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Reach Out and Green Touch Someone

by Richard T. Stuebi

A few weeks ago, the legendary Bell Labs, now the R&D engine behind Alcatel-Lucent (NYSE: ALU), announced the launch of a new global initiative called Green Touch.

The goal of Green Touch is to “create the technologies needed to make communications networks 1000 times more energy efficient than they are today.” To put that in perspective, the Green Touch roll-out press release noted that a thousand-fold reduction in energy consumption would power the world’s communication networks for three years with the amount of energy now consumed in one day.

Given the likely continuance of exponential demand increases for bandwidth around the globe, the need to make communications technologies radically more energy efficient will be critical — or else.

The founding members of Green Touch are a who’s who of high-technology, including enormous telecoms like AT&T (NYSE: T) and China Mobile, academic research labs such as MIT’s Research Laboratory for Electronics and Stanford University’s Wireless Systems Labs, and industrial labs (not only Bell Labs but Samsung’s Advanced Institute of Technology).

Green Touch is seeking additional collaboration partners, so if you’re interested and can contribute materially, it should be a fascinating table at which to sit.

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.

National Cut Your Energy Costs Day

by Richard T. Stuebi

Did you know that yesterday, January 10, was “National Cut Your Energy Costs Day”? Until a couple days ago, I didn’t. That is, until the folks at SunRun, a provider of residential solar energy systems, promoted the day by sending out the following blast email:

“Five quick tips on how cut costs and save energy this new year.

1. Power Strips: Plug your TV, computer, and other home electronics into power strips and flip the switch when they’re not in use. Even when appliances are turned off, they’re still running on phantom energy. If you don’t use power strips, remember to unplug your appliances when you’re done with them.

2. CFLs: Switch out your incandescent light bulbs with compact fluorescent light bulbs. CFLs last up to 10 times longer than and use about one-fourth the energy of incandescents.

3. Solar Panels: Reduce your electricity costs by installing solar panels in your home. You use the same amount of energy but pay less for it, because you can lock in a rate with solar, rather than be subject to your utility’s rate increases.

4. Sleep mode: Set your computers to sleep mode, rather than screen saver mode, when not in use. It takes about 100 Watts/hour to run a screen saver on your graphics card. Cut energy costs by letting your screen go black.

5. Air sealing: Seal cracks and openings to prevent outside air from otherwise entering your house. Paired with proper insulation, air sealing can increase energy efficiency and drastically reduce your heating and cooling costs.”

Well, truth be told, #3 above really isn’t an energy saving tip, but I’ll cut SunRun some slack because at least they are honest in pointing out that anyone interested in solar energy should first implement all cost-effective energy efficiency possibilities. It’s crazy, but too often the case, for someone to install a solar energy system when the building itself is terribly inefficient. There’s no point in generating relatively expensive electricity and then wasting it — especially when the costs to avoid the waste are often so modest.

We’ll have made real progress in this country when every day is National Cut Your Energy Costs Day.

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.

Dot’s Nice

by Richard T. Stuebi

One of the virtues touted for the so-called “smart grid” of the future is the ability to help customers manage their appliance usage better, and thereby reduce unnecessary energy consumption. However, since people are heavily influenced by economic considerations, fully capturing this opportunity presupposes that customers understand how much money (= energy) they could save by reducing consumption at any moment in time.
As profiled in the January/February 2010 issue of Technology Review, a company called Talon Communications has developed a neat little product called the “edot” to address this issue.


The edot communicates wirelessly with a house’s “smart meter” to fetch updates on real-time power prices, thereby indicating when power prices are relatively high or low. At roughly $10 per unit, the magnetic edot can be stuck to many major appliances around the house, providing an on-the-spot indicator to the user whether or not it’s an especially good (i.e., lucrative) time to turn off or reduce power.

No, the edot will not save the world, but it is indicative of the many tiny but reinforcing elements necessary to bring the smart grid to full fruition — and to bring intelligence to energy decision-making at the household level.

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.

Cracking the Codes

by Richard T. Stuebi

One of the big line-items in the energy-related provisions of the American Recovery and Reinvestment Act was energy efficiency. Over $3 billion was allocated to efficiency investments, with the expectation of a 7:1 economic return, based on previous results of the DOE’s State Energy Program since its inception in the late 1970’s.

Alas, it’s becoming evident to some observers (see article) that results will not be so good this time around. Part of this is almost certainly due to declining marginal returns: the $3.1 billion in ARRA efficiency investments is fully 70 times the normal annual investment by DOE in efficiency. Thus, it should be no surprise that returns will be diluted with such a huge one-time spike in funding.

But one of the big, and highly unfortunate, impediments to good returns on these ARRA energy efficiency investments is the obsolescence of building codes around the country. As building professionals know so well, building codes tend to be difficult to change, often due to resistance from builders and trades who prefer to maintain the status quo because…well, just because they’re more comfortable with and accustomed to the status quo.

While retrofit opportunities represent a large portion of the potential energy and emissions savings afforded by increased efficiency — and many of these, as analysis by McKinsey suggests, can be done at negative societal costs — it will be important to surmount this inertia and opposition to establish new and more stringent baselines for our new building stock, if we’re going to tackle our energy and environmental challenges in a permanent fashion.

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.

Energy Efficiency: How NOT To Do It

by Richard T. Stuebi

On October 5, First Energy (NYSE: FE) announced a planned energy efficiency program, involving the delivery of two compact fluorescent lightbulbs (CFLs) to each of its residential and small commercial customers in Ohio. This was to be a part of First Energy’s revived energy efficiency programs, stimulated in large part by the 2008 passage of Ohio SB 221, which stipulates that utilities must reduce their customers’ energy consumption by 22.5% by 2025.

Approved in a case by the Public Utilities Commission of Ohio (PUCO) without comment on September 23, the plan would have had each customer pay $21.60 on bill surcharges over 36 months for this package of two CFLs – whether they were used or not, or even wanted or not.

The story accompanying the roll-out of this program in the Plain-Dealer went into considerable detail about its economics. The $21.60 in extra charges not only covered the cost to First Energy of acquiring and delivering the two CFLs, but also would reimburse First Energy for the reduction in revenue associated with the use of these more efficient CFLs in lieu of traditional incandescent bulbs.

