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Wednesday, December 31, 2008

Latest aviation biofuel PR stunt

The search for renewable sources for aviation fuel continues. First it was coconut and babassu nut oil for a Virgin Atlantic 747, and this week it was jatropha oil on an Air New Zealand flight Tuesday.

This time, the biofuel was 50% of the mix (with jet fuel), unlike the 20% in the Virgin stunt. The jatropha crop is also promising because it can be grown places that other crops cannot, particularly sunny arid areas like the African continent, with 5 million hectares predicted to be planted by 2010, and acrages growing by 1-2 million hectares every year. As such, it seems more scalable than the earlier test.

However, the US alone uses about 20 billion gallons of jet fuel a year (nearly 60 million gallons a day). It may be that only algae-based biofuels will scale up well enough to have a meaningful impact on US consumption of jet fuel.

Thursday, December 25, 2008

Bah humbug

From Australia’s Courier & Mail on Christmas Eve:
SCIENTISTS have warned that Christmas lights are bad for the planet due to huge electricity waste and urged people to get energy efficient festive bulbs.

CSIRO researchers said householders should know that each bulb turned on in the name of Christmas will increase emissions of greenhouse gases.

Dr Glenn Platt, who leads research on energy demand, said Australia got 80 per cent of its electricity by burning coal which pumps harmful emissions into the atmosphere.

He said: "Energy efficient bulbs, such as LEDs, and putting your Christmas lights on a timer are two very easy ways to minimise the amount of electricity you use to power your lights."
Reader reaction was vocal (243 postings thus far) and fairly harsh:
Dear CSIRO, RE: fairy lights and the harm to planet EARTH..ABSOLUTE BOLLOCKS! For gods sake use my tax dollars on something real, or pack up all your wrong forcasts and .........thank goodness for censorship. ..

Posted by: Graham Keech of Brisbane 9:05pm December 25, 2008
At the West household, our Christmas lights have been on a timer since we moved to San José in 2002. (In our house before that, there wasn’t a good place to put the timer).

This Christmas, we’ve started to see LED lights in our suburban neighborhood. We have been considering converting to LED lights: the incandescents burn out and as with other incandescents, waste a lot of energy due to heat. We held off because we assumed they were too expensive.

However, Amazon has a 17’ string of LED lights for $30 (marked down after Christmas to $7-$20). They conform to standard lengths and are even designed to look like C7 Christmas bulbs. Not surprisingly, LED lights are prominent among all the Christmas lights being sold by Amazon this season. Clearly it’s a growth industry.

To me, this suggests that the idea of publicizing LED lights is timely, but the way it was expressed (as often is the case with scientists’ public policy opinions) could have been more tactful. It also doesn’t help that the comments were made by a government employee, and thus smacked of a government mandate to some people.

Thursday, December 18, 2008

Ethanol reform: too good to be true

My predicition of good news on the ethanol front proved premature, as Barack Obama has nominated Tom Vilsack, governor of Iowa, to be his agriculture secretary. Vilsack (like every other politician in Iowa or who even set foot in Iowa) worships the false god of corn-based ethanol.

Time magazine does a good job of analyzing the Vilsack appointment against the growing evidence of ethanol madness. Michael Grunwald professes optimism in that Vilsack is a corn-barrel moderate (rather than hawk), but I think he’s just giving the new president the benefit of the doubt. Time will tell, even if Time cannot.

Friday, December 12, 2008

At end to ethanol madness

Much has been made of that the Energy secretary-designate, Steven Chu, is a Nobel Laureate — a relatively rare qualification for a cabinet secretary. Apparently he would be the first one with an earned Nobel (as opposed to the Peace prize, which is an overtly political award).

A few have noted that Chu’s current job, as head of the Lawrence Berkeley Labs, includes a significant program on EE/RE.

The Domestic Fuel website concludes:
Dr. Chu has been heavily involved in biofuels research to find alternative and more efficient feedstocks for ethanol and biodiesel production. At a 25x’25 Renewable Energy Summit earlier this year in Omaha, Chu said, “We should look at corn as a transitional crop,” but within five to 10 years he expects scientific discoveries and refining processes could improve enough to move grasses, woody substances and waste to the head of the line for making fuels.
US News is more conclusive:
At a talk this summer in Nevada, Chu said, "In the first eight months of a new research program, we have developed ways to separate out cellulose, and we have already made a yeast [that] makes a gasolinelike fuel. Already within eight months, we are working on diesel and jet replacement fuels. We need to work with making this really scalable so it will outperform the yeast we have to today." (One potential disagreement with Obama: Chu has criticized corn-based ethanol, which Obama has strongly supported in the Senate and in the campaign.)
[Harris cartoon]The energy budget for corn-based ethanol is questionable, while the economics are not: it can’t survive without subsidies.

The case for celluosic ethanol (thus far) seems much more economically feasible, but it’s unclear whether President Obama (let alone Congress) will be able to stop buying votes with farm state subsidies.

Cartoon Credit: Science Cartoons Plus by S. Harris

Thursday, December 11, 2008

A peek inside NREL

Wednesday night was the 5th (ever) meeting of the Silicon Valley Photovoltaics Society. It was recommended to me by a friend in the industry, and I’m glad I went.

The topic was what the National Renewable Energy Laboratory does, and our speaker flew out from Golden, Colorado to give our talk (and make SV visits). The speaker was John Benner, whose business card says “Manager, PV Industry Partnerships, National Center for Photovoltaics.” He covered a lot in 45 minutes, and the slides will eventually be posted, so I’ll just cover the NREL highlights, both from the talk and talking afterwards.

John joined the Solar Energy Research Institute in 1978, soon after its founding in 1977. (The NREL name came in 1991). NREL is one of 36 FFRDCs ( Federally Funded Research and Development Center), in this case operated by Midwest Research Institute and Batelle.

NREL gets about $250m of its $300m budget from the DOE’s EERE division. EERE has a budget of about $1.8b, because it funds EE/RE efforts at other DOE labs like Sandia, Oakridge and Pacific Northwest National Laboratory.

Within NREL, photovoltaics are about 25% of the budget. Other major initiatives include biofuels, wind, and building energy efficiency.

NREL supplies research on basic technologies and also helps firms work on their own technologies. For example, a major issue is system reliability: NREL does research on accelerated testing, it does failure analysis for industry, but it’s up to industry to decide how to fix its own reliability problems.

NREL also provides funds to help firms commercialize technologies, both with its PV incubator (for those with proof of concept) and its new pre-incubator program. A wide range of firms have been funded, including Nanosolar, SoloPower, CaliSolar, SolFocus, and Skyline.

