Top Business Leaders Deliver Clean Energy Plan

Keywords: clean energy, business leaders, climate change, american energy innovation council

What do Americans spend more money on – potato chips, or energy research and development? See video below for the answer.

Seven business leaders, founders of American Energy Innovation Council, delivered a Business Plan For America’s Energy Future. The leaders are:

  • Norm Augustine, former chairman and CEO of Lockheed Martin
  • Ursula Burns, CEO of Xerox
  • John Doerr, partner at Kleiner Perkins Caufield & Byers
  • Bill Gates, chairman and former CEO of Microsoft
  • Chad Holliday, chairman of Bank of America and former chairman and CEO of DuPont
  • Jeff Immelt, chairman and CEO of GE
  • Tim Solso, chairman and CEO of Cummins Inc.

The US is the largest consumer of energy in the world. The American Energy Innovation Council makes the case that there is a pressing need for energy innovation, and we need to invest in that innovation.
Energy R&D Spending as a Share of Sales

Though energy is a key strategic component of any countries wellbeing, US energy R&D spending has been in decline.

Energy R&D Spending

Though the US is the worlds largest energy consumer, it spends less on energy R&D than China, France, Japan and Korea.

Energy as a Share of GDP
The council’s recommendations:

  • Create an independent national energy strategy board
  • Invest $16 billion per year in clean energy innovation
  • Create Centers of Excellence with strong domain expertise
  • Fund ARPA-E at $1 billion per year
  • Establish and fund a New Energy Challenge Program to build large-scale pilot projects

The full report can be viewed here, and for more on Bill Gates call for Zero Carbon emissions, see Bill Gates on Climate Change and Renewable Energy.

Farming Wind Versus Farming Corn for Energy

keywords: wind power, wind turbines, corn ethanol, ERoEI

corn field with wind turbines
Farmers can plant crops right to the base of wind turbines (photo: Warren Gretzl, NREL)

If a farmer has 1,000 acres of land, and he/she planted it with corn for making ethanol and erected wind turbines for generating electricity, how much energy will the farmer produce and what are the economics?

Wind Power

A typical wind farm will have about 15 wind turbines per 1,00o acres. Each wind turbine will generate about 500 kW of power (assuming 33% capacity factor). Electricity retails at about 12¢ per kW hour. So 1,000 acres will produce 15 x 500 x .12 = $900 of electricity per hour, which equates to about $8,000,000 per year, representing about 224 trillion BTUs of energy.

Corn Ethanol Power

A typical 1,000 acre corn farm will produce about 7,500 pounds of corn, yielding about 340,000 gallons of ethanol. Ethanol retails at about $1.80 per gallon. So 1,000 acres will produce 340,000 x 1.8 = $612,000 per year, representing about 26 billion BTUs of energy.

Energy Returned on Energy Invested

It takes energy to produce energy. The Energy Returned on Energy Invested (ERoEI) for wind turbines is an impressive, state of the art wind turbines are providing ERoEI of over 50:1.

It takes a lot of energy to produce corn ethanol, which yields a far lower ERoEI of between .8 and 1.65 (see Ethanol’s Energy Return on Investment: A Survey of the Literature 1990-Present by Roel Hammerschlag).

ERoEI

Side-effects of Wind Power and Corn Ethanol Production

Wind turbines are often perceived as an eyesore, marring the land with imposing manmade structures. Flying creatures such as hawks and bats are often killed as they pass through the turbine blades. Wind turbines are noisy, and are best located in rural areas, or at sea. Wind power needs to be located near power transmission resources, it that infrastructure will need to be built.

Corn ethanol yields just a bit more energy than it takes to produce it. It takes about 1,700 gallons of water to produce each gallon of corn ethanol. Corn used for ethanol production is corn not used for food production. As food corn supply is reduced, corn-based food prices rise.

Summary

Given 1,000 acres of land, planted with corn and a typical density of wind turbines, the table below summarizes the annual economic and energy value of corn ethanol fuel and wind turbine electricity.

