Is Ethanol Good or Bad?

One of the most confusing aspects of the alternative energy industry has to be the story about ethanol. Simply put, is ethanol good or bad? Does it help or harm the environment?

The confusion and controversy stems from evaluating the net effect on CO2 emissions of ethanol production and use, relative to the production and use of the incumbent fuel, gasoline. Largely, this is driven by questions concerning the energy balance of ethanol — how much energy is really required to fertilize, grow, harvest and process the ethanol, and what are the CO2 emissions associated with these steps. The proper quantification of these factors has seemingly been a matter of dispute between those who favor ethanol and those who see ethanol promotion as merely a means of subsidizing the agricultural sector.

A Reuters summary of an article in the January 2006 issue of the journal Science, written by several researchers from UC Berkeley, indicates that the current corn-based means of producing ethanol is in fact a dubious environmental proposition. However, the use of emerging technologies to convert cellulosic matter — the tougher fibers as found in trees, bark, woody wastes, etc. — in ethanol should be net environmentally positive.

Not surprisingly, the downside is that cellulosic technologies are now on the costly side. But, perhaps with additional clarification of the type on the net environmental benefit (along with the energy supply benefit) that can be generated by cellulosic ethanol, this controversy can be put to bed. With the concerns more definitively allayed, more effort and capital might flow to this potentially important source of energy.

Can RE Pay its Way?

With renewable energy companies, particularly in the solar and wind sectors, growing at double digit pace, there is a clear need to attract new talent to the industries. Indeed this is the prime reason we created Greenjobs as a place where those interested in working in renewables could find out about the types of jobs and job prospects as well as the different industries and the organizations populating them.

However, in the solar industry, and I suspect the other renewable sectors as well, there is a pervasive attitude that only enthusiasts work in the industry and they are happy to forgo competitive wages. In his excellent course on “Finding your dream job in Solar”, Andy Black actually advises candidates to anticipate lower wages than they can get elsewhere. He rationalizes the inevitability of the situation by the continued entry of new, cut-price entrants in to the marketplace forcing down margins. While this may reflect fairly what has gone before I do not see how it can continue.

As the sectors grow in size they will be less able to rely on enthusiast to fuel their continued growth. In order to attract the best talent, they will increasingly have to compete with other, mainstream industries and this will force them to make packages more competitive. Indeed if renewables become mainstream this is not only a possibility but an inevitability! How we bridge the gap remains to be seen but one thing I do believe is that renewable businesses and organizations will become increasingly focused on remuneration packages in order to be competitive and this will drive a need for more reliable information on what being “competitive” means. Reliable, cross industry statistics for renewables are hard to find and we hope to address the issue this year with the first annual North American survey of employment and remuneration across all RE sectors.

California’s Energy Tech Funding Keeps Rolling

California has a large and broad energy usage, and a very diverse energy mix. We also have one of the best energy tech funding programs in the country, as fitting with our status. A bit on both.

A few of our California energy statistics to think about:

We get 42% of our oil from our own wells (these amounts and the percentages have been declining for 20 years, it was 60% in 1980), 22% from Alaska, and 36% from overseas (the big suppliers are Saudi Arabia, Iraq and Ecuador).

We get only 15% of our natural gas from instate, the rest coming from Canada and other Western US states. Maybe Californians really should enter the debate about an Alaskan North Slope gas pipeline.

We generate 80% of our electricty instate with that same natural gas the largest source, at 40%, with the rest split between coal, rewewables (mainly wind and biomass), hydro, and nuclear, with coal the largest of those sources.

California Energy Commission has a number of programs running to fund and promote new and clean energy technologies in the state. Full details here.

The big ones include:

PIER – Small business R&D grants that in the past have included programs in new generation technologies, energy efficiency, and demand response. At $60 mm per year, PIER is one of, if not the largest government R&D funding program of any non-federal agency. The key funding areas are:

Buildings End-Use Energy Efficiency
Energy Innovations Small Grant Program
Energy-Related Environmental Research
Energy Systems Integration
Environmentally-Preferred Advanced Generation
Industrial/Agricultural/Water End-Use Energy Efficiency
Renewable Energy Technologies

Renewable Energy Funding – CEC runs ths solar rebate programs, to the tune of $135 mm/year. This is one of the largest in the US. Keep in mind, this is state money set aside by the legislature. The new solar news is about the recent PUC solar program – that’s ratepayer money mandated and overseen by the PUC (see earlier Cleantechblog post) . Though if I understand correctly, it is a close partnership as CEC has earmarked some of its funds for some allied programming related to new construction.

I know a lot of Californian’s don’t know exactly where we get our energy, and what we as a state are paying to improve that energy use and demand in the future, but as far as I’m concerned, kudos to the CEC and the people who keep it going.

