roll-out speed approaching call it 5-10 turbine installs offshore per week within a few years, and no part of the supply chain is yet ready to handle that.
  3. And finally, export market integration.  If places like Scotland are going to be the Saudi Arabia of renewable electricity, the markets have to be open to cross-border trade and export.  For example, assuming it has T&D lines to get it there, and a supply chain to build it, can a Scottish wind farm sell renewable power to pick you favorite EU country and meet their RPS requirements?  Currently, that just ain’t happening.  No open power markets in Europe outside of the UK means no real cross-border market for renewable electricity.

But, it’s hard to utter anything other than OMG, as the number of roll-outs todate, the amount of development resource in process, and headlong sprint in the supply chain compared to 5-10 years ago, means the potential for offshore wind to deliver RPAG within this decade is really, really awesome.

Renewable Fuel — Without Biomass

by Richard T. Stuebi

In recent years, there’s been a major push for renewable fuels — to reduce our needs for petroleum, as well as to reduce the carbon footprint associated with burning petroleum-based fuels.

The common thread of all of these renewable fuels has been the use of some sort of carbonaceous feedstock — typically biological organisms, till now agricultural crops like corn and soybean, and moving towards cellulosic wastes and algae — from which to produce a liquid fuel for vehicles. In other words, sunlight begets botanical growth begets fuel.

Now comes word of a company emerging from stealth-mode called Joule Biotechnologies, based in Cambridge MA and funded by Flagship Ventures, which has developed what the company is calling the “Helioculture” process for making fuels directly from the photosynthetic conversion of sunlight and CO2 — without requiring any biomass (nor any water, for that matter).

According to its press release, the company’s “SolarFuel” will satisfy current vehicle specifications. Although still a few years away from commercial production, Joule is projecting yields of more than 20,000 gallons per acre per year at long-run economics competitive with oil at $50/barrel.

Of course, entrepreneurs and inventors love to tout new ideas with great potential — potential that is often never achieved. But this idea at least has considerable intuitive appeal, and is very out-of-the-box relative to much of the innovation being pursued in the transportation fuels arena, which makes Joule definitely worth watching in the coming years.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Effective September 1, he will also become Managing Director of Early Stage Partners.

Water & Energy – crisis and opportunity

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

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

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

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

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

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

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

Election Predictions for Cleantech and Carbon in a Post Obama World

At the risk of sounding like I’m flip flopping, here are the top 5 reasons tonight’s election results mean lots of money for cleantech investors (and, unfortunately, my pocket).

1. An Illinois President and Democratic Congress equals good odds for corn ethanol and a Renewable Fuels Standard.
2. Think massive subsidies, loan guarantees and R&D funding for alternative energy (assuming our government has any money left in it’s pocket book).
3. CAFE standards are going up.
4. We can stop worrying about losing the wind and solar tax credits, and maybe get a federal Renewable Portfolio Standard.
5. And finally, strange bedfellows – Think McCain-Lieberman leading the swing votes in the Senate and an Obama led White House delivering our climate change legislation.
Good luck and God bless us all.
Neal Dikeman is a partner at cleantech merchant bank Jane Capital Partners, CEO of Carbonflow, and the Chairman of

Energy Versus Water

There is a growing awareness that there are two convergent crises facing the world: Energy and Water. Scientific Amercican just launced a dedicated environmental publication this month, Earth 3.0 and the cover story? … ‘Energy Vs Water’.

The article explores the dichotomy between the fact that we need energy to produce water and we need water to produce energy. Both resources are running out. As we are reaching Peak Oil, we also appear to approaching Peak Water. This creates a very interesting dilemma and one which will require no small amount of innovation to solve.
Biofuels, cited as one option to wean us away from petroleum, can consume 20 or more times as much water for every mile traveled than the production of gasoline. Not all biofuels are created equal however, some are worse offenders than others, and the US National Research Council addresses this very well in ‘Water Implications of Biofuels Productions in the United States’.
Electric hybrids are another solution to get away from imported gasoline. But if we switch to electric cars, we will need more electricity and at the moment 90 percent of electricity in the US is generated at thermal power plants, – those that consume coal, oil, natural gas or uranium, and these plants are water hogs. They use vast quantities of water for cooling. The US Army Corp of engineers is currently trying to find a middle ground in an interesting water drama unfolding between the states of Florida, Alabama and Georgia. Part of the problem is that both Georgia and Alabama have come dangerously close recently to having to shut down their nuclear power plants due to lack of water.
The Energy Vs Water article goes on to say that ‘any switch from gasoline to electric vehicles or biofuels is a strategic decision to switch our dependence from foreign oil to domestic water’.
The Concept of Virtual Water
To help assess issues relating to water use and water balance, Professor John Anthony Allan from Kings College London, developed the concept of ‘Virtual Water’. He was awarded the Stockholm Water Prize this year for his work in this area. The idea is that you can calculate how much water there is in, say an apple, not just physically in the apple, but on a life cycle basis, how much water went into growing it, transporting it etc, By doing this with various food items or other commodities, a country could take a view to import ‘water heavy’ items, as a kind of a virtual way of importing water. For instance behind that morning cup of coffee, are 140 litres of water used to grow, produce, package and ship the beans. The ubiquitous hamburger needs an estimated 2,400 litres of water. Put simply, it may be more cost effective to import oranges from a region that has plenty of water than to try and de-salinate water at home to irrigate an orchard. Now that doesn’t always work though, you can’t grow things like oranges in wet damp countries like England.
And herein lies one of the fundamental problems. There is a reason why it is easier to grow 50% of the nations fruit and vegetables in California – it’s warm and sunny. And for this same reason, populations have been moving to the sunshine belt. If we could all live in California and import melons and oranges and strawberries from England, wouldn’t that be great? And you can’t cool a nuclear reactor with virtual water – at least not yet!

