Some Clarity on Ethanol

The most controversial issue about ethanol is whether its use is actually a good idea, and therefore worthy of public policy support and environmental endorsement.

Two questions come up again and again:

1. Does the production of ethanol actually yield more energy than is consumed in the process of producing it?

2. Does the use of ethanol in transportation fuels actually reduce emissions?

A recent study by Argonne National Laboratory provides a seemingly convincing case that the answers to these two questions are “Yes” and “Yes”.

Summary of ANL Ethanol study

The study also shows how much better “cellulosic” ethanol approaches are than conventional “corn” (i.e., starch) ethanol approaches. Whereas corn ethanol requires about 0.8 Btu of non-renewable (fossil) energy input for each Btu of energy output, cellulosic ethanol requires only about 0.1 Btu of fossil energy input for each Btu of energy output. (There’s no need to count the “solar” energy associated with growing the feedstock, because it’s totally free.) Correspondingly, the use of corn ethanol reduces greenhouse gases (GHGs) by about 20-30% relative to conventional gasoline, whereas cellulosic ethanol offers a 85% reduction in GHG emissions.

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Although these two entry-level questions can now largely be dispensed with, there are other issues that remain important for ethanol. One is the economics. According to one industry analyst I’ve talked with, corn ethanol is not a very economically-attractive way of reducing GHGs, with an incremental cost of about $300/ton CO2 reduction — much higher than most other emission reduction alternatives. (Of course, the government’s promotion of ethanol is more for reducing oil consumption/imports than emissions.) The economics of cellulosic may be more promising, but are more uncertain.

The other key remaining issue for ethanol is how much of a dent it can make in the nation’s overall petroleum/gasoline requirements. Is there enough land (enough growth potential) to supply a large portion of motor fuel demand? I’ve heard that corn ethanol could supply perhaps high single digits of U.S. gasoline requirements, implying intuitively that cellulosic ethanol might be able to supply a share several times greater. Anyone?

Moving Small Wind into the Marketplace

A landowner in Boulder County, Colorado wants to install a small wind turbine on his property just outside the Boulder city limits. Trudy Forsyth, an engineer who leads the distributed wind portion of the National Renewable Energy Laboratory’s (NREL) wind program in Golden, Colorado, described what lies ahead for this property owner and others embarking on small wind projects. We met up this past week at the home of wind developer, Marilyn Hardy, for a gathering of Women in Sustainable Energy (WISE) where Trudy enumerated to a couple of us FIESTYs (Females in Energy Stop Talking, Yell!*) what it will take to get small wind into the marketplace.

The buyer of small wind is not an electric utility, but a homeowner or a business like a farmer. Trudy notes, small wind turbines can be smart investments for farms, especially electricity-intensive hog and dairy operations which are susceptible to rising electric grid and fuel prices. “These small wind turbines offer farmers stability and a hedge against price increases,” she says, adding that NREL “is working in rural America to get small wind in place.”

The hurdles to market adoption for this consumer market differ from those faced in utility-scale projects. (In marketing parlance, it’s not B-to-B so much as B-to-C.) Trudy finds that the consumer adoption curve, from the idea of a small wind project to actual install, takes about three years. She says that is the length of the learning curve for the buyer to go through all of the pieces and to determine how the hurdles may affect the project. NREL’s Wind Powering America program guides education and outreach, but nurturing small wind to fruition takes something more. Yes, even more than education, outreach and marketing.

Trudy counted on her fingers the three key elements required for small wind to make in the marketplace: a stimulating policy environment; reduced ‘hassle factors’; and a supporting infrastructure.

At the recent Solar2006 conference, a solar installer from California cited “a supportive government” as a critical element to solar adoption in the marketplace. The same is true for small wind. A stimulating policy environment could be a renewable energy portfolio standard. Here in Colorado, unfortunately, the designers of Colorado’s RPS did not include small wind. As a result, unlike solar, small wind gets no boost through utility marketing, education and outreach, or ratepayer-financed rebates.

Second on Trudy’s list is reduced ‘hassle factors’: amenable zoning laws, interconnection agreements, insurance requirements, and net metering. These last three ‘hassle factors’ were of notable contention during rulemaking for the solar set-aside in Colorado’s RPS. The Boulder landowner will fly solo to decipher these regulations, rules and requirements for his small wind project.

Finally, the customer needs supportive infrastructure for the small wind project: educators, dealers, installers, site assessors and people who work in the small wind business. Think quickly, where would you go to find such people in your (windy) neck of the woods?

Were the Boulder landowner located in the upper Midwest (say, Wisconsin) or the Northeast (say, Vermont), his probability of success would be better. Wisconsin, Trudy says, is where the three key elements come together: “Wisconsin has some of the best infrastructure for small wind.” Renew Wisconsin provides a “small wind toolbox,” and the Midwest Renewable Energy Association trains small wind site assessors. (MREA recently held a conference, “Barriers to the Installation of Small Wind Systems.”) Focus on Energy, also in Wisconsin, pays a site assessor two-thirds of the assessment cost and the customer pays one-third. The assessor determines the best place for a small wind turbine and can identify the best product for the particular site. The assessor also instructs the buyer how to interconnect with the utility…and who the utility is. Trudy notes that successful installations “pivot on the site assessor.”

Yet, while Wisconsin has a moderate, but not great, policy environment – and some state zoning laws in place for small wind – its struggles with ‘hassle factors’ (interconnection agreements, insurance requirements, and net metering).

Vermont also does fairly well, Trudy believes, because it’s small and green in its beliefs, and lots of smaller installers are supposed to be getting on board. Still, as in Wisconsin, remedies for the ‘hassle factors’ are not in place in Vermont.

FIESTY WISE members are doing their part to move this distributed, small-sized and consumer-oriented clean energy technology into the marketplace. This week, a couple of them will attend The Nevada Wind Workshop which proclaims, “Energy customers want to buy in, too, recognizing that new small wind systems are affordable, as well as reliable and environmentally appealing.” They will discuss “details on cost-effective ways to sidestep transmission access problems, through distribution-scale wind power development.”

Go, girls, go.

*Credit for “FIESTY” belongs to Southwest Windpower.

Texas Passes California in US Wind Energy Leadership in Cleantech

Being a Texan who began his career in oil & gas and now works in cleantech and alternative energy, I was pleasantly surprised to come across a recent article quoting a quarterly report from the American Wind Energy Association.

The gist – Texas surpasses California for the most wind generation in the US – 2,370 MW. That’s just under a quarter of the total US 10,000 MW of wind generation.

I found this quote from the AWEA’s site fascinating: “It’s a historic moment. California has led the nation in installed wind capacity uninterruptedly for nearly 25 years, ever since the first wind farms were built there in late 1981, and at one time the Golden State was host to more than 80 percent of the wind capacity in the entire world.”

It obviously begs two questions:

What Texas done to enable developers to grow so quickly, and what has California done to lose its leadership?

Here’s the other quote from the AWEA site that I liked – basically, wind may have along way to go, but it is accelerating.

“The U.S. Energy Information Agency (EIA) estimates that slightly less than 10,000 MW of new natural gas plants will be brought online in 2006, and that less than 400 MW of new coal- and oil-fired generating plants will be added, making wind power second only to natural gas in new capacity and new power generation for the second year in a row.”

For people interested in more research – the AWEA has a good fact sheet on wind economics available as well.