Although seemingly shocking to Ohio readers, the provisions of SB 221 do in fact allow for utilities to recover lost revenues associated with energy efficiency implementation, in recognition of some basic utility economic realities.

In traditional regulatory approaches, utilities earn more profits by selling more electricity. As is the case with most businesses, the company succeeds by selling higher volumes of its product. Thus, if we agree that we want to encourage less electricity consumption, we have to eliminate the financial motivations that utilities have against that desirable goal. In other words, we have to make it equally attractive for utilities to promote saving energy instead of consuming energy; we have to “decouple” electricity volumes from utility profitability.

Recovery of lost revenues from energy efficiency is by no means a novel concept. Indeed, California pioneered such “decoupling” ratemaking treatment all the way back in 1982 with the adoption of its Electric Revenue Adjustment Mechanism. But, in Ohio, it is very new – only now being adopted in the wake of SB 221. And, neither First Energy nor the PUCO made significant effort to educate the public that ratemaking practices of this type have been employed for decades, and are being increasingly employed around the country, for very sensible reasons.

At least equally concerning, First Energy claimed that each bulb was costing the company $3.50, for a total of $7.00 for the package of two. However, a little snooping around area stores revealed that a five-pack of CFLs could be bought at Ace Hardware (hardly the lowest-cost source) for $13.99, or about 20% lower on a per-bulb basis than what First Energy was proposing to charge customers for similar products sourced elsewhere – at presumably higher volumes and more favorable pricing.

In the wake of the initial article, reader reaction was overwhelmingly negative. People didn’t want to pay for light bulbs they didn’t request, and may not use. They didn’t want to get gouged on the cost of the bulbs. And, they didn’t want to pay First Energy for kilowatt-hours that weren’t being sold.

Not only did readers call the Plain-Dealer in complaint, they called their elected officials as well – including all the way to Governor Ted Strickland, who asked the PUCO to stop the program. Within a couple of days, the resulting political pressure prompted the PUCO Chairman Alan Schriber to ask First Energy to withdraw this proposed energy efficiency program. And so, in compliance with the PUCO order, First Energy postponed the program.

As reported in a follow-up Plain-Dealer article, John Paganie of First Energy admitted that “we didn’t do a good enough job in helping customers understand the purpose, the reason for [the program] and the impact.” Yep: First Energy didn’t sufficiently communicate to customers – or engage with trusted advocates such as the Ohio Consumers Counsel in working out the details of the program so they could offer their support – before the program roll-out appeared in newspaper ink.

In the same article, PUCO Chairman Alan Schriber noted that “although the PUCO allowed FirstEnergy to implement its program, we did not approve the charge that will appear on monthly bills as a result.” In other words, PUCO gave First Energy the go-ahead to do the program, but PUCO didn’t consent to how First Energy would be compensated. Huh?

So, the net result of this program announcement was a lose-lose-lose: First Energy came off as being greedy, the PUCO came off as being inattentive to program details, and promoters of energy efficiency came off as imposing unwanted economic burdens on customers. Certainly, Thomas Suddes’ editorial in the Plain-Dealer makes everyone look bad.

I thus submit this little vignette as a classic case study of how NOT to implement energy efficiency.

In my humble opinion, this would not have been such a public relations debacle if First Energy and the PUCO had both accumulated a greater store of citizen goodwill over the preceding decades. Unfortunately, this hasn’t been the case. And, resulting from this bungling by distrusted players, the generally-favorable cause of energy efficiency gets a public black eye in Ohio.

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.

Bela Legosi in the House

by Richard T. Stuebi

In a world where people are both tightening their fiscal belts and aiming to reduce their environmental footprint, the topic of standby power — sometimes called “vampire loads” — has gained increasing attention.

Vampire loads surround you all the time, from just about anything with digital intelligence. These appliances suck surprising amounts of power all the time they are plugged in, even when they’re not actually being used.

A recent post on the Yahoo! Green blog provided some very interesting statistics, developed by Lawrence Berkeley National Laboratory and the American Council for an Energy-Efficient Economy. For someone paying 11 cents/kwh (pretty typical for the average American), a household can easily blow hundreds of dollars per year on vampire loads. The big culprits are computers, cable boxes and video game players.

According to the post, on a national basis, these silent killers could account for perhaps $4 billion of wasted money in aggregate. Ouch! A sizable market opportunity for entrepreneurs to develop products or services that can put a stake through the heart of these vampires.

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. Later in 2009, he will also become Managing Director at Early Stage Partners.

Gridlock Windblock

by Richard T. Stuebi

I don’t know if it’s a myth, but I’ve heard it said that a city’s suicide rates and average wind speeds are correlated. According to the claim, there may be something fundamental about human biology – perhaps within the inner ear – that makes windiness tend to drive people crazy.

Whether it’s true or not, it’s indisputable that, where there’s lots of wind, there tends to be few people. And, vice versa: where there’s a lot of people, there tends to be little wind.

A casual look at a U.S. wind map confirms this: most of the best wind resources are in the middle of the country, from West Texas in the South to the Dakotas in the North. If you’ve ever driven in any of these parts, you know that this is an endless expanse of desolate, sparsely-populated land.

Unsurprisingly, it’s also the case that, where there are few people, there tend to be few electric transmission lines. Logically, it follows then that there is little electric transmission capacity in the places where wind resources are greatest.

So, when parts of the Great Plains get touted as the “Saudi Arabia of wind”, it may be true, but imagine the need to build a big set of pipelines to get that useful wind energy to customers in Minneapolis, Chicago and points further East and South.

Ask any wind developer about their business prospects, and it doesn’t take long for the conversation to turn to transmission – or, more precisely, the lack of enough of it.

Look at the study “20% Wind Energy by 2030” released in 2008 by the U.S. Department of Energy to envision the implications of supplying 20% of the nation’s electricity needs by 2030 from wind. Oh, there’s plenty of wind to actually supply the electricity, no problem. It’s just that tons of new transmission capacity would be needed.

