Plugin Electrics vs All Electric Battery EVs, Epic Throwdown?

I get this every time I discuss EVs.  Something along the lines of oh, you shouldn’t be including PHEVs in with EVs, they don’t count, or are not real EVs, just a stopgap etc.

I tend to think PHEVs may be better product.  At least for now.  And I follow the GM’s Chevy Volt vs the Nissan Leaf with interest.

The main arguments on each:

Plug in Hybrids

  • No range anxiety
  • Still need gasoline
  • Can fuel up at either electric charging station, your home or gas station
  • Depending on driving patterns, may not need MUCH gasoline at all
  • Expensive because:  need both gasoline and electric systems, and batteries are still pretty expensive, even with a fraction of the amount that’s in an EV
  • Get all the torque and quiet and acceleration punch of an EV without the short range hassle
  • But not really an EV, after a few miles it’s “just a hybrid”
  • Future is just a stop gap until EV batteries get cheap? Or just a better car with all the benes and no cons?


Electric Vehicles

  • No gasoline at all (fueled by a mix of 50% coal,20% gas, and the rest nuke and hydro with a little wind :) )
  • Amazing torque and acceleration
  • Dead quiet no emissions
  • Fairly slow to charge compared to gas
  • Lack of charging stations is getting solved, but still somewhat an issue
  • Switching one fuel for another, no extra flexibility on fuel
  • Expensive because lithium ion batteries are still pricey and way a lot
  • Future is cheaper better batteries?  Or they never get there and the future never arrives?

I tend to think the combination of plugins and EVs has actually worked together solved range anxiety.  As a consumer, I get to pick from a full basket when I buy, Leaf, Volt, Prius, Model S, lots of pricey batteries to deal with range anxiety, a plug in that gets me almost there with zero range issues, or a Leaf in between.  Whatever range anxiety I had disappears into consumer choice, just like it should.  I don’t think pure EV is any better or worse than a plugin, just a different choice.  They work together in the fleet, too, plug ins help drive demand for EV charging stations that are critical to electric car success, and EVs drive the cost down on the batteries that brings the plugin costs into line.  Unlike with the Prius over a decade ago, it’s not a single car changing the world, it’s the combination that’s working well for us.

A Tale of Two EVs

Albert Einstein once said:  “Make everything as simple as possible, but no simpler.”  Pundits always pursue the former, but often fail to uphold the latter.

Such has been the case recently in regards to the prospects for electric vehicles.  Will electric vehicles be commercially successful or won’t they?  As often happens, there is superficial evidence supporting both sides of the argument.

On one hand, you have Tesla Motors (NASDAQ:  TSLA).  Tesla recently announced that it had achieved its first quarterly profit, on the back of better-than-forecasted sales of its new Model S sedan.

On the other hand, you have Fisker Automotive.  At the same time that Tesla was releasing good news, Fisker was making waves with its drastic downsizing, laying off 75% of its workforce.  Fisker’s main model, the Karma, is probably unfortunately named, as the company is certainly beset with misfortune these days.

Fisker’s bad news made more headlines than Tesla’s good news, in part because Fisker has received financial support from the U.S. government, and was thus being lambasted by some as the “next Solyndra”.  (In part, also, because bad news seems to get more attention than good news.)

So, why is Tesla doing fairly well while Fisker is definitely not?  This comparison between the two makes a strong case that Tesla simply has a better all-around product at a more attractive price than Fisker.

Moreover, it is said by many observers that Tesla has pursued a different fundamental approach to business than Fisker.  Fisker started by designing a wholly-new electric vehicle that looks cool — and the Karma is by all accounts beautiful — but only much later turned to considering how to actually manufacture it.  As a result, the costs and complexity of the car ballooned.  It’s a big challenge to source and manage thousands of parts from many vendors.  (It didn’t help Fisker when their main battery supplier, A123 Systems, had performance issues with their products and then went belly-up.)

In contrast, Tesla focused solely on developing an electric vehicle drivetrain, including the battery packs, and then outsourcing design as much as possible to other companies expert in the car business, and then focusing on making the integration/assembly of all the relevant systems as low-cost as possible.  (However, it’s an been documented to be an oversimplification to say, as some have, that Tesla’s initial model, the Roadster, is simply a Lotus Elise with an electric drivetrain.)

Time will tell if Tesla will be a long-term survivor.  No question:  succeeding as a start-up car company is very difficult.  However, Tesla may have turned the corner.

Clearly, though, there’s a long way to go and plenty of opportunities for critics to pile on.  In the wake of some bad press in February, when a New York Times reporter wrote a famously negative review of the Model S, Tesla still must fight the headwinds of skepticism about electric vehicles as a major automotive force.

Fisker’s woes don’t help.  For the too-populous segment of oversimplifiers out there, it’s easy to extrapolate Fisker’s plight to other electric vehicle companies, particularly if they have a reason to want to make the sector look bad.  To illustrate, Sarah Palin piled on by lumping Tesla with Fisker and calling them both as “losers”.

Tesla will do well to distance itself from Fisker as much and as quickly as possible, as they really do have a different tale to tell.

Why is it So Hard to Make Money in New Battery Technology?

Energy storage is still the rage in cleantech.  But after the collapse of A123 and Beacon, and the spectacular failure on the Fisker Karma in its Consumer Reports tests, fire  in Hawaii with Xtreme Power’s lead acid grid storage system and with NGK’s sodium sulphur system, and now battery problems grounding the Boeing Dreamliners, investors in batteries are again divided into the jaded camp, and the koolaid drinker camp.   Not a perjorative, just reality.  New batteries and energy storage is still one of the juiciest promised lands in energy.  And still undeniably hard.  Basically, investors are relearning lessons we learned a decade ago.

Batteries are just hard.  Investing in them is hard.  Commercialization of batteries is hard. So why is it so difficult to make money in new battery technology?

Above and beyond the numbers, there are a number of commonalities related to the commercialization and venture financing life cycle of battery technologies that seem to differ to some degree from other venture investments in IT or even other energy technologies.  Having looked at probably 100+ deals over the years, and on the back of an deep study we did a couple of years ago on benchmarking valuations in energy storage, here’s our take on the why.

Timing – Battery technology commercializations have historically tended to be one of the slower commercialization cycles from lab stage to market.  Startups and investors in batteries have a long history of underestimating both the development cycle, capital required, and the commercialization cycle, as well as underestimating the competitiveness of the market.

Special chemistry risk – There is significant risk in launching a technology in newer battery chemistry.  There have been only a limited number of new chemistries succeed, and when they do, as in the case of NiMH and Energy Conversion Devices, they are typically either co-opted by larger competitors obviating a first mover advantage (that advantage is typically much weaker in this field than others) or requiring expensive patent suits.  Also as in the case of NiMH, there is no guarantee the chemistry will have legs (just when it is hitting its stride, NiMH is already becoming eclipsed by Li-On.  This risk has proven to be especially high for new chemistries (like Zn type) that are not as widely researched, as the supply chain development does not keep pace.  In addition, the battery field is highly crowded, and research is old enough that and despite new chemistry in most cases truly defensible patent positions are extremely hard to come by, or provide only discrete advantages (ability to supply a range of quality product cheaply in high volumes (or with value add to the product) seems to be the primary competitive advantage).  Few battery technologies of any chemistry end up their commercialization cycle with anywhere near as sustained an advantage as their inventors expected.

High capital costs – In any case, almost all battery startups will require extremely large amounts of capital (on the order of US$50 to 100 mm+) to achieve commercialization (much higher for real manufacturing scale), and the end product margins tend not to be particularly high.  Even with stage gate, a very large portion of this investment (US$10-50 mm+), is generally required to be spent while the risk of technical and economic failure is still high.  In addition, during the manufacturing scale up phase post R&D, capital investment required per $1 of revenue growth tends to be linear, making these technologies capital intensive to grow.