Flipping slides rapidly, Benner highlighted specific technology issues: wafer silicon (cutting wafer thickness by 50+%), film silicon, CdTE, organic PV as well as major cross-cutting issues (such as inverter failure). I typed furiously, but if I typed them right, the PV budget number were
  • 23% crystalline silicon
  • 18% concentrating PV
  • 7% next generation
  • 7% thin film CIGS
  • 5% thin film CdTE
  • 4% organic PV
  • 2% building integrated PV
  • 1% dye sensitized
  • 28% crosscutting, that covers multiple absorbent technologies.
The funding of DOE solar energy programs peaked in 1981, and then languished until 2006, when the Bush administration unveiled the Solar America Initiative, doubling funding in one year. Attendees are hoping for dramatic growth in RE funding under the new administration. (Obama was expected to announce that his new Energy secretary will be Steven Chu, director of the Lawrence Berkeley Lab, another FFRDC run for DOE.)

However, as Benner pointed out, the US story is now a private investment story, with $200m of annual government funding of PV dwarfed by $3b in private investment. The Federal role is strategically important (what else would he say?) but it’s not dominant.

Benner mentioned that NREL works with 70 of the 120 US companies that it knows of that do any sort of research or product development in PV, including some one- and two-person companies (that outsource almost everything). It also works closely with universities, including five universities on its board: MIT, Stanford, and three Colorado engineering schools (Boulder, CSU, CSM).

I’m hard pressed to think of another national lab that works so closely with industry on technologies being built and sold by industry to the commercial market. It seems to me (from this brief external perspective) that the NREL model has been “bring us your technologies and we’ll help you develop and fix them” while the other DOE labs have been more “here’s our cool technology, why don’t you license it.” Certainly the commercialization differences bear further investigation.

Update Dec. 17: Benner’s slides are now posted to the SVPVS website.

Wednesday, December 10, 2008

Tesla praying for its own bailout

Tesla delivered their 100th car Tuesday, of 1200 cars on their backlog. The (presold) delivery took place at their Menlo Park dealership to a minor celebrity best known for standing next to Oprah.

However, the big news is that Tesla is seeking $350 million in low interest loans to develop its (currently on hold) plans for a mass market ($58k) four-door sedan. The parallels to the bailout of the Detroit three are unavoidable.

Despite such parallels, CEO Elon Musk rejects the analogy. As KCBS radio summarized
Tesla needs government capital, but the federal loan the electric car manufacturer wants to use to finance production on a battery-powered sedan does not come from the auto industry bailout now being debated in Congress.

The San Carlos-based company is awaiting a $350 million loan from the Department of Energy under a program Congress approved last year to encourage the development of energy- efficient vehicles.

Tesla CEO Elon Musk said that money would finance a plant in San Jose where the Model S—to be priced just under $60,000—will be developed.

He was quick to clarify the money would go towards future development rather than existing day-to-day operating costs, a crucial difference between the DOE program and the bailout of the Big Three.
So it’s coming from a different pot of money, and (perhaps) the plan predated the recent collapse of demand for consumer durables.

Certainly the Tesla funding is more consonant with existing DOE policy to encourage alternative fuel vehicles, rather than the recent tendency of Washington politicians to offer (as both left and right deride it) a “bridge loan to nowhere.”

Sunday, November 23, 2008

Electric airplanes--no joke

On this blog, I was earlier making fun of the idea of biofuel, hybrid or electric airplanes.

However, at the Dec. 8 meeting of the MIT Club of Northern California, that’s exactly the topic:
Did you know that Electric Flight it has an amazingly long, technologically fascinating, and successful history?

Learn more from Dr. Mort Grosser, keynote speaker at EAA AirVenture 2008, where 540,000 people and 10,000 airplanes convened in Oshkosh.

Electric flight has become a hot topic because of the widespread Green Initiative and ongoing revolution in the electric power industry, from generation to end user. A piloted electric airplane flew at Oshkosh 2008, and rapid battery development presages a practical general aviation airplane within three to five years
So apparently it‘s no joke. I’m not sure if I can make it, but perhaps others will

Tuesday, November 18, 2008

Abolishing point estimates

One of my major gripes in my classes is that students put too much reliance on point estimates. Of course, when they (or other business students) graduate, the error is propagated into business.

Saying the company will generate $3,422.13 in revenues for the first month of a new product is useless information. No one knows what will happen in the future: the economy, reception of a new product, the reaction of competitors. People make assumptions — which are only assumptions, i.e. a SWAG or maybe just a WAG. So when I see a point estimate — to four significant digits — then I know all subsequent calculations are GIGO.

Saying that we expect sales to be between $500 and $5000 is more useful. It would be nice to say there’s a 95% chance (two standard deviations) that the results will be in that range, but for most analyses, that’s GIGO.

A common solution is to offer three cases, e.g. when startups offer “best case,” “worst case” and the median or average case projections to VCs. This is certainly better than nothing, because it forces you (for example) to think about what the appropriate level of hiring or advertising spending for each one.

The formal answer to this problem is scenario planning. I was reminded of this in checking out Adam Hartung (who posted a recent comment to my blog). In a posting on his own blog last week, he discusses the importance of scenario planning. In particular, he points out that many businesses (or individuals) made assumptions about energy prices without considering other plausible scenarios:
Over the last year the price of energy was one such big theme that interested a lot of people. But most only explored one scenario ─ what if oil prices went to $200 or $250? Interesting, but not sufficient. While that scenario is worth investigating in great detail, it's also important to investigate other options ─ like oil at $150, or $100 or $65 or $35. All of those have different implications. What's important in scenario planning is to investigate them all.
I have sometimes taught scenario planning in MBA technology strategy class. Although the material doesn’t really fit with the other readings, managing high-tech companies is inherently about dealing with an uncertain future.

Since the existing materials are not very good, at some point I guess I’ll have to write my own. However, blogger/consultant Martin Börjesson has a starter list of scenario planning resources.

Interestingly, everyone (including Börjesson) who teaches scenario planning goes back to the use of scenario planning by Royal Dutch Shell. This does make some sense, beyond the fact that Shell is famous for its use of the technique. Oil companies face a highly uncertain future — in terms of the supply and demand for oil, as well as the degree of environmental regulation (or societal pressure to self-regulate). They also have to make capital investments that last for decades and are planned years in advance.

Perhaps we can interest some renewable energy firms in also doing scenario planning. When they’re going for grid parity, they need to consider what the existing energy prices will be — which might be oil at $50 a gallon or $200 a gallon.

