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Monday, June 11, 2007
Occasional Dimes
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Tuesday, June 05, 2007
Clean Technology Venture Capitals
A few months ago I reviewed data on VC and Federal investments in Clean/Renewable energy. Since then I have been on the lookout for similar data by geography. Luckily The Economist just published an article comparing different regions in the U.S. in terms of the amount of Clean Technology VC investments.
Based on my previous post, Clean Energy accounted for about 10% in 2006 VC investments. The U.S. Clean Technology total for 2006 was $2.9B with Silicon Valley garnering the largest share:
If one adds up total investments in the State of California, I suspect that the Golden State took in close to 30% of the total. The regions that attract technology (VC) investments are the leaders in Clean Technology start-ups as well. The combination of entrepreneurs, engineers, great Universities, research labs, and environmentalists will make Silicon Valley hard to dislodge. Surprisingly, Denver which has the National Renewable Energy Laboratory attracted less investments than Texas.
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Based on my previous post, Clean Energy accounted for about 10% in 2006 VC investments. The U.S. Clean Technology total for 2006 was $2.9B with Silicon Valley garnering the largest share:
If one adds up total investments in the State of California, I suspect that the Golden State took in close to 30% of the total. The regions that attract technology (VC) investments are the leaders in Clean Technology start-ups as well. The combination of entrepreneurs, engineers, great Universities, research labs, and environmentalists will make Silicon Valley hard to dislodge. Surprisingly, Denver which has the National Renewable Energy Laboratory attracted less investments than Texas.Digg It! , Bookmark to del.icio.us , My Yahoo! , ATOM Feed
Thursday, May 31, 2007
The Importance of Power Supplies
Reading this recent post about Google's initiative to encourage PC makers to install more efficient power supplies, reminded me of a 2002 study commissioned by NRDC. Back in 2002, about 500M power supplies were sold in the U.S. annually, and about 6% of all electricity consumed in the U.S. flowed through power supplies. I haven't run across updated data and I will assume that the results of the 2002 study are still reasonable.
Energy-efficient power supplies, as we will see later, already exists and can be deployed by electronics manufacturers. Doing so would lead to about 15-20% savings in KWH consumed, or a savings of about 1% (from 6% to 5%) of the total electricity consumed in the U.S.
The 1 percentage point translates to about 24B tons of reduced CO2 emissions! Electronic products usually have three operating modes: active usage, standby, and sleep. The active mode accounts for a vast majority of electricity consumption:
With all the past attention given to standby energy losses ("leaking electricity", "vampires"), the above numbers justify the recent emphasis on power supplies that are efficient in active mode. The graph below illustrates what happens for an average PC, Monitor, and (analog) TV:
Drilling-down further and using numbers for PC's, Monitors, analog TV's, power supplies that are energy-efficient while electronic equipment are in active mode are paticularly attractive. Given that there are about 2 Billion power supplies sold each year, it becomes clear why power supplies are increasingly becoming an important issue among environmentalists. In the U.S. alone, the power supply market is about $4B/year and growing at 10% annually.
In the context of electronic equipment, power supplies take electricity (usually 110 Volts, AC) and converts it to a lower DC voltage. Linear power supplies are used mostly for low wattage products (15 watts or less), switching power supplies are more commonly found in higher wattage products like desktop computers, TV's and microwaves.
Energy efficiency of a power supply is measured by taking the ratio of output to input power:
Data from the 2002 NRDC study gives the following "typical" efficiency ranges (low, high) for when devices are operating in active-mode:
The more energy efficient switching power supplies range from 50% to 90% efficiency when devices/products are operating. While the data is about 5 years old, the 2002 NRDC study contains detailed efficiency and consumption numbers for a wide variety of electronic products:
PC's and Servers
What Google is proposing is to standardize PC power supplies from the current multiple voltages (+12v, -12v, 5v, and 3.3v) to a single voltage (12v). Google-designed power supplies are reported to achieve active mode efficiencies of 90%. Interestingly, Jeff Atwood graphs the efficiency of two very different power supplies:
and he notes that the more efficient power supply has peak efficiency at around 250 watts. Most home PC's barely consume 200 watts -- under full load! Google's proposal becomes even more interesting if power supplies can achieve 90% operating efficiency for a typical home PC user.
In order to start seeing efficient power supplies in home PC's and laptops leading PC manufacturers need to choose to install them. Google has chosen to bypass the server manufacturers and design their own power supplies. Here lies the quandry: the people who end up paying the electric bill (the consumers) are not the ones deciding what power supply goes into their PC's.
Consumers will start requesting energy-efficient power supplies and the OEM's will eventually relent and start transitioning to more efficient designs. There is already reason to be optimistic. As the NYTimes article notes, there is an initiative underway ("80 plus") which aims to encourage computer makers to start installing more efficient power supplies.
In the Data Center front, changes are coming at a faster rate, and multiple designs (including the use of shipping containers) are being proposed:
With power accounting for 40% of costs in a typical Data Center, energy innovations will emerge quickly. Hopefully some of the ideas will be applicable to the broader consumer market.
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Energy-efficient power supplies, as we will see later, already exists and can be deployed by electronics manufacturers. Doing so would lead to about 15-20% savings in KWH consumed, or a savings of about 1% (from 6% to 5%) of the total electricity consumed in the U.S.
The 1 percentage point translates to about 24B tons of reduced CO2 emissions! Electronic products usually have three operating modes: active usage, standby, and sleep. The active mode accounts for a vast majority of electricity consumption:
With all the past attention given to standby energy losses ("leaking electricity", "vampires"), the above numbers justify the recent emphasis on power supplies that are efficient in active mode. The graph below illustrates what happens for an average PC, Monitor, and (analog) TV:
Drilling-down further and using numbers for PC's, Monitors, analog TV's, power supplies that are energy-efficient while electronic equipment are in active mode are paticularly attractive. Given that there are about 2 Billion power supplies sold each year, it becomes clear why power supplies are increasingly becoming an important issue among environmentalists. In the U.S. alone, the power supply market is about $4B/year and growing at 10% annually.In the context of electronic equipment, power supplies take electricity (usually 110 Volts, AC) and converts it to a lower DC voltage. Linear power supplies are used mostly for low wattage products (15 watts or less), switching power supplies are more commonly found in higher wattage products like desktop computers, TV's and microwaves.
Energy efficiency of a power supply is measured by taking the ratio of output to input power:
Data from the 2002 NRDC study gives the following "typical" efficiency ranges (low, high) for when devices are operating in active-mode:
The more energy efficient switching power supplies range from 50% to 90% efficiency when devices/products are operating. While the data is about 5 years old, the 2002 NRDC study contains detailed efficiency and consumption numbers for a wide variety of electronic products:Our measurements of a variety of electronic products yielded a wide range of efficiency levels for external power supplies. Efficiencies were usually higher with the original factory power supply provided with the unit than with after-market, “universal” adapters. It is simply easier to optimize a power supply for energy efficiency when it is intended to operate at a single voltage and relatively high load (see part load efficiency discussion below). Note that standby power consumption varied from a low of (less than) 0.01 watts to a high of nearly 2 watts, while active mode efficiencies ranged from as low as 20% to more than 90%.
PC's and Servers
What Google is proposing is to standardize PC power supplies from the current multiple voltages (+12v, -12v, 5v, and 3.3v) to a single voltage (12v). Google-designed power supplies are reported to achieve active mode efficiencies of 90%. Interestingly, Jeff Atwood graphs the efficiency of two very different power supplies:
and he notes that the more efficient power supply has peak efficiency at around 250 watts. Most home PC's barely consume 200 watts -- under full load! Google's proposal becomes even more interesting if power supplies can achieve 90% operating efficiency for a typical home PC user.
In order to start seeing efficient power supplies in home PC's and laptops leading PC manufacturers need to choose to install them. Google has chosen to bypass the server manufacturers and design their own power supplies. Here lies the quandry: the people who end up paying the electric bill (the consumers) are not the ones deciding what power supply goes into their PC's.
Consumers will start requesting energy-efficient power supplies and the OEM's will eventually relent and start transitioning to more efficient designs. There is already reason to be optimistic. As the NYTimes article notes, there is an initiative underway ("80 plus") which aims to encourage computer makers to start installing more efficient power supplies.