Cleantech Venture Capitalists Beware – What You Don’t Know About Energy Can Kill You

Oil prices quietly (at least in the cleantech world), slipped below $80 last week, off some 50% from its highs a few months ago. Did I say 50%? Yes 50%. And gas has slipped, too, as with some variations, natural gas historically trades at a roughly 10:1 price ratio of Barrels to MCF.

It’s easy to get caught up in the cleantech hype and forget that only 10 years ago this year oil prices fell two thirds caught between rising supply from a decade of drilling and nasty Asian flu, triggered in part by, wait, a financial debt crisis, that time in emerging markets. Sound familiar? And oil hit less than $11 per barrel, less than 1/13th of its recent high, with people talking $6.

And it’s easy to forget that the half decade following 1998 the not yet named as such cleantech investment sector hyped fuel cells, microturbines and distributed generation on the back of clean cheap natural gas, which was the fuel of the future.

And it’s easy to forget that rising commodity prices wiped 99% of those business cases (only a few billion in value, though!) off the map until not a single cleantech venture investor today discusses distributed generation at all. But after a short hiatus, solar and ethanol exits on the back of some huge subsidies came through and cleantech was boomed.

And it’s easy to forget that only a couple of years ago we as an industry debated the viability of hybrids and biofuels – because of a breakeven at $40-50/barrel or higher (the oilman’s breakeven in Saudi Arabia is maybe $5/bbl)? Breakeven at $40 in biofuels? Corn ethanol maybe, cellulosic, dream on. But the switch from MTBE to ethanol came through on the policy side and unforeseen Chinese demand growth pushed oil prices stratospheric. And the corn ethanol plant owners built hundreds of plants at 5% of the size of average refinery, made hay and traded at tech multiples. Only to get crushed when corn prices, driven up by (gasp!) demand and higher natural gas and oil drove up their feedstock, fertilizer and transport costs and margins down. Welcome to refining, freshman.

And it’s easy to forget that the core economic value proposition for solar has the ever present cost escalation analysis – “lock in your power costs, energy prices have risen x% per year, if they continue to do so you’ll be paying 2.5x your current power prices in 30 years”. And that the solar industry quietly ignores that energy prices will decline not rise with economic turmoil. But the ITC and feed in tariffs came through paying more than half the cost and so the party goes on.

It’s easy to forget that energy is about commodity prices. And commodity prices are about cycles, supply AND demand. And that demand is GDP growth driven in energy. And that in our global markets GDP growth is more interlinked than ever, making it more, not less subject to cycles.

And that alternative energy is called alternative because it’s the most expensive form of energy, meaning it’s the swing producer, the type of guys who get killed in cycles (subsidies aside, of course).

And that the big fortunes made in cleantech investing todate have not been made on high risk early stage technology bets, but on 10 or 20 year old technologies who were in the right place at the right time when the policies came in. Or the low cost manufacturers of mature known technologies (think corn ethanol or wind developers and Chinese solar manufacturers) who moved fast when policies moved, making hordes of “that’s not a venture” bets. Disruptive technology has never been the winner.

In energy, there is no disruptive technology, only disruptive policy that makes some technologies look disruptive after the fact. In energy, the risk is in the scale up, not the R&D, and the end application is so massive, so capital intensive, and so utterly dependent on commodity prices, that you can’t invest in it like you invest in IT. It takes longer, 10x as much money, and the ante up to play the game for one project is the size of your largest fund. At scale, there is no capital efficient strategy in energy.

But we are Silicon Valley and we smash open gates with technology, and we know better than those energy dinosaurs in Houston, London, and Abu Dhabi, right? They just don’t get it, right? One game changing technology can force the oil companies and power companies to their knees. The one I’ve found really is new and different. This entrepreneur has discovered something new. And it can be *cheaper* than oil (if you define cheaper right).

Beware Silicon Valley, the great fortunes, wars, and economic crises of the world for 100 years are not technology ones, they were energy made. Half the schools you went to were built by oil money. And the entreprenuerial spirit in this industry was born in the hardscrabble oilfields of Pensylvania and Texas, and grew up in the far reaches of the globe. And the oil companies those entrepreneurs founded have forgotten more about technology in energy than you even know existed.

Be forewarned, you do not have a comparative advantage here. The oil men invented risk taking, AND risk management. The oil men are bigger, faster, smarter, richer, have more scientists and more entreprenuerial spirit than you, AND they know energy.

So while you fight the good fight to develop technology to change the world, don’t forget, be humble, learn what can be learned, build what can be built, and walk softly, because the elephant in this room floats like a butterfly and stings like a bee, and he has yet to take the field.

. . .

The little guys whose pension funds are paying you a cushy 10 year guaranteed contract are counting on you to put aside your hubris.

Neal Dikeman is a partner at Jane Capital Partners and the CEO of Carbonflow. He is the Chairman of and edits Cleantech Blog. He is from Houston, is a Texas Aggie, and believes in both energy and the power of technology to change the world.

Wind Leading the Pack of Winning Clean Tech Technologies

by Marguerite Manteau-Rao

Mark Jakobson, professor of Civil and Environmental Engineering, at Stanford University, performed a thorough evaluation of energy solutions to global warming, as applied to alternative vehicle technologies. His answers may surprise you.