Oddly, Shell CEO Jeroen van der Veer gave a speech in February where he made point predictions as to energy demand, the availability of conventional energy, and the cost of renewable sources. The scenario alternatives he presented (in February and earlier in January) were not about the economic or technical future, but about the policy choices made by energy-consuming nations.

Saturday, November 15, 2008

Riding the experience curve

In a VentureBeat article on CPV producer SolFocus, reporter Chris Morrison raises an interesting point: today’s relative position between concentrated PV and silicon-based PV is less important than the rate of change.
the newest generation of SolFocus panels average 25 percent efficiency at converting sunlight to electricity. That’s a significant jump over the company’s 18 percent first generation product, but an even larger advantage over the average PV panel, which gets about 15 percent.
While silicon PV is slowly improving, it doesn’t look like current products will hit 25 percent efficiency anytime soon, perhaps ever. And in the meantime, SolFocus is working to milk even more efficiency out of its own systems. Hartsoch says later generations are projected to top 30 percent efficiency, likely within three to five years.

These numbers become more meaningful when you look at how quickly costs for each product will decline. Silicon PV is dropping in price about 5 percent a year. Hartsoch says that SolFocus will bring prices down 10 to 15 percent yearly.
I heard this same argument made by another CPV producer made last week. And half the argument seems pretty sound.

Scientists have been working on silicon-based PV for decades: we have enough of a trajectory to see where it’s going and how quickly it will get there.

The SolFocus use of III-V technology has a less predictable cost curve, with less investment and less of a track record. Many of the patents date to 1991-1992, but others are only a few years old. So today the predictions for its progress are extrapolating from much more limited data.

Still the basic point is sound — which technologies are mature, and which ones have the greatest potential for improvement for riding down the experience curve.

As with (digital) semiconductors, experience curve effects have already been important for PV. In fact, without them it would be hard to see how PV will ever reach grid parity.

Friday, November 14, 2008

RE needs to get bigger

Blogger Jim Fraser summarizes the stats on the use of renewable energy in the US:
in 2007 total solar (including solar thermal) represented less than 1% of the total of all renewable energy [including biomass (53%), hydroelectric (36%), geothermal (5%) and wind (5%)] which in turn represented just 7% of total energy consumption in the U.S.
His article today focuses on thin film solar (particularly First Solar)
Thin film solar is becoming an increasingly important segment of the solar industry. Thin-film solar cells consist of layers of active materials about 10 µm thick compared with 200- to 300-µm layers for crystalline-silicon cells. Some sixty companies have announced to start thin film production by 2010, and EuPD Research estimates that by then, the production output will amount to 3.5 GW. According to the EIA, in 2006 thin film represented a 30% share of the of the 337,268 Wp of photovoltaic cells shipped by the U.S. solar industry, as compared to 12% in 2004.
From my research for my PV teaching case, it’s clear that the solar power industry is highly fragmented. What’s not clear is that among the various solutions — e.g. crystalline solar, thin film solar, concentrated PV, or solar thermal — which of these will take the lead in terms of installed capacity and electricity output.

My hunch is that even once solar power rises to 10% of RE — say 1% of overall US energy consumption — it will still be a highly fragmented industry. Perhaps when the solar LCOE reaches parity, one technology will have a dramatic cost advantage and will take off.

Another scenario would be that even once grid parity becomes economically possible, we will still be facing production capital (and thus manufacturing capacity) shortages for a decade, keeping prices high and adoption relatively low. The market should auto-correct — with high demand bringing high investment — but if investors are cautious (or the IPO market remains closed) it would continue to be a seller’s market for PV equipment.

Perhaps also the recent drop in oil prices will stretch out demand for PV capacity, allowing a more gentle and realistic ramp-up. Such a stretch-out would not be a good thing for cleantech VCs. A lot obviously depends on how quickly the economy recovers.

Tuesday, November 11, 2008

Realism in the energy debate

Retired KPCB partner E. Floyd Kvamme wrote an op-ed in this morning’s Merc in which he contradicts some of the commonly bandied about energy “facts” from the recent campaign:
  1. We're sending $700 billion abroad to buy imported oil. Fact: Our net cost of imported oil this year will be about $400 billion due to the midyear price spike.
  2. We're dependent on the Middle East for our oil. Fact: We import oil from 60 countries; Canada and Mexico are our first and third largest suppliers. Persian Gulf suppliers provide less than 20 percent of imports; thus, we send about $5 billion a month to the gulf.
  3. We import 70 percent of our oil. Fact: Our import percentage peaked in 2005 at 60.3 percent and now runs at 56.5 percent.
  4. We have 3 percent of the world's oil reserves. Fact: There's no agreement on the size of global reserves with OPEC nations playing games to get more allocation; we continue to maintain up to a 10-year "backlog" of available oil.
  5. Turn off your lights to save imported oil. Fact: Oil plays virtually no role in electricity production, which nationally comes from coal (50 percent), nuclear power (20 percent), natural gas (18 percent), and hydro (7 percent). Wind and solar currently contribute less than 2 percent.
Alas, he seems to be a support of ethanol†. But at least he’s introducing sanity to other aspects of the energy debate.

Let‘s hope that the heat of the political season over, we will hear an accurate and consistent set of numbers (from a credible source) upon which the politicians and the public will make energy policy decisions.

† A farm subsidy program designed to increase food prices and produce a lower-energy fuel that may (or may not) cost more energy to produce than it delivers.

Saturday, November 8, 2008

Transmitting clean power

California has a state goal of increasing the share of renewable energy used in the state. Of course, as with elsewhere in the country, the supply of such energy isn’t always where the demand is.

In particular, any large-scale solar energy plants will be built in Imperial, Riverside and San Bernadino counties, where it’s sunny and dry and land is cheap. (You won’t ever find solar plants on Palm Canyon Drive). For example, the big Kramer Junction power plant is in the Mohave Desert in San Bernadino County.

In the southwest corner of the continental US, San Diego is a geographically isolated metropolitan market without the hydro of the Sierra Nevadas or the windmill farms of the Tehachapis or the Altamont Pass. Instead, for years San Diego Gas & Electric has been pushing to build a new 123 mile power transmission line called the Sunrise Powerlink, to connect to a planned 900 MW power plant in Imperial Valley. In response to opposition by environmental groups, the environmental impact report runs 11,000 pages.

Now, Fortune reports that the power line has been rejected by Jean Vieth, an (Obama supporting) administrative law judge for the state Public Utilities Commission. The PUC uses law judges to develop the legal record, although the final decision is made by PUC commissioners. Oral arguments before the commissioners were held yesterday in San Francisco, towards a possible Dec. 4 decision.

