Lost (to me) during the holiday season was the late December announcement by the Department of Energy of roughly a 10% budget and staff reduction at the National Renewable Energy Laboratory in Golden, Colorado.

Rocky Mountain News Article on NREL Cutbacks

This announcement was accompanied by the expected indignant handwringing from local politicians worried about economic impacts, as well as from most renewable energy community advocates. Given all the hubhub about needing to wean America from its addiction to oil, how dare the Bush Administration simultaneously reduce funding at NREL?

While I concur with the prevailing sentiment that energy is a critical issue facing our society that requires much more technology research and development, I don’t necessarily take the next step in logic (or faith?) that others have in believing that NREL is the place to do it. In its 25+ year history, I would like to see a list of the commercially-viable technologies that have stemmed from NREL research. My guess is that it would be a pretty short and unimpressive list.

In my occasional interactions with current and former NREL staff, there is a recognition bordering on resignation, steeped in cynicism, of a deeply flawed organization with limited impact. NREL is filled with well-meaning people, but somehow, the lab just doesn’t seem to work. Is NREL really the type of place that should be further bloated with more funding? I say, “Not with my taxpayer dollars.” Far better to deploy the funding to other institutions with less dysfunctionalism, greater urgency and a better sense of the pulse of the energy marketplace.

The Department of Energy’s dream to build a superconducting power infrastructure in the U.S. has been dealt a symbolically serious, if not unexpected blow.  General Electric has quit its $27 million 100MVA high temperature superconducting (HTS) generator program.  The generator was envisioned as an opportunity to eventually introduce large generators (in the 100 to 500MVA range) that higher power densities and increased efficiency.  The heart of the DOE’s superconductivity program, HTS power cables, remains on track.

There were major problems, or at least challenges, with the program from the outset.  The first was that conventional generators, which use copper windings in both the stator and rotor, are extremely efficient, and the introduction of a HTS rotor meant only about a 0.35 to 0.55% increase in electrical efficiency.  While this does not sound like much, over the course of the machine’s life it meant considerable electricity savings that were anticipated to offset the technology cost of the superconducting rotor, and cryogenic refrigeration system.

GE says that another factor contributing to the decision to terminate the program was a shift in the energy market: “GE has observed that in the present energy marketplace, where the spot market price of natural gas has recently been greater than $10/MM BTU, operators of combustion turbines are shifting larger units to cyclic operation and supporting the base load with less expensive fuels such as coal and nuclear.  This shift in generation dispatch undercuts the economic benefit of the HTS generator.”  

GE has over 5,500 wind and 3,600 hydro turbines, for an installed capacity of renewable energy of 160,000MW, but this is a microscopic fraction of the capacity provided using fossil fuels, so its safe to say the drive for renewable energy is not negatively impacting R&D on large HTS generators.

The other major factors involved the technical and economic hurdles surrounding HTS.  The BSCCO-2223 HTS wire (currently produced primarily by Sumitomo Electric and American Superconductor) was too fragile, too expensive, and required too much cooling.  GE had repeatedly said it wanted the wire to cost well below $25 per kiloAmp-meter (this is the cost for an amount of HTS material sufficient to transport one 1000 Amps across a length of one meter).  At present, that target is a somewhat remote prospect.  (An OP-ED piece in the latest issue of Superconductor Week (v20 n02) provides an interesting analysis of these costs.)

Cooling the HTS rotor is another issue.  Today’s HTS wire does not work sufficiently well in the strong magnetic fields present with a device such as a motor without substantial refrigeration.  Whereas devices such as HTS cables may be able to operate in a liquid nitrogen environment at 77 degrees Kelvin, motors must run closer to 30K, or even cooler, using liquid neon or gaseous helium coolant.  

The cancellation of this program leaves the superconducting generator concept squarely in the hands of the military, which is effectively indifferent to costs, and is focused on increasing power density (the ability to cram a huge amount of generating capacity, or in the case of motors, horsepower and torque, inside a small, light-weight package) for applications where space/weight is restricted, such as ships and aircraft.  

It is likely that if these military programs are successful, the technology will eventually trickle back into the commercial sector.  For now, we will have to focus on the promise of HTS elsewhere.  

Mark Bitterman, Executive Editor, Superconductor Week
http://www.superconductorweek.com

Wednesday, February 8, 2006

When market research around sustainability asks what people value, so begins effective consumer messaging with emotional hooks. And, it begins the crossing of the chasm from eco-niche marketing to ‘dark greens’—to marketing to masses sporting sea-foam shades of green.

