New York Times brought out this article on Sunday narrating the experience of an electric car from behind the wheels. A good read!
http://www.nytimes.com/2011/06/26/opinion/sunday/26car.html?_r=1&scp=1&sq=is%20this%20our%20future&st=cse
Tuesday, June 28, 2011
Monday, June 27, 2011
The Wonder Car
Probably the two biggest topics in the news these days are technology companies’ IPOs and electric vehicles. While the former is out of the scope of this blog, despite their fantastic performance, I deem this a good time to write about electric cars in my post this week. The question that comes first to my mind is, where do I begin?:)
An electric car, per Wikipedia, is an automobile propelled by electric motors, using electrical energy stored in batteries or another energy storage device. Electric cars are not something new and they have been around for more than a century now. In fact, as Wikipedia has it, electric cars were preferred to gasoline cars at the dawn of the 20th century and only the rapid advancement in internal combustion engines coupled with the significant reduction in oil prices drove them out of the market. The vigor with which new models of electric vehicles are being rolled out, it seems that the time has come to right that wrong!
The most memorable push for electric vehicles in living history was during the 90s and mostly centered on California. California Air Resources Board (CARB), their emission control agency, mandated the development of zero emission vehicles which led to the development of EV1 by GM and RAV4 by Toyota. (Side note: GM swiftly, and almost shockingly, canceled their EV1 program, something that has been beautifully documented in the must-watch documentary “Who Killed the Electric Car”.) Toyota sold just about 1500 of RAV4s and cost and range limitation were cited as issues with the car.
Around the same time as RAV4, Toyota also started selling its hybrid car, the Prius. A hybrid car is one which can be powered by both gasoline and electricity. Typically, the distance such a car can be propelled by electricity is much smaller and the gas power takes over when this car is driven longer distances. The Toyota Prius uses a small, regenerative battery having a driving range of no more than a few miles. Charging of the battery is done internally by the gasoline engine and the energy generated in the car by the braking process. This car was hailed as an engineering breakthrough as it seamlessly combined the electric and gasoline fuel to propel a car. The smaller electric range in the car was just enough for the needs of the urban dweller, with enough miles to cover his/her trips to the grocery store. This is the reason why more than 2 million Priuses have been sold globally, so far.
It could be argued that the Prius used its battery power to supplement its gasoline engine. Lately, the major car companies have come up with models which have a markedly higher battery power, most prominent among them being Tesla Roadsters, GM’s Volt, Nissan’s Leaf and Toyota’s re-designed Prius. These cars have either significantly increased their mileage from electric power, like Volt and the reformed Prius, or have gone completely electric, like Leaf. The electric range of Volt is about 35 miles while the new Prius can take you upto 13-14 miles on its batteries. The all electric Leaf, on the other hand, can go about 73 miles with a single charge. The amount of power provided by a battery varies a lot with weather and driving conditions. So this number will go down if you are driving on a hot, humid day in dense traffic.
The most critical design element in these cars is the size of the battery, something whose impact cannot be undermined. Battery technology available today is really not capable of meeting the intense demands of electric transportation. The low energy density of batteries necessitates packing more volume of them to get a higher output. This greatly increased both the cost of a car, the cost of battery alone for Leaf is about $18,000 and the volume to fit the larger battery.
There has been a global push in research to drive down the cost of these batteries while also increasing their energy density. So, if you have an idea for a battery that is cheap and packs in a great energy, run straight to one of the car manufacturers! You could choose not to work for the rest of your life:)
Despite all the constraints, there is a definite tailwind behind electric cars, not only because of the generous subsidies provided by governments around the world but also because the common public is getting increasingly intrigued by the concept of charging a car like they charge their laptops or mobile phones. I knew that this topic will take up more than one blog post and I look to follow this up with more on battery technologies. I look forward to making one of you filthy rich!