And there’s the rub. It’s only marginally easier to site and build a new transmission line than a new nuclear powerplant. Transmission lines take many years and sometimes even decades to get done, due to a variety of NIMBY forces and overlapping regulatory regimes at the local, state and federal levels. And, they cost a fortune, easily a million dollars a mile, often considerably more.

So, that “pipeline” from Dakota to Chicago is on the order of a billion dollars of merely enabling infrastructure – and since there are many pinchpoints in the national power grid, that wind power probably couldn’t go much further than the terminating point anyway.

(From a technical standpoint, I’m massively oversimplifying here by comparing the power grid to a commodity pipeline, but the gist of the conclusion is essentially sound.)

Last year, most of the transmission grid operators from the Eastern half of the U.S. convened for the first time (that’s scary, isn’t it?) to develop what has come to be called the Joint Coordinated System Plan (JCSP) 2008. The JCSP report suggests that 10,000 new miles of transmission lines, at an investment of about $50 billion, will be needed east of the Rocky Mountains over the next 15 years just to meet expected load growth and current renewable portfolio standards on the books. Little of this required expansion is much beyond the drawing board.

The JCSP’s 20% wind scenario is even more daunting: 15,000 miles and $80 billion of capital. The map associated with this scenario is especially intriguing, with three major new hypothetical 800 kV DC corridors drawn right across Northeast Ohio to New York City. (No doubt, the nightmare of the August 2003 Northeastern blackout still sends nightmares through these transmission planners.)

Sorry, I just don’t see this happening in my lifetime.

In passing, the authors point out that neither energy efficiency nor offshore wind resources were investigated to alleviate these transmission requirements. My guess is that inclusion of these possibilities would change the results – a lot.

Significant penetration of energy efficiency could probably seriously reduce the quantity of new wind generation required to make up 20% of the region’s supply. Instead of nearly 230 gigawatts (!) of projected new wind capacity in the Eastern U.S. by 2024, my guess is that concerted exploitation of cost-effective energy efficiency opportunities could cut that investment requirement in half.

As for the 100+ gigawatts of new wind turbines in the Eastern U.S., it might be cheaper overall to put higher-cost installations offshore in the Great Lakes and in the Atlantic to avoid facing the perhaps impossible prospect of building lots of expensive new transmission lines to import onshore wind from the Great Plains.

The inability to expand transmission is a major impediment to the onshore wind business, and while it might be mitigated (slightly) with some regulatory reform, I don’t see it going away. Offshore wind may have its own development challenges, but for those in the wind industry, going offshore should become an increasingly interesting way to skirt the gridlock problem.

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. Later in 2009, he will also become a Managing Director of Early Stage Partners.

Financing the Fifth Fuel

by Richard T. Stuebi

Jim Rogers, the CEO of Duke Energy (NYSE: DUK), has been widely touting the phrase “the fifth fuel” as a synonym for energy efficiency.

As many analyses have shown again and again, such as the very prominent 2008 work of the McKinsey Global Institute, the most cost-effective approach for reducing emissions is afforded by increased emphasis on energy efficiency. Indeed, the impressive legacy of the Rocky Mountain Institute is based largely on the now 30-year-old observation by its founder Amory Lovins that energy efficiency is often less costly than supplying an additional increment of energy — irrespective of any mandate to reduce emissions.

So, if energy efficiency is so great, why isn’t it more widely pursued? This is the central question posed by the January 12 issue of Time, with a lengthy cover story exploring why energy efficiency is so underexploited.

Certainly, one of the key reasons is that energy efficiency seems so, well, boring. Compared to the sizzle of solar panels or wind turbines, or even the old-school industrial aesthetic of oil rigs and coal mines, efficiency is invisible: you can’t see what you don’t consume. It’s hard for most of us to get passionate about the lack of something. Weak public enthusiasm for energy efficiency is no doubt a major factor in coining the phrase “fifth fuel”, to put it on par with energy forms that people can relate to.

Beyond psychology and semantics, though, the bigger impediment to energy efficiency has often been finance. Economically-prudent energy efficiency options often don’t get implemented either because the benefits (in the form of cash savings on energy bills) don’t accrue to those who pay the costs for building upgrades, or because the savings take a few years to pay off — and clients either won’t or can’t afford to make such an investment.

Creative financing mechanisms are necessary to close these gaps. Thankfully, new financing approaches are increasingly emerging that aim to bridge the market failures that have heretofore thwarted full capture of the potential offered by energy efficiency.

For instance, the City of Berkeley has implemented its FIRST (Financing Initiative for Renewable and Solar Technology) program, which enables property owners to finance energy efficiency (and solar) installations via a 20-year surcharge on the building’s property tax bills. In Milwaukee, the Center on Wisconsin Strategy is similarly organizing a 2009 pilot launch of the ME2 (Milwaukee Energy Efficiency) Initiative, which involves charging for energy efficiency retrofits on energy bills via a rider that is linked to the building’s utility service meter.

In both cases, energy efficiency adoption should become much more compelling to many more clients, because the cost associated with the energy efficiency investment is amortized over 20 years at lower interest rates than most customers would be able to obtain on their own. This will create only a very small periodic payment, while leading to immediate and substantial monthly savings on energy expenditures.

I would expect that these models, and others, for financing the fifth fuel will become more commonplace in the coming years, as the imperative for more aggressive pursuit of energy efficiency becomes stronger with each passing day.

We should begin anticipating that eventually the biggest problem with these approaches will be answering the “too good to be true” perception. After all, who in their right mind would turn down the opportunity to save money instantly, without any cash outlay?

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. Later in 2009, he will also become a Managing Director at Early Stage Partners.

Let’s Get Small

by Richard T. Stuebi

In a recent story, CNN profiled the new home of Bill and Sharon Kastrinos.

154 square feet. That’s right, 154 square feet. Actually, it’s 98 square feet downstairs, plus a 56 square foot loft upstairs. The closet — well, that’s inside the car.

Why would the Kastrinos live in such a miniscule dwelling? Apparently, it’s driven by economics. Mr. Kastrinos wants to live on $15,000 per year, but also wants to live in a nice place, California wine country (specifically, Calistoga), where real estate costs are astronomical. With this home, costing $15,000 and with a utility bill of $15 per month, he and his wife can make it work. And, when they get the urge to go elsewhere, they can tow their home, which has wheels and a chassis on the bottom, making it essentially an RV.

