Blog on Kleiner Perkin’s Energy Tech Thoughts at Cleantech Conference

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Cleantech Venture Network’s Cleantech IX is in full swing at the Marriott in San Francisco this week. The largest turnout yet. Among the best received speakers were John Doerr and John Denniston of Kleiner Perkins. Kleiner Perkins, one of the best known players in venture capital, recently announced that they would be spending $100 mm on cleantech investments of their new funds. I don’t usually blog on other people’s thoughts, but theirs were certainly well received, and worth repeating, as well as informative summaries of why Kleiner is interested in investing in Cleantech, and what they are looking for. They described three core global problems driving their interest in Cleantech (or green technologies, as their press quotes have described it):
  • Oil Addiction
  • Urbanization
  • Climate Change
And called for joint efforts of private sector and policy to solve them. As part of this high level discussion, they gave a big plug to author and journalist Thomas Friedman (whose books I heartily endorse), quoting his statement “Green is the New Red, White, & Blue”, and referring to a recent OpEd piece he wrote (I haven’t read it yet) on 6 threats to national security that our oil addition has caused. The ones they mentioned 1) When the US exports dollars to “unaccountable” countries in return for oil, we risk those dollars coming back to haunt us, 2) Rises in oil prices impact poor countries more than rich ones, and provide recruiting fields for terrorists, 3) Globalization amplifies these risks, and 4) We are in a new flat world where we compete for oil with developing nations, too. To answer the question, if cleantech is so compelling, why now? they laid out three primary thoughts:
  • Market signals – demand is now there
  • Increasing computing power is becoming an enabling technology
  • New materials advances like nanotubes are enabling new breakthroughs

All of which I agree with, though I have concerns about how fast new materials can make it into a sector like energy.

They did mention specific areas of interest including solar of all kinds (see the previous Cleantechblog.com post on solar concentrators for my thoughts on where solar is going next), distributed & reliable power, energy efficiency & storage and batteries, consumer products, and transportation.

Intriguingly not on the list was water, which in recent years has become hot in Cleantech, and they explicitly rejected the hydrogen economy as an good investment theme, interesting for a company that has a significant amount of money into solid oxide fuel companies Ion America and Lilliputian (though perhaps they view those as a non-hydrogen fueled play).

A few of KPCB’s cleantech investments todate:

  • EEStor – Ultracapacitor/battery
  • Miasole – thin film solar cells
  • Ion America – SOFC
  • Lilliputian Systems – MEMs SOFC

One other theme that I found interesting in their speech, they said that after the tech bust happened, the partners at Kleiner sat back and tried make sense of why some internet deals survived post boom and others failed, and what lessons they could learn. Their conclusion, the key ingredient for success (and lesson to be learned) was in the values and culture of the management team. They referred to it as businesses with missionary vs. mercenary management teams. According to them Missionary vs. Mercenary means:

  • Driven by passion vs. driven
  • Strategic vs. opportunistic
  • Whole life plan in work/life balance vs. “deferred life plan”
  • Concerned about the big idea vs. concerned about the pitch or the deal
  • Looking at the long-run vs. looking at the short-run
  • Obsesses with customers vs. obsessed with competitors
  • Meritocracy focused culture vs. Founder focused culture
  • Focused on the mission statement vs. the financial statement

Values count. Even in venture capital. A refreshing way to look to at the world. Now let’s hope they did their homework as well. Because despite the enthusiasm, investing in cleantech & energy tech is fundamentally different than investing in IT or biotech.

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Nuclear Power – “The Cleaner Air Energy”

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March 22, 2006

Are nuclear technologies cleantech?

That’s a tough one. In the mid-90s “The Washington Times” ran a photo of me holding a Geiger counter at the edge of a nuclear-chemical company that had been contaminating my neighborhood with radioactive cobalt-60 (for over a decade) and was in violation of a string of health, safety, fire and building codes, as well as regulations guiding the safe handling of low-level radioactive material. “The Washington Post” thought the situation warranted coverage only when an inspector from the state’s department of the environment reported that the company’s owner had (it appeared) bribed the inspector with tickets to a basketball game and then (it was documented) threatened to kill – or was it shoot? – the inspector if he didn’t change the regulations to bring the company into compliance. (I’m not making this up.) Nobody monitored the company’s handling of chemicals, some of which the company radiated and sold as flocculants to the local coal-fired power plant.

