Archive for December, 2006

LED lamps still need work

A study from the Department of Energy compared the claims of LED downlights from four undisclosed manufacturers.  (See article in EERE Network News)  Although there is no question that individual LEDs perform better in terms of light emitted per watt, these downlights which incorporated them actually performed worse than fluorescents.

 LEDs are one aspect of energy efficiency that I think has a ton of potential, mainly because people aren’t nearly as excited about them as they are about renewable energy.  I think LEDs are much closer to being truly economic without subsidies than is PV, and the fact that they don’t get nearly as many subsidies, and have to stand on their own makes for much healthier companies.

In combination with photovoltaics, they are already economic in off grid outdoor lighting applications such as those solar garden lights we started seeing a few years ago.  They are also in use in many bus and train shelters… as well as flashlights, traffic signs, and stoplights(which are on so much they don’t have to be off-grid.  They also take advantage of the fact that LEDs are much better for color than white light.) 

 And, ‘Tis the season, so we shouldn’t forget about LED Christmas lights!

 But even in the most economic sectors, there are always hiccups when developing new technology, and it’s often the problems no one thought to anticipate.  That’s why it’s important to diversify, and only invest cautiously in new technology.   There are at least ten public companies I know of working on LEDs in one form or another… and some will inevitably fail, either in commercialization, or in cut-throat competition.  China is producing a lot of cheap LEDs now, which has caused problems for a lot of domestic LED companies.

In short, while I’m as bullish about LEDs as any other clean energy technology I can think of, it’s worth using the opportunity of studies like this one out of DOE to remind ourselves that there will be inevitable bumps along the way.

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1/4/7: I just ran across a very interesting survey on Treehugger (via EcoGeek) on the lumens/watt of all sorts of electrical lighting.   Turns out that the best light depends on your application, and neither CFLs nor LEDs are the most energy efficient forms of lighting out there… they’re not even second.  I won’t  spoil it, take the quiz, and read some intersting comments after.

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Diversification: Nature Knows Best

A study  in Science (see article in Renewable Energy Access) from David Tilman, an ecologist at the University of Minnesota shows what we should have known all along:  When energy crops are grown sustainably in poor soil (i.e. most of our available land) without fertiliser, a diverse mix of native prairie plants yeilds more than twice (238%) as much harvestable energy than any monoculture (including the much-hyped switchgrass) grown on the same land.

At some point, humans are going to have to realize that our production-line mentality, which seems so efficient to us, is not really the best way to do things.  We like farming just one species in neat rows because it’s easier for us to comprehend.  But easier to comprehend is not the same as more effective.  In money management, we know that there is no one perfect security for an investor: diversification allows higher returns with lower risk.  Farmers have yet to (re)learn that lesson: growing just one crop puts strains on the particular resources that crop needs most, and allows specialized pests an environment of limitless growth.

Monocultures are sub-optimal, both in your fields and your portfolio.   Enron employees with their retirement fund in 100% Enron stock learned that the hard way.  As we transition to a new energy economy, I hope that David Tillman, and researchers like him will help us realize that the places we grow out energy crops don’t have to be like an Enron employee’s 401(k).

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Solar panels for the price of the electricity

Many of us would like to have put solar photovoltaic (PV) panels on our home, and generate our own Citizenre Corporationelectricity.  Until now, I’ve always told people that they have better uses for their money.  Even with the recent extension of the federal tax credit until the end of  2008, and (in Colorado) the rebates being offered by Xcel Energy in order to meet their Amendment 37 requirements for customer sited solar electric, the return on investment for the electricity generated at current prices (about $8 per watt for the panels & system; $4.50 per watt rebates from Xcel, and a $2000 federal energy credit), a 4 kW system only returns 1.4% per year in electricity savings.  (I got these numbers from a workshop presented by Jeff Lyng, who will be vice-chair of The American Solar Energy Society next year, and calculated the return from those.  Jeff was speaking as a consultant for Xcel on their solar rebates program.)   To me, it makes more sense to invest in renewable energy or energy efficiency companies, which are likely to yield a higher return (or put the money in a CD and use the interest to buy RECs or give away CFLs).

