Thursday, March 29, 2007

What Would Karl Rove Do (W-W-K-R-D)

The White House is in the news a lot these days. I am going to show how all of these stories have a similar, Total War backdrop to them, and then examine what this Total War approach might look like for Clean Tech:

- The 'Surge' in the Iraq war and Congress voting to mandate timeframes for troop withdrawals
- The Attorney General and the politically based firings of well qualified U.S. Attorneys
- The General Services Administration is being investigated for inappropriately steering and guiding resources based on politics
- The censorship of environmental and climate scientists by political appointees.
- The destruction of civil liberties - either our own or our prisoners/enemy combattants

The present Administration is not just trying to promote an agenda - all administrations should - the present Administration is trying to destroy systems that do not align with its view. By destroy, I mean that literally. Take the battle to the EPA, the Clean Water Act, appoint a fervent religious extremist as your head of Justice, remove lawyers that don't prosecute (persecute) your political enemies, launch a "surge" of troops to Iraq in the months following a dramatic political rebuke of your war policy and execution.

In fact, if you look at any successes in the last 6-7 years from this administration, the vast majority of those haven't really proven to be effective in the promotion of any agenda item. They aren't succeeding by promoting compassionate conservativism, or increased religious conservativism in our schools, thoughts, conduct, as much as they are absolutely dominating the battle to DESTROY counter views.

Quoting from Wikipedia: Total war is a military conflict in which nations mobilize all available resources in order to destroy another nation's ability to engage in war. It's history can be traced to either World War One, The Civil War, The French Revolution, and depending on perspective even all the way back to the Pelopennisian War.

It's not really a complex notion or theory. It's simply the notion that you create so much pain, harm and destruction, unbound by any ethics, morals, or legal parameters that the result is permanent elimination of your enemy. In total war, your enemy isn't jailed, or weakened, or overthrown, but annihilated. And that annihilation isn't just the soldiers on the battlefield, it's their parents, cousins, children, their homes, fields, crops, and livestock, poison their wells, fry their electric grid, mangle their bridges, corrupt their culture, outlaw their history, ban their communications, and shatter any independent thought or peace of mind from ever taking hold again.

In January, Vinod Kholsa published a Wall Street Journal Editorial advocating a "War On Oil." In that piece, he makes the case for a war on oil to fund cellulosic biofuels, and for transportation fuels, he's probably right. But why stop at a battlefield war...

This week, the New Yorker has a book review on Slaughterhouse - The Idealistic Origins of Total War. The review examines the notion that Total War has it's start in Napoloeonic times, but more interestingly, that the original designers of total war were idealists. That war could be approached as a 'means to end all wars.' In other words, don't just go to war on battlefields with soldiers, but create a war system so massive, and so ugly, that no one would repeat it. (That no standing armies could be repurposed to start anew.)

In thinking about idealistic uses of total war, war on oil, and the complete and total war footing of the present administration, I am wondering about whether there is any relationship here to the future of cleantech. Specifically, what would an idealistic Total War approach to cleantech look like? Would it be beneficial? What would this war have as weapons and how total and comprehensive could it be. Are we to continually do 'battle' with shale oil, clean coal, nuclear and the like?

Total War on Cleantech: A comprehensive, dedicated, focused, many angled attack on all aspects of dirty tech. Or, more simply, if Cleantech were his agenda, Just what-would-Karl-Rove-Do? (WWKRD) (which strangely looks a lot like awkward :)

Such an approach wouldn't be an extension of our efforts today via the active promotion of renewable energy programs - and the moral, environmental, and business benefits from that development. But rather, Cleantech as a destroying force, the armed battle and aggressive, attacking, destroying, take no hostages, leave no stone unturned, have no morals, compunctions, qualms or ethics about tearing down and devastating the dirty tech alternatives we presently rely on. (primarily fossil and nuclear fuel approaches to energy.)

In fact, just as the administration has proven vastly more capable in destroying counter agendas, there is a case to be made that cleantech promotion is _harder_ than ditry tech wars. I gaurantee Karl Rove wouldn't be crying at TED or testifying the moral imperative to Congress. He'd be stirring headlines and launching daily attacks on toxic poisonings, terrorist funding, bribery charges and anything and everything else wrotten in Big Oil.