Pr. Jakobson looked at the following energy sources:

  • wind turbines
  • battery electric vehicles
  • solar photovoltaics
  • hydrogen fuel cell vehicles
  • geothermal power plants
  • tidal turbines
  • wave devices
  • concentrated solar power
  • hydroelectric power plants
  • nuclear power plants
  • coal with carbon capture and sequestration
  • corn ethanol
  • flex-fuel vehicles
  • cellulosic ethanol

and evaluated them according to the following criteria:

  • resource abundance
  • carbon-dioxide equivalent emissions
  • opportunity cost emissions from planning-to-operation delays
  • leakage from carbon sequestration
  • nuclear war/terrorism emission riks from nuclear-energy
  • air pollution mortality
  • water consumption
  • footprint on the ground
  • spacing required
  • effects on wildlife
  • thermal pollution
  • water chemical pollution/radioactive waste
  • energy supply disruption
  • normal operating reliability
Wind comes out the clear winner. Concentrated solar power, geothermal, solar photovoltaics, tidal, wave, are good additions to the mix. Hydroelectric is added for its load balancing ability. Nuclear and coal are less beneficial. Corn and cellulosic ethanol should not be included in policy options. Hopefully, the next administration will be wise enough to follow Pr. Jakobson’s recommendation . . . and align its subsidies with the right kind of technologies.

Marguerite Manteau-Rao is a green blogger and marketing consultant on sustainability and social media. Her green blog, La Marguerite, focuses on behavioral solutions to climate change and other global sustainability issues. Marguerite is a regular contributor to The Huffington Post. Since Sarah Palin’s VP nomination, she has also been impersonating Ms. Palin at What’s Sarah Thinking? blog

Climate Change Policy Thoughts, McCain, Palin, Obama, Et al

Those of you that know me know that fighting climate change is an issue near and dear to my heart – and day to day life, since I am currently involved with a start up working on helping to deliver even better transparency and environmental integrity to carbon credits.

So as a small government, energy focused, environmentally conscious, social liberal, fiscal conservative, who has worked in both oil & gas and alternative energy, I had a lot to like about the McCain-Palin ticket. And I’ve stated that and my reasons for it, and gotten ripped for it for an audience on this blog that is commendably and passionately progressive when it comes to these issues, but unfortunately doesn’t always read to the end of the blog articles or do their research before ripping me for being Republican. But one key area I struggled on was where Palin came down on climate change. Luckily for the 182 small government, energy focused, environmentally conscious, social liberal, fiscal conservatives like me left in America, John McCain’s climate change position has apparently rubbed off on her. Like her or not, this is a very good sign for progressives. It means we as a nation are joining the climate change fight no matter who wins the election fight.

To those of you who say we should have signed Kyoto, don’t forget, Obama, GW Bush, Hillary Clinton, and John McCain all agree on this one, multilateral climate change legislation has to include China and India committing to something. (Hillary actually flopped on this topic). And China and India haven’t agreed. The Senate voted something like 98 to 0 during the Clinton years saying no to Kyoto if China didn’t agree to caps.

The main difference between US politicians has been the willingness of every one on this list except Bush to work to push through some sort of cap and trade in the US – independent of a multilateral framework like Kyoto. McCain has been pretty lock step with the Democrats on this one. And then smaller differences emerge in their approach to tough the caps should be, and whether the profits from trading ought to go into the government coffers as a new (Iraq war size massive) tax, or back to industry to fund future abatements. Of those, Obama talks the toughest game, but McCain is the only one who has ever tried.

The problem with a unilateral approach to cap and trade is that it’s about like going into Iraq unilaterally – it’s a bad a idea. Carbon is a global problem, and lots of separate policies aren’t likely to solve it without significant economic collateral damage. And worse, with cap and trade or taxes, if we try to have separate markets or tax schemes, it means we likely get a different price of carbon in California than in Texas than in China, than in Europe. And if there is no way to equalize the price by trading credits in linked markets, the only route left for industry is to shift production out of the country with the highest price, or lose out to competitors from those markets with lower prices. If the markets aren’t linked (which Obama supports in small amounts and McCain in medium amounts), we will definitely see these geographical price differentials. Then industry will respond by shifting production to China and India, whether it’s overt or not, they won’t have a choice. The power of the consumer dollar will force it to some degree. And the tighter the US carbon legislation is compared to the Kyoto, the bigger incentive to shift production overseas. Hence Obama’s position on 80% auctions for very rapidly implemented, very tight caps results in a large tax windfall to the US government, and a correspondingly large effective price differential on the price of carbon from the US to Europe even, let alone the US to China which still has caps. Where as McCain-Lieberman’s slower and lighter (but still much faster and tighter than Kyoto) plan with explicit links to Kyoto markets, would result in more moderate price differentials. If the markets are linked (meaning you can buy Chinese credits to meet California demands), but the local carbon regulations are tighter, industry has less of a need to shift production ourseas, but can instead cans sometimes shift it’s carbon purchases overseas instead of labor or other materials, but instead we would still see an increased trade imbalance as dollars flow to China to pay for the carbon.

Basically, if the US cap and trade is tighter than foreign cap and trade, either manufacturing has to go off shore, or if the markets are linked and you can buy carbon offshore, then either dollars could go offshore for carbon to keep jobs and production home. That’s why the big push for multilateral climate change, carbon trading markets, and environmental regulation that moves in lockstep with our biggest trading partners.

Hey wait, does that mean that the Democratic position on climate change will actually exacerbate outsourcing to Asia and trade imbalances even MORE than the Republican position this time? ‘Fraid so. The thing I like about McCain on climate change, is that despite getting a bad rap on economics, he’s the only candidate who’s bothered to include the impact on you and I into the complex calculus of climate change legislation.

It’s a catch-22 with no real way out, and a lot of bad options. The worst option however, is doing nothing. Luckily, with Palin now toeing McCain’s line on climate change. That option may finally be off the table.

The Shiny Copper Penny Plan for Energy and Cleantech

I wrote a piece last week arguing that McCain / Palin was my energy/cleantech dream ticket, and promptly got slammed by my readers on the left (who generally think McCain’s plans for the environment /cleantech investing are nowhere near aggressive enough and that Palin is way too conservative), AND friends on the right (who think that Palin is anti-Big Oil). There were more of the former than the latter since Cleantech Blog has been more of a progressive voice than anything else. I think I have published all the comments that came through on the blog (though not the emails), even those ripping me to shreds.

