8020 Vision

Bill Gates on Climate Change and Renewable Energy

Posted on 25 August 2010 | by Jay Kimball | 11 Comments

Keywords: Bill Gates, climate change, energy, renewable energy, TED, zero carbon emmissions

Many newspapers and blogs are reporting on the Technology Review interview with Bill Gates (highlights below). Though that interview contains some good information, Gates’ presentation at TED was the stake in the ground that set the stage for this Technology Review interview. At TED, Gates called for reducing carbon emissions to zero. The presentation is worth watching. Considering that Gates is one of the most public faces of big business, his statements at TED are noteworthy:

climate change is real
climate change is the most important challenge on the planet
carbon emissions need to be reduce to zero as soon as possible, his goal is by 2050
increased investment in energy R&D is essential, and can be done at reasonable levels
zero carbon energy production makes business sense

Highlights from Technology Review interview with Bill Gates

On US Investment in Energy

TR: You are a member of the American Energy Innovation Council, which calls for a national energy policy that would increase U.S. investment in energy research every year from $5 billion to $16 billion. I was stunned that the U.S. government invests so little.

BG: I was stunned myself. The National Institutes of Health invest a bit more than $30 billion.

On Carbon Tax

It’s ideal to have a carbon tax, not just a price on carbon, which is this fuzzy word that includes cap-and-trade. You’re using the tax to create a mode shift to a different form of energy generation. And then you just take all the carbon-emitting plants, you look at their lifetime, and you say on a certain date this one has to be shut down and when a new one is put in place, it has to be low-CO2-emitting.

That’s a regulatory approach, and it’s very clear. Innovators are designing things for the power-plant buyers 10 years from now, who are looking at the regulatory and tax environment for the next 40 years. If you said to a utility company executive, which is more likely to stay in place: a cap-and-trade thing, whose price will vary all over the map, that will have some international things that will be shown to be a waste of money? Or a tax and a regulatory framework for plant replacement over the next 50 years? We should have a carbon tax. What we owe the developing world is this: we’re willing to pay high prices for energy plants above coal and drive prices down the curve so by the time they need to buy them, they don’t have to pay the high price.

Which is more likely: a carbon tax with all sorts of markets and options and uncertainties about prices, and traders in the middle, and confusion about who initially gets the most advantage? Or a regulatory thing and a 2 percent tax to fund the R&D so that utilities know they can buy a plant that’s emitting hardly any CO2? Raising energy prices by 2 percent and sending it to R&D activities seems easier in a weak economy than raising them 20 percent. Now, 0 percent is the easiest option of them all, but unfortunately, that doesn’t get us the solution to this problem.

The CO2 problem is simple. Any amount you emit causes warming, because there’s about a 20 percent fraction that stays for over 10,000 years. So the problem is to get essentially to zero CO2 emissions. And that’s a very hard problem, because you have sources like agriculture, rice, cows, and small sources out with the poorest people. So you better get the big sources: you better get rich-world transportation, rich-world electricity, and so on to get anywhere near your goal. If X or Y or Z gets you a 20 percent reduction in CO2, then you’ve just got the planet, what, another three years? Congratulations! I mean, is that what we have in mind: to delay Armageddon for three years? Is that really it?

The U.S. uses, per person, over twice as much energy as most other rich countries. And so it’s easy to say we should cut energy use through better buildings and higher MPG and all sorts of things. But even in the most optimistic case, if the U.S. is cutting its energy intensity by a factor of two, to get to European or Japanese levels, the amount of increased energy needed by poor people during that time frame will mean that there’s never going to be a year where the world uses less energy. The only hope is less CO2 per unit of energy. And no: there is no existing technology that at anywhere near economic levels gives us electricity with zero CO2.