Until now.  CitizenRE is offering to install photovoltaic panels on you house, and charge you only for the electricity.  Better yet, the price you will pay is equal to the same price (or less) than your utility charges.   If you like, you can lock in your current price for electricity for up to 25 years (although 5 is standard.)

You do still have to get power from your utility company… there is no provision for battery backup, and they require a $500 deposit which you don’t get back until the end of the contract.  Also, you are only renting the panels from CitizenRE, but you are responsible for damage to them from other than normal wear (as you would be for any other rental), so they suggest that you include them in your homeowner’s policy.

Still sounds pretty good, doesn’t it?  Here’s the big catch: they are signing people up now, but they plan to manufacture the panels at their own plant, which will not start operation until at least September 2007 (and, being a cynic, I’d expect further delays.)  Realistically, don’t be surprised if you don’t have your panels until mid-2008.  But for people who don’t have an extra $10,000 burning a hole in their pocket, you probably weren’t going to get a system until 2008 or later anyway.

This is probably not the only place you’ve heard about them… I’ve read several other blogs (here, here, here, and here. ) about them so far, and part of the reason for that is they are using a multi-level marketing scheme (MLM) (although they don’t like to call it that).  I don’t think any of the blogs I linked to back there are MLM-ers… I also came across several blogs like that (most of which had clearly been started for the sole purpose of selling CitizenRE), and decided not to do them the favor.  I’m not generally a fan of MLM, but I have to admit that it’s probably the best way to reach a lot of homeowners quickly.   As part of my research for this blog, I decided to sign up (it was incredibly easy… I did have to get 4/5 on a quiz, but three of the questions were general ones about solar and electricity, so I only had to guess right on one out of two, which I managed on the first try (but I could have tried again after 2 hours)… they have tutorials for people who are serious about this stuff, but who has time for that?)

Instead, I spent my research time reading the Forward Rent Agreement (FRA) contract their customers have to sign, which is where I got some of the above caveats (also note that they do reporting through a land telephone line, so if you sign up, you have to maintain telephone service for the duration of the contract.  That might be a problem for me, since I use Voice over IP.)

I also browsed through their marketing material, which was available after I took their little test.  After all, if putting solar on your own home is not a good financial proposition, why are they paying their associates $150 for each sale, plus 4% or more of the electricity sold in order to put panels on your house for you?  Here’s what I concluded:

  1. They will have lower costs than an individual homeowner.  Most of us have to pay contractors around $8 a watt for our systems.  Since they will be hiring their own dedicated installers, and install only equipment that they manufacture themselves, they think they can do it for around $4.50 per watt, a price which (In Colorado Xcel territory) would be covered completely by Xcel’s Solar*Rewardsprogram referenced above.
  2. As a business, they can deduct 30% of the full amount of the installation cost under the production tax credit, and it is not capped at $2000, as it is for homeowers.
  3. Also as a business, they are eligible for accelerated depreciation, which basically amounts to an added massive tax deduction.
  4. They get interest on your $500 deposit.  Not much, but if you have 1000 deposits, it starts adding up to real money.   1/15/07: Via PeakEnergy and The WorldWatch Institute I read that interest on the deposit is credited to the consumer.  Checking the associates’ website, it says: “Deposits are invested into 1 year treasury notes. Interest is compounded for the benefit of the customer.”

Starting to come clear?  By my ballpark estimate, if it costs them as much as $6 a watt to install a system in Colorado, they will be able to collect at least that much back under the various tax programs and rebates, and any money they collect from you, the customer, will be pure profit.

So it sounds like a legit business model to me.  In fact, when you look at the above, it’s somewhat surprising that no one has done it before.  If you still want to sign up (and if you want solar on your roof, this seems like the best financial deal currently on offer).

I don’t want to sign up anyone myself… I already have two full time jobs as an investment advisor and environmental activist, but if you use this link, for Frank Knight, who has agreed to make a donation to an environmental charity for any referrals (but not untl you get panels and he gets paid.  Contact me if you have a particular charity you would like to see the money go to.

If you want to become an associate, here’s the link for that.

