Cutbacks at NREL

Lost (to me) during the holiday season was the late December announcement by the Department of Energy of roughly a 10% budget and staff reduction at the National Renewable Energy Laboratory in Golden, Colorado.

Rocky Mountain News Article on NREL Cutbacks

This announcement was accompanied by the expected indignant handwringing from local politicians worried about economic impacts, as well as from most renewable energy community advocates. Given all the hubhub about needing to wean America from its addiction to oil, how dare the Bush Administration simultaneously reduce funding at NREL?

While I concur with the prevailing sentiment that energy is a critical issue facing our society that requires much more technology research and development, I don’t necessarily take the next step in logic (or faith?) that others have in believing that NREL is the place to do it. In its 25+ year history, I would like to see a list of the commercially-viable technologies that have stemmed from NREL research. My guess is that it would be a pretty short and unimpressive list.

In my occasional interactions with current and former NREL staff, there is a recognition bordering on resignation, steeped in cynicism, of a deeply flawed organization with limited impact. NREL is filled with well-meaning people, but somehow, the lab just doesn’t seem to work. Is NREL really the type of place that should be further bloated with more funding? I say, “Not with my taxpayer dollars.” Far better to deploy the funding to other institutions with less dysfunctionalism, greater urgency and a better sense of the pulse of the energy marketplace.

Carbon Capture

Most of us reading these columns are concerned with the impact that man is having on his planet. Despite the relative few(?) who discard the possibility of an anthropogenic impact on climate change, there seems to be an increasing acceptance that the rise in global average temperatures over the past century is largely due to combustion generated carbon dioxide emissions. Given the indisputable fact that global energy demand is ever increasing and the cheapest source of energy for most developing countries is coal – not quite pure carbon, but close to it – the outlook seems bleak. There seems no way that developing nations can be denied access to the cheapest source of energy as we transition to clean renewable sources, so we should take some consolation from the effort being expended to address the issue. There are various programs that address cleaning up the products of combustion but traditionally most have ignored carbon dioxide emissions. Even considerations of bioenergy are often based on the assumption that it is carbon neutral. Irrespective of the balance, it would be better for us all if no carbon dioxide emissions resulted from man’s activities – here, I just want to remind you of a program which promises that – well almost!

The Carbon Dioxide Capture Project started in 2000 and has two underlying goals: reduce the cost of carbon dioxide capture from combustion sources; and develop methods for permanently storing the captured gas underground. Carbon Dioxide capture and geologic storage are seen as bridging technologies that will help move society towards cleaner fuels in the future. It is a project led by some of the world’s largest energy companies in collaboration with bodies such as
the EU and the US DOE. Phase 1 was completed in 2004 and the report has just been published by Elsevier. Phase 2 runs from 2005 till 2007 and most of he original participants are still contributing. It is nice to see some of our oil money being reinvested in a project which, if successful, could benefit so many in almost every industry.

What is even more satisfying is to see the announcement today that BP, one of the Project participants, has committed to building a 500MW power plant in California that will embody the technology developed so far. They are working with Edison Mission Group on the plans for the power plant and with Occidental to explore the options for using Occidental’s California oilfields to host the carbon dioxide. Like most clean (or cleaner than most) alternatives, there will
be an economic penalty to be overcome, but successful demonstration at this scale will be a powerful argument in convincing others to follow. And, of course, Occidental would get a little more oil out of their wells!

GE Abandons Superconducting Generator

The Department of Energy’s dream to build a superconducting power infrastructure in the U.S. has been dealt a symbolically serious, if not unexpected blow.  General Electric has quit its $27 million 100MVA high temperature superconducting (HTS) generator program.  The generator was envisioned as an opportunity to eventually introduce large generators (in the 100 to 500MVA range) that higher power densities and increased efficiency.  The heart of the DOE’s superconductivity program, HTS power cables, remains on track.

There were major problems, or at least challenges, with the program from the outset.  The first was that conventional generators, which use copper windings in both the stator and rotor, are extremely efficient, and the introduction of a HTS rotor meant only about a 0.35 to 0.55% increase in electrical efficiency.  While this does not sound like much, over the course of the machine’s life it meant considerable electricity savings that were anticipated to offset the technology cost of the superconducting rotor, and cryogenic refrigeration system.