Recommended Climate Change Reading

I just read a superb report writtend for the nonpartisan Civil Society Institute called Seeds of Opportunity: Climate Change Challenges and Solutions by Professor Lloyd Dumas of University of Texas at Dallas. The report does two things exceptionally well:

  1. It conveys the extremely strong likelihood of climate change occurring (and its consequences) in the most balanced (non-hyperbolic, non-dogmatic) yet thorough manner I’ve ever read.
  2. It points out the strong rationale for early action, on a variety of different fronts (a diversified portfolio approach), to address the issue, which when pursued should enable significant commercial opportunities for at least some parties (i.e., early movers).

Because it is (I think) uncommonly well-written, and from a source not likely to be seen as a tree-hugger, this document should be required reading by ambivalent/skeptical audiences (especially private sector) – especially to become supportive of more proactive policy.

BP and GE Plan Multi-Billion Dollar Clean Hydrogen Power Plants

BP and GE on July 18, 2006, announced plans to jointly develop and deploy 10 to 15 hydrogen power plants that dramatically reduce emissions of the greenhouse gas carbon dioxide from electricity generation. Vivienne Cox, BP’s Chief Executive of Gas, Power and Renewables, and David L. Calhoun, Vice Chairman of GE and president and CEO of GE Infrastructure, signed the agreement.

These electric power plants are clean alternatives to coal, nuclear and natural gas power plants. Each plant is likely to require an investment of $1 billion and create a new use of hydrogen – generating electricity on a large scale. BP and GE will collaborate on power, carbon capture and sequestration technologies.

Prior to this major announcement, BP had already announced plans for two such hydrogen power projects with carbon capture and sequestration in Scotland and California, both of which will use GE technology. In California, BP and Edison plan to invest $1 billion for a large scale plant in Carson near BP’s current oil-refining operations that heavily use hydrogen to produce cleaner, high-octane gasoline. As a byproduct, the plant is likely to be a low-cost source of hydrogen fuel for the hundreds of hydrogen cars and buses already on the road in California.

The planned 500-MW hydrogen-fueled power plant in Carson, near Los Angeles, would increase use of hydrogen in California by 2 million metric tons per year. Petroleum coke produced at California refineries would first be converted to hydrogen and CO2 gases, then 90% of the CO2 would be captured and separated.

BP and Edison Mission Group, hope to complete detailed engineering and commercial studies for the Carson project in 2006, finalize project investment decisions in 2008 and bring the new power plant online by 2011. Once operational, the Carson project would produce 500MW of low-carbon electricity, enough to power around 325,000 southern California homes. The facility would also capture and permanently store about 4 million tones of CO2 a year.

David Calhoun of GE, “This initiative will demonstrate that our companies’ leading-edge technologies can make hydrogen production efficient, reliable, and economical for large-scale, commercial power production. Our financial strength will ensure it happens now globally, changing the way we envision our energy future.”

“The combination of coal gasification and carbon capture and sequestration is crucial for clean coal development and presents great opportunities for countries with substantial reserves of coal such as the USA, China and India,” says Lewis Gillies, BP’s Director of Hydrogen Power.

If applied to just 5% of the new electricity-generating capacity that the world is projected to need by 2030, this combination of technologies could potentially reduce global CO2 emissions by over 500 million tones of CO2 a year by 2030, equivalent to removing more than 100 million cars from the world’s roads.

John Addison is publisher of the California Hydrogen Report, a Board Member of the California Hydrogen Business Council, and a frequent conference speaker.

Complete Article and Diagrams

China’s Attempt to Balance the Environment and a Rapidly Growing Economy Drives Innovation and Investment in Renewable Energy, Water and Healthcare

With China’s growth at double digit rates into the first half of the year, the environmental concerns and pollution problems are escalating as quickly as the economy, with an estimated 76 reported pollution incidents in the past 8 months. The impact of rapid industrialization has created massive environmental problems in the water air and soil, creating disease and multiple health problems for people living in the affected areas. China is working to create and restore balance and harmony in their environment through pending law, regulation, and investment in new technology. Public companies Vitasti, Inc. (OTCBB: VITS), CECO Environmental Corp (NASDAQ:CECE), Hendrx Corp (OTCBB: HDRX) and Bridgetech Holdings International, Inc. (OTC.PK: BGTH); in renewable energy, air and water treatment and healthcare discuss how the serious problem of pollution has created business opportunities for their respective sectors.

The All China Environment Federation (ACEF) was launched in Beijing in 2005, receiving backing from high-level government officials as part of a movement to show that China is becoming very serious about the environmental damage and repercussions of the rapid economic growth. It’s receiving global support as evidenced by The World Bank loan of $668 million to the People’s Republic of China to support projects to address environmental problems and developing transport infrastructure. China may be positioning to change its global image from environmental disasters to an environmental leader, as it was recently recognized as the world leading investor in renewable energy. In order to pave the road to change, China is changing policy and legal framework to incite investment and innovation in technology.

Renewable Energy; Regulation and Investment Driving the Sector

China has set a target of twenty percent of its power to come from renewable sources by 2020. That kind of aggressive strategy sets the stage for renewable energy companies to participate in the anticipated growth in wind, solar and energy efficient technologies.

Wind energy technology is on the rise and China’s largest wind electric power generator manufacturer, Goldwind Science and Technology Co. Ltd., is currently pursuing a U.S. IPO, following on the tracks of several renewable IPO’s. The company plans to go public to finance its anticipated substantial growth as China demands green energy solutions as evidenced by its 6 billion U.S. investment in renewable energy in 2005.

Vitasti, Inc.’s (OTCBB: VITS)Director , Mr. deDelley, a wind farm developer targeting China commented “ The stage is set to provide environmentally friendly power to fulfill the needs of a electrically thirsty nation and stave the pollution associated with the massive developments China is experiencing. Our Company, Vitasti/Welwind ,has been moving projects ahead to develop 1000 megawatts of wind powered generation along the coast of the south China sea. All levels of government and industry are accepting the wind technology with great enthusiasm and willingness, making our work easier. “

Mr. deDelley went on to state” With the political and industry relationships Welwind has forged within China we are looking at continued support to advance the projects and to ensure successful wind farms, creation of rural employment, mitigation of pollution, and provide a greatly needed commodity : wind powered electricity.”

Chinese officials have announced plans for the country’s first energy “basic law” passed by the legislature in two years with a goal of reducing national energy consumption by 20 percent from 2006 to 2010 and creating an energy-efficient and environmentally friendly society. The law would encourage domestic energy exploration and international energy cooperation, optimize energy reserves and emergency response systems, scaling and development of renewable and new energies and enhance energy efficiency.

The China Environment Fund,, a leading VC fund in sustainable investment in China is investing in energy efficiency, solar and bio-diesel.

China’s Water and Air Pollution and Solutions

Recent news in China including the toxic spill into the Desha River have made China’s officials and global leaders take action into addressing the urgent environmental and water issues. It’s currently estimated that 300 million people, representing one-quarter the population, drink unsafe, water. Additionally, only one third of the 3.7 billion tons of wastewater discharged is treated.

China is taking steps to create law and regulation to address critical water issues including recently ratifying an international treaty to preserve the marine environment and prevent pollution on the high seas.

Global funding to address water problems has been approved by the World Bank. The World Bank’s Board of Executive Directors recently announced loans of $668 million to the People’s Republic of China in support of four projects to address environmental problems including water treatment and waste treatment.

Hendrx Corp (OTCBB: HDRX), a manufacturer of water purification technology with operations in China describes, “Senior management of our company is evaluating our current capabilities and seeking complimentary engineering, service and reporting capabilities to remedy and prevent future occurrences that will harm the environment. Our objective is to use computer age technology and instant monitoring of contributing factors that may predict future weaknesses and thereby enabling operating management to implement the appropriate safety measures.”