If you think this whole thing is a scam, and want a random associate, go directly to CitizenRE (there will still be as sales commission paid to some associate, but it will be someone assigned at random.)

I never thought I’d be telling people they could put solar on their roof (in an economical way) so soon.  Keep in mind, this does cost more than your normal electricity bill, because you pay for insurance for the panels, as well as losing the interest on your security deposit, but if you don’t plan on moving, and expect electricity prices to go up a lot, you may come out ahead anyway, because they let you lock in your electricity rate for the duration of the contract (up to 25 years, at your option.)

By the way, I think I read an article recently about a company that’s doing the same thing with solar hot water in Canada (only charging for the price of natural gas not used), but I can’t seem to Google it.  If you saw it too, please let me know.

(Note: apparently you can avoid the deposit if you sign a 25 year contract.  I’m not sure  if that’s a better deal or not… how many of us stay in one house (or even two) for 25-years?  Also, five to ten years from now, the technology will probably reach the point where it does make sense to borrow the money and put up your own panels.  I guess I’m just not a big fan of 25 year contracts for anything.  Mortgages, for instance.)

12/14 I’ve been thinking about this some more, and here are a couple other things to be wary of:

  1. They say they’ll start production of panels in September 2007.   But these things always take longer than expected.  If you sign a contract with them, you’re basically saying that you’re not going to use your roof for anything else while you wait.  At best, you’ll have your panels a year from now, but at worst, they might end up stringing you along for years, when you could have gotten solar from some newer outfit that came along in the meantime… if this model really works, it won’t bee too long before they have competition.
  2. Don’t expect to make money as an associate (salesperson) before 2009, or even later.  A lot of associates are already paying (out of their own pockets) for classified ads, but they don’t start earning any money until systems are installed on homes.  And who is to say that your sales are going to be the first in line… as far as I can tell, they can install systems in whatever order they choose, which means that the location with the highest rebates will probably get all the first panels produced.  Basically, the better a financial deal this is for the customer, the later they are likely to get their systems.  If you are considering signing up as an associate, treat it like a hobby, and don’t pour a lot of money into it.  Frank may be kicking in $75 to charity for each referral I give him, but at least he’s not putting a lot of money in up front… he does not pay unless he is paid.

You may also hear about the CitizenRE offering under the product name ReNu, as well as a couple of thier marketing websites www.jointhesolution.com, and www.powur.com.  The /xxxx at the end of the url is the associate’s ID which they use to track which associate brought in that particular customer.

2/14/07: Given the recent growth in controversy about CitizenRE, I’ve written a followup article here. 

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The Green 50

Inc. Magazine  just did a series of profiles of businesses working to solve our environmental problems.  There’s not much here for investors… almost all of the companies profiled are private.  (Interface, Inc. being one notable exception), but it always give me hope to see all the people out there working to solve the immense problems we face… it’s nice to remind ourselves that we are not alone; we’re all doing out part in our own way.

 Thanks to Nancy LaPlaca for sending me this.

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Other Peoples’ Clean Tech Investment Ideas

Just ran across this article on investing in renewable energy in the New York Times.  The author Norm Alster thinks that the new Democratic Congress will be good for renewable energy (I agree.)  For instance, I think there’s an excellent chance that the Dems will renew the Production Tax Credit before it expires at the end of 2007, and most renewable technologies, especially wind an geothermal will see big boosts when that happens.

He interviews several asset managers, and their picks are Sun Power in for solar, Zoltekfor carbon fiber used in wind turbines (no mention of the fact that Zoltek is currently embroiled in a nasty lawsuit with Structural Polymer Group over breach of contract), corn ethanol producers (too much overbuilding for my taste), Headwaters(more of a emissions reduction company), Herman Miller (I hadn’t realized they were big into recycled plastics) and Interface (one of my faves, but I wish it were cheaper) for the green building angle.

 Just looking at the list of companies above, I can think fo good reasons to buy, as well as good reasons to sell every company mentioned (except Herman Miller & Headwaters, which I have not researched.)  I won’t do anything just because I saw them mentioned in the NYT, but that doesn’t mean that it’s not interesting.

