Runaway Bride

Thursday night, Palo Alto-based Tesla Motors announced that its long-promised Model S electric sedan would be built using a portion of the closed NUMMI plant here in Fremont. The announcement came with a $50 million investment from Toyota.

Given the 25-year NUMMI joint venture between Toyota and GM had established infrastructure, and its April 1 closing was a source of great embarrassment to Toyota, this seems like a no-brainer. However, apparently it only dates to an April meeting between the Toyota CEO Akio Toyoda and Tesla CEO Elon Musk, who made the joint announcement Thursday.

When I heard this, however, it reminded me of all the previous places that Tesla had promised to build a factory:

• Albuquerque: promised 2007, abandoned 2008
• San José: a greenfield site, promised 2008, abandoned January 2009
• Palo Alto: a former HP factory, promised August 2009 — and apparently still on

This reminded me of the Julia Roberts movie “Runaway Bride,” about a woman who kept planning weddings but then abandoning them at the last minute.

Most recently, the company had been negotiating with Long Beach (the former Douglas Aircraft plant for making DC-9s) and Downey (a former NASA site) in the LA area:

"It's gonna be a tough decision, because I think frankly both Long Beach and Downey would be great locations," Musk said.

Downey officials had approved nearly $9 million in incentives to attract the factory. The facility had been once listed in Tesla’s proposal for a $465 million “advanced technology” federal loan. Needless to say, city officials were upset:

"We are shocked, upset and betrayed. We can see why the public is so upset with corporate America," said Downey City Councilman Mario Guerra, adding that Tesla had told the city it would sign the lease for the Downey plant on Friday.

According to proponents, the Fremont plant will create 1,000 jobs. The company has cumulative losses exceeding $200 million on sales of about 1,000 cars and total revenues around $100 million. For such a tiny car company — selling a niche product — it has been tremendously successful getting publicity and promises of subsidies from local governments.

Or as a Downey city official put it:

“I couldn’t be more disappointed. I feel like I was stabbed in the back,” Councilman Mario Guerra said yesterday. “We were promised all along that we weren’t being used and this is what happens.”

“Elon Musk personally gave me his word that we weren’t being used,” Guerra continued. “Somebody is a very good poker player and I guess that’s how you become a billionaire.”

Tesla had also been promised as the salvation of the American auto industry, which has lost 100,000s of jobs in the past three years. Now, with the strategic investment by Toyota, there is an increased possibility that its exit strategy will be to become a subsidiary of Japan’s (and the world’s) largest auto company.

EVs: An expensive way to pollute the planet

I've always wondered about the green bonafides of electric vehicles: not because of the batteries, but because of the greenness of the electricity that it pulls off the grid to charge those batteries.

Sure, some people make themselves feel better by buying electricity from green sources — but then that reduces the supply of renewable energy available for others to buy. Meanwhile, if California (and other regions) is straining to achieve even 20% RE share, the marginal effect of increasing electricity demand will be to increase fossil fuel consumption from peak sources. It’s easy to ramp up electricity generation from peak natural gas (or coal) plants, but nearly impossible to quickly increase baseline generation of carbon-free sources like RE or nuclear power.

Even if you go for average — rather than marginal — CO2 emissions from grid power, the federal Energy Information Administration predicts that fossil fuels will account for 65%of electric power generation in the US even in 2035.

Now, a veteran British auto journalist has attempted to calculate the lifecycle CO2 cost of electric vehicles. Building on a team of consultants working over a three year period, the report, “The Emperor’s New Car,”was authored by Clive Matthew-Wilson of the auto review site Dog & Lemon Guide.

As Matthew-Wilson writes:

Claims that electric cars are ‘emissions-free’ are simply a lie; they merely transfer the pollution from the road to the power station. Not only will electric cars not reduce emissions, they may actually increase emissions, because burning coal to make electricity to power an electric car creates more pollution than if you simply powered the same vehicle using petrol.

Renewable energy sources may be growing fast, but they’re still a tiny percentage of the world’s electricity supply and they’ll stay that way for the foreseeable future, because renewable energy sources tend to be far more expensive than fossil fuels.