On Renewable Energy

Almost everything called renewable energy is intermittent. I have another term for it: “energy farming.” In fact, you need not just a storage miracle, you need a transmission miracle, because intermittent sources are not available in an efficient form in all locations. Now, energy factories, which are hydrocarbon and nuclear energy–those things are nice. You can put a roof on them if you get bad weather. But energy farming? Good luck to you! Unfortunately, conventional energy factories emit CO2 and that is a very tough problem to solve, and there’s a huge disincentive to do research on it.

I think Gates approach to energy storage and transmission is too brute force. We are early into innovating alternative energy, and already there are some good innovations showing up that provide solutions to wind and sun intermittence. See Using Water Heaters to Store Excess Wind Energy for a good example of innovations that use existing infrastructure for storage and transmission.

Better, Cheaper, and Fairer Health Care

Posted on 22 August 2010 | by Jay Kimball

Keywords: healthcare, cost, life expectancy, t.r. reid, Japan, US

Washington Post reporter, documentary film correspondent and author T.R. Reid had a brief piece in Newsweek this week about Japan’s healthcare system. The article expands on an earlier interview Reid did on National Public Radio (NPR) – Japanese Pay Less for More Health Care – which you can listen to here.

To put Japan’s healthcare in perspective with the US and other countries, let’s look at healthcare performance data from the Organization for Economic Co-operation and Development (OECD). Using graphing approaches from National Geographic and Andrew Gelman we plot annual healthcare spending, life expectancy, and number of office visits per person, for a broad range of OECD countries. (NB: The area of the circle for each country is proportional to the number of doctor visits per person, e.g. Japan is 13.4 visits per year, US is 4 visits per year)

HealthcareSpending, Life Expectancy, Doctor Visits — (source: OECD Health Data 2009)

As can be seen, the US spends the most for healthcare, has middle of the road life expectancy, and few office visits. Japan has the highest life expectancy, three times as many office visits, at a third of the cost, compared to the US.

Commentary on the OECD data from National Geographic article The Cost of Care:

The United States spends more on medical care per person than any country, yet life expectancy is shorter than in most other developed nations and many developing ones. Lack of health insurance is a factor in life span and contributes to an estimated 45,000 deaths a year. Why the high cost? The U.S. has a fee-for-service system—paying medical providers piecemeal for appointments, surgery, and the like. That can lead to unneeded treatment that doesn’t reliably improve a patient’s health. Says Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health who studies health insurance worldwide, “More care does not necessarily mean better care.”

Highlights of T.R. Reids article – Japan shows how it’s done: keep quality up, costs down, and M.D.s on board

To gauge a health-care system’s success, it’s standard to consider three points: quality, coverage, and cost. On all three measures, Japan stands at or near the top in every comparative ranking.

Quality: The Japanese have the world’s longest life expectancy and the best recovery rates from just about every major disease. Infant mortality is less than half the U.S. rate. Japan usually leads the world in rankings of “avoidable mortality”—its effectiveness in curing diseases that can be cured.

Coverage: Japan’s health-insurance system covers everybody, including illegal aliens. It pays for physical, mental, dental, and long-term care. The Japanese are the world’s most prodigious consumers of medical care; on average they see the doctor about 15 times per year, three times the U.S. norm. They get twice as many prescriptions per capita and three times as many MRI scans. The average hospital stay is 20 nights—four times the U.S. average.

Cost: And yet Japan produces all that high-quality care at bargain-basement prices. The aging nation spends about $3,500 per person on health care each year; America burns through $7,400 per person and still leaves millions without coverage.

Japan has universal coverage, but it’s not “socialized medicine.” It’s largely a private-sector system. There is government insurance for the unemployed and the elderly, but most people rely on private plans. Japanese doctors are the most capitalist and competitive in the world. But we’re talking Japanese-style free enterprise here; there’s significant government regulation of the private players. Health insurers are required by law to cover everybody, and to pay every claim; the corollary is that everybody is required to buy health insurance. The price for a given treatment is identical everywhere in Japan. Officials say this is designed to attract doctors to rural communities, but that’s not working very well; many small towns on the outer islands have no doctor at all these days.

