The success of Suntech Power Holdings Ltd and SunPower Corp’s IPO’s, suggests an increased investor interest in the renewable energy industry and bodes well for future Chinese public offerings in this sector. According to Julie Blunden, Vice President of External Affairs for SunPower Corp. (NASDAQ: SPWR),”The drivers in China are a combination of how fast the demand is growing and their limited conventional energy resources. The demand is going up, and limited domestic supply cannot keep up with the demand, which is clearly the key driver of the move to renewable energy in China and around the world.”

As Michael Liebreich, Co-Founder and CEO of New Energy Finance, a London based informational clean-energy index explains, “The drivers for the acceptance by China of renewable energy technology are twofold; they have an almost insatiable requirement for energy and therefore they will need not only fossil fuels but also renewable and clean energy in order to avoid a bottleneck to their economic development. The other side to it is that China sees renewable energy as a growth industry with considerable potential, one that they want to have a very strong position in.”

As a growing world economy competes for the same oil and gas reserves, the benefits of investing in clean and self sustaining energy supplies has become evident to China. Tom Djokovich, CEO of XsunX, Inc. (OTCBB: XSNX) explains, “Investments in renewable technologies allows the Chinese to hedge energy costs and reduce dependency on fossil fuels in a competitive marketplace, while leveraging the growth potential of solar in the world marketplace. For XsunX, China’s mandates to increase the use of BIPV technologies as part of an effort to make all buildings “Green” represents a tremendous opportunity for our Power Glass(R) film technology in one of the largest and fastest growing commercial construction marketplaces.”

In addition, Wieland Koonstra, CEO of GiraSolar, Legend Investment Holding’s (OTC.PK: LVCP) solar division describes, “The main driver for solar growth in China in my opinion is not only environmental or energy concerns; but also their well strategized market entrée now that the market is ripe.” GiraSolar is a beneficiary of China’s activity in renewable energy as a recipient of Chinese exports in this area.

President Bush made a well-publicized speech at Johnson Controls in Milwaukee on Feb. 20, in which he touted advanced technologies that will radically reshape the energy sector. “We’re on the edge of some amazing breakthroughs,” Bush claimed.

Bush Feb. 20 Speech

I guess the good news is that the President is increasing his efforts from the bully pulpit to be talking about the energy challenges we face. Nevertheless, I’m a bit perplexed.

In the speech, he talks about hybrids and plug-in hybrids, cellulosic ethanol, clean-coal, solar and wind energy, hydrogen and fuel cells, nuclear, and so on. As anyone working in advanced energy technologies for a while would know, there’s nothing really new here. All these technologies are theoretically viable, having been known about for years, and some work quite well today. However, it is simply that the economics for most of these don’t pass muster under current market and policy conditions.

If electricity were 50 cents/kwh and gasoline $10/gallon, many of these technologies would be rapidly penetrating the markets everywhere in the U.S. right now. But, I can’t imagine Bush is going to shift his stances and start proposing higher taxes on conventional energy sources to make the economics of these emerging energy technologies suddenly compelling.

Has he been informed about some technological, performance or cost breakthrough that’s just around the corner that I don’t know about? If not, then why he is so damned optimistic? And, will such boasting come back to haunt proponents of advanced energy as yet another case of overexuberant hype?

I met with SRT Group recently, whose technology I find quite unique. They are under-resourced, and need some integration and scale up work done to prove out the concept for commercial use, but kept me captivated nonetheless. As advertised the technology has the potential to become a highly economic replacement for current coal fired power plant emissions systems.

The basic premise is using a closed loop hydrogen bromine electrolysis solution for flue gas clean-up (NOx, SOx, Hg), where one of the by products is hydrogen. A couple of fascinating claims:

• The more sulphur in the flue gas, the more hydrogen you get.
• The multi-pollutant removal system will basically pay for itself with production of hydrogen and other by products.

SRT’s technology is based on the Ispra Mark 13A process, which was developed by the European Research Centre and demonstrated successfully at the 30 MWt scale in Sardinia, Italy from 1989-91 to remediate SOx only. They have gotten hold of this process in the mid 1990s, and developed additional IP to expand it. Partial list of US patents includes: 5,443,804, 6,093,306, 5,219,671.

Process involves using a recycled hydrogen bromine electrolysis system

Stage 1: Flue gas is reacted in a bromine water solution, reducing the flue gas pollutants to a water solution of mercuric bromide precipitate, sulfuric acid, and nitric acid, and hydrogen bromide.

Stage 2: The hydrogen bromide is then electrolyzed to produce pure hydrogen, and bromine to be recycled.