But pretty much everyone agreed I was crackers for one reason or another. So of course I’ve expanded the discussion, and am opening the floor to you. I am looking for comments that reflect at least one pro AND con for each candidate as the best candidate for energy / cleantech. Comments that only offer pros on one side or the other will be sent straight to the trash can.

Here’s mine to get you started – and while you’ll see my opinion come straight through, attached are the reasons behind it:

Barack Obama – Dubbed the Shiny Copper Penny Plan

His environmental and energy issues page

His stated plan’s objectives (editor’s notes in [brackets])

“Provide short-term relief to American families facing pain at the pump [How, by raising taxes elsewhere to subsidize energy and thereby support increased demand but oppose any increase in domestic production? Our gas prices are already way lower than Europe’s. The best policy I’ve seen to reduce gas prices is corn ethanol, yes the much maligned corn ethanol, which has reduced prices at the pump $0.29 to $0.40 / gallon. That plus CAFE plus domestic drilling, and we may have a viable answer. The real short term answer to high gas prices is break the back of OPEC as a cartel, but NOBODY wants to go there.]

Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future. [Despite the fact that this would likely make me quite rich (I have significant interests in several companies that could milk the hell out of this), I’m not really interested in massive increases in government spending. And let’s be clear, Presidents do not create jobs, you and I do. Oh, and Barack wants to get the US government into the venture capital business in cleantech. On what planet is THAT a good idea?]

Within 10 years save more oil than we currently import from the Middle East and Venezuela combined. [We don’t import a lot of our oil from the Middle East, it’s too far away, we get a large chunk of ours from Mexico and Canada :)].

Put 1 million Plug-In Hybrid cars — cars that can get up to 150 miles per gallon — on the road by 2015, cars that we will work to make sure are built here in America. [I’m a big fan of PHEVs, but right now the technology is just not there yet, despite all my electric car friends. This is definitely a shiny copper penny. I would rather focus on CAFE, car size, and biofuels.]

Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025. [2012 is just around the corner in energy terms, virtually nothing the next President can do would really change our trajectory here. 25 x 25 is a good goal, and probably his best energy plank in my opnion, but he’s short on the details of how to actually achieve it, even at astronomical energy price increases. One main challenge is that to accomplish this, we need more clean baseload (coal, gas, nuke or hydro) to underpin it and lots and lots and lots of new transmission lines – which are 7 to 10 year projects in of themselves. And of course, it depends on what you mean by renewable, right now every state in the US defines it differently.]

Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050. [I’m very pro cap and trade, but Obama’s plan is the high cost, unilateral way to do it, resulting in the most revenues to the government. The other issue here (which McCain will also face), is that even reducing the US impact on CO2 emissions is pretty much lost in the wash if China and India et al don’t commit to some sort of reductions (And of course if we do and they don’t the net effect is to push manufacturing jobs overseas. THAT is why neither the US Senate, the Clinton administration nor the Bush Administration, Barack Obama or John McCain has supported ratifying Kyoto (Hillary used to, then flipped once she figured it out))]”

The Pro

  • Clearly the most aggressively stated energy and environmental plan – if you like all green with costs taking a back seat, Obama is the way to go. But it’s very hard to conceive of cheap energy and aggressive switchs to alternatives.
  • Supports most aggressive climate change proposals out there – would definitely put us in the lead in solving the climate change problem – if you believe that us solving our part of the problem internally is more important than the world working to solve it together.
  • Supports long term not short term incentives for alternatives in general (as does McCain)
  • Would likely spend mega bucks on new energy techology spending and subsidies – great for me personally, bad for you and the country in the near term, possibly good for the country in the long term.

The Con

  • Very limited resume of actually authoring any legislation on energy or the environment
  • No experience in domestic energy policy
  • Anti- drilling (or was until he realized that like two-thirds of Americans support it)
  • Supports climate change plan that would represent a wealth transfer from the central US to the coasts and result in a several hundred billion dollar per year new tax on energy (that’s on the order of the Iraq war size)
  • Picked a VP with no real energy experience
  • Seems to have little respect for the cost of his energy plan to you and I – read Jimmy Carter all over again?

John McCain – Steady Wins the Race

John McCain’s energy page. His stated plan’s objectives (editor’s notes in [brackets])

