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by craigshieldsPosted on Posted in Electric Vehicles

I have mentioned that I work with four American and three Bermudan business partners in an effort to bring electric vehicles to this charming island nation. Bermuda has all the potential in the world for a super-steep EV adoption curve: expensive gasoline (imported at great cost), a total of 125 miles of twisty roads (militating low-speed, preferably narrow vehicles), and an off-the-charts wealthy, eco-aware population. I’m confident that we’ll ultimately succeed.

But to what end? I hope to make a buck; I’ve done it before, and folks tell me I’m a good bet to do it again — and that’s all just great.  But though EVs have the potential to provide clean transportation, from an environmental viewpoint, we obviously need to understand the actual source of the energy.

And in Bermuda, that’s not pretty. Two huge smokestacks (soon to become three?) visible from all over the island, tell the story: diesel power plants – among the dirtiest of all the world’s energy sources.  When the wind blows the wrong way, Hamilton (the capital) gets coated in soot.  And to their credit, Bermudans know that there is far more at stake.  In a recent white paper (linked below) we read:

This … will guide Bermuda to take an increasingly sustainable approach toward the production and consumption of energy. The paper outlines how we will begin a path toward an alternate future not bound by fossil fuels, but one where we conserve energy, use energy more efficiently and harness indigenous renewable energy resources.

But underneath the rhetoric, what is Bermuda doing about this issue? Where are they in their migration to renewables? After three full years of being a part of this group, to be honest, I’m not at all sure.

As one can imagine, this is a three-ring political circus, with a constantly changing set of personalities – and even ministries. When I was last “on island” (as they say), I made 30-minute-long presentations to eight different commercial and political groups, including the then-Minister of Energy, Michael Scott and his entourage.   He was a kind and intelligent man with a deeply penetrating glare, completely attentive to every syllable coming out of my mouth.  But as I was to learn later, the talk was totally inconsequential, as Scott was on his way out.

Now, not only is Scott gone, but the whole Ministry has been replaced.  The current Minister of “Environment, Planning and Infrastructure Strategy,” Walter Roban, now offers this 2011 Bermuda Energy White Paper.

Is this whole conversation moving forward with the pace that we would have hoped? No. But is it becoming the political football that clean energy is in the US?  Again, I’m not sure. I’ll ask you to read the white paper, if you want, and be the judge.

The honest answer for Bermuda is so much easier than that which we face in the US, as they have far fewer renewable resources about which to quibble.  They don’t have the landmass or geologic resources we in the US argue about daily: no deserts for solar, no plains for wind, no geothermal, nor attractive amounts of biomass.

If the Bermudans want to solve the problem, let me ask them about the compound they have all around them: water.  Therein lies the answer. If you want my input (at no charge), hit Contact, and ask me to tell you about the latest breakthroughs in hydrokinetics.  All I ask of you is what I request of your American counterparts:  put the politics aside, and let the technology do the talking.

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by craigshieldsPosted on Posted in Fossil Fuels

In a recent post I suggested that renewable energy throws a new set of variables into an already complex energy market: intermittencies, transmission issues, suitability for certain kinds of storage, etc.  At the end, I asked: Are we intellectually capable — and honest enough — to make all this happen?

In preparing for a talk I’m giving at a conference later this month, I started to think about that.  We?  Who’s “we”?  The citizens of Earth? Am I implying that the seven billion inhabitants of Earth have some collective voice in the matter?

In truth, most of the decisions that this world makes on a day-to-day or year-to-year basis with respect to energy policy fall largely into the hands of a very few billionaires, whose fortunes were made in the energy monopolies, and, though those fortunes seem bound to ebb in the future, will certainly not go down without a considerable fight. 

It’s clear that our civilization will, in fact, get to renewable energy – purely because it must.  Fossil fuels, starting with oil, will prove too costly in the long run.  Supply and demand alone will ensure that the energy stored here over the last hundred million years (and consumed without a thought over the last century) will soon become unacceptably expensive. 

But what will happen as we struggle along this supply and demand curve?  Will this become, as most of our scientists say, a tough time for a growing population of people and the biosphere that supports it?  

It’s clear that there’s more at stake here than the fortunes of a few billionaires.  May we make the right decisions.  Oops — there I go again..  Who’s “we”?

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by craigshieldsPosted on Posted in Energy Storage

In the venture capital community, one hears a great deal about “technology risk.”  In my most recent meeting with Ray Lane, Managing Partner at Kleiner Perkins a few months ago, he told me: “We want all technology risk removed before we put more than a few million dollars into a deal.” 

OK, but what exactly does that mean?  To illustrate the point, let me tell you about a company I came across at the Energy Storage show in San Diego earlier in the week, that appears to me to be the poster child for technology risk. Check out “Gravity Power.”

The website does a far better job than the description I’m about to provide, but imagine a hole 30 meters in diameter and 2000 meters deep, filled with water, in which a huge stack of pancake-shaped concrete disks rises and falls. The concrete, which is heavier than the water by a factor of 4 to 1, is driven upwards by energy coming in beneath it pushing it up, or falls, releasing that stored energy. In the energy generation mode, as the concrete falls, it pushes water up through a return pipe connected to the main hole. In the charging mode, water is pushed down the pipe, forcing the concrete to rise.