The small pre-fab home market has become a bit of a “cottage industry” (sorry, couldn’t resist). Mr. Kastrinos himself has made and sold 11 of them in the last half-year. In nearby Sebastopol, Jay Shafer’s Tumbleweed Tiny House Company offers a full range of home designs between 65 (!) and 774 square feet.

The common theme of the customers is a desire to downsize their lives and their consumption patterns, the equivalent of a colonic cleansing. It’s a bit extreme for me; I couldn’t imagine making such a big change in lifestyle in one fell swoop. But there’s little doubt in my mind: unAmerican as it may be, if we as a society are to achieve significant reductions in energy consumption and emissions output, some degree of downsizing will occur. The question is going to be: will it be by choice, or will it be forced?

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.

The Energy Policy Act of 2008

by Richard T. Stuebi

Betcha didn’t know that there was an Energy Policy Act of 2008, did you? Well, you won’t find any bill of that name. But, the passage of last week’s appropriately titled “Emergency Economic Stabilization Act of 2008” is almost tantamount to an energy bill.

The Senate prepared a nice summary of the energy-related provisions that were stuffed into the bill during the chaotic process to get something passed promptly that would reassure the financial markets. I have yet to review all of the provisions, but it’s clear that many of them have favorable implications for a variety of clean energy technologies, inluding wind, solar, energy efficiency, hybrid vehicles, biofuels, and smart grid.

It’s nice that there has been at least one small silver lining to the dark cloud of financial implosions in the past few weeks.

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.

8 Lessons From Twitter Energy Monitoring

by Marguerite Manteau-Rao

Two weeks and 77 tweets later, the Twitter “green_watch” project has come to an end. Lots of insights, problems raised, and beginning of answers.

The goal was to use Twitter as a real time, online reporting tool for my personal energy consumption, round the clock.


Lessons learned from the project:

#1. The more engaged we are in flow-like activities, the less our propensity to consume energy and buy things that depend on energy for their production:

Adults and children should be encouraged to develop capacity to engage in activities that are deeply satisfying by themselves, eg, hobbies, work, physical activities. Early education could play an important role in that respect. Children’s creativity should be encouraged more, including the ability to do much with little.

#2. Energy vampires, although well known by now, continue to do their silent work of sucking up electricity unnecessarily, and with no added benefit for the end user.

Smart meters, power strips, are available. But how many people use them? How many know much they could save? The effort required is still too great for the mainstream.

#3. There are no readily available monitoring system to alert us when we are consuming energy, and how much, and in ways that talk to us.

I understand $, comparisons, savings, cute pictures, and sensorial signals such as bells and changing colors. Forget kWhs, tables, and graphs. Lots of work is currently being done in this field. But it still has a long way to go, and is still in pilot stage.

#4. The switch from car to alternative low energy mode of transportation requires that people experience first hand the superior benefits of those alternatives.

From riding my bike a few times, I realized that biking was better for my health, took no more time than driving, avoided traffic jam and parking problem, was a lot of fun, and cost me nothing. Same with taking the train, and realizing that I could use time riding productively, working on my laptop, or reading, plus I did not have to find parking. This shows the importance of jumpstarting the conversion process by eliminating barriers to trial of other mode of transportations.

#5. We are addicted to convenience, even more than to things. Rather than fighting that addiction, we should focus on sustainable alternatives that are as, if not more convenient that current solutions.

The bike example also applies here. If we can convince people that biking is as fast, and less hassle than driving, at least for short distances, then we will have an easier sell. Trying to go against that cultural reality of our Western world, is likely to be met with great resistance, and be counterproductive.

#6. There is a huge fuzzy area in collective energy consumption, and indirect energy use. How does one establish the share between individual and institutional responsibility?

At home, and in my car, I am in charge. What happens when I consume electricity from lighting on the freeways, or university campuses? Or when I buy processed food, without any knowledge of the energy that went into producing it? Information becomes critical, as in food carbon labeling, or public display of energy consumption, for let’s say a public pool. Although not a mainstream reality yet, such information would empower individuals to make informed decisions about their use of such collective services.

#7. Green-ness is a privilege of the rich. People with money to spend on home solar installations, hybrid cars, and carbon offsets for air traveling, can lower their carbon footprint, a lot more easily than their less well-off fellow citizens.

That is a fact. In the absence of significant government subsidies and investments, the average person needs to work a lot harder to decrease his or her carbon footprint

#8. Energy efficiency and conservation, the two low hanging fruits of climate change remediation, have not yet entered the public consciousness.

I am dreaming smart homes, smart transportation, smart consumption. No fancy new technologies required. Only a shift in mindsets, and the pulling together of existing technologies.

Any ideas how to make this happen? I am asking you . . .

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

First Impressions of China

by Richard T. Stuebi

I just returned from my first trip to China – a whirlwind ten-day tour spanning the cities of Beijing, Shanghai, Guangzhou, Xiamen and Wenling – involving a number of private meetings (some with senior public officials) as well as public presentations at PennWell’s China Power Oil & Gas conference and at a cleantech symposium hosted by the American Chamber of Commerce in Shanghai (AmCham Shanghai) at the annual China International Fair for Investment and Trade.

It is impossible in a brief blog post to give a detailed report on my visit, or to more broadly comment meaningfully about the profound issues confronting the whole world as a result of China’s rise and arrival to world pre-eminence. With this note, I will only attempt to offer some immediately apparent observations related to cleantech issues and opportunities in China that emerged for me from my visit.

Pollution. It is well-known that China is experiencing tremendous environmental challenges, with almost a million Chinese estimated to die each year prematurely from health issues stemming from poor environmental quality. Air visibility can sometimes be less than a mile on what would otherwise be an ordinary hazy humid summer day, although frankly, I was expecting the air pollution to be worse than it was. On the other hand, the water situation shocked me. China’s Ministry of Environmental Protection (formerly known as the State Environmental Protection Adminstration) is said to admit that 60% of the country’s rivers are polluted to the extent that they can’t be used for drinking, and I have heard claims from American sources that a majority of Chinese rivers are so bad that the U.S. EPA would deem their waters to be unacceptable for industrial purposes (much less for drinking). Even at the finest hotels, guests are warned not to drink the tap water, and bottled water is generally provided as part of the room rate. (In case any of you are eating while reading this, I won’t bring up the public toilets.) The other major surprise for me was how much worse the pollution situation was in the countryside than in the cities. Bad air, disgusting water and (especially) litter are much more starkly obvious in the poorer rural areas – a powerful indication of the positive correlation between income/wealth and environmental quality. This reinforced to me how important it is to promote (rather than to retard) economic growth in China, so as to facilitate environmental improvement both for the sake of the Chinese and for the world.

