Category Archives: renewables

Wind is shelved from the Pickens Plan

Senator Byron Dorgan (D-ND) speaks at a press ...

T. Boone Pickens (left) with Senator Byron Dorgan (D-ND). Image via Wikipedia

The 2008 “Pickens Plan,” U.S. financier T. Boone Pickens’ proposal to reduce U.S. dependence on foreign oil, anticipated that 20% of American power generation could come from wind while natural gas could power the nation’s transportation sector. At the time, he received support from unlikely sources, including the executive director of the Sierra Club, Carl Pope.

Pickens’ interest in wind generation, however, has been steadily decreasing since his plan was initially announced, and in a recent interview with Roll Call, he said he’s entirely shelving the wind portion of his plan. According to Pickens, wind is not financially viable because natural gas is too cheap. Until the cost of natural gas rises, wind generation doesn’t make economic sense. In the meantime, he is focusing entirely on getting natural gas into the energy market.

The move has produced a backlash from some of the environmentalists that formerly supported the Pickens Plan. They accuse Pickens of lobbying for incentives in order to make more money off natural gas, and they complain that the natural gas industry is too unregulated to be considered a clean source of fuel. The process known as “fracking,” which is used to produce natural gas, has been questioned as a possible source of groundwater contamination.

Meanwhile, supporters of wind power say Pickens’ move shouldn’t be seen as a reflection of the health of the wind industry as a whole, but as how things happen to be playing out in Texas at this particular time. Wind industry analyst Matt Kaplan, with IHS Emerging Energy Research, told Climate Progress that it’s very difficult right now for wind farms to beat out natural gas on the spot market. It’s also difficult for developers to find long-term agreements in Texas since Texan utilities have already purchased enough wind power to fulfill their required targets. Other markets, however, still have a lot of room for renewable energy development. California and the Northeastern states, in particular, are willing to sign power purchase agreements. Overall, Kaplan thinks development will stay relatively flat until the price of natural gas begins to rise.

“We think it’s really a more healthy trajectory for the industry – this moderation is going to make wind more cost competitive over the long term by forcing companies to improve technology, build better projects, and reduce costs,” Kaplan told Climate Progress.

Peter Kelley, the vice president of the American Wind Energy Association, told Roll Call, “We agree [with T. Boone Pickens] that natural gas prices won’t stay as low as they are today for very long, and that’s one of the reasons we believe wind energy needs to be a bigger part of our energy mix all along, so electric utilities can lock in long-term low rates today.” Indeed, Pickens’ organization stresses that wind power is still an important piece of America’s energy independence. They’re just not building large wind farms in Texas for the time being. Considering Pickens expects natural gas prices to rise by 2016, however, we have to wonder why it doesn’t make sense to continue planning for wind farm construction now.

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.

What’s Google doing in the energy sector?

Another view of the south side of the Googlepl...

Google headquarters. Image via Wikipedia

There was a lot of buzz last year when Google created Google Energy LLC, a subsidiary of the search engine giant that is focused on reducing energy costs and consumption for the company but that can also produce and sell clean energy.

Prior to the formation of the company, Google had already been investing in wind, solar, and geothermal projects, including a 1.6 megawatt (MW) solar panel array at its Mountain View CA headquarters. Google Energy has since invested $38.8 million for wind farms generating 169.5 MW in North Dakota, agreed to purchase 100 MW of wind energy in both Iowa and Oklahoma, joined a group of investors building an undersea cable in the Atlantic to carry wind energy from future offshore wind farms to transmission grids, invested $168 million in BrightSource’s Ivanpah solar thermal plant being built in the California’s Mojave desert and capable of generating 392 MW of solar power, and put money into a variety of smaller greentech startups. Google said that with the Ivanpah deal, its investment in clean power has hit $250 million.

With so much money going into support for renewables, it’s ironic that Greenpeace recently knocked Google in a recent study looking at data centers and the dirty energy powering them. Greenpeace later issued a special statement to the press praising some of Google’s clean energy efforts.

So what is Google up to? In an article at Gigaom last year, Google’s Niki Fenwick said that the creation of Google Energy was an attempt to proactively address hurdles the company might face in its plans to be carbon neutral. By buying and selling clean energy from its investments, Google would help offset the carbon emissions associated with its data centers and other operations. Owning its own power generation will also allow the tech giant to lower its energy costs.