A Total War approach to Clean Tech would require:

- Hostile action on fossil fuel technologies, past, present and future.
- Hostile action on supply lines of fossil fuels (boycotts, new regulations for shipping, etc.)
- Hostile action on carbon emissions (laws, taxes, fees, bans)
- Hostile action on anything status quo (e.g. Who knew the Clean Water Act should be undercut... Karl Rove Did!)
- Hostile action on businesses engaged in dirty tech.

Is there a Karl Rove in cleantech's future? Do we need a radical zealot that doesn't treat cleantech as an enlightened choice, or a moral imperative, but rather, a a viscious, cut throat, to the death battle where every piece of resource, money, direction should be crushingly dominated and distorted to the cleantech view?

I don't know. I suspect that IF we get to cleantech, it won't be via Total War primarily because it requires administrative/political effort from the very same people betrothen to an extremely well funded and massive Oil Lobby.

I'm expecting supply challenges from Big Oil / dirty tech sooner than any real war footing or moral imperative to go clean...

Monday, March 26, 2007

All Power is Geography, Part Two

In my continuing series on All Power Is Geography: Here is a map of the solar resources in America.

#1. I am surprised by how non-uniform this map is. There are almost more longitudinal strata (resource changes moving east to west) than latitudinal stata (boundaries moving North to South) , especially in the Midwest region.

2. No clue why Southern Texas is so weak, I guess weather is almost as important as latitude (or else, why is half of Colorado stronger than Southern Florida.)

3. I'd be curious to see where and how the world's hot spots of population densities map to solar resource, particularly for Indonesia, India, and China. My guess is that this bodes well for solar in Mexico City, I suspect it bodes poorly for solar in Tokyo Japan.

Here is the wind resources map for the U.S..

Given the strong resource in the Northeast, I am surprised that there are not more wind power startups or markets there. Sure, we know about the Cape Wind effort/issues. But given Maine's proximity to large power distribution lines feeding Boston and New York, I am particular surprised that the Maine high wind resource is not further developed... ?

Also, just an absolute 'dead zone' for the South East - null white space across entire States.

Lastly, someone, somehow, is going to get clever and do some Google-esque "mashups." I've seen one on the overlay of wind resource and transmission lines (link tbd). Someday, I'll get clever and submit one on Hybrid Resources (where to put Wind + Solar) (installers take note:), I could also see usefulness in Solar/Wind Resource + Incentives/Carbon Credits. These may exist, but I haven't seen them and cannot easily google them...

Friday, March 23, 2007

All Power Is Geography

All power is geography. Always has been, always will be. Power is a universal need, and like water, which we get by whatever means are present, we've taken energy from camp fires, peat moss, wind and water mills, whale blubber, coal, oil, hydro, nuclear, ethanol, etc. etc. This is all obvious, but yet, people still seem to think of power sources as "competing" in a zero sum game...

I was at a recent cleantech conference looking at corporate adoption for cleantech. The panel of presenters included Applied Materials, Starbucks, and HP. One of the questioners asked the Starbucks rep about finding the "perfect" Starbucks shop configuration for utilizing cleantech so that the company could then "stamp and copy" this {exact} configuration throughout all of their coffee stores.

Wrong, wrong wrong. Starbucks will face the same economics as everybody else and will take the most efficient power where it exists. If it's hot, then geothermal cooling the building may make the most sense, in Iceland I can almost guarantee geothermal heating/power (opposite) may make sense, in New Mexico, light up those panels, in foggy, windy Seattle, spin some turbines on the roof. People, especially in America, have gotten used to a large, central, grid system where their power is delivered remotely, sans-geographia if you will. (if such a word exists...?)

But enough about me saying this, I found this excellent graphic from the American Solar Energy Society's report on Tackling Climate Change in The U.S. It may be a little too hard to read the legend from this pic, but if you click on the picture, it shows the general relative utility of various renewable energy sources for the United States. What's interesting is how prevalent biomass is, wind does about what I'd expect, and solar seems to be less prevalent than I would have guessed. Ironically, even this map is falling somewhat prey to zero sum, as there must be locations with high sun/biomass/wind and only one color is showing up. Nonetheless, I still think this speaks to the notion of geographies and their _relative_ relationship to energy sources just about perfectly.