If you’re not on the CEC listserv, check it out. The mailing list includes information on all upcoming RFPs as well as energy news.

Wind Turbine Manufacturers Getting Greedy?

An article in the January 2006 Windpower Monthly corroborates the rumors heard over the past year in the wind industry: the installed price of wind turbines is rising. Since the installed cost of the turbine is the dominant factor in wind energy economics, this means that the cost of wind energy is rising.

Windpower Monthly Article on Wind Energy Economics

The article goes on to note that wind turbine costs have increased because of unavoidable factors such as higher materials costs and higher shipping costs. Fair enough. But, distressingly, the article points out only in passing two important factors that are well within in the control of the wind turbine manufacturers: tightness of supply and increased margins.

In other words, the wind turbine manufacturers — Vestas, Gamesa, GE, et al — are not expanding assembly capacity commensurate with the rate of demand growth, and are instead using the favorable situation to extract higher prices from project developers who purchase wind turbines.

As a capitalist, I generally have no problem with manufacturers taking advantage of a strong bargaining position to make good money. However, I don’t think the current pricing practices are a good situation for the still-maturing wind industry. Especially without subsidies, wind is still largely uncompetitive relative to other forms of electricity production (especially coal), and wind still faces considerable skepticism from utilities and many uninformed observers. In other words, wind energy is not yet on firm ground: now is not the time to get greedy.

It strikes me that the manufacturers are gouging a little bit while they can — maybe the first time that conditions have allowed them to do so — but at the risk of damaging their market, and thereby reducing the full magnitude of the growth potential open to wind energy. It is a risky strategy that could backfire.

I’d like to see a bit more manufacturing capacity expansion, especially here in the U.S. where little currently exists. Not so much as to create a glut and a subsequent bust — the industry definitely doesn’t need that — but enough so as to facilitate the growth potential of the sector and serve what currently seems to be unmet demand.

Of course, another interpretation of the current situation is that the improvement curve of the dominant 3-bladed upstream wind turbine is flattening out. If so, this would open up opportunities for alternative turbine designs to come into the market. I’ve seen some interesting designs (e.g., vertical axis) with potentially better economics, but these have largely been ignored as unviable against the tried-and-true conventional paradigm.

However, if the standard wind turbine has minimal further cost reduction potential, then perhaps it’s time for the innovators to get to work again on new wind turbine technologies. That would shake things up for the wind turbine manufacturers — and maybe make them regret the overly strong pricing tactics they seem to be using today.

Is Superconductivity Cleantech?

I’ve heard some feedback from people asking why superconductivity is given a voice in a cleantech blog. This is a good question. There are a few reasons.

In one area in particular–power quality–superconductors are directly related to renewable energy. Advanced, flywheels, superconducting magnetic energy storage, superconducting fault current limiters, etc. are all being proposed as technologies that will allow for erratic, geographically distributed generation sources such as wind and solar to be brought onto power grids more effectively. Basically, superconducting power systems developers believe without some way of balancing load versus supply, electric utilities have a difficult time matching load with supply, and all the resulting economic and technical problems that come with it. Also, add-on generation grids such as wind farms are prone to introducing fault currents to the main grid, or require VAR compensation—both of which increase the cost of using that energy. Superconductors are being used in the development of solutions for all three of these problems. Siemens, GE, Sumitomo Electric, IGC SuperPower, American Superconductor, SC Power, CAS in China, KEPRI in Korea, and a bunch more are, or have been, working in this area, and their technologies and businesses have been reported on in some detail.

Perhaps more speculative, developers of high temperature superconducting (HTS) generators are looking to put them in wind turbines. The main reasons for this have to do with the electrical properties of AC superconducting machines, an also because such machines would be dramatically lighter and smaller than conventional generators. There is also some improvement in generation efficiency.

The cost of cooling superconductors is not necessarily a significant hurdle, and refrigerators that cool superconducting devices to their 30 to 65 degrees Kelvin operating temperature are commercially available. Admittedly, the technical challenges of integrating the cooling systems within the device are sometime daunting.

One last reason why superconductors may be considered by some to be “clean tech” is because they may, in fact, provide a cleaner alternative to conventional technology.

For example: in a story we are preparing in Superconductor Week, we look into the massive transformers that are used in substations to take power from transmission voltages to distribution voltages. These devices are inefficient, dangerous, and environmentally hazardous. One company researching the topic concluded that existing conventional 26MVA transformers contain seven tons of copper winding, 16 tons of iron, and 14,000 liters of highly flammable oil. In contrast, an equivalent HTS transformer could contain just 200kg of superconductor in its windings, which are immersed in non-flammable and environmentally benign liquid nitrogen.

In addition, this research concluded that operating at full load, such a HTS transformer would provide an annual abatement of 1,500 ton of CO2 and save $900,000 in electricity over its lifetime. The study concluded “that by including the installation of HTS transformers as part of their national abatement strategy… countries could meet a significant proportion of their Kyoto protocol targets.”

