The Clean Energy, Clean Tech Revolution - PDF

Document Sample
The Clean Energy, Clean Tech Revolution - PDF Powered By Docstoc
					                 The Clean Energy, Clean Tech Revolution
                       By Allen Jackson, March 31, 2010,

1. A New Revolution Begins

How does a revolution begin? The American Revolution began with a shot. Ralph
Waldo Emerson who lived in Concord, Massachusetts wrote a memorable poem
about the Battle of Old North Bridge. On April 19, 1775, British soldiers in their
resplendent red coats marched forward with drum cadence. A few farmers stood on
the bridge in defiance. Emerson describes the historic event in words inscribed at
the base of the Minute Man statue in Concord:

             By the rude bridge that arched the flood,
             Their flag to April’s breeze unfurled;
             Here once the embattled farmers stood
             And fired the shot heard ‘round the world.

Some say that another revolution has begun, a revolution that is changing the
world economy. It concerns the kind of energy that will increasingly power
electricity for our homes, factories, businesses and vehicles. The changes that are
coming will forever change our lives.

We have known for a long time that some forms of energy on planet earth are free.
The sun shines, the wind blows, water tumbles down with insistent force in
streams, and from dams. Water bubbles up from the earth’s cauldron of heat below.
In contrast to fossil fuels, these energies are clean, and will last for as long as the
earth itself.

The only cost of these energies is in the technologies to harness the energy and
direct it for useful purposes. Clean technologies are driving a replacement of the
old energy economy fueled by fossil fuels. The new economy is being powered by
wind, solar and geothermal energy. The pace and scale of the transition is
revolutionary, a changing panorama unimaginably just a year ago.

Today only about 4 % of our economy is powered by clean energy. But consider
what has been happening. Compare the average annual growth rates in the amount
of electricity produced by energy sources for 5 recent years, from 2002 to 2007.
Nuclear energy grew at an annual rate over the 5 years at just .4 of 1 %. Oil grew at

an annual rate of 1.8%, natural gas 3.1%, hydro power 3.1%, biofuels at 19.8%.
Wind energy electric production grew annually for those recent years at 24.1 %
annually. Solar photovoltaic energy production of energy grew annually at 40.6% .

What are the forces driving the spectacular growth of clean energy? Think of cost.
The cost of fossil fuels and nuclear energy is generally going up. The cost of clean
energy is doing down. Efficiencies in the transmission of electricity, the expansion
of markets and production of scale are contributing to declining costs for clean
energy. In 2007 solar energy, for the first time became cheaper than nuclear energy,
9.55 cents per kilowatt hour compared to nuclear electric transmission, at 10.08
cents. Wind became cheaper than natural gas in electric transmission, and has
nearly matched what has been the cheapest generation of electricity by coal plants.
That rate is a little more than 5 cents per kilowatt per hour. Continuing innovations
and efficiencies are lowering the costs of solar photovoltaic’s, and solar heat
concentrated energy. Their costs are projected in the next five years to match wind
and coal with a cost of 5 to 7 cents per kilowatt hour. That is the residential rate in
Pocatello for Idaho Power with a large subsidy of publicly financed hydro power      .

An unprecedented influx of capital for clean energy and clean tech from public and
private sources is changing the energy landscape. Government initiatives play an
important role. California has plans to add up to a million solar roofs by 2020 with
a $3.3 billion solar initiative and subsidy. Approximately $100 billion of the $787
billion stimulus package will go to clean tech investments. Thirty six states have
quotas for as much as 20% of utility electric generation from clean energy sources
by 2020.

Impressive are venture capital commitments by multi-national companies and
major investment bankers. General Electric, the world’s largest diversified
manufacturer plans to invest $1.5 million in clean-tech R & D by 2010. Goldman
Sachs has about 20 full time investment professionals putting about $2 billion of
capital to work in wind and solar projects. New mutual funds offer investors
opportunities in clean energy and clean tech.

In 2000 total venture investments in the United States for clean energy and clean
tech came to less than 1%. In 2009 total venture investments in clean energy and
clean technology had risen dramatically to 12.9% . By early 2009 these

investments helped create 253 clean energy start-up companies. Clean energy has
become the hottest new sector for entrepreneurs and investors. Given the flow of
venture funds global revenues from clean energy are soaring. From 2007 to 2017,
revenues from solar installations are projected to increase from $38 billion dollars
to $99 billion dollars. Wind revenues are projected to grow from$63 billion to 114

2. Wind, Solar and Geothermal Energy

Consider some of the wind projects in other countries: Britain announced in
January plans to develop 32 gigawatts in off-shore wind farms. To get 32
gigawatts capacity in perspective only 150 gigawatts of wind energy is currently
operative world-wide. Nine wind farm sites in the U.K. waters will provide a
quarter of the country’s electricity needs. The nation that launched the industrial
revolution with coal has switched to wind.