In an interview with TechCrunch, Google’s green energy czar, Bill Weihl, said that the company had reduced energy consumption by more than 50% over the last five to six years at their server and data centers. Moreover, he said that Google Energy was interested in improvements and efficiencies, but also what he called “additionality.” In Weihl’s words, “Basically, we ask: will our purchase [of power from a renewable energy provider] result in something new happening beyond business-as-usual.”

Google is famous for aggressively pursuing side projects that don’t seem to have a clear connection to its core business. Google Energy, however, makes sense: it provides clean energy for data centers, the investments offer good returns for the capital, and, as noted by Fenwick, it positions the company to proactively address issues that might rise in the future.

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.

Learn by osmosis… and extract some energy

Energy can be extracted from all sorts of physical processes. That wind can provide energy is very intuitive. So is solar heating. Solar PV takes a bit more to understand, but we’ve all seen it in action. Tidal energy extraction? Also fine. Biomass energy? Understandable.

What baffles the mind a bit more though is extracting energy from salinity gradients. It has been studied for some time. For example, Dr. Wick, from the Scripps Institution of Oceanography in La Jolla, wrote a paper titled “Power from Salinity Gradients” in the 70s. In these earlier concepts, osmotic pressure was utilized, but costs and lack of robustness of the devices kept them from being commercialized.

Statkraft demonstration plant

More than 30 years later, the idea is revisited. The Norwegian company Statkraft built a first demonstration plant to generate energy from osmosis in 2009. It’s been a little quiet around them, but they are still hoping to open a large scale plant in the next decade. Osmosis is the transport of water through a semi-permeable membrane. Plants use osmosis, for example, to absorb moisture through their leaves. Our body cells use osmosis all the time for transfer of fluids. In an osmotic power plant,  fresh water and salt water are channelled into separate chambers. The chambers are separated by an artificial membrane that is good at passing through water, but not at passing through solutes like salt. Now comes the interesting part: the fresh water will be pushing through the membrane to the saltier side. This leads to an increase in pressure on the salt water side of the membrane. How much depends on the quality of the membrane. If the membrane is really good at drawing through the fresh water, the pressure difference thus obtained may be large enough to drive an actual turbine. Statkraft and other companies have invested a lot of money in developing ever better membranes and seem to be getting somewhere.

But, there are other ways to exploit salinity gradients. My colleague Yi Cui from Materials Science and Engineering at Stanford recently demonstrated a new technique. It’s nice and uses batteries rather than membranes. The following explanation of the mechanism was recently described in the Stanford Report.

The battery itself is simple, consisting of two electrodes – one positive, one negative – immersed in a liquid containing electrically charged particles, or ions. In water, the ions are sodium and chlorine, the components of ordinary table salt. Initially, the battery is filled with freshwater and a small electric current is applied to charge it up. The freshwater is then drained and replaced with seawater. Because seawater is salty, containing 60 to 100 times more ions than freshwater, it increases the electrical potential, or voltage, between the two electrodes. That makes it possible to reap far more electricity than the amount used to charge the battery. “The voltage really depends on the concentration of the sodium and chlorine ions you have,” Cui said. “If you charge at low voltage in freshwater, then discharge at high voltage in sea water, that means you gain energy. You get more energy than you put in.” Nice. Once the discharge is complete, the seawater is drained and replaced with freshwater and the cycle can begin again.

The cycle that generates electricity in Cui’s new battery. In their lab experiments, Cui’s team used seawater they collected from the Pacific Ocean off the California coast and freshwater from Donner Lake, high in the Sierra Nevada. They achieved 74 percent efficiency in converting the potential energy in the battery to electrical current, but Cui thinks with simple modifications, the battery could be 85 percent efficient. 

To enhance efficiency, the positive electrode of the battery is made from nanorods of manganese dioxide. That increases the surface area available for interaction with the sodium ions by roughly 100 times compared with other materials. The nanorods make it possible for the sodium ions to move in and out of the electrode with ease, speeding up the process.

Why are they even interested? Cui’s team calculated that if all the world’s rivers were put to use, their batteries could supply about 2 terawatts of electricity annually – that’s roughly 13 percent of the world’s current energy consumption. But, Cui realizes that river mouths and estuaries, while logical sites for their power plants, are environmentally sensitive areas. The good thing about his device is that it just needs to route some of the river water through the system. A power plant operating with 50 cubic meters of freshwater per second could produce up to 100 megawatts of power, according to the team’s calculations. That would be enough to provide electricity for about 100,000 households. After use, the water is simply returned. The process itself should have little environmental impact.