That fee schedule is the key to cost control in a country where people love going to the doctor. Basically, it shafts doctors and hospitals, paying some of the lowest fees on earth. As a result, doctors work long hours. They are comfortably middle-class, but not in the country-club set. But the savings can be huge in the high-tech realm that drives U.S. bills so high. An MRI scan of the neck region—routinely $1,400 or so in America—is $130 in Japan. Cost cutting like that has stimulated innovation and efficiency. Low fees are taking a toll, though. In a sense, Japanese medicine is the mirror opposite of America’s. We spend too much on health care, but still cover too few of our citizens; Japan provides lots of care to everybody, but probably spends too little to make its best-in-the-world system sustainable.

Reid’s bestselling book The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care is available in paperback.

Growth Versus Consumerism

Posted on 19 August 2010 | by Jay Kimball | 1 Comment

Keywords: growth, consumption, GDP, global economy, China, India, consumerism

Robert Reich wrote a thoughtful article on Why Growth is Good. Highlights of the article are below. In it, he differentiates between growth and consumption.

Growth is really about the capacity of a nation to produce everything that’s wanted and needed by its inhabitants. That includes better stewardship of the environment as well as improved public health and better schools.

A couple years ago I wrote an article – Nobel Laureate Joseph Stiglitz on Sustainability and Growth – in which Stiglitz talked about the idea that “we grow what we measure.” Here’s an exerpt from the end of that article that I think is relevant to Reich’s article:

For me, what Stiglitz is getting at is: We grow what we measure (GDP), and because we are measuring the wrong stuff, we are growing wrong. It seems to be in our DNA to want to “grow,” but like a garden, don’t we have a choice about what we grow? Are there ways we can grow our economy that restore abundance rather than consume it? What are the essential things to measure so that we are growing good things?

Using ecological footprint data from Global Footprint Network we can see the current state of consumption for North America and the rest of the world. American per capita consumption is legend. China and India are adopting their own versions of American-style consumerism. All nations are bumping up against the limits of the earth to provide what is needed for growth. We are collectively challenged to find new ways to grow, more lightly, in ways that restore rather than deplete.

N.B. The width of bar proportional to population in associated region. Ecological Footprint accounts estimate how many Earths were needed to meet the resource requirements of humanity for each year since 1961, when complete UN statistics became available. Resource demand (Ecological Footprint) for the world as a whole is the product of population times per capita consumption, and reflects both the level of consumption and the efficiency with which resources are turned into consumption products. Resource supply (biocapacity) varies each year with ecosystem management, agricultural practices (such as fertilizer use and irrigation), ecosystem degradation, and weather.   This global assessment shows how the size of the human enterprise compared to the biosphere, and to what extent humanity is in ecological overshoot. Overshoot is possible in the short-term because humanity can liquidate its ecological capital rather than living off annual yields.

Highlights from Robert Reich’s Why Growth is Good

Economic growth is slowing in the United States. It’s also slowing in Japan, France, Britain, Italy, Spain, and Canada. It’s even slowing in China. And it’s likely to be slowing soon in Germany.

If governments keep hacking away at their budgets while consumers almost everywhere are becoming more cautious about spending, global demand will shrink to the point where a worldwide dip is inevitable.

You might ask yourself: So what? Why do we need more economic growth anyway? Aren’t we ruining the planet with all this growth — destroying forests, polluting oceans and rivers, and spewing carbon into the atmosphere at a rate that’s already causing climate chaos? Let’s just stop filling our homes with so much stuff.

The answer is economic growth isn’t just about more stuff. Growth is different from consumerism. Growth is really about the capacity of a nation to produce everything that’s wanted and needed by its inhabitants. That includes better stewardship of the environment as well as improved public health and better schools. (The Gross Domestic Product is a crude way of gauging this but it’s a guide. Nations with high and growing GDPs have more overall capacity; those with low or slowing GDPs have less.)