Degradation of initial technical advantage – In many technology areas one can expect the performance of the final manufactured product to improve over the performance in initial lab results, In part because of the low cost target, high reliability, high volume requirements of this product type however, promising battery technologies, are often forced to make compromises in the scale up, manufacturing, and commercialization stages that mean the performance of actual product might be expected to fall from levels or rates seen in lab scale experiments (though cost may go the other way).    At the same time, battery performance of standard technologies, while mature, is a moving target, and during the time frame for commercialization, will often improve enough to obviate the need for the remaining technical advantages.

Size matters – Most battery products (whether batteries or components like anode or cathode materials or electrolyte), are sold to large customers with very large volume requirements, and highly competitive quality and performance requirements.  As a result, breaking into new markets generally is extremely hard to do in niche markets, and means a battery startup must prove itself and its technology farther and for a longer period of time than other technology areas (see capital costs, timing and down rounds).  Many battery components technology developers as a result will be relegated for early adopters to emerging customers with high risks in their own commercialization path.

Lack of superior economics from licensing – As a result of these size, capital cost, timing, and commercialization risk issues most battery technologies will command much lower and more short-lived economics than anticipated from licensing (or require expensive patent lawsuits to achieve), and will require almost as late a stage of development (ie manufacturing operating at scale with proof of volume customers) and commensurate capital requirements, as taking the product to market directly.

Propensity for down rounds – In addition, battery technology companies tend to have down rounds in much larger numbers in the post A rounds (Series B through D+) than other venture investment areas, as these challenges catch-up to investors and management teams who overestimated the scope of work, capital and timing required in the seed, A and B rounds.  In particular, battery investors have tended to invest in seed, A and B stage battery technologies (pre-scaled up manufacturing process or even lab and prototype scale) with expectations of typical venture style timing and economics.  Quite often instead, it is the B, C, or D investor group that post cram-down rounds achieve the Series A economics (even when the technology IS successful), and the seed, A and B investors suffer losses or subpar IRRs.

Bettering Batteries

I recently got an email entitled “Trojan Tips”.  Hmmmm, wonder what that could be about?  Alas, upon scrolling down from the subject line, I found the message provided advice from the battery manufacturer Trojan about proper battery management practices.

The more you get into cleantech, the more you realize how central a role is played by battery technology

Really, more broadly, energy storage technology is the central player in the cleantech drama.  Energy storage is not technically synonymous with batteries:  there are other non-battery storage technologies such as flywheels that exist.  Sandia National Laboratories has recently developed a modeling tool, called ES-Select, to help in determining which energy storage technology is most well-suited to a particular application need.

However, most of the major technology and commercial issues associated with energy storage are battery-related.  In other words, for the most part, talking about energy storage means talking about batteries, and vice versa.

Of course, everyone has used batteries for decades in portable electronics — beginning with transistor radios (remember them?) and flashlights, and now to smartphones and computers. 

Less obviously, batteries are making an increased push for stationary applications.  

Though generally invisible, banks of batteries have been in use for decades in telecommunications systems — ever notice how you get a dial tone on your landline when there’s a power outage? — and also in large computer and data centers in uninterruptible power supply (UPS) systems, such as those from the APC division of Schneider Electric (Euronext:  SU).  Since computers have become a consumer item in the past twenty years, UPS systems have gotten substantially smaller, to the point where many households now have them to prevent brief disruptions in power from the grid from affecting sensitive electronics. 

Imagine a UPS system so large it can power a whole neighborhood, situated at the local utility substation.  This would not only improve power quality for all the customers in the area, but it would also enable more utilization of intermittent renewable energy resources like wind and solar energy.  As this article discusses, the independent power producer AES (NASDAQ: AES) has established a new business unit to implement battery-based grid storage facilities at grid-scale.

As important as batteries may be in the future for the electricity grid, the really big future opportunity for batteries is in transportation.  For performance and economic reasons, this is also the most challenging application for batteries.

Improvements in batteries are the key enabler for wider market penetration of electric vehicles (EVs) to reduce petroleum consumption and associated emissions.  As noted by David Bello in “What Do We Need From the Battery of the Future?”, “the battery the future requires is cheap, more energy dense and less fragile”, while Joe Fargione of The Nature Conservancy is quoted as saying that EVs “need batteries that last longer, charge quickly and are inexpensive.”

Lower cost, more reliable, higher energy density, faster recharge times, longer lifetimes – all at the same time?  That’s a tall order, indeed.

Well, you can probably build a battery that simultaneously improves all of the above criteria…except the first one.  Alas, a high-performance small and lightweight battery that costs a fortune is of interest only for space and military applications.  Hardly anyone will buy a car where the batteries will cost more than a few thousand dollars.  A recent article by Vince Biancomano in Energy Efficiency & Technology says it all in the title:  “Industry Grapples with EV Battery Economics”.

One of the ways that EV players are “grappling” with battery economics is by considering leasing models, involving “hot-swapping” of discharged batteries with fully-charged batteries at service stations, as Better Place is aiming to offer (about which I’ve blogged in the past).  Alas, it will be difficult for the industry to come up with standards as uniform and widespread as the fueling infrastructure of gasoline pumps, nozzles and tanks that is ubiquitous in today’s developed economies.

Ultimately, however, an expensive battery being leased is insufficient to largely debottleneck the EV marketplace; the cost of higher-performing batteries must also come down significantly. 

According to McKinsey in its recent article entitled “Battery Technology Charges Ahead”, batteries must cost less than $250/kWh to be competitive with automobiles running on $3.50/gallon gasoline.  Alas, batteries currently cost about $500-600/kWh today, but the McKinsey analysis suggest a 60+% cost decline in the next decade, to $200/kWh by 2020.  This is hoped to be achieved by attaining greater manufacturing scale economies, reducing component prices via competitive pressures, and advancing technologies to increase the performance of batteries.

Our venture capital firm, Early Stage Partners, continues to see a robust deal flow of investment opportunities in early-stage companies that are working to develop innovative battery-related technologies – mainly for EVs, but also for other applications. 

Though discovered over 200 years ago by Alessandro Volta (hence, “volt” as the key unit of measurement), batteries remain an active field of invention, though the capital-intensity associated with maturing a physical technology through proof of concept all the way to achieving scale economies of mass production can be daunting.

It’s A Nano World

For the uninitiated, “nanotechnology” refers to the science of the very small, engineering particles and their corresponding materials at the nanometer scale.  For a sense of perspective, at one-billionth of a meter, a nanometer is about 1/60,000 of the width of a human hair, so we’re talking engineering not just at the microscopic scale, but the electron-microscopic scale.

Why bother?  Because researchers from across a number of disciplines have discovered that engineering particles at such minute scale can change the fundamental performance characteristics of the material.  You want a material that captures a certain wavelength of light, or transmits a certain frequency of energy?  You just might be able to obtain it by tweaking currently available materials at the nanoscale, to change the “morphology” (think texture) of the particles so that they behave in the desired way.

The nano-world is sometimes mind-bending.  For instance, with enough wrinkles, folds or pockets, a particle with the volume of a grain of sand can have a surface area much greater than that of a basketball.  When you’re able to play topological tricks like this, amazing performance improvements in even the most basic stuff can be achieved.

As this capability has been increasingly revealed in the past decade or so, more and more acadmic research and an increasing number of companies are investigating how nano-engineering can improve the performance of all sorts of things.  This is especially true for the cleantech arena. 

Product innovation ranges across the map:  nanomaterials optimized for increased performance of membranes for fuel cells and cathodes for batteries, enhanced thermal insulation for building materials, higher capacity of contaminant capture from water, and on and on and on.