Is this theoretically possible? Of course. But has anything like this ever been built?  Sort of.  Anything of this scale?  No, and the first deployment will cost $600 million. Now that’s what I call risk.

And yes, most of the risk is associated with technology. What if you can’t fabricate a huge concrete pancake with seals sufficient to do the job? What about earthquakes — and hundreds of other issues that I can’t even imagine?

But let’s acknowledge that there are other forms of risk here as well. What happens if a better form of energy storage comes into play in the years that it takes you to get your first implementation in place?  What happens if energy storage is taken over by vehicle-to-grid connected EVs — or somehow doesn’t turn out to be the big deal that most people expect? 

I can find you people who will risk $6 million on an idea like this that has the potential to impact the world of energy storage as we currently conceive it.  But $600 million?  That’s some real risk.

by craigshieldsPosted on Posted in Renewables - Business

I’m headed back to New York City next week for a great number of meetings, built around my “anchor appointment” – a two-day consulting action for our client Windfuels, for which I’m co-presenting at a venture capital forum. I’m always flattered when a client wants me to present its story to a large audience, as if I’m clean energy’s answer to Winston Churchill, which I clearly am not.

But bombast isn’t what’s needed here anyway.  Windfuels, for those who may have missed the concept, is a monumentally important breakthrough in synthetic fuels – one of only a few legitimate concepts that enables storing energy and making it available at a time and place of our choosing.

Nowadays, we have an enormous (and growing) amount of off-peak wind energy, generated late at night, that is unneeded and would otherwise be “curtailed” – or simply shut off.  Instead of letting all this energy go to waste, Windfuels offers a unique approach: a patented set of chemical reactions that use that energy as well as water and carbon dioxide as reactants, and transforms them to synthetic gasoline or diesel fuel as products.

I’ll be using my time in “The City” (as they call it) to meet with numerous other clients, prospects, and friends. As we’ve all experienced, travel isn’t as much fun as it used to be, so I like to extract as much value from each air mile as possible. If you’ll be in the area and want to have a cup of coffee one morning or a couple of beers some evening, please let me know.

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by craigshieldsPosted on Posted in Renewables - Business

There are times I think we’re right around the corner from an aggressive path towards clean energy — and other times when it seems that we’re a million miles away. In response to my piece about Abu Dhabi’s strange decision to commission nuclear power plants, AltEnergyStocks Tom Konrad writes:

CSP would be a much better match for air-conditioning driven peaks, and could be “big,” too. But maybe a tiny country like Abu Dhabi does not have enough domestic land for CSP, and aren’t willing to import electricity from a neighboring emirate.

Yes, CSP would be incredible, given the synchronicity with the load, which, as I mentioned, is a whopping 85% air conditioning.  But I’m sure you’re right about the landmass.

And what you say about their not wanting to buy power reminds me of the unique rules, idiosyncrasies, traditions, and hidden relationships that exist in each of the 180+ countries on Earth. Even within our 50 states, there is a daunting number of regional, state and local rules that were put into place to make money for the energy industry, while regulating that industry so consumers didn’t get totally fleeced.

Now enter renewables, with their own set of variables: intermittencies, grid-tie and transmission issues, environmental consequences, suitability for certain kinds of storage, etc. It’s really going to require a whole new set of thinking.  Are we intellectually capable — and honest enough to make all this happen?  It remains to be seen.

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by craigshieldsPosted on Posted in Nuclear

Abu Dhabi is commissioning a new set of nuclear plants for the first time in 2018, that will generate 25% of its power. I find this a bit hard to understand, since it’s happening just as countries like Germany and Italy are decommissioning their nuclear power. Also, Abu Dhabi has huge peaks; their ratio of peak to average load is one of the largest on Earth, due largely to air conditioning, which represents 85% of load — even more surprising for a country that has huge energy needs for water desalination and the petrochemical industry.

Making matters worse, they don’t seem to be able to handle these peak loads too elegantly. It’s not uncommon for transformers to burst into flame, turning people out into the streets to sleep where it’s much cooler when the A/C goes out.  This, in turn, negatively affects production, when people can’t get a good night’s sleep.

Holy cow. 

So, I asked the speaker: “Why on Earth do they want nuclear (that doesn’t scale up and down according to load)?”

“They like ‘big,’” he answered. “They want to make one deal and have a solution – large enough to make it possible for them to crank up their air conditioning so they can show off their furs.”

Wow. I thought we had idiotic extravagances here. It’s quite a world.

by craigshieldsPosted on Posted in Energy Storage

One of the things I enjoy most about shows like Storage Week, sitting through many dozens of presentations on energy storage, is the breadth of perspective on the subject of clean energy.  We all know that ultimately, storage is 100% required if we are to achieve the high rates of penetration we’d all like to see.  That, of course, is a function of intermittency – dealing with the fact that the sun shines only during the day, while the wind blows hardest at night, when the demand is at its lowest.  (70% of the total wind energy in California happens at night.)