In the Data Center front, changes are coming at a faster rate, and multiple designs (including the use of shipping containers) are being proposed:
With power accounting for 40% of costs in a typical Data Center, energy innovations will emerge quickly. Hopefully some of the ideas will be applicable to the broader consumer market.
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Monday, May 28, 2007
Your State, You, and Kyoto
While the U.S. Goverment has shied away from Renewable Energy mandates, Federalism is alive and well on the energy issue. A recent WSJ article included a "cheatsheet" on the current State-by-State renewable energy targets:
Based on the current level of interest in renewables, I suspect that National legistlation outlining targets for the use of renewables, to be in place by the end of the NEXT administration. Don't be suprised if states like California, continue to move more aggresively and set targets well beyond any Federal mandates. States (and cities) realize that Clean Tech companies are going to generate a lot of high-paying jobs.
Using the table above, I put together a short slideshow to help visualize how the State-by-State targets will spread over time. For a full-screen view, click here:
Finally, check out Personal Kyoto for tips on what you can do to track your personal electricity usage.
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Based on the current level of interest in renewables, I suspect that National legistlation outlining targets for the use of renewables, to be in place by the end of the NEXT administration. Don't be suprised if states like California, continue to move more aggresively and set targets well beyond any Federal mandates. States (and cities) realize that Clean Tech companies are going to generate a lot of high-paying jobs.
Using the table above, I put together a short slideshow to help visualize how the State-by-State targets will spread over time. For a full-screen view, click here:
Finally, check out Personal Kyoto for tips on what you can do to track your personal electricity usage.
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Tuesday, May 22, 2007
Occasional Dimes: Memorial Day Edition
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Monday, May 21, 2007
Danish-Style Energy Policy
About a month ago, the Wall Street Journal had an article on Denmark's approach to energy. The Danes are rock stars in the world of energy efficiency and conservation, their overall energy consumption is identical to what it was 30 years ago:
While America's energy consumption rose 40% over the same thirty-year period, the U.S. GDP quadrupled. Danish population went up 7% while US population went up 38% over the thirty-year period. U.S. population growth roughly tracked growth in energy consumption, while the Danes have gotten more energy efficient over the last thirty years (7% growth in population, zero growth in energy consumption). The kicker of course is the much faster growth in the U.S. economy.
Besides energy there are other forces at work to explain the much faster GDP growth in the U.S.: at 5.5M, Denmark's population is smaller than the SF Bay Area, and as a state with generous social welfare benefits, taxes are quite a bit higher than the U.S. Show an average American the above graph, they would likely say that for the given the growth in GDP, a 40% rise in energy consumption is acceptable. Denmark's economy has not grown as fast as the U.S., but they have had solid growth, and by European standards fairly low unemployment. With global warming increasingly becoming a problem, and with India and China poised to start consuming a lot more energy, the Danish approach has been attracting a lot of attention from policy makers worldwide.
Before we delve deeper into Danish energy policy, let's revisit a few head-to-head comparisons between the U.S. and Denmark. By some estimates Electricity and Heat generation account for about 40% of CO2 emissions in industrialized countries -- representing the largest source of emissions. The graphs below give a breakdown of Electricity and Heat generation for the U.S. and Denmark. Denmark is among the largest Wind Energy producers in the world, and in the graphs below Wind falls under "other" sources. For both Electricity and Heat generation, the combined shares of Biomass, Waste and Wind/Other in Denmark are impressive:
In terms of emissions per capita, Denmark is down 13% over the last 30 years, while the U.S. is producing 7% less emissions per capita over the same time period:
Now we turn to some hallmarks of Danish Energy policy as discussed in the WSJ article.
"But in Denmark, much of the country's energy sector is in the hands of nonprofit cooperatives, with residents as shareholders, which makes it easier for government to direct policy with little opposition from business interests."
Municipalities in California are starting to consider public power as a solution to their energy woes. The combination of rising electricity prices, the state's power crisis from a few years ago, and lower prices in LA, Palo Alto, Sacramento, Santa Clara and other localities with municipal power, have made public power a possibility in other parts of the state. Maybe what social scientists refer to as the external locus of control, is waning!
"'We redesigned the whole manufacturing process to save energy,' says Søren Eriksen, technical director of Danish Crown, a meat company that produces $11 billion of pork and beef annually. 'Everything is reused.' ... Danish companies pay 43% more per megawatt hour of electricity than companies in the U.S., 24% more than in France and 19% more than in England, according to Dansk Industri, an industry trade association."
In recent posts I highlighted the ineffcient use of energy in the U.S. Chemical industry, and energy arguments in favor of Organic agriculture. In Denmark, the high-cost of energy means that industries have no choice but be as energy efficient as possible:
The downside is that the high cost of energy (and labor costs) has made Denmark less-competitive in energy-intensive industries. U.S. industries seem to be trying to get ahead of climate change legislation and the ones who have the foresight will come up with cost-effective, innovative and game-changing technologies that promote energy-efficiency.
"A Dane buying a new car must pay a registration fee of approximately 105% of the car's value, plus additional taxes on fuel. ... Taxes now make up more than half of Danish households' electricity bills; prices at the gas pump doubled once fuel taxes took effect."
The car tax is a non-starter in the U.S.: Americans love their cars and mass transport sucks in most parts of the country. Any politician who even suggests a tax increase of that scale will be vilified. In a related article, the Journal featured Copenhagen and Amsterdam as bicycle nirvanas, places where more than a third of commuters go to work by bike. Copenhagen is launching more initiatives aimed specifically at encouraging even more bikers. Heck the Dutch PM sometimes bikes to work! A quick glance at a list of bike-friendly cities in the U.S. reveals mostly college towns, with a few large cities further down the list. I have to admit being impressed by the fact that Mayor Daley of Chicago bikes to work -- probably not in the winter :-)
"To build on the success of the new heating system, the government introduced a new building code in 1979 that forced people to build their homes with thicker insulation and tighter-sealing windows that would preserve energy. The building code is tightened periodically. It lowered Denmark's heating bill by 20% between 1975 and 2001, even though some 30% more heated floor space in buildings and homes was built during that period, according to the Danish Energy Authority."
Coincidentally, the NYTimes Magazine has an excellent article on this topic. By tightening building codes over the last decade, Green Building and Architecture has become a reality in parts of Western Europe. While U.S. politicians have been talking about ethanol, climate change, and more efficient cars, Green Architecture is an area which is ripe for discussion. In a future post, I will analyze energy use in the construction sector.
While parts of the Danish approach are non-starters in the U.S., its still interesting to see how this relatively small European country has chosen to address its energy challenges. More importantly, Denmark's energy policy has drawn a lot of interest from other countries. From an American perspective, all is not lost. As I pointed out in a previous post, sound energy policy already exists in the U.S.
While America's energy consumption rose 40% over the same thirty-year period, the U.S. GDP quadrupled. Danish population went up 7% while US population went up 38% over the thirty-year period. U.S. population growth roughly tracked growth in energy consumption, while the Danes have gotten more energy efficient over the last thirty years (7% growth in population, zero growth in energy consumption). The kicker of course is the much faster growth in the U.S. economy.Besides energy there are other forces at work to explain the much faster GDP growth in the U.S.: at 5.5M, Denmark's population is smaller than the SF Bay Area, and as a state with generous social welfare benefits, taxes are quite a bit higher than the U.S. Show an average American the above graph, they would likely say that for the given the growth in GDP, a 40% rise in energy consumption is acceptable. Denmark's economy has not grown as fast as the U.S., but they have had solid growth, and by European standards fairly low unemployment. With global warming increasingly becoming a problem, and with India and China poised to start consuming a lot more energy, the Danish approach has been attracting a lot of attention from policy makers worldwide.
Before we delve deeper into Danish energy policy, let's revisit a few head-to-head comparisons between the U.S. and Denmark. By some estimates Electricity and Heat generation account for about 40% of CO2 emissions in industrialized countries -- representing the largest source of emissions. The graphs below give a breakdown of Electricity and Heat generation for the U.S. and Denmark. Denmark is among the largest Wind Energy producers in the world, and in the graphs below Wind falls under "other" sources. For both Electricity and Heat generation, the combined shares of Biomass, Waste and Wind/Other in Denmark are impressive:
In terms of emissions per capita, Denmark is down 13% over the last 30 years, while the U.S. is producing 7% less emissions per capita over the same time period:
Now we turn to some hallmarks of Danish Energy policy as discussed in the WSJ article.