Germany and Spain a few years ago were the world leaders in Wind Energy. China
has overtaken them with an added total 13,000 megawatts of new wind projects,
more than a third of total new global installations. China also leads the world in
solar hot water heaters, and manufactures more solar PV than any other country.

The United States is rapidly catching up in wind installations. Texas with the
Roscoe complex has a capacity of 782 megawatts, the current largest wind power
project in the world. General Electric has just made a $2 billion deal for Oregon’s
Shepard’s Flat with 338 turbines, and a capacity of 845 megawatts of capacity. It
will generate enough electricity for more than 230,000 households.

TXU, a large electric utility in Texas, recently cancelled eight coal companies and
is planning a 3000 megawatt wind farm. Its wind farm complex will include
compressed air storage in large pipes, and in geologic formations for an
uninterrupted source of energy. Texas will have 45,000 megawatts of wind-
generating capacity. Think of 45 coal fired power plants.

Other states are emerging wind super powers. Clipper Windpower and BP are
teaming up to build the 5,050 megawatt Titan wind farm. It will be in eastern South
Dakota, and when completed will be the largest wind farm in the world. The

Clipper project of South Dakota includes a transmission line along an old rail line
feeding electricity into Illinois and the mid west industrial center

Wind seems destined to become the centerpiece of the new U.S. energy economy
with several thousand megawatts of electricity. Wind power we know is also a
boon for jobs right here in river city with Pocatello’s Nordic Wind Company. An
investment led by Khosla Ventures, a premier investor in clean technology, has
recently committed $38 million in financing to improve and hasten Nordic’s
production progress.

Solar power is also expanding at break-neck speed. Solar energy is harnessing
both PV cells and solar thermal power plants to generate electricity. Proctor &
Gamble has a contract for two solar cell plants that will cover 12 square miles of
desert with solar cells generating 800 megawatts. This is comparable to a large
coal fired plant. As of last September 10 large solar thermal plants are under
construction, 8 in California, one in Arizona and one in Florida. These plants use
mirrors that concentrate sunlight on containers with a fluid heated to 750 degrees
Fahrenheit to generate steam and produce power   .

Solar panels are ideal for villages and subsistence farms in developing countries
without transmission lines. Last year with government incentives 20,000
households in rural Kenya installed solar roof panels. For the first time these
subsistence farmers experienced the beneficial uses of electricity. India has about
700 million subsistence farmers that hunger for such installations to bring
electricity to them. Alcatraz Island is converting to solar power electricity. Silent
solar panels and storage batteries will replace two thundering oil generators to
provide electricity for the isolated population of 5000.

A new technology concentrates sunlight and heat on a tower of molten salt up to
1000 degrees Fahrenheit. The molten salt flows down to an insulated storage tank.
The molten salt feeds into a steam generator as needed to sustain a continuous 24
hour production of electricity. The molten salt is then recycled and pumped back
up to the tower Hamilton Sunstrand is commercializing the molten salt plant, and
estimates a total of $1 billion dollars in five years in sales of equipment for molten
salt plants in sunny places with open spaces.

Storage of electric energy in new batteries of extraordinary capacity is another
innovation being tested to deal with the intermittent power and variability of wind
and solar energy. Smart grids are being installed to monitor and integrate energy
sources to balance out fluctuations of demand and generation of electricity.
Stronger smarter grids and a new generation of generators will gradually reduce
the need for the base load of a coal or natural gas plant. Germany has
demonstrated a Combined Power plant that links 36 wind, solar biomass and
hydropower installations to provide reliable electricity without any traditional base
load power .

Geothermal energy, along with wind and solar, is also developing at a rapid pace.
As of 2008 the United States has nearly 3,000 megawatts of geothermal generating
capacity, with 2,500 megawatts in California. Geothermal electric plants are being
developed through much of the western region. Some 96 geothermal power plants
are now under development in twelve western states.

3. The Electric Car Is Here

The last component of the new energy economy to note is perhaps the one that
affects us immediately. What will be the fuel of the future for our automobiles?
Let’s start with a hard truth: Petroleum is not sustainable as the primary source of
energy for transportation. The United States imports two-thirds of our petroleum,
and most of that is for our vehicles. Our transportation energy and our economy is
vulnerable with dependence for most of our oil from the OPEC cartel, and from
some rogue and unstable countries. We also have to be concerned that the
greenhouse gases from the exhaust of our vehicles accounts for almost half of
carbon dioxide emissions.

Oil reserves are falling and the increase of demand is expected to skyrocket in the
next 20 years. Two thirds of the energy demands in the next twenty years are
expected to come from developing countries. Seven countries - China, India,
Indonesia, Brazil, Pakistan, Bangladesh, and Nigeria make up more than half of the
population on planet earth. Their governments and people have ambitions to enjoy
the same benefits of modern technology that we do, especially the ownership and
use of cars and trucks. In the United States 6 % of the sales are to first time buyers.
In China 84 % of auto sales are to first time buyers.

