Moving the Needle in Energy Efficiency

One of the most neglected areas of investment/startups in cleantech, in my view, has been in energy efficiency. That now seems to be changing. The New York Times is reporting on an energy efficiency study by the McKinsey Global Institute that examined projected energy savings Americans could achieve with focused energy efficiency standards.

This graphic shows total power used in typical American households (in Quadrillion BTUs), and shows what kinds of savings are achieveable with present advanced techniques.

Below is some additional analysis that helps clarify where the biggest gains are achieveable. In summary, we can cut out total U.S. household energy bill by 35% by implementing existing technology.

If I were investing in the space, I'd look at the Appliance category, as it gets you the most bang for the buck, and a decent improvement ratio from what's out there today.

People Moving and Power

Two interesting web connections on the movement of people on the planet and in the United States.

Thanks to Paul Kedrosky for pointing me to this very cool, flash based global map of where people are moving on the planet. Surprised to see the relatively low movement out of China. I suspect that the data has been normalized to mean percentages of inbound and outbound movement. Must be, as China would presumably have orders of magnitude more activity than Peru without normalization. It's a pity that Asia-to-America and Asia-to-Great Britain traffic goes across the rest of the map, as it's hard to discern which dots are going where between and betwixt these edge cities. Someone needs to redo with a "wrap" function so that we can separate out patterns of East-to-West and West-to-East from any country a little easier.

With richer specific data, jonrayjay has parsed U.S. Census bureau data to come up with a notion of the Great Decline of the Coastal Megalopolises. Putting my All Power Is Geography hat on, this population shift in is mostly a net neutral impact for solar, and in general, quite a bad thing for wind. As you can see from even the cartoon picture here, leaving the coasts means leaving some of the best wind resource in America. On the positive side, it means a lot less consumption of heating fuels in the winter. On the negative side, it also means a lot more stain on already constrained internal water resources, and more power to power hungry AC. (Actually, AC consumption and it's strain on the grid is floating north as well.)

America's Power Footprint

I finally had a Eureka moment today in understanding the 'power footprint' data in the United States. The pie chart above shows which constituents are burning the most coal/oil/gas power in the United States for 2000. What I long struggled with was the appearent "double counting" between the "Electric Power" category, and the household, commercial and industrial categories. Weren't these users also the same end users of "electric power" ???

My Eureka moment came from the footnote on this chart. Yes, these users ALSO use electric power. In other words, natural gas electric plants + coal burning electric plants make up the Electric Power category, and your John Deere, and backup diesel generator, and propane forklift whizzing around Costco make up your residential / commercial / industrial consumers of fossil fuel power.

In some ways, there is a notion of double-counting still going on, because that "electric power" category ends up being consumed in houses, builidings and factories. But in terms of managing future carbon emissions, and pricing systems for carbon, the pie is useful as a starting point in who's going to pay, and what impacts a tax / pricing scheme will have across the economy.

Fortunately, others have appearently had similar thinking, from the National Commission on Energy Policy's Carbon Pricing Report, here's the "no double counting version" of that same pie chart that accurately breaks down the end uses from the Electric Power category. People should be required to show this version of the energy footprint chart to save others from needless confusion.

On Aesthetics, Part Two

In the past, I've written about factors outside the control of Wind-Sail, such as Wind Permits, that may directly impact our success. Another one of those factors, that clearly plays a role in future trajectories for distributed wind is Aesthetics. Specifically, much of today's buying public in America would be concerned about the visual impact of turbines, and perhaps more importantly, whether 'others' such as neighbors and future buyers would be put off be those visual aesthetics of a turbine on their property.

To me, aesthetics are more about past precedence and timing than about intrinsic beauty or not.

Past Precedence

Would anyone tolerate the aesthetics of transmission lines if they were new?


And yet, there are literally millions of these populating our landscapes because we had to have them for our power delivery. Of course, there continues to be concerns today about the safety of these transmission systems, but you don't see a lot of people making the case on the aesthetics of these. They've gotten used to them. or more specifically, there is no alternative to having them.

That's what I mean by power crunch mode, or carbon crunch mode. Someday, we could very well see the power utility mandate the local use of turbines, panels, geothermal, etc. because they'll have no traditional alternatives.

