A look at 2007 and 2008

2007 has been a rough one for the biofuels industry. In hindsight, it will be noted as a turning point for the industry. There are three big developments that propagated during this year:

• Corn ethanol development stalled due to high corn prices and low ethanol prices. The fallout has been a receding of enthusiasm for ethanol from the financial industry and a second look from the agricultural community (not to mention consumers who don’t like high beef prices).
• Several start-up companies emerged focusing on advanced biofuels like biobutanol or cheap, non-corn ethanol. The kick-off of this initiative was the $387 Million given by the DOE earlier this year to fund several cellulosic ethanol initiatives.
• Real industry movement on electric vehicle systems (Tesla, GM, Ford, Toyota)

2007, however, should be known as a disappointment. We were supposed to have cellulosic ethanol this year. And even now, it’s still a question mark.

Who killed the flying car?

When I was a kid, I never wanted an electric car. I wanted one that flew. Like the Delorean in Back to The Future II. It’s almost 2008 and still no flying cars.

Why is that an important question? Because it underscores that maybe our dreams and our needs aren’t always the same thing. I now know that a flying car would be a really bad idea (if you doubt me, drive on the 405 in Los Angeles and then imagine it in 3D). But perhaps the design challenge wasn’t in making a car fly, but making it as ultra efficient and human-friendly (not just earth friendly) as possible.

That’s the difficulty with what the cleantech industry is trying to do, I think. While we want bigger houses and bigger/faster cars, it is coming at a price. Our environment at large is suffering. Air pollution still causes severe health effects in our cities. And gas is expensive (economically) and costly (politically) .

The electric car wasn’t killed by Big Auto, Big Oil, or SCAQMD.

We killed it.

The Energy Bill Impact

It’s done. It’s signed. The 2007 Energy Bill (officially as HR 6 The Energy Independence and Security Act of 2007) has several far-reaching policies. I wanted to take a look at two important ones: the expanded renewable fuels standard (RFS) and the increased CAFE standard.

Expanded RFS
The Expanded RFS standard, if achieved, could go a long way to reducing our petroleum-based fuel demand. I ran a few numbers using the schedule included in the bill (and the Renewable Fuel Association website) to see what type of investment would be required to meet the volume capacity requirements. If we assume that capital costs for a corn ethanol facility are around $1.50/gallon of annual capacity and that advanced ethanol facility run around $2.50/gallon, we get the following investment amounts:

This is doable, from a magnitude standpoint. It would require a lot of renewed enthusiasm around the industry. It’s important to note, not surprisingly, are that corn ethanol has a limited future and that the future of the industry requires advancements in cellulosic ethanol…right now.

Cleantech Company Directory

In continuing to develop this site, we have added a directory of cleantech companies. This directory includes companies of all stages of development, but primarily consists of start-ups. Over time, the directory will develop and grow to include additional information including investments, and stock information. Take a look »

Finavera signs PPA deal with PG&E

Finavera has signed a power purchase agreement with PG&E for a 2 MW installation to be cited 2.5 Miles of the coast of California.

From the Press Release:

Finavera Renewables has initiated development plans for the two megawatt wave energy project to be constructed approximately 2.5 miles off the coast of Humboldt County, California for electricity delivery to PG&E’s customers throughout its northern and central California service territory. The power purchase agreement calls for 3,854 MWh of clean, renewable electricity to be delivered annually to PG&E over the term of the contract. The project is expected to offset greenhouse gas emissions by displacing an estimated 245 tons of carbon dioxide (CO?) annually.

It’s not clear how long the term of the contract is (it’s stated to start in 2012).  California power prices range around the $0.12/kWh (during the energy crisis, my plant paid upwards of $0.17/kWh to get an idea of how high it can get during certain demand loads).  That would bring this deal to around $465k/yr of income for Finavera.  That’s not a whole lot of money, but it’s a great start for this project.   The exciting part comes when they get their first 100MW deal and earn upwards of $23 Million/year.  That’s clean power with no raw material inputs.  That sounds like a great business to be in.

This is a big deal for Finavera as it given them another opportunity to being the commercialization process of their technology.  They have other wave installations planned up the west coast, but this seems to be the first in California.  If it works well, then I would expect the larger agreements to be made (around the 100MW size).   California in particular is a power-hungry state and surely would be very interested in this technology if it works well in this demonstration installation.

More on Finavera: http://www.finavera.com

Nanosolar’s coming out party

Nanosolar has announced deliver of its first solar panel. This is a long time coming and indicates a great opportunity for OEMs to integrate this product into their designs.

