Will The U.S. Generate Too Much Energy? Vinod Khosla Thinks So

August 12, 2010

The potential for clean-tech innovation is so great you might be wise to expect the unexpected. What about an energy glut?

This was the prediction of rock star venture capitalist Vinod Khosla during a panel discussion Tuesday. The event at Google’s Silicon Valley campus was held to discuss the implications of California’s Proposition 23, an attempt to rollback the state’s ambitious climate legislation.

But Khosla stole the show with his outlook for the clean-tech innovation and energy use. “In 10 to 15 years, we will be shutting down (power) plants” because of an excess of electricity in this country, Khosla said. There is an “infinite” opportunity for technological innovation.

Such an upbeat outlook is no surprise from a man whose venture firm, Khosla Ventures, is an active clean-tech investor. Khosla said his firm is backing companies that hope to cut energy use in lighting and data center server racks by 80 percent.

He is equally upbeat about prospects for the United States over China – not always the prevailing wisdom these days. “I won’t say China is winning the clean-tech race,” he says. “But they are clearly paying a lot more attention to the race.”

Here are several other observations from the panel:

*Asked if there was an advantage to creating companies in Silicon Valley rather than China, Khosla was emphatic. “No question about it.” The people are here. The markets are here.

*Nuclear power no longer has an advantage over renewables, he added. There hasn’t been a nuclear plant build in recent years that can beat $7,000 a kilowatt. That makes wind and solar (in some parts of the world) competitive, he says.

*Proposition 23 is a threat because it will kill the clean-energy markets California’s A.B. 32 created. Both Khosla and Google Green Energy Czar William Wiehl concur on this point. Proposition 23, which will go to the ballot in November, would suspend A.B. 32 until the state’s unemployment rate drops to 5.5 percent or less for four consecutive quarters. Texas oil companies Valero and Tesoro back the measure. A.B. 32 sets reporting guidelines for polluters, establishes a statewide limit for carbon and guides emissions back to 1990 levels by 2020.

*A.B. 32 has helped create 500,000 clean-tech jobs in California, Wiehl says.

*Google, adds Wiehl, has made strides with energy efficiency. The company builds its own data centers and servers. As a result, data center energy use is one half of what it would be if the company followed industry-standard best practices, he said.

*As to the next “Google.” “There is no doubt in my mind we will see 10 of these” in clean tech, says Khosla. “Today California has the pole position to win that race.”

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Posted by Mark Boslet

H-P, Sony Lay Out Green Goals Including A Sony Push For A Zero Carbon Footprint By 2050

April 13, 2010

Achieving a “zero carbon” environmental footprint is still a distant goal for most corporations.

But that doesn’t mean many aren’t trying. Take Intel, for instance, the largest corporate buyer of renewable energy in the United States. Or Dell, whose headquarters is powered by 100 percent renewable energy, counting credits.

A lot of electricity is used when consumers use the products companies such as Hewlett-Packard and Sony make, but the companies continue to trim energy use at plants and by suppliers.

At the top of Newsweek’s list of green corporations, environmentally conscious Hewlett-Packard takes great pains to reduce greenhouse gases at its own buildings and across its massive 700-partner supply chain. That doesn’t mean organizations like Greenpeace don’t goad it to do better. But at least it is making an effort.

The company’s “corporate try” comes through in its 2009 Global Citizenship Report, released last week. HP laid out several freshly burnished goals for carbon reduction and environmental stewardship. They include the 2013 goal of reducing energy use and greenhouse gas emissions from internal operations by 20 percent. The company’s 2010 goal of 16 percent was revised after its purchase of EDS.

This same determination infuses Sony’s new “Road to Zero” sustainability targets, released the same day. As a centerpiece, Sony lays out the laudable, if distant, goal of a “zero environmental footprint” by 2050. Fortunately, there are many interim goals with which it can demonstrate progress.

Electronics makers are in a strange bind when it comes to environmental concerns. The vast bulk of greenhouse gases associated with their products get generated by consumers actually using them. Often less than ten percent of emissions are produced at the plant. Still, the sprawling size of many of these operations creates an opportunity. Many ideas that seemed outlandish in the past are becoming feasible. Samsung, for instance, has started to tinker with its chemical formulas for chipmaking. It also manufactured a phone with a somewhat sturdy bioplastic. Sony, for its part, has cut bundling manuals – those bulky piles of paper few actually read — with some products. (Packaging is part of a larger category you could call Stupid Green: changes that can save money, don’t take a tremendous amount of money, can curb resource consumption, and yet still aren’t undertaken because no one has really paid that much attention.)