Things might have gone better had I the ‘je ne sais quoi’ of Julia Roberts (in “Erin Brokovitch”) or John Travolta (in “A Civil Action”)…or had I wisdom and humor as deep as Yucca Mountain, as protracted as the Rocky Flats legal battles, as hot as the radwaste at Hanford or Barnwell (where the company was supposed to ship its waste but didn’t, opting instead to dump it at the local trash transfer station or pile it up on-site, uncontained.) After 9-11, the local paper reported that the company’s dump trucks set off radiation monitors going into the trash transfer station. (That trash is hauled by rail to a trash burner.)

By 2001, almost 20 years to the month after the first ‘uncontrollably released’ hot spots were discovered on neighboring lawns, the company had been blocked from building a radwaste processing facility for its own and imported waste; it could not import hot cobalt-60 until it had anted up the previously-mandated decommission funding. By then, I had left my home with hair that had, spurred by stress, gone from brown to silver, a wrecked relationship and disgust for a system that continues to this day to fail this politically-weak, rural community. Only one person in the nuclear industry stood up for us, albeit quite tentatively and from afar.

Aside from all of that, can the myriad applications of nuclear technology be marketed as cleantech? Of course.

The Nuclear Energy Institute is running an ad campaign, “The Clean Air Energy.” The NEI places its ad before E&ETV “On Point” interviews and on E&ETV’s front page: “Know a kid today? They demand lots of electricity and clean air. Don’t tell them you have to sacrifice the environment for technology. Today nuclear energy provides one-fifth of America’s electricity. Tomorrow it could supply even more. And nuclear power plants don’t burn anything so they don’t pollute the air. We need reliable electricity for the 21st century but we also need clean air. With nuclear energy we can have both. Nuclear. The Clean Air Energy.”

This is marketing; the nuclear industry, fully taking advantage of concerns of climate change and air quality, asserts that nuclear power emits no greenhouse gases and air pollutants. Yet, Dr. Helen Caldicott and the Nuclear Policy Institute say nuclear power does emit greenhouse gases. (I’m intrigued by the small voice, the Helen Caldicott kind of voice, which can carry seeds of truth and speaks in contrast to well-funded and deafening chants.) The NEI website asserts that nuclear is reliable, economical, safe and secure. It includes a site (in bright primary Crayola colors) called ‘Science Club’ to teach children about nuclear and includes ‘Teacher’s Lounge,’ ‘4 Your Class Project,’ and ‘Fun & Games.’

But is “The Clean Air Energy” cleantech?

That depends how narrow the definition. This is how the Cleantech Venture Network defines cleantech: “The concept of “clean” technologies embraces a diverse range of products, services, and processes that are inherently designed to provide superior performance at lower costs, greatly reduce or eliminate environmental impacts and, in doing so, improve the quality of life.”

Here’s what “The Clean Air Energy” is not. It is not renewable (a resource that’s naturally replenished in a relatively short period of time), that’s certain. It’s not green (an energy resource with few negative impacts – in the form of wastes and emissions – on the environment and on human health). ‘Clean energy’ is renewable and green; so nuclear is not ‘clean energy.’ It’s an ‘alternative’ to fossil fuels, but an old technology that grew out of Eisenhower’s Atoms for Peace:

“It is not enough to take this weapon out of the hands of the soldiers. It must be put into the hands of those who will know how to strip its military casing and adapt it to the arts of peace. The United States knows that if the fearful trend of atomic military build up can be reversed, this greatest of destructive forces can be developed into a great boon, for the benefit of all mankind… The Atomic Energy Agency [Nuclear Regulatory Commission] could be made responsible for the impounding, storage, and protection of the contributed fissionable and other materials. The ingenuity of our scientists will provide special safe conditions under which such a bank of fissionable material can be made essentially immune to surprise seizure.” (Psst, if you want some “other materials” with shorter half-lives, just follow the rabbits under the chain link fence.)