Keys of note:

• Removes all 3 major pollutants, NOx, SOx, Hg, in one step, reducing them to saleable product streams (H2, sulfuric and nitric acids)
• All fluid recycled process, no consumable reagents, and no waste stream to dispose of, the bromine is not a fuel, but a recycled carrier
• Small footprint
• Produces significant H2 by volume as a byproduct of the clean-up. Note: electrolyzing Hydrogen bromide is a much less power intensive process than water electrolysis (about 40% of the electricity), a major factor in making this process attractive. Also quite interesting, hydrogen bromide electrolysis performance improves tremendously at slightly higher temperature (c. 100-150 C), and higher concentrations, meaning the process is very optimizable.
• As sulfur is a reagent in this process, the higher the sulfur content of the flue gas, the more hydrogen is produced

Following the demonstration in Italy (for SOx remediation), EPRI promoted instead its limestone forced oxidation process for coal plants as a cheaper process, without including the advantages of NOx and mercury control (patented by SRT later), and hydrogen product value in the analysis. SRT believes that including these the process is highly economical. Data is available on this pilot. SRT has done additional work and patenting on expanding the process.
Conceivably would make hi sulfur eastern coal more valuable, perhaps even than western coal.

The next stage for SRT for which they are seeking funding is to develop a small scale prototype to confirm the multi-pollutant results, and inform the design of a scaled up system.

SRT Group is an R&D firm in Florida, operating predominantly under government grants with its work done with commercial partners and through university laboratories. The President is Robin Parker, a technology evangelist who has been working with this technology for some years, and courteously took the time to walk me through the details of his process. He can be reached at rzpsrt@compuserve.com.

Wednesday, February 22, 2006

“Live Green, Go Yellow”
GM’s E85 Campaign

Between the SBX snowboard event and Evan Lysacek’s courageous come back in the Olympic free skate, you may have caught General Motor’s advertisement for E85, part of GM’s campaign to promote its “flex fuel” vehicles – cars and trucks that run on fuel comprising 85 percent ethyl alcohol (ethanol) and 15 percent petroleum.

“Let’s create a greener future with cleaner air, renewable energy. GM is harnessing the power of corn. Now you can too.” Young, active, multi-racial, urban and rural, the ad’s actors say, “What if an answer to our dependence on oil was growing right in front of us? What if we could lower greenhouse gas emissions with a fuel that grew back every year? What if a company had already built over 1.5 million cars and trucks that could run on this fuel? What if they were willing to build a whole lot more? What if we could live green by going yellow? Yellow is the E85 ethanol. And one car company will lead us there. Go to livegreengoyellow.com.”

Primarily an air quality and greenhouse gas reduction pitch, the campaign assumes we all know what “living green” is – and that whatever it is, we want it, and ethanol is it. GM presumes, or hopes, that the “ethanol=green” message is enough to win over consumers.

GM’s campaign steers clear of fuel efficiency, possibly because of the company’s position on Corporate Average Fuel Economy (CAFE) standards for the internal combustion engine: “[GM’s] CAFE reflects which products its customers choose. In recent years, consumer trends for larger models, higher performance engines, and more features have offset much of the fuel economy increases from technologies we’ve implemented.” (Other American car manufacturers voiced similar sentiments at the Great Energy Efficiency Debate sponsored by the Alliance to Save Energy in Washington, DC, May 2005 saying, “we’re just giving consumers what they want.” The representative from Toyota, the maker of the Prius hybrid, listened contentedly as Detroit sputtered in defense of its position on fuel efficiency.)

How efficient, then, is ethanol? E&E Publishing’s Greenwire reports “ConocoPhillips CEO James Mulva pointed out that E85 gets only 75 percent fuel efficiency of traditional gasoline.” (“Oil companies question feasibility of E85 in national fuel strategy”)

The GM ad steers clear of messaging around domestic job creation – possibly because ethanol can just as likely come from Brazil as Iowa. The campaign steers clear of national security (reduced dependence on foreign oil). And the campaign doesn’t get into the problematic issue of competition between fuel and food crops (after all, it’s a marketing campaign).

As far as marketing “green” goes, it’s clever, youthful and provocative, particularly when compared with Detroit’s other media buys. The website, branded with integrated print and tv advertising, provides information about E85, a cornulator (a ‘corny’ twist on environmental offset calculations), ‘cobcasts’ (videos of Americans extolling corn), a ‘stalk car’ race (a game), and a schwag shop (t-shirts, screensavers) as well as links to the National Ethanol Vehicle Coalition and DOE’s Energy Efficiency and Renewable Energy (among other) websites.

But I can’t help but wonder…what if GM gave consumers fuel efficiency and better air quality and reduced emissions? That would be downright chartreuse.

:: When you’re really good, you get the gold! Just in time for the winter Olympics, SmartPower received its own Gold Medal for Best Television Advertising Series in the Third Annual Services Industry Advertising Awards (SIAA) – joining the likes of Verizon, Marriott, MasterCard and Time Warner Cable. ::