GE says that another factor contributing to the decision to terminate the program was a shift in the energy market: “GE has observed that in the present energy marketplace, where the spot market price of natural gas has recently been greater than $10/MM BTU, operators of combustion turbines are shifting larger units to cyclic operation and supporting the base load with less expensive fuels such as coal and nuclear.  This shift in generation dispatch undercuts the economic benefit of the HTS generator.”  

GE has over 5,500 wind and 3,600 hydro turbines, for an installed capacity of renewable energy of 160,000MW, but this is a microscopic fraction of the capacity provided using fossil fuels, so its safe to say the drive for renewable energy is not negatively impacting R&D on large HTS generators.

The other major factors involved the technical and economic hurdles surrounding HTS.  The BSCCO-2223 HTS wire (currently produced primarily by Sumitomo Electric and American Superconductor) was too fragile, too expensive, and required too much cooling.  GE had repeatedly said it wanted the wire to cost well below $25 per kiloAmp-meter (this is the cost for an amount of HTS material sufficient to transport one 1000 Amps across a length of one meter).  At present, that target is a somewhat remote prospect.  (An OP-ED piece in the latest issue of Superconductor Week (v20 n02) provides an interesting analysis of these costs.)

Cooling the HTS rotor is another issue.  Today’s HTS wire does not work sufficiently well in the strong magnetic fields present with a device such as a motor without substantial refrigeration.  Whereas devices such as HTS cables may be able to operate in a liquid nitrogen environment at 77 degrees Kelvin, motors must run closer to 30K, or even cooler, using liquid neon or gaseous helium coolant.  

The cancellation of this program leaves the superconducting generator concept squarely in the hands of the military, which is effectively indifferent to costs, and is focused on increasing power density (the ability to cram a huge amount of generating capacity, or in the case of motors, horsepower and torque, inside a small, light-weight package) for applications where space/weight is restricted, such as ships and aircraft.  

It is likely that if these military programs are successful, the technology will eventually trickle back into the commercial sector.  For now, we will have to focus on the promise of HTS elsewhere.  

Mark Bitterman, Executive Editor, Superconductor Week

Recent Energy News on Global Policy

Global warming action supported by evangelical Christians

A group of 85 evangelical Christian leaders in the US, including Rick Warren, have initiated a campaign to back legislation opposed by the Bush Administration to fight. They are helping to launch an advertising campaign to support legislation like the McCain-Lieberman Climate Stewardship Act.

Oil prices are a hot topic at upcoming G8 conference

High oil prices and what to do about them, specifically how to spur energy investment are a hot topic at the G8 conference in Moscow.

Exxon announces that energy independence is not feasible

Responding to Bush’s speech on energy and calls for energy independence from mid east oil, ExxonMobil executives have stated that they believe eliminating US dependence on foreign oil imports is not a practical solution. As I have stated in previous Cleantech blog posts, I believe it should be a core part of foreign policy, though I agree it is not easy.

Values and ‘tude in consumer marketing

Wednesday, February 8, 2006

When market research around sustainability asks what people value, so begins effective consumer messaging with emotional hooks. And, it begins the crossing of the chasm from eco-niche marketing to ‘dark greens’—to marketing to masses sporting sea-foam shades of green.

A common thread of values runs through the landscape of marketing sustainability, from transportation to clean energy to high performance building.

“Toyota > The Power to Move Forward”
Toyota nailed values-based consumer marketing in an ad for a 2007 hybrid Camry aired during the 2006 SuperBowl, an ad imbued with themes of sustainability, cost savings, bucolic peacefulness, health and safety – an ad that also appeals to progressive, bi-lingual consumer segments. (“Papa, why do we have a hybrid?” “For your future.” “Why?” “It’s better for the air, and we spend less because it runs on gas and electrical power. Mira. Mira aquí. It uses both.” “Like you with English and Spanish” “Sí!” “But why did you learn English?” “For your future.” Tum, tum, tum.)