"But in Denmark, much of the country's energy sector is in the hands of nonprofit cooperatives, with residents as shareholders, which makes it easier for government to direct policy with little opposition from business interests."
Municipalities in California are starting to consider public power as a solution to their energy woes. The combination of rising electricity prices, the state's power crisis from a few years ago, and lower prices in LA, Palo Alto, Sacramento, Santa Clara and other localities with municipal power, have made public power a possibility in other parts of the state. Maybe what social scientists refer to as the external locus of control, is waning!
"'We redesigned the whole manufacturing process to save energy,' says Søren Eriksen, technical director of Danish Crown, a meat company that produces $11 billion of pork and beef annually. 'Everything is reused.' ... Danish companies pay 43% more per megawatt hour of electricity than companies in the U.S., 24% more than in France and 19% more than in England, according to Dansk Industri, an industry trade association."
In recent posts I highlighted the ineffcient use of energy in the U.S. Chemical industry, and energy arguments in favor of Organic agriculture. In Denmark, the high-cost of energy means that industries have no choice but be as energy efficient as possible:
The downside is that the high cost of energy (and labor costs) has made Denmark less-competitive in energy-intensive industries. U.S. industries seem to be trying to get ahead of climate change legislation and the ones who have the foresight will come up with cost-effective, innovative and game-changing technologies that promote energy-efficiency.
"A Dane buying a new car must pay a registration fee of approximately 105% of the car's value, plus additional taxes on fuel. ... Taxes now make up more than half of Danish households' electricity bills; prices at the gas pump doubled once fuel taxes took effect."
The car tax is a non-starter in the U.S.: Americans love their cars and mass transport sucks in most parts of the country. Any politician who even suggests a tax increase of that scale will be vilified. In a related article, the Journal featured Copenhagen and Amsterdam as bicycle nirvanas, places where more than a third of commuters go to work by bike. Copenhagen is launching more initiatives aimed specifically at encouraging even more bikers. Heck the Dutch PM sometimes bikes to work! A quick glance at a list of bike-friendly cities in the U.S. reveals mostly college towns, with a few large cities further down the list. I have to admit being impressed by the fact that Mayor Daley of Chicago bikes to work -- probably not in the winter :-)
"To build on the success of the new heating system, the government introduced a new building code in 1979 that forced people to build their homes with thicker insulation and tighter-sealing windows that would preserve energy. The building code is tightened periodically. It lowered Denmark's heating bill by 20% between 1975 and 2001, even though some 30% more heated floor space in buildings and homes was built during that period, according to the Danish Energy Authority."
Coincidentally, the NYTimes Magazine has an excellent article on this topic. By tightening building codes over the last decade, Green Building and Architecture has become a reality in parts of Western Europe. While U.S. politicians have been talking about ethanol, climate change, and more efficient cars, Green Architecture is an area which is ripe for discussion. In a future post, I will analyze energy use in the construction sector.
While parts of the Danish approach are non-starters in the U.S., its still interesting to see how this relatively small European country has chosen to address its energy challenges. More importantly, Denmark's energy policy has drawn a lot of interest from other countries. From an American perspective, all is not lost. As I pointed out in a previous post, sound energy policy already exists in the U.S.
Consider the case of California:Digg It! , Bookmark to del.icio.us , My Yahoo! , ATOM Feed
Power use per person has remained roughly stable in the state since the 1970s, even as it has doubled in the rest of the country (see chart above). As a result, California's greenhouse-gas emissions per person are on a par with those of Denmark. Relative to the size of its economy, they are lower.
Monday, May 14, 2007
EPA Ranking and Political Contributions
The EPA ranks companies based on the amount of renewable energy they generate or purchase to meet their electricity needs. The ranking is based on data submitted by the companies and submission is on a voluntary basis. Nonetheless, the results were suprising. I was assuming that Silicon Valley companies, given their interest in renewables would be disproportionately represented. Pepsi Cola, Wells Fargo, and HSBC suprised me: Wells and HSBC cited Wind as their main source of renewables, while Pepsi generated 100% of its electricity needs from "various" renewable sources.
I plotted the EPA ranking of the top for-profit organizations, and used the Open Secrets database of PAC contributions for the 2006 election cycle, to highlight the partisan breakdown of the contributions. In the graph below, the length of a bar is the amount of electricity (in thousands of megawatts) purchased as of April 9, 2007, the percentage next to a bar is the proportion of electricity from renewable sources. I highlighted the companies with at least 70% of Total Electricity purchased coming from renewables. The graphs are also color-coded based on the percentage of PAC contributions made to each party:
(To enlarge an image, click on it.) Not suprisingly, the PAC contributions were mostly to Republican candidates, with the exception of Nike (54% Democrats), and to a lesser extent Safeway (45%), Sprint (46%), and Cisco (46%). Significantly, none of the Top 20 PACs, appear in the EPA Top 25 ranking:
CEO's have recently been showing interest in climate change, let's see if the PR events translate to significant commitments in renewables.
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I plotted the EPA ranking of the top for-profit organizations, and used the Open Secrets database of PAC contributions for the 2006 election cycle, to highlight the partisan breakdown of the contributions. In the graph below, the length of a bar is the amount of electricity (in thousands of megawatts) purchased as of April 9, 2007, the percentage next to a bar is the proportion of electricity from renewable sources. I highlighted the companies with at least 70% of Total Electricity purchased coming from renewables. The graphs are also color-coded based on the percentage of PAC contributions made to each party:
(To enlarge an image, click on it.) Not suprisingly, the PAC contributions were mostly to Republican candidates, with the exception of Nike (54% Democrats), and to a lesser extent Safeway (45%), Sprint (46%), and Cisco (46%). Significantly, none of the Top 20 PACs, appear in the EPA Top 25 ranking:
CEO's have recently been showing interest in climate change, let's see if the PR events translate to significant commitments in renewables.
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Monday, May 07, 2007
Carbon Offsets and Footprints
As carbon offsets become more popular (the Financial Times estimates it will be a muti-billion market in a few years), articles questioning the programs they fund are starting to appear:
The term eco-mansion refers to energy efficient homes above 6,000 square feet. I applaud those who can afford to take advantage of the the green technologies available to homeowners -- from solar panels, smart sensors, and advanced building materials. Green industries need early adopters to nurture these nascent technologies. However, I still think that reducing ones footprint is just as important.
A reasonable rule-of-thumb would be a basic home for two people should be about 1,000 - 1,200 square feet, with an additional 300 square feet for each additional person, and a Maximum home size of 2,500 square feet. While I admire what Al Gore has done for the environment, I still feel he would be more effective if he did NOT have 10,000 square foot home. But let me emphasize that I am no purist: an eco-mansion is better than a conventional one.
I do wonder whether Gore and the Hollywood environmentalists realize that they could be more persuasive if they simply downsized. If we are in a crisis, why have an eco-mansion or your own private jet? Offsets are one thing, but leadership by example is more powerful. One can of course be completely off the grid, and continue to power a huge house. But if ones message is that we in the developed world need to lead by example, then some reduction in lifestyle is in order. I don't favor the legislative approach to reducing consumption. The more powerful method is to educate and convince people that a simpler lifestyle can be more fulfilling. High-profile celebrities would be great advocates for this message.
There will be a transition period: an economy so dependent on consumption will go through a painful adjustment period. For the record I hope to practice both: the use of offsets and scaling down of my lifestyle. It means less plane trips if possible, a smaller house (a necessity and not a choice in the SF Bay Area), less spending on non-essentials, and less driving.
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Worse, reports of fraud and abuse are piling up. Most recently, an investigation by The Financial Times found that companies and individuals “rushing to go green have been spending millions on ‘carbon credit’ projects that yield few if any environmental benefits” (ft.com).I take the perspective that once we get past the initial growing pains, organizations with better oversight will emerge. My problem with offsets is that they continue to promote the idea that the size of your energy/environmental footprint is not the issue, you can always buy offsets and still maintain what could be an exorbitant lifestyle.
The newspaper’s environment correspondent, Fiona Harvey, wrote of “widespread failings in the new markets for greenhouse gases, suggesting some organizations are paying for emissions reductions that do not take place.” In other cases, organizations profit by selling credits for environmental projects they would have undertaken anyway.