Poorer countries tend to be more polluted than richer ones because they don’t have the capacity both to keep their people fed and clothed and also to keep their land, air and water clean. Infant mortality is higher and life spans shorter because they don’t have enough to immunize against diseases, prevent them from spreading, and cure the sick.

In their quest for resources rich nations (and corporations) have too often devastated poor ones – destroying their forests, eroding their land, and fouling their water. This is intolerable, but it isn’t an indictment of growth itself. Growth doesn’t depend on plunder. Rich nations have the capacity to extract resources responsibly. That they don’t is a measure of their irresponsibility and the weakness of international law.

How a nation chooses to use its productive capacity – how it defines its needs and wants — is a different matter. As China becomes a richer nation it can devote more of its capacity to its environment and to its own consumers, for example.

The United States has the largest capacity in the world. But relative to other rich nations it chooses to devote a larger proportion of that capacity to consumer goods, health care, and the military. And it uses comparatively less to support people who are unemployed or destitute, pay for non-carbon fuels, keep people healthy, and provide aid to the rest of the world. Slower growth will mean even more competition among these goals.

Faster growth greases the way toward more equal opportunity and a wider distribution of gains. The wealthy more easily accept a smaller share of the gains because they can still come out ahead of where they were before. Simultaneously, the middle class more willingly pays taxes to support public improvements like a cleaner environment and stronger safety nets. It’s a virtuous cycle. We had one during the Great Prosperity the lasted from 1947 to the early 1970s.

Slower growth has the reverse effect. Because economic gains are small, the wealthy fight harder to maintain their share. The middle class, already burdened by high unemployment and flat or dropping wages, fights ever more furiously against any additional burdens, including tax increases to support public improvements. The poor are left worse off than before. It’s a vicious cycle. We’ve been in one most of the last thirty years.

No one should celebrate slow growth. If we’re entering into a period of even slower growth, the consequences could be worse.

For some excellent reading on this subject, check out the Recommended Reading section on Sustainable Business, Government, and Community. I especially found useful Lester Brown’s Plan B 4.0 and Jeffrey Sachs’ Common Wealth.

China Manufacturing and Transport Cost Showing Sharp Rise – Trends and Implications for Business

Posted on 17 August 2010 | by Jay Kimball

Keywords: China, manufacturing cost, transport cost, Credit Suisse, jobs, per capita income

There is growing concern among U.S. and European companies that higher China manufacturing and transport cost, coupled with an inability to push through price increases due to the weak economy, will pressure profit margins in 2011. This according to a Credit Suisse report citing their survey of mostly private consumer, industrial and technology companies that source products from China. An article in Reuters provides details – highlights below.

This should not come as a surprise to anyone that is observing the trends in China around per capita income and consumption. China is becoming America – fast. Before we know it, we will be bringing jobs back here to the US. You might think that jobs would migrate to India or Southeast Asia next, and there will be some of that, but the inflation occurring in China will happen to those countries too as they move up the income and consumption curve. Using GapMinder’s Trendalyzer with energy consumption data from BP’s Statistical Review of World Energy 2010 and income data from the IMF, we can see some powerful trends unfolding (N.B. data presented for 1965 through 2008, 1 year steps, circle area proportional to population size, energy use in tonnes of oil equivalent):

Energy Consumption and Income for US, China, and India — Per Capita Income and Energy Consumption in China, India and the US

And with increasing resource scarcity (water, energy, food) and climate change, those regions will likely be challenged by social tensions or state instability (see National Intelligence Assessment on the National Security Implications of Global Climate Change to 2030 by US Director of National Intelligence in Recommended Reading). With all this to consider, we encourage companies to take the long view as they evolve their manufacturing strategy.

Highlights from China costs may surprise investors–Credit Suisse

Credit Suisse, which said it sees the risk of very limited pricing power for consumer companies next year amid tepid economic growth, found 40 percent of respondents are “very worried” or “extremely worried” about wage pressure in China; 29 percent are very or extremely worried about transport costs; and 18 percent are so about the rising yuan currency.