  • “Expanding Domestic Oil And Natural Gas Exploration And Production – John McCain Will Commit Our Country To Expanding Domestic Oil Exploration. John McCain Believes In Promoting And Expanding The Use Of Our Domestic Supplies Of Natural Gas. [You may not like it, but most Americans do, and underpinning domestic supplies should be a part of every energy policy discussion. Tax the output at the pump if you want, but this country was built on cheap domestic energy, never forget that.]
  • Taking Action Now To Break Our Dependency On Foreign Oil By Reforming Our Transportation Sector – The Nation Cannot Reduce Its Dependency On Oil Unless We Change How We Power Our Transportation Sector. John McCain’s Clean Car Challenge. John McCain Will Propose A $300 Million Prize To Improve Battery Technology For Full Commercial Development Of Plug-In Hybrid And Fully Electric Automobiles. John McCain Supports Flex-Fuel Vehicles (FFVs) And Believes They Should Play A Greater Role In Our Transportation Sector. John McCain Believes 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. John McCain Will Effectively Enforce Existing CAFE Standards. [I hate prizes. The government shouldn’t be in the l0ttery business, but battery technology IS the ultimate force multiplier in energy and transport. Flex fuel, should be a basic requirement. See above on ethanol’s impact on prices already. CAFE standards, here is our near term transport lynchpin, I’d like to see McCain stronger on this.]
  • Investing In Clean, Alternative Sources Of Energy – John McCain Believes That The U.S. Must Become A Leader In A New International Green Economy. John McCain Will Commit $2 Billion Annually To Advancing Clean Coal Technologies. John McCain 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. John McCain Will Establish A Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D. John McCain Will Encourage The Market For Alternative, Low Carbon Fuels Such As Wind, Hydro And Solar Power. [Long term R&D tax credit, finally! This is part of a policy that has helped Australia punch outside it’s weight in technology for years. Nukes + clean coal, we may not like it, but it HAS to be done to baseload all those new renewables. Obama will figure this out, eventually.]
  • Protecting Our Environment And Addressing Climate Change: A Sound Energy Strategy Must Include A Solid Environmental Foundation – John McCain 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: Return Emissions To 2005 Levels (18 Percent Above 1990 Levels)2020: Return Emissions To 1990 Levels (15 Percent Below 2005 Levels) 2030: 22 Percent Below 1990 Levels (34 Percent Below 2005 Levels) 2050: 60 Percent Below 1990 Levels (66 Percent Below 2005 Levels). The Cap-And-Trade System Would Allow For The Gradual Reduction Of Emissions. [See below, the most practical multi-lateral plan yet devised in the US]
  • Promoting Energy Efficiency John McCain Will Make Greening The Federal Government A Priority Of His Administration. John McCain Will Move The United States Toward Electricity Grid And Metering Improvements To Save Energy. [Investing in the smart grid and smart metering, now there’s an interstate highway style policy I can support. Smart grid is THE key to underpinning a generational shift in our power use or EV fleets. It’s our electric power sine qua non – without which there is nothing]”

The Pro

  • His energy plan is balanced, focuses on the force multiplier’s like R&D tax credits, batteries, and smart grid, and cleaning up cheap domestic resources like gas, coal, nuke, and ethanol, not the shiny copper pennies like a US Venture Capital Fund, PHEVs, and cool sounding names like 25×25.
  • Only candidate to actually author a climate change bill. It gets dinged for not being aggressive enough, but it is MORE aggressive than Kyoto, and probably the most reasonably practical one that’s come through Congress.
  • Picked a VP with lots of domestic energy experience (The state of Alaska is basically an oil company) who while pro drilling is not pro Big Oil.


  • Legislative record on environmental protection issues is generally considered spotty. I’d like to see more balance here.
  • Hasn’t pushed CAFE like I’d like.
  • I’d like to see explicit support for a 10 year PTC (Obama supports a 5 year one)
  • Depending on your position, pro nuclear (which is a very climate change friendly answer, by the way), but often viewed as anti environmental.

So sorry folks, I think McCain’s energy and environmental plan is as spot on as any presidential candidate in a long time. Yes his record on the environment is “spotty”, but energy and environment always involve tradeoffs with economic and technological reality, and I think any balanced plan will look spotty to some.

My rationale for McCain getting the crown on energy and cleantech, because it’s real and focuses on the long term force multipliers that will keep us competitive, clean and safe in the most economic manner, not Obama’s shiny copper penny plan.

In full disclosure for those of you who don’t know me, of my two largest clients, one is an oil company, and the other is an all renewable power company. I have been helping them develop their solar and low carbon strategies and businesses. I have founded cleantech startups myself in superconductors and carbon, and stand to see more financial benefit from Obama’s plan than McCain’s. But that doesn’t make it right.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of

McCain-Palin is the Energy / Cleantech Dream Ticket

John McCain picked first term Governor Sarah Palin of Alaska as his veep choice today. I love this pick.

She’s a 44 yer old first term, youngest and first, woman Governor of Alaska. She’s known as a maverick and anti-establishment in Alaska, and has taken on Republicans and the oil industry over ethics and pork. She beat two longtime Alaskan political heavyweights to win the Governorship. She’s a fiscal conservative, anti pork, pro drilling, and pro Alaskan gas pipeline. She used to be on Alaska’s oil & gas commission, and is a progressive on climate change. Her bio from Wikipedia. So what does the choice of Palin mean for McCain’s climate change and alternative energy focused energy policy?

In some ways she and John McCain make an energy /cleantech dream ticket. He has made his reputation in energy around proposed legislation like the McCain-Lieberman climate change bill, the most well thought out climate change bill yet proposed in the US. He’s got an energy plan hinging on domestic drilling, transport fuel switching, alternative energy expansion in power, progressive climate change policy and energy efficiency. More progressive on energy and environment than any Republican in history.

And he’s adding a climate change progressive domestic energy expert to the ticket. Not a bad combo for cleantech.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding CEO of Carbonflow, founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of, and a blogger for CNET’s Greentech blog.

Is Al Gore Nuts?

In his speech in Constitution Hall this week, former Vice President and renewable energy investor Al Gore extolled a stretch goal challenging America to achieve 100% renewable power within 10 years. The quote: “Today I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years.” And my favorite part: “When President John F. Kennedy challenged our nation to land a man on the moon and bring him back safely in 10 years, many people doubted we could accomplish that goal. But 8 years and 2 months later, Neil Armstrong and Buzz Aldrin walked on the surface of the moon.”

That statement is about like challenging your 2 year old to finish college by the time she is 12. Not exactly practical, more than a little crazy, and likely to be either ignored, or if you push it, to cause lots of therapy sessions by the time she is 8. I will, however, credit him with getting almost every renewable energy platitude I’ve ever heard into one succinct speech.

He does raise lots of good points about the need for a new energy policy not built around shipping dollars to the MidEast for oil (a definite must), for long term support for renewables (it is critical for us to get off our fits and starts mish mash idea of renewable energy policy), and for moving faster and larger to fight climate change (a topic near and dear to my heart, and one that is only partially helped by making broad statements about how fast the sky is falling, I mean, the glaciers are melting). In fact, there is no better way to give anti renewable energy and climate change naysayers fuel and ammunition than to make statements like these. Any path we go down, I’d still rather challenge that two year old to do something they can achieve, not try and make it through college by age 12 – especially if I’m asking her to pay for it. Slow and steady wins the race.