“Can Do!” Clean Energy
Presentations at DOE’s Green Power Marketing Conferences provide market research and real-world marketing reports from multiple (pro-clean energy) viewpoints, like Natural Marketing Institute (research), Green Mountain Energy Company (a competitive electricity retailer with some stories to tell) and Utah Clean Energy (a community campaign for clean energy). The conference, now in its tenth year, unearths marketing gems-in-the-rough like a Research Into Action report from 2002 on self-efficacy (the confident “Can Do” attitude) that may be a predictor in market adoption and a basis for messaging. The Toyota ad is all about “Can Do.”

According to Gang & Gang research on Salt River Project’s EarthWise Energy program, the really important emotional issue areas in marketing clean energy center on self and environment, as well as program design. Some of SRP’s non-participating customers had weak but positive, passionate emotions about the program, and others had significant negative, inhibiting emotions.

:: That is, not everybody thinks everything “green” is great. A certain segment, the anti-greens (it’s an attitude), may come to appreciate the value and benefits of green in their own lives when the message is disassociated from ‘tree-hugging liberal lefties.’ The likes of Andrew Bernstein who calls environmentalists “socialists” and discounts anthropogenic contributions to climate change may never be won over. ::

An insightful 2003 Canadian report “Consumers and Green Electricity: Profiling Potential Purchasers” found that consumers’ attitudinal characteristics were especially significant, more so then demographics and socialization in purchasing clean energy. “First, there appears to be continuing message of warning to marketers who think that they should base their segmentation criteria (and hence, their marketing strategy) solely upon demographics. Indeed, the recent conclusions of Straughan and Roberts can be applied to our investigation, virtually verbatim: ‘From the results of both past studies and the present work, the use of either a psychographics-only model (incorporating perceived consumer effectiveness, altruism, and environmental concern) or a mixed model (incorporating a range of demographics and psychographics) should be preferred to traditional demographic profiling methods.’ (Straughan and Roberts, 1999, p. 567).” Per the report, liberalism (progressiveness) is a fourth significant attitudinal variable determining a consumer’s willingness to pay more for clean energy. (Rowlands, Scott, Parker, 2003, p. 45).

:: The “willingness to pay more” benchmark can detour from the values, attitudes and non-energy benefits that inform sustainability marketing strategy. Some people buy coffee infused with milk foam and a squeeze of caramel for $4.00…jeans beaten to look worn for over $100…highway ‘vehicles’ better suited for jungle warfare at nearly the price of real estate…because it makes them feel good. How much would someone pay for a hybrid car, clean energy, a high performance home if it made her feel good, if it spoke to values? ::

Co-op America, a non-profit dedicated to “creating a just and sustainable society by harnessing economic power for positive change” knows what makes people feel good. Executive Director, Alisa Gravitz wrote in their Spring 2005 Quarterly: “When you ask people [young kids in an inner-city school, activists, business people] to describe what they want the world to look like, the pictures come out so much the same…In almost every picture, you see a nice house—representing comfort, quality of life, and economic security. People draw their families and friends relaxing or playing outside of their homes, sometimes sitting together at a picnic, often in a green yard or garden. Indeed, there is usually lots of green—sometimes a meadow or forest—and lots of blue, clear sky and clean water—a lake or stream or the ocean. Family, friends, home, community, blue sky, clean water, good food.”

“Alternative fuel” manufacturers like Toyota and the clean energy crowd are well on their way to incorporating these values and attitudes into marketing strategy.

The high performance building crowd has begun to recognize the values and attitudes of its consumers, spurred by rising energy costs and concerns for quality building—and demands for better product.