Timing

To me, nothing better exemplifies the role of timing in aesthetics than the Eiffel Tower. Today, the tower is the very epitome of European elegance and design. in fact, the tower is the single most recognized landmark in Europe. Property prices in the 7th arrondissement are some of the highest in Paris, no doubt aided by the appeal of the Champs de Mars and La Tour Eiffel. Yet, it wasn't always this way... Here's an excellent history of the early struggles Monseir Eiffel faced in trying to put up the tower.


From: (Mary Louis King, "A History of Western Architecture" pp.175-195)

The Eiffel Tower was designed by the French engineer and bridge builder Alexandre Gustave Eiffel (1832-1923) for the Paris Exposition of 1889. The tower is 300 m (984 ft) high and consists of an open iron framework making it the highest manmade structure in the world at the time. It was the largest attraction at the Exposition and today it remains the most recognized structure in all of Europe.

It was nearly never built.

After being awarded the contract to build the tower, Eiffel discovered that the Exposition Committee would only grant about a fourth of the monies needed to construct it. Eiffel himself would have to finance the balance. He struck a deal that would make him a very rich man. He agreed to independently find the funders for his tower but he wanted sole control of the tower and its profits for twenty years. They agreed. In a surprise to everyone, including Eiffel, the tower was paid off in the first year.

The deal that Eiffle hammered out is probably what saved the tower from destruction. Many in the arts and civic leaders felt the tower was an abomination. "They have only erected the framework of this monument, It has no skin"

The whole idea that iron -- just iron -- could be beautiful, flew in the face of architectural history. Everyone knew that the great cathedrals and palaces had all been built of stone with the careful craft of ornamentation which adorned them. Sure, iron can play a part in an unseen, underlying structure such had been done with the Statue of Liberty, but to leave it exposed was just poor taste. It was like showing your dirty laundry.

A Committee of Three Hundred was formed and they petitioned for its demise:

Honored compatriot, we come, writers, painters, sculptors, architects, passionate lovers of the beauty of Paris -- a beauty until now unspoiled -- to protest with all our might, with all our outrage, in the name of slighted French taste, in the name of threatened French art and history, against the erection, in the heart of our capital, of the useless and monstrous Eiffel Tower.

Are we going to allow all this beauty and tradition to be profaned? Is Paris now to be associated with the grotesque and mercantile imagination of a machine builder, to be defaced and disgraced? Even the commercial Americans would not want this Eiffel Tower which is, without any doubt, a dishonor to Paris. We all know this, everyone says it, everyone is deeply troubled by it. We, the Committee, are but a faint echo of universal sentiment, which is so legitimately outraged. When foreign visitors come to our universal exposition, they will cry out in astonishment," What!? Is this the atrocity that the French present to us as the representative of their vaunted national taste?" And they will be right to laugh at us, because the Paris of the sublime Gothic, the Paris of Jean Goujon, of Germain Pilon, Puget, Rude, Barye, etc. will have become the Paris of Monsieur Eiffel.

Listen to our plea! Imagine now a ridiculous tall tower dominating Paris like a gigantic black factory smokestack, crushing with its barbaric mass Notre Dame, Sainte Chapelle, the Tour Saint-Jacques, the Louvre, the dome of Les Invalides, the Arc de Triomphe, all our humiliated monuments, all our dwarfed architecture, which will be annihilated by Eiffel's hideous fantasy. For twenty years, over the city of Paris still vibrant with the genius of so many centuries, we shall see, spreading out like a blot of ink, the shadow of this disgusting column of bolted tin.9

It may have taken every bit of those twenty years to change some people's minds. All of the other iron buildings built for the Exposition were torn down shortly after (a shame). Today we look upon Eiffel's tower as anything but hideous. Mary Louis King calls it "a monument to nineteenth century architectural engineering and a frank display of structure and material."

Although built of iron, it is an inherently inferior material and a single beam is unable to withstand large stresses. That is why the tower appears over engineered by today's standards. Though, from this very weakness its' simple beauty is found. If you look at the tower, the tight lattice work of beams sort of mimic the biological cellular structure of a plant.

In 1855, Sir Henry Bessmer discovered a process of converting iron into steel thereby making it much stronger and lighter, but the evolution from invention to practical use and mass production took many years. Steel would eventually replace iron and would bring the "sky scraper" to the city skylines of America and in 1885 (actually four years prior to the Eiffel's tower), William LeBaron Jenney built the Home Insurance Building in Chicago -- the first sky scraper.