Electricity sector. Although I haven’t investigated in any detail, what I heard suggests to me that the electricity industry in China is on the verge of a financial breakdown, analogous in some ways to the California fiasco of the early 2000’s. Retail electricity prices are subsidized (heavily for large industrial customers), and allowed wholesale prices to generators are fixed. However, coal prices are on the rise, because the mining industry is sufficiently fragmented and privatized that government attempts to set the prices are ineffective. Since the vast majority of the electricity in China is produced from burning coal, the combined effect of increasing coal prices and steady electricity prices is putting a financial squeeze on many generators – so much so that in some cases generator firms are reducing output from their plants. It is unclear how long this can go on before electricity supply inadequacy (already a problem) becomes acute. The financial health of China’s electricity sector ought to be important to the cleantech industry, because a collapse of some type might jeopardize the attainment of the government’s ambitious clean energy aspirations that have been set forth in its Renewable Energy Law.

Manufacturing. In some parts of the U.S. (such as here in Ohio), we like to think we are a manufacturing powerhouse, but China makes us look like pikers. The ascendancy of Chinese manufacturing is nowhere near its peak: with several hundred million people still living in desperate poverty (pre-industrial conditions) in the hinterlands, the prospect of earning US$1000 per year by moving to the city to work in a factory represents a five- or ten-fold increase in income and quality of life. In other words, unless/until fuel prices make transportation of goods prohibitively expensive, stringent emission reduction programs become binding in China to double or triple electricity prices, and/or the yuan-dollar relationship alters dramatically, its huge labor cost advantages can only enable China to further strengthen its already dominant position in global manufacturing – excepting certain niches of production (items with very high shipping costs such as wind turbines, items with limited labor input due to capital-intensive production processes, items still in low-volume early production runs). Outside China, we will generally be relegated to being the technology innovators, the product designers and system integrators, the sellers and distributors, the installers and the service people. Rather than rue that position, let’s embrace it. Because of their production orientation, my speculation is that the Chinese are not so strong in innovation, leaving it to others to be the technology pioneers. After being bombarded by souvenir hawkers and market barterers who make undifferentiated “me-too” offers and compete almost solely on price (or on aggressiveness or loudness), I also conclude that these Chinese will not be the leaders in identifying customer needs as they emerge and evolve, nor in delivering high-value (not price-based) solutions to meet those needs. Those games are for us to play, so let’s go after them.

Capital. It is abundantly clear to any observer on the street that China is awash in money. In Beijing and Shanghai, designer consumer goods and high-end automobiles are not ubiquitous, but they are evident. (In Xiamen, I saw an Audi A8L – a $120,000 vehicle in the U.S. – with police lights on top of the roof. Nice cop car! Does your town have a municipal budget that would support a fleet including one?) I met venture capitalists looking for deals in China, as well as a bevy of consultants who facilitate technology transfer and commercialization into China. However, I didn’t see much evidence of interest in foreign investment by Chinese parties. For the cleantech revolution to be amped up, we need to make the case that this Chinese capital is well-served being deployed outside China – not only for good financial returns, but to generate more future opportunities for Chinese domestic investment.

Inefficiencies. Centrally-planned economies (e.g., the former Soviet Union) are legendary for begetting ridiculous systemic inefficiencies. The Chinese economy is quite a bit different – the central government indeed establishes absolute policies, but only at a very general level, providing minimal specific guidance and instead allowing individual actors almost complete autonomy to comply within the bounds of what’s permitted – but the inefficiencies are nevertheless astounding. I speculate that the inefficiencies are driven more by the explosive growth of the economy – averaging a mind-boggling 9.9% per year for a 30 year period since 1978 – which propels businesses and individuals to act quickly, with much replication and little reflection or innovation. A vivid illustration of this is the abundance of highly inefficient mini air conditioning units (rather than more efficient central air conditioning systems) in relatively new high-rise buildings, presumably because they’re cheap and quick and easy to replicate. The resulting inefficiencies also reach into the social realm: schedules are set late, remain fluid and dynamic up until the event, and tardiness is common. The Chinese way of doing things thus requires some acclimation for those of us accustomed to considerable structure and discipline.

Urban mobility. Reflecting the economic explosion, people are constantly trying to get somewhere. Even though the big cities (especially Shanghai and Beijing) have reasonably well-developed public transportation systems (including modern subway systems), and even though the per capita level of car ownership in China is only less than 10% of what it is in the U.S. (reflecting the amazing fact that private auto ownership was forbidden in China until the mid-1990’s), traffic is truly chaotic in urban areas. It is said that there used to be bicycles everywhere in China, and while many still remain (often abiding by well-designed separated bicycle lanes), many bicycles appear to have been replaced and superseded by electric scooters that are clean and silent. (By the way, the silence isn’t always a good thing, as any aimless and unattentive walker is under a constant threat of being steamrolled by an aggressively-driven scooter stealthily zooming in from behind.) It appears to me that “rules of the road” is an oxymoronic concept in China, as vehicles undertake passes in the most imprudent circumstances and drive on the left or on the right almost on discretion. (Of note, traffic lights are world-class: many have timers indicating the number of seconds remaining for a green light or red light.) Taxis are about as ubiquitous as two-wheeled vehicles and are unbelievably cheap – an hour ride of perhaps 30 miles might cost the equivalent of US$20 – but you’ll never complain about a Manhattan cab ride again. As a consequence, drivers and pedestrians alike must be vigilant to protect their lives. And, it is a good thing for all concerned that foreigners are not allowed to drive; when you rent a car in China, you also get a Chinese driver, who is well-accustomed to seeing driving behaviors evidenced in the U.S. only at race tracks and demolition derbies.

