Archive for March, 2009

As posted to CleanTechBlog

One of the more contentious questions in the cleantech community is the role of coal in the energy sector of the future. There’s a lot of coal in the world – many decades of supply left – including here in the U.S. It’s pretty darned cheap to mine. So it would be great to figure out a way to use it in non-harmful ways.

And there’s the rub: it’s a pretty nasty fuel. Putting aside the issue of how to mine coal in an environmentally acceptable manner, coal is one of the most highly carbonaceous of hydrocarbons, meaning that it generates a lot of carbon dioxide per unit of energy released when burned – much more so than oil or natural gas. As a result, the worldwide use of coal – primarily for power generation – is the largest component of global carbon dioxide emissions, which in turn is the most important of the greenhouse gas emissions contributing to climate change.

In the arena of climate change, coal is therefore the main culprit. Not the only culprit, to be sure, but the main one.

For coal advocates, the first line of defense is to dismiss the climate change issue outright. That tactic is still used, but is becoming increasingly untenable under the Obama Administration, which appears to be remaining steadfast in pushing for climate change legislation.

That leaves the coal industry in the position of promoting new approaches for coal utilization wherein the carbon dioxide produced from combustion is somehow prevented from being released into the atmosphere. The most well-known of these approaches is termed carbon capture and storage, or CCS.

The idea behind CCS is intellectually appealing, if a bit fantastic: extract the carbon dioxide from the exhaust stream of a powerplant, and inject the carbon dioxide underground in such a way that it stays entrained in the earth. The technological concepts are pretty well understood.

Alas, as this article in the March 7 issue of The Economist shows, the main challenge associated with CCS is the cost. CCS has never been undertaken at a large-scale at any powerplant, much less attempted for a fleet of powerplants, because the capital and operating costs of a CCS system are seen to be so high as to be daunting.

As with many things in life, a half a loaf is better than none, and so may be the case with CCS. As indicated in this article in the March/April issue of Technology Review, perhaps the economic challenges can be tackled by biting off something less than 100 percent carbon capture and storage.

Many environmental advocates can’t stand the concept of coal utilization in any guise, and decry the use of the phrase “clean coal” as an oxymoron. I don’t think we can afford idealistic dogma, but neither do I think we can afford the environmental cost of unlimited conventional coal use. There’s got to be a middle ground somewhere.

In the energy and environmental realm, I have consistently found in my 23 years of experience that there is rarely a perfect solution to any situation, and everything involves tradeoffs. Partial CCS might yield an outcome in which neither the green community nor the coal/power industry get all of what they want, but produces a far better result than the “worst-case” scenario each side fears.

As posted to CleanTechBlog.com

My colleague Carter Williams, formerly CEO of Gridlogix, which was bought recently by Johnson Controls, invited me to participate in a panel at last week’s GridEcon conference in Chicago. Because it had been awhile since I had plugged into (so to speak) the Smart Grid discussions, I accepted Carter’s offer so that I could get more up-to-speed.

If you are one of the seven people in the U.S. who haven’t pored over the American Recovery and Reinvestment Act of 2009 (better known as the Obama Economic Stimulus package), you may not know that a large pot of money – $4.5 billion to be exact – has been allocated to the Smart Grid, plus other pockets of money may also be accessible for Smart Grid development.  The Smart Grid is thus going to be the subject of a lot more attention than it has been so far. The national TV ads about Smart Grid products from GE are only intensifying that interest.

What did I learn from the GridEcon conference? I was hoping to crystallize my thinking about the Smart Grid, but unfortunately I walked away with my thinking just about as muddled as it had been. Joe Miller of Horizon Energy Group did provide a fairly good primer on the Smart Grid, grouping innovations into five technological areas: grid condition sensing/measurement, grid controls, decision-support tools (for both electricity companies and users), advanced customer-sited components, and communications to/from and/or between any of the first four areas.