The core of Al Gore’s argument in his speech on the practicality of a 10 year all renewable energy goal boils down to this quote from his speech on fuels:

“What if we could use fuels that are not expensive, don’t cause pollution and are abundantly available right here at home?

We have such fuels. Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world’s energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses.

And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America.”

And this one on costs and technology:

“To those who argue that we do not yet have the technology to accomplish these results with renewable energy: I ask them to come with me to meet the entrepreneurs who will drive this revolution. I’ve seen what they are doing and I have no doubt that we can meet this challenge.
To those who say the costs are still too high: I ask them to consider whether the costs of oil and coal will ever stop increasing if we keep relying on quickly depleting energy sources to feed a rapidly growing demand all around the world. When demand for oil and coal increases, their price goes up. When demand for solar cells increases, the price often comes down.”

These quotations, while partially true and very seductive, are highly misleading in this context. The effective conversion rates of that energy to usable electric power or liquid fuel is still horrendously low, and requires lots and lots of capital expenditures, and thousands of miles of new transmission lines to implement. And that’s not taking into account the state of technology – as an industry we really are the two year old in my analogy.

So given those conversion rates and the current high capital expenditures per unit of energy, the cost is still 5-20x (depending on what you count) the cost of conventional electric power generation (yes I know, unless you add in the carbon price and environmental externalities, but that’s still extra cost any way you slice it . . . unless you’d like to subsidize mine). Frankly no serious analyst is suggesting that within 10 years, given the state of technology and the best case forecast capacity, that solar can make up more than a small single digit fraction of even electricity needs or that wind can make up more than a meaningful minority share (let alone after doubling the global power demand by replacing liquid fuels in cars with electricity, which Al Gore also suggests), especially given lead times on power plants and transmission lines.

Most likely even if the technologies were already cost comparative, which they are not – if you need evidence, just look at our wind and solar industries in their current tizzy because their biggest subsidy programs are up for renewal this year – most analysts wouldn’t project a fabled grid parity on cost for renewables for at least the next decade, and certainly not at scale. So Mr. Gore’s statements on cost and technology are in part true, but imply a maturity level in these industries that just doesn’t exist yet. Given manufacturing scale up issues on the technology, transmission infrastructure requirements at least as large as the new generation requirements, and long lead times on building projects of this size (industry executives point to seven year time frames just to build a single transmission line), probably reaching even significant low double digit percentages of carbon free power within ten years is a stretch (excluding large hydro and nuclear which we already have but are hesitating to expand) across the whole nation. Notwithstanding that California has managed to come close to its target 20% number over the last decade, that’s one state leaning on the resources of many states, using the best available sites, federal subsidies paid for from all of our pockets, and that took a decade. When it comes to carbon capture and storage for coal fired generation, a concept with lots of legs – if it works – 10 years just isn’t enough time to achieve scale. The first big pilots are scheduled over the next several years, and there are too many unknowns to bet the farm on, without the lead time and capital cost issue. Though still definitely worth trying.

And as far as paying for it, there was an article in the San Francisco Chronicle today calculating our Federal government long term liabilities at $450,000 per American already mainly for Medicare and Social Security. Actually trying to replace our entire fossil fuel infrastructure within 10 years would push that to how much? Somebody please do the math before we launch a government funded mission to the moon, or legislate that our citizens pay for it instead. On costs, Mr. Gore made the statement in his speech “Our families cannot stand 10 more years of gas price increases.” I agree, but Mr. Gore, your 10 year, hell for leather, man to moon race for 100% renewable energy would guarantee just that.

So while extolling stretch goals for a two year old is probably a good idea, let’s keep it within the realm of possibility, and not just make grandiose statements for media effect. Now if Al Gore’s silly challenge on renewable energy was simply a trojan horse to get people talking about how to move forward on fighting climate change and addressing our long standing energy policy issues, I’m all for that and am happy to help. After all, the words Al Gore and climate change make for very searchble blog articles! But personally when I make outlandish statements, I do like to bring an modicum of practicality to the discussion.

I will leave you with one final note, and please remember, I am actually a proponent of the ideals in Al Gore’s speech, I just prefer to get there in one piece. One theory on the effect of the history of the man on the moon driven space race that Mr. Gore challenges us to copy basically says that we pushed for a single high profile goal so fast and furious that we effectively skipped ahead and outran our infrastructure and capabilities to get a nonscalable shot at the moon in the target time frame. The theory goes on to suggest that’s why after reaching the moon so fast we haven’t progressed at the same rate in space since, and had we taken it slower, we would have gotten there a few years behind, but might be on Mars by know. Akin in a military campaign to outrunning your supply chain, and then getting your army surrounded and destroyed – or perhaps invading a country half way around the world, winning the war in weeks and forgetting to prepare for the peace. And just to show that I can deliver as many platitudes in one article as Mr. Gore, that’s why you never get involved in a land war in Asia.

Energy and environment are the two pillars of everything in our lives. Mr. Gore and I want the same thing, but he thinks we can’t afford not to swing for the fences – I think we can’t afford to mess it up.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding CEO of Carbonflow, founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of, and a blogger for CNET’s Greentech blog.

Solar and Renewable Electricity Gain (Week Ending 5/9)

Author: Mark Henwood

Broad market indices (Emerging Markets, EAFA, S&P500) all fell this week. Camino’s PurePlay™ indices were mixed, commodities (ticker DJP) rose strongly.