At few weeks ago, as the investment banking firm Livingston Securities convened their 7th Annual Nanotechnology Conference in New York City, Crystal Research Associates released a new report, entitled “Nanotechnology and the Built Environment:  The Transition to Green Infrastructure”.  This document profiles some of the seemingly-mature industrial sectors that are being transformed by nanotechnology, including some of the biggest corporations in the world such as GE (NYSE: GE), BASF (Deutsche:  BAS), Siemens (NYSE:  SIE) and Honeywell (NYSE:  HON) working on some of the smallest scales imaginable.

The report covers many of the sectors you’d expect to be revolutionized by materials enhancements, such as photovoltaics and lighting, but also touches on a couple of real surprises.  For instance, consider NanoSteel – a company that is commercializing metallic coating technology developed at the Idaho National Laboratory to improve the performance of structural metals under challenging environmental conditions, such as high temperature or corrosion.

In addition to NanoSteel, other presenters at Livingston’s nanotech conference that particularly piqued my personal interest included Siluria (developing an approach to convert methane into ethylene, thereby reducing the requirement for petroleum to make plastics) and QM Power (offering a new basic design of motors and generators promising higher-efficiencies).

It’s always interesting to go to events such as this to get exposed to companies working under the radar screen that are aiming to achieve fascinating innovations, sometimes in the most mundane or obscure areas.  Even if not all these companies will ultimately be successful, either in serving customer needs or in generating good returns to investors, it’s heartening to note the degree and scope of creative disruption that continues to seethe in our world of incredible challenges, turbulence and pessimism/cynicism. 

Many players thinking big about the future are moving small, as small as possible.

Assaulting Batteries

A radical breakthrough in energy storage has long been considered the “holy grail” of cleantech.  With ubiquitous, scalable, reliable and (most importantly) low-cost energy storage, two main thrusts of cleantech adoption will be debottlenecked:  much deeper penetration of zero-emitting and limitless but intermittent solar and wind into the electricity generation mix, and significantly reduced needs for fueled internal combustion in vehicles.  Either of these is gargantuan in scope and implications.  As I like to say, whoever solves just one of them in a commercially-attractive way will make Bill Gates look like a pauper.

Of course, the primary energy storage technology in use now, and for the past century, is batteries.  The current state of battery technology has well-known performance characteristics that are generally satisfactory for present applications (e.g., starting automobiles, power quality management in uninterruptible power systems (UPS), portable consumer electronics), but not for the two above-noted game-changing applications.

And so the cleantech innovation and investment world has been searching near and far, high and low, for better energy storage solutions.

Some trailblazers are pushing entirely new technological platforms for energy storage.  About a decade ago, flywheels were especially in vogue.  As the name implies, this is a mechanical device that stores energy in a spinning mass.  However, several issues – notably frictional losses for stationary applications and weight and containment (you do NOT want a flywheel disintegrating into a hail of shrapnel in an accident) for mobile applications – have been difficult to overcome.  The two most well-known flywheel developers:  Active Power (NASDAQ: ACPW) continues to make a go of it, whereas Beacon Power (NASDAQ: BCON) just announced bankruptcy last week after a very long slog.

Supercapacitors and ultracapacitors also horn in on battery territory.  Like batteries, both supercaps and ultracaps are electrochemical devices.  However, unlike batteries, they typically charge/discharge more quickly, thereby allowing rapid surges and refills of power.  In truth, supercaps and ultracaps may be more of a complement than a threat to batteries:  batteries being generally pretty good in slow/long energy flows but not strong in fast/short energy flows (i.e., high energy density and low power density) and super/ultracaps being the opposite (i.e., high power density and low energy density).  Of course, if super/ultracaps can be matured to provide both high power and high energy density at attractive economics while meeting other key performance criteria (reliability, temperature tolerance, weight, etc.), then batteries will truly be under siege.  Indeed, as one recent article on GreenTech Media suggests, Ioxus claims to be developing an ultracap that really begins to intrude on the battery space for electric vehicles.

Even so, don’t underestimate the challenges these upstart technologies face in penetrating the energy storage market.  There’s a reason why batteries, as suboptimal as they may be, dominate the energy storage space:  nothing else has been able to do better, consistently, at low cost.

Accordingly, a lot of attention, effort and money still flows to the battery space – to make improvements to the reigning energy storage technology champion.  Of course, batteries can be improved on just about every possible dimension imaginable:  energy density, power density, weight, cost, depth of discharge, speed of recharge, number of lifecycles.

Battery technology innovations can generally be lumped into two categories.  One is better materials for the electrodes or electrolytes, to improve the performance of individual battery cells.  Second is battery management systems (BMS), which aim to improve the way multiple cells interact and affect overall battery performance. 

Both types of innovations were on display at last month’s unimaginatively-named The Battery Show in suburban Detroit.  It was a modest exhibition, as cleantech shows go. 

With few exceptions – LG comes most to mind, with a demo of its lithium-ion battery-based whole-home UPS that it will be unveiling in the next year or two – most of the booths showed the wares of small little-known companies seeking to get a toehold in the battery space, selling to battery manufacturers or gaining the enthusiasm of battery users who can then apply pressure on the battery manufacturers themselves.

Among manufacturers of batteries, most of the biggest companies such as C&D Technologies (OTC: CHP), East Penn Deka and Exide Technologies (NASDAQ:  XIDE) did not have visible presences.  Although disappointing, it’s not surprising:  the battery industry has consistently been characterized to me as sleepy and resistant to change, focused more on manufacturing and cost-minimization than technology advancement.  The one company probably most shaking up the battery sector – A123 Systems (NASDAQ:  AONE) – was in good force, although perhaps that should be discounted somewhat, since many of their employees are located just a few miles from the show venue.

While the battery sector may have largely been “fat, dumb and happy” for decades, I see that characteristic fading away in the coming years, perhaps quickly.  Many staid management and operating teams of the big guys are nearing retirement, and there’s so much at stake in the future of energy storage that highly-disruptive and well-capitalized global players will no doubt be increasingly entering the market and stirring the pot.  For instance, a recent article in The Economist mentioned the battery ambitions of Samsung (KSE: 005930), a formidable entrant-to-be.  

Increasing dynamism will be uncomfortable for the battery incumbents, but then again, no-one said the cleantech market was easy.

The Elusive Energy Storage Yeti

Large scale energy has proven almost as elusive a Yeti, and perhaps almost as all world saving juicy as the silver bullet for the werewolf or the Holy Grail itself (and not the Monty Python kind).

Energy storage for nearly 15 years has been the energy tech and cleantech version of the ultimate “but-if”.  I.E., but if we had that, life would be grand.  And untold billions have been expended globally on searching for it, here in the US in the distributed generation and fuel cell boom created in large part by Enron and , and through today’s ARPA-E.  Let alone in corporate and national research centers and universities around the globe, and venture capital backed startups galore.  Flywheels, superconducting energy storage, solid oxide fuel cells with internal batteries, hydrogen in metal hydrides, high pressure tanks, and activated carbon, super capacitors, regenerative PEM fuel cells, and those running on methanol and ethanol, new battery chemistries with lithium, zinc, sodium, etc, new battery topologies – bipolar this and left twisted plate that, varying chemistries and systems for flow batteries which look like fuel cells and act like batteries, new materials for old electrodes with nanomaterials, graphite, silicon, carbon nanotubes, and let’s not forget better power electronics to mimic the results, as well as compressed air, plain old ice and massive thermal sinks.   New and reworked energy storage ideas have proved a dime a dozen. Making them work, let alone scaling them up, costing them down and changing the world?  Well, that’s still Yeti-land.

So far we can’t beat the simple cost and expediency of building more power plants, more lines, and burning more natural gas. Let alone beat simply dialing back the usage.  Gravity and liquids and energy efficiency are still the ultimate crown jewel of energy storage.

The Problem basically boils down to this.  Yes, a myriad of technologies work.  Some work well.  Some look cheap on the surface.  Some even scale up. BUT they don’t get widely deployed.  Why?

