When it comes to renewable energy, the U.S. is a follower, not a leader. Our solar markets lag behind Germany, Japan, and other countries. We're addicted to cheap energy, primarily because the free market’s invisible hand is not just invisible, it’s also sometimes blind. Sometimes the cheapest option isn’t really the cheapest, which is especially true with polluting forms of energy such as coal and oil. They contain hidden costs, such as damage to the environment as well as dependence on unreliable foreign governments. These are the classic 'externality' case studies from Economics 101. And the classic solution to the classic externality case is that government steps in and 'moves the supply curve' over to reflect the true costs of the supply.
While many states in the U.S. have implemented net metering (which would allow customers to get refunds for providing their own clean energy), the Federal government just missed the chance to do more to encourage utility-scale renewable energy by failing to extend the tax credit for solar energy, which expires at the end of 2008. Meanwhile, European and other governments have been taking gigantic steps forward by implementing feed-in tariffs. A feed-in tariff essentially means that you get paid more than the going rate of electricity for each kWh of clean energy that you (or a utility-scale renewable plant) feed in to the grid.
Germany is the leader, having begun feed-in tariffs in the 90s. In Spain, the generator of solar or wind energy gets paid 5x the base rate of fossil-generated electricity for up to 25 years, after which the rate drops by 20% for the life of the system. And in Ontario Canada, the utility is obligated to pay 42 Canadian cents per kWh for solar electricity, roughly four times the price of retail electricity rates. And Italy has just passed feed-in tariff legislation that should spur huge market growth there for solar and other renewables.
So why hasn’t the U.S. government implemented feed-in tariffs? The answer may be lack of political will, or it may be the sheer strength of the Coal and Oil lobbies. Another reason may be that we rarely look to our government to solve our problems. Here in the U.S. we often bristle when someone suggests that government should solve our problems instead of the free market. We're too independent.
But in this case we may be wrong… I would argue that government action is needed. To demonstrate the point, what if instead of the government stepping in we brought in the lawyers (after all, what could be more American than that?)?
Imagine plaintiff attorneys across the U.S. banding together for the largest class-action lawsuit in history. Forget Big Tobacco, I’m talking about a multi-trillion dollar suit against Big Oil and Big Coal for global warming, and Big Oil for funding terrorism (I know, a bit sensationalist, but then again this is a lawsuit we’re talking about). Think about the trillions of dollars of damage that have been done to resources we all share, such as the earth, such as the air and the water, such as our lungs and our health. If we factored the price of that settlement into the price of oil and coal, maybe the gallon of gas would cost $10 or more, and the kWh of energy from coal would cost $0.40, not ten cents. Then our free market would wake up and build solar, wind, and even nuclear power plants by the hundreds. Then we’d ditch our 15 MPG SUVs and demand and buy the electric cars and plug-in hybrids by the millions.
But this is, for now, just a fun case study. A sturdy feed-in tariff enacted by the federal government, or by states individually, could accomplish the same results as that class-action lawsuit and help us avoid the future hidden costs of coal and oil.
Saturday, December 29, 2007
Wednesday, December 26, 2007
Solar: V-shaped Christmas Gift
One of my goals in this blog is to avoid, as much as possible, the pitfall of overhyping every purported advance to come along in the alternative energy space. The reason this is a pitfall is that critics can then claim, "oh, that's really not going to change the game... a 10% improvement does nothing when you need to reduce the cost of solar by 67% to make it competitive with coal," and they promptly shift their focus elsewhere.
But I want to point out an article today as a good example of what I see as an overall trend in the alt energy space. In this article, researchers at Stanford claim that a relatively simple step, creating v-shaped PV cells, could increase efficiency of the cells by up to 50%. I find simple advancements like this fascinating not because they offer The Answer by themselves, but because the answer is going to come from a bundle of simple advancements such as this one. There may be ten different areas (shape of the cell, placement, mirrors, new cell technology such as CIGS, etc.) where incremental improvements will be made. Even if you only achieve 10% improvements in ten different areas, the cumulative effect can be massive, and in ten or twenty years we could see a world where people scoff at coal as being too expensive, never mind too dirty.
So without placing too much hope in any one of these advances, it's still great to see them happen.
But I want to point out an article today as a good example of what I see as an overall trend in the alt energy space. In this article, researchers at Stanford claim that a relatively simple step, creating v-shaped PV cells, could increase efficiency of the cells by up to 50%. I find simple advancements like this fascinating not because they offer The Answer by themselves, but because the answer is going to come from a bundle of simple advancements such as this one. There may be ten different areas (shape of the cell, placement, mirrors, new cell technology such as CIGS, etc.) where incremental improvements will be made. Even if you only achieve 10% improvements in ten different areas, the cumulative effect can be massive, and in ten or twenty years we could see a world where people scoff at coal as being too expensive, never mind too dirty.
So without placing too much hope in any one of these advances, it's still great to see them happen.
Thursday, December 20, 2007
Battery Technology - Nanotech Breakthrough
Plug-in hybrids and electric cars are the future, period. Why the future is not here has a lot to do with people's skepticism regarding battery technology. You always hear about limited range, size, and safety concerns. I've been of the opinion, however, that battery technology is going to improve, and when it does the economics of an electric car are going to be undeniable (see my post on how the cost of gasoline will soon outstrip the cost of the car, if it doesn't already).
That's why today's Science Daily article on nanowire technology is so exciting. Researchers at Stanford, led by Yi Cui, have come up with a new structure for lithium ion batteries using silicon nanowires as opposed to carbon for the anode. This allows the battery to store up to 10 times the charge of existing Li-ion batteries, and the nano-structure prevents the degradation of the silicon.
This would represent a geometric improvement in the capabilities of batteries, a technology that's already quite close to making electric cars feasible. This kind of breakthrough is what's going to make the electric car a no-brainer. Obviously there's going to have to be testing done on a battery like this, but improvements like these leave me optimistic that the battery technology will improve, and the electric car will have its day. If I were a big auto manufacturer I'd invest a lot of money now to get a head start on this market.
That's why today's Science Daily article on nanowire technology is so exciting. Researchers at Stanford, led by Yi Cui, have come up with a new structure for lithium ion batteries using silicon nanowires as opposed to carbon for the anode. This allows the battery to store up to 10 times the charge of existing Li-ion batteries, and the nano-structure prevents the degradation of the silicon.