The energy efficiency folks? They have a way to go, but have successful examples to emulate, and some valuable insights from the likes of E-Star which posed the question: “What brings people to energy efficiency? Is it the desire to ‘do the right thing,’ the desire to save money?” E-Star says the evidence is conflicting. In polling for Colorado’s renewable energy portfolio standard (a clean energy mandate), the results showed a wide enough margin for a win at the voting booths if the RPS included only renewables. But, when energy efficiency was added to the mix, the margins dropped by 5%. E-Star has found that in residential home construction people want comfort, health and safety, and quality. “There is no single driver that brings brings people to energy efficiency. In the near term, it will not be the price of energy alone. A successful campaign in regard to energy efficiency should probably encompass a broad spectrum of values (saving money, doing the right thing, patriotism, and higher quality products such as homes.)”


Over 1,000 Hydrogen Riders in California

2005 finished with over 1,000 Californians taking daily rides on hydrogen vehicles. In addition to about 80 hydrogen cars, SUVs and trucks were eight high-capacity hydrogen buses. Scheduled deliveries will double the number of hydrogen vehicles in California in 2006. 1,000 daily riders is an important increase from a meager few hundred in 2004.

Santa Clara VTA has 3 buses covering standard routes in daily use. AC Transit is bringing its three hydrogen powered buses online now. SunLine Transit Agency received enthusiastic rider acceptance of its first hydrogen bus. It recently added a second. With many vehicles just now being put into commercial service, the daily ridership will jump to over 2,000 in the next few months.

In 2009, we will likely see over 10,000 daily riders of hydrogen vehicles. In 2012, we will likely see over 100,000 daily riders of hydrogen vehicles. Both forecasts assume that vehicle growth will slow to 70% per year in 2007.

Buses have been very helpful in moving hydrogen forward. A fleet of buses needs only one hydrogen fueling station. Hydrogen skeptics have predicted that we will wait forever as public station owners refuse to add hydrogen pumps without millions of hydrogen vehicles and vice-versa. The general public does not take the lead in technology like this. Fleet owners take the lead.

These fleets are like anchor tenants in a shopping center. SunLine started with one bus. Soon other hydrogen vehicles were using the same fueling station. CNG vehicles then started using hydrogen-CNG blends, increasing fuel efficiency and reducing damaging emissions. Stations are being expanded in capacity to support larger fleets. To be part of the California Hydrogen Highway, these fleet stations must provide limited public access. This encourages other organizations and individuals to use hydrogen vehicles.

Most public transit buses carry 200 to 2,000 riders per day. The number varies with routes and urban density. The buses often run 18 hours daily. Hydrogen buses are popular with riders. Jaimie Levin, Director of Marketing for AC Transit, reports rider enthusiasm and strong community support. Being new and somewhat limited in range, hydrogen buses may only average 10 hours of daily use. It is too early to have precise numbers of daily riders, but 250 people per bus per day is reasonable. This will bring us to 2,000 riders on the 8 hydrogen buses running in California.

A sage said that we tend to over estimate success in the short term and under estimate it in the long term. Disruptive technology has always shown this pattern. It took Alexander Graham Bell over 20 years to get a few hundred people to lease telephones. After all, who could they call? IBM’s initial forecast of the saturation of the global computer market was seven. Over time, they increased their forecast. The same growth will happen with hydrogen transportation. As fleets expand and as the hydrogen stations expand in capacity, costs will diminish and ridership will grow.

In his State of the Union Address, President Bush stated, “And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology…. tonight, I announce the Advanced Energy Initiative — a 22-percent increase in clean-energy research — and in pollution-free cars that run on hydrogen.” Hydrogen is one of the technologies which will lead us to energy security.

Hydrogen promises to end our nation’s dependency on oil. Wall Street lives in fear of a disruption in the Mideast sending oil to over $100 per barrel and our nation into another Great Depression. Hydrogen is a ubiquitous energy carrier. In today’s modest quantities it is also a good deal more expensive than gasoline.

Early clean transportation riders are benefiting from fleet owners such as SunLine, AC Transit, Santa Clara VTA and South Coast Air Quality Management who are willing to invest in the future. They are leading with multi-million dollar fleets and their own hydrogen fueling stations. California is a role model for the world.

John Addison is the author of the book Revenue Rocket (Executive Summary at John Addison’s articles have appeared in H2Nation Magazine. Since 2002, John has been a Board member of the California Hydrogen Business Council. John Addison is president of OPTIMARK Inc. a firm that helps with marketing strategy and partner development. He teaches extension courses for the University of California at Davis and at Santa Cruz. He is a popular speaker in the Americas, Europe and Asia.

