Category Archives: news

Obama’s drilling plan

Petroleum drilling rig. Capable of drilling th...

Petroleum drilling rig. Image via Wikipedia

President Obama announced last Saturday that, in an effort to promote greater domestic oil production and help relieve prices at the fuel pumps, he intends to expand oil and gas drilling in the Gulf of Mexico and Alaska. The move was apparently meant to appease voters that are angry over soaring gas prices. At the same time, Obama has continued to press for repealing $21 billion in tax incentives for the big oil companies.

This isn’t the first time Obama has proposed expanding drilling. On March 31, 2010, he also announced the need to open more areas to gas and oil drilling. At that time, environmentalists sharply criticized the move and Republicans only offered lackluster support. The BP oil spill that occurred in the Gulf of Mexico a few weeks later effectively killed the proposal, with the administration placing a moratorium on deep water drilling.

This time around, Obama wants the Interior Department to allow drilling in Alaska’s National Petroleum Reserve. He also called for the faster evaluation and leasing of new oil and gas areas in the Gulf of Mexico. Obama cautioned that, “while there are no quick fixes to the problem [of high gas prices], there are a few steps we should take that make good sense.”

Some have argued that the proposal is aimed more at voter psychology than good sense. It’s unclear whether the move would have much effect on gas prices. It takes a long time for a policy change to produce a noticeable rise in oil production. Moreover, oil is a fungible global commodity. The price is determined by global supply and demand. If China is willing to pay more for oil than America, oil companies will only be too happy to send Alaskan oil overseas. The only way drilling for more oil in America would appreciably alter the price of gasoline is if the oil industry were nationalized.

However, there are ways in which the move does make good sense. Obama now looks like he’s doing something, energy markets usually respond positively to the prospect of greater future oil supplies, and real jobs will be created. The effect on the markets and the creation of jobs are especially welcome as the economy continues to slowly recover.

We’re No. 17! We’re No. 17!

Wind turbines (Vendsyssel, Denmark)

Wind turbines in Vendsyssel, Denmark, help make the country a top clean energy producer. Image via Wikipedia

The Associated Press (AP) is reporting that a study (to be released May 9) commissioned by the World Wildlife Fund for Nature (WWF) and prepared by Roland Berger Strategy Consultants ranks the U.S. 17th in clean energy production. Denmark earns the top spot, with 3.1 percent of its gross domestic product (GDP) coming from clean tech (about $9.4 billion).

The report used data gathered from various energy and financial sources, like the International Energy Agency or bank and brokerage reports, to measure earnings from green energy technologies. These included not only energy production from renewable sources, such as biofuels, solar, or wind, but energy efficiency technologies as well. The countries were then ranked according to the amount of national revenue generated from these technologies. In other words, the percentage of a country’s GDP that came from clean tech determined its rank.

The report also looked at the pace of growth. The AP quotes Roland Berger Strategy Consultants’ senior research associate Ward van den Berg as saying, “Clean technologies are really growing fast, but China is responsible for the majority of that growth.” The report ranks China second, but says its production of green tech has grown a whopping 77 percent a year. This accounts for the largest earnings stated in the report, about $64 billion, which is 1.4 percent of China’s GDP. Donald Pols, an economist with the WWF, told the AP, “The Chinese have made, on the political level, a conscious decision to capture this market and to develop this market agressively.”

Pols went on to say that U.S. clean tech had grown substantially thanks to the policies of Obama, but this couldn’t compare to Chinese policies and Chinese growth. “When you speak to the Chinese, climate change is not an ideological issue. It’s just a fact of life. While we debate climate change and the transition to a low carbon economy, the debate is passed in China. For them it’s implementation. It’s a growth sector, and they want to capture this sector,” Pols told the AP. The U.S. generates about $45 billion from clean tech, representing 0.3 percent of its GDP.

According to the report, the top five producers in terms of percentage of GDP, in order of rank, are Denmark, China, Germany, Brazil, and Lithuania.

Batteries not required: Wireless sensors promote building efficiencies

ECO 100 power generator and PTM 230 transmitte...

EnOcean's Eco 100 power generator and transmitter. Image via Wikipedia

Wired’s Gadget Lab is reporting on a clever wireless energy sensor developed by EnOcean that can help manage energy efficiencies (and cut costs) in commercial buildings.