The PurePlay™ Solar index, comprised of 34 companies, reversed last week’s 2.0% loss with a 0.9% gain. The index members were mixed with 13 stocks increasing and 21 stocks declining. In contrast to last week, two stocks (ENER and CSIQ) increased by over 20%. Energy Conversion Devices’ eye popping 45.2% gain for the week was largely responsible for lifting the index. The company stock rose sharply in very heavy trading after its 7 AM press release on the 8th, and then more after their earnings call concluded later in the morning. The company reported great results for its Q3 with solar product sales up 193% from the previous year. In contrast to prior periods the company showed a profit. More on ENER below.

The Renewable Electricity index increased 0.7% with 11 stocks climbing and 12 retreating. No stock increased or declined by over 20% and nothing caught our attention to report here other then to note that the index’s relatively low volatility continues.

Biofuels followed last week’s loss with an additional 3.4% loss. There were 5 advancing stocks to 10 stocks falling. Biofuels are now down 35.2% for the year, the worst showing of our four strategies.

Aventine (AVR) reversed last week’s gain with a 23.0% decline contributing significantly to the index’s decline. I previously noted Aventine’s large USD 26 million mark-down for its student loan ARS position and noted the company is engaged in other complex financial transactions to hedge operational risk. The company’s value decreased this week by USD 52 million, not because of operational risks, but due to an analyst’s concern about liquidity on the 5th and Moody’s concerns and negative outlook on the 8th. Is there more financial risk to come?

Fuel Cells posted another loss of 1.1% this week with 3 stocks advancing and 4 stocks declining. No stock increased or declined by over 20%.

Energy Conversion: After its big price move, annualizing the company’s Q3 earnings results in a current period PE ratio of 68.

The question is can the company continue the growth necessary to support this price? To grow at the PE ratio, the company will need to expand its Q3 2008 production of 21.6 MW to a Q3 2010 production 61 MW. With its announced plans to increase annual production capacity to 300MW by the end of FY2010 it looks like it may be possible to keep pace. But there isn’t much room for error. Any problems that impact this rapid growth with likely be rewarded with sharp price movements. In our view the stock may be fully priced after this week’s huge gains.

Mark is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks. He also is an investor in sustainable energy stocks.

Edison International Says Solar is the Great Untapped Resource

Cleantech Blog had a conversation last year with Stuart Hemphill, now the newly appointed Vice President for Renewables and Alternative Energy at Southern California Edison, a subsidiary of Edison International (NYSE:EIX), one of the largest purchasers of renewable power in the US. We caught up with him again today in a lively discussion around his predictions for the renewable sector.

Today they are announcing their sixth competitive solicitation for renewable energy. On peak delivery from the Tehachapi region is preferred, as they are currently building a massive transmission line to tap into the 4,500 MW of wind potential. But wind produces only 35% of the time. This major pipeline needs to be balanced. So they are looking for creative proposals from developers to fill up the rest of that transmission line with on peak power deliveries.

Renewable and alternative energy are still top goals for Edison. Stuart says his promotion is part a reflection of the business’ expanding interest in leadership in renewables in the US.

Prediction Number 1 – The next 10 years are going to be a wild, wild west in the solar industry. Companies around the globe are exploring new solar technologies of every variety. Stuart thinks it’s way too early to tell which ones are going to be successful. But he considers solar to be the great untapped resource in California and elsewhere.

So I asked him if by that he meant solar thermal or photovoltaics. The answer is “Yes”. Stuart responded that in the past couple of years we have seen incredible amounts of venture capital investment going into solar firms, and PV is only part of that equation.

When I pushed Stuart to predict a winner between conventional solar parabolic trough and other types of solar thermal technologies, Stuart refused, suggesting that it is still too early to tell which technologies will be the winners. That’s what makes it exciting to watch, in his opinion. As an example, he stated that we are now seeing renewed interest power tower technologies with pretty high efficiencies. The challenge is to see which ones get done.

When it comes to what’s important to SoCal Edison itself, it is really important that they sign PPA contracts with viable companies and viable technologies. He sees a wide spectrum of proposals in terms of viability, and is always looking for at least some sort of demonstration plant to prove it up and a significant level of backing for the companies before they can get involved.

Prediction Number 2 – I did ask him what his take on run of river hydro is. He responded that he hopes to be wrong, as he likes run of river hydro, but doesn’t see any major increases in the resource coming in California. Hydro in California in general has a very a limited resource potential left to be developed and lots of stakeholder concerns to be addressed in each case, so while he is hopeful, he is not predicting any great increases.

Prediction Number 3 – US Offshore Wind – We will not see much from offshore wind in California, as the limitations both from physical layout of shoreline as well as policy and consumer concerns.

We then switched to what the industry challenges are. Stuart nailed two big ones, transmission and interconnection.

He believes that transmission is getting even more challenging than last time we spoke. What’s interesting to Stuart is that most people agree and are in support of renewables in California, but very few people support the way that the goals need to be attained, ie, significantly increase transmission infrastructure. There tends to be lots of local opposition, or federal agencies that aren’t always in support of particular local goals. This makes sense, as transmission by its nature always touches a lot of different land and communities in its path, meaning lots of different stakeholders need to be involved.

Interconnection queue bottlenecks are the real next challenge in California and in the Midwest according to Stuart. This is a challenge that is addressable and there are proposals into FERC to do so. But currently it is a first come first serve system, and easy to get into the queue. Getting in the queue starts a study process based on FERC rules, including a feasibility study, then a system impact study and a facility study. The bottleneck arises because according to the current rules, if your facility is further back in the queue, your studies assume that the facilities ahead of you are up and running, but if at any point in time someone ahead of you drops out, your studies need to be effectively redone. Because it is relatively easy to get into the queue, nonviable projects that do not end up coming online as planned have been upsetting the applecart, causing all the projects behind them to go back to the drawing board as far as the study process is concerned. Since 2002, we’ve seen a steep ramp up to a level that is just unmanageable given that dynamic. CAL ISO has a proposal in with FERC to change this, so Stuart believes a solution is coming, just not here yet.

