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Saturday, August 24, 2013

Potential payoffs from ubiquitous BIPV

As an MIT alum interested in clean energy, I subscribe to the free semiannual magazine Energy Futures.

The purpose of the magazine is to tout MIT advances in energy technology, but since MIT (with the MIT Energy Initiative) is one of the world's cutting-edge energy research labs, I find that it is often a provocative look into a possible future that may or may not* come to fruition. (*The technology may not work, it may not scale, it may not be cost effective, something better may come out, etc. — such are the risks of technology entrepreneurship).

In the spring issue, one article describes the work of Prof. Vladimir Bulović, recent PhD grad Miles Barr and ex-postdoc Richard Lunt to create transparent solar cells. The cells absorb energy in the UV and near-infrared, but only about 30% of the visible light. This would allow the PV cells to become just another layer on a building’s windows, and could also use the window class to protect the (currently fragile) layers from the elements.

[Spectral response]

Right now, the efficiency is only 2%, but are hoping to get the efficiency up to 10-12%.

As with any BIPV (Building Integrated Photovoltaic), integrating the PV into windows would eliminate most of the installation cost; it would also mean that the PV is not an obstacle in use of the existing roof, interfere with drainage, need to cope with snow accumulation, etc.

The big win seems to be for large commercial buildings. The article claims that a 5% efficient PV cell could generate 25% of a building’s electricity. Absorbing near IR would reduce cooling in the summer (but increase heating in the window). With such a cost-benefit, the builder of a new commercial building would invest in such efficiencies (even ignoring the LEED bragging rights) while a consumer might worry about increasing the price of a house $20-50k (and would also tend to have more shading problems). If every new skyscraper had such BIPV, it would both generate a lot of energy and also be a big market.

To exploit the opportunity, the three men formed a company called Ubiquitous Energy, where Barr is president and CTO, and the other two are on the scientific advisory board. They have a $1m in seed funding and $375k in SBIR funding so far.

Like any tech startup, it’s a gamble — but this seems one with a big payout if they can solve all the challenges.

Sunday, June 30, 2013

Where will the clean energy come from?

Last week, the president proposed a new push to reduce GHG. It’s not clear how (or if) the Congress will go along, or how much can be legally accomplished without legislative support.

One of the major targets is, as expected, coal generating electricity plants. Obviously the coal miners and the coal-intensive electric companies would try to push back, but again, it’s unknown how successful they will be. It’s also not entirely clear what the point of reducing US coal consumption is, if the entire US consumption is about a billion tons while Chinese demand has risen from 3 to 4 billion tons in only 5 years and India is also increasing coal generation.

That said, if the plan (or some other approach) succeeds in getting rid of US coal plants, where will the replacement electric generating capacity come from?

Hydro is maxed out, and wind and solar can only ramp so quickly. The remaining no-CO2 option is nuclear, but it’s becoming increasingly uneconomic. As the WSJ reported last week:
Nuclear power produces two-thirds of the nation's emission-free electricity, but that industry is in the doldrums now because of slack power prices in deregulated markets and generally low demand for power. The plants also suffer from high fixed costs.

Dominion Resources Inc., D +0.60% a big owner of nuclear plants and utilities, shut down its Kewaunee nuclear plant in Wisconsin last month because it can't operate it profitably in the current energy environment. "Longer term, nuclear has to be a major part of the solution," said Tom Farrell, chief executive of Dominion, which is based in Richmond, Va.
Nuclear is plagued by high capital and other fixed costs, despite low variable costs. With natural gas prices plummeting, it’s hard to see how it will ever be cost-competitive again.

Natural gas generates half the carbon emissions of coal plants, but that’s still more than zero. Fixed costs (and nuclear waste) aside, nuclear would be a better GHG solution but one that seems increasingly out of reach.

Sunday, May 19, 2013

Hopes and dreams for the Department of Energy

The Senate last week unanimously confirmed MIT physicist Ernest Moniz as the new Secretary of Energy. As an MIT alumnus, I’m proud — but as an organizational scholar and (part-time) energy economist, I'm somewhat apprehensive.

A cabinet secretary is not just a domain expert, but a politician and an administrator. Sometimes capable politicians with domain expertise get appointed to the cabinet (John Kerry, Donald Rumsfeld) and other times they are mediocre politicians with little particular expertise (typically at Agriculture, Labor or Transportation).