I like to look at other people’s ideas about how to invest in renewable energy, because it tells me what other people are thinking about.  I look for ways to invest in renewable energy that not a lot of others are thinking about… that way, when they do start thinking about (and buying) the ones I have bought, the price rises.   That’s the theory anyway.

 Another way to use others’ research without getting caught in the stampede it to start watching the ones other people like, and wait for them to get bored.   If a company does not produce any good news for several months, people who got in on a rush of excitement will get impatient and sell… that’s the time to get in… unless the company really is boring.

Nobody said investing was easy. 

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Clean Coal?

Coal powered utilities have a “solution” to global warming caused by carbon dioxide, and they call it “Clean Coal” and “Carbon Sequestration.”  To many environmentalists, clean coal is simply an oxymoron.

 Also known by its technical name, Integrated Gasification Combined Cycle or IGCC, this new type of electric generator heats coal in the presence of oxygen, producing carbon dioxide and hydrogen gas, and leaving a bunch of the nasty stuff found in coal (mercury, sulfur, etc.) which would be released into the air in ordinary coal combustion plants stays (mostly) put.  The hydrogen is separated off by absorbing the carbon dioxide with an amine solution (other methods are in the works, but this is the only one in use now), and the hydrogen is burnt in a modified turbine to produce electricity.

Compared to conventional pulverized coal plants, this is an elegant solution.  There is much less of a problem with the traditional pollutants associated with coal (mercury, particulates, etc.), the whole process is slightly more efficient than pulverized coal, producing slightly more electricity per ton of coal burned (and carbon dioxide produced), and there is the theoretical possibility of capturing the carbon dioxide and putting it somewhere where it won’t enter the atmosphere and heat our planet (i.e. “sequester” it.)

On the downside, in the three IGCC plants currently in existence, there has been no attempt to capture CO2, for the simple reason that we don’t have any place good to put it, and any attempt to do so would require a significant portion of the energy output of the plant (I’ve heard numbers ranging from 10% to 30%), meaning that a lot more coal would have to be burnt just to deal with the carbon dioxide emissions.

FutureGen proposed design renderingXcel Energy, is with grants from the federal govenrment and other partners, is planning a 300 to 350 MW IGCC plant in Colorado, which will be the first in  the United States, as well as the first anywhere in the world to attempt carbon sequestration (most likely by taking some of the carbon dioxide and injecting it down old oil wells, a practicepioneered at the Wyburn oil field in Canada.  Some other methods of sequestering carbon dioxide, such as injecting it in brine formations, have shown the potential to form acid, leading to worries that the acid will breach the geologic formation, leading the carbon dioxide to escape.

In addition, according to an interesting article Can Coal be Clean? in the Nov 30 Economist, IGCC plants are also much higher maintenance than the old pulverized coal plants.  So is it any surprise that among the 150 new coal plants now being planned, only one or two are IGCC, and of those, only FutureGen is actually planning to test all the technologies that the utilities are holding up as the “solution” to carbon dioxide emissions, while the rest are just more business as usual.

Should we hold out much hope for IGCC with carbon sequestration?  Maybe in 30 years, after all the kinks have been worked out.  Carbon sequestration today is at a similar level of technological maturity as wind was in 1980.  Now that wind and solar have been generating electricity for 30 years, and are proven to work well, that’s where we should be focusing our efforts. 

I applaud FutureGen as a research project, but if we’re looking for a carbon neutral place to get our electricity today, IGCC with sequestration is a distraction.  However, if it can be made to work, I hope to be around when we have IGCC with carbon sequestration, fuelled by biomass, for a net carbon-negative power source.

Some numbers:

According to this testimony before the US house of Represnetatives, cost of electricity from IGCC without sequestration is $46 to $49 per MWh, and cost to sequester CO2 is estimated at $3-$10 a ton, depending on method an geology.  At treehugger, I found an article which implied that IGCC produces about 1 ton of CO2 per 5 MWh, which would make the cost of sequestration between $.60 and $2.00 per MWh, or .6 to 2 cents per kWh.   We do need to consider the fact that some of that $3-$10 per ton cost comes in the form of cost of electricity, so the calculation of cost of energy becomes depends on the source of electricity for sequestration, and how much of that carbon is sequestered.  None of this includes the cost of carbon capture, which would likely be low if only a fraction of the CO2 were captured, but become more expensive as the 90% or so theoretical limit is approached.  60% capture seems to be a number that the people who study this think would not be onerous in terms of cost.