As usual, SoCal Edison is pushing forward aggressively on renewables, and we were excited to see the new solicitation and changes they are making. As we have said before, let’s just get it done.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of, and a blogger for CNET’s Cleantech blog.

GE: Doing Cleantech The Right Way

I have long had a respect for GE (NYSE:GE), and how it runs its business. In cleantech, I am very, very jealous. They have made themselves into the company to beat. Whether by plan, luck, or simply applying sound business discipline, GE has made itself into a top 3 global cleantech player no matter happens. And they did it for a fraction of the price, and a lot less risk than anyone in Silicon Valley or the energy sector. Venture capitalists beware, in cleantech, the behemoths have beat you to the punch, have done it cheaper, faster, and with more grit than you realize.

5 step Cleantech Program by GE

Wind – In 2002, GE bought Enron Wind out of Enron’s bankruptcy for about $300 mm, making GE one of the top 5 wind players overnight (it’s now well in excess of a billion in revenue). It was their first cleantech steal, right before the wind industry got amazingly tight (and huge).

Power – In 2003, GE acquired one of the leading gas engine manufacturers in Jenbacher, making GE an overnight leader in small, clean power systems, and powering their way into everything from distributed generation to landfill gas markets.

Solar – In 2004, just before the solar boom, GE acquired Astropower, one of the top 5 solar energy companies in the US, for less than $20 million out of bankrupcty, after the company was delisted following accounting irregularities. You cannot even build a single solar manufacturing line for $20 mm. Only the subsequent silicon supply shortages, and a lack of the needed investment in the business and next generation technology kept GE from making a homerun out of it. But despite that, there will never be another steal in solar quite like this.

Water – In 2005, GE acquired one of the largest water technology businesses in the US, Ionics, to complement its previous acqusitions in the water sector. Paying a full price of $1.1 Billion, it virtually guaranteed GE a top 5 position in the reverse osmosis, desalination, and water purification markets going forwrad, right after Ionics was shored up through a merger with Ecolochem.

Ecomagination Brand – Then on the back of these deals, in 2005 GE launched its Ecomagination initiative, and anchored the entire company’s image around its new cleantech empire.

That, my friends, is the way you make money in cleantech venture capital. I would venture to guess that GE has made 10x its money, no matter how you spin it. Or put another way, an IPO of the GE cleantech business would be the hottest thing in years.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of, and a blogger for CNET’s Cleantech blog.

Cleantech Blogroll Review: Sulfur, Flipper, and Cellulose

by Frank Ling

Sulfur Batteries

The EPA has banned sulfur in gasoline but not in batteries. Sulfur, in the form of a sodium salt, has been used as large-scale storage systems. Pioneered in Japan, these batteries are gaining acceptance in the US as a reliable form of energy storage.

Due to the intermittent nature of wind energy, storage systems are needed to make wind power more reliable. The sodium sulfur battery is not only affordable and compatible with these turbines, they are robust and responsive to the output of the generators.

Jim Fraser writes in the Energy Blog:

The 50-kilowatt battery modules, 20 in total, will be roughly the size of two semi trailers and weigh approximately 60 tons. They will be able to store about 6.5 megawatt-hours of electricity, with a charge/discharge capacity of one megawatt. When the wind blows, the batteries are charged. When the wind calms down, the batteries can be used to supply energy to the grid as needed.

Such systems will can power up to 500 homes for over six hours.

Whale Inspired Wind Turbines

The shape of sea creatures have inspired the design of ships. Now, they are also inspiring the design of blades used in wind turbines.

Like the wings of an airplane, the blades can also suffer from drag, reducing it’s overall efficiency. Now, a company in Canada has developed a new design that greatly improves the efficiency.

Hank Green writes in EcoGeek:

Using these little “tubercles,” a new firm in Toronto has created fan blades that have 32% less drag and are, overall, 20% more efficient at moving air. The new design could lead to similar gains in wind turbines, though the testing and certification process for turbine efficiency takes some time.

For an in-depth analysis of the science behind these modified blades, take a look at the paper recently published in Physical Review Letters.

Cellulosic Ethanol Dead on Arrival?

Clearly, cellulosic ethanol would have much more environmental benefits to corn-based fuel. Scientists believe that cellulosic technology may be viable within five to 10 years but there are many logistical issues that have yet to be solved.

Robert Rapier in R-Squared Energy Blogwrites:

…you still have to haul all of this biomass to the plant, convert the cellulose (and get a low concentration of ethanol for your efforts), and then get rid of a sopping wet mess of waste biomass. Sure, it can be burned – if you spend a lot of energy drying it first. Because of the very nature of the process, I don’t believe this challenge will be solved…

Frank Ling is a postdoctoral fellow at the Renewable and Appropriate Energy Laboratory (RAEL) at UC Berkeley. He is also a producer of the Berkeley Groks Science Show.

Up in the Air With Biofuels

by Richard T. Stuebi

Over the weekend, Virgin Atlantic Airways flew a passenger-less Boeing 747-400 partially fueled by a biofuel mixture of coconut oil and babassu oil from London’s Heathrow Airport to Amsterdam’s Schiphol Airport. (Read USA Today story.)

The test flight, performed to evaluate comparative engine performance and emissions rates with standard jet fuel and biofuel mixtures, was conducted by Virgin along with partners Boeing (NYSE: BA), the engine-maker General Electric (NYSE: GE), and the biofuel company Imperium Renewables.

No matter how the results of the experiment pan out, and no matter your personal view on the fundmental utility of biofuels, this is yet another example of how a passionate entrepreneur — albeit one with billions of dollars on his personal balance sheet like Richard Branson — is exploring the cleantech frontiers of what is possible, what is economical, what is environmentally-beneficial.

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.