Probably because at the spear point – at the application that each is best suited for, the costs are higher, the scale up is trickier, the directly applicable market is smaller, and the substitutes relatively better or cheaper or easier than we thought they were.

I’ve taken an only partially tongue in cheek attempt to describe the problem here, in the hope that a firm description of the problem will find us NOT waxing eloquent about the issue 15 years hence,  but find it solved by sharp minds.  Assuming of course that this is a problem that a better mousetrap can solve.  Better mousetrap of course, defined as better and cheaper than the alternatives, and better and cheaper than the value provided, by enough margin to make us get off the dime.

Energy Storage Adoption Problem

Direct Technology Cost x (1.5 to 2 yielding acceptable manufacturing and distribution margins)


Installed Cost x (1 + Service Margin)

= Total Installed Cost

Then where Cost is F(Depr of TIC, O&M Cost, Fuel Cost)

Then TIC / Number of Hours Used Per Unit of Time (Max of Rated Life (Max of Rate Life per Unit of Time)

+ (O&M Cost / Unit of Time) / Number of Hours Used Per Unit of Time

= O&M Cost Per Hour Used

+ Fuel Cost Where Applicable (F of cost of “storing the energy”, e.g. the device literally needs to “buy” and “sell” its energy stored for the time used.

And where Cost /Per Energy Hour Must Be:

Greater than Value of an Energy Hour Used in that Application


Less than the Cost /Per Energy Hour of the Substitutes

On both an LCOE and NPV basis, with adequately large differentials to justify the switching costs

Provided that:

Where DTC is a F(Technology type, Scale of systems, Unit Vol Sold/Unit Time)

Where UVS/Unit Time if F(time and construction and regulatory annoyance for Installed Cost, TC, Rated Life, Actual Field Performance, Availability/performance/cost of substitutes)

And where IC is a F(Scale of systems, Unit Vol Sold/Unit Time) – but a viciously different F than DTC

And where Substitutes can Comprise (Direct energy storage alternatives for that application, Indirect energy storage alternatives at system level that alter the need at that application, downstream energy efficiency projects, downstream demand response projects, downstream production alternatives, infrastructure or capacity expansion and adjustment both at that application and system wide that alters the need at that application, expenditure delays or adjustments in acceptable reliability or reserve margin requirements, and additional energy production both marginal in short term and base load in long term).

And that no subsidies or quotas are factored in.

And if we’ve provided got an articulation and a theoretical formula describing the problem – then it’s time for some to crack it. Peer review requested, fire away.  Provided that, no commentary will be read by the author if it does not either contain reference to one of my acronyms, or introduce a new one.

Hola, Tres Amigas!

by Richard T. Stuebi

Something grand is emerging on the vast dusty plains of West Texas and Eastern New Mexico.

Tres Amigas is an ambitious scheme to interconnect the three primary power grids in the U.S. — the Western grid known as WECC, the Eastern grid known as the Eastern Interconnection, and the Texas grid known as ERCOT.

As profiled in an article called “A Highway for the 21st Century” in the recent edition of Energy Biz magazine, Tres Amigas aims to incorporate high-voltage direct current (HVDC) and grid-scale energy storage technologies to enable synchronization and massive power transfer capability across the three grids — which are almost completely separated today.

Although it might seem straightforward to tie together three power grids, this is actually a very challenging technological problem.  AC to DC to AC converter stations are required at the interfaces, relying upon HVDC technologies that, while beginning to be more commonly employed, have never been deployed at the scale — 5 gigawatts initially, up to 30 gigawatts eventually — contemplated by Tres Amigas.  And, to absorb the large swings in generation provided by wind and solar projects in the Great Plains, Texas and the Desert Southwest, Tres Amigas aims to install utility-scale batteries, a still-developing area of technology.

Not surprisingly for a large and first-of-a-kind project, it’s not cheap.  Tres Amigas is forecasted to require up to $1 billion in capital.  The question will be whether the investors in Tres Amigas can make good returns. 

Presumably, the business model is based on a combination of wheeling charges (revenues from renewable energy project developers seeking to move power from source to load centers) and ancillary service fees (charges to the three grid operators to keep each of them more stable in the face of shifting supply and demand conditions).  A “merchant project” of this type and magnitude has never been tried.  No doubt, it’s a very risky bet. 

Not surprisingly, American Superconductor (NASDAQ:  AMSC), whose technologies are at the core of Tres Amigas and who would stand to benefit big-time from its success, is an investor sponsoring the development team.  It wouldn’t surprise me to see the battery supplier, when chosen, also joining the mix.

The upside of Tres Amigas to renewable energy interests is big.  If the project is completed, works well, and remains financially solvent, it will debottleneck many limits to adding further wind and solar projects in the Southwestern U.S.  There’s plenty of sun and wind out there, but the constraining factor in tapping it has been the ability of the power grid to cope with the inherent fluctuations in power output. 

With its energy storage capability and linkage across three grids, Tres Amigas would be big and bold enough to enable many heretofore thwarted renewable project developers West of the Mississippi to effectively reach a broader spectrum of potential customers from L.A. to Dallas to St. Louis, while mitigating the operational problems — such as those at the infamous congestion point near McCamey TX — that grid operators and other skeptics use as a basis for criticizing or objecting to renewable energy development.

Cleantech and the Future of GM

Jon Lauckner, President GM Ventures, said that GM now has a straightforward vision, “Design, build and sell the world’s best vehicles.” I took notes as he gave his keynote speech at the Clean Tech Investors Conference and asked him about GM’s investment priorities. To achieve GM’s vision, focus is now placed on four strategies: (1) a culture that is more aggressive and flexible, (2) customer focus, (3) Team GM, and (4) technology.

Mr. Lauckner is focused on investing in innovative and early stage companies. He has been busy since GM Ventures was established last June and he was promoted from head of GM global product planning. GM Ventures has invested in Bright Automotive, which has designed an advanced plug-in hybrid delivery van with much greater cargo space than Ford’s Transit Connect Electric. GM has invested in two advanced next generation biofuel corporations – Mascoma and Coskata. Given the success of the Amyris IPO, these investments could should a high return for GM.

GM has the potential to drive down lithium battery cost and weight with its strategic partner LG Chem, supplier for the Volt. The two corporations recently licensed cathode technology from Argonne National Lab that can lead to better energy density and make future cars like the Chevrolet Volt even more cost effective.

GM is also looking beyond today’s lithium technology. GM Ventures has invested in SAKTI3, which has developed a rechargeable solid-state battery with the potential to lower the cost of manufacturing batteries.

All of these innovators are creating offerings that could accelerate GM offering a wider range of vehicles, lower the carbon footprint of GM vehicles, and make electric cars less expensive than gasoline powered in this decade. So far, all of these innovators are U.S. based and already creating hundreds of new jobs. GM is open to investing globally and often partners with venture capitalists such as Khosla Ventures, corporate private equity such as Itochu Technology Ventures, and public economic development such as the Michigan Economic Development Corporation.

The technology will not necessarily become a GM offering, but that is a potential value-added in partnering with GM Ventures. For example, Powermat is not only receiving a $5 million investment from GM Ventures, Powermat will be offered in many 2012 GM cars. Powermat solves that problem of trying to keep many mobile electronic devices charged. Forget using the cigarette lighter. Powermat’s technology allows electronic devices – smart phones, MP3 players and gaming devices – to be charged inductively by just placing them on the Powermat.