This would represent a geometric improvement in the capabilities of batteries, a technology that's already quite close to making electric cars feasible. This kind of breakthrough is what's going to make the electric car a no-brainer. Obviously there's going to have to be testing done on a battery like this, but improvements like these leave me optimistic that the battery technology will improve, and the electric car will have its day. If I were a big auto manufacturer I'd invest a lot of money now to get a head start on this market.
Tuesday, December 18, 2007
The Energy Bill Passes - A Great Step in the Right Direction
Good news. The energy bill that included the biofuel mandate I talked about last week passed the House today, 314 to 100. This is an excellent step in the right direction, partially because of the biofuels, but also because it includes the first big boost in fuel economy in 32 years, from 25 MPG to 35 by 2020. Obviously, if your chief issue is the environment you're pretty happy about this.
But if your chief issue is the economy or homeland security, you should also be ecstatic. Here's why:
We use 9.2 million barrels of oil a day for transportation, which equals roughly 65 billion gallons of gas a year. If the average MPG is 25, that gas gets us 1.6 trillion miles. But with a MPG of 35, we can travel the same distance for only 47 billion gallons of gas, saving us $56 billion per year, not to mention the 374 billion pounds of CO2 we won't pump into the air each year.
So one way to think of this is as a $56 billion per year TAX CUT. That's a ton of money that the average Joe and Jane will cycle back into other goods in our economy, and not into the hands of governments that hate us.
But if your chief issue is the economy or homeland security, you should also be ecstatic. Here's why:
We use 9.2 million barrels of oil a day for transportation, which equals roughly 65 billion gallons of gas a year. If the average MPG is 25, that gas gets us 1.6 trillion miles. But with a MPG of 35, we can travel the same distance for only 47 billion gallons of gas, saving us $56 billion per year, not to mention the 374 billion pounds of CO2 we won't pump into the air each year.
So one way to think of this is as a $56 billion per year TAX CUT. That's a ton of money that the average Joe and Jane will cycle back into other goods in our economy, and not into the hands of governments that hate us.
NanoSolar Hits a Milestone
I blogged before about NanoSolar's exciting prospects, and today they announced that they've shipped their first product and received their first check of product revenue.
In their announcement they make the claim that they'll be able to produce at $0.99/watt, which is on the way to the $0.30 they predicted before. If you'll recall, my calculations used a more conservative $0.60 and showed that they were on track for utility-scale power generation competitive with coal. So their claim today of $0.99 is a big milestone.
Funny enough, you can buy one of their first commercial panels on eBay. It's up to $7,350 right now. If they could just get that much for each panel, that'd be a pretty profitable model...
In their announcement they make the claim that they'll be able to produce at $0.99/watt, which is on the way to the $0.30 they predicted before. If you'll recall, my calculations used a more conservative $0.60 and showed that they were on track for utility-scale power generation competitive with coal. So their claim today of $0.99 is a big milestone.
Funny enough, you can buy one of their first commercial panels on eBay. It's up to $7,350 right now. If they could just get that much for each panel, that'd be a pretty profitable model...
Thursday, December 13, 2007
The Biofuel Mandate - Offsetting 25-55% of the Oil We Use for Transportation
I haven't discussed biofuels yet, partially because I'm pretty clearly excited about electric and PHEV vehicles. But it would be a mistake to think that electric vehicles or plug-in hybrids are going to come in and gain the whole market right off the bat. Their introduction may certainly be encouraged by rising oil prices, but you could say the same thing about biofuels. So what about biofuels? What does the market look like?
Well, it looks pretty huge is what it looks like. This article discusses the pending legislation that would mandate the use of 36 billion gallons of ethanol motor fuel by 2022. 36 billion gallons at a few bucks a gallon could mean this is a $100 billion market. And since 21 billion of those gallons are supposed to come from advanced biofuels (e.g. switchgrass, cellulosic, and my favorite, algae) there's a very large market that's being invented right now. That's a space I'd bet on.
That article also claims that 36 billion gallons equals 15% of U.S. gasoline consumption. My calculations show that it's actually between 25% and 55%, depending on how many gallons you can get from a barrel of oil. I've seen 19.5 quoted a lot of places, which would mean that 36 B gallons a year replaces 5 million barrels of oil per day. Since we currently use 9.2 million barrels/day for vehicle transportation, that would mean we're replacing 55% of the oil we use for transportation.
But this article from the AP claims that our 9.2 million barrels of oil per day equals 388 million gallons. That's more like 42 gallons per barrel of oil, which means biofuels would replace 25% of the oil we use for transportation.
Either way, biofuels will be a big market, and will go a long way toward getting us off foreign oil. If electrics and PHEVs can meet them halfway, the future is looking good on the independence from foreign oil front, and pretty darn good on the greenhouse gas front.
Well, it looks pretty huge is what it looks like. This article discusses the pending legislation that would mandate the use of 36 billion gallons of ethanol motor fuel by 2022. 36 billion gallons at a few bucks a gallon could mean this is a $100 billion market. And since 21 billion of those gallons are supposed to come from advanced biofuels (e.g. switchgrass, cellulosic, and my favorite, algae) there's a very large market that's being invented right now. That's a space I'd bet on.
That article also claims that 36 billion gallons equals 15% of U.S. gasoline consumption. My calculations show that it's actually between 25% and 55%, depending on how many gallons you can get from a barrel of oil. I've seen 19.5 quoted a lot of places, which would mean that 36 B gallons a year replaces 5 million barrels of oil per day. Since we currently use 9.2 million barrels/day for vehicle transportation, that would mean we're replacing 55% of the oil we use for transportation.
But this article from the AP claims that our 9.2 million barrels of oil per day equals 388 million gallons. That's more like 42 gallons per barrel of oil, which means biofuels would replace 25% of the oil we use for transportation.
Either way, biofuels will be a big market, and will go a long way toward getting us off foreign oil. If electrics and PHEVs can meet them halfway, the future is looking good on the independence from foreign oil front, and pretty darn good on the greenhouse gas front.