Thursday, March 22, 2007

On Nameplates and Metrics, Part Three

In previous posts, I've written about how broken namplates are as a metric in clean power, and how these broken metrics are typical in nascent businesses that don't know how to measure themselves.

And now, a solution.

The renewable industry needs to move away from nameplates entirely. Rating these systems on their peak power 'capability' should be replaced by rating these systems on their annualized power production (app).

An APP in a solar panel would be the expected yearly power production of this panel at a "normalized" location.

An APP in a wind turbine system would be the expected yearly power production, assuming rayleigh distribution, at wind class 3. The best online resource I've found for determining power generated from various wind classes and distribution can be found here.

Speaking of metrics, there is a buzz of late on the "cubic mile of oil", which is essentially the amount of oil we consume, globally, in a given year.

Wednesday, March 21, 2007

On Nameplates and Metrics, Part Two

I touched briefly on the notion of nameplates in renewables as a hangover from the legacy coal plant or gas-fired power systems in which all supply was predictably controlled. In predictable grids, talking about nameplates is very useful, as they indicate the peak capability and help you model loads, distribution, demand response, etc. Namplates are also useful in your house - knowing that your refridgerator will draw XX watts at peak operation is a must for proper circuit planning. The problems start when you transfer that notion to unpredictable, highly variegated renewables.

All of this notion about "metrics" and how broken they can be very much reminds me of Web 1.0, in which the key metric for evaluating websites were "page views". A good blog post on the demise of that metric can be found here.

What is perhaps surprising to me is that "page views" weren't really what mattered... Google, the largest, most successful Web based revenue model on the planet, in most respects, has monetized the opposite of the page view. The page leave? They earn revenue when you leave them. Granted, you had to get there, and find what you needed to leave. But even Serge Brin is famous for stating: our goal is to get you to leave our site as fast as possible. So that particularly blows away Web 1.0 metric notions around click-throughs, page minutes, etc. etc.

So, where will we get to in renewables if the legacy 'nameplate' is non sensical? Found some interesting threads on the web in regards to nameplates in renewables. Appearently, I am not the only one that thinks that nameplates are not necessarily representative or useful comparitives for different systems. The Interstate Renewable Energy Council is actively trying to come up with a proper certification program for solar hardware based on what they produce - not what they have as nameplates. ...Notes from that fall meeting are here.

On Nameplates and Industry Metrics, Part One

If you track cleantech, you've quickly come across nameplates. These are the standard metric used for indicating the power output of any renewable energy system that produces electric power. A typical solar panel will be rated and sold as "120 watts", or a wind turbine as a "3 kw" turbine. These power ratings are known as the system's "nameplate" value.

But what does this nameplate actually mean?

The nameplate is the peak power production the panel/turbine/system is capable of producing. By peak, it's meant to indicate the maximum power, but it also requires "best" conditions, e.g. 120 watts will come from this panel at noon, on a clear skies day, in New Mexico, on June 21rst with the panel at an optimum operating temperature. Now, if you don't happen to live in New Mexico, or it isn't noon, or it's cloudy, or the panel is overheated, that panel could produce that power, less power or no power depending on conditions. In other words, you buy the solar panel as a 120 watt nameplate power output, but you will only get it's peak power output for a limited range of irradiance, temperature, angle of incidence, etc.

In wind power, a 3 kw system will produce 3 kilowatts when the wind is blowing at a certain speed, typically but not always 11 meters per second. While that 11 m/s is an industry norm and AWEA recommendation, some leading vendors in wind turbine market still "cheat" - labelling 3 kW on systems that requires 13 or 14 m/s. That may not seem like much of a trick, but in reality, most wind sites will have 14 m/s winds 2% as often as 11 m/s winds. And in wind power, where power delivered is the CUBE of wind speed, a spare 3 meters a second means you get HALF as much power as you thought.