What will be the next General Motors investment? Speaking to over 400 executives at the Clean-Tech Investor Summit,  co-produced by International Business Forum and Clean Edge with CleantechBlog as a media sponsor, Jon Lauckner said that GM Ventures is looking for promising innovation in these areas:

Automotive Cleantech

  • EV
  • Fuel cell
  • Charging
  • Emission controls
  • Motors
  • Smart grid
  • Energy efficiency for vehicles
  • Biofuels


  • Vehicle HMI
  • Voice recognition technologies
  • In-vehicle advertising
  • Cloud services
  • Personal device integration

Smart Materials

  • Cost
  • Mass
  • Lightweight materials
  • Eco-friendly materials

Automotive-Related Technologies

  • Innovations for unmet consumer needs
  • Advanced sensors for autonomous driving
  • Safety features

Value Chain / Business Model

  • New automotive business models
  • Leverage GM technology and assets for upstream and downstream revenue

I asked Jon Lauckner about alternatives to rare earth elements. Currently, the motors in electric cars and hybrids are permanent magnet motors. To improve weight, efficiency and heat resistance, rare earth elements such as neodymium and dysprosium are used in these permanent magnets. Such rare earths are currently mined in China, but the big money is not in the mining, it is in the final products. China is restricting rare earth exports, and giving priority to using rare earths in its own manufacturing of turbines and motors for products ranging from military systems to high-speed rail to electric cars.

Toyota Motors is developing inductive car motors that do not use rare earths. Although Lauckner was carefully non-committal about whether GM is also working on inductive automotive electric motors, he did say that he would be “very interested” in such motors requiring no rare earths. Smart materials, nanotechnology, and advanced powertrain components are all strategic to the future of GM.

In one decade, transportation will be very different from today. With GM Ventures, General Motors is positioned to invest, integrate, and deliver to global customers better cars and services that include innovations in cleantech, infotainment, materials, autonomous driving, and new business models.

Ford Focus Electric takes on Nissan LEAF

Ford Focus ELectricFord’s Newest EV is Official

Ford has officially announced the Ford Focus Electric, a new aerodynamic 5-door hatchback with an expected range of 100 miles per charge. This 5-seat car matches the specs that I published after my test drive of the Focus Electric in May 2010. First consumer deliveries of the all-new Focus Electric will start towards the end of this year. At that point Ford will have solid EV experience and probably have delivered thousands of Ford Transit Connect Electric Vans to delivery and service fleets.

The Ford Focus Electric has a Magna drive system and a 23 kWh Ford designed battery pack using LG Chem Compact Power lithium-ion tri-metal cells with over 17 kWh available in the charge-discharge cycle. The battery pack is actively liquid cooled and heated battery pack allowing for stable battery operation over a wide range of temperatures and lower temperature-related swings in driving range. The all-electric powertrain and single-speed transmission provide immediate responsiveness and smooth acceleration when the driver pushes down the accelerator, up to a top speed of 84 mph.

The first markets selected to receive the Ford Focus Electric are Atlanta, Austin, Houston, Boston, Chicago, Denver, Detroit, Los Angeles, San Francisco, San Diego, New York, Orlando, Phoenix, Tucson, Portland, Raleigh Durham, Richmond, Seattle, and Washington, D.C. Ford is starting with these cities to insure that their will be charging stations at work and public spaces, as well as city and utility support for fast track approval of home chargers. This will also allow Ford to train dealers and service teams.

MyFord Mobile App

MyFord Mobile is an app for your web browser, iPhone, Droid, and other mobile devices, to monitor and schedule the chargingmyford mobile app Ford Focus Electric Car Review of your Focus Electric from anywhere, to help you maximize your range. It gives you remote charging status updates, so you can check existing charge levels and available range, while keeping track of your charge schedule. It also provides you with the location of your vehicle, where you can find the nearest charging stations and the most efficient route to get there. The app also estimates the amount of CO2 emissions and money you save based on your driving style – to help you manage costs and improve your efficiency.

  • Receive instant vehicle status information
  • Perform key functions remotely
  • Monitor the car’s state of charge and current range
  • Get alerts when it requires charging or has finished charging
  • Remotely program charge settings and download vehicle data for analysis
  • Get map routing to the nearest available charge stations

The feature also allows the owner to program the vehicle to use electricity from the grid to heat or cool the battery and cabin while plugged in – called preconditioning. For example, during hot summer months, owners can preprogram the car the evening before to be fully charged – and fully cooled to a particular temperature – by a certain time the following morning. Users can also locate the vehicle with GPS, remotely start the vehicle and remotely lock and unlock the car doors.

Test Driving the Ford Focus Electric

focus ev screen Ford Focus Electric Car ReviewLast May, I made my second test drive of the Ford Focus Electric. It felt just like driving a regular gasoline Focus 4-door sedan, except it was more quiet and accelerated faster due to the torque of the electric motor. The Focus Electric accelerated faster than when I test drove the Nissan LEAF. Both allow me to accelerate on to a freeway with my power than I really need.

The handling was smooth while driving the Focus EV. Unlike some electric car prototypes, when I hit the brakes, it stopped evenly and quickly. The coordination between regeneration and disc braking was effective. The car felt ready for serious driving 8 months ago.

Charge Twice as Fast

Ford is making a big deal of the fact that the 2012 Ford Focus Electric charges twice as fast as the 2011 Nissan LEAF. Ford is 6.6 kW/h; Nissan is 3.3 kW/h. The comparison is unfair. The 2012 Nissan LEAF, available at the same time as the 2012 Focus Electric, will also charge at the faster 6.6 kW/h. Nissan, like most automakers, have been waiting for SAE to finalize certain charging standards. In 2012, both cars can be recharged after typical driving in less than 3 hours.

If you are a pioneer buyer of the 2011 LEAF, then you will either be content to charge at 3.3 kW/h, or you will pay to upgrade to 6.6 kW/h. Clean Fleet Report speculates that Nissan will charge $1,000 to $2,000 for the upgrade. Most chargers being installed are ready for 6.6 kW/h and are smart enough to charge at the vehicle’s rate, be it 3.3 or 6.6.

Ford and Microsoft are partnering to implement the Microsoft Hohm energy management application for Ford’s electric vehicles and Synch for entertainment. The Ford Focus EV will be the first electric car to use Hohm, an Internet app built on top of Azure, Microsoft’s new cloud-computing operating system. Four utilities are piloting this smart-grid application: Xcel Energy, Sacramento Municipal Utility District (SMUD), Seattle City Light, and Puget Sound Energy.

Competition with the Nissan LEAF and Other Electric Cars

Ford has yet to announce the price of the Ford Focus Electric. Ford could select a price less than the Nissan LEAF’s $32,780. We expect both the Honda Fit EV and the Mitsubishi I to be priced in the U.S. at $29,990 or less. Will Ford underprice Honda or focus on making the Focus Electric profitable?

Price depends on the cost of the lithium battery packs. Three years ago, prices were close to $1,000/kWh. By next year, they may be under $500/kWh. Cell makers keep refining battery chemistry. Pack makers look at design and volume manufacturing. Ford, Nissan, and GM are in a race to see who will be the first to sell 100,000 cars with lithium battery packs in one year. Ford is the likely winner, because next year all Ford hybrids and electric vehicles will use lithium battery packs. Ford will buy cells from competing battery giants, but Ford will make its own packs. Within 24 months Ford will be offering 3 battery-electric vehicles and 2 plug-in hybrids.

The battery pack for the 2012 Ford Focus Electric weighs 500 pounds. Ford has a roadmap that envisions the battery eventually being reduced to a size of the current Focus gas tank and a weight of only 125 pounds using new battery chemistry. Although some express concern about the long-term availability of lithium, Ford’s Nancy Gioia, Director, Sustainable Mobility Technologies and Hybrid Vehicle Programs, said that Ford’s analysis is that there will be no shortage through 2050. Battery makers expect to recycle 98 percent of the lithium in batteries.

Ford is also reducing car costs by giving customers a wide choice from one assembly line. This year we expect Ford to officially announce that customers will be able to order the new Focus with their preferred drive system including gasoline engine, hybrid, plug-in hybrid, and battery electric. The Ford Focus Plug-in Hybrid is likely to price for less than the Chevrolet Volt.