The water used does not have to be clean fresh water, and this is one thing I really like about Cui’s device. Storm runoff would be useable and maybe even sewage water might work.

Green Tech investment has second highest quarter

Jeff St. John at GigaOm is reporting that venture capital firms have invested about $2.5 billion into green technology during the first quarter of 2011. The figure, compiled by Cleantech Group and reported by CNET, is only topped by the $3 billion invested in the third quarter of 2008. Cleantech has been tracking data since 2002.

However, St. John notes that much of the investment was concentrated in large deals for late-stage companies in renewable energy or electric vehicles. Meanwhile, there has been a decline in investments in early stage companies, probably because of the lack of returns. This leads St. John to question whether the upswing has  to do with the renewed confidence of investors or whether VCs are stepping into an area that could be met by public markets. Thin-film solar module maker Solyndra canceled its IPO last year to instead raise money from existing investors. Other solar companies as well as electric vehicle makers have also turned to follow-on investments.

Despite these examples, there are certainly companies that have bucked this trend. China’s Sinovel Wind, for instance, had a 9.46 billion yuan ($1.4 billion) public offering in Shanghai, making it the quarter’s biggest green tech IPO. And early-stage companies, like C3Nano raising $3.2 million to develop nanomaterials for solar panels, have captured a fair amount of investment money.

For more details, read St. John’s entire article here.

Loan guarantees are a no-brainer

In one of our previous posts

, we discussed the House Continuing Resolution sections that called for a stop on loan guarantee programs for large scale renewable energy projects. Today, 34 CEOs of renewable energy companies wrote to House and Senate leaders to protest against this proposal. They say the loan guarantee program will help create tens of thousands of jobs and generate billions of dollars in investment from the private sector. Of course it will. Moreover, without a loan guarantee program it simply cannot happen.

I’ve had various arguments in the last weeks with people about this. “Unfair treatment of renewable energy over traditional (fossil fuel) energy” is the most heard argument against such loan guarantees. Of course, this is a crazy statement to make. All industries receive government support in forms of loan guarantees, tax subsidies, hidden tax subsidies, accelerated depreciation programs, stimulus programs, you name it. The oil, gas and coal industry certainly receive their fair share. In fact, I’d argue that at this point in time, the renewable energy industry is not at all yet at a level playing field with the established fossil fuel industry. The price tag for large scale renewable energy projects over the duration of their lifetime is nearly fully determined by capital costs: fuel is free. If a company cannot get a decent loan, with a decent interest rate, the price of the renewable energy resource will go up and its competitiveness will go down. Is it fair that large scale solar plants cannot get the same interest rates as a nuclear power plants, or coal-fired power plants? Typically rates are determined by perceived risk. Here’s a catch 22. The current perceived risk is high because we have little experience with large scale renewable power plants. But, if as a result, the capital costs remain unfairly high, we will never get this experience.

A governmental loan guarantee eases the discomfort that financial institutions may have with lending money to “risky” businesses. The guarantee means that the government agrees to pay part of the money owed to lenders if a company defaults. The government itself estimates a risk associated with the loan guarantee. Suppose that a plant will cost 2 billion dollars to construct. The government could, say, provide a loan guarantee for 80% of this capital investment, and decide that it needs to actually put aside 10% of this 80% for each project as insurance against the loan guarantee, so 160 million dollars. The higher this insurance set-aside is, the harder it is to convince congress to put the loan guarantee up. But, ultimately all it is is a perception. There is little base in numbers, because there are so few numbers.

In short, without a loan guarantee program, we will in the current economic climate not get anywhere with large scale renewables. Besides, the chief executives also say, the cuts would “defeat America’s effort to compete with China, Germany and others in the clean technology marketplace.”

Together, the companies these 34 CEOs represent have already invested $13.3 billion dollars in projects that are being considered for the loan guarantee program and should break ground before the end of September. The projects are in 28 states, and will create an estimated 25,000 construction and operating jobs. Companies include solar panel maker First Solar Inc (FSLR.O: Quote), solar thermal company BrightSource Energy, solar panel maker SunPower Corp (SPWRA.O: Quote), geothermal power company U.S. Geothermal Inc (HTM.A: Quote) and biofuels maker POET, among others.

I’m hoping this CEO plea will help. Particularly now that nuclear energy is being seen by many as a no-no, and we will (tomorrow) be commemorating the anniversary of the Deepwater Horizon disaster, it seems like such a crazy idea to halt large scale renewable projects and kill this industry before it even has a chance.