A common thread of values runs through the landscape of marketing sustainability, from transportation to clean energy to high performance building.

“Toyota > The Power to Move Forward”
Toyota nailed values-based consumer marketing in an ad for a 2007 hybrid Camry aired during the 2006 SuperBowl, an ad imbued with themes of sustainability, cost savings, bucolic peacefulness, health and safety – an ad that also appeals to progressive, bi-lingual consumer segments. (“Papa, why do we have a hybrid?” “For your future.” “Why?” “It’s better for the air, and we spend less because it runs on gas and electrical power. Mira. Mira aquí. It uses both.” “Like you with English and Spanish” “Sí!” “But why did you learn English?” “For your future.” Tum, tum, tum.)

“Can Do!” Clean Energy
Presentations at DOE’s Green Power Marketing Conferences provide market research and real-world marketing reports from multiple (pro-clean energy) viewpoints, like Natural Marketing Institute (research), Green Mountain Energy Company (a competitive electricity retailer with some stories to tell) and Utah Clean Energy (a community campaign for clean energy). The conference, now in its tenth year, unearths marketing gems-in-the-rough like a Research Into Action report from 2002 on self-efficacy (the confident “Can Do” attitude) that may be a predictor in market adoption and a basis for messaging. The Toyota ad is all about “Can Do.”

According to Gang & Gang research on Salt River Project’s EarthWise Energy program, the really important emotional issue areas in marketing clean energy center on self and environment, as well as program design. Some of SRP’s non-participating customers had weak but positive, passionate emotions about the program, and others had significant negative, inhibiting emotions.

:: That is, not everybody thinks everything “green” is great. A certain segment, the anti-greens (it’s an attitude), may come to appreciate the value and benefits of green in their own lives when the message is disassociated from ‘tree-hugging liberal lefties.’ The likes of Andrew Bernstein who calls environmentalists “socialists” and discounts anthropogenic contributions to climate change may never be won over. ::

An insightful 2003 Canadian report “Consumers and Green Electricity: Profiling Potential Purchasers” found that consumers’ attitudinal characteristics were especially significant, more so then demographics and socialization in purchasing clean energy. “First, there appears to be continuing message of warning to marketers who think that they should base their segmentation criteria (and hence, their marketing strategy) solely upon demographics. Indeed, the recent conclusions of Straughan and Roberts can be applied to our investigation, virtually verbatim: ‘From the results of both past studies and the present work, the use of either a psychographics-only model (incorporating perceived consumer effectiveness, altruism, and environmental concern) or a mixed model (incorporating a range of demographics and psychographics) should be preferred to traditional demographic profiling methods.’ (Straughan and Roberts, 1999, p. 567).” Per the report, liberalism (progressiveness) is a fourth significant attitudinal variable determining a consumer’s willingness to pay more for clean energy. (Rowlands, Scott, Parker, 2003, p. 45).

:: The “willingness to pay more” benchmark can detour from the values, attitudes and non-energy benefits that inform sustainability marketing strategy. Some people buy coffee infused with milk foam and a squeeze of caramel for $4.00…jeans beaten to look worn for over $100…highway ‘vehicles’ better suited for jungle warfare at nearly the price of real estate…because it makes them feel good. How much would someone pay for a hybrid car, clean energy, a high performance home if it made her feel good, if it spoke to values? ::

Co-op America, a non-profit dedicated to “creating a just and sustainable society by harnessing economic power for positive change” knows what makes people feel good. Executive Director, Alisa Gravitz wrote in their Spring 2005 Quarterly: “When you ask people [young kids in an inner-city school, activists, business people] to describe what they want the world to look like, the pictures come out so much the same…In almost every picture, you see a nice house—representing comfort, quality of life, and economic security. People draw their families and friends relaxing or playing outside of their homes, sometimes sitting together at a picnic, often in a green yard or garden. Indeed, there is usually lots of green—sometimes a meadow or forest—and lots of blue, clear sky and clean water—a lake or stream or the ocean. Family, friends, home, community, blue sky, clean water, good food.”

“Alternative fuel” manufacturers like Toyota and the clean energy crowd are well on their way to incorporating these values and attitudes into marketing strategy.

The high performance building crowd has begun to recognize the values and attitudes of its consumers, spurred by rising energy costs and concerns for quality building—and demands for better product.