As the following graphic demonstrates, the same nameplate turbines will deliver substantially different total power outputs based on their overall efficiencies in different wind speeds. You care about the volume UNDER the curves, but the nameplate is simply the peak power produced at the top right hand side of these curves. Quite literally, two turbines with 3kw nameplates could deliver 3000 OR 6000 kw/hrs in a given year at the same install.

So what?

Hopefully, I've shown that nameplates for renewable power are a nearly useless metric. They don't tell you anything except an ideal condition you won't experience often and are a hangover from when a maximum power output was something you could literally "flip on" on demand in gas-fired and coal electric plants. Renewables don't work that way.

Far more useful than "nameplates" would be a way to tell you what kind of total power delivery you will get from a system. That is after all, the most important metric for any power system.

Unfortunately, that's much easier said than done. In solar panels, you'll first need to know the panel's power curve- essentially the sum of all the power outputs the panel is able to produce across the sun rising to sinking in the day. To calculate a yearly power output for the panel would be even more useful, as the sun moves through different angles of incidence for that panel depending on the calendar, and you'll need to factor in region-specific degrees of cloudy days.

In wind, a similar power curve exists that begins with the cut-in wind speed (what speed do you start generating power), and increments power delivery up to the peak capacity speed in a curve. Luckily for wind, there are not quite as many variables to factor. Unfortunately, the power output calculations are made more complex by the higher degree of wind speed variability at any given location.

We need a new power metric.

Slideshare, Check It Out

Came across this cool online tool called SlideShare. It's essentially the "YouTube" of Powerpoint. I am very happy with the interface, does exactly what I need and no extra frills or nonsense.

For those interested in Wind-Sail the company, we've posted our investor-focused "pitch" slides online there.

Tuesday, March 20, 2007

New Clean Tech Trends Report

The new clean energy trends report by Clean Edge research group is out. Considering it's free, it's quite a good high level view of investment and technology trends in renewables with a primarily U.S. focus, and there is the corresponding focus on solar and ethanol as a result. The key trends are also ALL U.S. based, which is a shame as 2006 saw some very interesting dynamics in surging demand and cleantech spending in China and India, European progress on carbon trading systems and legislation, European technology advances across the board, massive new wind capacity put online (15,000MW), and the growing competitive nature of large China PV manufacturing and India wind turbine manufacturer Suzlon, etc. etc.

Of course, one nice surprise is that the report - while U.S. centric - is not as solar centric as so much of the media and investment interest seems to be focused right now. A good all around read, especially for newbies to get a lay of the land.

Booming Mice and Enlarging Elephants, Part Two

The new wind power installed capacity numbers are out, and 2006 was a blockbuster year for wind turbines worldwide.

Some key stats:

* The total market revenue for new turbines: $26 Billion.
* United States #1 in new installed capacity: 2,454 MW
* Germany #1 in total capacity: 20,621 MW

Perhaps more important for the planet, two key trends in 2006 included:

* Asia region grew at a whopping 52%: 3,679 MW
* Wind power in U.S. was second only to natural gas generation capacity: 10,657 MW

On a nameplate basis, we're still adding too much fossil fuel capacity (11,400 MW from fossial fuels in 2006), and only 3000 MW from renewables, but at least on a relative basis, renewables is in the running and starting to be a realizable 'alternative' to the old way of doing things.

Booming Mice and Enlarging Elephants

The Tale of the Booming Mouse and Enlarging Elephant:
A Look At New Power Production For PV Solar and Wind Power in 2006:

There is a very widespread notion, especially in Silicon Valley, that solar energy is the "fastest" growing clean energy source. And various growth statistics speak to 20-40% growth in yearly and decade scale views of both the PV production and installed capacity measures of power.

Of course, there is no doubt that solar deployments, production facilities, and worldwide demand is growing, but some readers may find surprising is the relative growth of various clean tech sources.

According to a newly released report on PV production for 2006 from Solar Buzz,

Global solar added 1,744 MW (nameplate) new installations in 2006, reflecting a 19% growth over 2005 (1,465 MW added in 2005).

Now let's put some things in perspective.