About 40 percent of executives said their costs on Chinese-sourced goods are up at least 6 percent from a year ago, with nearly a third reporting a double-digit increase. The survey polled 28 firms with annual sales of at least $500 million that rely on China for a portion of their goods sold.

Nearly half of respondents said it is “not easy at all” to relocate sourcing from China and two-thirds say they could increase prices somewhat, but would likely lose profit margin.

China’s explosive economic growth has pushed up manufacturing wages nearly fourfold over the past decade. The average worker earns about $3,900 a year, up from about $1,900 in 2005 and just over $1,000 a year in 2000. Wages are expected to rise further, reflecting emerging labor shortages.

The pace of wage increases, currently around 13 percent a year, could accelerate, Rochon said. With U.S. wages flat or down, the difference in costs is narrowing, especially as transport costs — and times — go up.

Containership fleets, eager to cut capacity, save fuel and raise prices, have slowed ships crossing the Pacific by about 50 percent. More inventory is sitting on the ocean.

Factoring in currency, wages and transport, the hit to earnings could be substantial for some companies, Rochon said.

Credit Suisse posits a worst-case scenario in which costs rise 20 percent with no ability to pass on higher prices. Under that scenario, 2011 earnings per share (EPS) would be reduced by about 60 percent at Maidenform Brands Inc and by some 70 percent at Jones Apparel Group Inc.

Giant retailers like Target Corp and Macy’s Inc would see about a 40-percent hit to 2011 earnings. On the other hand, a stronger currency and rising living standards in China could benefit companies that sell to Chinese consumers, such as Yum Brands Inc and McDonald’s Corp, the report said.

The biggest risks are not to makers of high-margin, easy-to-ship products like Apple Inc’s iPads, or to labor-intensive, high-volume manufacturers like clothing companies, which can move operations. Rather it is companies in the middle that are the most exposed, such as low-priced retailer Dollar Tree Inc with about 40 percent of goods sourced from China, according to Credit Suisse.

Current Wall Street estimates call for Dollar Tree to earn $3.35 per share in fiscal 2011, according to Thomson Reuters I/B/E/S. That would fall to $2.24 if costs rose 20 percent with some pricing power, and EPS would be only $1.67 without pricing power, the report estimates.

Some companies have already responded. General Electric Co, for example, has moved production of its hot water heaters to Kentucky from China, partly as a reaction to cost.

Large industrial companies like GE, Cummins Inc and Emerson Electric Co would see 2011 EPS reduced by 10 percent or more under the adverse scenario.

Electrical machinery and equipment were the top U.S. imports from China at $73 billion, though the report notes many industrial companies manufacture in China for the local market and are able to move production elsewhere.

Using Water Heaters to Store Excess Wind Energy

Posted on 13 August 2010 | by Jay Kimball | 14 Comments

Keywords: energy management, energy storage, smart grid, wind energy, renewable energy

The Bonneville Power Administration (BPA) is recruiting one hundred homeowners in Washington for an experiment on how to store surplus wind energy. The BPA is testing a promising smart-grid concept that would use residential water heaters to help manage the fluctuations of wind energy generation.

The project will address two problems experienced on the grid: shortage of power during peak times and surges of power during windy periods, when the energy isn’t needed.

The BPA, working with Mason County Public Utility District Number 3, will install special devices on water heaters that will communicate with the electrical grid and tell the water heaters to turn on or off, based on grid conditions and the amount of renewable energy that’s available.

While homeowners will be able to override the control device at any time, it’s unlikely that they would even notice a change in temperature.

The water heaters in effect become energy storage devices — turning on to absorb excess power and shutting down when demand ramps up —leveling out the peaks and valleys of energy use. Benefits include:

no need for expensive and toxic battery storage
no need for fossil fuel burning power plants to fill in low wind energy gaps
water heaters provide distributed storage, avoiding point loads on grid
smart water heaters can be manufactured economically, for just a few dollars more.