I wouldn’t say, not exactly, that nuclear technologies have improved my own quality of life nor offered peace of mind. They have, however, been proximate and personal. Before the debacle with the nuclear-chemical cowboy, there was an English professor at my boarding school in New Hampshire. He propped against his desk a large black and white photo of himself and a trail of boys in jackets and ties protesting the Seabrook nuclear plant; I often fixated on that photo (and not so much on Walker Percy’s “Love in the Ruins: The Adventures of a Bad Catholic at a Time Near the End of the World.”) The top floor of my grandmother’s condo at North Hampton Beach commanded a view of Seabrook. My siblings and I peered at it – out at sea beyond the rocks where we had played with starfish – through her binoculars. In New York, my mother worked a night job at a tennis club near the Indian Point nuclear power plant. My favorite plant nursery in Pennsylvania was within view of Three Mile Island. Writ on the global national security scene, as for decades, we now have India (today a democracy, tomorrow a who-knows-what) negotiating nuclear power arrangements with the U.S., as the world eyes Iran’s nuclear power plans suspiciously. Nuclear has never been a comfortable presence in my life (which brings us back to the NEI’s Science Club…younger generations may be swayed with marketing and public relations.)

But is it cleantech?

Cutting greenhouse gases and air pollutants to meet demand for electricity is not the only concern to the nation – nor should it be the only criteria for cleantech. Add in quality of life concerns – national security, human health, transportation and storage of radioactive waste, foreign relations, safety, human error and political ineptitude, and the full-cycle economic costs of nuclear technology – and nuclear power is precluded from meeting the definition. Even the term ‘advanced energy’ doesn’t ring quite right.

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Extended Range for Hydrogen Vehicles

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Extended range with metal hydride storage is now a reality

Large scale use of hydrogen vehicles requires that they have the same range as gasoline fueled vehicles. This challenge is being addressed by an innovative hydrogen vehicle from Energy Conversion Devices (ECD) which has now started fleet testing at the South Coast Air Quality Management District (AQMD) in Diamond Bar, California.

The advanced vehicle is a high-profile test designed to prove that hydrogen hybrids can be practical in daily life. The vehicle also serves to showcase ECD Ovonic(R) solid metal hydrogen storage technology. Based on a production gasoline-electric hybrid model, it is part of a five year, $7 million multi-vehicle hydrogen hybrid demonstration at AQMD. Additional ECD Ovonics hydrogen hybrids are expected to join the fleet in the coming months, and one is already in service at ECD Ovonics’ headquarters in Rochester Hill, Michigan.

“The ECD Ovonics hydrogen hybrid will help demonstrate this emerging technology and address current storage and range limitations,” says Chung Liu, D.Env., Deputy Executive Officer of Technology Advancement for the South Coast AQMD. “This technology will help us expand our region’s hydrogen infrastructure and serve as a stepping stone to longer-term future technologies including fuel cell vehicles.”

ECD Ovonics’ hydrogen hybrid has been equipped with hydrogen storage tanks using the company’s proprietary solid metal hydride technology, which enables hydrogen to bond at the atomic level with a powdered metal alloy inside the tanks. This technology allows storing hydrogen at much lower pressures than the 5,000 to 10,000 psi storage tanks typically used in other hydrogen vehicle applications. The result is the ability to carry a greater volume of hydrogen on-board to provide increased driving range, in this case to almost 200 miles.

“That’s substantially greater range than most hydrogen vehicles today, and an important milestone toward making hydrogen vehicles a practical alternative for the highway,” says Robert Stempel, chairman and CEO of ECD Ovonics. “Our goal is to apply the diverse technologies based on ECD Ovonics’ proprietary work to make advanced hybrid, hydrogen, and fuel cell vehicles competitive in the marketplace. This hydrogen hybrid vehicle is a great example of that evolutionary process.”