The study contrasted the Tesla Roadster with the Lotus Elise (petrol-fueled) car that it’s built from. It concluded that the Tesla produced less CO2 emissions if used in New Zealand (where grid power is primarily hydro) but more emissions in the US, UK, China and Australia.

The report also concludes that the EVs are likely to be produced mainly at Chinese factories with far less environmentally friendly production and energy generation than those of the developed world.

Such errors are hardly accidental. As the Toronto Globe & Mail summarized the report:

The report says car makers, not environmentalists, are prematurely pushing electric cars. Car makers want electric cars because of the enormous subsidies they will generate.

This is hardly the final word on the subject, and it would be naïve to think this will end the hype and exaggeration. However, one can hope it will engender more accurate estimates among environmentalists and policymakers as to actual ways of reducing CO2 emissions.

Instead of cutting edge, technologically risky and expensive EVs, the report concludes that the best way to reduce CO2 emissions in populated areas is by using a proven (100-year-old) technology: mass transit.

Here in Silicon Valley, we’re heading in the other direction. In Santa Clara County, we have a mediocre bus network and a limited light rail system. Meanwhile, the three-county commuter rail (Caltrain) is about to disappear as cash-strapped local governments end their subsidies. Meanwhile, Googlers and other members of the Silicon Valley elite buy Teslas rather than depend on mass transit.

To me, it seems like stimulating EV usage before we have a large supply of RE is putting the cart before the horse. In 2009, both RE and EV manufacturers won generous Federal subsidies, but if the government some day decided to adhere to a budget, the data suggests subsidizing RE now and EVs later.

Which way is the wind blowing?

The most controversial wind project in the US, the 400+ megawatt Cape Wind planned off Cape Cod, was approved by the Federal government Wednesday. Many considered this a surprising development, because of the adamant opposition of the Kennedy family — and other affluent members of the Massachusetts economic and political elite — who objected to the impact on their views of the Nantucket Sound.

As with solar energy in the Mojave Desert, this controversy found unlikely adversaries between pro-RE environmentalists and anti-development environmentalists. The Obama Administration, represented by Interior Secretary Ken Salazar, came down (mostly) on the side of renewable energy.

The NY Times captured the tension of this conflict in its own backyard:

Friends and foes have squared off over the impact it would have on nature, local traditions, property values and electricity bills; on the profits to be pocketed by a private developer; and even the urgency of easing the nation’s dependence on fossil fuels, a priority of the Obama administration.

Opponents argued that Cape Wind would create an industrial eyesore in a pristine area; supporters countered that it was worth sacrificing aesthetics for the longer-term goal of producing clean, renewable energy.

Developers say that Cape Wind will provide 75 percent of the power for Cape Cod, Nantucket and Martha’s Vineyard — the equivalent of that produced by a medium-size coal-fired plant. It would also reduce carbon dioxide emissions by the equivalent of taking 175,000 cars off the road, officials said, and provide 1,000 construction jobs.

The project has also made for some strange bedfellows. Cape Wind is backed by both Greenpeace and the United States Chamber of Commerce.

It has been opposed perhaps most prominently by members of the Kennedy family. Senator Kennedy was a longtime sailor on Nantucket Sound and fought the project up until he died.

President Obama himself on Tuesday toured the Siemens factory in Iowa where the turbines would be made. (No mention whether Iowa’s pivotal role as a swing state played any role in the factory location or the presidential visit.) The administration expects a string of future offshore wind farms up and down the East Coast, as part of a plan to raise wind to 4% of electricity generated in 2030.

In my memory, renewable energy was last in ascendancy in the 1970s and early 1980s around the time of the two Arab oil embargoes. Of the influential politicians of the day, Jimmy Carter probably would have sided with green energy (and energy independence) over Kennedy views — particularly when Sen. Kennedy began his very public nomination challenge leading up to the 1980 election.

I suspect that another Carter primary rival in 1976 and 1980 — Edmund G. Brown Jr. — would have come down another way. Then at the peak of his “Small is Beautiful” (ala EF Schumacher) infatuation, Jerry Brown was then about building less things, using less, spending less and consuming less.

What about today? In his adamant support for AB32 — the California precursor to national cap-and-trade legislation — Brown today is clearly about consuming less energy. While his campaign website brags about tax credits in the 1970s that brought windmills to California (mainly in the Altamont Pass,Tehachapis, and near Palm Springs), it doesn’t say how he’d come down on an RE vs. environmental preservation issue.