Francis Sullivan, the environment adviser for the banking giant HSBC, said: “The police, the fraud squad and trading standards need to be looking into this. Otherwise people will lose faith in it.”
The term eco-mansion refers to energy efficient homes above 6,000 square feet. I applaud those who can afford to take advantage of the the green technologies available to homeowners -- from solar panels, smart sensors, and advanced building materials. Green industries need early adopters to nurture these nascent technologies. However, I still think that reducing ones footprint is just as important.
A reasonable rule-of-thumb would be a basic home for two people should be about 1,000 - 1,200 square feet, with an additional 300 square feet for each additional person, and a Maximum home size of 2,500 square feet. While I admire what Al Gore has done for the environment, I still feel he would be more effective if he did NOT have 10,000 square foot home. But let me emphasize that I am no purist: an eco-mansion is better than a conventional one.
I do wonder whether Gore and the Hollywood environmentalists realize that they could be more persuasive if they simply downsized. If we are in a crisis, why have an eco-mansion or your own private jet? Offsets are one thing, but leadership by example is more powerful. One can of course be completely off the grid, and continue to power a huge house. But if ones message is that we in the developed world need to lead by example, then some reduction in lifestyle is in order. I don't favor the legislative approach to reducing consumption. The more powerful method is to educate and convince people that a simpler lifestyle can be more fulfilling. High-profile celebrities would be great advocates for this message.
There will be a transition period: an economy so dependent on consumption will go through a painful adjustment period. For the record I hope to practice both: the use of offsets and scaling down of my lifestyle. It means less plane trips if possible, a smaller house (a necessity and not a choice in the SF Bay Area), less spending on non-essentials, and less driving.
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Monday, April 30, 2007
Organic Agriculture and Energy Policy
Last week, I gave a detailed analysis of Energy Consumption in the Chemical Industry, and one of the most disturbing factoids was how inefficient that sector is. Ingredients needed for fertilizers and pesticides account for big chunk of Chemical manufacturing, so by supporting locally-grown Organic agriculture we realize significant savings in fossil fuels.
Organic agriculture has several environmental and ecological advantages over conventional crop production methods, but in this post I wanted to highlight its Energy advantages. Regardless of whether you believe Organic foods have health advantages, the fact that it is significantly more Energy Efficient should be enough to change some of your purchase decisions. By emphasizing Energy Efficiency, I am taking advantage of Green Energy's growing popularity. You can't read the news without coming across more endorsements in support of a Green Energy policy.
So with apologies to Al Gore, I put together a three and half minute slide show to demonstrate why Organic agriculture is a key component of any energy efficient economy. For a closer to a full screen version, click HERE.
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Organic agriculture has several environmental and ecological advantages over conventional crop production methods, but in this post I wanted to highlight its Energy advantages. Regardless of whether you believe Organic foods have health advantages, the fact that it is significantly more Energy Efficient should be enough to change some of your purchase decisions. By emphasizing Energy Efficiency, I am taking advantage of Green Energy's growing popularity. You can't read the news without coming across more endorsements in support of a Green Energy policy.
So with apologies to Al Gore, I put together a three and half minute slide show to demonstrate why Organic agriculture is a key component of any energy efficient economy. For a closer to a full screen version, click HERE.
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Monday, April 23, 2007
Energy and the Chemical Industry
In a previous post, I estimated that the Industrial sector consumes about a third of all energy used in the U.S. I ended with the results of a 2002 survey which identified which particular industries consumed the most energy. In this post I will do a detailed analysis of what was estimated to be the leading energy consumer in the industrial and manufacturing sector: the Chemical industry. The primary data source is a 2000 study from LBL.
Which Chemical products accounted for the most energy consumption in the Chemical industry? In the chart below, the Chemical sector refers to industries classified under SIC Code 28:
Ethylene and co-products:
Ammonia and Nitrogenous Fertilizer Industry:
Chlorine:
Energy Efficiency: Chemical Industry is highly inefficient it its use of energy.
The above energy consumption estimates, include the massive amount of energy lost during production/manufacturing processes:
I. Energy (in the form of fuel or electricity) is produced for Chemical plants. 27% is lost by the utilities during electricity generation or during the delivery of fuel and electricity.
II. 73% of total energy is delivered "to the fence" of chemical industries. Close to 27% more energy is lost, with the largest loss due to Energy Conversion ("energy is converted to motive energy used by motor drives, pumps, heat exchangers, etc.").
III. 47% total energy available for useful consumption. Another 3% is lost, primarily to space conditioning and heating.
IV. Only 44% of total energy is actually used for Industrial processes!
Conservation and efficiency on the part of homeowners and consumers is something we highlighted in an earlier post. Using the Chemical Industry as a case study, it appears that end-use efficiency is even more important in the industrial sector. Besides the environmental benefits and reasons, the potential financial savings are huge. Why wait for mandates to be imposed when end-use efficiency is such an obvious competitive advantage?
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Which Chemical products accounted for the most energy consumption in the Chemical industry? In the chart below, the Chemical sector refers to industries classified under SIC Code 28:
Ethylene and co-products:
In the petrochemical industry mostly relatively simple organic chemicals are produced such as ethylene, propylene and benzene. These chemicals (some through intermediates, e.g. mono vinyl chloride or styrene) form the building blocks for many products such as plastics, resins, fibers, detergents, etc. The single most energy-consuming step in the petrochemical industry is the steam cracking of hydrocarbon feedstocks to produce ethylene, propylene, butadiene and aromatics (benzene, toluene and xylenes).The less petrochemicals we use, and the more we reuse, the less energy is consumed in the manufacturing of these chemical building blocks. Simple examples include cleaning, health and beauty products which have become available even in mainstream retailers.
Ammonia and Nitrogenous Fertilizer Industry:
The production of ammonia is the most energy intensive production step in the manufacture of fertilizers and other nitrogen containing products. In the U.S. ammonia is one of the major chemicals produced ... In the U.S. about 80% of the ammonia is used for fertilizer production, the remainder for a variety of products, mainly explosives and plastics. The most important fertilizers produced in the U.S. are ammonium nitrate (AN), nitric acid (NA), urea, compound fertilizers, and liquid ammonia. Ammonium sulfate (AS) is most commonly produced as a co-product of nylon manufacturing. ... The world fertilizer market grows slowly, due to growth especially in developing countries. The world market price of ammonia has been depressed since the late 1980’s due to cheap exports from producers in Central and eastern Europe and the former Soviet Union, limiting expansion in the Western World (especially Western-Europe).In a future post, I will compare the energy demands of conventional and organic agriculture. Ignoring the health advantages cited by proponents of Organic food, we will see that the energy and environmental advantages of Organic agriculture are compelling.
Chlorine:
The major markets for chlorine are PVC (37%), inorganic chemicals (22%), other organic chemicals (17%), propylene oxide (7%), pulp and paper (6%), water treatment (6%), solvents (5%). The major markets for caustic are: pulp and paper (26%), soaps and detergents (9%), propylene oxide (9%), petroleum (8%), water treatment (6%), other organic chemicals (13%), inorganic chemicals (12%). ... The production of chlorine gas is an energy intensive chemical process requiring between 25-40 GJ (worldwide average) primary energy per tonne chlorine produced.Avoiding PVC is a key component of Green Architecture. For a hilarious look into the role of PVC in homebuilding, check out the documentary Blue Vinyl -- a cult classic in the Green Building industry.
Energy Efficiency: Chemical Industry is highly inefficient it its use of energy.
The above energy consumption estimates, include the massive amount of energy lost during production/manufacturing processes:
One of the chemical industry’s biggest—and most misunderstood—business opportunities is the recovery of income lost to energy waste. Out of 3.73 quadrillion Btu of fuel and electricity delivered “to the fence” of chemical industry facilities in 2001, a conservative estimate claims that 37 percent (1.36 quads) was lost in combustion, distribution, and energy conversion activities. At today’s fuel prices of about $7 per MMBtu, those losses equate to over $26 billion.A detailed analysis (from a separate data source) yields the following interesting graph (the red bars represent energy losses):
... The fundamental laws of physics and thermodynamics make some losses unavoidable, but much of this loss is an opportunity to embrace efficient technologies and practices. Every one percent recapture of energy losses saves the chemicals industry over $95 million. Estimates of practical energy savings available to industry range from 10 to 20 percent. Note that this is an industry average—some plants can save more than this range, some less. If the chemical industry recaptured 10 percent of energy waste, this would represent $1.7 billion. Keep in mind that each dollar of energy cost savings is one extra dollar of net income.