College professors tend to be long on domain expertise and short on political or administrative abilities. Academic administrative experience tends to be a poor predictor of success in managing a federal bureaucracy. Harold Brown left the presidency of Caltech to become Jimmy Carter’s defense secretary, and probably was more helped by his Johnson-era DoD experience than anything he learned at Caltech.

Moniz is the second academic physicist appointed by the president to a job that once seemed crucial to his intended legacy. The first, Nobelist Steven Chu of UC Berkeley, was appointed at a time of seemingly unlimited resources to spend on research and fledgling cleantech companies.

Secretary Chu was obviously very smart, and his passion was in funding research, which he was able to do. However the climate changed after the Democrats lost the House in 2010, and after the bankruptcy of five DoE-funded startups (A123, Abound Solar, Beacon Power, Ener1 and Solyndra). At that point, any secretary trying to implement the president’s policy goals would be facing strong headwinds.

Even so, I’d be hard pressed to call Chu a success as an administrator and leader. Apparently I was not the only one who was unimpressed. An energy industry publication, Power magazine, was harsh in its assessment:
I believe it is fair to say that Chu was a failure at DOE, but nobody noticed. That’s not necessarily a harsh indictment. There have been, in my estimation, no successes at DOE. And that’s because it is an impossible job, created under circumstances that dooms the incumbent to failure. The Department of Energy is, to be honest, a fraudulent entity. It has almost nothing to do with energy, although Chu and his boss, President Obama, tried to transform it into an institution that somehow has relevance to the way Americans make, use, and pay for energy. Both failed…
As the National Journal reported upon Chu’s resignation, his lack of political skills were a mixed blessing: at first Congress enjoyed dealing with a non-politician, but when the going got tough, Chu was hobbled in his ability to represent (or lead) his agency.

I know little about Moniz other than his online biography. He was the founder of the greatly respected MIT Energy Initiative, which includes both science and also MIT’s decades-long experience with science policy. Before that, he was an undersecretary in Clinton’s DoE. His official home page lists a 2002 article on energy policy from Physics Today. Other than its embrace of “all of the above,” it’s about what you’d expect given his resume.

In the end, however, I think the past decade demonstrates that the emphasis on physics in energy policy is vastly overrated. Anyone with a college degree (except maybe a lawyer) can be taught about the four laws of thermodynamics and how to break down the 100 quads of energy produced and used in the U.S. every year.

However, energy is not a scientific problem, and only somewhat a business and systems problem. Fundamentally, it’s an economic problem: we have many sources of energy and for many uses (e.g. grid-connected electricity) the sources are completely fungible. The challenge facing the DoE and the government is simple: how do we most cost-effectively deliver the energy needed by American society to enable economic growth? Yes, R&D for new technologies will change that picture over time, but even with cool new technologies, the final resolution is an economic — what can we afford — rather than technical one.

Saturday, May 4, 2013

Rise and fall of the world’s biggest solar company

In 2011, Suntech Power Holdings was the world’s biggest solar panel producer, shipping more than 2 gigawatts of panels. As Wayne Ma of the Wall Street Journal reported today:
Suntech is now in Chinese bankruptcy court, and [founder Zhengrong] Shi isn't allowed to leave China without court approval, as is customary with non-Chinese executives involved in bankruptcy proceedings
The article is a must-read for anyone who follows the solar industry.

One reason is the dramatic turnaround of the personal fortunes of Shi, a Chinese-born Australian citizen. With his holdings in Suntech, Shi was on the Forbes list of billionaires (with a net worth of $2+ billion) in 2006 and 2008. The WSJ says his holdings were worth $4 billion in 2007 but “around $31 million” today. The pictures also show a man dramatically aged in the past five years.

The failure of Suntech has been assumed to be due to falling solar prices, but this is a pressure that all Chinese producers are facing. It was highly leverage, borrowing heavily to grow capacity and volume after the financial markets collapsed in 2008.

However, there were also unique problems of self-dealing and fraud. The WSJ focused on the investments of Suntech and Shi in Global Solar Fund, which financed European sales of Suntech panels. The story is complicated, but apparently the GSF manager posted fraudulent security for a €554 million Chinese government loan. When GSF got in trouble, the fraud was discovered, and Suntech (an NYSE-listed firm) was forced to report the GSF liabilities on its books and found itself unable to refinance more than $500 million in corporate bonds.