According to the American Wind Energy Association, wind capacity worldwide grew at 32%. But much more importantly, inside the numbers you see a veritable 10x in scale between solar and wind:

Global wind added 15,197 MW (nameplate) new installations in 2006, reflecting 32% growth over 2005 (24227 MW added in 2005).

New Wind Power: 15197 MW
New Solar Power: 1744 MW

Sour grapes from a wind guy? Maybe a little, but I am also amazed at the power of marketing... say something enough and people really start to believe you. The solar contingent has been so consistent in the "fastest growth" aspect of their marketing that even I had to do a double-take on these numbers. My guess is that 9 out of 10 people where I'd live would think solar is adding 10x the new capacity of wind power...

Monday, March 19, 2007

Distributed Wind in War zones

Perhaps in an irony of ironies, our Middle East military forces, sent to protect our "strategic assets" (re: our oil under their sand), are paying an extraordinary high price to ensure the safe delivery of that fuel to our troops.

According to a report in the Christian Science Monitor, nowhere on the planet are the rising costs of petroleum and fossil fuel energy supplies as acute as they are for Uncle Sam's Army:

• Until recently, the Army spent about $200 million a year annually on fuel, but paid $3.2 billion each year on 20,000 active and 40,000 reserve personnel to transport it.

That was before $70-per-barrel oil. In the spring of 2006, the Defense Energy Support Center reported the US military used about 128 million barrels of fuel last year, costing about $8 billion, compared with about 145 million barrels in 2004 that cost $7 billion.

I don't know if a wind-driven humvee would make sense, but at $300 a gallon, and the human risks of delivering a highly explosive fuel system into harsh regimes, I gaurantee that a $20,000 3kW system for high wind locations such as remote camps in high-wind driven Afghanistan mountain ranges starts to look attractive...

Godin's guide to VCs

Seth Godin has put up some excellent high level rules for navigating VCs.

I particularly liked rule #1:

* 1. Investors like to invest in categories they've already invested in. If your business is so new that it's never been tested before, or is in a category VCs hate, think twice.

I would put an additional 1a. or rule 2 right next to that. If you are ALSO presenting a team that is unknown to the VC and/or has not already developed the "Pay Pal" blockbuster in another or preferably related category, walk away. In other words, VCs generally want ALL their criteria matched (market, team, #1, execution track record, protection/differentiation, etc.), and they might take a random "flier" on something breakout with one criteria missing. What they won't do, at least in my experience, is move in two directions of risk at the same time (new market, new team.)

This notion of taking a pass on startups with risks in two dimensions is not a tremendous surprise but the real crux here is : how often is a new market/category being represented by a known team? I'd say not often. Hence, rule #1 becomes a double whammy of market and management team track record if you will.

For new market/category entrepeneurs, this doesn't mean that you have to form with the brother-in-law of your VC group, but it certainly put a stronger focus on team and any relevant track record in businesses /business models darn close to what you are pitching.

p.s. (But having a family relation doesn't hurt... In a truth-is-stranger-than-blogging moment, a couple of weeks ago, I came across a competitor's vertical-axis wind turbine technology startup that was funded by socially focused Calvert Funds. This startup looked quite primitive and less than wholly compelling from a technology or differentiation or execution standpoint... until someone told me that one of their founders had an uncle at Calvert... :)

Jeremy Stieglitz Bio

Jeremy is on the founding team of Metro Wind Power, a breakthrough vertical axis wind turbine system optimized for where we work and live. He is active in all early stage developments of the company, including business plan development, fund raising, and leads the platform strategy, business development, and the company's first platform launch planned for the summer of 2007. Prior to Metro Wind, Jeremy has worked in various technical and business management roles at Cisco, Microsoft, RSA Data Security and Entrust. Jeremy is the author or co-author of 12 patents in network security, user authentication and wireless LAN security.

Thursday, March 15, 2007

Angel forums (for cleantech)

I am beginning to lose patience with angel "forums" for cleantech. These forums are aggreate collections of individual investors that pool their collective resources to leverage screening committees and larger economies of scale in deal flow and flow analysis.