Who will benefit? Companies like Hara and Carbonetworks that sell energy monitoring software will likely be big beneficiaries of these trends in the future. Startups and stalwarts like DuPont with green chemicals can expect to see sales creep up. Options like localized manufacturing to curb transportation and rail shipping get talked about more and more. And saving water is on everyone’s mind.

Here are top points from both reports, starting with Hewlett-Packard’s:

*Double the purchase of renewable energy to 8 percent by 2012;

*Reduce the energy consumption of HP products 40 percent by 2011 (baseline 2005). This replaces the goal of a 25 percent energy cut for products and operations by this year, which was met. Some of the cuts will likely be met by reducing standby power to single-digit levels.

*Increase the reporting of greenhouse gas emissions from first-tier and second-tier suppliers. This year’s goal is to report on 85 percent of H-P spending with top-tier suppliers and 40 percent with second tier companies. Reporting amounted to 29 percent in 2009.

*Reduce CO2 emissions from shipping and transport by 180,000 tonnes compared with 2008. The company increased its use of less-polluting rail last year;

*Eliminate all mercury from HP notebooks by the end of the year. Sixty-four percent of notebooks were free of mercury last year. And

*Reduce water consumption by 5 percent this year compared with 2007 consumption.

Sony’s goals target greenhouse gas reductions as well as resource conservation and chemical use. The company set 5-year targets starting next year and they include:

*Reducing the energy consumption of Sony products by 30 percent (baseline 2008).

*Reducing CO2 emissions related to transportation and logistics 14 percent.

*Cutting waste 50 percent (baseline 2000).

*Trimming product mass by 10 percent.

*Slashing water consumption 30 percent.

*Shrinking packaging waste from parts and components 16 percent.

Already, Sony reports substantial progress in lowering CO2 emissions from electricity and heat use at its European sites by about 93 percent over seven years. Obviously, there is more to do — and no reason to stop trying.

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Posted by Mark Boslet

California Renewable Energy Credits To Spark The Building Of Solar And Wind Farms

March 18, 2010

The California Public Utilities Commission approved the use of tradable credits for renewable energy in a ruling that should promote new solar and wind farms in the state.

The decision allows utilities to buy and sell credits for renewable power – a step that will necessary if they are to meet state’s 20-percent renewable energy goal by this year and the 33 percent goal by 2020.

Out-of-state credits can only make up 25% of a utility's renewable power, so more in-state plants will be needed

The credits allow utilities to pay for out-of-state renewable power – such as from a wind farm in Montana – that will be delivered to California at some point in the future, though not immediately. The commission says the scheme, which has been adopted by 30 others states, will provide utilities with the flexibility they need to meet ambitious targets that otherwise might not be reached.

But in contrast to other states, it drew a line in the sand. It ruled that only 25 percent of a utility’s renewable power can come from credits, putting pressure on the state’s energy sector to build more in-state plants. In recent years, California has lagged other states in adding renewable generation.

Some observers said the decision, released largely unnoticed late last week, could create an environment for more rapid development.

“It lends some certainty to the markets in California,” says  Seth Hilton, a partner at the law firm Stoel Rives. “It’s helpful in that sense.”

But it ultimately may prove to be unrealistic. Utilities may need to buy renewable power from where ever they can find it and in whatever quantities available to meet the 33-percent target. So if the 25 percent limit remains in place and citing new plants in state continues to plod along, credits may only contribute to failure.

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Dire Outlook For Green Jobs Without Targets For Renewables

February 5, 2010

A new study of green jobs paints a dire outlook for U.S. employment if the nation fails to adopt aggressive targets for renewable energy use.

The study by the RES-Alliance for Jobs has a natural bias. The organization is funded by wind, solar, and other renewable energy companies and associations, which would stand to benefit from such goals.

But its stark assessment raises a terrifying question: what if it’s right? The study argues that 37 countries around the world have adopted goals for alternatives energy and will be the likely spots for new plants, companies and projects. This includes China and the members of the European Union.

In contrast, many states in the U.S. will shed green jobs without appropriate nationwide goals, it claims. The study, released Thursday, projects the nation will create 67,000 new jobs if it adopts a 12 percent renewables target for 2014 and 274,000 jobs if the target is raised to 25 percent by 2025.

The breakdown of new jobs by industry follows: 116,000, wind; 60,000, biofuels; 50,000, solar; 34,000, hydropower; and 15,000, waste to energy.