The core arguments seem to be energy vs. the environment: the irony is that this energy would enable a shift by SDG&E from fossil fuels to renewable energy. Critics have claimed that San Diego doesn’t need the line to import the power, an argument that has been repeatedly rebutted by the state’s own power transmission bureaucracy, the Independent System Operator.

Perhaps this is the wrong project and there really are viable alternatives; I have no direct knowledge. However, rejecting efforts to increase the production and supply of clean energy will eventually either result in brownouts (as in the Gray Davis era) or the state failing to meet its goal of 33% renewable energy supply that’s 11.1 years off.

A belief in small is beautiful is not going going to eliminate the fundamental economic laws related to scale economies. Right now, solar thermal is the best option for California to gain the capacity necessary to replace fossil fuels.

Wednesday, November 5, 2008

A Sunny New Day

It’s a sunny new day here in Silicon Valley. The weekend rain is gone, replaced with nearly blue skies. And our local renewable energy companies are waking up to a new presidential regime that will be very different than the current one. Although both candidates emphasized renewable energy more than the incumbent, this is clearly the best possible outcome for the industry.

Doyle McManus, Washington bureau chief for the LA Times, asked the question that is on the minds of many business executives: “Which Barack Obama will govern?” As with many politicians, there is the tension between pragmatism and ideology, and between primary and general election positions.

Even if Obama the president is more cautious than Obama the candidate, spending on infrastructure and renewable energy seem a sure thing:
"We'll create 2 million new jobs by rebuilding our crumbling roads and bridges and schools," Obama said in his "closing argument" campaign speech last week. "And I will invest $15 billion a year in renewable sources of energy to create 5 million new energy jobs over the next decade -- jobs that pay well and can't be outsourced."

All that spending will create a budget problem for a president who has promised to reduce the ballooning federal deficit, and it will mean a debate in Congress between big spenders and deficit hawks, including in the Democratic Party.
McManus speculated that spending on renewable energy seemed the most likely part of his energy agenda:
The president-elect's ambitious energy proposals may also be tackled piecemeal, advisors said. Some elements, such as the job-creating investments in alternative energy that Obama emphasized last week, are broadly popular.

But proposals for tough limits on greenhouse gas emissions from energy-generating plants and other facilities, a program known as "cap and trade," will be harder to pass because they impose new costs on energy producers.

"This is going to be a tremendously heavy lift to get passed," acknowledged Heather Higginbottom, Obama's chief domestic policy advisor in the campaign.
Every indication is that national and state voters were concerned with the economy above all other issues — which will make certain forms of fiscal stimulus popular, but higher taxes and other spending more risky.

In California, Obama won with 61% of the vote, and voters approved $10 billion in bonds as the down payment on a planned $45 billion high speed rail system. However, two ballot measures (nominally) promoting renewable energy were soundly defeated.

The less surprising was Proposition 7, which would have mandated (to simplify greatly) state electric utilities increasing their use of renewable power from about 13% to 20% by the end of 2010. However, the measure was highly controversial in that it only counted large plants — those of 30 MW or more — which would have wiped out the small providers that today provide the majority of the state’s solar power.

Eliminating the incentive to use small suppliers of electricity would have also hurt those who install such small systems. Gary Gerber, president of Sun Light and Power — and 2008 president of the — became the face of these small contractors. Thanks to TV advertising money from the two big electric utilities, Gerber’s face became a familiar one to California voters. The controversial approach to a popular end won widespread criticism, including from leading newspapers such as the LA Times.

Update 10pm: The LA Times breakdown shows that Prop 7 won in only one county — Imperial County — where such large-scale solar farms would be located.

More surprising was the failure of Proposition 10, a $5 billion bond measure to fund various hybrid or natural gas vehicles, as well as incentives for RE production and R&D. There were lots of TV ads promoting the measure and (AFAIK) not a penny to oppose it.

Why did it fail? Was it the cost? (Beyond high speed rail, the only other spending measure to pass was a $1 billion veterans’ bond). Was it the ballot argument that emphasized the role of T. Boone Pickens in paying the cost of putting it on the ballot? The PickensPlan assumes that heavy trucks will switch to natural gas, which is slightly cleaner than gasoline, and Pickens provided most of the $22 million to promote the measure.

Given these voter reservations, I think the new administration will have to pick and choose its battles. Since solar is only a few years (a decade at most) away from grid parity, the Feds may be able to provide a short-term stimulus and then declare victory when, grid parity achieved, the industry meets explosive demand without further subsidy.

Monday, November 3, 2008

Leveraging solar GIS services

The Merc has an interesting article this morning about how free satellite data services are changing the process of siting and installing solar energy systems. The article interviews two of California’s biggest solar panel installers: venture-funded SolarCity of Foster City (Bay Area) and Borrego Solar of El Cajon (San Diego)

The article shows various GIS (Geographic Information Systems) solutions help solar siting. One is Google Earth or Google Maps (the article blurs the difference), to look at satellite imagery from Google Earh or Google Maps: the article blurs the difference, and also doesn't explain why Google is better than Yahoo. Photos from space could suggest the optimal location on a site for solar panels, free from building or tree shading.

The article also says that SolarCity uses Google Earth to measure roof size.

Finally, there is a new solar map of the Western Hemisphere from 3Tier of Seattle. The FirstLook map, browsable online by latitude/longitude or zipcode, uses 11 years of NOAA satellite data to estimate average incident solar radiation at a given address. The map presents the data as a color-coded overlay onto the Google Maps service.

The map is free to browse. From it, I concluded that the average daily incipient radiation at my San Jose home is about 5 kWh per square meter — above average for the US but typical for the Western US.

3Tier is giving away aggregate data useful for consumers, but wants to sell more sophisticated data to solar professionals. It provides free to consumers global horizontal irradiance, which includes both direct and diffuse incident light. It sells the direct normal irradiation, which is most useful for commercial, sun-tracking systems. Among the data it sells is the breakdown of radiation by month and time of day.

Both the analysis and installation companies right now are enjoying a boom period that looks to continue for many years. Solar hot water installers enjoyed a boom in the 1970s and 1980s, but then it went bust after tax credits expired and all the most likely customers had been serviced. Right now, I can’t see how to predict whether the residential installation boom in the US will last 2 years or 20.

Monday, October 27, 2008

Colorful EE/RE entertainment

Santa Monica Pier Ferris WheelSearching through my IEEE Spectrum for articles germane to the solar energy case I’m writing, I found an article on the new Ferris wheel installed on the Santa Monica Pier last May. Living now in N. California, I hadn’t heard about it at the time.