Wind power is the fastest growing source of renewable energy, accounting for about 3 percent of US electric generation. About 53 million homes in the United States, or 42 percent of the total, use electric hot water heaters. Added up, they account for 13 percent to 17 percent of nationwide residential electricity use.

In the Pacific Northwest, home of the BPA, it’s estimated that there are 4.3 million water heaters that can store 2,600 megawatt-hours by allowing the storage temperature to vary by five degrees. (NB: For a detailed analysis see the Northwest Power and Conservation Council report prepared by Ken Corum.)

The Northwest Energy Coalition does a nice job detailing the background, and benefits of this approach to storing excess wind energy. Highlights of their article, Using simple smart water heaters to integrate intermittent renewables, are below.

Highlights of Using simple smart water heaters to integrate intermittent renewables

Background

Wind-generated power is clean, relatively cheap and available in large quantities. But the wind itself is quite unpredictable, so much so that for each average megawatt (aMW) of wind power we need, we must erect about 3 megawatts of turbine capacity, since actual output could be anywhere from 0 to 3 megawatts at any instant.

Suppose our region, which consumes about 21,000 average MW of electricity each year, wants to get a third of its power from wind. We’d have to build about 21,000 megawatts (MW) of turbine capacity to get 7,000 average MW of electricity. Given weather variability and the geographical spacing of wind projects, over time the actual production of those 21,000 megawatts of turbines will vary from about 1,000 MW to 15,000 MW due to weather fronts and daily warming patterns. Problematic 3,000- to 4,000-megawatt swings can occur in as little as 10-30 minutes.

To deal with large variations in wind, grid operators use some expensive tools now at their disposal, generally limited to ramping natural gas-fired combustion turbines and/or hydro generation up and down. Ramping up is fairly easy; today’s grid has ample reserve capacity on which to draw.

Ramping down is another matter. When wind generation suddenly spikes during periods of low demand (at night or during mild weather hours), the system can have less flexible generation on-line (nuclear and coal plants) that cannot be cut back to make room for the wind. The region’s inflexible “baseload” coal plants and one nuclear plant, which together provide more than a quarter of our electricity, cannot be economically ramped up and down in response to wind variability.

Previous Transformers and NW Energy Coalition’s Bright Future report have addressed wind-integration issues, noting – in particular – that the problems will lessen as we progressively eliminate coal-fueled power from the Northwest grid, as renewable projects grow and become more diverse and geographical dispersed, and as “smart grid” deployment provides a new back-up resource.

Smart grid to the rescue

In a Feb. 10, 2009, presentation to the Northwest Power and Conservation Council, Council staff member Ken Corum provided a powerful example of how one relatively simple smart grid innovation – using electric water heaters as temporary storage devices — could help the grid integrate large amounts of wind power at very low cost. We expand on Corum’s example below.

The Northwest power system serves about 4.3 million electric water heaters. If all were running at once, their loads would total more than 19,000 MW. Of course, they don’t all run at the same time. Actual demand might be just a few hundred megawatts in the middle of the night, surging to more than 5,000 MW around 8 a.m. when people take their showers. Use drops during the day, and then peaks again at about 3,500 MW around 8 p.m. as people come home and wash dishes, clothes, etc.

Now imagine that as part of the smart grid, each water heater contains a chip that can receive signals from grid operators to raise or lower the water temperature by a few degrees. As wind generation picks up, the grid operator slightly raises the temperature set points on millions of water heater thermostats, thus “storing” the wind power for later use. Should the wind suddenly drop, the operator lowers the temperature points, causing many water heater elements to click off for a time.

Most people won’t even notice the small temperature changes. But spread over millions of water heaters, those few degrees of difference are enough to avoid ramping fossil-fuel and hydro generation up and down, thus improving system-wide fuel efficiency and leaving more water in the river for migrating salmon.

Once the infrastructure — smart meters that can communicate with both the utility and home appliances — is in place, manufacturers could start installing computer chips, adding perhaps $5-10 to the cost of a water heater, Given the system savings the water heater controls would generate, utilities could afford to cover the additional cost, and/or offer customers a rate discount or other incentive in exchange for limited control of their water heaters.