Our current Governator has strongly favored RE over environmental protection, implying that favoring the latter is something only a “girly man” who do. Given their moderate records on green energy, I suspect both of Brown’s GOP rivals — Meg Whitman and Steve Poizner — would also come down in favor of renewable energy (ala the Chamber of Commerce), particularly if there’s little government money involved.

But what would Jerry Brown do? I guess it depends on which way the wind is blowing. For the Obama administration, it appears that making progress on long-term renewable energy goals is more important than satisfying a small number of avid supporters in its base. This is good news for the wind turbine industry, and renewable energy advocates more broadly.

Three cheeers: Facebook favors EE over RE

The Merc Sunday carried an AP story (also in Business Week) about how Greenpeace is upset at Internet companies for not using clean power on their datacenters. The BBC had a version of the story last month.

The Green peace criticism is particularly harsh for Facebook for building a datacenter in Prineville, Oregon, because the local utility uses coal instead of the hydro power commonly found elsewhere in the Pacific Northwest.

Datacenters are certainly important: the AP reports an EPA estimate that in 2006 they accounted for 61 billion kilowatt hours, or 1.5% of the nation’s grid power.

The charge is somewhat spurious: in the short term, having company X buy more RE means that there is less RE available to sell to company Y (or consumer Z). In the long term, it’s possible that greater demand for RE will push up the supply of RE, but in the near term the supply of RE — particularly hydro, solar and wind — seems to be growing as fast as is possible.

(Of course, firms like Google etc. that add their own onsite generating capacity are certainly increasing the supply of RE and reducing the demand for grid power overall).

Instead, Facebook is choosing approach both reduced costs and power purchased from the grid. By building its datacenter in a location with good natural cooling, it hopes to dramatically reduce its AC bill.

As the AP reported:

In most data centers, cooling the servers takes nearly as much electricity as running the servers themselves. Facebook hopes its new cooling system will take only 15 percent as much power as the computers. Facebook is also shooting for a gold rating from the green building standard known as LEED.

The climate is important. Even in summer, nights are cool. The center can take in outside air for free. When temperatures rise, a high-tech swamp cooler blows dry air over water, and the evaporation lowers temperatures. In winter, hot air from the servers is blown into office space.

In other words, by emphasizing energy efficiency, Facebook will pull less power from the grid (from any source), leaving that power (both RE and non-RE) available for other sources. In the long term, that will do more to provide a net reduction in CO2 emissions than any effort to shift some uses to RE.

As Matthew Humphries of geek.com concluded:

I don’t think any of the tech companies are dismissing renewable energy and trying to save power. The fact is, energy is expensive so any way it can be saved is thought about and implemented. Datacenters are starting to ditch air conditioning in favor of natural airflow through buildings, for example.

Hydropower, solar, and wind are all being used if they are accessible to a datacenter, and Google has also started experimenting with wave power and creating floating datacenters. Some datacenters route their waste heat to act as heating or a power source for other buildings. There’s also the introduction of Bloom Energy, which relies on natural gas, but uses significantly less fuel to generate energy. It’s a power source of the future, but is already in use at a number of technology campuses.

Greenpeace are right to highlight the need to focus on renewable energy, but I believe this is one area where the companies running these centers will jump to renewable and clean energy wherever possible because it is cheaper and more reliable going forward.

EE is decidedly unsexy, but every kilowatt-hour saved is one less kWH that has to be generated. Efforts by datacenters to reduce energy consumption — whether from servers, networking equipment, A/C or anything else — are a win-win proposition for the operators, the grid and the environment.

Rooftop wind turbines

The San Diego newspaper had an interesting story about a developer of small wind turbine.

The company, Helix Wind, appears to be struggling, but the product description was fascinating:

Helix Wind makes turbines small enough to be mounted on homes or commercial buildings. Its core products spin on a vertical axis and look like soft-serve ice-cream cones.

It reminds me a little of the story about Adobe installing wind turbines on roof of its skyrise HQ in downtown San Jose. The latest round of turbines generate about 50 kWh per year. The installation was finished last month.