The states with the most jobs to gain are Pennsylvania, Florida, Colorado and California. Midwest and Mid Atlantic states will benefit to a lesser degree, as will Texas, Oregon and Washington.

Biofuels in particular would generate jobs in Florida and Louisiana. Wind energy will be a significant employer across the Great Plains and Midwest.

Without use targets, which the study claims are more effective than the tax credits the country is relying on today, many states will shed green jobs, including Texas, Ohio, Indiana and a number of states across the Great Plains. Let’s hope this doesn’t happen.

The nation will create green jobs if renewables targets are put into place. The darker the color, the more jobs. (Source: RES Alliance for Jobs)

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Europe Added More Wind Energy In 2009 Than Other Energy Technologies

February 3, 2010

Europe cozied up to wind energy again last year, installing more of it than any other energy technology.

Sixty-one percent of Europe's new energy capacity last year came from renewables, like wind.

Leading the rush to wind were the nations of Spain, Germany, Italy, France and the United Kingdom, all of which add the most capacity as the continent sought to favor renewables over energy from fossil fuels. Altogether, renewables accounted for 61 percent of the continent’s new generation in 2009.

Wind accounted for 39 percent of new capacity followed by gas, 26 percent, and solar, 16 percent, according to the European Wind Energy Association, a trade group.

Wind energy also grew in the U.S. last year, but at a considerably slower pace as a significant minority of citizens, largely Republicans, continue doubt the scientific evidence behind the earth’s warming.

In Europe, the fastest growth was in offshore farms, though on-land installations still made up the lion’s share of additions. Wind energy also was the most widely adopted technology in 2008.

Germany has the most wind installations followed by Spain.

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Posted by Mark Boslet

Tough Ride For Solar Market Will Continue In 2010

January 12, 2010

The solar market was a tough ride in 2009. It could be more tumultuous this year.

That’s because so much of the industry’s sales are tied up in one country – Germany – and subsidized Chinese manufacturers are cutting prices so deeply that competing is nearly impossible.

In a worst case scenario, solar shipments this year could fall below those in 2009, says analyst Paula Mints

The result could be falling sales in 2010 if German policy makers cut the country’s generous feed-in tariff, says Paula Mints, principal analyst at Navigant Consulting.

Mints, who spoke at the Industry Strategy Symposium in Half Moon Bay, said she estimates solar manufacturers shipped 5 GW of panels in 2009. Under the worse case scenario (a dramatic cut in the German subsidy), that could fall to 4.1 GW this year.

A more hopeful outlook with little or no cut from Germany could lead an upswing of 5.5 GW of shipments.

The difficulty hinges on the reality that Germany accounts for 58 percent of sales (76 percent for Europe as a whole). Sure, China is a booming market as the government tries to stimulate domestic purchases, and India is on the rise, too. Demand in the United States also should grow, though not at an explosive rate until 2011.

So what happens in Germany dictates the health of the solar market. So, too, do manufacturers in China, which have been selling panels at almost breakeven. About 52% of solar panels come from China and “prices were so low it was impossible to compete with them” last year, says Mints.

As a result, the industry’s profit margin fell almost 10 percent in 2009 after rising for four years. From a pure revenue perspective, “it will take this industry at least three years to recover and be above 2008” levels, says Mints.

Until then, the tough ride will continue. That is unless the U.S. market takes off earlier than expected. “We need for the U.S. to become a top market for the whole industry to keep moving forward,” she says. “We can’t keep relying on Europe.”

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Posted by Mark Boslet

Intergovernmental Panel To Recommend Higher Renewable Energy Use

December 2, 2009

The Intergovernmental Panel on Climate Change is ready to raise its target for renewable energy use.

At the United Nation’s Climate Change Conference in Copenhagen next week, the panel will recommend states and municipalities shoot for what it calls a “zero carbon” energy mix. The goal will require renewables to account for 85 percent of energy use by 2050 and fossil fuels the remainder.

There is not question the new targets can be met, says Berkeley professor Daniel Kammen

The new formula is an acceleration of the targets progressive states and cities have in place today, where decade-long initiatives will bring renewables to 15 percent, 20 percent or perhaps 33 percent levels. Many laggard states haven’t yet put plans in place.

Daniel Kammen, a Berkeley professor and a coordinating lead author for the panel, says climate scientists haven’t sent strong enough signals of the gathering dangers of climate change. But he describes himself as a optimist as to the new target.

“There is no question in my view it can be accomplished,” he said this week at a Google sponsored green-tech event in San Francisco.