On Aesthetics, Part One

I was at a local cleantech "Earth Day" fair in Atherton CA over the weekend. Had some good discussions with Akeena and Solar City sales teams. I wanted to know about 1.) how they do online internet monitoring for the power delivered from solar, and 2.) whether they saw any opportunities for "hybrid" installs combining solar and wind turbines for a better ROI.

For monitoring, I got some leads and will post an update soon. A quick internet search gets you to Fat Spaniel, but this looks like potentially overkill for my needs to monitor our first 3 kW test install. (please feel free to email me any leads/info on Internet-based remote power monitoring systems.)

For hybrid residential systems, I don't think there is any immediate traction in the Bay Area. For one, there are not that many residences in Northern California in Wind Class 2, let alone Wind Class 3-4 where the ROI and paybacks would be most compelling. Secondly, these guys are so utterly busy, that they can't scale their installers to keep up with present Solar-Only deman. (If it ain't broke...). And lastly, both sets of folks related stories about customers thinking about solar, but abandoning the projects based on "aesthetics."

We're still not in power crunch or carbon crunch mode. In crunch mode, people won't be "picky" about how their power delivery systems look.

Renewable power paybacks, Part One

Anyone who has ever contemplated installing solar panels or wind turbines to "go green" and offset their electricity consumption with renewable power has run into the payback model. The model measures how many years before the money you put into a system is "earned back" in the savings you make from offsetting your electric bill with by generating local, renewable power.

It's the primary way that the costs of installing clean power are measured and here's how it works.

To calculate your payback model, you'll need to know the following inputs:

1. Cost of System
2. Rebates
3. Expected Yearly Power Output of System
4. Today's Grid Tie-In Price For Local Power Output
5. Rate of Increase in Power Prices
6. Cost of Money (Interest Rate)


Many of these inputs have a high degree of regional variability, which is one of the reasons that payback models seem complicated. Certainly the install costs, power output, local power price, and rebates can all change depending on what State you live in. For my model, I will use California as my reference. California in many respects is the "Best Case" model for renewable power, because the rebates, power produced, and power purchased by the utilities are all some of the highest in the country. It's also more expensive to install, but those other benefits usually outwiegh that higher expense.

Let's Now Compare Power Payback Models for Home-based Solar (3kW) and Wind (3kW)


#1. TOTAL SYSTEM COST
3 kW Solar System (Installed Cost) : $28,500 (aka $9.50/watt is typical in CA)
3 kW Wind Turbine System (Installed Cost): $20,000

ASSUMPTIONS: I am using conservative numbers for each of these. In theory, you might be able to get these installed for a lower cost point.


#2. REBATES

SOLAR SYSTEM COST AFTER REBATE: $17,100
WIND SYSTEM COST AFTER REBATE: $12,500

The State of California offers substantial rebates for both large and small commercial solar electric systems through the California Solar Initiative (CSI). Depending on the size of your facility, you will qualify for either the Expected Performance Based Buydown (EPBB) or a Performance Based Incentive (PBI) program.. These rebates can cover as much as 40% of the total system cost. For my math, I'll assume that the rebates get you the full 40% cost reduction.

Fortunately, the State of California is also quite aggressive with Wind Turbine system rebates. The California Energy Commission is offering cash rebates on eligible grid-connected small wind renewable energy electric-generating systems through its Emerging Renewables Program (ERP). This rebate for wind provides $2.50 up to the first 7.5kW nameplate systems.


#3. EXPECTED YEARLY OUTPUT
Solar: 3,780 kw/hrs per year
Wind: 5,940 kw/hrs per year

One of the benefits of solar power over wind power, from a consumer standpoint, is that it's easier to calculate expected yearly power output, and the variance in total power produced is lower (how much your calculation could be off should be low). There are quite a number of complexities even for determining solar. See a good summary of factors afftecting solar power production here.

I've written about nameplates versus total power produced starting here, but to calculate the total power produced for wind is something I will leave for a different blog post. It's probably even more complex than the solar reference above, and there is a much higher degree of variance, site to site, in the same geographies (even same site depending on where the system is installed, shading, height, etc.)


#4. California Residential Retail Power: 13.07 c

I used the PG&E rate available from the California Energy Commission weighted rates table here.

#5. RATE OF INCREASE IN POWER PRICES

1%, 5%, 20%

Depends on scenarios into the future...In some respects, this is the most important variable in the equation, and yet, it's the least known to us today. If you think long term energy prices will remain where they are today, you probably won't be purchasing solar or wind. The math on today's cheap energy prices "doesn't add up." When people do buy these systems, it's because they either believe long term prices are headed much higher, or they are price-insensitive and can afford to go green regardless of the economics. When I model out paybacks, I'll use three scenarios here: 1% (less than inflation), 5% (present status quo), 20% (bad moon rising).