Wednesday, November 28, 2007
Marketing the Plug-in Hybrid - Emphasize Savings
As I read articles and press releases about plug-in hybrids, I've noticed the topic of expensive batteries mentioned several times, with cost estimates ranging from $1,200 to $3,600. The "Green Car Journal" recently featured an essay claiming that "battery costs remain the biggest obstacle to the rapid introduction of PHEVs." The author was quite ingenious and came up with good ideas on how to overcome this obstacle, including a very clever one involving utilities owning the batteries and 'leasing' them for free to the owners, with the utility gaining, well utility, by being better able to manage grid resources.
Okay, very clever, but I think there's a much simpler solution: marketing. Right now the average driver probably thinks, "well, I'll save a few bucks here and there with a plug-in, but it's going to cost me so much more to get the car..." And no one's telling him "the battery will save you $3,700 in 5 years!" Don't believe me? Let's do the math.
Let's look at a typical driver's fuel usage on a plug-in and a regular internal combustion motor. On Sunday, he just does some around-town driving, adding up to 10 miles. Three days of the week he just goes back and forth to work (34 miles). Two days of the week he adds five miles to his commute to run some errands (39 miles). On the 7th day he heads out for a 100 mile road-trip. Over a year this adds up to 15,000 miles. But as you can see in the graph below, if he plugs in every night, the first 60 miles of each day are electric, with gas kicking in only on his long road trips each Saturday. I used $3/gallon gas, and I figured that the gas he does use is at a higher MPG, because it's kicking in on the freeway on those long road trips. (Click to enlarge the image).
It's pretty easy to see that this average commuter will save almost $1500 a year! Even paying for an expensive $3,600 battery, he saves $3,653 over five years. And if the price of gas jumps fifty cents, he saves over $5,000 over five years.
Now isn't that way more compelling to the consumer than fretting about how expensive the battery is?
Okay, very clever, but I think there's a much simpler solution: marketing. Right now the average driver probably thinks, "well, I'll save a few bucks here and there with a plug-in, but it's going to cost me so much more to get the car..." And no one's telling him "the battery will save you $3,700 in 5 years!" Don't believe me? Let's do the math.
Let's look at a typical driver's fuel usage on a plug-in and a regular internal combustion motor. On Sunday, he just does some around-town driving, adding up to 10 miles. Three days of the week he just goes back and forth to work (34 miles). Two days of the week he adds five miles to his commute to run some errands (39 miles). On the 7th day he heads out for a 100 mile road-trip. Over a year this adds up to 15,000 miles. But as you can see in the graph below, if he plugs in every night, the first 60 miles of each day are electric, with gas kicking in only on his long road trips each Saturday. I used $3/gallon gas, and I figured that the gas he does use is at a higher MPG, because it's kicking in on the freeway on those long road trips. (Click to enlarge the image).
It's pretty easy to see that this average commuter will save almost $1500 a year! Even paying for an expensive $3,600 battery, he saves $3,653 over five years. And if the price of gas jumps fifty cents, he saves over $5,000 over five years.
Now isn't that way more compelling to the consumer than fretting about how expensive the battery is?
The L.A. Auto Show - The Year of the Green Vehicle
The "green" theme was a big presence at the L.A. Auto Show this year. So were gorgeous Ferraris, Maseratis, and Lamborghinis, but I was just there to check out the environmentally-friendly cars, right? Below are some of the cars we saw along with some quick thoughts. (Props to my photographer and girlfriend Kate... some of the shots she took were magazine-quality!).
Here's the Tesla. All-electric, 0-60 in 3.9 seconds, good-looking car... here's hoping they deliver on their promises. See my thoughts in the post below.
Chevy is heavily hyping their "gas friendly to gas free" concept, and they had the Chevy Volt on display (right). They call it an electric car, but it's really a plug-in hybrid electric vehicle
(PHEV). It's got an electric range of 40 miles, which will work for 75% of commuters, and then after that gas (or ethanol) kicks in to extend your range. I'm a big fan of this technology, since it solves a big part of the problem now, the "fueling" infrastructure is already in place, and battery technology will only improve making PHEVs into BEVs (battery-only) and getting us gas-free.
Some stats on the Volt:
Recharge time: 6 to 6.5 hours.
Battery life: 10 years.
0-60: 8 to 8.5 seconds
Launch date: 2010
My apologies to Volvo. They had a Volvo C30 ReCharge there, but I didn't get a picture.
So I borrowed one from their website (right). The ReCharge is a PHEV that promises a 60-mile range with a full battery recharge in only 3 hours. Also, apparently a quick charge of 1 hour should get you 30 miles or so. Not bad.
I really liked this car because it looks normal. I don't hate the look of the Chevy Volt, but why does it have to look so weird? Props to Volvo for integrating advanced PHEV technology so well into a normal-looking car.
There were a couple hydrogen cars there, a technology I don't like for two main reasons: (1) it's far inferior to battery electric vehicles (BEVs) or plug-in hybrids (PHEVs) for the simple reason that it requires a whole infrastructure of hydrogen fueling stations to be built, whereas sockets are already ubiquitous, and (2) up to 75% of the energy is lost in generating, compressing/liquefying, and transporting the hydrogen.
But here they are: the Honda FCX Clarity Fuel Cell car, which will start with a limited lease plan in 2008.
And GM's Fuel Cell SUV:
And then, just for fun, the Lamborghini. Man, I love lambos. Probably not the solution to the Energy Crunch, but great to look at.
Here's the Tesla. All-electric, 0-60 in 3.9 seconds, good-looking car... here's hoping they deliver on their promises. See my thoughts in the post below.
Chevy is heavily hyping their "gas friendly to gas free" concept, and they had the Chevy Volt on display (right). They call it an electric car, but it's really a plug-in hybrid electric vehicle
(PHEV). It's got an electric range of 40 miles, which will work for 75% of commuters, and then after that gas (or ethanol) kicks in to extend your range. I'm a big fan of this technology, since it solves a big part of the problem now, the "fueling" infrastructure is already in place, and battery technology will only improve making PHEVs into BEVs (battery-only) and getting us gas-free.Some stats on the Volt:
Recharge time: 6 to 6.5 hours.
Battery life: 10 years.
0-60: 8 to 8.5 seconds
Launch date: 2010
My apologies to Volvo. They had a Volvo C30 ReCharge there, but I didn't get a picture.