According to a Hendrx spokesperson, “In as much as the regulatory agencies have not yet begun to create the inquiries, we expect that we will be able and ready to respond to such inquires as they are forthcoming. Realistically, we don’t expect any one entity to be selected to find a solution to the different challenges; rather we expect to be part of a team that will over time solve the total problem.”

“Hendrx is in a unique position to be optimistic about our chances to be part of the “problem- solving team” because we already have more than 200 employees in the Fujian province of China. Our technical know how and our reputation is well respected on both sides of the Pacific.”

In terms of air pollution, according to a 2006 report by the World Watch Institute, China is home to 16 of the 20 cities with the most polluted air in the world.

According to Phillip DeZwirek, Chairman & CEO of CECO Environmental (NASDAQ: CECE), a world leader in clean air solutions, “CECO Environmental is the largest independent air pollution control company in N.A. and having been in business since 1907 has established a customer base of over 2000 companies including most of the Fortune 500. As many of our customers have established manufacturing operations in China they imported our technology and expertise into their Chinese facilities. Chinese based companies recognized the multiple benefits that CECO’s environmental installations brought to these new U.S. owned factories and are now hiring CECO to solve their environmental challenges. The market for air pollution control systems in China is vast and with the imminence of the 2008 Olympics plus the pollution potential from the rapidly expanding Chinese economy the demand for all methods of pollution control is and will be enormous.”

Healthcare – The Impact of Air and Water Pollution on Human Health

If you survey any average person on the street that saw Julia Roberts play Erin Brockovich, they can make the instant connection that industrial water pollution can cause multiple forms of cancer. It’s no different in China, but the problem is multiplied beyond anything North America has experienced. Last November, for example, a factory explosion resulted in benzene, a cancer-causing chemical linked to forms of leukemia, to run into the Songhua River, effecting millions of people in northeast China. More recently, the Dasha River was contaminated when a truck overturned dumping in 60 tons of potentially carcinogenic coal tar.

According to a 2006 report by the World Watch Institute, (, “a Chinese research institute found that 400,000 premature deaths are caused every year in China by diseases linked to air pollution.”

Bridgetech Holdings International, Inc (BGTH:OTCBB), a medical and healthcare company sees China’s environmental situation creating a major impact on the country’s healthcare, as well as influencing the product mix their company is bringing to the Chinese market.

According to Michael Chermak, Bridgetech’s Chairman & CEO, “Over the near term Bridgetech will specialize in introducing oncology products. This is a direct response to the fact that China is experiencing dramatic changes in the types of cancer and in the overall cancer incident rate. This rate is growing at the unprecedented pace of 3.3 percent per year. The environmental problems associated with rapid industrialization, like coal fired power plants, certainly contribute to this high growth rate. The growth of cancer has affected women most severely. In the last fifteen years the incident rate for women has grown from 89 per 100,000 women to 138 per 100,000. For men it is now at 200, up from 148. “

At present, Bridgetech is very encouraged by developments in China’s regulatory system. The government’s moves to protect intellectual property and to stem the favoritism and traditional practices in China’s product distribution system hold much promise for Bridgetech’s future because they will allow the company to introduce the very best in foreign technology with less fear that technology might be unfairly appropriated and because the company will be able to apply professional business practices to more effectively distribute its products throughout China. Faced by the demands of a evolving healthcare system and challenged by sudden changes in the nation’s epidemiological profile, China’s State Food and Drug Administration recognizes the need to supplement its domestic pharmaceutical industry with foreign medications and is proving a fast track to approval for medications that have undergone the approval process of other regulatory agencies such as the U.S. Food and Drug Administration. This is another positive development for Bridgetech because these are exactly the types of medications the company is seeking approval for.

The Ultimate Goal

We often hear and use the expression “follow the money” to watch and understand industry trends. In China, it’s a case of “smell the water and the air” to understand what is needed and where the money should be going in China.

Ironically, information on disasters and health crises may not always be available to the public if the Chinese government has its way, based on newly drafted legislation that will allow them to fine newspapers up to $12,000 if they report on these types of emergencies without first getting permission.

But we won’t be in the dark completely if renewable energy companies like Vitasti have their way. As Vitasti, Inc states, “The country knows that it cannot proceed with the economic development and ignore the environment in future growth”

Consumers in China are readily embracing the environmental movement as evidenced by recent info released by Greenpeace International stating that their surveys showed Chinese consumers were prepared to pay more for environmentally friendly PCs than any other country. It’s a step towards the ultimate goal of creating balance and harmony with technology and the environment.

The environmental race is one that China cannot afford to loose and based on recent news, they are making serious efforts to repair the damage of the past and find solutions for the future. The question remains – are they moving fast enough? The outcome of the balancing act of managing rapid economic growth and the environmental concerns will impact the world for generations to come as the pollution moves outside of China’s borders. Disclaimer:
©Copyright InvestorIdeas 2006

The Trendy. The Cool. The Energy Geek.

What happens to the trendy and the cool who lay out serious cash for solar photovoltaic panels? Like drivers of the Toyota Prius, they become energy geeks, according to installers for the German solar outfit, Conergy.

Some Prius owners aim for a distinguishing statement by driving a car that is, by distinctive and unmistakable design, trendy and cool. Beyond the ecological feel-goodness and the desire to save some bucks on petrol, driving a Prius is about making a statement. But once behind the wheel, I have heard, the Prius driver becomes fixated on fuel-efficient driving techniques. Saving energy at the pedal becomes a game, a challenge.

At the ASES Solar2006 conference in Denver, I heard a variation on the Prius story. Solar electricity is not the most economical green energy technology, nor is it the one with the best near-term mass-market adoption promise (look instead to the likes of biomass, solar thermal and geothermal). It does, however, instill in some people an ecological feel-goodness to produce electricity from the sun, and, as a PV installer from California commented – to much nodding from the crowd – it does offer the PV buyer an opportunity to retaliate against the electric utility.

Yet, for the trendy and the cool, PV is where it’s at. These PV buyers are not looking to save kWhs or to stick it to the utility; energy efficiency is of little concern. They are in it for the cool factor. But once the panels are in place and the meter starts running on an on-grid PV system, these PV owners become fixated on kWh savings. It’s only after the PV owner sees the panels generate power that the PV owner begins down the road of energy efficiency, replacing incandescent bulbs with CFLs, insulating the attic and taking other efficiency and conservation measures to get the most out of those panels. As with the Prius driver, saving energy becomes a game, a challenge.

I have been trained that energy efficiency is the first step on the road to clean and green. Once a building has been analyzed with blow-door tests and infrared scans of hot and cold spots and appropriate measures to tighten things up have been accomplished, then, and only then, do we recommend PV. For “the trendy and the cool, on-grid” customer segment, the energy efficiency-first approach is entirely backwards. For marketers, that’s a valuable nugget to toss in the strategy bag.

Other going on this week
There were two electric cars parked on the main streets of Telluride, Colorado early this week. The GEM is made by Global Electric Motorcars, LLC a subsidiary of DaimlerChrysler. The Ĭt car (It™ is Electric) is a Canadian import. Both cars charge off standard 240V.

Go see “Who Killed the Electric Car” and gird yourself for the advertisements that General Motors created to “sell” the EV1 electric car. Creepy. Once you’ve seen the movie, pray for the GEM and the Ĭt car. I’ll be looking for marketing for these two babies – but will likely have to move to another state or country to catch it first hand.