Examples in the bay area include:
Band of Angels
Sandhill Angels
The Keirestsu Forum

My experience with these groups thus far has been one of limited traction. In general, I've found these groups to be:

- Less focused expertise. At least in cleantech, the partner and technical teams at MDV, VantagePoint, Battery, Kleiner are vastly more knowledgeable than these angel forums in the realm of cleantech. Some VC groups have had in-the-business veteran wind and mechanical engineering knowhow at least relevant to the realm. The angel groups, on the other hand, seem to be empty of real world expertise, which should probably not come as a surprise given the newness of this industry. However, it still doesn't stop them from being opinionated. Point in fact was an argument that "distributed power is never going to happen" with the clean power committee at one of these angel groups. I struggled to keep my patience with a very ornery, argumentative "thought leader" that told me that large scale, central grid distribution was the only realistic way to service electric power in the U.S., now and forever. Perhaps said individual was testing my ability to react to wrongheaded and stubborn viewpoints, but quite honestly, that's a test I am going to fail every time if the other side is simply dead wrong.

- Less tolerance for risk. The angel screening groups I've met with want to see real paying customers. Wasn't that what I was meeting you to help fund? You are certainly not "seeding" anything if you expect concrete on the floor, and a cash register with money already flowing into it. I have no problem with groups that want to see proven market success, but then they should probably change their name to "expansion" forum - because their capital is expanding, not seeding anything.

- Less leverage. Not clear to me, as I've not worked through deal sheets with either. But my sense is that the term sheet negotiation is nearly equivalent between VCs and angel forums - and yet - you get more transitive leverage, more sustained support, more general company support from the VCs.

Comments from other entrepeneurs and their successes or challenges with Angel forums welcome.

Wind Permits

What happens when your technology startup is inhibited by factors completely outside the realm of technology? In small wind, the number one inhibitor to market success is the difficult siting and permitting process for installing wind turbines in anything from residential to utility scale projects.

Small wind power has this problem in a particularly acute way, as there are painful diseconomies of scale for the little guy. Yet, where it is windy, wind turbines are presently 5-10x more cost effective than solar on a yearly $/kwhrs standpoint. And yet, getting new users or even solar installers excited about using wind turbines is very very difficult. Even when you can find a motivated buyer with good wind resource, budget, and knowhow, you are still looking at a permitting and siting process than can take months to years.

Don't believe me, just look at the advice from the American Wind Energy Association on how to get started...

  • Find out what zoning regulations apply to appurtenant, or non-dwelling, structures on your property. Ask if small wind energy systems are specifically addressed by local ordinance, and if so get a copy of the ordinance. You'll need to know the permitting procedures and find out what documentation is required for your turbine. You may have to submit a structural plan drafted by an engineer, but documents from your turbine manufacturer or dealer may be enough. (A checklist of common permitting issues is available for California residents.)

Just no fun at all...

If wind power is going to make a serious contribution on the local scale, the political and regulation environment is going to have to dramatically change how small wind systems are controlled, regulated and permitted. Part of this will come from an ecosystem of installers, manufacturers, local power utilities that should be motivated to see more local power gen, but I suspect a bigger push needs to happen in the political/legislative/municipal realm. And a final part of this can come from systems that don't spin big blades at 300 miles per hour :)

My thinking on this matter is that LEED may be a good place to start driving this evangelism. I'll keep the audience posted to future developments within that body and others to see if public policy can shift to easily support this compelling clean energy source.

The Competition As Double-Edge Swords

Invariably, any investor discussion I have around Wind-Sail eventually touches on the subject of vertical axis competitors. In general, I have no problem trying to address and differentiate our product - that's when every entrepeneur should expect every time. Lately though, I seem to be encountering two sets of working assumptions that make this question a real trap:

Assumption #1: Investors that see VAWTs are junk, see them as having been written off by the leading experts, and the only people now presenting VAWTs are quacks, whacks, and nut jobs. Unfortunately, there is a ton of truth to this statement. The early history of first generation VAWTs should them to be substantially inferior to HAWTs and the market 'moved on' to HAWTs in significant ways and never looked back. Since then, the vast majority of VAWTs that show up are junk - they are based on faulty designs, weak structures, and make outrageous claims that are not back up technically.