The 85 percent renewables and zero carbon target can be met with solar providing up to 25 percent of a state’s energy; wind, 20 percent; nuclear, 20 percent; hydroelectric, 10 percent; and carbon capture and sequestration, 20 percent.

Energy efficiency measures could make up for any shortfalls in the mix.

Ready, set, the new renewables race is on.

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Posted by Mark Boslet

PGE Wants To Invest Up To $1.5 Billion In Solar And Wind Farms

November 18, 2009

The hurdles to building large-scale wind and solar farms are substantial.

Communities sometimes object to projects for aesthetic and environmental reasons. Water for cooling can be hard to find, and technology is often new and unproven.

On top of that, major transmissions lines frequently don’t run nearby, financing and Department of Energy loan guarantees aren’t easy to come by.

The company is looking for projects with the goal of investing between $1 billion and $1.5 billion, says PG&E's Fong Wan

To grease the skids, PG&E intends to set aside between $1 billion to $1.5 billion to take equity stakes in projects, says Fong Wan, senior vice president of energy procurement at the company.

Wan said the company doesn’t know yet whether it will invest in large-scale projects or smaller ones that are easier to put together. But the company is evaluating proposals.

Nevertheless, working with a utility can require patience. BrightSource, with its thermal solar technology, is proof. The company approached PG&E about three years ago and the utility reviewed its technology.

“At the end of the day, no one really knew” whether it would work, Wan said at the Dow Jones Alternative Energy Innovations conference. Most thermal solar technologies use temperatures of 350 degree Celsius. BrightSource uses temperatures of 550 degrees Celsius.

PG&E demanded a demonstration site, which the BrightSource built in Israel, says Wan. It worked. Now “whether they can scale it…remains to be seen.”

Despite the long review period, when it comes to investments, “we’re looking,” says Wan.

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Posted by Mark Boslet

PGE Vows To Meet 20% Renewables Target In California – On A Technicality

November 18, 2009

California utility PG&E says it will meet California’s 20 percent renewables target for 2010, but on a technicality.

The state's more ambitious 33 2020 goal is going to be very demanding, says PG&E's Fong Wan

However, the more ambitious 33 percent target set for 2020 is anyone’s guess. “It’s going to be very demanding,” says Fong Wan, senior vice president energy procurement at the company. “No one really knows” if the state’s utilities will make it.

Wan said the rules governing 2010’s 20 percent target permit a utility to average the amount of energy its gets from renewable sources, such as wind and solar, for the years 2010 to 2014. So the excess PG&E expects to receive in 2013 can balanced against the deficiency in 2010.

The utility presently gets 14 percent of its power from renewable sources, but “we have signed far, far in excess of 20 percent” in future contracts, Wan said at the Dow Jones Alternative Energy Innovations conference.

“We will met the RPS,” he said, referring to the renewables portfolio standard.

The challenge facing utilities is that many renewables projects are confronted with technical, financial, siting and water-cooling hurdles.

Nevertheless, Wan in optimistic about 2020’s goal. “I plan to meet it,” he said.

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Posted by Mark Boslet

PGE Sees Solar Feed In Tariff Coming To California – A Boon For Solar – And Favors Internet Based Smart Grids

November 16, 2009

In October, the California Legislature passed an amended bill requiring a feed-in tariff for residential and commercial customers hoping to sell solar and other renewable power to utilities.

Buying solar from rofftop installations stresses the electrci grid and adds costs

The tariff is scheduled to go into effect on Jan. 1, 2010, but in practice won’t get underway until the California Public Utilities Commission develops regulations to govern it. How long that will take is unclear.

But a feed-in tariff seems destine in California, says Pacific Gas & Electric.  “I think ultimately…we’re heading toward a feed-in tariff,” PG&E Senior Director Andrew Tang said Friday.

Such a move would likely have two major impacts on the state. First, it would stimulate the solar market, as it did in Germany. A solar installation boom in the state could follow.

Second, it would better distribute solar purchase costs among ratepayers. Buying solar and other renewable power puts strains on the power grid and higher utility costs result. Those costs would be spread out among the state’s utility customers, lessening the local impact, said Tang.

Speaking at the Berkeley Stanford CleanTech Conference in Menlo Park, Tang said PG&E favors an Internet-based, or IP, network as the backbone of the smart grid.

“We’ve been very focused on IP” because the security and management tools exist, he said. Other utilities, especially those in Europe, have been building smart grids that run over electrical networks.

Companies, such as Cisco Systems, are hoping to have it both ways. The company is focused on IP-based smart grids, but works with vendors to extend its reach to electrical networks

The tug of war between the two systems is likely to go on for some time.

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