Air service. Air travel in the U.S. has nothing on China. I was impressed with the very new and modern airport terminals in all of the cities I visited. The primary domestic airlines (Air China (LSE: AIRC), China Southern (NYSE: ZNH), etc.) have thoroughly modern Boeing (NYSE: BA) and Airbus fleets – no Soviet-era Tupolevs here anymore, no reason to worry about making it alive to your destination. Fares are reasonable – and they still serve meals (though Chinese airline food is no better than the U.S. airline food of days past).

Language. I am no linguistic expert. I struggle with English, and my high school experience in studying French convinced me that I do not possess the language gene. But, since it doesn’t use an alphabet and is incredibly reliant in verbal communication upon imperceptible shifts of tone, Chinese (Mandarin) is a whole ‘nother level of challenge. I am not raising this issue as an interesting or amusing tangent, but rather because the language barrier (and overcoming it more satisfactorily) will be truly fundamental in determining the future success of Chinese-American relations. As the work of Maturana and Varela shows compellingly, humans live in language: that is, they make assessments of the world and create new possibilities only through language. Without sharing a language, it is simply not possible to come to agreement on the current situation or to invent directions for beneficial action. In my time in China, I experienced a deficit of good translators – more properly termed, interpreters – who were strong in both Mandarin and English, and who were also knowledgeable enough about the subject matter to convey the fully nuanced intentions of the speaker. (To illustrate, I would hear a Chinese speaker utter 60 seconds of Mandarin, and the English translation would hesitantly be passed on, usually some banal statement like: “China uses a lot of energy”. Come on — I know in his minute of talking he must have said something more insightful and detailed that that!) If we’re going to enable massive/rapid cleantech transfer into and adoption within China, there’s going to have to be an order of magnitude expansion of cleantech-knowledgeable people that also possess high degrees of English-Mandarin fluency.

As Mark Twain once was alleged to have said (though in actuality the maxim was coined by the French philosopher Blaise Pascal), “I have made this letter longer than usual, only because I have not had time to make it shorter.” I apologize for my rambling incoherence. I’m still digesting what I observed from my first visit to China, with an aim towards developing and executing an approach to work more systematically with/in China on cleantech opportunities. The above is merely my first transcription of my emerging thoughts. I don’t know what it all means yet, but I do know that there’s something pretty important in here somewhere.

One final anecdote to wrap up: during my trip, I had the pleasure of being able to connect personally with the U.S. Assistant Secretary of Commerce David Bohigan, as he happened to coincidentally be leading a group of U.S. business people on a clean energy trade mission to China and India. As Mr. Bohigan noted to me, the relationship with China and the need for clean energy will be the two most dominant forces shaping the U.S. economy in the 21st Century.

So, at least one bit of clarity has so far pierced the fog in my mind: it is incumbent upon the U.S. cleantech community to engage meaningfully with/in China, as it is there that the largest opportunities both for wealth creation and for environmental improvement lie.

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.

Geothermal Heat Pumps: The Forgotten One

by Richard T. Stuebi

Before I was introduced to EnLink Geoenergy Services in 2000, I had never heard of geothermal heat pumps (GHPs), even though I had been in the energy industry for almost 15 years then, and even though GHP systems had been in successful operational service for over 50 years by that time.

The GHP concept is pretty straightforward: use conventional heat exchanger technologies to utilize the soil underneath the surface as a heat sink in summer and to exploit the soil’s absorbed warmth in the winter. Thermodynamically, this is much more efficient than using the hot summer air as a heat sink when in air conditioning mode. As a result, the use of GHP systems can reduce a building’s energy consumption associated with space heating and cooling by up to 70% relative to traditional HVAC systems.

Given that buildings are responsible for a large portion of the economy’s overall energy requirements, and that heating/cooling requirements represent one of the largest energy loads for a building, GHP systems thus represent a technology that could potentially take an enormous bite out of current energy demands.

GHP systems are not new and unproven: hundreds of thousands of systems are installed across the U.S., some dating back to the late 1940’s. Way back in 1993, the U.S. Environmental Protection Agency released a report called Space Conditioning: The Next Frontier, which declared that GHP systems “are the most energy-efficient, environmentally clean, and cost-effective space conditioning systems available” — a statement that’s probably still accurate in most cases.

Even with all of this substantiation, GHP still represents only a very tiny segment (no more than 1%) of the U.S. HVAC industry.

Why should such a promising technology area be so overlooked?

There are several reasons why GHP systems are not widely adopted yet. Certainly, there are economic factors at play. Simple GHP systems have historically had higher up-front costs than conventional HVAC systems (particularly cheap, inefficient ones), and this up-front cost premium is no doubt an important decision factor in many instances.

We all know that many customers often make irrational economic decisions, selecting the lowest first-cost option for capital purchases, even when other options offers superior life-cycle economics.

In the context of heating and cooling options, such short-term thinking is likely to come back to haunt customers. Rising energy prices and climate change concerns should increasingly drive more customers to undertake more thoughtful analysis when making HVAC decisions.

Most simply considered, the “payback” from the energy savings relative to the incremental additional outlay for a GHP system is often reasonable — less than five years for many buildings in many locations. If more sophisticated financial approaches (such as a discounted cash flow analysis over the life of the system) are conducted and all future costs the customer is likely to face — including maintenance and replacement costs, likely price increases for electricity and heating fuels, and the economic impact of probable greenhouse gas policies — are considered, the financial case for GHP over conventional HVAC becomes even more compelling.

A more fundamental challenge than economics for the GHP sector is that very few decision-makers have ever heard of GHP systems, and therefore don’t even know to consider them when evaluating HVAC alternatives.

This is the case even in California, which prides itself on energy efficiency innovation and progressivism. Look in all of the issuances from the California Energy Commission, the California Air Resources Board and the California Public Utilities Commission — all of whom are desperately looking for good energy efficiency approaches as critical answers for meeting the ambitious carbon emission reduction requirements of AB 32 — and you’ll find hardly a mention of GHP systems as an attractive approach for building HVAC.