The Focus Electric and the LEAF are beautiful compact cars. What do you do when you need to carry lots of stuff? Both include 60/40 reclining rear seats. In both cases, however, the placement of the battery pack precludes a completely flat cargo platform.

The Focus EV will be made in America – Warren, Michigan. Ford is investing $550 million to transform its Michigan Assembly Plant into a lean, green and flexible manufacturing complex that will build Ford’s next-generation Focus global small car along with a new battery-electric version of the Focus for the North American market. Ford is planning on a Global C platform for 12 to 14 different vehicles with a volume of 2 million units per year. Such volume, common chassis and many common components, can give Ford improved profit margins and room to price hybrid and electric cars competitively.

Announcing the new Ford Focus Electric is a proud moment for CEO Alan Mulally and the entire Ford team. Back when Ford refused to take part in the $70 billion bailout of GM and Chrysler, big investors were writing off Ford. If you had invested $100,000 in Ford at that crisis point less than 2.5 years ago, it would be worth $1,800,000 now.

Right Time for Better Place?

by Richard T. Stuebi

Although the benefits of electric vehicles (EVs) have long been intuitively understood, EV market adoption has been limited by various issues associated with batteries.  Batteries cost too much and are too heavy/bulky, the operating range an EV is too short, and there’s no convenient way to recharge batteries with the speed and ubiquity of filling up a gas tank.

Well, there’s a lot of money being invested in many companies to address the first set of issues concerning battery cost and performance.  However, there hasn’t generally been a lot of attention paid to the question of how excellent/cheap batteries will get recharged – even though the lack of a solution on this issue would completely nullify the value of any progress on battery technologies for EVs.

Enter a company called Better Place.

Having secured $350 million of new investment in early 2010, led by HSBC (London: HSBA), Palo Alto-based Better Place is developing proprietary technology and installing infrastructure to streamline the process by which electric vehicle (EV) owners recharge batteries.

I recently had the opportunity to visit the research and testing facility for Better Place, which is located just north of Tel Aviv in Israel.  At this facility, Better Place allows visitors to test-drive a near-production prototype EV made by Renault (Euronext:  RNO), with whom Better Place is working closely.  It’s a fun exercise to gun an air conditioned mid-size five-passenger sedan up to 60 mph in a few seconds with no transmission shifts and virtually no sound, although Better Place has virtually nothing to do with the EV or the battery within it.

More interestingly, the facility lets future would-be EV drivers interface with how the battery pack would be recharged – if the vision of Better Place gets adopted.

Better Place envisions that EV drivers would buy a monthly subscription to Better Place recharging services.  At parking spaces hosted by Better Place, there is a post about one meter in height, in which is embedded a retractable cord to plug into the EV for battery recharging while the car is parked.  The retractable cord is unlocked by an electronic key card that the Better Place subscriber waves in front of the charging post.  (I wish I had asked what happens if a non-subscriber occupies a Better Place parking spot, or if a user forgets to disconnect their EV from the charging cord before driving away.)

This is all well and good for commuters or around-towners that have ample parked-car time for a recharge, but Better Place also has a solution to the EV challenge of quick recharging for long-distance trips.  Better Place has developed a service station design involving robotic arms in underground bays to reach under a parked EV, extract the depleted battery, and replace it with a fully-charged battery – all within a couple minutes. Thus, an EV-driver can be back on the road as quickly as refilling a gas tank, without even having to get out of the car.

Additionally, Better Place is developing software to facilitate vehicle-to-grid (V2G) utilization, wherein the customer would enable the EV’s batteries to sell power back to the grid during high-value peak periods.  Each customer would set his/her own parameters as to when Better Place would allow the grid to tap the EVs batteries for resale to the grid:  some customers would be willing to save (or even make) a few dollars by letting the grid utilize the EV for power supply pretty much anytime, whereas other customers wouldn’t want to risk depleting the EV batteries (and hence EV range) for any price.

The Better Place business model has many interesting and compelling aspects to it – recurring revenues, different price points and subscription packages – but it has one very scary element:  there is no avoiding its capital intensity.

In essence, Better Place strives to become an unregulated utility, with massive infrastructure deployment in its parking recharge posts and service stations.  Better Place needs to gain sufficient critical mass of customers in relatively dense geographic areas in order for the infrastructure investments to pay off.  Over time, Better Place can stitch together multiple clusters into pan-reginoal and eventually national ubiquity.

Although smart money is making a big bet on Better Place, only time will tell.  Be on the lookout for a Better Place regional pilot taxi program in the San Francisco Bay Area in early 2011.

It’s About China, Stupid

by Richard T. Stuebi

In the energy sector, it’s becoming increasingly clear that the name of the game — whatever game you wanna talk about — is China.

My favorite recent contribution to this strain of literature was a blog entry from late August written by the Center for Geoeconomic Studies at the Council on Foreign Relations
called “China Will Force the World Off Oil”. Here’s the eye-popping core of this short post:

“As a country’s per capita income increases, its per capita oil consumption increases. Consumption growth tends to be modest up until $15,000 income per head, but then accelerates rapidly. China is quickly approaching this point…Were China’s per capita oil consumption be brought up to South Korea’s, its share of global consumption would increase from today’s 10% to over 70%. In order to cap China’s share at 22%, which is the U.S. share today, global oil output would have to increase by a massive 13% per annum over ten years — well beyond the 1% growth averaged since 1975. This rate of growth is inconceivable, even if vastly more expensive sources of supply…were developed at breakneck speed.”

And, of course, this is why China is leading the pack on advanced energy technologies of all sorts to move off of oil and other fossil fuels. Take batteries, for instance: as Thomas Friedman noted in his late September New York Times editorial “Their Moon Shot and Ours”, China will be “providing $15 billion in seed money for the country’s leading auto and battery companies to create an electric car industry.”

Note the choice of words: Beijing is not aiming to merely build companies, but to create entire industries. (Of course, that’s easier said than done, and top-down command-and-control economic dictates don’t necessarily produce success.)

And, note the magnitude of dollars: $15 billion of them, just for electric vehicles (not to mention investments in solar energy, wind energy, etc.). In contrast, according to some comments made at the Cleantech Forum in New York earlier this month by Dr. Arun Majumdar, Director of ARPA-E, the U.S. spends more each year on potato chips than it does on energy sector R&D.

Here in the U.S., we don’t have a lot of disposable dollars either in public or private coffers, and we aren’t inclined to allocate a large share of the little we have to our energy challenges. China has lots of bucks — primarily from U.S. purchases of consumer products — and is flowing a large portion of them to energy technologies. The Chinese can see, as apparently we Americans can’t, that the current energy paradigm isn’t sustainable — even if we loved it and didn’t want it to change. Even though status quo isn’t an option, we Americans seem to think our current system of energy supplies, technologies and economics is a destiny or a right that must be defended.

Why, then, do we need to ask what ABC World News did a few months ago with their story “Clean Energy: Why Is China Ahead of the U.S.?” Why, then, is anyone surprised when they learn about examples such as New Jersey-based solar company Natcore Technology being lured by sizable financial inducements to set up operations in China?

If you want to be at the tip of the spear in advanced energy over the coming decades, you will need a major presence in China. It’s really that simple.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

More Charge for Grid Storage

by Richard T. Stuebi

While battery technology has been the subject of intensive focus for vehicular applications since the emergence of hybrid electric vehicles over the past few years, much less attention has been paid to batteries for the electric grid.

Although energy storage for the power grid offers great promise to augment the smart grid, facilitate more application of intermittent solar and wind generation and improve power quality, the costs of such technologies have generally been prohibitive relative to the economic benefits that they enable. Accordingly, grid storage has been relegated to a relatively small niche in the cleantech community.

That may be about to change.