Wind Power Corn Ethanol
Retail Value $8,000,000 $612,000
Energy Yield 224 trillion BTUs 26 billion BTUs
ERoEI 50:1 1.5:1

Bjørn Lomborg Changes His Mind About Climate Change

Keywords: Bjørn Lomborg, skeptical environmentalist, climate change, Howard Friel, The Lomborg Deception, carbon tax

Bjørn Lomborg, infamous “skeptical environmentalist,” has changed his mind about climate change. According to an article in The Guardian:

The world’s most high-profile climate change sceptic is to declare that global warming is “undoubtedly one of the chief concerns facing the world today” and “a challenge humanity must confront“, in an apparent U-turn that will give a huge boost to the embattled environmental lobby.

Lomborg has a new book coming out in a few weeks and this will certainly create buzz around the book. The Guardian says:

Bjørn Lomborg, the self-styled “sceptical environmentalist” once compared to Adolf Hitler by the UN’s climate chief, is famous for attacking climate scientists, campaigners, the media and others for exaggerating the rate of global warming and its effects on humans, and the costly waste of policies to stop the problem.

But in a new book to be published next month, Lomborg will call for tens of billions of dollars a year to be invested in tackling climate change. “Investing $100bn annually would mean that we could essentially resolve the climate change problem by the end of this century,” the book concludes.

Examining eight methods to reduce or stop global warming, Lomborg and his fellow economists recommend pouring money into researching and developing clean energy sources such as wind, wave, solar and nuclear power, and more work on climate engineering ideas such as “cloud whitening” to reflect the sun’s heat back into the outer atmosphere.

In a Guardian interview, he said he would finance investment through a tax on carbon emissions that would also raise $50bn to mitigate the effect of climate change, for example by building better sea defences, and $100bn for global healthcare.

Global Carbon Emissions 2010
(source: EIA, CDIAC, Raupach et al. 2007, Proceedings of National Academy of Sciences)

Most news outlets reporting on Lomborg’s turn-around are simply repeating the provocative bullet points of this story. To the Guardian’s credit, they ran a second article by Howard Friel, author of The Lomborg Deception, that brings some balance to the Lomborg stealth PR campaign. For example, Friel points out Lomborg still is not calling for reduction of CO2 emissions:

Here’s where the missing question comes into play, since Lomborg does not seriously address the fundamental problem of rising atmospheric CO2 concentrations in the absence of global greenhouse reductions: what will happen to the earth and human civilisation when atmospheric CO2 concentrations rise – essentially unchecked, if we followed Lomborg’s recommendations – to 450 parts per million, 550ppm, 700ppm, 800ppm; and when the average global temperature rises by 2C, 3C, and 4C to 7C?

Climate scientists have set 350ppm and a 2C average temperature rise (from 1750 to 2100) as the upper range targets to prevent a global climate disaster. Since we are already at 390ppm and since a 2C plus rise is a near certainty, how does Lomborg’s appeal to forgo sharp reductions in CO2 emissions reflect climate science? He argues that there are “smarter solutions to climate change” than a focus on reducing CO2. This is hardly smart: it’s insanity.

As one commenter noted:

The denialists are like a chain-smoker with emphysema who rants at his doctor for telling him to quit.

Lomborg has left this crowd and has progressed, very late, to the bargaining stage. “Doctor, is there some medicine I can take? What if I cut down to two packs from three a day?”

For an example of someone coming late to the discussion, but thinking big about how to take on the enormous challenges posed by climate change, see Bill Gates on Climate Change and Renewable Energy. Here’s an excerpt from that article:

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

Bill Gates on Climate Change and Renewable Energy

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.

Using Water Heaters to Store Excess Wind Energy

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

Wind PowerThe 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.

Electric water heaterWhile 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 articleUsing 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

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

Vinod Khosla
Vinod Khosla

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