Cleantech blog

Los Angeles World Airports (LAWA) opened the first public access hydrogen station in the nation in October 2004. The station supports the fleet of five hydrogen vehicles used daily near Los Angeles International Airport (LAX). It is available to the growing hydrogen fleets at the City of Los Angeles, UCLA, Toyota, Honda, and soon others. It is part of the California Hydrogen Highway.

The station is a jointly funded by BP, Praxair, LAWA, South Coast Air Quality Management District, California Energy Commission and the U.S. Department of Energy, all of which helped fund the $1.5 million construction cost. For station funding partner, BP, this is part of their $8 billion investment in alternative energy. Industrial gas giant, Praxair, is the station operator.

Within transportation, aviation accounts for about 13% of CO2 discharges according to the United Nations Intergovernmental Panel on Climate Change (IPCC). Because the entire industry is committed to jet fuel, reducing this percentage will be difficult. Airport operator, LAWA, has no control over the airplane emissions in the air. On the ground, electric generators are available so that running the tail jet engine is not required to run air conditioning and other accessories. LAWA has taken an active role in reducing the emissions of ground vehicles. These vehicles account for about 50% of airport emissions.

Since 1993, LAWA has been buying vehicles which reduce smog-forming emissions and which reduce greenhouse gases. LAWA now has 490 alternate-fuel vehicles at the four airports which it operates – LAX, Ontario International, Palmdale and Van Nuys. At LAWA, I met with Dave Waldner, Alternative Fuels Fleet Manager, who has been reducing emissions for over 13 years. He is justifiably proud of running the second largest alt-fuel fleet of airport vehicles in the country.

He explained that early success started with compressed natural gas (CNG) in vehicles in 1993. Then liquid natural gas (LNG) was used in transit buses. LNG provided for longer-range than CNG. With oil prices increasing over 50% annually, CNG has proved to lower fuel cost. LAWA has secured very favorable long-term contracts, paying a little over $3.00 per thousand cubic feet of natural gas. CNG is also available to the many independent fleet operators and individuals using airports. LAWA encourages independent operators to use clean vehicles that use CNG and hydrogen. Clean Energy operates public CNG stations at LAX and Ontario.

An easy way to reduce emissions is to encourage people to ride together. For its own employees, LAWA has 70 Van Pools. There are also three pool fleets of 30 vehicles each. Many of these vehicles are hybrids, CNG vehicles, and five are new DaimlerChrysler F-Cell hydrogen fuel cell cars. The only emission from the F-Cells is water vapor.

Complete Article

Renewables to the Rescue?

This past week in Denver, the American Solar Energy Society (ASES) held its annual conference, Solar 2006. The theme of the conference was “Solar Energy: The Key to Climate Recovery”.

The first two days of the conference featured several of the leading scientific experts on climate change, including NASA’s James Hansen and NCAR’s Warren Washington. The uniform view was that it was basically too late to avoid climate change – it’s already here and happening at a frighteningly accelerating pace – and that it was getting close to being too late to avoid catastrophic planetary damage. The best we can hope for is containing future impact to modest levels, and even this would require a massive and rapid shift to much lower carbon energy. To prevent widespread loss of species and coastal areas, it is suggested that the U.S. will need to reduce the absolute quantity of annual CO2 emissions by 60-80% from today’s levels by 2050 – which frankly seems beyond reach. Failing that, all we can do is become more adaptable as a species to the sweeping global climatic changes that are inevitably forthcoming.

All of which was terribly depressing, seemingly hopeless. Fortunately, the last two days of the conference were a little more inspiring.

The Chair of the conference, NREL’s Chuck Kutscher, asked experts from each of the segments of renewable energy and energy efficiency to quantify the economically/technically plausible deployments of these technologies in the U.S. by 2030, to see if we could get onto a path of 60-80% CO2 reduction by 2050. When each of these independent analyses was added together, the overall conclusion at the closing session was that it was indeed viable for the U.S. to achieve the dramatic emission reductions that are estimated to be necessary to avoid catastrophic climate change.

In seeing the summary results of this broad integrative effort, I found some questionable assumptions, and certainly additional analytic refinement through a robust peer review process is required to make the conclusion unassailable by critics. And, the analysis was silent on the undoubtedly large economic costs of making such a huge transition in the energy system. But, there was undeniably some comfort that the energy path required in the U.S. to avoid really bad global damage is probably doable, though it certainly will require huge and immediate political will that sadly seems lacking.

The conclusion of this initial scoping study also made sense in that it requires intensive effort on all dimensions of alternative energy – renewable supply and demand reduction – to achieve the overall goal. In other words, there is no one single “silver bullet” solution to our energy/environmental challenges. Solar alone can’t do it, neither can wind, nor can biomass, nor efficient building technologies. All of the tools that we have available to us must be used thoroughly if we’re going to get to where we need to go.

Next year, the theme of the annual ASES conference will be “Solar Energy Puts America to Work” – discussing solar energy as an economic development vehicle, in addition to an environmental savior. Hopefully, this message will be less threatening to those in denial about climate change, thereby generating stronger political impetus for alternative energy. We hope to see you in Cleveland next July for Solar 2007.

German Superconductor Manufacturers Found Industrial Association

Disenchanted by what many consider years of neglect by the German government the superconductivity community in Germany has banded together to advance the industry.  Eight manufacturers of material and components for superconducting systems have founded the industrial association Industrieverband Supraleitung (IV Supra).  

The German superconductor industry hopes to realize the same success historically achieved by the German photovoltaics, wind, and nanotechnologies industries.  The goal of the association is to inform politicians and the public about the utility of superconducting technology for a sustainable and reliable energy supply.

“We are already able to present marketable products, but the utilities, which are very conservative and politically strong, will not buy into them without political pressure and legislation to support superconductor technology,” said Werner Prusseit, President of the association and also CEO of THEVA Dünnschichttechnik GmbH.  “Through our three goals of publicity, networking, and political lobbying, we hope to bring superconducting technology into widespread use, and also to support the development of new products.”

Joachim Bock, spokesman and First Deputy for IV Supra, as well as Vice President and CEO of Nexans SuperConductors GmbH, said: “At present, clean coal and renewable energy receive a lot of attention and outshine other technologies.  Especially in Germany there are a lot of economic incentives for renewable energy.  We should have something similar for superconductivity, which reduces the consumption of energy.  There are hardly any innovative concepts to increase the efficiency of the electrical grids and to improve the way energy is used; superconductor technology is one of them.  Superconductor technology provides intelligent ways to use electrical energy, and we have to communicate this fact to the decision-makers who can provide the political and financial support to implement superconductor technology in the power system.”

“It’s all about energy efficiency,” Bock added.  “Hence, we are proposing pilot and reference projects which are already very advanced, or which will have a big impact.  Typical applications will be generators and motors, fault current limiters, power cables in urban areas, energy storage systems, and bearings/levitation.”  The association also plans to promote the development of HTS wire for power applications.

U.S. Provides Example for Superconductivity Program

Prusseit suggested that a new German push for superconductor development could support research and development the way the U.S. system does: “In the U.S., superconductor development is driven by projects and system studies from the DOE and DOD, which even give orders to private industry.  Here we need similar system studies to demonstrate the feasibility and reliability of the technology.  

Some additional information on the IV Supra’s goals and planned activities, funding targets and strategies, and information on how IV Supra intends to leverage off Germany’s nanotechnology, solar, wind, and other cleantech industries is available in Superconductor Week, Volume 20, Number 14.  