In July’s issue of Intelligent Utility, Kate Rowland wrote an article entitled “No More Foot Dragging for Energy Storage?”, which begins with the following grabber: “Grid storage. You’re going to be hearing those words with increasing frequence in the weeks and months to come.”

In part, this is because Senators Jeff Bingaman (D-NM), Ron Wyden (D-OR), and Jeanne Shaheen (D-NH) in mid-July introduced the Storage Technology of Renewable and Green Energy Act of 2010 (S.3617), or more pithily known as the STORAGE Act.

The gist of the STORAGE Act is to make available $1.5 billion in tax credits to storage projects connected to the U.S. power grid, with each utility-based project eligible for a 20% investment tax credit (capped at $30 million) and each customer-sited project (with minimum 80% “round-trip” efficiency, “energy out” vs. “energy in”) eligible for a 30% ITC (capped at $1 million).

In her article, Rowland interviews David Nemtzow of Ice Energy, a developer of thermal energy storage units. Nemtzow was optimistic about the effectiveness of this policy approach, noting that “tax credits are a time-honored and pretty successful way to stimulate investment,” using the wind, solar and energy efficiency industries as examples.

It will be interesting to see if the STORAGE Act passes in something like its current form. If it does, it could well signal the breakout of a new frontier in the cleantech space. If not, like so many things in the cleantech realm, grid storage may be an idea whose time has not yet quite come.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Rare Earth

by Richard T. Stuebi

Remember the white soul group on the Motown label, Rare Earth? If you do, sorry: this posting isn’t about them….

Nope, it’s about the fact that rare earth metals represent a unique problem — and opportunity — in the cleantech realm.

As PBS reported on “Newshour” a few months ago (transcript here), rare earth materials are important commodities essential to the production of many environmental technologies — from batteries to wind turbines to solar panels. Unfortunately, many of these materials are highly toxic and thus pose significant environmental hazards if mis-managed.

Regrettably, since most of the world’s endowment of these rare earth materials is found in China, the extraction of these materials from the ground is often done with little concern for environmental protection.

In addition, to the extent the world becomes reliant on technologies that depend upon rare earth materials, substantial geopolitical issues emerge as these elements become strategic inputs for economic activity. (In other words, replace “Saudi Arabia” with “China”, and “oil” with “rare earth metals”, and you get the idea.)

So, cleantech innovators would do well to find economical, widely-available, and environmentally-friendly substitutes for rare earth metals — or to re-engineer cleantech widgets so that they don’t require these scarce and nsaty materials. There’s a lot of money to be made, and a lot of headaches to be saved, if we don’t become stuck over the rare earth barrel.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Meeting the Energy and Climate Challenge

Dr. Steven Chu, Secretary of Energy and co-winner of the Nobel Prize for Physics (1997) delivered this speech “Meeting the Energy and Climate Challenge” at Stanford University on March 7, 2010, where he was formerly a professor.

Dr. Chu called on the students and faculty to take part in a new Industrial Revolution. At the epicenter of Silicon Valley, Stanford has been at the heart of the Information Technology Revolution – a catalyst for innovators such as Intel, Cisco, and Google. “America has the opportunity to lead the world in a new industrial revolution,” he was quoted in the Stanford Report.

Humans are causing Global Warming

The Novel Laureate discussed the irrefutable case for anthropogenic climate change. “There is a mountain of climate data going back to 1860.” Climate deniers say that humans are not causing global warming; rather it is a variance of solar energy including sun spots. Dr. Chu presented a chart showing the long-term continued rise in the global surface temperature while the solar energy reaching the atmosphere followed a predictable 11-year cycle of 1366 and 1367 watts per square meter (W/m²).

CO2 concentration has increased 40% since the start of the first industrial revolution, including all GHG such as methane the equivalent increase has been 50%. Irrevocable effects are under way. The Earth must warm until a new equilibrium is reached in about 150 years due to time lags such as deeper ocean warming. Added temperature increase will result from the long life of greenhouse gases, such as CO2, and from increased emissions.

The effects of warming can be measured. Satellites can now measure with good precision the mass of the earth. Dr. Chu observed that the ice mass is decreasing quadratically in the Greenland and decreasing in the Antarctic.

He also pointed to potential tipping points. There are huge uncertainties with the risk of 3.5 to 6 degree temperature increases.

United States Innovation in Energy Efficiency, Renewables, and Transportation
“The U.S. innovation machine is the greatest in the world,” said Dr. Chu. “When given the right incentives, [it] will respond.” Energy efficiency and renewables present major opportunities.

The U.S. market share of photovoltaics peaked in 1996 at over 40 percent of global production;
it is now less than 10%. Asia has the lead in batteries. China is spending $9 billion a month on clean energy. For example, the State Grid is investing $44 billion by 2012 and $88B by 2020 in UHV transmission lines with transmission losses over 2,000 kilometers that are less than 5%. China is committed to produce 100GW of wind power by 2020.

The United States Recovery Act is making an $80 billion down payment on a clean energy economy to regain our global competitiveness and create U.S. jobs. Dr. Chu described how the United States could be the world’s innovative leader. The most immediate opportunity is in energy efficiency.

Since 1975, the electricity saved from energy efficient refrigerators with smaller compressors exceeds the total energy produced from wind and solar. Consumers respond to Energy Star ratings. We are expanding our energy efficiency standards to include buildings. In answering a question, Dr. Chu noted that energy efficiency can be extended beyond buildings to city blocks and cities themselves. The Energy Secretary got laughs from the students when he demonstrated how to adjust the sleep mode settings on their PCs and Macs.

Optimistic about Research Breakthroughs

There is good reason for optimism for renewable energy. The cost factor of wind power has decreased by a power of ten. Learning curves for photovoltaics has also declined by over a factor of ten. On a large roof, the installed solar cost is still around $4 per watt. If you get to $1.50 per watt installed, solar takes off without subsidy.

Because renewables are variable they benefit from local and grid storage, and from a smart grid. Pumped water storage is often 75% efficient; compressed air has the potential to be 60 percent efficient. The DOE has funded research for a variety of grid and vehicle battery chemistries.
Currently the United States is dependent on oil. Most proven reserves for oil majors such as Exxon, BP, Shell, are now off-shore. It will cost more to extract from tar sands and with more CO2 emissions.

Transportation is the hardest area to improve, mused Dr. Chu. Liquid petroleum fuels have excellent energy density. A Boeing 777 departs with 45% of its weight in jet fuel which has an energy density of 43 Mj/kg and 32 Mj/liter; a lithium battery, only .54 Mj/kg and 0.9 Mj/liter, yet batteries can compete in cars because of the efficiency of electric drive systems and learning curve improvements. We need an automotive battery pack for less than $10,000 with 5,000 deep discharges and 5X higher storage capacity, stated Dr. Chu.
We need breakthroughs. Much can from great research labs, such as Dr. Chu’s former Bell Labs. Scientific research for new breakthroughs will be encouraged with multiple programs:

Energy Frontier Research Centers = university sponsored scientific research for
innovative energy solutions.
Energy Innovation Hubs = multi-disciplinary,
highly collaborative teams working under one roof.
Advanced Research Projects
Agency – Energy (ARPA-E) = short term, high risk – high reward research

Energy Secretary Chu concluded with the first view of Earth from the Apollo 8 orbit of the lunar surface and with these two quotations:

“We came all this way to explore the moon and the most important thing is that
we discovered the Earth. – U.S. Astronaut Bill Anders (Dec 24, 1968)

“…We are now faced with the fact, my friends, that tomorrow is today. We are confronted with the fierce urgency of now. In this unfolding conundrum of life and history, there is such a thing as being too late.” – Dr. Martin Luther King (1967)

Video of Dr. Chu’s Speech at Stanford

John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Batteries ‘R’ Us

by Richard T. Stuebi

Of all the cleantech technology sectors, the one I can least keep track of is batteries. For those of you who want to keep pulse of this dynamic arena, a new blog called This Week in Batteries is just what you might be looking for.