But here are a few additional ways of looking at storage.  A great deal of attention in managing the electrical grid in any given region is placed on dealing with peak consumption on a daily basis – and especially with the few hours per year that represent the absolute highest peaks that occur during the summer’s hottest afternoons.  But grid managers’ dealings with load fluctuations and resource availability are not occasional incidents.  In one region of the country, the spreadsheet that lists the purchase of “ancillary services,” those that are necessary to provide the precise correct amount of power, has 850,000 rows (i.e., purchases) annually.

Thus, from one important perspective, energy storage solutions compete against gas-fired peaker plants, those facilities that can be ramped up and down very quickly to meet peak demand.  How quickly?  There are places in the US where weather conditions change dramatically and 900 MW of wind goes to 200 MW in half an hour.  And wind is far more predictable than solar, where a cloud can form and blow over a solar field in a matter of minutes.

But another completely different way of looking at storage is finding a home for off-peak energy generation.  As we put more wind into our grid mix, we get more off-peak wind – and thus more curtailment – the condition where wind turbines must be turned off because the power they produce cannot be accommodated.  Curtailment costs wind developers huge sums of money; last year, it represented 5% of the total installed wind capacity.

Yet another viewpoint is demand response.  Utilities pay their customers big bucks (in rate reductions) for the right to cut a certain percentage of power to those customers under peak load conditions.

So, storage provides a great number of different but important benefits.  Yet at the end of the day, the gating factor for storage is essentially political and economic.  Though there is enormous value to having storage on the grid, the question is: Who’s going to pay for it?  In an environment like the one we have in the US, where there are different types of entities that generate, transmit, and distribute the power – each regulated differently, there is no one single entity that can rationally be expected to pay for a solution whose benefits do not accrue solely to that entity.

As one of the speakers here just told me when I confessed how difficult the business issues in this area are so hard for me to grasp, “The politics behind all this is byzantine.  It’s not terrible in Texas, but in places like California, it’s a total mess. Powerful interests have succeeded in pushing through legislation, and they derived great benefit, but left the state with a set of regulations that make no sense whatsoever.  Don’t feel bad if you’re having trouble understanding this.  It took me years to figure it out.”

OK, I feel a bit better.  But it sure is a shame that our health and safety — not to mention economical well-being — is being manipulated by a few greedy pigs.

And not to sound pessimistic, but we really seem to be a million miles from straightening this out.  In essense, you have huge business interests in the energy industry that have no incentive to move this in the right direction.  Are we expecting them to do it anyway?  Doesn’t sound too likely to me.

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by craigshieldsPosted on Posted in Fossil Fuels

Europe has had a much higher cost of fuel for decades.  After the oil shocks of the 1970’s, many of the countries took action. Europe is far ahead of the U.S. in moving to smaller and more fuel-efficient cars, hybrids, EVs and Europe has adopted a greener outlook than the U.S.  Yet, even so, the EU still depends on oil and oil products for energy and transport needs.

Now the European Commission has a new aim, outlined in a recent White Paper. It aims to phase out and eliminate gasoline and diesel-powered cars in cities by 2050 among other things.

(more…)

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by craigshieldsPosted on Posted in Energy Storage

There are elements of the energy business that I find monstrously complex – namely, everything but the technology. The political wranglings – the way the federal, regional, state, and local agencies work in conjunction with the utilities and the regulatory bodies – appear to be the ultimate rats’ nest.

Here’s a good example of how nutty this looks: the power utilities in the US remain uninterested in – and in some cases actively resistant to — electric vehicles. Is there anything not to like about EVs if you’re a utility? It means sales of off-peak power, of which there is a super abundance, and it means stable, long-term growth as electricity replaces oil. Isn’t that good? Maybe someone can explain this.

Of course, the incentives that utilities have are quite enigmatic. It’s said that the real core competency of utilities is the management of regulators. The game is finding clever ways to pass through your costs to the rate-payers. And that represents a nasty little element of the equation: utilities can pass through fuel costs, so getting rid of coal in favor of a resource in which the fuel is free (e.g., solar and wind) represents zero gain in profitability.

In fact, utilities couldn’t care less what fuel they use – or what technologies they’re mandated to use. As long as they can make 12% return on their invested cash, they’ll happily do anything they’re told. Want wave/tidal power in Kansas? No problem, let me charge my customers what it costs to get me 12% on that, and it’s a deal.

It’s one of those moments where I wish I were king of the world. I just think of how easy it would be to create a way to regulate utilities that would provide incentive to do the right thing. I’m available to function as king, btw, but so far I haven’t received the invitation to serve.

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by craigshieldsPosted on Posted in Fossil Fuels

I may have mentioned that I’m on a personal quest to figure out the dynamics of our society’s migration from fossil fuels to renewables.  To that end, I conducted a 90-minute interview over lunch today with Wally Rippel, Cal Tech physics star of the 1960s, whose half-century career took him to places very few of us can imagine in terms of understanding the issues: technological, economic, and political, that form the underpinnings of where we are as an energy-consuming society. 

In preparation for my next book, I’m anxious to get as many different viewpoints as I can on our society’s apparent resistance to change with respect to energy, and this was a terrific experience.  More soon.

 

 

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