The founding members of IV Supra are: Adelwitz Technologiezentrum GmbH, Adelwitz; Bruker BioSpin GmbH, Karlsruhe; ERT Refrigeration Technology GmbH, Hamburg; European High Temperature Superconductors GmbH & Co. KG, Hanau; Evico GmbH, Dresden; Nexans SuperConductors GmbH, Hürth; Theva Dünnschichttechnik GmbH, Ismaning; and Trithor GmbH, Rheinbach.  The company Oswald Motorentechnik has reportedly also agreed to join.

Mark Bitterman, Executive Editor, Superconductor Week

Values & Vehicles & Advertising

On June 29th, The Washington Post printed a full-page ad, “Driving American Innovation.” Paid for by Ford Motor Company, it touts Ford’s foray into ethanol. The next day, on the front page of its business section, The New York Times covered Ford’s plans to focus less on hybrids and more on flex-fuel vehicles, because, the car manufacturer explained, flex-fuel “takes little new investment.”

In the ad, beneath a giant highway sign for a fictional Interstate E-85 and two ears of green and yellow corn, Ford says: “Announcing the Midwest Ethanol Corridor, a brand new way to drive between Chicago and Kansas City, made possible by Ford Motor Company. With filling stations delivering E-85 ethanol along the I-55 and I-70 corridor, it’s an innovation that’s reducing America’s dependence on foreign oil. Visit or for more information and exact locations.”

This “innovation” (ethanol from corn as depicted in the ad) was discovered decades ago, but who’s (ac)counting. On the upside, Ford’s chief told The New York Times that the venture into flex-fuel vehicles is part of a broader program to produce cleaner, more efficient vehicles. A couple of days after Ford’s announcement, a contributor to The Denver Post, a student of sustainable agriculture in the Midwest, explained the biological limitations and environmental downsides of ethanol and argued for fuel efficiency and hybrids. (No matter. Ethanol has arrived, and it’s growing. Senator Ken Salazar applauded the opening of Colorado ethanol plants in plenary remarks to Solar2006, a solar conference held this week in Denver.)

In the Times article, in the jump to page two, Jo Cooper of Toyota and Mark LaNeve of GM comment on motivations behind customer car purchases. Toyota’s Cooper told the paper that hybrids appeal to customers for a variety of reasons, beyond fuel economy: “‘…People love them because they’re different. They love them because they feel like they’re making a contribution’ to helping the environment.” Toyota understands customers. LaNeve of GM told the paper: “The Japanese reputation for fuel economy really got set back in the ‘70s. This shows you how long it takes, how embedded some customers’ opinions are, and how long it takes to change those opinions.”

Building a brand image around fuel economy, or consumer interest in the environment, public health or national security, takes time, yes, but car manufacturers have to earn it, too – which means segmenting your markets and delivering. It means understanding customers’ multiple values and attitudes. Not everyone wants a Hummer; not everyone wants a hybrid. And not everyone wants a hybrid for the same reasons. Marketing strategy and communications should reflect, and respond to, those different values and attitudes.

The public is reading about inequality and the American dream (The Economist), climate change (Time magazine and elsewhere), Iraq/Iran and oil (you pick), the rising and uncertain price of petrol (throw a dart) and the connection between terrorism and current energy policies (Center for American Progress and Foreign Policy magazine via The New York Times). What does GM read, The Detroit Navel-Gazer?

A perusal of vehicle ads in Rolling Stone’s 1,000th issue (May 18-June 1, 2006) suggests so. GM’s Hummer3 (starting at $29,500, no fuel estimates) leads the car ads: “Now you can get one before you ink the record deal.” The second car ad – at the other end of the values spectrum – is for Toyota’s Yaris Tames (starting at @12,405, 40mpg). In the next ad, BMW sells the fuel efficiency of the Mini Cooper in a joint message with The Nature Conservancy – whose logo takes up a third of the page. (“Let’s make room for mother nature. Let’s not hog the road or the page. Let’s conserve space as well as fuel. Let’s leave a small footprint and an even smaller tire track. Let’s hug trees as tightly as we hug corners. Let’s motor.”) Escalade goes for a big, shiny, bling ad – which makes me wonder how soccer-driving moms feel behind the wheel of an Escalade. (Like Crystal champagne, the Escalade is a hip-hop brand-of-choice). Chevy’s still musing egocentrically about innovation. Ford tries to get hip using the singing duo Klik – and a malfunctioning vending machine: “Life.” Finishing off its presence in Rolling Stone, GM chooses a vertical, washed-out ad…on leaky oil. (“It’s amazing what you’ll forget when you own a GM certified used vehicle.”)

Yes, it’s amazing. In mid-June, E&ETV interviewed US Representative Bart Stupak (D-Michigan). I distinctly remember his sleekly coifed salt-and-pepper hair and his comments about the habits of the American car buyer. He said Americans want big SUVs – that’s what “his” people in Michigan want – and so, that’s what GM sells. I was astounded.

Harper’s Index
Factor by which Hummer sales in April exceeded those a year earlier : 3
Percentage change in average U.S. gas prices over that year : +80
Volume of new reserves added by major oil companies in 2005, expressed as a percentage of oil pumped that year : 51
Ratio of the amount of energy used in producing corn ethanol to the amount yielded when it is burned in gasoline : 1:1
Ratio of the amount of energy used in producing gasoline itself to the amount yielded when it is burned : 6:5

Kick the Oil Habit
The Center for American Progress Action Fund explains its campaign, “Kick the Oil Habit”, on E&ETV. The Center is taking a consumer-oriented, popular-culture outreach strategy using TV and other mediums to motivate the American people to reduce their addiction to oil. Log on and send a message to Exxon, Chevron, BP, Shell, Valero, and ConocoPhillips.

Disturbing statistics
The New York Times ran an article, interestingly juxtaposed below the Ford article on flex-fuel vehicles, on carbon emissions by the oil industry with a graph titled, “Burning more energy.” “For all the interest in alternative energy sources, the world economy remains highly dependent on fossil fuels, with consumption of them expected to double over the next 25 years. As a result, the oil industry is under increasing pressure to control carbon dioxide emissions that contribute to global warming. Without controls, emissions are projected to increase at a faster rate than over the last two decades.”

The Economist Roundup
Periodically, I peruse the issues of my father’s annual Christmas gift, a subscription to The Economist, looking for signs that clean energy matters to the globalized market set. (I can mitigate the cognitive dissonance of this activity by limiting my concurrent intake of Harper’s Magazine, The New York Times, and magazines like yes! and Plenty.) Last week’s roundup lassoed two articles on wind power (“Wind power in Texas, Blowing Strong. The oil and gas state is bullish about a new sort of energy” and the Blowhard piece “Wind power has propelled Tulsi Tanti into the ranks of India’s corporate titans.”) There are no ads for anything related to clean energy. There is, however, a call by McKinsey & Company for petroleum consultants. McKinsey is expanding its global services in petroleum exploration and production, refining, trading, and/or marketing activities. The ad is titled, “Fuelling the Future” (with two ‘l’s).

Unversity Solar Car Challenge Time Again

A friend sent this over today, and I thought it was interesting to blog on, most of the commentary below is his reprinted. Thanks Chris. Also check out a blog we did a while back on the World Solar Challenge in Australia.

Beginning on July 16th, high school students from the US, Puerto Rico and India will travel to Texas Motor Speedway to compete in the 11th annual Dell-Winston School Solar Car Challenge, a race tasking students to design, build and race their own solar powered cars. This year, the Sundancer Solar Race Team, from Houston, Miss., will attempt to win the Solar Car Challenge for the sixth year in a row. You can track their progress this year, at the Sundancer Blog, where the team will be uploading photos and providing written updates both as they prepare for the event and during the actual race.