#6. Cost of Money

5.3 %

I used BankRate.Com and assumed a best case, long term money market account with $10k minimum.


So, we're now ready to go. Check back for Part Two, how to run the model next.

Contrasts

Today, friends emailed me almost completely opposite views on the future prospects of cleantech. From CNN, we have a bullishly 'anti-green' interview with EXXON CEO Rex Tillerson: "I don't have a lot of technology to add to moonshine," says Tillerson of ethanol.

From the New York Times, we have a very long piece by Thomas Friedman on the power of green as a "geostrategic, geoeconomic, capitalistic and patriotic" way for America to proceed.

From Tillerson, we get the unabashed champion of capitalistic pursuit of profits in oil tech. And based on Exxon performance, he runs that business very well.

From Friedman, we get some very compelling business, political, and environmental reasons to pursue green as a stratetic initiative. He is dead right to say that government must find a way to price the carbon emissions these fuels put into the air. But he totally, utterly misses when he states that: "presidential candidates need to help Americans understand that green is not about cutting back. It’s about creating a new cornucopia of abundance for the next generation by inventing a whole new industry."

I don't agree. I think the mindset that says that our present consumption in the First World is supportable going forward as an a priori to considerations of green and sustainability is dangerously wrong headed. Unless and until we can find replacement technologies that provide the same (or more) aubundance than dirty tech provides, it is NOT at all clear that green can mean no hard trade-offs or reductions.

It's really two problems: how to shift away from dirty tech and maintain an acceptable quality of life (not necessarily growing aubundance for the rich), and how to bring up the worldwide quality of living for the vast billions living in abject poverty without using those easy, dirty methods to get there. Of course I want more aubundance, but I suspect that cheap, dirty fossil fuels provide a bigger pie than sustainable, green practices. Maybe we must accept a smaller pie? I want my politicians brave and capable enough to see and communicate that to the American people.

Wind-Sail At Demo Show (Someday...)

Chris Shipley is the founder and director of the Demo trade show. It's billeted as the launchpad for emerging technology, and true to it's advertising, every year some of the coolest new product launches happen there. (Google, Ebay, E*Trade, Sun's Java, Tivo, Skype, the Palm Pilot, etc. etc. ).

Well, in reading about this year's upcoming show, I decided to make a run at pitching "Wind-Sail" with a very short email to Chris: "wouldn't it be sweet to see one of these beauties up on stage..."

Well, we did end up discussing Wind-Sail in good detail. And we agreed that we are probably "too early" for a Demo launch - at least, until we are in production with a certifiable unit.

The conservation wasn't all in vain, as it also led to a very excellent write up by a collegue's of Ms. Shipley's, please check out Janet Rae-Dupree's Wind-Sail blog post here. It's the rarest of interviewers who gets things exactly right, and nothing wrong, and lucky for us, Ms. Rae-Dupree has done this in this most excellent write up. (link)

On Maps, Innovation and Cleantech

I love maps. Any kind, new or old. And I've been known to spend literally hours in map stores agape at their beauty, elegance, and moment-in-time aspects. When I can afford them, it is my longstanding goal to be an avid collector.

I used to think that maps were static, and with our modern GPS and satellite driven imagery, a limited space for innovation. But I also remembered a whole team of geographers and mappers that were hired into Microsoft in 1992. That was my first early signal that mapping could be matched to technology to produce new innovation. Microsoft went on to create a $100 million business in online mapping software, but more importantly, mapping online and mapping mashups have exploded onto the scene.

Play the tape forward to 2007, and the notion of mapping technologies as cool is bleedingly obvious. In fact, not a day goes by that I don't see new map mashups. Here's one for London that is color-coded to transportation ease of use.

Clearly, updated daily traffic maps are well known and found on every morning tv news broadcast. But with digital mashups, what about mixing traffic patterns with London regional house prices, or if you think that there will be more plague-born insects, or if you think it's going to get hotter, house prices, pools.

Basically, since the calibrations are constantly changing, so will the maps. In time, I hope to look for more mashups specific to cleantech and have already looked at some cursory notions of geography and cleantech in previous posts, starting with All Power Is Geography.

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.

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...