So I borrowed one from their website (right). The ReCharge is a PHEV that promises a 60-mile range with a full battery recharge in only 3 hours. Also, apparently a quick charge of 1 hour should get you 30 miles or so. Not bad.I really liked this car because it looks normal. I don't hate the look of the Chevy Volt, but why does it have to look so weird? Props to Volvo for integrating advanced PHEV technology so well into a normal-looking car.
There were a couple hydrogen cars there, a technology I don't like for two main reasons: (1) it's far inferior to battery electric vehicles (BEVs) or plug-in hybrids (PHEVs) for the simple reason that it requires a whole infrastructure of hydrogen fueling stations to be built, whereas sockets are already ubiquitous, and (2) up to 75% of the energy is lost in generating, compressing/liquefying, and transporting the hydrogen.
But here they are: the Honda FCX Clarity Fuel Cell car, which will start with a limited lease plan in 2008.
And GM's Fuel Cell SUV:
And then, just for fun, the Lamborghini. Man, I love lambos. Probably not the solution to the Energy Crunch, but great to look at.
Tuesday, November 27, 2007
Google's Gigawatt
If you've been reading my blog, you'll notice that I've been asking a lot of "what am I missing" questions about my observations that renewable energy, over time, should be competitive with energy from current energy sources. Well today, Google came out and asked the same thing: why can't we create renewable energy cheaper than coal? The challenge they've come up with? To create a gigawatt of renewable energy (between 0.2% and 0.3% of the U.S.'s total electricity needs) at costs below coal, and they're putting hundreds of millions of dollars into their various efforts. And everyone laughed when I said it was possible. (OK, no one laughed, but no one exactly went out there and offered my $100 million to go see if it was possible). Google is serious, and thinks this can be done "in years, not decades."
I have to tell you, I'm fired up about this. The more I look into my crystal ball, the more I see a future where our electricity is renewable and our vehicles are electric. When private-market behemoths like Google start moving in the same direction, I see the time to this future scenario shortened.
I have to tell you, I'm fired up about this. The more I look into my crystal ball, the more I see a future where our electricity is renewable and our vehicles are electric. When private-market behemoths like Google start moving in the same direction, I see the time to this future scenario shortened.
Friday, November 23, 2007
Electric Cars - Kicking The Oil Habit and Saving Money Doing It
I've brought up the idea of peak oil on this blog a few times before. It's a topic that's starting to enter the mainstream's consciousness the way global warming was 10 years ago. I think it's going to loom larger and larger as oil production flattens and/or falls, and demand for oil keeps going up. The Wall Street Journal this week pretty much said: Peak Oil, Not Just For Wackos Anymore. OK, so maybe they call it an "oil production plateau" and not peak oil, but the concepts of "energy shortages, high prices and bare-knuckled competition for fuel" are similar.
And so far I've talked a lot about renewable energy sources such as solar and wind, but they won't solve the problem of peak oil, at least not by themselves. That's because there are no realistic solar vehicles, and the idea of a wind-powered boat, or "sail" boat, is ridiculous. Oh wait...
Jokes aside, our country's transportation is 90% dependent on oil. So to avoid the Energy Crunch of peak oil, we're going to have to come up with another way to fuel our cars and trucks, and quickly. That is if we want to avoid paying massive prices for gas, having those price increases hit our middle and lower classes the hardest, entering a recession or possibly depression, having our gas money go into the hands of countries that hate us, and possibly tangling militarily with other large economies vying for oil around the world.
I'll take a look at three ways we can kick the oil habit: electric vehicles, hydrogen vehicles, and biofuels. I'll start today with electric vehicles which, in my mind, have suffered badly from poor PR and from some of the most unfortunate car designs ever to hit the road. This has cemented them in the average consumer's mind as the car of the be-turtlenecked tree-hugger with his head in the clouds, a car no real man would ever be caught dead in. What a tragic error!
I've said it before and I'll say it again. Change will have to make sense where it matters most:
in the pocketbook, and well in this case, the consumer's ego. So this Thanksgiving many many thanks go out to Tesla Motors, whose new roadster (right) has changed everything. Finally a good-looking electric car which, oh by the way, completely dusts the Ferrari going from 0-60.
So maybe now we can leave behind those lame wheel-covered designs and make a nice electric car. But what about the pocketbook? Won't an electric car be too expensive because of the battery?
Let's do the math. New electric cars are piggybacking off the extraordinary amount of research that's been done on Lithium-Ion batteries for cell phones and laptops, and the idea is that one of these batteries for a car might add $1,200 to the price. That's a big hit... until you think about the money you save.
Here are some assumptions. Electric cars use about 0.215 kWh per mile. Cost of a kWh from the electric company (at least for me here in L.A.) is 10.5 cents. MPG of an internal combustion engine vehicle is 23 (U.S. fleet average). I used $3/gallon prices, as well as the new and improved $5/gallon we'll be paying soon (ok, that's just a guess for now), and I came up with the following annual costs of fueling your vehicle to go 12,000 miles:
At those rates, here is the money you'd save after five years of using an electric car versus the car you drive today, and that's including the battery:
I don't know about you, but I could use the extra $10 grand. And mass production of these vehicles would reduce our dependence on that dwindling supply of oil, helping us avoid the problems I mentioned above. And to top it off, you'll be pumping less pollution into the air, especially as more of the electrical grid is powered by renewables. How could a mass-produced electric vehicle fail? Detroit, Japan, and Germany - market opportunity beckons.
And so far I've talked a lot about renewable energy sources such as solar and wind, but they won't solve the problem of peak oil, at least not by themselves. That's because there are no realistic solar vehicles, and the idea of a wind-powered boat, or "sail" boat, is ridiculous. Oh wait...
Jokes aside, our country's transportation is 90% dependent on oil. So to avoid the Energy Crunch of peak oil, we're going to have to come up with another way to fuel our cars and trucks, and quickly. That is if we want to avoid paying massive prices for gas, having those price increases hit our middle and lower classes the hardest, entering a recession or possibly depression, having our gas money go into the hands of countries that hate us, and possibly tangling militarily with other large economies vying for oil around the world.
I'll take a look at three ways we can kick the oil habit: electric vehicles, hydrogen vehicles, and biofuels. I'll start today with electric vehicles which, in my mind, have suffered badly from poor PR and from some of the most unfortunate car designs ever to hit the road. This has cemented them in the average consumer's mind as the car of the be-turtlenecked tree-hugger with his head in the clouds, a car no real man would ever be caught dead in. What a tragic error!