ECD Ovonics’ hydrogen hybrid has been turbocharged to compensate for hydrogen’s lower energy density and enhance overall performance and drivability. Refueling during fleet testing is taking place at a hydrogen station at the South Coast AQMD headquarters, which has been specially modified to refuel the vehicle at a low 1,500 psi.
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The View from Pew

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I had the privilege last week of attending a speech given by Eileen Claussen, the President of the Pew Center on Global Climate Change. Pew is a critical organization in constructively spreading awareness and promoting practical thinking among government and business leaders about the climate change issue.

Ms. Claussen’s main message was that it was important to view climate change as an opportunity, not a threat. She provided an optimistic message, asserting that many major companies (e.g., BP, Shell, GE, DuPont, etc.) have made this shift in perspective, and that others are bound to follow.

It is notable that a number of electric utilities (e.g., Exelon, Cinergy, AEP, PG&E, Wisconsin Electric, DTE, Entergy, Ontario Power, TransAlta) are on the Pew Center’s Business Environmental Leadership Council. It’s also notable that a number (though not all) of these companies have large nuclear portfolios. And, it’s further notable that Ms. Claussen was of the opinion that nuclear had to be a large part of the solution to the climate change issue.

Personally, I agree with that assessment. Because nuclear is essentially a zero-carbon energy source that is proven to be scalable and in adequate supply, it seems clear that any future energy system must involve substantial nuclear power generation capacity if it is to successfully address the climate change challenge while providing the requirements that citizens of the developed world in the 21st Century demand.

But, however pragmatic I think it to be, this view is outright anathema to many environmentalists. What does the cleantech community think about nuclear? Is it part of the solution, or part of the problem?

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Berkeley Green Home EXPO – Local Cleantech Support

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Cleantechblog is sponsoring the Berkeley Green Home EXPO coming up in April. We are excited to see local support for energy tech and cleantech, and are happy to support Berkeley’s efforts in sustainability, solar, clean energy and cleantech. Announcement below:
Energy Independence to Be Focus of Berkeley’s 3rd Annual Green Home EXPO
Panel to be moderated by Mayor Tom Bates, with representatives from California Energy Commission, PV-NOW, Cal State/East Bay, and PG&E
Berkeley, CA – With their Zero Greenhouse Gas goals in mind, the City of Berkeley will be hosting the third annual Green Home EXPO and Energy Symposium on Saturday, April 29th from 12 noon to 5 pm, in Berkeley’s Civic Center Park next to the Saturday Farmer’s Market.

The main event will be a panel discussion titled, “Can We Achieve Energy Independence? Actions and Consequences” moderated by Mayor Tom Bates. Long an advocate on behalf of environmental causes, Mayor Bates will bring to light many new ideas on greenhouse gas reduction through discussion with panelists with backgrounds in science, politics, energy, and the environment.

Panelists include: Karina Garbesi of Cal State/East Bay Professor of Geography and Environmental Studies: California Energy Commissioner John L. Geesman, David Hochschild, Executive Director of PV-NOW!, and Hal La Flash, PG&E’s Director of Renewable Energy Policy and Planning.

Radio station KPFA will record this panel discussion for broadcast.

Other activities at this event will include a Zero Waste Art Contest, and a Solar home Design Contest. There will be free recycling for electronic waste, household batteries, fluorescent lighting, and mercury thermometers, and a Safe Medicine Disposal collection. There will also be a number for free swaps and give-aways. Admission is free and open to the public.

For complete details on the contests and give-aways, visit http://www.greenhomeexpo.org/ or email Energy@ci.berkeley.ca.us

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$310 Million Wendelstein 7-X Fusion Experiment Advancing on Schedule

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Thirteen of the 70 superconducting coils for the $310 million Wendelstein 7-X stellarator-type fusion experiment have been tested at low temperatures and delivered, and the 41 additional coils specified are in various stages of manufacturing.  When complete, sometime in 2010, Wendelstein 7-X will be the largest stellarator fusion device built to date, and will test the suitability of a stellarator design for power plants.  