A second questionable deal was that Shi founded a polysilicon producer, Asia Silicon, and provided the unproven startup with both financing and more than $1 billion in purchase contracts. Suntech's failure to disclose its dealings and Shi’s conflict of interest are the subject of a class action shareholder lawsuit filed in San Francisco last year — a lawsuit that’s curiously been ignored by the US media.

After a 2005 IPO and a peak price of near $90, Suntech shares closed Friday at $.61 after trading under $5 for the past 18 months. For Shi, his dreams of creating an enduring industrial empire have been destroyed, as has his personal fortune.

Monday, February 11, 2013

Magnifying rather than quelling range anxiety

In the ongoing search for electric car nirvana, the Tesla Motor Company has enjoyed an unusually charmed existence. Perhaps it’s the Silicon Valley mystique, perhaps it’s the Midas touch attributed to its co-founder Elon Musk — who became a centimillionaire from selling PayPal to eBay, and then used his funds to start a car company, a rocket company and a solar company.

After discontinuing its $100k niche toy, the Tesla Roadster, the future of the company depends on producing and selling its $60-100k Model S sedan in volume. The latter effort was dealt a major blow Sunday when the NY Times reported the very real problems in an actual test drive:
Stalled Out on Tesla’s Electric Highway By JOHN M. BRODER

Washington — Having established a fast-charging foothold in California for its electric cars, Tesla Motors has brought its formula east, opening two ultrafast charging stations in December that would, in theory, allow a speedy electric-car road trip between here and Boston.

But as I discovered on a recent test drive of the company’s high-performance Model S sedan, theory can be trumped by reality, especially when Northeast temperatures plunge.
The problem was that — after several close calls — the car ran out of power shy of the next charging station, requiring a complex and time-consuming flatbed tow. Perhaps it was the effect of cold upon the battery life, perhaps it was the power consumed by the heater, perhaps it was bugs in the software or hardware.

Still, there’s no reason to think that the problems didn’t actually happen. In response, one would presume that Tesla would both improve its products and add additional charging stations to enable long-distance recharging.

Instead, the notoriously thin-skinned Musk tried to smear the messenger, both on a CNBC interview and on his twitter account:
@elonmusk: NYTimes article about Tesla range in cold is fake. Vehicle logs tell true story that he didn't actually charge to max & took a long detour.
In responses to major media outlets, the NYT stood by its story:
The Times's February 10 article recounting a reporter's test drive in a Tesla Model S was completely factual, describing the trip in detail exactly as it occurred. Any suggestion that the account was "fake" is, of course, flatly untrue.

Our reporter followed the instructions he was given in multiple conversations with Tesla personnel. He described the entire drive in the story; there was no unreported detour. And he was never told to plug the car in overnight in cold weather, despite repeated contact with Tesla.
Apparently the attack was an effort to prop up the stock price, which fell 4% in response to the NYT story. (That’s about $175 million in market cap — more than any of us mere mortals will ever see in a lifetime).

Despite the stress on the company and its stock, this is a textbook example of how not to handle a PR crisis. But it appears that within a NASDAQ-traded public company, no one can tell the emperor of Tesla to put his clothes on, or to listen to professional advice. As The Atlantic summarized its media report: “Elon Musk's Crusade Against The New York Times Isn't Helping Tesla.” The WSJ wonders whether this sort of concerted effort to intimidate reviewers will discourage coverage in the future.

Of course, this happened the same week that Musk — an expert in all things everywhere — was offering advice on Boeing 787 batteries. As Seeking Alpha dryly put it:
Tesla has burned through $1.25B in free cash flows in order to develop the company, and we expect that terrifying test-drives of electric vehicles from Tesla Motors will continue. We find it amusing that Elon Musk is willing to help out Boeing's Dreamliner due to the battery issue. We would like to remind Elon Musk and his team that they need to first fix their problems with their products before trying to be a superhero with the products of other companies.
Cruising range is an inherent limitation of the current generation of electric cars, and thus “range anxiety” will be a major obstacle to adoption. Musk has done himself — and the industry — no favors by helping to call attention to the article, rather than (as his employees apparently were trying to do) work with the reviewer to understand and correct the problems.