The new wheel is energy efficient because it uses 160,000 LEDs instead of 5,400 incandescent bulbs, cutting energy consumption by 75%. Like its 1996 predecessor, it also uses renewable energy — powered by the same solar cells as the 1996 Ferris wheel. The old Ferris wheel was taken apart and sold for $132,400 on eBay to an Oklahoma developer.

Flickr photo by Marla Davis-Marinelli licensed under Creative Commons.

Saturday, October 25, 2008

Clean California travel

One of my first jobs was as a political reporter, including writing voter guides for our readers showing both sides of controversial issues. On next week’s California ballot, there are two propositions directly related to clean energy and a third indirectly related. Here I’ll write about the latter, and cover the former later.

Proposition 1A is the $10 billion rail bond measure. Like all California bond measures (or NSF funding budgets), it has been carefully crafted to buy off supporters in as many counties as possible, rather that fund the absolutely highest priority projects. If you compare Proposition 1A with the (now obsolete) Proposition 1, the main difference seems that the original plan emphasized LA-SF but the new plan attempts to fudge the issue.

Of the $10b, 90% is to start the California high speed rail initiative and 10% for misc. other local and intercity rail efforts. Some of the support comes from clean technology fans. With an ideal top speed of 200 mph, the high speed rail would be electrified — potentially from renewable energy — and thus presumably supplant passenger airplanes (which cannot yet run on electricity) and electric cars (which can make short but not long trips on stored grid power).

Only the “pro” side has enough money to run ads. If you listen closely, they are paid for by the Northern California construction industry, and the California heavy construction worker’s local, which would both benefit financially from the billions spent on a new rail system. Some of this is a point of pride: Europe and Japan have high speed trains but the US does not (Acela hardly counts). There is also a large constituency of those who like mass transit as a “green” solution, train buffs, and probably from a few places (like Fresno) that don’t get good air service. San José is happy because we beat out Oakland as the gateway city to the Bay Area. (Note to non-Californians: San Francisco is a great water and air hub but a terrible rail hub, especially since they removed the trains from the Bay Bridge).

Far less organized, the “con” side has two basic arguments. One is that this $9b (not counting the billion for unrelated projects) is just a down payment — only 20%of the amount needed to build the promised system. What are people voting for if they haven’t been told the final price, and if the initial investment isn’t enough to create a useful system on its own? The second is that the claimed prices and costs don’t seem to match — the $55 fare is much lower than other global rail fares.

I would count as a train buff. When I was trying to break into news photography, my most striking photos were of the Washington Metro and other transit subjects. have ridden the Shinkansen, EuroStar, TGV and German ICE trains. I try to prefer the train whenever it’s cost and time-competitive to a car or plane. I spend a lot of time trying to figure out the subway or light rail system whenever I visit a strange city, and use it (or commuter rail) to visit Boston, Chicago, DC or even downtown SF. If it is finished before I die, I would certainly be a regular user of the California bullet train. Today I regularly travel between Northern and Southern California, and before that I made many trips between the SD and LA regions.

However (as one friend used to say) my “spidey sense” is tingling. The $9b for high speed rail is 20% of the $45b the legislative analyst says the system will cost (such projects tend to run over). There is no guarantee that this first installment will finish anything useful (or revenue generating) without floating another $10 or $20 billion in bonds. If the state had put all $45b on the ballot at once, perhaps it would have been too threatening given that the state’s existing outstanding bonds are about $53b.

There’s also the curious wording on outside money. Half of the actual construction costs must come from “private” or “other public funds” but the bonds may be used to pay all the cost of studies, right of way and rolling stock. (Seems bass-ackwards to me — as with airlines or buses, it would make sense to have the government own the right of way but make private entities buy and operate the rolling stock). As a free market economist, I’m still a little puzzled by the failure to find a private operator (as once promised), which suggests that the system’s operating deficits need to be paid (or at least guaranteed) by taxpayers.

So will this be (as proponents say) permanent infrastructure that will be used for decades? Or (as opponents say) an expensive boondoggle? I think we’ll have to spend the money and build the system to find out.

Friday, October 17, 2008

Cleantech Venture Challenge

Cross posted to Engineering Entrepreneurship

The University of Colorado at Boulder is preparing to host its 4th annual Cleantech Venture Challenge, an international business plan competition for new ventures that somehow address a “sustainability” need. The business plan competition is sponsored by the Deming Center for Entrepreneurship at the Colorado’s Leeds School of Business.

The competition uses a three-stage process. An intent to compete must be filed by Nov. 21, followed by a complete business plan on January 30, 2009. The eight semifinalists will come to Denver March 17-19 for the final rounds and the ultimate selection. The National Renewable Energy Lab (in nearby Golden, CO) will also invite the top renewable energy project to present at NREL.

The top prize is $25,000. The finals will also coincide with a sustainable business summit to be held at the Denver convention center, part of the state’s efforts to position itself in the cleantech business.

Thursday, October 16, 2008

Tesla's bump in the road

The Merc reports that Tesla has killed (or at least postponed) its sedan, laid off the engineering workers designing the car, and is delaying its planned San Jose plant.

The announcement was made on the blog of founder (and now CEO) Elon Musk, who’s giving up his SpaceX hobby to come back to Tesla. He blames the financial crisis, which the Merc interprets as meaning a “credit crunch” but I see as meaning “rich people with plummeting stock portfolios can’t afford a $100,000 toy.”

No mention was made in either story of the Dodge EV, although Scientific American notes that Tesla’s woes come as the big three are getting a $25 billion subsidy to develop alternative fuel vehicles.

I don’t see how the Dodge news could do anything but hurt Tesla’s business. The overpowered, overpriced, grid-powered 2-seat toy market isn’t all that big to begin with, and splitting it in half is even worse. About the only way to brush it off is to assume Chrysler will be incompetent, and given they’ve produced some good hot-rods in the past 50+ years, that seems like a bad bet.

Sunday, October 12, 2008

Spook turned VC

R. James Woolsey, former Rhodes scholar and Yale Law graduate, is best known as CIA director under President Bill Clinton. He also served in a series of defense-related government positions during the Bush, Reagan and Carter administration.

Today, Woolsey is a venture partner and “senior advisor” for the CleanTech investment group at Vantage Point Venture Partners, near SFO in San Mateo County.

Sunday, the Merc published an interview with Woolsey, focusing on his perceptions of the need for CleanTech investing, both from the standpoint of carbon emissions and also oil imports. He mentions how he introduced Tesla to the VPVP senior partner which led to their investment and Woolsey’s halftime role at VPVP.