... Energy management is a process, not a project. Sure, engineering hardware projects are part of the solution. But energy-smart behaviors, folded into standard operating procedure, represent about 30 percent of potential energy savings.
I. Energy (in the form of fuel or electricity) is produced for Chemical plants. 27% is lost by the utilities during electricity generation or during the delivery of fuel and electricity.
II. 73% of total energy is delivered "to the fence" of chemical industries. Close to 27% more energy is lost, with the largest loss due to Energy Conversion ("energy is converted to motive energy used by motor drives, pumps, heat exchangers, etc.").
III. 47% total energy available for useful consumption. Another 3% is lost, primarily to space conditioning and heating.
IV. Only 44% of total energy is actually used for Industrial processes!
Conservation and efficiency on the part of homeowners and consumers is something we highlighted in an earlier post. Using the Chemical Industry as a case study, it appears that end-use efficiency is even more important in the industrial sector. Besides the environmental benefits and reasons, the potential financial savings are huge. Why wait for mandates to be imposed when end-use efficiency is such an obvious competitive advantage?
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Monday, April 16, 2007
Hydrogen Production
A friend alerted me to a recent Popular Mechanics article on the "Hydrogen Economy": a concept frequently promoted by politicians (especially Bush and Schwarzenegger). The article is an excellent overview on the Production, Storage, Distribution, and Use of Hydrogen energy. Needless to say, the article brings up lots of hurdles that need to be overcome before Hydrogen becomes a viable source of clean energy. I also recommend the National Hydrogen Roadmap, published by the DOE in 2002. In this post, I will summarize the state of Hydrogen production.
In 2002, about 9M tons of Hydrogen was produced in the U.S., the small fraction used for energy purposes was consumed mostly by NASA. As far as I can tell the "Hydrogen Economy" refers to Federal and State initiatives to promote the use of Hydrogen as a transportation fuel. Critics point out that other applications of Hydrogen Energy -- batteries for mobile electronics, electricity generation -- would require less infrastructure investments than the construction and deployment of Hydrogen fueling stations. However one feels about the near term viability of Hydrogen-powered vehicles, in order for the Hydrogen economy to come to fruition, the U.S. needs to produce Hydrogen cleanly on a much larger scale. Let's look at the current production methods:
Currently 95% of all Hydrogen produced in the U.S. comes from natural gas, using a process called steam methane reformation. This production method generates emissions in order to arrive at an emission-free source of energy! Some forecasters predict that fossil fuels will remain the primary feedstock over the next decade or two. There are research initiatives (BP has even announced plans to build plants) aimed at developing technologies that can generate Hydrogen from natural gas while capturing the resulting CO2 and trapping it underground. It is important to emphasize that these carbon capture technologies are unproven on large scale. These next generation steam methane reformation plants would be clearly better than the current technology, but they still involve the use of fossil fuels -- natural resources subject to mining, and the usual supply and demand fluctuations.
Electrolysis involves the use of electricity to split "... water into its constituent parts, hydrogen and oxygen". While not yet as cost and energy efficient as steam methane reformation, given that it relies on electricity, electrolysis leads to more distributed generation facilities. Unfortunately as I noted in an earlier post, the U.S. currently gets close to 70% of its electricity from fossil fuels. Ideally one can use renewable energy to generate the required electricity. Proponents of Nuclear Power will point to Hydrogen production as yet another argument in favor of generating electricity using Nuclear power.
Other methods being developed include " ... thermochemical water-splitting using nuclear and solar heat, photolytic (solar) processes using solid state techniques (photoelectrochemical electrolysis), fossil fuel hydrogen production with carbon sequestration, and biological techniques (algae and bacteria)." Thermochemical water-splitting from Nuclear heat won't be viable for another decade:
The total cost using only solar energy is prohibitive, while relying solely on wind is still thrice as expensive as natural gas. While scaling wind and solar in their current form doesn't make sense, can next generation solar PV or solar thermal systems be viable? Using the total cost estimates cited above, what would be the cost to consumers at the pump? We look at the cost of the Hydrogen equivalent of a gallon of gas:
This chart is reminiscent of estimates I presented on the cost per kilowatt hour of electricity. Wind is cost-competitive, but the estimate for solar makes it a non-starter. On financial costs and CO2 emissions, Nuclear appears to be the most sensible option. The U.S. Federal goverment is providing huge subsidies for Nuclear energy, I wonder if the costs reflected are based on having equal subsidies regardless of technology? In a future post, I will highlight challenges which face Nuclear Energy: Waste, Accidents, Terrorism, and the High Costs without subsidies.
Depending on the mode of production, the total cost estimates should reflect the CO2 emissions which results from producing the 150M tons of Hydrogen. Using Solar, Wind, Nuclear results in no CO2 emissions, while Natural Gas is estimated to result in 300M tons. Using optimistic assumptions ("90% will be captured and stored underground") Coal is estimated to lead to 600M tons of CO2 emissions. In the following treemap, the size of a square reflects the total cost required to produce 150M tons of hydrogen, the color of a square represents the amount of CO2 emissions resulting from producing that amount of hydrogen. A large square implies the project is costly; a red square implies the project will generate a lot of CO2 emissions, a green square implies no CO2 emissions:
To summarize, here is a list of some of the key (large-scale production) challenges listed in the National Hydrogen Roadmap:
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In 2002, about 9M tons of Hydrogen was produced in the U.S., the small fraction used for energy purposes was consumed mostly by NASA. As far as I can tell the "Hydrogen Economy" refers to Federal and State initiatives to promote the use of Hydrogen as a transportation fuel. Critics point out that other applications of Hydrogen Energy -- batteries for mobile electronics, electricity generation -- would require less infrastructure investments than the construction and deployment of Hydrogen fueling stations. However one feels about the near term viability of Hydrogen-powered vehicles, in order for the Hydrogen economy to come to fruition, the U.S. needs to produce Hydrogen cleanly on a much larger scale. Let's look at the current production methods:
Currently 95% of all Hydrogen produced in the U.S. comes from natural gas, using a process called steam methane reformation. This production method generates emissions in order to arrive at an emission-free source of energy! Some forecasters predict that fossil fuels will remain the primary feedstock over the next decade or two. There are research initiatives (BP has even announced plans to build plants) aimed at developing technologies that can generate Hydrogen from natural gas while capturing the resulting CO2 and trapping it underground. It is important to emphasize that these carbon capture technologies are unproven on large scale. These next generation steam methane reformation plants would be clearly better than the current technology, but they still involve the use of fossil fuels -- natural resources subject to mining, and the usual supply and demand fluctuations.
Electrolysis involves the use of electricity to split "... water into its constituent parts, hydrogen and oxygen". While not yet as cost and energy efficient as steam methane reformation, given that it relies on electricity, electrolysis leads to more distributed generation facilities. Unfortunately as I noted in an earlier post, the U.S. currently gets close to 70% of its electricity from fossil fuels. Ideally one can use renewable energy to generate the required electricity. Proponents of Nuclear Power will point to Hydrogen production as yet another argument in favor of generating electricity using Nuclear power.
Other methods being developed include " ... thermochemical water-splitting using nuclear and solar heat, photolytic (solar) processes using solid state techniques (photoelectrochemical electrolysis), fossil fuel hydrogen production with carbon sequestration, and biological techniques (algae and bacteria)." Thermochemical water-splitting from Nuclear heat won't be viable for another decade:
Next-generation nuclear power plants will reach temperatures high enough to produce hydrogen as well as electricity, either by adding steam and heat to the electrolysis process, or by adding heat to a series of chemical reactions that split the hydrogen from water. Though promising in the lab, this technology won't be proved until the first Generation IV plants come on line — around 2020.Ignoring the challenges with large-scale Hydrogen production for a moment, how would the different production methods scale from the current 9M tones per year to 150M tons per year? 150M tons/annually, is based on the stated goal of replacing fossil fuels used in cars with Hydrogen, by the year 2040. First we look at the TOTAL cost (infrastructure + raw materials) of scaling production to 150M tons:
The total cost using only solar energy is prohibitive, while relying solely on wind is still thrice as expensive as natural gas. While scaling wind and solar in their current form doesn't make sense, can next generation solar PV or solar thermal systems be viable? Using the total cost estimates cited above, what would be the cost to consumers at the pump? We look at the cost of the Hydrogen equivalent of a gallon of gas:
This chart is reminiscent of estimates I presented on the cost per kilowatt hour of electricity. Wind is cost-competitive, but the estimate for solar makes it a non-starter. On financial costs and CO2 emissions, Nuclear appears to be the most sensible option. The U.S. Federal goverment is providing huge subsidies for Nuclear energy, I wonder if the costs reflected are based on having equal subsidies regardless of technology? In a future post, I will highlight challenges which face Nuclear Energy: Waste, Accidents, Terrorism, and the High Costs without subsidies.