Here are a few:

Let's put wind turbines along highways, because it's "windy" there. Sorry, but it's not. Yes, you can occaisionally experience wind gusts close to the edge of a road, but you can stand 5-10 feet from a highway with well provisioned, high speed traffic, and experience zero mile per hour winds. Also notice that the turbines would all be significantly displacing and disrupting each other. The general wind direction would be straight along the road, and you'd thus have to space these out considerable to avoid wind blocking.

Just out of curiousity on wind speeds need highways, I found this pic in google:

And I also found this transportation data on wind speeds. In here, you can see wind speed measurement data that averages out to a measly 8.5 km/hr which is a lousy 2.4 m/s. I'll writeup a post on the magnificant, magical power of cubes in wind speeds, but take it on faith for now that it's not worth your trouble, ever, to site wind turbines in such a weak wind regime. (would be like installing solar under a shady tree.)

The other nutter worthy of calling out is TMA Wind. Let's use wind "funnels" to focus the wind. Wind power is a function of blade rotation and torque. All wind systems that rely on "pushing" blades are limited to spinning only as fast as the wind blows, which converts to an upper CPP of 28% efficiency. Unless and until you can create drag on a blade, which can then accelerate the blade to spin faster than the wind (as all typical "horizontal" turbines operate, and spin upwards of 5-6x the wind), you are forever limited to really poor power efficiencies.

Another recent "drag" based design, Mariah Power, seems to have landed some angel investments. In defense of Mariah, they have some elements of lift in the blade designs, although any tubine that relies as heavily on drag as their blades do is probably still in the realm of 30-32% CPP on their design.

Yet, technology is not static, and the design, modelling tools for wind aerodynamics have not stayed still either. Using modern computer modelling and advanced 21rst century understandings of aerodynamics, VAWTs can achieve 40% + CPP - putting them "dead on" parity with CPP efficiencies for HAWTs.

The hard lesson here is:
You need healthy, vibrant, honest, capable competition, or else the investor community considers your entire space "tarnished." You really do face a doube-edged sword in competitive positioning a new technology startup. On the one hand, you need some viable, capable alternatives so that the water isn't muddied. On the other hand, you need to be legitimately different, better, and protective in your differentiation. A tough nut to crack appearently.

Will distributed or small wind every be a feeding frenzy for VCs?

What will it take for distributed wind startups to generate the "hype" cycle presently feeding solar power cleantech investments...

First and foremost, I think the "game changes" when clean energy is needed for power, not aesthetics, social conciousness, LEED certificates, or green eco-business. In other words, when your power is costly, or unreliable, or unattainable. Let's call this - real "power crunch" time, that's when small wind power could be very compelling.

#1. In power crunch, we won't use the near-worthless notion of "nameplates". (Comparing systems by their peak power output under best conditions.) Instead, yearly power output will be used. (think $/yearly kWh instead of $/watt). Wind power delivery is more consistent, and the power delivery over the year is substantially better (2-3x) than the nameplate comparisons of wind "vs" solar. By this math, in good wind sites, wind is already 10x better than solar (3x cheaper on 1kwh and 3x more productive)

#2. Wind turbines rely on many of the same burdened cost structures as solar. A million solar homes are going to create lots of shared economies of scale for wind. That means cost reductions to inverters make small wind more compelling as well. Of those million homes, if some enlightened system integrators start doing "hybrid" installs in good wind sites, that alone could drive demand for 50,000-100,000 turbines.

#3. All power is geography. When power becomes more precious/scarce, we'll be forced to pay more attention to geography. That means, we'll take tidal power under bridges, solar power in strong sun, and wind power in high wind. More importantly, we'll pay attention to watts/meter (sorry, that should be: yearly kwh/meter). In urban settings, (such as tall rooftops) wind can achieve on the order of 10x the energy ouptut per square meter. Again, nobody is paying attention to energy footprints in linear feet, but it will come when the decision making is driven more by economics.

#4. Related to geography is of course, application. There are applications where wind and only wind can deliver power (think cell towers or mountain top army bases) Having congress drive small wind is important and useful. I think a bigger/better role may take place inside green design. (LEED and Green Buildings Council) That group can best overcome siting/aesthetics and also help penetrate vibrant and exploding mid-scale commercial market.)