EnOcean is a spinoff of Siemens focused on making energy harvesting wireless sensors and transmitters. These devices harvest energy from the mechanical movement of light switches, swipe card readers, and door handles, or use the Peltier effect to extract energy from the temperature difference between surfaces, to power tiny transmitters. These transmitters can communicate on TCP/IP networks allowing for whole-building control.

“Most buildings today are dumb,” says EnOcean Chairman Graham Martin, “meaning they completely lack automation systems to manage energy use.” With EnOcean’s easy-to-install switches and thermostats in place, any internet-enabled device can communicate with the sensors to turn down the heat or shut off lights. And since the whole system is wireless, there’s no need to rip holes in walls to install automation systems.

While currently focused on commercial uses, EnOcean has its sights on more mainstream applications, such as homes. You can read more about how their technology works on their website.

China’s energy consumption will level off?

One of the biggest bugaboos in the west about the rise of China has been the concern over an exponential increase in Chinese energy consumption and greenhouse gas emissions. A new report by researchers at Lawrence Berkeley National Laboratory (LBNL) is now challenging that assumption.

As reported in ScienceDaily, report co-author and director of LBNL’s China Energy Group Mark Levine says, “There’s been a perception that China’s rising prosperity means runaway growth in energy consumption. Our study shows this won’t be the case.”

The labor-intensive study developed a “bottom-up” model of energy use providing a more detailed look at energy demand patterns than standard methodologies. It looked at the drivers of energy consumption and the implications of efficiency policies. It also allowed for improvements in the efficiency of equipment as well as the reduction in demand as more households become saturated with appliances.

What the researchers (Nan Zhou, David Fridley, Michael McNeil, Nina Zheng, Jing Ke, and Mark Levine) found is that China’s energy consumption will begin to flatten in 2025-2030 and will fall by mid-century. Once everyone has a refrigerator, they won’t need another one each year. Once a highway or commercial building has been built, it will have a certain life period before needing to be replaced. The reason China’s energy demand is so high now is that it has to build up much of its infrastructure, as well as meet the demand for appliances from an increasingly wealthy populace, but that won’t last forever. China will eventually fall into the pattern of more developed countries where energy demand is flat even though standards of living continue to rise.

While this is good news, even if China’s energy consumption and greenhouse gas emissions level off, they will still be far above their former levels.

You can read the report here.

Ready, set, innovate!

Back in March, we mentioned that the Department of Energy had a new idea to help jump-start energy startups – The ‘America’s Next Top Energy Innovator’ Challenge.

Well guess what, folks? Today marks the start of the Challenge! From now until December 15, entrepreneurs and companies can apply for up to 3 of the Department of Energy’s 15,000 unlicensed patents for only $1,000 up front and with much less paperwork required.

The idea is to expedite the process of bringing new energy technologies to the U.S. marketplace. “Our goal is simple,” said Secretary Chu, “unleash America’s innovation machine and win the global race for the clean energy jobs of the future.”

If you’re interested, you can look through the available technologies and learn more about the process on the Department’s Energy Innovation Portal. You can also see a short powerpoint document the Department compiled that answers the most commonly asked questions.

Now get out there and innovate!

IEA says more support needed for energy innovation

The IEA has recently released their Clean Energy Progress Report

A few days ago, we posted that the first quarter of 2011 saw the second largest amount of investment by venture capitalists in green tech. Despite these promising numbers, a recent report released by the International Energy Agency (IEA) says governments are still lagging far behind in providing public support for renewable energy and efficiency research. Such support is critical since private companies can’t pony up the kind of R&D funding that governments provide and without R&D, innovation falls behind.

The report, called the Clean Energy Progress Report, notes that the last decade has seen a dramatic rise in global investments in renewable energy, led by wind and solar. Energy efficiencies have also seen modest gains and car companies have added hybrids and all-electric vehicles to their product lines.

Despite these positives, the growth of fossil fuel development has continued to outpace clean energy technologies. In fact, coal has been the fastest growing global energy source for the past decade, providing 47% of new electricity demand. And while research investments in nuclear are high, the recent events in Japan leave that industry with a vastly uncertain future.

The IEA notes a number of ways governments can address the situation, such as policies that support the longer term goals of meeting clean energy and carbon reduction targets. For instance, many of the renewable energy government subsidies  have expired while fossil-based technologies continue to receive them. In 2009, renewables received $57 billion in subsidies while fossil fuels received $312 billion. The difference in those numbers is understandable when compared to the amount of energy provided, but for change to occur, renewables will need continued and greater support until their development is cheaper. Governments should also continue providing tax credits and other incentives to stimulate private sector investments.