 There is an incredible pile of information to sort through at Gasification.org.

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They do it with Mirrors: Concentrating Solar Power

Note 5/3/09 Some more recent CSP articles are here.

I’ve just spent some time reviewing a pile of reports on concentrating solar power (CSP) technologies for Ratepayers United Colorado (RUC), so here is a summary of the various types.

 

Technology descriptions

        Concentrating Photovoltaic

o       This technology uses mirrors or lenses to focus sunlight on high-efficiency photovoltaic chips.  The extra sunlight makes it worth the expense of making a more efficient higher complexity chip because each chip can convert more sunlight to electricity, with conversion efficiencies often twice as high as the efficiencies of conventional soar panels.  This also has the advantage of saving silicon (which is in short supply) for making chips.  Problems are that they do not work as well as conventional panels in diffuse light through clouds (because the light cannot be focused) so they are only appropriate for areas with very little cloud cover, and the extra light heats the chips more, which lowers their efficiency, and so may require some sort of additional cooling loop.

o       Article links:

o       http://thefraserdomain.typepad.com/energy/2006/03/concentrix_conc.html

o       http://thefraserdomain.typepad.com/energy/2005/11/stellaris_conce.html

        Parabolic trough

o       The oldest CSP technology, parabolic trough plants, known as SEGS 1 through 9, have been operating reliably in theParabolic solar trough technology  -  such as this SEGS plant - will be reborn in Red Rocks, California.
California and Nevada deserts since the 1970.  Parabolic trough plants work by focusing sunlight on pipes by means of parabolic mirrors.  These pipes contain a working fluid (several have been used, from water and superheated steam to molten nitrate salts.)

o       Parabolic trough technology is currently experiencing a revival, with several new plants being built.  The using of Organinc Rankine Cycle generators allows solar trough plants as small as 1 MW to be built (such as the new Saguaro plant north of
Tucson, AZ.

o       Parabolic trough technology allows energy to be stored as heat, which is much less expensive than storing electricity.  This allows the energy from these plants to be available at times of peak demand, making the electricity much more valuable.

o       Steve Raabe recently wrote an article for the Denver Post providing a good overview of the prospects of this technology in
Colorado.  The only point that he missed is the potential for hybridization with existing coal and gas plants.  By preheating steam for an existing fossil fuel fired turbine, CSP can make an old power plant operate much more efficiently.  Arnold Leitner of SkyFuel (
www.skyfuel.com) tells me “Our preliminary engineering estimates, satellite imagery of the locations and solar data show that SkyFuel could supply 50-100 MW-electric solar steam to the Comanche power plants generating an estimated 65,700-131,400 MWh of pure solar power at the facility via the existing steam turbine. SkyFuel could deliver this solar-generated steam to the power plant at an effective fuel cost commensurate to the fuel cost of burning natural gas at a modern combined cycle power plant at fuel price of 7-8 cents/mmBtu. In other words, through a FuelSaverTM at a coal-fired power plant SkyFuel could provide solar energy at the price of natural gas generation.”

o       Considering that solar power is available during peak demand, gas ifered generation is the appropriate cost comparison (as opposed to wind power, which does not deserve (or need) a price premium due to its unpredictable timing.

o       A variant on this called Concentrating Linear Fresnel Reflector (CLFR) uses many thin mirror strips instead of parabolic

troughs to concentrate sunlight from a large field onto just two tubes of working fluid.  This has the advantage that flat mirrors are much cheaper to produce that parabolic mirrors, and also allows for a greater density of reflectors in the array, allowing more of the sunlight to be used.