The Sundancer Solar Car is powered by photovoltaic solar cells manufactured by SCHOTT, one of the world’s leading providers of innovative solar energy products.

Check out the links below to learn more about the Dell-Winston School Solar Car Challenge and the Sundancer Team in particular.

A few other solar races to check out if you are interested:

Death of Enron Founder Ken Lay

Enron founder Ken Lay died today, apparently of a heart attack at age 64. Despite the massive scandals and fall from grace of Enron, I still have a great deal of respect for what Ken Lay and the company he built accomplished over the past 20 years.

On the good:

  • Built a $100 Billion/year business, to become one of the top 10 largest companies in America. One of the few meteoric rises in a traditionally slow moving energy industry in the last half century.
  • Driving force behind electric utility deregulation in the US.
  • Made a staid little gas pipeline company a global household name.
  • Helped introduce whole new industries in from things like trading broadband to independent electricity retailing, and spawn whole new financial products – and if not created, at least drove the concept of convergence of telecom, gas, and electric utilities, into the market.
  • Introduced a freewheeling, dealmaking culture into an industry that often struggles to get out of its own way. At one time, virtually EVERY utility in the country, if not the world, was advocating a “be like Enron or get squashed” strategy.

On the bad:

  • Presided over the fall of said company, now the largest bankruptcy in history, reputation tarnished with scandal after scandal – and today viewed as at best a house of cards, at worst an utter fraud.
  • Presided over a range of alleged and proven securities frauds from insider trading, to accounting fraud, to stock manipulation.
  • Fall of Enron, coupled with significant difficulties in the bellwether California deregulation model, helped topple signficant advancements towards deregulation, and may have brought a complete stop to future US power market deregulation for years to come.
  • Even at his trial, was unable to shake the fraud allegation that he was selling his own Enron stock while telling his employees and the market he was buying, and asking his employees to buy as well.

Love ’em or hate ’em, take the good with the bad, Ken Lay and Enron certainly made their mark. I’m not sure I could do better even with all the stars aligned in my favor. My condolences for the Lay family in their time of sorrow.

What, We Worried? Yes!

RBC Capital Markets recently conducted a survey that shows the widespread worry, perhaps despair, that Americans have about our energy situation:

  • 53% think energy problems will not be solved in their lifetime
  • 80% think high energy costs are not temporary

The good news, if any, from this survey is that maybe the dissatisfaction will – finally, eventually – spur real political action:

  • 84% say they will consider a candidate’s positions on energy in the next election
  • 91% think steps are necessary to dramatically increase energy conservation and alternative energy sources
  • 77% recognize that wind and solar energy require government support

I hope that voters walk the talk this November.

RBC Capital Markets survey

They Can’t Handle The Truth

By now, I’m sure every reader of this blog knows about Al Gore’s movie on global climate change, An Inconvenient Truth. Reputable scientists have generally given the movie excellent marks on the accuracy and reliability of the information presented.

USA Today article

Of course, that hasn’t completely stopped the few remaining global change skeptics from maintaining their positions. The Competitive Enterprise Institute is one of the clubhouses where the willfully oblivious gather and continue to spout spurious and misleading arguments based on selective facts and other half-truths.

Competitive Enterprise Institute

I am beginning to see that the media is finally tiring of the charade. In May, Vanity Fair exposed that many of the same players who long denied the linkage between smoking and lung cancer are now being employed in the current misinformation campaign denying global climate change.

And, I was really pleased to see an account of this exchange on NBC, as reported by Fortune:

“The chief science correspondent for NBC News, had a great line Thursday night when Brian Williams asked him if it was fair to say the debate had ended on whether or not global warming exists and if human beings are the cause.

“You could find someone who believes the earth is flat and put them together with another person and have a debate on it, Bazell said. But that wouldn’t make the earth flat.”

Fortune article

Well put indeed.

Cleantech, Biofuels and Fuel Diversification

Bio fuels along with solar are rapidly becoming one of the twin cylinders of the Cleantech industry. Jim Fraser on the Energy Blog has a very interesting blog this week triggered by Washington Post article about the availability of biofuels feedstocks as a limiting/contributing factor to bio fuels growth.
My belief is that if the economics work, the market manages to push the envelope a lot further than a resource availability study would have predicted, and if the economics do not work, nothing happens anyway. Private industry proves to be extremely more innovative and resourceful than the study can ever predict.
So I never feel that these types of analyses add a huge amount of value beyond initiating a debate. We did an earlier blog about an NREL analysis questioning whether the ethanol industry would have to move towards cellulosic technologies as too much of the US corn crop was needed for animal feed. Our analysis, the current superior economics and lower switching costs of corn based ethanol will win out. Farmer’s are smart, the substitute rather rapidly when the economics are in their favor. We expect to see signficant subsitution of corn into fuel crop use over feed at much lower prices than others have. The real drivers keeping corn ethanol afloat over cellulosic will be sheer process economics (most cellulosic process are not only more costly, the feedstock has severe transport issues), and ease of switching costs (relatively high with new crops like switchgrass, and very low with corn).
The Energy Blog’s response to this debate is to champion fuel diversification, PHEVs, EVs, fuel blends, bio fuels, etc., as the solution. With this I wholeheartedly agree. The idea of fuel diversification and fuel switching as a core part of the US energy strategy and the Cleantech debate needs a lot more attention.

Environmentology: Honda thinking in action

Wednesday, June 28, 2006

I live in a part of the U.S. that is at once tied to the economies of extractive industries, and perceived as the land of outdoor adventure. These two activities conflict, mightily. And they make for interesting party conversation.

Bill LeBlanc of the Boulder Energy Group (“BEG…for more”) threw his annual summer fête this past weekend – complete with volleyball net, burgers on the grill and progeny of all ages. We sought shelter from a torrential hail storm that rained down for many minutes, infusing the front porch with the pungent scent of shredded garden mint. Unlike the deluged U.S. east coast, we need the rain.

I spoke with energy folks from Architectural Energy Corporation, WellDog, Southwest Energy Efficiency Project, and ESource as well as graduates of Rutt Bridges’ Bighorn Center. WellDog based in Laramie, Wyoming, manufacturers a device that accurately and quickly identifies sources and quantities of natural gas in coal seams. (The ecological defense…if we’re going to drill, and we will, we might as well reduce the destructive practices of frac’ing and water production.) Southwest Energy Efficiency Project (SWEEP) promotes energy efficiency through legislation and outreach programs. ESource, which originated at the Rocky Mountain Institute and recently spun itself off from McGraw-Hill/Platts, serves utility clients. The engineers at Architectural Energy Corporation (AEC) advise in the sustainable built environment, and Bill’s Boulder Energy Group recently completed a review of California’s utility marketing programs and presented findings through the Association of Energy Services Professionals (AESP).

Lightheaded from half a brew and altitude, I spoke with a finance professional – who has been with several IT start-ups and is now dedicated to energy sustainability. He said progress of alternate fuels will be made in the transportation sector because of peak oil, but progress coming out of concerns for climate change will be slow: we won’t see habits change because of climate change until we are building dikes around Manhattan to stem rising tides.

I agree, though rack my brain to find a really good refuting argument, because I don’t want to agree with him…hoping for a little more enlightenment. Peak oil threatens consumption and prices – our lifestyles in the immediate. Climate change threatens the ecology by which we survive – our lives.