As proof, you already see tremendous "love" for wind in rest-of-world. Small wind purchasing in China and India, are growing like gangbusters. Those buyers presumably have considerably higher economic and reliable supply issues, and have probably never measured anything on a nameplate basis :)

What happens if there isn't a power crunch? Well, the whole bet is probably "off" for all cleantech if the only market forces are social and not economic.

p.s. would also love to see the name change from "small wind" to "distributed wind". The irony of calling sub 100kw wind power 'small 'just goes to show how incredibly biased we are to solar. (How many solar installs as a percentage of solar are >100kw?)

No Cleantech Hype Cycle For Small Wind

There is not a day that goes by these days without cleantech and clean energy investing generating media buzz. This week, topping that buzz list is the New York Times write up on the "fervor" of cleantech startups taking hold in Silicon Valley. In fact, the NYT piece jumped to #1 on their "most popular" list of emailed articles.

Yet most of this investment feeding frenzy seems to be overly focused on all things "solar" (cells, concentrators, themal, etc.) and paying very little attention to wind. Besides some fledging startups with limited outside funding, and one set of institutional investors putting approximately $15M into venerable 30 year old Southwest Windpower, there is very little dynamism or venture investment interest in "small wind" or wind power in general.

Considering the fact that large scale wind is a blockbuster success, with a $26Bn market, growing at >30% CAGR, with hugely more real power delivered into the market than solar today (10x more) and leading vendors sold-out through 2008 it might seem baffling why small and distributed wind doesn't get more investor interest.

Having pitched Wind-Sail to over 20 investment groups including all the major tier 1 VCs and angel groups in Silicon Valley in cleantech, I have the following reasons for the lack of interest in small/distributed wind:

Investors see small wind power as very tough to use - and I can't disagree:

1. Determining your payback isn't straightforward and requires measuring your wind speeds over time.

2. Requires complex siting and permitting. (I have some preliminary thoughts on permitting here.)

3. May require towering

4. {Network effect} No large ecosystem of installers/system integrators

5. Confusion if and whether subsidies exist.

6. Aesthetics, aesthetics, aesthetics. Solar has "cracked the code" and is now deemed hot and cool on your rooftop. Wind turbines still often considered unsightly, ugly, or detractful a home owner's resale value.

From the additional metrics that a VC investor uses { the technology, differentiation, IRR, etc. } small wind is also challenged by:

1. Hard to evaluate technology differentiation. Perceived as "bunch of mechanical metal up in air" with high startup costs and little competitive protection

2. Personal Mental Mapping: It's more sunny than windy where most investors live - especially in Silicon Valley.

3. Personal Mental Mapping Part Two: This won't fit on MY rooftop.

4. No "10x" left; market perceived to be mature from technology/innovation standpoint, and gains from here are only incremental.

5. Total market perceived to be poor. Graveyard of dead and failed small wind companies, two surviving firms make <$30m combined. Seen as existing in "rural" and "farm" scale only. 6. Doesn't fit in a home environment as easily. Not just aesthtics here, but the reality of safety, space, installation of guy-wired towers. 7. Birdkill still shows up, erronesouly or not, as an environment thorn in the clean aspects of wind. Outside of the users and the investors, there are macro issues hurting the love for wind. Last but not least, if you parse the data available from CEC on solar purchasing, you'll see a lot of buying behavior NOT driven by economics.

Yet, people are spending a lot of money on solar for systems that give them a poor return on their money - subsidies or otherwise. That means that the buying behavior is something other than economic. Call it "social" or "green".

So can wind systems fit into social buying? Perhaps, but aesthetics clearly play a larger role when the buyer is motivated by the "social" aspects of their energy purchase.

Stay Tuned For My Next Post: Will distributed or small wind every be a feeding frenzy for VCs?

Wednesday, March 14, 2007

Welcome To Wind-Sail

Wind-Sail is developing a breakthrough vertical axis wind turbine optimized for capturing wind power where we work and live. This site will contain observations around the clean energy technology and supply issues, venture funding cleantech, and specialized expertise in vertical axis wind technologies, applicaitons and marketplace.