Cleantech Success Formula = EE + ROI + 0 Capex

Cleantech Growth for Energy Efficiency, Smart Grid, Distributed Solar

metro la rooftop1 300x217 Cleantech Growth for Energy Efficiency, Smart Grid, Distributed SolarBy John Addison (11/5/10)

Energy Efficiency with Fast ROI Voted Most Likely to Succeed

Venture capitalists, cleantech executives, and technology experts gathered this week for GreenBeat 2010, hosted by SSE Labs of Stanford University andVentureBeat.

John Doerr, Partner KPCB, is optimistic about cleantech. He is one of the most successful venture capitalists of all time, backing Google, Amazon, and my alma mater Sun Microsystems. He has made six new cleantech investments this year. KPCB cleantech investmentsinclude Silver Springs Networks, Amyris, Mascoma, Ausra, Bloom Energy, and Fisker Automotive with ambitions to surpass Tesla.

Mr. Doerr is enthusiastic about cleantech in California, where voters this Tuesday defeated proposition 23, effectively showing that 60 percent of voters favor California’s climate cap-and-trade program. The oil industry proposition threatened hundreds of cleantech companies and ultimately hundreds of thousands of future jobs.

Nationally, however, the voters sent a clear message that they want fiscal responsibility and an economy that creates jobs.  Projects that need billions in federal funds or billions in loan guarantees are likely to go nowhere including nuclear, so-called clean coal, and utility-scale solar.

Distributed Solar and Energy Efficiency

Solar experts from SunRun, Sungevity, and SolarBridge observe that business is growing rapidly for distributed solar, confirming our solar energy report that distributed solar will grow over 40 percent annually. Commercial rooftops can support 100 kW to 20 MW solar projects located where power is consumed. Distribution investment is minimized. In contrast, utility-scale solar in the desert is more expensive to site, according to the industry panel, requires major high-voltage line and distribution investment, and can face years of NIMBY opposition. All this adds cost, risk, and project finance difficulty. These same factors can allow local solar, more expensive per kWh, to compete against remote coal and natural gas. A cap-trade fee for carbon emissions provides added distributed solar advantage over fossil fuel plants.

Negawatts are cheaper than megawatts. The biggest opportunities are in helping commercial customers and consumers reduce their electricity and heating bills. The Empire State Building will save over $4 million per year through energy saving initiatives such as installing 6,500 dual pane windows from Serious Materials whose CEO, Kevin Surace, reports that he already has 400 employees and is adding jobs.

Optimal energy savings occurs where energy technology converges with information technology to manage everything in buildings and homes from HVAC to lighting. Energy savings of 10 and 20 percent were reported without asking people to change behavior. Customers want these savings without capital expenditure (capex). Innovative companies that provide solutions as services win. Even better is when they implement demand response solutions that make the customer money.

Smart Grid to Grow to Billions of Nodes

Smart grid technology will ultimately be used to manage billions of points of energy generation and consumption. The first payoff of smart grids is allowing electric utilities to be more efficient and avoid payroll costs of manual meter readers and technicians that turn-on home power. So far, the utilities are saving and the ratepayers are footing the bill for smart meters. Consumers are starting to benefit as they get information about where they are losing energy money. Bill Weihl, Green Energy Czar for Google reports a large number of users, with hundreds commenting about saving money.

The “killer app” for the smart grid may be electric cars. By charging cars off-peak, utilities will find a home for electricity generated in power plants that like to run 24/7. Consumers, using smart charging and friendly charging apps and net tools, will save with low time-of-use rates for nighttime charging instead of expensive trips to the gas station.

Ten cleantech start-ups presented to a panel of venture capitalists at GreenBeat 2010. The winner was Redwood Systems, an intelligent lighting provider. Redwood is already saving money for giant customers like Flour. Redwood provides LED lighting networked with sensors and software for monitoring, control, and automated lighting. The VCs liked that Redwood addressed the need for energy efficiency with a high ROI, low barriers of entry in the built environment, and no big capex decision by the customer.

5 replies
  1. kent beuchert
    kent beuchert says:

    I'm amazed at the number of fallacies in this cheerleading article. "Distributed energy sourcing " WOULD
    be very beneficial except for the fact that the source of power (solar, wind, etc) is unreliable. This leads to the obvious conclusion that, regardless of how much power is produced locally by such sources, the grid must be maintained with full capacity undiminished. The reason should be obvious to folks who speak as though they are experts on grid technology – the sun doesn't always shine., even when it's supposed to. That, in turn, fellow students, mean that no conventional powerplants can be done away with, or even reduced in staff. Only fuel will be saved, meaning that the cost for each kilowatthour produced grows ever larger, since fewer will be produced but with the same fixed costs. Why so few fail
    to understand something as simple as this is a mystery. But they do.
    So does this website.

  2. Solar Energy Systems
    Solar Energy Systems says:

    To address the previous comment…. You are right that solar and wind are less reliable than coal, however, the key is distributed energy (meaning, throughout the country) and a good interconnected transmission system. So, for example, if a storm front is over Colorado then energy can be moved from California that isn't cloudy that day. With HVDC lines, transmission distances are less critical making the movement of energy more feasible. We couldn't do this now because the transmission systems are too lossy. However, the key is to get a significant installed base of PV and Solar Thermal (with storage capacity) that is strategically placed to minimize possible outages and can generate "on average" what is needed. In the event that a large amount of the country is cloud covered for a significant time, gas plants could be used as a backup source. This may not be idea, but it would be huge progress to have fossil fuels as a backup versus the main source. In the mean time, we'll continue to develop technology to address energy storage. Necessity is the mother of invention.

  3. Residential Solar
    Residential Solar says:

    Kent, another point to consider is that energy storage is an option. Pumped hydro storage is 75% efficient and there are other technologies that could possibly help as well. Storage is an added expense, but it also solves many problems not only for renewables but for coal fired plants as well. There are solutions, you just have to open your mind and consider they are outside of your box.

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