Depending on the mode of production, the total cost estimates should reflect the CO2 emissions which results from producing the 150M tons of Hydrogen. Using Solar, Wind, Nuclear results in no CO2 emissions, while Natural Gas is estimated to result in 300M tons. Using optimistic assumptions ("90% will be captured and stored underground") Coal is estimated to lead to 600M tons of CO2 emissions. In the following treemap, the size of a square reflects the total cost required to produce 150M tons of hydrogen, the color of a square represents the amount of CO2 emissions resulting from producing that amount of hydrogen. A large square implies the project is costly; a red square implies the project will generate a lot of CO2 emissions, a green square implies no CO2 emissions:
To summarize, here is a list of some of the key (large-scale production) challenges listed in the National Hydrogen Roadmap:
- Hydrogen production costs are high relative to conventional fuels.
- Low demand inhibits development of production capacity.
- Current technologies produce large quantities of carbon dioxide and are not optimized for making hydrogen as an energy carrier.
- Advanced hydrogen production methods need development.
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Thursday, April 12, 2007
U.S. Energy Consumption By Sector
Over the next several posts, I will attempt to highlight the major uses of energy in the U.S. The Energy Information Administration provides a breakdown of energy use by sector:
While the share of energy use from the Industrial sector has dropped over the last decade (1995 to 2005), it still accounts for about one-third of total energy in the U.S.
In the next several posts I will try to analyze each sector in detail. We start by examining the Industrial and Manufacturing sector. Statistics on Industrial use of energy is typically based on surveys. The most recent data I could find was based on a survey conducted in 2002:
NEXT: Energy use in the Chemical industry.
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While the share of energy use from the Industrial sector has dropped over the last decade (1995 to 2005), it still accounts for about one-third of total energy in the U.S.
In the next several posts I will try to analyze each sector in detail. We start by examining the Industrial and Manufacturing sector. Statistics on Industrial use of energy is typically based on surveys. The most recent data I could find was based on a survey conducted in 2002:
NEXT: Energy use in the Chemical industry.
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Monday, April 09, 2007
Detroit's Market Share
The last few weeks have not been kind to the Big 3 U.S. automakers. First the SCOTUS ruled that under the Clear Air Act, the EPA has the authority to set fuel efficiency standards. Second, March vehicle sales showed the Asian carmakers continuing to grab market share from Detroit. With gasoline prices rising, and with the Big 3 weaker in the compact and subcompact categories, expect things to get worse over the next few quarters.
As I will illustrate using a few simple charts, the SCOTUS and the EPA might be doing the Big 3 a favor by forcing them to improve the fuel efficiency of their fleets. As the Union of Concerned Scientists points out, the Asian carmakers have vehicles that are on average more environmentally-friendly:
(To enlarge an image, click on it.) The Environmental Score rewards fuel efficient vehicles because increasing fuel economy reduces global-warming pollutants. I correlated the Environmental Scores with U.S. vehicle sales figures from Auto Data Corporation. Manufacturer's market share reflects totals when applicable: G.M. (includes Saab), Ford (includes Jaguar, Land Rover, Volvo), DaimlerChrysler (inludes Mercedes, Maybach), Volkswagen (includes Audi, Bentley). In the following bubble chart, the size of a bubble reflects market share for Q1-2007, the vertical axis measures the percentage change in total vehicles sold from Q1-2006 to Q1-2007, the horizontal axis is the manufacturer's average Environmental Score:
Recall that a lower environmental score, means less pollution, and that the industry average is 100. The chart gives a natural segmentation between the environmentally-friendly Asian carmakers, and the less environmentally-friendly Big 3 U.S. companies. Volkswagen scored around the industry average. More importantly, the Japanese carmakers all sold more vehicles in Q1-2007 compared to Q1-2006: Toyota sold 11% more vehicles, while Honda and Nissan sold 6% more vehicles compared to Q1-2006. The Big 3 U.S. carmakers all sold less vehicles in Q1-2007, with Ford selling 13% less than it did in Q1-2006. From the chart, one can detect that the Environmental Score and Year-over-Year change in total sales are quite negatively correlated.
The next chart is similar to the previous bubble chart, except the vertical axis measures the (absolute) change in Market Share from Q1-2006 to Q1-2007. Since total U.S. vehicle sales was down 1% from Q1-2006, we expect the Japanese carmakers to have gained market share:
Toyota's market share was 1.74% higher compared to its market share in Q1-2006; Honda gained 0.63% and Nissan gained 0.49% in market share. On the other hand, the less environmentally-friendly Big 3 all lost market share in Q1-2007: in particular Ford's Q1-2007 market share was 2.28% lower than what it was in Q1-2006.
The Environmental Score compiled by the Union of Concerned Scientists is something the Big 3 should take seriously. Detroit's low Environmental Scores are not simply due to their propensity to build larger vehicles. As the full report points out, Toyota produces vehicles of all classes, but their fleet is still more environmentally-friendly than Detroit's.
While things change slowly in the American auto industry, there are some positive signs. Ex-Boeing executive now Ford CEO, Allan Mullaly, an auto industry outsider, seems to be bringing a fresh perspective (WSJ, subscription required):
UPDATE: NPR's Science Friday on Green Cars.
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As I will illustrate using a few simple charts, the SCOTUS and the EPA might be doing the Big 3 a favor by forcing them to improve the fuel efficiency of their fleets. As the Union of Concerned Scientists points out, the Asian carmakers have vehicles that are on average more environmentally-friendly:
Each automaker has been scored on the average per-mile emissions of global-warming and smog-forming pollutants from the vehicles it sold in MY2005. The emission average across all eight manufacturers is defined as a score of 100, and each automaker is assigned a score indexed to this average. Thus a score of 80 indicates that an automaker's average emissions across all vehicles is 80 percent of the industry average. Lower scores indicate lower emissions.
(To enlarge an image, click on it.) The Environmental Score rewards fuel efficient vehicles because increasing fuel economy reduces global-warming pollutants. I correlated the Environmental Scores with U.S. vehicle sales figures from Auto Data Corporation. Manufacturer's market share reflects totals when applicable: G.M. (includes Saab), Ford (includes Jaguar, Land Rover, Volvo), DaimlerChrysler (inludes Mercedes, Maybach), Volkswagen (includes Audi, Bentley). In the following bubble chart, the size of a bubble reflects market share for Q1-2007, the vertical axis measures the percentage change in total vehicles sold from Q1-2006 to Q1-2007, the horizontal axis is the manufacturer's average Environmental Score:
Recall that a lower environmental score, means less pollution, and that the industry average is 100. The chart gives a natural segmentation between the environmentally-friendly Asian carmakers, and the less environmentally-friendly Big 3 U.S. companies. Volkswagen scored around the industry average. More importantly, the Japanese carmakers all sold more vehicles in Q1-2007 compared to Q1-2006: Toyota sold 11% more vehicles, while Honda and Nissan sold 6% more vehicles compared to Q1-2006. The Big 3 U.S. carmakers all sold less vehicles in Q1-2007, with Ford selling 13% less than it did in Q1-2006. From the chart, one can detect that the Environmental Score and Year-over-Year change in total sales are quite negatively correlated.
The next chart is similar to the previous bubble chart, except the vertical axis measures the (absolute) change in Market Share from Q1-2006 to Q1-2007. Since total U.S. vehicle sales was down 1% from Q1-2006, we expect the Japanese carmakers to have gained market share:
Toyota's market share was 1.74% higher compared to its market share in Q1-2006; Honda gained 0.63% and Nissan gained 0.49% in market share. On the other hand, the less environmentally-friendly Big 3 all lost market share in Q1-2007: in particular Ford's Q1-2007 market share was 2.28% lower than what it was in Q1-2006.