Think about the number of vehicles on the road today and where we are headed.
Today there are about 600 million vehicles on the road world –wide, one vehicle
for about every 10 people on earth. We have about 250 million vehicles on the road
in the United States, three cars for every four people. Some observers of trends in
the expansion of car productions suggest that by 2030 the number of vehicles could
double world-wide with as many as one and a half billion.

Do you think that five years from now there will be oil sufficient to sustain the
price at today’s pump cost of $2.87 a gallon? If you believe that I have a deal on
the Brooklyn Bridge. This year as the economy heats up, and summer vacation
trips begin, pump prices are expected to advance to $3.00 by late spring and
perhaps reach $4.00 this year.

Fortunately there is a good option to supplement and eventually replace gas as the
main source of energy for transportation. In 1997 The Honda Insight Hybrid and
the Toyota Hybrid Prius came on the market. In 2000 the Toyota started selling the
Prius in the United States. More automotive companies began to produce a variety
of hybrid models. By the end of 2009 about 2 million hybrids have been sold.
About 1.2 million of them were the Toyota Prius. Toyota has 70 % of the Hybrid
market and Honda 16 %. Hybrid sales account for just one percent car sales in the
last 9 years. Are electric assisted cars and electric cars a tentative move forward,
or is there a revolution stirring?

Recently the American 123 Battery Systems Company secured the contract for
development and manufacture of advanced lithium batteries for the Plug-In Hybrid
Prius (PHEV Prius). The 123 Battery Company aspires to provide lithium batteries
for other automobile companies. Their marketing staff recently released a list of car
manufacturers planning hybrid models. The long list of companies and models
provide evidence of the confidence of the automobile industry’s in a new era of
electric energy.

Today there are 32 automobile companies from a half a dozen countries offering
48 new models - hybrids, plug-In hybrids (PHEV) and all electric vehicles (EV).
The auto companies include established manufacturers – Audi, B M W, Chrysler ,
Ford, G M, Hyundai, Mitsubishi, Nissan, Renault, Toyota, Volkswagen and Volvo.

There are many start-up companies such as Tata Motors of India, Telsa Motors,
Think Autos, and Apera in the United States, and B Y D in China.

Which models and companies are attractive contenders for attention? The plug-in
hybrid (PHE V) Chevy Volt is an electric car expected to get 40 miles on the battery
pack. After that a small gas engine generates electricity to power the car and
recharge the battery for a total range of 300 miles. The price is estimated around
$32,500 after the tax rebate. It will be in mass production in late 2010.

Three all electric cars (EV) will get a lot of press, each with more than 100 miles
on a charge. The Ford EV retails at $27,000, the Nissan Leaf, at $29,000, and the
COD A by the start-up Coda Automotive Company, at $40,000.

Warren Buffet’s investment in B Y D, Build Your Dreams, the Chinese lithium
battery maker and auto manufacturer has attracted attention to the B Y D plug in
hybrid (PHE V) and all electric (EV) models. Buffet invested $230 million for a
10 % ownership in the company . B Y D aims to be the largest car company in
China and one of the world’s largest car manufacturers by 2015. The F6D M Plug-
in Hybrid, a four door sedan has a 60 mile electric range, and gets another 300
miles with a gas engine assist. It is advertised at the lowest price of all the 48 new
models. It proposes a retail price in the United States below $20,000, after the
$7,500 tax credit. The e6 All Electric car of B Y D offers a range of 205 miles and
will sell for

The Telsa Roadster made by the Telsa Motor Company, a Silicon Valley company,
is the top of the line. It is the first production automobile to use lithium-ion battery
cells, and the first production all Electric car (EV) with a range greater than 200
miles per charge. It accelerates from 0- 60mph in 3.9 seconds. The company had
produced 1,000 cars as of January 2010, and has delivered Roadsters in 43 states
and 21 countries as of February 2010. It retails for about $101,500 after the
$7,500 tax credit.

Telsa Motors is developing the Model S, an All Electric Sedan seating 7 people.
Telsa launched the car in March 2009. It will have a range of 300 miles, the
greatest range of the all electric cars of up to 300 miles. Telsa has taken more than
1,500 reservations for the Model S and expects to begin production in late 2011.
The anticipated base price is $49,000 after the federal tax credit.

Who will be interested in buying an electric car? The National Research Center of
Consumer Reports reported in a March 19th publication the results of a randomized
telephone survey of car owing households. Surprise! More than a quarter of adult
respondents said they would consider an electric car and 7 % said they would very
likely consider one. Sixty three percent agreed that they’d be more likely to buy an
electric car if their place of employment offered charging stations.

William Wordsworth said of the heady days of the American Revolution years
“Bliss was it in that dawn to be alive, but to be young was very heaven.” How will
we come to view the revolution in clean energy and clean tech? We might take a tip
from Mr. Wordsworth: It’s a great time to be alive. Let’s make the most of it.