Although there are not just one but rather two relevant trade associations — the Geothermal Heat Pump Consortium (GHPC) and the International Ground Source Heat Pump Association (IGSHPA) — the GHP industry has clearly been ineffective in promoting the compelling benefits of GHP systems to the masses of building owners and professionals. In general, the architect and engineering community has been especially remiss in failing to learn more about an attractive heating/cooling alternative for their clients — and one would think that continuing this neglect would not serve their profession’s long-term interests well.

The unfortunate result from all of these forces at work is that GHP systems are rarely even considered (much less selected) when an HVAC decision must be made for a new building being constructed or an old building being renovated.

At long last, the rise of GHP systems may finally be beginning in earnest. Last month, the New York Times published a prominent article on the GHP sector, in which a number of sources in the U.S. GHP marketplace are cited to highlight the industry’s rapid growth. For instance, Climate Master — the largest U.S. manufacturer of in-building heat pumps for GHP systems — reported that revenues increased by 200% between 2005 and 2007.

As the article reports, the bottlenecks to continued increases in GHP adoption include equipment and component supply, and probably more importantly, a lack of adequate capability around the country to install GHP systems — particularly the underground component of the system entailing a series of plastic pipes buried underground.

Leveraging drilling techniques and other mechanical equipment long used in the oil/gas sector, my long-time client EnLink has consistently focused solely on developing new technologies and approaches to improve the economics and speed of installing the underground “loop field” for GHP systems.

With such innovation, it will become more feasible to expand a base of experienced GHP installation capabilities to scale across the U.S. As this occurs, the costs and time required for GHP installation will become lower (and less variable) for building owners and professionals in more regions of the country — at which point, GHP systems will become increasingly compelling as the preferred HVAC approach.

Although they have long provided subsidies and incentives for other renewable and efficiency technologies to accelerate their adoption, the Feds have consistently ignored GHP for similar treatment — at least so far, though this too may be changing. Three bills are currently under consideration in Washington, most notably the Geothermal Heat Pump Development Act (S. 2314) sponsored by Senator Ken Salazar (D-CO), which would make GHP systems eligible for tax credits already afforded to other clean energy technologies.

The GHP market is a sector rapidly in the making. Perhaps GHP systems won’t long remain the forgotten one in the cleantech universe.

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.

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.

Con

  • 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 Cleantech.org.

Wanted: Carbon Productivity Revolution

by Richard T. Stuebi

The think-tank arm of the management consulting firm McKinsey & Co., the McKinsey
Global Institute (MGI), has been releasing some pretty darn interesting analyses to frame the overall energy and environmental situation the world faces.

The breakthrough was MGI’s February 2007 work to develop a “cost-curve” for GHG reductions, showing the quantities and relative costs associated with various emission reduction technologies and approaches that could be pursued. Since its release, the cost curve framework has been an incredibly valuable and widely-used analytic and communication tool for policy-makers worldwide, and it has been used to good effect by MGI’s researchers.

In February of this year, MGI issued a report on energy productivity, which showed the compelling financial returns offered to society by massive investments in energy efficiency. This summer, MGI issued a subsequent report on carbon productivity, which presents a simple but stunning challenge to the human race:

Over the next 40 years, we need a new industrial revolution equivalent in magnitude to the 120-year Industrial Revolution, to enable a ten-fold increase in economic output per unit of carbon emissions. If such a “carbon productivity revolution” is not achieved, we will not be able to get the planet onto a climate stabilization path, or the world’s population will face significant global economic declines, or both.

Think about the changes wrought upon society between 1850 and 1970: railroads, steel, oil, telegraph, telephones, automobiles, airplanes, radio, television, computers, Internet. Now, think about changes of comparable magnitude, occurring from today’s technological and infrastructure base, occuring during the next 40 years.

Do you think the human race can do it? According to McKinsey, we had better do it, or else.

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.

What’s the Buzz About Clean Tech and Other Green Stuff?

by Marguerite Manteau-Rao

Green or sustainability? Clean tech or environmental conservation? If you want to get a sense for what topics generate the most buzz at any point in time, Nielsen BlogPulse is the place to go:

‘Green’ is a word understood by all. Sustainability is still a concept for the business elite.  

I thought clean tech would have an edge over conservation. Nielsen statistics are proving otherwise. I find it rather encouraging. Note the peak on Earth Day, for conservation. Conservation is still very much associated with big environmental events.

Solar is still generating more buzz, ahead of other clean tech approaches. As more and more of the public discourse shifts towards energy efficiency, it will be interesting to see if it gets reflected in blogging conversations.


Now you play!

Marguerite Manteau-Rao is a green blogger and marketing consultant on sustainability and social media issues. Her blog, La Marguerite, focuses on behavioral solutions to climate change and other global sustainability issues.

Rock Out With Your Dock Out

by Cristina Foung

My favorite green product of the week: Vers 2X wooden iPod dock

What is it?
The Vers 2X is a compact, all-in-one iPod dock. It plays and charges any iPod (or iPhone; it also comes with a universal MP3 dock in case you’re breaking the mold with a Zen or a Zune or something else). It has 2 3” 15-watt speakers, dual port design for deeper bass, and a sweet little silver remote control.

Why is it better?
If you’re going to be playing music, you want it to sound good. Well, the Vers 2X sure does sound good. It amazes me every time I turn mine on how such a little box can produce such solid sound.

But on to the “green factor:” Vers uses wood which displaces 80% of what otherwise would have been plastic. They’ve also done their homework so the wood they use is sustainably harvested. Each unit is also put together with screws (not adhesives or snaps), so each dock can be broken down for easy recycling. There’s no formaldehyde or toxic glue in the wood bonding. And in other chemical news, Vers is RoHS compliant.

The packaging is also made from 100% recycled materials and is 100% recyclable. The class D amplifier used in Vers 2X is 80% more energy efficient than other amplifiers. That means it uses about half the energy to produce the same amount of sound.

Where can you find it?
You can get your 2X for a (suggested retail) price of $149.99 directly through the Vers website or through any of their retailers (Target.com, Feel More Human, and many others). Also, back when I got mine, they only had it in Natural Cherry, but now you can choose from Bamboo, Natural Walnut, or Dark Walnut.