I've said it before and I'll say it again. Change will have to make sense where it matters most:
in the pocketbook, and well in this case, the consumer's ego. So this Thanksgiving many many thanks go out to Tesla Motors, whose new roadster (right) has changed everything. Finally a good-looking electric car which, oh by the way, completely dusts the Ferrari going from 0-60.So maybe now we can leave behind those lame wheel-covered designs and make a nice electric car. But what about the pocketbook? Won't an electric car be too expensive because of the battery?
Let's do the math. New electric cars are piggybacking off the extraordinary amount of research that's been done on Lithium-Ion batteries for cell phones and laptops, and the idea is that one of these batteries for a car might add $1,200 to the price. That's a big hit... until you think about the money you save.
Here are some assumptions. Electric cars use about 0.215 kWh per mile. Cost of a kWh from the electric company (at least for me here in L.A.) is 10.5 cents. MPG of an internal combustion engine vehicle is 23 (U.S. fleet average). I used $3/gallon prices, as well as the new and improved $5/gallon we'll be paying soon (ok, that's just a guess for now), and I came up with the following annual costs of fueling your vehicle to go 12,000 miles:
At those rates, here is the money you'd save after five years of using an electric car versus the car you drive today, and that's including the battery:
I don't know about you, but I could use the extra $10 grand. And mass production of these vehicles would reduce our dependence on that dwindling supply of oil, helping us avoid the problems I mentioned above. And to top it off, you'll be pumping less pollution into the air, especially as more of the electrical grid is powered by renewables. How could a mass-produced electric vehicle fail? Detroit, Japan, and Germany - market opportunity beckons.
Monday, November 19, 2007
Nanosolar Goes Macro
Nanosolar has been getting a lot of press recently, and the reports are certainly encouraging. This article mentions "30 cents a watt" production costs and a production facility that can crank out 430 MW worth of cells per year. Impressive numbers.
A quick check of the math shows that these are some saliva-inducing figures, even if you assume that it costs double the quoted price to get the panels configured in power-plant-size arrays. Another key assumption is the longevity of the panels... do they last a year, 25 years, 100 years?
As you can see, if they last just 15 years they're beating out coal, which would mean Nanosolar has a [come on Mark, fight it, FIGHT IT... ah to heck with it] very bright future. I'd have to think that becoming a power-plant producer that uses this technology would be extremely lucrative, which is probably why a lot of people are drooling on the sidelines waiting to see if Nanosolar can deliver on these big promises. I know I am.
A quick check of the math shows that these are some saliva-inducing figures, even if you assume that it costs double the quoted price to get the panels configured in power-plant-size arrays. Another key assumption is the longevity of the panels... do they last a year, 25 years, 100 years?
As you can see, if they last just 15 years they're beating out coal, which would mean Nanosolar has a [come on Mark, fight it, FIGHT IT... ah to heck with it] very bright future. I'd have to think that becoming a power-plant producer that uses this technology would be extremely lucrative, which is probably why a lot of people are drooling on the sidelines waiting to see if Nanosolar can deliver on these big promises. I know I am.
Wednesday, November 14, 2007
TerraPass - Consumer Driven Change
A few years back my friend Tom Arnold founded a company called 
. The company has been getting a ton of press and momentum, and for good reason. I love what they do and the concept is simple. You want to be carbon neutral, so you decide to offset the CO2 you put into the air by driving, flying, or heating your home. You go to TerraPass.com, input your driving/flying/home energy habits, and buy a corresponding TerraPass. They then put your money into clean energy projects, such as wind energy, that replace enough "dirty" energy to offset what you've pumped into the air, functioning like your own personal carbon offset. Great idea.
I just offset two business flights, a weekend flight for me and my girlfriend, and my flight home for Christmas, all for just $37. Then I offset my car for a year for $30 (I know, no electric car yet, can you believe it?). Conscience clear, but even more important, CO2 clear.
They've also announced great partnerships to effect change at the point of purchase, such as the ones with Enterprise, Alamo, and National. When you rent a car through these companies you'll be given the chance to offset the CO2 from your rental. Or with Expedia, which allows customers the same option when they book a trip.
I'd love to see even more of this, such as a GreenGrocer TerraPass at grocery store checkout lanes, giving you the ability to offset CO2 involved with the manufacturing and transport of your groceries. I'm sure Whole Foods customers would jump all over that, and it'd be a great marketing move for Whole Foods. Alternatively, other grocery chains could move first to capture more of that lucrative customer segment.
And my personal favorite would be if they could put an option right at the gas pump. Pay an extra 5 or 10 cents per gallon, and your entire fill-up is carbon neutral. I'd do that. But I wonder if Exxon and co. would go for that... "hey, pay a little extra to help put us out of business!" Hmmm, somehow I think it's a tough sell to the execs. But BP just might go for it, since they're trying to position themselves as the environmentally friendly oil company.
. The company has been getting a ton of press and momentum, and for good reason. I love what they do and the concept is simple. You want to be carbon neutral, so you decide to offset the CO2 you put into the air by driving, flying, or heating your home. You go to TerraPass.com, input your driving/flying/home energy habits, and buy a corresponding TerraPass. They then put your money into clean energy projects, such as wind energy, that replace enough "dirty" energy to offset what you've pumped into the air, functioning like your own personal carbon offset. Great idea.I just offset two business flights, a weekend flight for me and my girlfriend, and my flight home for Christmas, all for just $37. Then I offset my car for a year for $30 (I know, no electric car yet, can you believe it?). Conscience clear, but even more important, CO2 clear.
They've also announced great partnerships to effect change at the point of purchase, such as the ones with Enterprise, Alamo, and National. When you rent a car through these companies you'll be given the chance to offset the CO2 from your rental. Or with Expedia, which allows customers the same option when they book a trip.
I'd love to see even more of this, such as a GreenGrocer TerraPass at grocery store checkout lanes, giving you the ability to offset CO2 involved with the manufacturing and transport of your groceries. I'm sure Whole Foods customers would jump all over that, and it'd be a great marketing move for Whole Foods. Alternatively, other grocery chains could move first to capture more of that lucrative customer segment.