The energy efficiency folks? They have a way to go, but have successful examples to emulate, and some valuable insights from the likes of E-Star which posed the question: “What brings people to energy efficiency? Is it the desire to ‘do the right thing,’ the desire to save money?” E-Star says the evidence is conflicting. In polling for Colorado’s renewable energy portfolio standard (a clean energy mandate), the results showed a wide enough margin for a win at the voting booths if the RPS included only renewables. But, when energy efficiency was added to the mix, the margins dropped by 5%. E-Star has found that in residential home construction people want comfort, health and safety, and quality. “There is no single driver that brings brings people to energy efficiency. In the near term, it will not be the price of energy alone. A successful campaign in regard to energy efficiency should probably encompass a broad spectrum of values (saving money, doing the right thing, patriotism, and higher quality products such as homes.)”

Sí!

To catch up on the state of the fuel cell sector, I traveled to Tokyo last week to attend the grandly titled “2nd International Hydrogen and Fuel Cell Exposition“.

Below are a few observations from my visiting the Japan fuel cell expo:

1. There’s a lot of fuel cell activity in Japan right now — much more than in North America. This is a very sizable show by any standard, and positively immense for an alternative energy field. At over 400 exhibitors, it’s several times times bigger than the biggest comparable event in North America, the annual Fuel Cell Seminar — and even bigger than AWEA’s trade shows that I’ve visited in the past couple years during boom times for the U.S. wind energy sector. According to show promoters, over 20,000 attended last year’s event, and I saw nothing to suggest that such an estimate for this year was off-base. Crowds and crowds of people clogged the aisles. Press and TV cameras were frequently sighted. No doubt, this intense interest is motivated by Japan’s more dire energy supply situation and the high energy prices that result.

2. The fuel cell activity in Japan appears primarily to be by Japan, for Japan. Though it probably shouldn’t have surprised me, given the venue, the vast majority (95%?) of attendees and exhibitors were Japanese. Although the conference was held bilingually, almost all of the booths were exclusively in the Japanese language — and since I don’t read or speak Japanese, most of the information presented was wholly inscrutable to me. From strolling the venue in somewhat of a daze of perplexion, I am led to speculate that there must be a huge tech transfer opportunity for those who can translate Japanese into English and mine the best nuggets from this show to bring to the U.S. and elsewhere.

3. Lots of small firms are involved in the fuel cell industry. It was modestly surprising that many of the most well-known North American fuel cell players — such as Ballard, Plug Power, FuelCell Energy — did not have booths. Even more suprisingly, among Japanese firms, most of the displays were from smaller companies. Several of the most recognizable Japanese megamonoliths — such as Kyocera, Hitachi, Mitsushita, Sharp, Toshiba — had no trade floor presence. I see good news and bad news from this. The bad news is that the lack of participation of bigger firms undermines perceived commercial credibility, which is already weak in the fuel cell sector. The good news is that smaller players are much more likely to be acting with urgency, absent the stifling bureaucracy so prevalent among large corporations, leading to more rapid advancement in the field.

4. Most of the displays were ancillaries and components, as opposed to integrated fuel cell products. To me, this was a good sign. Although there were the obligatory “visionary” displays of the future hydrogen economy and of fuel cell stacks and applications thereof (e.g., scooters, cars, etc.), there were probably five times as many booths focused on more mundane specialized components and supporting goods — pumps, valves, sensors, materials, and so on — that are truly essential to creating a vibrant and viable market-based fuel cell industry. If more attention can be focused narrowly on solving the many small but crucial technical challenges, rather than “shooting for the moon” for grand breakthrough solutions, only then can fuel cells achieve their large potential upside.

As a result of attending the show, what am I thinking about the fuel cell sector? Well, at least in Japan, things are trending in the right direction.

No doubt, it remains prudent to be sanguine and sober about fuel cells. It will be tough for fuel cells to overtake conventional energy technologies in mass-market applications — internal combustion engines for vehicles, batteries for mobile devices, central powerplants for electricity generation – simply because the incumbent approaches work pretty darn well and are pretty darn affordable.

However, a growing number of more finely-defined niche segments are being identified for plausible fuel cell application, where current power approaches are in some way unsatisfactory. And, it does appear that many technical advancement needs in the fuel cell realm are transitioning past the fundamental science stage towards application engineering as a precursor to commercial products. In sum, tough-minded optimism is warranted for the fuel cell sector.