The Environmental Score compiled by the Union of Concerned Scientists is something the Big 3 should take seriously. Detroit's low Environmental Scores are not simply due to their propensity to build larger vehicles. As the full report points out, Toyota produces vehicles of all classes, but their fleet is still more environmentally-friendly than Detroit's.
While things change slowly in the American auto industry, there are some positive signs. Ex-Boeing executive now Ford CEO, Allan Mullaly, an auto industry outsider, seems to be bringing a fresh perspective (WSJ, subscription required):
Ford President and Chief Executive Officer Alan Mulally says the Supreme Court ruling earlier this week that federal environmental regulators have a duty to consider limits on the carbon dioxide chugging out of vehicle tailpipes made him even more committed to improve fuel efficiency, develop alternative fuels technology and advanced engines. "The citizens of the U.S. are really going to decide what we want to do about energy and what do we want to do about the environment," Mr. Mulally said in a dialogue with reporters on the sidelines of the show. "The cars you see today are what customers want. The customers are going to decide, not Ford."Based on recent history, it might take years for the Big 3 to catch up with the Asian automakers. Toyota has a shot at overtaking G.M. in terms of market share, AND replacing Honda as the greenest automaker.
UPDATE: NPR's Science Friday on Green Cars.
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Monday, April 02, 2007
The Global Water Crisis
Growing up in Southeast Asia and having gone through seasonal water rationing, I still wonder whether I appreciate how precious water is. Having lived in the U.S. for years I take for granted that water is available on demand. But in large regions of the world, water is increasingly becoming a precious commodity. Political scientists and environmentalists have been warning that wars and crises might erupt over water in the near future.
In this post, I will use time-series and geographic data to highlight the serious challenges that lie ahead. Water availability is measured, in terms of cubic meters per capita (annually), during three periods: 1975, 2000, 2025. I use the following definitions which appeared in a recent issue of Plenty Magazine:
(To enlarge a particular image, click on it.) In 1975, Scarcity and Stress was centered primarily in North Africa.
By the year 2000, three large countries (China, India, Iran) were classified as vulnerable. East African nations were experiencing Stress or Scarcity.
To forecast water supply per capita in the year 2025, we need to make some assumptions regarding population growth (low, medium, or high growth rates). In the map below, I elected to use medium population growth rates. Looking towards the year 2025, current forecasts paint a bleak picture:
By 2025, the impact of drier climate translates to well over 2 Billion people experiencing water Scarcity or Stress. If we include Vulnerable countries, we are looking at over 3 Billion people! Besides North and East Africa, the Middle East and South Asia will be struggling to meet their water needs. The humanitarian, geopolitical, and security implications are quite scary. (The more optimistic forecast, using low population growth rates, paints essentially the same picure.)
The coming water crisis is a global problem -- the number of people and the regions affected means that the industrialized countries cannot ignore this issue. Can regions and adjacent nations work together peacefully to meet their water needs? Will desalination overcome its current economic and environmental deficiencies? Just as energy conservation and efficiency are important components of any sound energy policy, water conservation and efficiency need to be emphasized.
Green architects in industrialized countries are already designing buildings which incorporate design features like reusing gray water and low-flow toilets. Suitable water capture and efficiency solutions need to be funded for developing and poor countries. Poor nations can use funding and expertise from the industrialized nations, particularly the OECD members. Unfortunately, Western leaders are not acting fast enough. When was the last time you heard a politician talk about this issue?
UPDATE: Newsweek has a short article on China's water crisis.
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In this post, I will use time-series and geographic data to highlight the serious challenges that lie ahead. Water availability is measured, in terms of cubic meters per capita (annually), during three periods: 1975, 2000, 2025. I use the following definitions which appeared in a recent issue of Plenty Magazine:
- Scarcity = less than 1000 cubic meters per capita
- Stress = 1000 to 1700 cubic meters per capita
- Vulnerable = 1700 to 2500 cubic meters per capita
(To enlarge a particular image, click on it.) In 1975, Scarcity and Stress was centered primarily in North Africa.
By the year 2000, three large countries (China, India, Iran) were classified as vulnerable. East African nations were experiencing Stress or Scarcity.
To forecast water supply per capita in the year 2025, we need to make some assumptions regarding population growth (low, medium, or high growth rates). In the map below, I elected to use medium population growth rates. Looking towards the year 2025, current forecasts paint a bleak picture:
By 2025, the impact of drier climate translates to well over 2 Billion people experiencing water Scarcity or Stress. If we include Vulnerable countries, we are looking at over 3 Billion people! Besides North and East Africa, the Middle East and South Asia will be struggling to meet their water needs. The humanitarian, geopolitical, and security implications are quite scary. (The more optimistic forecast, using low population growth rates, paints essentially the same picure.)
The coming water crisis is a global problem -- the number of people and the regions affected means that the industrialized countries cannot ignore this issue. Can regions and adjacent nations work together peacefully to meet their water needs? Will desalination overcome its current economic and environmental deficiencies? Just as energy conservation and efficiency are important components of any sound energy policy, water conservation and efficiency need to be emphasized.
Green architects in industrialized countries are already designing buildings which incorporate design features like reusing gray water and low-flow toilets. Suitable water capture and efficiency solutions need to be funded for developing and poor countries. Poor nations can use funding and expertise from the industrialized nations, particularly the OECD members. Unfortunately, Western leaders are not acting fast enough. When was the last time you heard a politician talk about this issue?
UPDATE: Newsweek has a short article on China's water crisis.
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Monday, March 26, 2007
Electricity Generation By Source
In an earlier post, I noted that about 40% of CO2 emissions is from electric power generation. I also provided some interesting graphs comparing electric power generation from the U.S. with China, India, and the OECD.
In this post, I will provide detailed graphs comparing electricity generation in the U.S. with a few key countries. I was motivated by a friend's question regarding how other countries are addressing their energy and environmental problems. In particular, are there countries who are using substantial amounts of energy from alternative sources, as part of a diverse energy portfolio?
Rather than selecting the "benchmark" countries based on their CO2 emissions per capita, I picked countries based on anecdotes I have heard in the past. Hopefully these are graphs you can use in your (slide) presentations. The bar graphs measure the amount of electricity (as measured by the % of total Gigawatts) from a particular energy source (horizontal axis). Data is from the International Energy Agency:
(To enlarge a particular image, click on it.) The above graph compares the U.S. with three, somewhat arbitrarily chosen, European & Asian countries:
In the graph below, we "zoom in" to highlight "alternative" sources of electricity. Note that "Other" includes Wind Energy:
Denmark generated 16% from (Wind and) "Other" sources. From the above graph, it is clear that, in terms of their use of alternative energy, Germany and Denmark are way ahead of the U.S., France and the three Asian countries. Besides (Wind and) Other sources, Denmark generates substantially more electricity from Biomass and Waste than the other countries. I was definitely expecting Japan to show stronger dependence on alternative energy sources, than the U.S.
By "zooming in" further, we see that Germany did generate a large amount of electricity from Solar PV/Thermal compared to the other countries:
Even in Germany, Solar Energy accounted for less than one-tenth of one percent of total electricity generation. While Germany is a large market for Solar PV, the U.S. is a larger market for promising Solar Thermal technologies. Given that Japan is another large market for Solar PV products, I have questions about the accuracy of the data for Japan.
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In this post, I will provide detailed graphs comparing electricity generation in the U.S. with a few key countries. I was motivated by a friend's question regarding how other countries are addressing their energy and environmental problems. In particular, are there countries who are using substantial amounts of energy from alternative sources, as part of a diverse energy portfolio?
Rather than selecting the "benchmark" countries based on their CO2 emissions per capita, I picked countries based on anecdotes I have heard in the past. Hopefully these are graphs you can use in your (slide) presentations. The bar graphs measure the amount of electricity (as measured by the % of total Gigawatts) from a particular energy source (horizontal axis). Data is from the International Energy Agency:
(To enlarge a particular image, click on it.) The above graph compares the U.S. with three, somewhat arbitrarily chosen, European & Asian countries:
- Germany is reputed to be the largest market for Solar PV products.
- Denmark has a reputation for being energy efficient and for using a lot of Wind Energy.
- France made a conscious decision in the early 1970s to support Nuclear Energy.
- China & India are the world's largest countries and fastest-growing economies.