An electric car, per Wikipedia, is an automobile propelled by electric motors, using electrical energy stored in batteries or another energy storage device. Electric cars are not something new and they have been around for more than a century now. In fact, as Wikipedia has it, electric cars were preferred to gasoline cars at the dawn of the 20th century and only the rapid advancement in internal combustion engines coupled with the significant reduction in oil prices drove them out of the market. The vigor with which new models of electric vehicles are being rolled out, it seems that the time has come to right that wrong!
The most memorable push for electric vehicles in living history was during the 90s and mostly centered on California. California Air Resources Board (CARB), their emission control agency, mandated the development of zero emission vehicles which led to the development of EV1 by GM and RAV4 by Toyota. (Side note: GM swiftly, and almost shockingly, canceled their EV1 program, something that has been beautifully documented in the must-watch documentary “Who Killed the Electric Car”.) Toyota sold just about 1500 of RAV4s and cost and range limitation were cited as issues with the car.
Around the same time as RAV4, Toyota also started selling its hybrid car, the Prius. A hybrid car is one which can be powered by both gasoline and electricity. Typically, the distance such a car can be propelled by electricity is much smaller and the gas power takes over when this car is driven longer distances. The Toyota Prius uses a small, regenerative battery having a driving range of no more than a few miles. Charging of the battery is done internally by the gasoline engine and the energy generated in the car by the braking process. This car was hailed as an engineering breakthrough as it seamlessly combined the electric and gasoline fuel to propel a car. The smaller electric range in the car was just enough for the needs of the urban dweller, with enough miles to cover his/her trips to the grocery store. This is the reason why more than 2 million Priuses have been sold globally, so far.
It could be argued that the Prius used its battery power to supplement its gasoline engine. Lately, the major car companies have come up with models which have a markedly higher battery power, most prominent among them being Tesla Roadsters, GM’s Volt, Nissan’s Leaf and Toyota’s re-designed Prius. These cars have either significantly increased their mileage from electric power, like Volt and the reformed Prius, or have gone completely electric, like Leaf. The electric range of Volt is about 35 miles while the new Prius can take you upto 13-14 miles on its batteries. The all electric Leaf, on the other hand, can go about 73 miles with a single charge. The amount of power provided by a battery varies a lot with weather and driving conditions. So this number will go down if you are driving on a hot, humid day in dense traffic.
The most critical design element in these cars is the size of the battery, something whose impact cannot be undermined. Battery technology available today is really not capable of meeting the intense demands of electric transportation. The low energy density of batteries necessitates packing more volume of them to get a higher output. This greatly increased both the cost of a car, the cost of battery alone for Leaf is about $18,000 and the volume to fit the larger battery.
There has been a global push in research to drive down the cost of these batteries while also increasing their energy density. So, if you have an idea for a battery that is cheap and packs in a great energy, run straight to one of the car manufacturers! You could choose not to work for the rest of your life:)
Despite all the constraints, there is a definite tailwind behind electric cars, not only because of the generous subsidies provided by governments around the world but also because the common public is getting increasingly intrigued by the concept of charging a car like they charge their laptops or mobile phones. I knew that this topic will take up more than one blog post and I look to follow this up with more on battery technologies. I look forward to making one of you filthy rich!
Monday, June 13, 2011
Let there be light!
If a survey was carried out for the most innocuous, under-rated, unassuming piece of equipment in anybody’s home, the incandescent light bulb would probably be top the list. After all, how many of us even register the presence of this ubiquitous bulb in our homes, until we get rid of it for the “cooler” and energy efficient CFL. Well, it might come as a surprise to all of you that this same old bulb is lining up to be at the center of a great battle in the near future. Find out below why exactly it should be so.
Light was not always meant to be this abundant and easy as it is today until electricity came along. Prior to electricity, light was expensive, a product of exhaustible, and expensive, resources like whale oil. Edison’s invention really made light a commodity and took it to the masses in limitless quantities. On Dec 31, 1879 he unveiled his incandescent device, which provided illumination by running a current through a filament encased in a vacuum-sealed glass bulb. The newspapers compared the orange glow of the bulb to the “mellow sunset of an Italian autumn”. Obviously, not everyone agreed. Remember that this bulb was competing against the gas flame and some found the light to be unnatural and lacking the comforting attributes of the latter.