Besides her green products column on Cleantech Blog, Cristina is a passionate advocate for green living at the Green Home Huddle at Huddler.com, which focuses on electric cars, energy efficient appliances, and other green products.

"A Special Report on the Future of Energy" by Mother Jones

by Richard T. Stuebi

I’ve never been a fan of the periodical Mother Jones – it’s always seemed a bit too “alternative” for me. That said, I was recently given a copy of the May/June 2008 issue – a special report on the future of energy – and was surprised by the quality and balance of the articles.

I particularly found “The Seven Myths of Energy Independence” by Paul Roberts (author of The End of Oil) to be a compelling read. To him, the seven myths are:

1. Energy Independence Is Good
2. Ethanol Will Set Us Free
3. Conservation Is a “Personal Virtue”
4. We Can Go It Alone
5. Some Geek in Silicon Valley Will Fix the Problem
6. Cut Demand and the Rest Will Follow
7. Once Bush Is Gone, Change Will Come

I think many advocates are well-advised to really reflect on #7. Bush is unquestionably the bête-noire of all things environmental, but he’s only a part of the problem – and arguably not even the biggest part. Congress and the entrenched interests completely stymie good energy/environmental policy. A new President will help, but won’t be a simple cure-all, for what ails us in the energy and environmental arenas.

Which brings me to another article in the issue: “Congress’ Top 10 Fossil Fools” by Chris Mooney, profiling the “foes and thwarters of renewable energy”. In his list, they are:

1. Senator Pete Dominici (R-NM)
2. The Southern Company (NYSE: SO)
3. Senator Mary Landrieu (D-LA)
4. Representative Joe Barton (R-TX)
5. Senator Jim Bunning (R-KY) and “Coal-State Dems”
6. Representative John Dingell (D-MI)
7. Senator Lamar Alexander (R-TN)
8. Senator Ted Kennedy (D-MA)
9. Senator John Thune (R-SD)
10. Senator John McCain (R-AZ)

Probably no surprise that there are more R’s than D’s on the list, but I was really surprised at the omission of Senator James Imhofe (R-OK), and by the inclusion of McCain. Apparently, the League of Conservation Voters gave the impending Republican Presidential nominee a rating of 0 (that’s right, zero) last year “because McCain missed every single environmentally relevant vote”, including ones in which he could have been the tie-breaker to overcome a filibuster on the 2007 clean-energy bill. Alas, what could have been…

Other good articles in the issue include:

“The Greenback Effect” by Bill McKibben on why markets aren’t necessarily antithetical to the environment, but can be the driving force for environmental solutions.
“Breaking the Gridlock” by Jennifer Kahn on how the smart-grid could be the major enabler for energy efficiency.
“The Nuclear Option” by Judith Lewis – a reasonably fair and balanced view of the pros and cons of nuclear energy, without the expected hyperbole.
“Tar Wars” by Josh Harkinson, which paints a not-at-all pretty picture of what’s happening to the landscape in Northern Alberta as the tar sands are mined to make oil.
“Put a Tyrant in Your Tank” by Joshua Kurlantzick, profiling the bad guys leading many of the major oil producing nations – who are financed every time you fill up at the pump.

Lots of interesting nuggets to be found in the sidebar boxes too. For instance, did you know that 30% of the electricity supply at the infamous Guantanamo Bay Naval Base is provided by wind turbines?

Well worth spending $5.95 at the newsstand, pick up the May/June 2008 Mother Jones.

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.

Green Ratings

Food prices have rocketed 83% in the past three years. The World Bank just released the figures. If you are trying to raise a family in much of the world, you are already painfully aware of the crisis. There are a number of causes that are likely to be linked to a climate crisis caused by increased greenhouse gases: draught, groundwater scarcity, eroded soil, disease, and food being used to make biofuel.

People ask if I could provide guidelines on green ratings. There are a number of wonderful organizations with helpful guides to reduce our emissions, often saving money in the process. The following are excellent:

Carbon Calculator & Going Carbon Neutral

www.carbonfund.org

Green Guides

http://www.treehugger.com/gogreen.php

Energy Efficient Homes, Appliances, Lights

http://www.energystar.gov/

Buildings and Communities

http://www.usgbc.org/DisplayPage.aspx?CMSPageID=222

Fuel Efficient Cars and Transportation

www.Fueleconomy.gov

www.cleanfleetreport.com

Consumer Products

http://www.greenerchoices.org/

Food and Water

http://www.localharvest.org/

http://www.treehugger.com/files/2006/12/how_to_green_your_water.php

http://edf.org/page.cfm?tagID=1521

Corporations

http://www.innovestgroup.com/index.php?option=com_content&task=view&id=169&Itemid=61

http://www.cleanedge.com/

U.S. Cities

http://www.sustainlane.com/us-city-rankings/

Enjoy Earth Day,

John Addison

Progressive Thinking

by Richard T. Stuebi

Last week, Cleveland-based Progressive Insurance (NYSE: PGR) announced that it was sponsoring the Progressive Automotive X Prize: $10 million to develop a market-ready automobile that would achieve 100 miles per gallon fuel efficiency.

The Associated Press reports that 60 teams from nine countries have already signed up for the competition, which will occur in 2009 and 2010, involving cross-country and urban driving tests. It will be interesting to see the technologies, designs, and approaches employed by the teams to produce such the required breakthroughs.

What would cause an insurance company to offer so much money to improve auto fuel efficiency? Clearly, Progressive has concluded that increasing gasoline prices, and perhaps increasing scarcity of oil products generally, are a major threat to their auto insurance business. Unless auto efficiency improves significantly, auto ownership and mileage-driven will decline — thus leading to lower insurance premiums paid to companies such as Progressive. Evidently, Progressive estimates the net present value of this threat to their company at many millions of dollars.

It’s also quite telling that a major corporation in a highly competitive industry isn’t putting much faith in the auto/energy markets to drive auto manufacturers to achieve the desired auto energy efficiency improvements on their own. Perhaps Progressive sees what many free-market advocates haven’t: that the auto/energy markets are encumbered by so many barriers to competitive activity that the beneficial forces of Adam Smith’s “invisible hand” can’t and don’t operate effectively.

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.