Probably most intriguingly, I discovered that Google.org, the philanthropic arm of Google, has recently begun toying with a Google PowerMeter, which is aimed to allow just about anyone to assess their electricity consumption over the web (or over their BlackBerry or iPhone) on a real-time basis. Of course, the real question is, how many people will be interested in watching their electricity use the way they text their friends or surf Facebook?

Beyond Google’s presentation (by David Bercovich), I was a little underwhelmed by the insights offered by the speakers. Candidly, many of the topics discussed – wholesale power market structures, electricity pricing – seemed to me like they were lifted straight out of the late 1990s. And the discussions of the carbon markets did not seem cutting-edge or particularly illuminating.

At least the second day of the conference was more energized (again, no pun intended, or maybe it was, I don’t know) than the first. No doubt this was because of the provocative comments of Marc Levinson, an economist from JPMorgan Chase, who had the gall of asking the uncomfortable question: does the Smart Grid really provide that much value, and if so, who really ought to be willing to pay for it? This hand grenade punctured what had been a quiet, polite and therefore mostly dull set of sessions.

The panel on which I sat – including Carter, Jamie Wimberley of Distributed Energy Financial Group and John Moore of Acorn Energy – did its best to keep up the heat. The general perspective I offered was that the Smart Grid wasn’t going to happen any time soon, no matter how good the intentions.

This is mainly because of the complex tussle of jurisdiction between federal and state authorities to which the grid is beholden, which is unlikely to be eliminated by fiat, notwithstanding the comments of observers who ought to know better such as Sen. Harry Reid (D-NV). This is further amplified by the fact that electric utilities will remain the primary implementor of Smart Grid technologies on the grid assets they own and control, and utilities just don’t move very fast even when all of the forces are aligned.

My overall take is that the Smart Grid community is still self-organizing and finding its footing. Now that it’s much more in the bright spotlight, I expect that leaders will emerge to help better coalesce the thinking and dissemination of information. Their mission will be to cut the Gordian knot that strangles the current not-so-smart grid.

As posted to CleanTechBlog.com

One of the bummers of having been in the energy/environmental field for so long is that rarely do I read or learn something I haven’t heard before. It’s hard to for me get excited anymore.

Perhaps one of the silver linings of the current economic malaise is that thought leaders are coming up with novel and interesting ideas for the public sector to raise revenues. Yes, that’s right, new taxes.

Two recent examples. First, an intriguing idea put forth by Ian Ayres and Barry Nalebuff in the March 16 Forbes: a voluntary gas tax. This brings back, in different clothing, the concept of war bonds that could be marketed as a matter of patriotism to promote energy independence – citizens can optionally buy an advance tax rebate in exchange for paying an extra amount per gallon of gas purchased at the pump. If you drive little, or drive a fuel-efficient vehicle, you can actually profit from this transaction.

Second, Seattle city officials are considering a $0.20 charge per plastic or paper shopping bag. The idea is up for referendum in August, but unfortunately, it seems to be on the ropes. That’s too bad, because the same idea has been in place (unbeknownst to me) in Ireland since 2002, and appears to be working well.

Although four-letter words are considered nasty, there’s no worse word in the American lexicon than that little three-letter devil. No politician can afford to raise the specter of new taxes, even when they’re desperately needed to balance budgets while encouraging more responsible behaviors.

The cap-and-trade legislation is being threatened by opponents who claim it is nothing but an energy tax (see, as an example, the March 9 editorial by the Wall Street Journal). The dirty little secret is that they’re right: cap-and-trade is a tax. Does the mere fact that something is a tax mean that it shouldn’t be adopted?

As posted to CleanTechBlog.com

In a recent article in USA Today, a spokesperson for the Competitive Enterprise Institute was quoted as asserting that schools and teachers educating children about eco-friendly actions was tantamount to “environmental religion” and should be stopped.

Angela Logomasini of CEI went on to state, “Let the parents teach the kids the values and the lifestyles….If [a child] is going to be ostracized for legitimate choices that people can make in a free world, that’s not right.”