        Power Tower

o       Power Tower technology is similar to solar trough technology in that it uses mirrors to concentrate sunlight on a working fluid which is then used to superheat steam to run a turbine.  The difference is that the mirrors concentrate all the sunlight onto a single receiver at the top of a tower.  This allows for higher temperatures, but leads to engineering problems because of the high temperature at the receiver.

o       Lower price per watt is theoretically possible compared to trough technology because of the higher temperatures.

o       So far, only two pilot plants have been built and operated, called Solar One and Solar Two (actually the same facility as Solar One, but converted to use nitrate salts as the working fluid rather than superheated steam).    Both Solar One and Two incorporated thermal energy storage.  Due to the success in demonstrating the technology of Solar Two, a commercial 15MW plant Solar Tres is in the planning stations.  This station will incorporate enough thermal storage in molten salt tanks for 24h operation.

        Solar Chimney

o       A Solar chimney consists of a large greenhouse (multiple square miles of area covered by a transparent roof) which is sloped gently up to a central hollow tower or chimney.  The sun heats the air in the greenhouse which then rises up the chimney driving an air turbine (similar to the hydroelectric turbines used to generate power at dams) in the chimney as it rises.  Water filled tubes on the floor of the greenhouse serve as heat storage which allows the chimney to operate even at night and on cloudy days.  The amount of water in the tubes can be changed to alter the profile of power production and match it closely to the power demand the chimney serves.

o       The edges of the greenhouse can actually be used for agribusiness to grow plants, so not all the space taken up is solely devoted to electric production. 

o       The beauty of solar chimneys is that they are extremely low tech, and can be built without heavy equipment using simple materials.  The only exception to this is the turbine, and even that is much less complex than turbines used to generate power from wind, because the wind in a solar chimney is much more regular than naturally occurring winds and storms that wind turbines have to deal with. 

o       The first solar chimney was built in
Manzanares, Spain and ran continuously for 32 months in the late 1980s with 95% availability (considerably better than most coal and nuclear plants.)   See a video tour of this chimney I ran across on EcoGeek.

o       A 200MW chimney is planned by EnviroMission of Melbourne Austrailia for the Austrailian Outback.

o       It may be possible to build solar chimneys on south-facing slopes or simply as an extra layer of glazing on tall buildings with a turbine at the top which would make them even cheaper by avoiding the necessity of building the tall chimney (my idea).

 

        Dish Stirling

o       A Dish Stirling system is a parabolic mirror which focuses heat directly on a Stirling engine, a simple closed-cycle engine which operates simply using any heat source.  Sometimes hybridized with a fossil fuel source to provide heat when the sun is not shining. 

o       Dish
Sterling systems have the advantage of small size and scalability, because each individual mirror-engine system produces only around 25kW, but many can by linked together.

o       Because the suns rays are focused directly on the engine, there is little opportunity for thermal storage, a great advantage of several other thermal concentrating technologies.

o       Stirling Energy Systems currently has a few demonstration systems in operation.  They have signed purchase agreements with two
California utilities to build a total of around 1 GW of electric generation, but both projects are still in early testing phases.

o       According to Sandia National labs, this is the most efficient technology for converting sunlight into electricity.

CSP Technology comparisons

Technology Scale Levelized cost per MWh Pros/Cons Complexity/ deployment

Concentrating PV

Any

$15-$20

No storage option; does not work well on cloudy days

High.  Beginning to be deployed in last couple years.

Dish
Sterling

25 kW per dish

Unknown

High efficiency, modular.  No thermal storage.

Just beginning to be deploy

Parabolic Trough

Most: >50 MW for economies of scale;

Organic Rankine Cycle 1MW+

$8-$18 current

$6 potential

Can hybridize with existing fossil plants.

Storage, well understood technology, needs water for efficient cooling.

Plants operating consistently for 30 years in CA.

Solar Tower

>30 MW

$18+ current,

$5 potential,

can hybridize with existing fossil plants.

Storage.  Potentially cheaper than solar trough. Needs water for efficient cooling.

2 pilot plants with operational history.  First commercial plant now operational.

Solar Chimney

100-200MW

Not yet known.

Baseload power, low maintenance.

Low complexity, great potential for 3rd world.

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