The host of this blog is Venkat Srinivasan, who is part of the Batteries for Advanced Transportation Technologies (BATT) Program at Lawrence Berkeley National Laboratory, so he should be pretty near the center of the action in the battery world — at least as it pertains to electric vehicle applications.

Srinivasan’s most recent post is a nice riff exposing the absurdity of extrapolating Moore’s Law for semiconductors to other realms of technology advancement — as if forever-continuing exponential improvements won’t bump up against the laws of physics.

Richard T. Stuebi is a founding principal of the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Plugging Electric Vehicles

by Richard T. Stuebi

Much has been written about the planned release by General Motors (NYSE: GM) of the Chevy Volt, a plug-in hybrid electric vehicle. When GM launches the vehicle, now slated for late 2010, it plans to sell tens of thousands of them.

As profiled in an article in the August 24 issue of Forbes, the bigger mover in the electric drive vehicles game looks to be Nissan (NASD: NSANY), which is investing several billion dollars to ramp up for producing 300,000-400,000 electric vehicles within a few years. Its entry model is the Leaf, a five-passenger hatchback that it aims to sell in the U.S. by late 2010, at a price point of about $30,000.

A key aspect of Nissan’s surge into electric vehicles is its joint venture with NEC, for their lithium-ion (Li-ion) batteries. The NEC battery design employs a laminated structure that improves cooling performance, which has been a major stumbling point for the use of Li-ion batteries. Indeed, Nissan plans to sell these batteries to other automakers.

Nissan’s CEO, Carlos Ghosn, is by his own words “extremely bullish on zero-emission vehicles.” He is bold enough to predict that 10% of world auto sales will be all-electric within 10 years.

An excellent overview of the electric vehicle realm, entitled “The Electric-Fuel-Trade Acid Test”, was published in the September 5 issue of The Economist. In this article, not only were several of the new electric vehicle makers (e.g., Tesla Motors, Venturi, BYD Auto, SAIC Motors) and battery developers (A123 Systems, Boston Power) put into context, but some all-new technologies and business models enabled by vehicle electrification were highlighted.

For instance, consider the case of Better Place. This California-based firm is launching a business to serve local auto markets with a network of stations that will swap out depleted batteries with fully-charged ones within seconds, and charge the spent batteries for reuse in other vehicles, thereby offering customers a quick recharge akin to a refill at a gas station. Pricing will be akin to “rental” on the battery, until it is returned to a station to be replaced by a fresh one, which will also be “rented”. Each stop at a station thus implies a customer outlay on the same order of magnitude as a tank of gasoline or diesel.

Then there is the case of Michelin, which is developing something called the Active Wheel. Beyond just the tire, Michelin is aiming to embed motors, brakes, suspension and associated systems into wheels, thereby distributing physical control to each wheel and allowing heavy items such as springs and transmissions to be entirely eliminated from the vehicle. Not only will this (theoretically, at least) improve auto performance, but it will reduce weight to increase energy efficiency and possibly lower capital and operating costs of vehicles.

The possibilities for an entirely new industry to emerge in providing and supporting electric vehicle markets are becoming clearer. Earlier this year, a study (accessible here) commissioned by the Electric Power Research Institute (EPRI) – funded by The Cleveland Foundation, the Greater Cleveland Partnership and First Energy (NYSE: FE) – assessed the potential for Northeast Ohio to become a major player in the electric drive vehicle industry. The study makes indicates that many thousands of jobs are at stake for the Cleveland region – but only if (1) the U.S. takes actions to accelerate the penetration of electric vehicles in the transportation sector, and at least as importantly (2) Northeast Ohio organizes itself to more earnestly pursue the business and technology opportunities associated with electric drive vehicles.

This economic potential is not just for Northeast Ohio. Clearly in response to the downturn of the American auto industry, the Obama Administration has made the state of Michigan a major recipient of its largesse, allocating half of a recent $2.4 billion in grants to stimulate electric vehicle and battery production. As reported in the Forbes article, Nissan’s U.S. battery manufacturing will occur in Tennessee, supported by a $1.6 billion loan from the U.S. Department of Energy. A123 and Boston Power are both based in Massachusetts. Along with Tesla, Fisker Automotive – both supported by the Silicon Valley mega venture capital firm Kleiner Perkins – are based in California.

Of course, not everyone is enamored with electric vehicles. In the same issue in which it profiles Nissan’s electric vehicle strategy, Forbes’ editor William Baldwin writes a skeptical opinion about the cost-effectiveness of electric vehicles in reducing greenhouse gas emissions.

When considered solely as an approach for reducing emissions, perhaps electric vehicles aren’t the absolute best solution. However, when one also considers the economic revitalization possibilities, as well as the imperative for reducing reliance on oil (from unstable and unfriendly sources around the globe), electric vehicles seem far more worthy of plugging.

As the Fellow for Energy and Environmental Advancement at the Cleveland Foundation, Richard T. Stuebi is on loan to NorTech as a founding Principal in its advanced energy initiative. He is also a Managing Director at Early Stage Partners, and is the founder of NextWave Energy.

BlogRoll Review: Space Beams, Leaded Batteries, and Sins

This seems like something out of a James Bond movie. There is a startup, Solaren, which is trying to build panels in space that converts sunlight into a radio frequency beam aimed at a receiving station near Fresno. The station then converts the radio waves into electricity.

Megan Treacy at EcoGeek says:

“If everything goes according to plan, this will be the first real-world application of space solar power, with power delivery starting in 2016. I’m keeping my fingers crossed that this works out. The technology has been experimented with for a while and has a lot of potential and, let’s face it, running your home on “space power” would be really cool.”

If anyone is worried that the beam is gonna fry birds or planes that fly into its path, apparently the company has done analysis to show that radiation is not intense enough to cause harm.

Still, the thought of fried chicken falling out of the sky is kind of cool. :)

In other news…

While not the most attractive of technologies, lead acid batteries are certainly robust…and they may still have a promising future. On CleanBreak, Tyler discussed Axion’s lead battery technology that lasts three times longer than conventional ones.

* It looks like the folks at Google think lead is the way to go, too. AltEnergy Stocks agrees.

* I don’t remember how many ways you can sin, but Joel Makower talked about the Seven Sins of Greenwashing.

* Maria talked about Cap-and-Trade on TV.

* Simon says efficiency is still promising.

* Is natural gas a better standard than oil? Rob Day ponders.

Battery Breakthrough?

by Richard T. Stuebi

I recently was sent an article about electric cars. It profiles the Lightning GT, a 700 hp electric sports car that can accelerate to sixty mph in four seconds. To me, the news is not so much about the Lightning GT as it is about the batteries being used in the car.

The claim is that the battery, a Lithium-ion (Li-ion) type called Nanosafe being developed by a company called Altairnano, is able to provide a useful operating range of 250 miles, a full recharge time of 10 minutes, and a useful life of 12-20 years through 15,000 charge/discharge cycles.

If a battery can produce this kind of performance, and if large-scale production can enable the battery pack to be profitably sold at a few thousand dollars, mass adoption of electric vehicles cannot be far behind. This is because recharging an electric car from an socket produces a “fuel” that costs about the equivalent of $0.60 per gallon — about 1/6th the current cost of gasoline at the pump.

That’s a game-changer that could end our addiction to oil. While potentially a big threat to the big petro-companies, such a development would be a huge boon to electric utilities, which all of a sudden would have a major overnight load to soak up off-peak excess capacity.

And, the big long-term winner would be the environment. Even if the electricity comes from coal, the emissions profile of an all-electric car is much better than even a highly-efficient gasoline or diesel car. If the electricity is produced by renewables such as solar and wind, then we’re talking about virtually a zero-carbon car.

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.

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.