Woolsey has recently left his Maryland farm for a year to hang around in the Bay Area, both for VPVP and as a Hoover Fellow. On the off chance that John McCain wins on Nov. 4, Woolsey could be called back to Washington, but right now it seems like the Woolseys can feel confident that they will finish their one-year lease here in the Bay Area.

Thursday, October 9, 2008

Holy solar panels, Batman!

Flipping radio channels over the weekend, the local Catholic radio station reported that last week the Vatican has began installation of solar panels on the roof of a large hall at the Vatican City.

The panels will generate about 280,000 kWh/year of power, around 15% of the energy needs for the 6,300-seat hall. The project was timed to a needed roof replacement, and also because the hall was one of the most modern buildings in the city-state.

The Vatican got the $1.5 million worth of panels donated by SolarWorld of Germany, who gave them as a gift to the German-born pontiff.

After this project, an employee cafeteria will also be getting solar panels. The Vatican is hoping to be the first European nation to comply with EU goals of having 20% of all energy consumption covered by renewable energy. Give that the landlocked nation is only 0.44 sq km, it seems pretty clear that the power will be coming from solar rather than hydro or even wind turbines.

Note to European readers and readers under 40: the headline refers to a common exclamation made by Burt Ward in the 1960s television drama Batman.

Tuesday, October 7, 2008

Out into the sun

The lead business story in the Merc this morning is about yet another solar panel manufacturer based here in the Bay Area — in this case, one that’s coming out of the shadows (so to speak) and revealing its business strategy:
Solyndra, the noisiest stealth start-up in Silicon Valley, emerges today as a solar heavyweight.

The company, based in Fremont in a series of large buildings visible from Interstate 880, says it has orders for $1.2 billion worth of its solar panels over the next five years. It has raised more than $600 million and already has 500 employees. And it plans to construct a second, larger plant in Fremont next year.
The company brags of celebrity investor (and Virgin megapromoter) Richard Branson.

The photovoltaic market has a range of approaches — in terms of core technology, packaging and target markets. This reflects both the unknowns about technical approaches to grid parity, and also an increasingly crowded, VC-funded startup market. Solyndra is going for lie-flat systems on commercial rooftops, a large market.

Although chip making is now gone, Silicon Valley still has the materials scientists, universities and VCs that put it on the map. The Solyndra founder/CEO is an 11 year veteran of Applied Materials. Of course, we also have a lot of rich (i.e. relatively price-insensitive) “green” consumers and businesses that will buy panels even before they reach parity with on-grid electricity prices.

Thus, despite the high cost of living, the Bay Area (including Silicon Valley) also has a number of photovoltaic startups, including SunPower (already IPO'd), Nanosolar, MiaSole and (stealth mode) Solar Junction. Most of these are in San Jose (which is bigger and cheaper than the Peninsula), including the new UL lab for testing PV systems.

I would be shocked if there's fabrication in the Bay Area in 2015 — this stuff will eventually end up in Arizona or Utah or New Mexico. But still, the new industry is getting off the ground here, which shows that Silicon Valley has a few more acts left before it becomes a mere financial center.

Sunday, October 5, 2008

Pleasant surprise on hybrid costs

My undergraduates have been assigned a couple of auto industry cases in the capstone strategy class, so the past week I’ve been reading the textbook case on GM vs. Toyota.

Reading the case reminded me of the warning (as the case puts it):
The big drawback [of a hybrid] is that … the battery has to be replaced about every 100,000 miles at a cost of around $2,000.
This was written about four years ago, and when looking into it, the real world experience has been much better. Honda has a 0.2% replacement rate (although many of those cars are no where near 100,000 miles), while battery costs are declining.

This has obvious positive implications for the (even more battery dependent) true electric vehicles as well as plug-in hybrids (PHEVs). Of course, we are talking about different battery technologies as the Chevy Volt (among others) will lead the shift from the NiMH of the Prius to Lithium Ion now used in laptops and soon in automobiles.

If EV batteries have an improving cost-effectiveness curve comparable to laptops of the past 15 years, this solves one of the two main economic problems facing electric vehicles. The other is where we get another 3,000 GWh of electricity (presumably all distributed off peak).

Here is an opportunity where a blind faith in technological progress will apparently rewarded with solutions to a major cleantech business problem. I’ve been skeptical of such technological determinism for aspects of cleantech business, but it appears that for electric vehicles — like computers but unlike nuclear airplanes — market demand looks like it will solve key technology hurdles.

Wednesday, October 1, 2008

GM's battery gambler

I'm an IEEE member, but have not been the most religious reader of the various pieces of glossy paper they send me every month, both the technical journals and the general interest magazines.

However, catching up over the weekend with the August IEEE Spectrum (the main magazine), I saw a couple of articles that provided an interesting insight on cleantech topics.

One was a long feature article on Denise Gray, a Detroit native and EE graduate of the GM-affiliated Kettering University. Gray has worked her way up through GM in a variety of electronics, embedded software and controller positions. The one that sounded most fun to me was managing the test suites (and testing) of the fuel-injection software for the small-block V8 of the 1997 Corvette.

From this, she was promoted in 1995 to a director-level position, the manager of software for all engine groups. She later became director of software engineering, director of controller integration, and overseeing all software for all automatic transmissions.

In October 2006, she was became the company’s first director for advance battery work, a high priority, highly visible job within the company.

Job one is to work with suppliers to design (and then select) the lithium-ion battery for the Chevy Volt, the long promised (but recently demonstrated) electric car due in November 2010. This car could be the most important vehicle for GM’s future in decades — particularly since the company’s survival has never been previously been more in doubt.

Gray worked with a wide range of potential suppliers to explain the company’s needs. The competition is down to two, Continental of Germany (using cells from US firm A123Systems), and CompactPower, using cells from parent LG Chem of Korea. It goes without saying that the performance (and durability) of the Volt will depend on Gray’s ultimate decision and its supplier’s ability to deliver on promises.

In addition to the human, technical and business interest story, there’s also the career lessons. Gray managed a 28-year fast-track career in which work came third after family and church, during a period when women engineers were uncommon. If my daughter eventually becomes a MechE or EE, these are the sort of role models I’d like her to have.

Sunday, September 28, 2008

Dodge's Tesla knock-off

Chrysler has a long record of engineering successes, including muscle cars like the Charger and the Viper. As the smallest US automaker, it’s had to zig when others have zagged. It worked (at least for a while) with the Caravan, Cherokee, PT Cruiser and some other models of the past few decades.

Thus, it shouldn’t have been surprising that when it unveiled its (long-secret) electric car strategy last week, that one of the three vehicles was the Dodge EV sportscar, which claims to go 0-60 in less than 5 seconds and a 13 second quarter mile.