Both tokamak and stellarator types of fusion reactors utilize a ring-shaped magnetic field generated by massive superconducting magnets to suspend the ultra-high temperature plasma needed for fusion reactions within a containment vessel.  The difference between the two is that tokamaks produce part of the field by an electric current flowing through the plasma, while stellarators rely on external coils to provide the field.  Although tokamaks have been the subject of more investigation, the stellarator design more easily allows for longer pulses of operation – for Wendelstein, possibly up to thirty minutes.  

Researchers hope Wendelstein 7-X will bring them closer to the ultimate goal of continuous operation fusion reactions that can be harnessed for electric power generation.  The European Union, the Federal Republic of Germany, and the State of Mecklenbourg-Western Pommerania are funding the project.

For the many who have heard of fusion energy, but either dismissed it as a fairy tale, or avoided thinking about it altogether due to the sheer complexity of prospective fusion technologies, the Wendelstein 7-X demonstrates that at least on a global level, the effort to make fusion a reality is serious.  

While nobody expects fusion to solve today’s energy problems within the next few decades, even critics of the fundamental technological feasibility of fusion admit that the basic science, technology development, and industrialization of the core technologies behind fusion are key to the long term advancement of society.  

Many industrialized nations in Europe and Asia have serious fusion programs, and emerging economic forces such as China and India are increasingly aggressive in their scientific collaboration, internal and international research & development projects, and political and financial support.  

Fusion research in the U.S. is more uncertain.  We are on a clear path to full participation in the massive $10 billion International Thermonuclear Experimental Reactor (ITER).  However, while support for ITER–which is being hosted in Europe and included participants in several nations–is fairly strong, budgetary constraints and political shortsightedness have jeopardized domestic fusion research.  

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

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Resourceful by Nature™

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March 15, 2006

Yesterday morning’s mail brought a solicitation from Earth Policy Institute for its (Lester Brown’s) new book “Plan B 2.0: Rescuing a Planet Under Stress and A Civilization in Trouble.” My first sighting of Lester Brown was in 1994 in Washington, DC at a large meeting on sustainability. I had, by then, purchased and read several of his Worldwatch Institute reports, and Flavin and Lenssen’s “Power Surge, Guide to the Coming Energy Revolution,” and I respected Mr. Brown to the level of a deep bow. In 2002, I spoke with (at) him at a DOE Green Power Marketing Conference, effusive with admiration and awkward – a self-immolating and embarrassing habit.

“Dear Reader,” (begins the solicitation) “In his book ‘Collapse: How Societies Choose to Fail or Succeed,’ Jared Diamond describes how earlier civilizations moved onto an economic path that was environmentally unsustainable.” Ah, too early in the morning for Jared Diamond and his depressing tome. I skim on, but think about my work for the day: writing an article on renewable, clean energy for an energy training company in California which has an interest in biomass…

“The competition for oil is already altering the relationship between oil and food. We have long been concerned about the effect of rising oil prices on food production costs, but now we can see its effect on the demand for food commodities. Since virtually everything we eat can be converted into automotive fuel either in ethanol distilleries or in biodiesel refineries, high oil prices are opening a vast new market for farm products. Fuel producers are competing directly with food processors for wheat, corn, soybeans, sugarcane, and other foodstuffs. With high oil prices, more and more ethanol distilleries and biodiesel refineries are being built to convert food into fuel. As a result, supermarkets and service stations are competing for the same commodities. In essence, the affluent owners of the world’s 800 million automobiles will be competing with the world’s poor for food.”

Maybe these commodities are better suited as fuel anyway, I speculate…all that genetic modification and chemical fertilizer. Maybe the competition from fuels will egg on the slow-food and relocalization movements. It’s all too dreary before a second glass of tea, and I gravitate to the jazz radio station, only to hear NPR, sponsored by none other than Archer Daniels Midland Company (ADM): “ADM is a global leader in biofuels and is helping to meet these growing demands [for energy].”
…

ADM plans to fuel the cars of the world and feed the people of the world (tofu to the Chinese from American soybeans, in fact).