Currently, for example, Idaho Power pays residential customers $7 per month to participate in its A/C Cool Credit Program, which slightly backs down air conditioning power during peak demand periods.

Water heaters are a great choice for smart grid applications because of their relatively short life spans. Over about 12 years, the current stock could be totally replaced with smart water heaters.

Shifting peaks – and keeping the lights on

Aside from facilitating the integration of thousands of megawatts of wind power, controllable water heaters (and other appliances and equipment that draw electricity 24/7) provide two other benefits:

1. Reliability. Major power lines and generating plants occasionally suffer sudden outages due to fires, ice, wind or equipment failure. Turning down a few million water heaters could quickly shave demand enough to cover the power loss and avoid a major blackout. In fact, the chips discussed above can be made to automatically and instantaneously detect frequency changes in the electricity they use without any operator intervention. The chip reacts to a sudden change from the standard 60 cycles per second by instantly turning the heater on or off to keep the grid stable.

2. Money. Utilities spend a lot of money following the daily peaks and valleys of human activity. Thirty to 40% of their generation capacity sits idle for much of each 24-hour day. Another 5-10% come on only during very extreme weather — the hottest or coldest days. But utilities must cover the capital and maintenance costs of all these resources, no matter how little used.

Controllable water heaters would rarely go on during system peaks and could help utilities respond to system emergencies … at huge cost savings. Utilities would be able to spread demand more evenly throughout the day, increasing power line and substation efficiency and avoiding the costs of some mostly idle generation resources. These actions could lower bills substantially and/or provide savings to fund additional smart grid investment.

And that’s just one example

Though this article has focused on electric water heaters, similar controls can be installed in freezers, air conditioners and electric furnaces. Electric and hybrid-electric vehicles are other examples. Their charging rates can be altered while the vehicles are plugged into the grid. The opportunities are only starting to reveal themselves.

Allowing grid operators access to our appliance controls raises issues of cybersecurity, privacy and the potential for short-circuiting due process (e.g., automatic shutoff for non-payment of bills). Those issues must be adequately addressed. But the smart grid can help move the Northwest quickly and affordably to a bright energy future.

Google: Implications of California’s Proposition 23

Posted on 12 August 2010 | by Jay Kimball | 4 Comments

Keywords: Google, California Proposition 23, Vinod Khosla, William Wiehl, cleantech, A.B. 32

Google convened an event at their Silicon Valley campus to discuss the implications of California’s Proposition 23, an attempt to rollback the state’s ambitious climate legislation (A.B. 32). In an article at Greentech Media, panelists, including venture capitalist Vinod Khosla, sounded upbeat on contributions California cleantech ventures will make toward solving US energy and climate challenges.

Highlights from Google’s Implications for California Proposition 23 Event

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

Khosla’s firm is backing companies that hope to cut energy use in lighting and data center server racks by 80 percent.

Regarding China’s serious investment in cleantech, Khosla said “I won’t say China is winning the cleantech race,” he says. “But they are clearly paying a lot more attention to the race.”

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

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

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

A.B. 32 has helped create 500,000 cleantech jobs in California, Wiehl says.

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

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

Note:

California’s major initiatives for reducing climate change or greenhouse gas (GHG) emissions are outlined in Assembly Bill 32 (signed into law 2006), 2005 Executive Order and a 2004 ARB regulation to reduce passenger car GHG emissions. These efforts aim at reducing GHG emissions to 1990 levels by 2020 – a reduction of approximately 30 percent, and then an 80 percent reduction below 1990 levels by 2050. The main strategies for making these reductions are outlined in the Scoping Plan. Also provided here are links to state agencies and other groups working on climate issues which are being coordinated by the state’s Climate Action Team.

More on the California’s Prop 23 initiative here:

California’s Prop 23 Morphing into Prop 26