According to their website, CEI is “a nonprofit public policy organization dedicated to advancing the principles of free enterprise and limited government,” which believes “that individuals are best helped not by government intervention, but by making their own choices in a free marketplace.”

That all sounds well and good, but how does this mission coincide with concerns about what kids are being taught in schools? Oh yes, I see: According to SourceWatch’s profile of CEI, the organization has a long history of being opposed to government action on most environmental issues, with a particularly strident focus on thwarting any action to mitigate climate change.

By the logic of CEI, children should be similarly shielded from concepts such as fiscal responsibility (”don’t spend more than you have”) or ethical behavior (”don’t lie or take actions that can benefit you while seriously harming other people”), as they place restraints on an individual’s free will.

I don’t know about you, but when someone criticizes teachers for exposing children to ideas and concepts that have considerable benefit without much downside, it’s hard for me to take their side of the issue. In my eyes, CEI looks really bad on this one.

As posted to Huffington Post

No one has ever accused California of being timid. Certainly, in the area of energy and environmental policies, California has long been considered the leader among the 50 United States. But maybe California has bitten off more than it can chew - or at least, more than it thought it had bitten off.

The issue is the Global Warming Solutions Act of 2006, better known as AB 32, which compels the state to plan to achieve CO2 emission levels in 2020 equivalent to the emission levels in 1990.

As covered well in an article titled “California Plans a Carbon Diet” by Heather Mehta, Briana Kabor and Dr. Robert Weisenmiller of MRW & Associates in the January 2009 Project Finance Newswire, a publication produced by the law firm of Chadbourne & Parke, two years after the passage of AB 32, California continues to struggle in implementing a regulatory approach for enacting the program.

Meanwhile, economically, the state is suffering, as well profiled in this recent article in The Economist, which argues that “California makes Washington D.C. look like a model of fiscal probity.” Facing a massive budget deficit of about $42 billion, the state government reached a painful agreement to slash spending and raise taxes.

In turn, these fiscal concerns are putting pressures on AB 32. Earlier in February, Stephen Moore in the Wall Street Journal wrote a highly negative piece headlined “California’s ‘Green Jobs’ Experiment Isn’t Going Well,” in which the state’s employment and budget downturn are implicitly linked to the passage of AB 32, while few of the “green jobs” and other economic benefits suggested by advocates of AB 32 have yet to materialize.

This is a damaging line of argument for the “green economy promoters.” In my opinion, Mr. Moore’s story is way too negative - most of the economic downturn in California has nothing to do with AB 32 and almost everything to do with the simultaneous collapses in housing, credit and equity markets, which are completely independent of AB 32.

But underneath it all, Moore is onto something: that proponents of climate action have often been far too fast and loose with the promises of economic growth, and too easily dismissive of the economic costs and dislocations that will be endured. Those of us in the cleantech community must respect the near-certainty that there will be losers in the move to a low-carbon economy, and we can’t simply ignore that “inconvenient truth,” just as we are appalled when others deny the “inconvenient truth” of climate change.

At a micro level, it’s interesting to see how one entrepreneur has responded to the doldrums in California. As profiled in the February issue of Fortune Small Business, Bob Hertzberg launched a company called Solar Integrated Technologies in Los Angeles, got fed up by government bureaucracy and changing of policies/programs at a whim, and moved from sunny La-La land across the ocean to cloud-shrouded Wales, where he started another solar company, G24i.

A solar company in Wales, as opposed to California? Hertzberg is convinced it’s a better place to be. Maybe some of the other VC-backed PV companies in the Bay Area could take note? Word through the grapevine suggests that the Sand Hill Road gang is now beginning to recognize that maybe other geographic areas are better suited (i.e., lower cost) for building out their ventures.

California may be the place of dreams, but with the hard realities it’s facing right now, the state is tossing and turning through nightmares.