From the Nanosolar blog:

Our product is defining in more ways I can enumerate here but includes:
- the world’s first printed thin-film solar cell in a commercial panel product;

- the world’s first thin-film solar cell with a low-cost back-contact capability;

- the world’s lowest-cost solar panel – which we believe will make us the first solar manufacturer capable of profitably selling solar panels at as little as $.99/Watt;

- the world’s highest-current thin-film solar panel – delivering five times the current of any other thin-film panel on the market today and thus simplifying system deployment;

- an intensely systems-optimized product with the lowest balance-of-system cost of any thin-film panel – due to innovations in design we have included.

The $0.99/watt jumps out at me immediately. Other companies have made claims to severely reducing the $/watt, but this is the lowest I’ve seen claimed by any particular company.

What’s not quite clear to me yet (and I only know so much about this technology) how much square footage is needed to get a given output.  Or in other words, did they reduce the numerator or increase the denominator?  Decreasing the numerator means they made a significantly cheaper cell out of a less efficient material.  While the costs on this sound very compelling, the square footage matters as there’s usually a limit to surface area for solar-based projects.  Best Buy’s rooves are only so big.  So while these panels are cheap, if they cover the entire roof, will they produce a significant amount of electricity?

I’d be interested in seeing what products/installations are developed with this technology in the coming months.

A good time to discuss PHEVs and EVs

(Detroit News Image)

I’ve been critical of PHEVs and EVs lately. Mostly because advocates don’t seem as though they are representative of the population at-large. I was in Chicago when this storm hit. A foot of snow came and buried everything. This image gives a small glimpse of what snow can do to a car. There are a few things to take away from it:

1) Where do I plug-in? This is a typical urban street – filled with apartment livers who park on the street. In a PHEV world, where do they plug-in? What if they forgot (like I forget to plug-in my phone every night and rely on recharging it in my car)?

2) This is pretty cold weather. I’ve seen metal bent and reshaped in temperatures this low. So the notion of a battery or electric motor scares me a bit. Will they withstand the cold. Will they stand-up to the salt (if the city could actually get around to salting).

3) Would you want to drive around with a plug-in without a gasoline engine? You can refill your gas in a few minutes. But recharging seems like hassle in weather like this.

Let’s be clear: I’m not against PHEVs or EVs. I actually think they’re great ideas that have some really great prospects. But they’re only one solution that meets only some of individuals’ needs. I have issues with their viability for many people in different walks of life. This recent Midwestern storm underscores my concern. The Midwest represents around 25% of the U.S. Population (consider also the demographics of similar climates in Asia and Europe). So it seems as the prospect of a sale of PHEVs or EVs would be tough.

If I had a choice, I’d much rather have a Chevy Tahoe in this condition (a hybrid would be fine – but I wouldn’t bother plugging in during weather like this). I only add this commentary to add to the debate. PHEVs are great – but they’re only part of a solution.

U.S. in Bali: We’re in.

The U.S. has agreed to participate in an environmental treaty to reduce harmful emissions.

From the CNN article:

Humberto Rosa, a Portuguese environmental official, said a standoff had come to an end when specific guidelines were removed from wording about future emission cuts.

The United States objected to the specific guidelines, saying including them was moving the process too quickly and would preempt any future negotiations.

This is a great sign. Any global climate treated is moot without the U.S. and other powerful nations. But it’s not an outright victory. It’s a victory to get to the next set of negotiations.

I’m not sure how this will turn out (I certainly didn’t see this coming). While my personal opinion is that it’s not in the U.S.’ best interest to agree to an emissions abatement treaty that puts undue weight on developed countries and not developing countries. A more equitable agreement accounting for emissions levels, economic strength, technology sharing, and more would be more fair to everyone (and actually accomplish the goal).

This not withstanding, the American people are who run this country. And while the government has dragged its feat, the private sector has been working hard to push for local policies and developing new businesses that provide new, environmentally friendly options. I hope that the rest of the world acknowledges this work as well.

Senate Expands Farm Subsidies

You read that right. The Senate passed 79-14 to expand the farm subsidies. This is clearly a political move to appease the farm states before the 2008 election. But be that as it may, even Senators from those states noted the conflict of expanding farm subsidies during the time of high corn and other commodity prices.

From CNN:

President Bush has threatened to veto the legislation, saying it costs too much and should instead be cutting subsidies at a time of record-high crop prices. He also has threatened to veto a House version passed in July.

White House opposition and criticism from fiscal conservatives has so far had little impact on the politically popular bill.

Farm-state senators deflected several attempts to derail the bill and reduce government payments to large growers. Still, even some from farm country acknowledged the bill doesn’t do enough to trim the government’s massive subsidy programs.

I don’t have much else to say about this. I’m pretty agnostic about farm subsidies. But if the objective is to keep farmers from going broke, the elevated prices we have right now seem adequate for accomplishing that goal. This bill seems ill timed. Support for ethanol and other crop-based biofuels are a means for the government to increase the value of crop land giving farmers more opportunity to generate revenue. This should, over time, eliminate the need for subsidies. Or at least I would think that’s the objective.

But what do I know?

Amory Lovins @ TED





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