Japanese Fuel Cell Expo

To catch up on the state of the fuel cell sector, I traveled to Tokyo last week to attend the grandly titled “2nd International Hydrogen and Fuel Cell Exposition“.

Below are a few observations from my visiting the Japan fuel cell expo:

1. There’s a lot of fuel cell activity in Japan right now — much more than in North America. This is a very sizable show by any standard, and positively immense for an alternative energy field. At over 400 exhibitors, it’s several times times bigger than the biggest comparable event in North America, the annual Fuel Cell Seminar — and even bigger than AWEA’s trade shows that I’ve visited in the past couple years during boom times for the U.S. wind energy sector. According to show promoters, over 20,000 attended last year’s event, and I saw nothing to suggest that such an estimate for this year was off-base. Crowds and crowds of people clogged the aisles. Press and TV cameras were frequently sighted. No doubt, this intense interest is motivated by Japan’s more dire energy supply situation and the high energy prices that result.

2. The fuel cell activity in Japan appears primarily to be by Japan, for Japan. Though it probably shouldn’t have surprised me, given the venue, the vast majority (95%?) of attendees and exhibitors were Japanese. Although the conference was held bilingually, almost all of the booths were exclusively in the Japanese language — and since I don’t read or speak Japanese, most of the information presented was wholly inscrutable to me. From strolling the venue in somewhat of a daze of perplexion, I am led to speculate that there must be a huge tech transfer opportunity for those who can translate Japanese into English and mine the best nuggets from this show to bring to the U.S. and elsewhere.

3. Lots of small firms are involved in the fuel cell industry. It was modestly surprising that many of the most well-known North American fuel cell players — such as Ballard, Plug Power, FuelCell Energy — did not have booths. Even more suprisingly, among Japanese firms, most of the displays were from smaller companies. Several of the most recognizable Japanese megamonoliths — such as Kyocera, Hitachi, Mitsushita, Sharp, Toshiba — had no trade floor presence. I see good news and bad news from this. The bad news is that the lack of participation of bigger firms undermines perceived commercial credibility, which is already weak in the fuel cell sector. The good news is that smaller players are much more likely to be acting with urgency, absent the stifling bureaucracy so prevalent among large corporations, leading to more rapid advancement in the field.

4. Most of the displays were ancillaries and components, as opposed to integrated fuel cell products. To me, this was a good sign. Although there were the obligatory “visionary” displays of the future hydrogen economy and of fuel cell stacks and applications thereof (e.g., scooters, cars, etc.), there were probably five times as many booths focused on more mundane specialized components and supporting goods — pumps, valves, sensors, materials, and so on — that are truly essential to creating a vibrant and viable market-based fuel cell industry. If more attention can be focused narrowly on solving the many small but crucial technical challenges, rather than “shooting for the moon” for grand breakthrough solutions, only then can fuel cells achieve their large potential upside.

As a result of attending the show, what am I thinking about the fuel cell sector? Well, at least in Japan, things are trending in the right direction.

No doubt, it remains prudent to be sanguine and sober about fuel cells. It will be tough for fuel cells to overtake conventional energy technologies in mass-market applications — internal combustion engines for vehicles, batteries for mobile devices, central powerplants for electricity generation – simply because the incumbent approaches work pretty darn well and are pretty darn affordable.

However, a growing number of more finely-defined niche segments are being identified for plausible fuel cell application, where current power approaches are in some way unsatisfactory. And, it does appear that many technical advancement needs in the fuel cell realm are transitioning past the fundamental science stage towards application engineering as a precursor to commercial products. In sum, tough-minded optimism is warranted for the fuel cell sector.

SmartPower is smart marketing

Wednesday, February 1, 2006

Hunter Lovins, President of Natural Capitalism (and former CEO of the Rocky Mountain Institute), met recently with a small gathering of energy consultants in Boulder, Colorado. An advantage of living in Colorado, aside from sunshine (300 days a year) and great skiing, is access to talent like Hunter and her colleagues, the National Renewable Energy Laboratory, Western Resource Advocates and Interwest Energy Alliance, among many others.