We put solar panels on roofs due to scarce real estate, so at some level wind turbines on commercial or residential roofs make sense. The Merc story implies they get more energy per square foot than the equivalent solar panels.

To me, this seems to renew the (often unseemly) rivalry between the two main renewable energy growth areas. (Hydro is certainly renewable, but the recent growth has been in the wrong direction from a RE standpoint).

Green Technology Entrepreneurship Academy

From Andrew Hargadon’s blog:

Green Technology Entrepreneurship Academy
June 28 - July 2, 2010 @ the Tahoe Center for Environmental Science
Lake Tahoe, Nevada

Moving Sustainable Technologies Out of the Lab and into the World

The one-week intensive academy is open to science and engineering faculty, graduate students, post-doctoral researchers, and senior undergraduates working on research in green technologies. The academy combines seminars and networking sessions in an innovative format to help you learn how to commercialize your technology.

The workshop is presented by UC Davis. The application deadline is May 14, 2010.

For more information, see the complete posting in Prof. Hargadon’s article.

Green before our time

Last year, some of my students in my business plan class proposed creating a business to build “green” houses. They made it to the semifinals of the SVBPC, although ultimately the plan fell apart because it’s hard to start up a business building spec homes (particularly nowadays) if you don’t already have the capital to carry the houses while they are under construction. (Talking to a builder friend, the construction finance lenders have either withdrawn from the business or gone out of business).

One of the things I pushed them to do, however, is get their message straight. “Green” is so broad and vague that it doesn’t mean anything to buyers — particularly given all the drek out there in the name of green-ness. I encouraged them to focus on energy efficiency — very cost-effective and a clear message. Add a few other wrinkles, perhaps as optional features — water reclamation here, solar power there — but keep the message focused.

On Sunday, our local TV station ran a feature encouraging homeowners to buy or remodel their homes as “green,” largely focusing on energy efficiency. On the one hand, it validated my former students’ plan and the advice they came them, including the suggestion that such features could only command a 3% (or was it 2%?) premium. On the other hand, some of the ideas seemed pretty old hat. (Even ignoring that the EE story of the day was clearly the Merc’s coverage of Serious Materials’ multi-million dollar EE retrofit for the Empire State Building.)

The one that made me smirk was the suggestion that homeowners should buy a whole house fan rather than air conditioning to drastically reduce the electricity cost. Been there, done that.

The Bay Area home we bought in 2002 didn’t come with air conditioning, and summer heat was certainly a problem. The average high in July-August is usually around 85°, but many days are over 90° and 10-15 days a year it’s above 100°. As with most of California (except the Central Valley), hot days are rarely humid.

So before our first full summer, we installed two whole house fans, and nearly seven years later, we couldn’t be happier. It’s perhaps difficult to go to sleep 3 or 4 days a year — when the temperature remains above 80° after 9pm — but otherwise the fan (and good insulation) solves most of our cooling needs. Perhaps a few more days, I decide to work downstairs after 2pm rather than in my office, but with a laptop that’s no great loss (particularly since my least productive part of the day is between 1-5pm.)

What I’m particularly proud is that we were the first on our block to get a high-efficiency, (relatively) low noise whole-house fan, the 1000 CFM Tamarack Technologies HV1000. The fan had three winning features:

• It was much quieter than a standard whole house fan.
• It was almost trivial to install, because it fits between the ceiling joists.
• Unlike most fans, with a self-closing R38 cap it doesn’t leak out warm air in the winter.

The PBS tv show “This Old House” featured the faster, noisier HV1600, but we decided to go with two smaller HV1000 fans in our 2F hallway. It gives us better control over the air flow, and it’s possible to sleep at night with only one fan running.

The fans were about $500 apiece, and they don’t seem to be much more expensive today. If I recall, it was about a day’s worth of labor to cut the ceiling, run the wires, and install the switch.

When we retire back to Oceanside in 10 or 20 years, we probably won’t need a whole house fan given that the temperature rarely reaches 90°. However, if we were to relocate to another part of California, I would certainly order more of the fans as a cost-effective, energy-efficient solution. (The one exception would be Palm Springs, where I’d check out the efficiency of the swamp coolers we used in my childhood rather than conventional AC.)