This past Sunday, climate change made the Parade magazine (I use the term generously) cover story: “How Climate Change Affects You Right Now.” The inside story begins “Global warming is already affecting your life…and costing you money. Why You Can’t Ignore The Changing Climate.” The list of what we can do runs the gamut of conservation, energy efficiency, voting with your wallet, and demanding that government make climate change a priority and – echoing Thomas Friedman and Tim Flannery – enact a carbon tax.

I believe, Houston, we have passed the media tipping point on climate change – just as we have passed the marketing tipping point on the environment (everyone, Wal-Mart included, wants to tell a green story.) While it may well be peak oil – and increasing petrol prices – that drives switching to alternative fuels and fuel-efficient cars, and while it may be the allure of profits in ethanol that brings along suppliers, to date, it is the loftier environment – our survival – not the price of petrol or cost of insurance, that will continue to drive marketing messages, although those marketing messages and the attendant visuals will be gleeful and sunny, and absent New Yorkers building dikes.

Take this Environmentology (“Honda thinking in action”) ad for example:

“When it comes to talking about the environment, we let our products speak for themselves. In 1974, Honda introduced the ingeniously simple Civic CVCC. World-changing for its fuel efficiency and low emissions, the CVCC demonstrated our spirited commitment to environmentally responsible technology. Many other firsts were to follow, such as the first hybrid vehicle sold in North America and the first government-certified fuel-cell car. This legacy of innovation and acting on our beliefs is what we call our Environmentology. And it’s seen in every Honda product, like the 2006 50-mpg Civic Hybrid. Honda. The Power of Dreams.”

It’s this kind of marketing, social marketing, that grabs attention and holds it. But can it hold our attention long enough for people to make the connections between our consuming lifestyles and the destruction of the environment on which we depend for survival, our lives? I remember the post-OPEC go-go 80s. Can social marketing hold attention – and influence behavior – in the face of falling oil prices and increased domestic fossil fuel exploration? Will the 21st century version of the Honda Civic CVCC endure?

That’s hard to affirm from this geographical vantage point, as gas drilling undergoes a massive boom (great for WellDog) and the likes of Morgan Stanley and Houston-based Anadarko buy up local natural gas exploration companies, because of the promise of profits (not great for Colorado). And yet another college-age petitioner with a clipboard from Environment Colorado stands on a street corner appealing to the passerby to protect the wilderness from drilling. And Colorado’s governor vetos a natural gas efficiency bill supported by SWEEP and the local utility. And coal-plants are breaking ground. And the NRC has approved a nuke plant in New Mexico (after a settlement with the state…) And the CEO of Western Gas tells the local paper: “It is up to the American people. The American consumer needs to decide how much they want that balance between their energy consumption and lifestyle and preservation of pristine areas like [the Arctic National Wildlife Refuge].” The CEO, Peter Dea, is an avid outdoorsman. I just wish Dea had recognized the choice is between lifestyle and protection of the umbilical cords of life itself, not protection of pretty pristine places.

The conflict between lifestyle and life…it does make for interesting party conversation.

Other goings on this week:
For Good or Ill, Ethanol Boom Reshapes Heartland Economy in The New York Times
Wal-Mart, Health and the Environment in The New York Times
Colorado study on energy efficiency finds it’s good for business (you don’t say!)
NPR reports that GM’s solution to slow Hummer sales is the Mileage Maximizer. For $200, the “Maximizer” brings fuel efficiency from 0mpg to 5mpg, NPR jokes.

Biofuels Activity in Australia

Recently Clean Technology Australia hosted a cleantech dealer forum to brief institutional investors by CEO presentations on three listed Australian Biofuels companies with interests in Australia and Overseas. The CEOs and companies were:

Australian biofuels companies are benefiting from the increasing demand for alternative fuels as a source of energy for transportation and electrical generation. No doubt you already know that demand is being driven by a combination of factors such as climate change, high oil prices, market and government incentives or subsidies and increasing oil imports. Presenter’s explained the national and international market opportunities, the maturing of the industry, the technologies and the investment rationale including debt and equity with the prospect for solid growth and returns.

I’ve summarised a few of the key points presented below – but you should be able to find more on each of the companies at the above websites and via their ASX profile. For US readers you may find it interesting to see the external perspective on the US market.

· When compared with the usage of biofuels such as ethanol OS, Australia is at a very early market development stage. Ethanol makes up 23% of fuel market in Brazil, 3.2% in US and 0.3% in Australia. US market for biodiesel is mainly made up of smaller producers, whereas Australia is now becoming dominated by larger production facilities. There is a lot of opportunity to aggregate production, vertically integrate feedstocks in the US.

· Availability of feedstock is a large factor in how large production of biofuels in a market can grow. In the US production is supported by 80mT soy crop in US. In Australia the market can grow to around 600-750 million L based on tallow and other waste oil feedstocks.

· Oil price has significantly climbed in last year and looks set to remain high. Tallow and oil seed commodity prices are generally in decline but the availability of tallow is expected to tighten.

· Companies are looking to increase their control of the oil field – this is resulting into forays into the oil crop production market. Interestingly the oil crops in developed countries need not necessarily compete directly against food crops.

· Technology has moved from liquid catalyst to solid catalysts to improve the quality and yields from the product. There is also likely to be a shift to high quality product as the off take shifts from the farmyard tractor to $10m locomotives.

· Logistics are some of the key cost challenges that have to be considered in the construction and siting of production facilities. This presents limits to the optimal scale of plant to be developed eg 45 Million L in Australia and 250 Million L in US

· Cost Structure is US$2.73/gal cost reduced by US$1/gal Blending rebate vs. current oil price of US$3.50/gal for mineral oil. Current margins in the industry look to be around 27%-29%. 75% – 77% of cost is the feedstock price. UK has rebate of 20p per litre. Australian biodiesel market mechanisms include the 38c/L producer’s rebate.

· The varying maturity and regulation in US vs. Australia is resulting in varying financial environments for raising capital. There is a significant ability to raise debt to finance capital upgrades or purchases in the US where as in Australia debt finance is most difficult but there is significant interest in the equity markets.

For a detailed summary which includes a link to the presentations visit the Clean Technology Australia Website


Nick Bruse is the General Manager of Clean Technology AustralAsia Pty Ltd, the organiser of the AustralAsian Cleantech Forums and Dealer Forums, and the leading advocate of Cleantech in Australia. Nick does a weekly blog column on Cleantechblog profiling innovative Australian cleantech, energy, water and environmental technology companies.

Recently Licensed Gas Centrifuge Facility for Uranium Enrichment

I recently picked up a news article on the licensing by the Nuclear Regulatory Commission of what’s billed as the first major nuclear processing facility permitted in the US in 30 years. Announcement here. Called the National Enrichment Facility, it will be the only privately owned source for commercial enriched uranium. The license is issued “to Louisiana Energy Services (LES) to construct and operate a gas centrifuge uranium enrichment plant in Lea County, N.M.” LES license application and environmental report.

Description of LES from the NRC’s website, “The LES partnership is made up of limited and general partners consisting of Urenco, Exelon, Duke Power, and Entergy. The partnership intends to use Urenco’s sixth generation gas centrifuge technology that is being used in Europe. Urenco has a capacity of about 20 percent of the world’s enrichment market.” Announcement from the NRC here.