- Japan is the second largest economy in the world, and has a reputation for being the among the most energy efficient countries.
In the graph below, we "zoom in" to highlight "alternative" sources of electricity. Note that "Other" includes Wind Energy:
Denmark generated 16% from (Wind and) "Other" sources. From the above graph, it is clear that, in terms of their use of alternative energy, Germany and Denmark are way ahead of the U.S., France and the three Asian countries. Besides (Wind and) Other sources, Denmark generates substantially more electricity from Biomass and Waste than the other countries. I was definitely expecting Japan to show stronger dependence on alternative energy sources, than the U.S.
By "zooming in" further, we see that Germany did generate a large amount of electricity from Solar PV/Thermal compared to the other countries:
Even in Germany, Solar Energy accounted for less than one-tenth of one percent of total electricity generation. While Germany is a large market for Solar PV, the U.S. is a larger market for promising Solar Thermal technologies. Given that Japan is another large market for Solar PV products, I have questions about the accuracy of the data for Japan.
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Monday, March 19, 2007
U.S. Clean Energy Investments
In a previous post, I estimated Big Oil's investments in Renewable Energy, and concluded that total investments are still a small percentage of overall profits. Fortunately, the U.S. Venture Capital community is starting to invest Billions into Clean Energy. Before we dive into the numbers, a note about terminology: I've been noticing the use of the term "Clean" over "Green". Clean Tech is a term used to describe energy efficient and environmentally friendly technologies. VC's prefer it over Green Tech, since for whatever reason, they feel Green implies "... greater interest in the environment than in profit."
First we look at the annual survey of VC investments, from Nth Power and Clean Edge. In the graph below, we compare total VC investments (left axis), with total Clean Energy investments (right axis):
(To enlarge an image, click on it.) Total VC investments was still off 75%, from the high of $103B in 2000 -- last year's total was $25.5B. After a slow decline from 2000 to 2005, Clean Energy investing took off in 2006, growing 164% from 2005 ($917M) to 2006 ($2.4B). While total VC investments are still significantly lower compared to the levels seen during the dotcom era, Clean Energy is grabbing an increasing share of total VC investments:
From a mere 1.3% in 2000, Clean Energy accounted for close to 10% of total VC investments 2006! In terms of geographic breakdowns, I have seen estimates which suggest that 26% of all Clean Energy VC investments in North America go to California based companies. What technologies are VC's investing in? The graph below looks at investment levels for a few sectors -- note that for Wind Energy, the estimate I found was for North America:
Energy Intelligence refers to investments in energy efficiency and grid infrastructure technologies. $813M was invested in Biofuels, representing 34% of total Clean Energy investments. The large amount that went into Biofuels (ethanol, biodiesel), leads one to wonder whether there is a bubble in that sector. Exploding valuations would be a clear sign of a bubble. According to CleanEdge, overall, valuations are growing modestly: from a median valuation of $6.5M in 2005, to $8M in 2006.
Federal Investments
How do the VC bets line up against the Bush administration's Advanced Energy Initiative (AEI)? The goal of the AEI is to lessen America's dependence on fossil fuels. To uncover the AEI's priorities, I used budget reports from the DOE's Office Energy Efficiency and Renewable Energy (EERE). In the graph below, we look at the 2006 appropriations and 2007-2008 budget requests for some of EERE's larger programs:
Rising budget requests reveals the types of research the DOE will focus on over the 2007-2008 budget years. Biomass & Biorefinery includes research into biofuels, infrastructure, collection and other industrial processes. The growth in Solar Energy funding is primarily in the area of photovoltaics, which includes semiconductor materials research, and initiatives to promote the widespread deployment of solar PV systems. Hydrogen Technology focuses on technologies designed to lead to the commercial viability of hydrogen and fuel cell systems. Finally Building Technologies refers to techniques and technologies designed to make commercial and residential buildings more efficient and affordable. Declining levels of funding for Weatherization are planned for the same time period. Weatherization is the program which " ... develops, promotes and accelerates the adoption of energy efficiency, renewable energy and oil displacement technologies and practices by a wide range of stakeholders."
Conclusion
The amount of VC investments in Biofuels stands in contrast to the more balanced Federal budget requests, reflecting the private sector's belief that Biofuels is close to being commercially viable. In a previous post, I gave a brief introduction to some of the challenges facing ethanol in the U.S. Ethanol powerhouse Brazil needed twenty years before ethanol started gaining traction. While the U.S. will probably get to the same point in less time, it does face challenges. Besides the need to use feedstocks other than corn, the U.S. will need to overcome distribution and infrastructure problems to make Biofuels readily available.
Was 2006 an aberration, or will the amount of VC investments in Clean Energy increase in 2007? Based on recent media coverage, 2007 looks to be another banner year for Clean Energy investments. While valuations grew modestly, the rapid rise in VC funding for Biofuels does raise some red flags. Hopefully, we will see better portfolio diversification and less emphasis on Biofuels over the next year.
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First we look at the annual survey of VC investments, from Nth Power and Clean Edge. In the graph below, we compare total VC investments (left axis), with total Clean Energy investments (right axis):
(To enlarge an image, click on it.) Total VC investments was still off 75%, from the high of $103B in 2000 -- last year's total was $25.5B. After a slow decline from 2000 to 2005, Clean Energy investing took off in 2006, growing 164% from 2005 ($917M) to 2006 ($2.4B). While total VC investments are still significantly lower compared to the levels seen during the dotcom era, Clean Energy is grabbing an increasing share of total VC investments:
From a mere 1.3% in 2000, Clean Energy accounted for close to 10% of total VC investments 2006! In terms of geographic breakdowns, I have seen estimates which suggest that 26% of all Clean Energy VC investments in North America go to California based companies. What technologies are VC's investing in? The graph below looks at investment levels for a few sectors -- note that for Wind Energy, the estimate I found was for North America:
Energy Intelligence refers to investments in energy efficiency and grid infrastructure technologies. $813M was invested in Biofuels, representing 34% of total Clean Energy investments. The large amount that went into Biofuels (ethanol, biodiesel), leads one to wonder whether there is a bubble in that sector. Exploding valuations would be a clear sign of a bubble. According to CleanEdge, overall, valuations are growing modestly: from a median valuation of $6.5M in 2005, to $8M in 2006.
Federal Investments
How do the VC bets line up against the Bush administration's Advanced Energy Initiative (AEI)? The goal of the AEI is to lessen America's dependence on fossil fuels. To uncover the AEI's priorities, I used budget reports from the DOE's Office Energy Efficiency and Renewable Energy (EERE). In the graph below, we look at the 2006 appropriations and 2007-2008 budget requests for some of EERE's larger programs:
Rising budget requests reveals the types of research the DOE will focus on over the 2007-2008 budget years. Biomass & Biorefinery includes research into biofuels, infrastructure, collection and other industrial processes. The growth in Solar Energy funding is primarily in the area of photovoltaics, which includes semiconductor materials research, and initiatives to promote the widespread deployment of solar PV systems. Hydrogen Technology focuses on technologies designed to lead to the commercial viability of hydrogen and fuel cell systems. Finally Building Technologies refers to techniques and technologies designed to make commercial and residential buildings more efficient and affordable. Declining levels of funding for Weatherization are planned for the same time period. Weatherization is the program which " ... develops, promotes and accelerates the adoption of energy efficiency, renewable energy and oil displacement technologies and practices by a wide range of stakeholders."
Conclusion
The amount of VC investments in Biofuels stands in contrast to the more balanced Federal budget requests, reflecting the private sector's belief that Biofuels is close to being commercially viable. In a previous post, I gave a brief introduction to some of the challenges facing ethanol in the U.S. Ethanol powerhouse Brazil needed twenty years before ethanol started gaining traction. While the U.S. will probably get to the same point in less time, it does face challenges. Besides the need to use feedstocks other than corn, the U.S. will need to overcome distribution and infrastructure problems to make Biofuels readily available.
Was 2006 an aberration, or will the amount of VC investments in Clean Energy increase in 2007? Based on recent media coverage, 2007 looks to be another banner year for Clean Energy investments. While valuations grew modestly, the rapid rise in VC funding for Biofuels does raise some red flags. Hopefully, we will see better portfolio diversification and less emphasis on Biofuels over the next year.
Digg It! , Bookmark to del.icio.us , My Yahoo! , ATOM Feed
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