The question of whether superconductors are “clean tech” is semantic. The real question is, can developers make HTS devices that work, and can utilities be persuaded to buy them?

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Limitations on Metals Not Usually Addressed by Cleantech

This article on LiveScience comments on an area that we do not discuss that often in the Cleantech world, but gets more attention in sustainability discussions: namely that the base raw materials that we use are running down, as well as our fossil fuel energy sources.

The Live article primarily quoted a Yale University study in the Proceedings of the National Academy of Sciences.

The statistic in the article that I found most intriguing:

“According to the study, all of the copper in ore, plus all of the copper currently in use, would be required to bring the world to the level of the developed nations for power transmission, construction and other services and products that depend on the metal.”

A couple of comments on metals use reduction:

I’m not entirely sure how our world can reach true sustainability long term without running down inventory stocks of metals to some degree, but we should be able to flatten the decline curve.

I would think that energy efficiency can have some impact on reducing metals use, all the way back down the supply chain. But it is a bit unclear to me how much. As a side note on that, I ran across a new group today, a nonprofit in Oakland called Their mandate is analyzing the environmental footprint of businesses, regions, and organizations.

I would think switching fuel sources can sometimes reduce metals on a life cycle basis, when you are switching to a source like photovoltaics, where the materials input/watt produced is much lower than say, a diesel engine and all the fuel, supply chain, manufacturing and production requirements. But the calculation to estimate that is not a simple one.

Superconductor wire technology, like our blogger Mark Bitterman from Superconductor Week has written on before, with tremendously higher efficiencies, is a direct replacement for copper, and uses far less materials, but is not ready for prime time yet. You can find additional blog commentary on HTS and superconductor impact on James Fraser’s The Energy Blog.

Of course, the main area of impact from our daily lives is the sustainability mantra: reduce, recycle, reuse.

Future Looks Brighter Thanks to the California Solar Initiative

On January 12th the California Public Utilities Commission (PUC) approved the California Solar Initiative (CSI), which provides $2.9 billion in incentives from 2007 – 2017 to help promote the development of solar power. This program is aimed at reducing the costs of solar technology for State consumers as California move towards cleaner energy solutions. The CSI represents the largest program of its kind in the United States, setting an example that many hope will lead to nationwide growth opportunities within the renewable energy arena.

“The California Solar Initiative is the largest solar program in the country and I hope it will be a model for other states. The program will be a major source of dependable and environmentally friendly electricity, and is a major tool in the State’s promise to address climate change and meet the Governor’s goals to reduce greenhouse gas emissions,” stated PUC Commissioner Dian M. Grueneich.

It is believed that this program will help to stabilize and solidify the market for solar technology, benefiting consumers as well as participating companies operating within this space. Dr. Robert Wilder, CEO & Founder of Wildershares, LLC and Manager of the WilderHill Clean Energy Index explains, “Many solar companies have already sold out all their panels for this entire year and some into the next year, so this isn’t so much going to create wanted demand – the demand is there now. Instead, it’s going to ensure a more stable scenario for the future. Producers of raw silicon for panels will ramp up with less risk now, as they look five or ten years out.

This Initiative will also help kick-start other States and even Nations to grow their solar programs. Germany and Japan have benefited so far with the jobs created and growth from their ambitious programs, and now it’s California’s turn. I’m proud that the State is going to generate economic growth and new jobs, enacting this smarter energy policy that’s a win-win all around.”

I am looking forward to evaluating the impact that this initiative will have not only for Californians, but for many of the other states that have aggressively been pursuing clean energy

The Solar Market Marches On – Major Recent Trends in Cleantech

I thought for todays post I’d summarize some of the major trends that I see in the solar market:

1. IPOs and VCs Are Stilll Headed Up – Solar is still the biggest thing in cleantech or energy tech from an investor standpoint. I think a solar company has won the NREL Growth Forum award 3 of the last 4 years. Suntech Power just had a big solar splash on NYSE, listed at $19 and is up to $35/share now. (we discussed this on Cleantechblog recently) Q-Cells AG in Germany saw similar results, and we’ve seen numerous little IPOs in the sector. Just wait until one of the real power players like Shell or Kyocera or BP IPOs their solar unit.

2. Everyone’s adding capacity – Every time I turn around their is another press release on solar companies large and small expanding.

3. New power players are emerging. See comment on Suntech Power above (only a couple of years old, as well as my previous post on Honda, More Cleantech News – Honda Enters the Solar Business.

4. The Developing World Will Become a Major Driver – See Peter Beadle’s previous post on Cleantechblog

5. But the big players, Sharp, BP, Kyocera, Shell, etc. are still the big players, and aren’t showing any signs of relinquishing the title.