In Colorado, we have leading marketers of renewable energy credits (Renewable Choice Energy, Clean & Green, NativeWind). We are home to WhiteWave Foods (Silk and Horizon Organic) one of the nation’s top 25 green power purchasers. New Belgium Brewery in Ft. Collins is on the forefront of sustainable industrial practices (and even has on staff a Sustainability Goddess). In 2004, Colorado voters made history by passing the only voter-mandated renewable energy portfolio standard, overcoming opposition from utilities and coal companies.

Yet, progress toward the next industrial revolution is molasses-slow in Colorado, even with all of our talent and significant milestones…despite rosy reports of clean energy’s dawning over Red Rocks in the Rocky Mountain News. At the gathering at D’Napoli Ristorante, Hunter asked how many of us had read the article by Briton James Lovelock, an independent environmental scientist and Fellow of the Royal Society. (“The Earth is about to catch a morbid fever that may last as long as 100,000 years; each nation must find the best use of its resources to sustain civilisation for as long as they can.”) Hunter asked, what are you – you with expertise in energy – going to do about it?

Building public awareness is front and center for market transformation – a market in which, to quote from “Natural Capitalism,” “business and environmental interests increasingly overlap, in which businesses can better satisfy their customers’ needs, increase profits, and help solve environmental problems all at the same time.”

For cleantech products and services to gain traction, the public needs to know about them, to believe that they work, to know how and where to buy them – and how to finance them if necessary. Competitive pricing, favorable regulations and legislation matter, too, but public awareness, education and marketing are critical for the next industrial revolution to take hold.

“It’s here. It’s real. It’s working. Clean Energy. Let’s Make More.”

SmartPower based in Hartford, Connecticut, gets public awareness, education and marketing. It is a non-profit marketing campaign that promotes clean energy (their tagline: “leading the effort to market clean energy”). SmartPower used “innovative and traditional marketing techniques to identify and create effective messages that resonate with the general consumer, aiming to capture attention, create customers and cultivate a mainstream market for clean energy;” it conducted market research around messaging to find consistent nomenclature (such as “clean energy”), core messages, and branding with emotional hooks.

SmartPower collaborated with the Clean Energy States Alliance (CESA) on public education. “In 2003, as part of the Clean Energy States Alliance (CESA), several state clean energy funds joined resources to develop a public education approach to clean energy. These states (Connecticut, Rhode Island, Massachusetts, New Jersey and Pennsylvania) faced similar market issues: despite consistently reported research findings that showed consumer preference for clean energy over fossil fuels, even at higher prices, market activity failed to materialize. Clean energy has remained a low interest, low purchase commodity that has yet to penetrate at meaningful levels.”

Far from doom and gloom, SmartPower created insightful, uplifting material. Its advertising agency, Gardner Nelson & Partners out of New York City, first conducted focus groups with consumers, businesses and opinion leaders. Participants were asked to: 1) write an obituary for fossil fuels; 2) draw a picture of their clean energy world, name it and date it; 3) review concept ads that reflected a range of potential messaging themes; and 4) select those messages that most resonated.

Gardner Nelson’s findings can explain why people say they want clean energy, but don’t buy it: “Our focus group participants understood that clean energies such as solar and wind would possibly take [the place of fossil fuels], but these energies were described as ‘quirky’ and possibly not up to the task.”

To demonstrate clean energy’s viability, SmartPower produced dynamic tv, radio and outdoor advertising – as well as a streamlined website that provides resources for taking action (options, costs, suppliers). The organization also puts out a newsletter, “The Monthly Charge” to deliver news on clean energy adoption in the CESA. Businesses, faith-based institutions, governments, educational institutions and other organizations that purchase clean energy get their names listed on the website (that’s smart marketing to give recognition where it’s due).

SmartPower plans to expand its message nationwide….and we sure could use it in Colorado. Take a look, and spread the word.