And my personal favorite would be if they could put an option right at the gas pump. Pay an extra 5 or 10 cents per gallon, and your entire fill-up is carbon neutral. I'd do that. But I wonder if Exxon and co. would go for that... "hey, pay a little extra to help put us out of business!" Hmmm, somehow I think it's a tough sell to the execs. But BP just might go for it, since they're trying to position themselves as the environmentally friendly oil company.
Tuesday, November 13, 2007
Fun With Balloons - Correction
Correction. My last blog post was quite excited about Cool Earth's new inflatable solar concentration technology, which lowered the cost per Watt for solar to $0.20, and I found the idea too good to be true. Well, I did some further research and found a CNET article with the following quote:
"Cummings [Cool Earth's founder and CTO] envisions that these balloons will be cabled together above farmland and would be replaced every year"
Darn. I was hoping the balloons could stick around for at least a few years. If they have to be replaced every year, the cost per kWh becomes a bit higher. But what's interesting is that it's still cheaper than oil, getting close to natural gas, while still quite a bit more pricey than coal. But if they could make those balloons last four years, the price per kWh is about what coal costs!
Here are my rough calculations (I'm not a commodities trader, so I apologize if the prices aren't up to the minute):
I, for one, am rooting for them to make those balloons a little more durable.
"Cummings [Cool Earth's founder and CTO] envisions that these balloons will be cabled together above farmland and would be replaced every year"
Darn. I was hoping the balloons could stick around for at least a few years. If they have to be replaced every year, the cost per kWh becomes a bit higher. But what's interesting is that it's still cheaper than oil, getting close to natural gas, while still quite a bit more pricey than coal. But if they could make those balloons last four years, the price per kWh is about what coal costs!
Here are my rough calculations (I'm not a commodities trader, so I apologize if the prices aren't up to the minute):
I, for one, am rooting for them to make those balloons a little more durable.
Fun With Balloons!
As I say in my introduction above, I'm interested in solutions that will be real, achievable, and market-driven. So with that last part in mind, let's see if we can have some fun with balloons and make some money in the process.
Cool Earth claims to have technology, called Inflatable Solar Concentration, that will reduce the price for solar energy to roughly $0.20 per Watt within three years (for comparison purposes, check out my posts below for the solar stations that are producing it at $2 to $3.20 per Watt). Wow.
So let's say you had a really big back yard and you wanted to buy some balloons and create your own power plant. Could you make money? Let's run the numbers:
So we raised $200k, bought 2,000 balloons, strung them together, and we're cranking out a Megawatt. Assuming they capture energy 9 hours a day, we're selling 3.3 M kWh back to the grid. At 7 cents per kWh, we make our money back plus a profit in year one. And each successive year is pure profit.
Is it just me or does this sound too good to be true? I'm going to give these guys a call and see if I can buy some balloons.
Cool Earth claims to have technology, called Inflatable Solar Concentration, that will reduce the price for solar energy to roughly $0.20 per Watt within three years (for comparison purposes, check out my posts below for the solar stations that are producing it at $2 to $3.20 per Watt). Wow.
So let's say you had a really big back yard and you wanted to buy some balloons and create your own power plant. Could you make money? Let's run the numbers:
So we raised $200k, bought 2,000 balloons, strung them together, and we're cranking out a Megawatt. Assuming they capture energy 9 hours a day, we're selling 3.3 M kWh back to the grid. At 7 cents per kWh, we make our money back plus a profit in year one. And each successive year is pure profit.
Is it just me or does this sound too good to be true? I'm going to give these guys a call and see if I can buy some balloons.
Monday, November 12, 2007
Energy Crunch
Okay, I came across an amazing article that happens to be titled 'The Energy Crunch to Come.'
If you don't know about the idea of peak oil, suffice to say that most experts agree that it's real. They disagree on the date, but this article explains why it may come sooner rather than later. His conclusion should sound familiar if you've been reading my blog:
"Only an ambitious program of energy conservation -- entailing the imposition of much higher fuel-efficiency standards for American automobiles and SUVs -- and the massive funding of R&D in, and then the full-scale development of alternative, environmentally-friendly fuels can offer hope of averting the disaster otherwise awaiting us."
If you don't know about the idea of peak oil, suffice to say that most experts agree that it's real. They disagree on the date, but this article explains why it may come sooner rather than later. His conclusion should sound familiar if you've been reading my blog:
"Only an ambitious program of energy conservation -- entailing the imposition of much higher fuel-efficiency standards for American automobiles and SUVs -- and the massive funding of R&D in, and then the full-scale development of alternative, environmentally-friendly fuels can offer hope of averting the disaster otherwise awaiting us."
A Small Effort Can Have Big Effects
So I've been asked, "you talk a big game about energy independence through renewables, but it seems so hard and expensive. Isn't it just a pipe dream?" (ok, no one asked me that... I asked myself) In truth, it's far far more expensive for us NOT to develop renewable energy. I talked about a gas tax, and then I came across this article that agrees with me, basically saying that while we've dithered and fought over what to do with our energy policy, the price of oil has jumped from $40 to $100. And there are signs that it could go to $200 or more. We're absolutely shooting ourselves in the foot with every dollar we don't spend right now on renewable energy, dollars that in the future will go three and fourfold into the pockets of foreign governments hostile to us. What a waste.
Let's look at what a little tiny change now could do for us when applied over ten years. I'm going to use the example of my 20-cent per gallon gas tax below, and say that each year we took those proceeds and built a solar plant, using the cost model of the Victorville solar energy station. Are you ready?
Doesn't that just kill you? $10 bucks a month and in ten years those 13 million people could get 40% more energy from solar, using existing technology. Considering SoCal Edison energy is already 18% renewable, this would bring the total near 60%! Victorville is being built right now, with available technology. It's not a pipe dream. Why are we not building a hundred of these, and a hundred wind and geothermal stations as well? The cost of the alternative is about to get more expensive than we can imagine.
Let's look at what a little tiny change now could do for us when applied over ten years. I'm going to use the example of my 20-cent per gallon gas tax below, and say that each year we took those proceeds and built a solar plant, using the cost model of the Victorville solar energy station. Are you ready?
Doesn't that just kill you? $10 bucks a month and in ten years those 13 million people could get 40% more energy from solar, using existing technology. Considering SoCal Edison energy is already 18% renewable, this would bring the total near 60%! Victorville is being built right now, with available technology. It's not a pipe dream. Why are we not building a hundred of these, and a hundred wind and geothermal stations as well? The cost of the alternative is about to get more expensive than we can imagine.