Each of the articles announced opposition from NIRS, where you find a bit of historical color. Apparently according to NIRS, Louisiana Energy Services originally tried to license a facility in 1989 in Louisiana, and pulled the application it 1997 when the NRC found that the plant siting was “environmental racism” as the site was next to poor, rural predominantly African-American towns. A full history of LES and the application process according to the NIRS is on their site here. As you might imagine, they are not particularly positive about the project or the firms behind it. Each of the press releases include US minority partners Duke, Entergy, and Exelon, but the company is a consortium controlled by European nuclear industry heavyweight Urenco, a multi-national nuclear venture. And Urenco’s annual report lists their ownership in LES at 100%, after buying out Westinghouse last year, so I’m unclear exactly what interests US concerns have in the venture.

The site for the project is, and states that construction will begin in 3Q2006 and with first production expected 2008/09. Urenco, who is also providing the technology, operates three similar facilities in Europe, and makes and sells the centrifuges.

Urenco is owned by British Nuclear Fuels (a UK government entity) a Dutch government entity, and a partnership of E.On and RWE from Germany. In 2005 it had annual revenues of 730 mm euros, operating cashflows of 460 mm euros, and claims 20% of the global uranium enrichment market, apparently a significant portion of that already in the US.

The project is slated to cost $1.4 Billion. With an equity base of only 600 mm euros, and an asset base of 2 billion euros, I haven’t figured out how Urenco is financing the project, but it with a single A credit rating, tremendous cashflows, and deep pocked owners, it looks like they would likely have the wherewithal to accomplish it.

I am one of those that views nuclear as relatively clean power source, when compared to breadth of the upstream environmental footprint of coal, gas, hydro, etc. And given that our power industry has been looking at nuclear as a key growth fuel of the future, I can’t help but think this project is a big plus for the industry. In addition, it seems from Urenco’s annual report, that US utilities are already buying from Urenco, and this facility is simply onshoring the production of enriched uranium fuel supplies, bringing more investment capital into a critical industry in the US.

Cleantech Investment Forum in Palo Alto, California

Announcement of an interesting looking Cleantech forum coming up in Palo Alto, put on by the Asia America MultiTechnology Association.

Clean Technology: Investments, Technology, and Policy

Date: Tuesday – June 27, 2006

Time: 6:00PM

Cost: $25 for Members, $45 for non-Members; +$15 after June 21th; +$15 at the door

Location: Ming’s Restaurant – 1700 Embarcadero Road Palo Alto, CA


Moderator:John Denniston – COO and Partner, Kleiner Perkins Caufield & Byers

Vikas Desai – General Manager, North America. SunPower Corp

Bryant Tong – Managing Director, Nth Power

David Pearce – President & CEO, Miasolé

David Wooley – Vice President, The Energy Foundation

Clean Technologies have the potential to reshape our future. Now the 5th largest category in venture investments, and out-performing the market by a ratio of 3 to 1, clean technologies are gaining huge attention while addressing some major global environmental issues. Energy, manufacturing, nanotechnology, transportation, water and air quality, automotive, and semiconductor industries are rapidly joining the “cleantech” movement. Rising energy prices, dependence on oil, and the rapid development of China and India are also accelerating the demand for innovative solutions to address these issues. In 2005, China became the number one investor in solar technology and its largest IPO was a “cleantech” company.

Is the U.S. getting left behind on this opportunity? Is “cleantech” just a buzz word or is it the future’s most important technology? What policies are affecting the market and potential for new technologies to emerge? What kinds of returns are expected? Is this the perfect marriage between business and a lasting, positive impact on society and the environment? Please join us as we discuss the investment, technology, and policy behind Clean Technology, and the impact on our future.

Contact Information Name: Paul Leow Email: Phone: 650.738.1480

Speaker Biographies:

John Denniston – COO and Partner, Kleiner Perkins Caufield & Byers – John came to Kleiner Perkins Caufield & Byers from Salomon Smith Barney, where he was a Managing Director and head of Technology Investment Banking for the Western U.S., and also served on the Investment Committee for Salomon’s direct investment venture fund and its venture capital fund-of-funds. Prior to Salomon, John was a Partner with the law firm Brobeck, Phleger & Harrison, where he was the head of Brobeck’s Venture Capital Practice Group, Co-head of its Information Technology Practice Group and a member of the Investment Committee for its venture capital fund.

Vikas Desai, General Manager, North America. SunPower Corp – Vikas has extensive leadership experience in the management of hi-tech power products and product teams. Having started his career as a design engineer, he has since managed product, operational and customer issues in almost every part of the world, dealing with some of the world’s largest companies in variety of manufacturing sectors. In his last role, he headed up the Global Product Management and Product Support Group at Emerson Electric’s industrial automation division, Control Techniques where he was responsible over 11 product lines with total annual revenues > $250 million. Vikas has a Bachelors degree in Electrical Engineering and a Master’s degree in Power Electronics. In 2004, he graduated from the MBA program at the Haas School of Business, UC Berkeley.

Bryant Tong – Managing Director, Nth Power – Mr. Tong has led Nth Power’s investments in Accelergy, NanoGram Corporation and Envenergy, Inc. (merged with Encorp, Inc.) and he serves on the board of each of these companies. Mr. Tong also led Nth Power’s investment in NanoGram Devices Corporation and later successfully sold the company to Wilson Greatbatch in March 2004. Previously, Mr Tong was founder, President and CEO of Pacific Venture Capital, LLC (PVC), the venture capital arm of the PG&E Corporation. At PVC, Mr. Tong led investments in the energy and telecommunications sectors. A native of San Francisco, California, Mr. Tong received his Bachelor of Science in business administration from the Haas School of Business at the University of California, Berkeley. Mr. Tong is a member of the American Institute of CPAs and also serves as a member of several industry advisory boards including the Energy Venture Fair and the Golden Capital Network. Mr. Tong also founded and chairs the China/U.S. Energy Efficiency Alliance.

David Pearce – President & CEO, Miasolé – Mr. Pearce has over 30 years of broad-based business, sales, operations and financial management experience in both private and public high-technology companies. He has been at the CEO level for the past 18 years. Mr. Pearce is a serial entrepreneur, having founded four venture-backed companies. Prior to founding Miasolé, Mr. Pearce founded two companies focused on the optical communications industry; OptCom, Inc. in 2000 and SciVac, Inc in 1997. OptCom manufactured precision thin-film optical filters while SciVac designed and manufactured vacuum-deposition equipment. From 1992 to 1994 Mr. Pearce, served as president and co-founder of JTS Storage, a pioneer in the design and production of hard disk drives. Mr. Pearce holds a Master of Business Administration from the University of Texas, Austin, and a Bachelor of Science, Industrial Management, from Georgia Tech.

David Wooley – Vice President, The Energy Foundation – David Wooley currently serves as Vice President of the Energy Foundation, with responsibility for a $17 million portfolio of grants on domestic energy policy reform. In 2004-5 he led a team that helped develop the greenhouse gas emission reduction target for California announced by Governor Schwarzenegger on June 1, 2005. From 1999-2003 he served as the Director of American Wind Energy Association’s Northeast State Policy Project. David was appointed to Governor Pataki’s Greenhouse Gas Taskforce in 2002. The recommendations of the task force led to the NY Renewable Portfolio Standard and the Northeast states’ Regional Greenhouse Gas Initiative (RGGI). David previously served as Professor for Environmental and Energy Law, and as Executive Director to the Pace Energy Project, at Pace University School of Law. David was lead counsel for a coalition of national and state environmental groups in the electric utility restructuring proceedings before the NY Public Service Commission. One outcome of the cases was the establishment of an $87 million/year fund to support energy efficiency services and commercialization of renewable energy technologies.