What seemed odd was that the EV (due “after 2010”) uses a Lotus chassis, from the British automaker known for small, fast and lights sports cars.

If that sounds familiar, it’s because there’s already a Lotus-based electric sports car, shipping today. It’s from Tesla Motors, and is currently being built for Tesla by Lotus — at least until Tesla’s (planned San Jose factory is done. CNET says Tesla is a Lotus Elise and the Dodge is the larger Lotus Europa. Perhaps that’s why the Dodge EV will initially be sold in Europe, rather than head-to-head with Tesla in the US.

In a major shift, Chrysler is using an open innovation strategy, depending on outside suppliers, including the batteries, electric motors and (in the case of the Dodge EV) even the chassis. What’s left? Perhaps just systems integration and control software, plus marketing and distribution.

Perhaps this is a time-to-market strategy that’s intended as a temporary expedient. (That didn’t work out so well when IBM did this with its 1981 PC). Perhaps it’s a recognition that cut free of Mercedes, Chrysler doesn’t have word-class technologies and so should buy the best it can on the open market. Or perhaps it’s permanent recognition that Chrysler is now a second tier car maker (akin to Mitsubishi) that lacks R&D and manufacturing efficiencies to do things on its own.

Thursday, September 25, 2008

Your not so-green-blogger

A google news watch reported today that the website Zimbio has created a page for “Joel West”. The picture is the same as the one at right (and the one given below), and the first three entries are about a professor at SJSU. The fourth entry is about a fullback in Broward County high school football.

What I found most amusing was that the main summary for the page — listed next to the photo below — had nothing to do with the other four entries:
PortraitJoel West is a Green Party politician from Texas's 22nd Congressional District. Check back for more coverage of Joel West, congressional elections and Texas senators and representatives.
I have a strong interest in the economics of green issues, but I think hell will probably freeze over (now unlikely given global warming) before I’m a Green Party political candidate.

Wednesday, September 17, 2008

EV News: Less Than Meets the Eye?

Today brought two major announcements on opposite sides of the country regarding electric cars.

This morning in Detroit, GM unveiled the real version of the Chevy Volt, promised to ship in 26 months. The announcement was timed as part of the GM centennial celebration.

Meanwhile, Tesla Motors made its own announcement here in San José. Tesla plans to employ 400 workers to build its eponymous product at a 90-acre site in Northeast San José. The site will include both the company HQ and (unless some details fall through) the factory for the Tesla Roadster now being assembled by Lotus in England.

While both are major milestones, below the surface are some details that suggest these announcements are less significant than claimed.

One report said that the Volt would save $1,500 a year in gasoline (vs. $180-$300/year in electricity) but could sell for as much as $40,000 — in other words, a 10-15 year payback period over a typical small car. Once upon a time, Americans bought small fuel-efficient cars because they were cheap, so the idea of paying a $20K premium for an electric car is going to limit the market. I think Honda’s plan for a sub-$20K hybrid is a much more important way to bring LEV/ZEV cars to the mass market.

“Mass market” and “‘Tesla” are not terms used in the same sentence, but the technologically advanced $100K sports car has certainly captured the imagination of local dot-com zillionaires (and some self-indulgent boomers who are slightly less affluent, like one of my neighbors). Although it’s a niche product, it’s a sexy product nonetheless.

Tesla was once going to build its factory in New Mexico, but when production delays hit, state and local officials began wooing it to stay here in the Bay Area. Two things about the deal were troubling.

First, the state is giving at least a $9 million subsidy and the city at least a $15 million subsidy to Tesla. Other firms that create jobs don’t get subsidies, so why are the (economically inept) government officials intervening for this particular employer?

The second problem is the justification for the subsidy, which is the claim is that this is the first of many such local employers:
While San Jose has been active in attracting solar companies to locate in the city, "this is a much bigger deal because of what it is and the technology it represents," [San José mayor Chuck Reed said. "It's not just another solar company. It's an electric car, which has tremendous upside for us, and a whole new area of job potential."
Reed is the most pro-business mayor we’ve had in decades, but he still seems (to put it charitably) misinformed.

The idea that the Bay Area will become a hub of manufacturing high-tech cars is just laughable. Because of labor, land, taxes and all the other costs, by the end of the year Intel won’t even have make semiconductors here — and they have a much higher technology content and value per pound.

Most of the parts for an electric car are shared in common with fossil fuel cars, and so if EVs catch on, nearly all of the electric cars in North America will be made in factories owned by the major world automakers (in Michigan, Ohio, Kentucky or wherever). Perhaps the Prius will someday be made at NUMMI in Fremont — and even the 2010 plug-in version — but today NUMMI is the only remaining auto plant in North America west of Texas.

There’s also the strong possibility that one car company will become zero, i.e. how long Tesla Motors will survive. It might last longer than the seven years of DeLorean Motor Company, since I assume JB Straubel has a more normal personal life than did John Delorean. Even so, I would bet $500 that Tesla will be gone by 2020 — whether dead or gobbled up won’t matter to the San José employees they leave behind. I suppose the best case is that its production moves over to NUMMI, but I think Ford or Chrysler seems a more likely buyer than GM (with its Volt) or Toyota (the world leader in hybrids and soon plug-in hybrids).

So in 5 years, the best case is that we will have dozens of solar photovoltaic firms in the Bay Area, and one electric car company. Perhaps the car company will be employing more people, but the PV companies will be providing higher-wage jobs that are more likely to stay here in the long run.

Sunday, September 7, 2008

Electrifying general aviation

Our local CNN Radio affiliate carried a story about a new “green” technology: an electric airplane known as the ElectraFlyer. I couldn’t find the CNN footage, but there is 60 second ad on YouTube.

Obviously a few Lithium-Ion batteries used to power an ultralight aren’t going to get a 747 across the Pacific. There are also a few regulatory hurdles to be cleared, but it’s a start.

Friday, September 5, 2008

I’ve got a lovely ton of coconuts

In February, Richard Branson and Virgin Atlantic flew a 747 from London to Amsterdam using (some) biofuel. The effort was also publicized by partners Imperium Renewables (the fuel supplier) Boeing, while GE Aviation did not. One of the four plane engines was running a blend of 20% biofuel and 80% jet fuel. The renewable fuel came from coconut and babassu oil.

This is an obvious PR effort for airlines and aircraft makers to keep air travel relevant and politically favored. (Virgin Atlantic has a whole website section on sustainability). Planes will be burning hydrocarbons and spewing CO2 for decades to come, so the aircraft sector needs to come up with a way to help its image even if there’s not a lot they can do about the substance.