In short, the world needs nothing short of “a clean energy revolution,” says the report. And while it outlines possible combinations of policies that could provide such a result, the recent wrangling in Washington over the US budget, in which Republicans want to axe funding for renewables while continuing tax benefits for oil companies, shows that not everyone is in agreement.

Although it’s hard to argue with Republicans given the amount of energy and jobs fossil fuels provides, we should also take note of other approaches. For instance, the Wall Street Journal recently reported on the growth of renewables in China, due in large part to government policies. As a result of those policies, wind energy has increased substantially and Chinese solar panel companies are now the largest in the world. The success of China’s clean energy policies hasn’t only helped its own supply-chain companies, it’s also attracting U.S. and European manufacturers.

You can read the entire IEA report here.

For sale, for cheap: Clever ideas in energy innovation

The wee town of Startup, Snohomish County, Washington State

If you have a little cash, an entrepreneurial drive and an interest in energy, but you lack the innovative idea of your new start-up, shop around at the Department of Energy. This week, our Secretary of Energy Steve Chu announced a new program, part of the Startup America Initiative, called “America’s Next Top Energy Innovator“. OK, cute play on America’s Next Top Model, although perhaps not as appealing to the general public. Here’s the deal: for a little money ($1000) you can obtain an option agreement to license a patent held by one of our 17 national laboratories. In the past, this would have cost anywhere between $10,000 and $50,000. So, the new deal is a bargain. There is more though: filing is made much easier with a streamlined online process, and DoE will even help you promote your new business idea to potential investors at the 3rd Annual ARPA-E Energy Innovation Summit in 2012, as well as give you access (at some costs for some time) to national research laboratories. The announcement boasts that there are 15,000 unlicensed patents and patent applications on the books to choose from. That sounds like a nice well-stocked ideas stop. The Department hopes that through this simpler and much cheaper process, more startups will be formed based on innovative ideas developed using federal support. In fact, its goal is to double the number of new startups.

It all sounds terrific at first. I’m all for stimulating market innovation. We are in danger of loosing the battle with other countries in this area and, like many others, I’m concerned about our industrial competitiveness in renewable energy, energy efficiency and carbon emission reduction schemes.  Without stimulus, we may become dependent on other countries, such as Japan and China that are investing very strongly and at increasing rate, for our clean energy innovations. Patent applications are telling. Globally around 20,000 new patents are filed per year in the energy area. US patents account for around 4-5% of total, which is less than the annually than patents filed by countries like China and Japan. Applicants from Japan accounted for the largest number of applications in the fields of solar energy and fuel cells.  In the last decade, Japan filed over 40% of the patents in this area, with China 13%, the US 12% and Germany 6%, approximately. Germany and Japan were the top two countries of patent origin for wind energy technologies in that same time period. Of course it is not only the number of patents that counts, but also the quality of them. And it is (still) true that the number of citations, a measure of the innovation level of a patent application, is much higher for US patents at this moment than for Chinese patents, say, but this advantage is also shrinking over time.

So, it seems like a great idea, this ANTEI (aye, bad acronym) program. But, can we expect it, though announced with a lot of trumpeting, to achieve much? It’s hard to gauge. First of all, how many startups are formed now? I could not find the statistics. The Department does mention that at the moment only 10% of all available patents are licensed. I take it those are the good ones. Would there still be pearls amongst the remaining unlicensed patents, and was it really the higher fee and more arduous application process that kept savvy entrepreneurs away?  If so, these changes are certainly welcome. But more importantly, how many of these startups formed are actually successful in bringing innovation to the marketplace? And would the program really make a difference in this successrate, which is what really matters?

If you’ve ever tried to launch a successful startup, you know that strength of the underlying innovation is only one factor deciding your successrate. Especially in energy. Market penetration is particularly difficult because of large established players. Margins are relatively small. Competition is fierce, also international competition. And, moreover, the market is highly dependent on economic policies that are not always steady.

It seems to me that we need much, much more than this Next Top EI (hey, that’s funny, “ei” in Dutch means “egg” – Next Top Egg program!) to successfully launch more US startups in energy innovation. We need to help create the market. A carbon tax, or consistent and clear carbon trading, would help. Clear consistent policies on tax credits as well as loan guarantees would help. And of course, if we are wanting to tap more into clever ideas generated through governmental research support, we should keep supporting that kind of research, rather than constantly reduce its level of funding.