Thursday, November 8, 2007
The Gas Tax - Is It Feasible? (Don't Kill Me!)
I was talking with my friend J-Ro* about his favorite subject, Peak Oil, and we began talking about taxing gasoline. Obviously it's not the most popular of political moves (ok, it's political suicide), and there are concerns about the ripple effects to the economy, including potential recession. But on the upside it could be used to develop renewable energy (see my first post for the benefits of this), and it could speed the consumer's move to reducing energy/oil consumption and demanding renewable energy. So I did what I am wont to do... I opened up an Excel spreadsheet.
People complain to no end about increases in gas prices, and to me it's highly irrational. A tax of $1 per gallon (which would cause large-scale mobs to burn in effigy whomever had proposed such a monstrous tax, which, I now fear, they could think is me!) only costs the average driver $50 per month.
A tax of $0.20 per gallon, which would most likely still be hugely unpopular, would only cost $10/month.
So consumers seem to resist anything that costs them $10/month.
Now let's look at that same average consumer and see what they might save by replacing current 100-Watt bulbs with 26-Watt fluorescent bulbs.
$8.16! That's almost the $10 the gas tax would cost. So it's basically a wash.
I just installed these bulbs and they're actually brighter than the old 100-watt bulbs. So now the consumer is resisting using a better product that saves them the $10 per month they were about to kill me for suggesting I put into renewable energy.
I really believe this is an information war. The ultimate answers to the Energy Crunch will come from rational decisions. We just need to make sure the rational arguments get into the heads of the decision-makers.
*Incidentally, J-Ro, whose full name I won't use to protect his identity, was the one who suggested starting this blog in the first place. Thanks J-Ro!
People complain to no end about increases in gas prices, and to me it's highly irrational. A tax of $1 per gallon (which would cause large-scale mobs to burn in effigy whomever had proposed such a monstrous tax, which, I now fear, they could think is me!) only costs the average driver $50 per month.
A tax of $0.20 per gallon, which would most likely still be hugely unpopular, would only cost $10/month.
So consumers seem to resist anything that costs them $10/month.
Now let's look at that same average consumer and see what they might save by replacing current 100-Watt bulbs with 26-Watt fluorescent bulbs.
$8.16! That's almost the $10 the gas tax would cost. So it's basically a wash.
I just installed these bulbs and they're actually brighter than the old 100-watt bulbs. So now the consumer is resisting using a better product that saves them the $10 per month they were about to kill me for suggesting I put into renewable energy.
I really believe this is an information war. The ultimate answers to the Energy Crunch will come from rational decisions. We just need to make sure the rational arguments get into the heads of the decision-makers.
*Incidentally, J-Ro, whose full name I won't use to protect his identity, was the one who suggested starting this blog in the first place. Thanks J-Ro!
Solar calculations - part 2
OK, I did a bit more research into the cost of solar power by looking into the Victorville, CA Solar Power station. The plant plans to build 20,000 Stirling generators, producing 25 kW each. The cost at such production levels is estimated to be $50-80,000 per generator, which is a cost per watt between $2 and $3.20, a bit lower than the Nevada One figures I mentioned in my post below.
So this stuff is realistic.
What's even more interesting is that the plant will earn back its cost in 15 years by selling power at ~7 cents/kWh, and after that it's going to "mint money," as this Business Week article puts it.
So this stuff is profitable. My question is, what's the holdup?
So this stuff is realistic.
What's even more interesting is that the plant will earn back its cost in 15 years by selling power at ~7 cents/kWh, and after that it's going to "mint money," as this Business Week article puts it.
So this stuff is profitable. My question is, what's the holdup?
Wednesday, November 7, 2007
Solar calculations - part 1
This article is an interesting exercise in figuring out the scale of the solution. But I can simplify the math. He's basically saying the Nevada Solar One project cost $240M and puts out 64 MW of energy. That's $3.75 per watt. So he could have just skipped all his intermediate steps and said: $68 B (what Bush is asking for the Iraq war right now) buys you 18 GW. The U.S.
So why is this Economist article so pessimistic that solar won't amount to more than 1% of our energy needs in the next decade? There must be production limitations (i.e. we can only make so many panels per year currently).
Am I missing something?
So why is this Economist article so pessimistic that solar won't amount to more than 1% of our energy needs in the next decade? There must be production limitations (i.e. we can only make so many panels per year currently).
Am I missing something?
What will spur change in the energy industry? Gas that costs more than your car?
I was driving around yesterday and got to thinking... with the rising price of oil due to shrinking supply and rising demand, we'll soon realistically see gas prices in the $5 to $6 per gallon range. Some Americans will scoff, but as many people have pointed out, Europe's been above this level for a long time. At that level, we can see from some pretty standard calculations that the gas will cost more than the car over the life of the car.
And if we slightly modify some of those assumptions, we see a dramatic shift where the fuel now costs nearly 3X what the car cost.
Prices such as these would look more like the razor blade model, where you get the razor for cheap, but the company nails you when you buy the blade refills for 12 bucks. Come to think of it, if I were an oil company I'd launch a series of ads showing just how sexy and cool these un-economical cars are... you know, distract people from the fact that they're paying more for the fuel than the car.
But I think consumers are smart, and while they've already begun to wake up, they'll REALLY wake up when gas hits $6/gallon. And I do believe demand for electric cars, not just hybrids, will begin to come from the bulk of society, not just the "green fringe."
And that's really where we have to go on this issue. Change will have to come because it makes economic sense to the consumer. I fear we're living a pipe-dream if we think that consumers will think 30 years into the future and make a choice that hurts them economically today. They have to feel some pain so that the better choice becomes the economical choice, and vice versa. Unfortunately, we'll see just how much pain we have to endure first.
And if we slightly modify some of those assumptions, we see a dramatic shift where the fuel now costs nearly 3X what the car cost.
Prices such as these would look more like the razor blade model, where you get the razor for cheap, but the company nails you when you buy the blade refills for 12 bucks. Come to think of it, if I were an oil company I'd launch a series of ads showing just how sexy and cool these un-economical cars are... you know, distract people from the fact that they're paying more for the fuel than the car.