Their recent ad campaign splices images of hardworking, healthy American farmers with images of healthy Asian consumers. A background of eastern Indian music fades. Highway traffic flows in double-time. Trains and trucks zip alongside cornfields. There are more vibrant images of American farmers. And vivid landscapes of city lights. And acres of gentle waves of green crops. And wide open clear blue skies. Their ads are fashioned similarly across all product lines. For corn-based ‘plastics,’ food and transportation fuel, it’s the same smooth, soothing male voice-over, same visual treatments, same repetitive copy format, same kind of assured message:

“The world’s demand for energy will never stop. Which is why a farmer is growing corn and a farmer is growing soy. And why ADM is turning these crops into biofuels. The world’s demand for energy will never stop. Which is why ADM will never stop. We’re only getting started. ADM. Resourceful by Nature™.”

“Somewhere west of Topeka someone’s getting out for a breath of fresh air. Which is why a farmer is harvesting corn. And why a train is transporting corn. And why ADM is turning corn into ethanol, a renewable, cleaner-burning fuel. Somewhere west of Topeka someone’s getting out for a breath of fresh air. And lots of us are helping make sure that fresh air is actually – fresh. ADM. Resourceful by Nature™.”

This particular someone, sporting red hair and lime-green scoop-neck, is way, way west of Topeka, and she’s at the wheel of a sweet, grey, vintage convertible, cruising alongside a silver lake with mountains off in the distance. She’s definitely not in Kansas. Like ADM, she’s got full tank (money’s not a problem). And she’s on a roll. This ad – the woman, the open air, the notion of carefree escape – gave me goose bumps. Please forgive me, Mr. Brown.

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The Advance of Transformerless Solar Inverters – An Opportunity Lost

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It’s always nice to be proven right, but sometimes the ones that got away just gall me.

Four or five years ago we developed a business case with a large Japanese battery manufacturer to bring their solar inverter products into the US market. We would sell, they would build. At the time they had roughly 50% of the Japanese grid-tie industrial size solar installation market for inverters, and a sizeable share of the residential market, and wanted to get into the growth markets in the North America, as the Japanese growth had plateaued.

We had one of the largest US solar system providers agreed in principle to switch to our products, we were planning to certify them to the UL spec, and build them on the Japanese production line for sale in the US. We would have been the low price leader out of the gate.

How? First off, we had a very mature engineering and manufacturing plant in Japan, we had a full range of product – led by a 3.5 kw product for the residential market and a 10 kw modular product for the industrial market (before anyone here had thought about productizing larger sizes). And we had transformerless inverters. We had already started discussions with sources in UL about bringing that technology into the US. In 2001.

Our “best-price” scenario way back then was about $0.50/kw for our residential product, $0.65-$0.75/kw for the off the shelf price. For those of you who might be skeptical, that INCLUDED a nice gross margin. Our partner had pioneered transformerless inverters in Japan in the early to mid 1990s, and by the time they met us, this type was fairly standard throughout that market.

After getting the green light, the project was killed shortly thereafter when our Japanese partner ran into financial problems in other parts of the company, and was forced to re-focus their efforts away from the solar energy division.

I was reminded of all of this recently when a friend of mine sent over a presentation from an energy tech startup talking about advanced, low cost, lightweight inverters. When pressing them about how they could do this, they explained that they had no transformers. So I went do some research, and low and behold, not two months ago Magnetek announced the UL listing of their transformerless solar inverter, and then I noticed recent SMA articles on the now transformerless Sunny Boy String solar inverters in Europe.

“January 4, 2006 Magnetek, Inc. today announced that its indoor and outdoor transformerless Aurora™ Photovoltaic (PV) Inverters have been listed by the California Energy Commission and meet the latest National Electrical Code (NEC) as well as Underwriters Laboratories’ (UL) 1741 standards.”

It’s a shame our project didn’t go forward, but I’m glad the North American industry continues to drive costs down, even if we’re a bit behind the EU and Japan.

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