At the time, Wired was appropriately skeptical about the effort, with a balance of praise and criticism of Sir Richard’s stunt.

This morning, the NY Daily News reported some tidbits about the flight from an apperance by Sir Richard in NYC:
Branson, on hand at JFK yesterday [told] us that "the best way to reduce your carbon footprint is not to fly at all. But that's not realistic. You can't walk to England."

So what's the next best thing? "Fly Virgin," Branson laughed. "One hundred percent of all profits from all our airlines are reinvested into finding a cleaner fuel solution. We had an experimental 747 that ran on coconut oil ... but it took 150,000 coconuts for one flight. So now we're looking at developing fuel from algae. If you fly Virgin, you'll support this cause."
This suggested a simple back of the envelope calculation. Crude Google search suggested that the average weight of a coconut is 300-500g. So 150,000 coconuts is 45-75 metric tonnes, or about 100-165,000 pounds worth.

Let’s assume best case — 300g coconuts, negligible babbassu oil. Biofuel was only 5% (20% x 25%) of the fuel used on the flight, so pure biofuel would require 2 million pounds of coconuts for this flight.

The flight was 231 miles (or 370 km), while the average fight distance is probably closer to 1000 miles. Since fuel consumption is more proportionate to hours rather than miles, I’m guessing the flight was about half as long as normal, but a 747-400 holds more than twice as many passengers (416) as an average plane.

In 2007, there were 29 million flight departures last year. So if we assumed the world’s airlines together need 10 million times as much fuel as the Virgin flight used, that’s 2 trillion pounds (1 billon tons) of coconuts a year.

How big is that? To quote from an Indian website:
The world production of coconut currently is around 55 million tons, Indonesia having the highest production figures accounting up to around 30% in world figures. The nut is cultivated on around 26 million acres of land throughout the world in more than 90 countries of the world. The production of coconuts has increased significantly during the last decade with the increase in the world demand. The world consumption figure in context of coconut oil is around 3.8 million tons.

World trade in coconut complex is limited as most of the produce is consumed at the place of its production. The countries that have demand supply mismatch usually indulge in the trade of the fruit. The exports of coconuts fluctuates depending upon these factors and hovers around 1800000 tons per year.
[Mounds bar]So converting the global supply of coconut would supply only 5% of the world’s jet fuel needs, leaving nothing for Mounds bars and coconut milk.

Of course there is a broader question as to the economics (let alone energy budget) of the crops-to-fuel biofuel effort. But it’s a shame that people are not doing the simple math to see how little an impact some of these initiatives would actually have on global energy consumption.

Monday, September 1, 2008

EE/RE news sources

The focus of this blog is on renewable energy and energy efficiency. In coming up to speed, I’ve tried to find online sources of targeted news on these topics. Below are the most interesting pages I found, ignoring those sites that seem less relevant to the business of the field.

One obvious place to start is the Department of Energy’s Office of Energy Efficiency and Renewable Energy. The EERE has a number of news feeds and e-mail lists in addition to its news pages and data sources.

There are a few sources specifically related to the business of energy efficiency, such as Energy Efficiency Markets blog and the (global) news site Energy Efficiency News. Another news source is the Alliance to Save Energy, a 30-year-old bipartisan 501(c)(3) nonprofit which has a news page, monthly newsletter, and email newsletter.

When compared to efficiency, there seems to be more news on the alternative energy side. For example, Camino Energy has a blog logging the weekly status of publicly held sustainable energy stocks. Another weekly review is given by Alternative Energy Stocks. (Progressive Investor lists recent prices for a wide range of renewable energy and energy efficiency stocks).

More general blogs on cleantech that cover solar and wind include:
  • Venture investing news can be found in VentureBeat’s cleantech news and the Cleantech Investing blog.
  • The aptly named Cleantech Blog seems to take a more critical look at industry economics than most cleantech blogs.
  • The market watch section of  photovoltaic site PV-Tech.org summarizes business news related to solar energy.
  • Not specific to business, general news on solar power and wind power is repackaged by Alternative Energy News.
Original reporting on a wide range of a green and clean business and technology topics (including some renewable energy) is at the Business Week Green Business section, its Green Business blog, and on the CNET Green Tech blog.

Overall, it was a surprisingly short list of useful sites. For some topics, a Google news Alert (part of Google’s perpetual beta program) would seem to be the most efficient way to monitor key developments.

Saturday, August 30, 2008

About this blog

For nearly 30 years, I've worked in (and later researched on) various aspects of the IT industry. My other blogs emphasize various aspects of competition and business in these industries.

However, living here in Silicon Valley, you’d have to be deaf and dumb to ignore not only the social and political momentum building around clean technologies, but also the business opportunities being pursued. I see these as separate (albeit related topics). Some people believe it’s necessary to change how we live — whether in terms of energy consumption, CO2 emissions or solid waste generation. Nothing new there: the first Earth Day was in April 1970, and (particularly here in the Bay Area) there has been a strong environmental movement making strong (some would say shrill) pronouncements about the consequences of misusing (or overusing) the earth’s resources.

Since that time, we’ve had Kyoto, an Al Gore movie, and the IPCC — and a fear of nuclear winter became a fear of global warming became a fear of climate change — but for many the principle remained unchanged.

What really is different is the stampede of interest in potential business opportunities, fueled (ahem) both by entrepreneurs and venture capitalists. Al Gore may be just a retired politician and movie producer, but when Klein Perkins made him a VC, the Valley (and the world) took notice.

Because cleantech is a big topic, the focus here is on the entrepreneurial efforts to find electrical engineering energy solutions. Part of this will be on the alternative energy sources, such as wind and solar, as well as related issues such as energy storage (essential to make wind power viable).

But equally important are efforts on energy efficiency, which many argue is a more economically viable and feasible short-term approach to solve energy problems. This is a particularly hot (!) topic here in California, with major research centers at UCSB, UC Davis, UCSB, Lawrence Berkeley Labs, and the University of California, as well as smaller projects at UCSD and UC Merced.

Electricity is a commodity: consumers and businesses normally buy the cheapest possible kilowatt-hours, whatever the source. Thus, my interest is on the economics of alternative energy and energy conservation — when the numbers work, the new technologies will sell themselves and be widely adopted. In other cases, they will depend on government subsidies intended to “prime the pump” — subsidies that ideally (although not always) are pulled as the technologies eventually pay their own way.

This commentary is offered from the standpoint of a strategy professor, business model consultant and firm believer in free market economics. While there are a lot of good blogs on the business of IT, few alternative energy blogs focus on the economics of the industry and the progress it is making (or needs to make) towards becoming economically self-supporting.