But I think consumers are smart, and while they've already begun to wake up, they'll REALLY wake up when gas hits $6/gallon. And I do believe demand for electric cars, not just hybrids, will begin to come from the bulk of society, not just the "green fringe."
And that's really where we have to go on this issue. Change will have to come because it makes economic sense to the consumer. I fear we're living a pipe-dream if we think that consumers will think 30 years into the future and make a choice that hurts them economically today. They have to feel some pain so that the better choice becomes the economical choice, and vice versa. Unfortunately, we'll see just how much pain we have to endure first.
Friday, November 2, 2007
Peak Oil - the Energy Crunch Opportunity
Peak oil is here. I don't want it to be here. You don't want it to be here. But as someone once said (I think it was Jack Welch, although he surely can't have been the first), "deal with the world as it is, not as you want it to be."
Oil production is declining according to a report from the Energy Watch Group in Germany. The world currently produces 83 M barrels/day, or 30.3 billion/year. At current oil prices of ~$93/barrel, that means $2.8 trillion spent on oil this year worldwide.
As that report predicts, global oil output is going to drop by 25 million barrels/day by 2020 to a predicted output of 58 million barrels/day. That equates to almost a trillion dollars of value PER YEAR that will need to be replaced, and that's not even taking into account the projected increase in the world's energy demand over the same period. That amount will rise to a trillion and a half dollars per year by 2030.
Where will that energy come from? Oil shale, oil sands, or natural gas? Biofuels, solar, wind, or geothermal? The answer is yes. It will have to be a combination of a lot of different answers, since no single answer seems complete.
A trillion and a half per year. Seems like a fairly large market. Clever entrepreneurs wanted.
Oil production is declining according to a report from the Energy Watch Group in Germany. The world currently produces 83 M barrels/day, or 30.3 billion/year. At current oil prices of ~$93/barrel, that means $2.8 trillion spent on oil this year worldwide.
As that report predicts, global oil output is going to drop by 25 million barrels/day by 2020 to a predicted output of 58 million barrels/day. That equates to almost a trillion dollars of value PER YEAR that will need to be replaced, and that's not even taking into account the projected increase in the world's energy demand over the same period. That amount will rise to a trillion and a half dollars per year by 2030.
Where will that energy come from? Oil shale, oil sands, or natural gas? Biofuels, solar, wind, or geothermal? The answer is yes. It will have to be a combination of a lot of different answers, since no single answer seems complete.
A trillion and a half per year. Seems like a fairly large market. Clever entrepreneurs wanted.
Introduction to Energy Crunch
Welcome to Energy Crunch. As this is my first post, I think I'll lay out why I'm blogging here, why I'm focusing on energy.
Simply put, we are facing an Energy Crunch. Energy is going to be the #1 issue facing our country in the coming 50 to 100 years. Our economy has been built on the back of cheap energy. But getting that cheap energy out of oil has caused lots of problems. And lots of indicators show that we may not be able to get that energy out of the ground so cheaply anymore. Alternative energy sources will be needed, and fast. I say that energy is the #1 issue because working to solve the energy issue means that you're simultaneously working to solve other major issues, such as global warming, peak oil, and terrorism.
Global warming. We need to stop producing CO2. Renewable energy sources (which I will argue need to be re-branded as "free" energy sources, which is what they are... a post is almost certainly forthcoming on the re-branding of energy as the front line of the energy war) don't produce CO2, or produce a lot less of it. That case is pretty clear.
Peak oil is happening, in that oil production has already begun its decline year-to-year. Some will debate whether we're just seeing the effects of various geopolitical situations, which, when cleared up, will see us back to producing more and more oil for the foreseeable future. I think, though, the most reasonable assumption is that peak oil is here, and that we need to start thinking about what's going to replace all that oil. I'll do a post on that in the very near future.
Terrorism is linked to the oil problem, but this will be a lesser focus of my blog. Suffice to say for now that the U.S. needs massive amounts of oil, and this has meant dealing with the Middle East. It may be oversimplified to say our thirst for oil causes or funds terrorism, but not by much.
So what am I going to do? I'm on a mission of exploration. I'll be looking, and re-looking, at a lot of the potential solutions for what I see as the Energy Crunch problem. I'll spend some time discussing the problem itself (i.e., what is peak oil, have we hit it yet, etc), but I want to focus more on the solutions. What are the viable alternative energy sources out there? What new breakthroughs are popping up? How do those impact that technology as a viable source of energy in the future? How should individuals and governments act and react to these changes?
Let the energy exploration begin.
Simply put, we are facing an Energy Crunch. Energy is going to be the #1 issue facing our country in the coming 50 to 100 years. Our economy has been built on the back of cheap energy. But getting that cheap energy out of oil has caused lots of problems. And lots of indicators show that we may not be able to get that energy out of the ground so cheaply anymore. Alternative energy sources will be needed, and fast. I say that energy is the #1 issue because working to solve the energy issue means that you're simultaneously working to solve other major issues, such as global warming, peak oil, and terrorism.
Global warming. We need to stop producing CO2. Renewable energy sources (which I will argue need to be re-branded as "free" energy sources, which is what they are... a post is almost certainly forthcoming on the re-branding of energy as the front line of the energy war) don't produce CO2, or produce a lot less of it. That case is pretty clear.
Peak oil is happening, in that oil production has already begun its decline year-to-year. Some will debate whether we're just seeing the effects of various geopolitical situations, which, when cleared up, will see us back to producing more and more oil for the foreseeable future. I think, though, the most reasonable assumption is that peak oil is here, and that we need to start thinking about what's going to replace all that oil. I'll do a post on that in the very near future.
Terrorism is linked to the oil problem, but this will be a lesser focus of my blog. Suffice to say for now that the U.S. needs massive amounts of oil, and this has meant dealing with the Middle East. It may be oversimplified to say our thirst for oil causes or funds terrorism, but not by much.
So what am I going to do? I'm on a mission of exploration. I'll be looking, and re-looking, at a lot of the potential solutions for what I see as the Energy Crunch problem. I'll spend some time discussing the problem itself (i.e., what is peak oil, have we hit it yet, etc), but I want to focus more on the solutions. What are the viable alternative energy sources out there? What new breakthroughs are popping up? How do those impact that technology as a viable source of energy in the future? How should individuals and governments act and react to these changes?
Let the energy exploration begin.
Subscribe to:
Posts (Atom)