The initial bulbs were fairly expensive as well, going for 44 cents apiece in 1891, which when adjusted for inflation becomes $10 in today’s world. However, as electricity became the backbone of lighting in the world, the price of bulbs keeps plummeting. Falling prices and the rapidly growing demand for the existing product stalled advancements in home lighting for more than a century. That the bulb was highly inefficient, giving off 90% of its energy as heat and not light, was largely ignored in the hundred years that ensued. It was not until the energy crises of 1970s that these shortcomings of the bulb came to light, pun intended, and compact fluorescents were invented.
This sets up a nice background about the current war being waged in the realm of lighting products in the US. The US Congress approved a bill in 2007, which mandated a 25-30% increase in lighting efficiency starting January of 2012. The incandescent bulb, as we know it, is not capable of being that efficient; this could very well be the end of the 150 year old invention. As the deadline for this law draws closer, the arguments get more polarized and one could see a badly waged battle on this front.
There are two issues at stake in this debate, price and quality of light. That the Edison’s bulb is dirt cheap is already acknowledged. What is often missed is the quality of light this bulb produces. Research says that the light from an incandescent bulb mimics the natural spectrum and produces light that is in best agreement with the human physiology. CFLs and other forms of lighting products are believed to produce light that is “unnatural”, to say the least and could potentially be harmful to our physiology. This is one argument that would be played several times in this debate.
The ride has not been smooth for these CFLs since their inception and any amount of subsidies or “green branding” has not made the light bulb obsolete. The price of a CFL could be the primary reason for its mild acceptance; the first CFLs sold for $25-$35 a bulb in the 1970s.
There is also active interest in using LEDs(Light Emitting Diodes) for lighting. Scientists at Phillips have put together a LED bulb that also produces light that nicely agrees with the natural spectrum. One such bulb is supposed to last anywhere between 17 and 22 years but the cost of one is an exorbitant $40. Getting this number to a price less than $10 apiece, the magic number reported for consumer acceptance, is only part of the problem. This product would also require intelligent marketing to sell a product that is supposed to last for a generation. Proponents of this technology claim that switching to LED bulbs from the traditional ones would eliminate carbon emissions by 200 million tons, about 3% of the total US carbon emissions.
The next time when you look at your bulb, if you still own one, make sure you remember the 150 year history it carries:)
Light was not always meant to be this abundant and easy as it is today until electricity came along. Prior to electricity, light was expensive, a product of exhaustible, and expensive, resources like whale oil. Edison’s invention really made light a commodity and took it to the masses in limitless quantities. On Dec 31, 1879 he unveiled his incandescent device, which provided illumination by running a current through a filament encased in a vacuum-sealed glass bulb. The newspapers compared the orange glow of the bulb to the “mellow sunset of an Italian autumn”. Obviously, not everyone agreed. Remember that this bulb was competing against the gas flame and some found the light to be unnatural and lacking the comforting attributes of the latter.
The initial bulbs were fairly expensive as well, going for 44 cents apiece in 1891, which when adjusted for inflation becomes $10 in today’s world. However, as electricity became the backbone of lighting in the world, the price of bulbs keeps plummeting. Falling prices and the rapidly growing demand for the existing product stalled advancements in home lighting for more than a century. That the bulb was highly inefficient, giving off 90% of its energy as heat and not light, was largely ignored in the hundred years that ensued. It was not until the energy crises of 1970s that these shortcomings of the bulb came to light, pun intended, and compact fluorescents were invented.
This sets up a nice background about the current war being waged in the realm of lighting products in the US. The US Congress approved a bill in 2007, which mandated a 25-30% increase in lighting efficiency starting January of 2012. The incandescent bulb, as we know it, is not capable of being that efficient; this could very well be the end of the 150 year old invention. As the deadline for this law draws closer, the arguments get more polarized and one could see a badly waged battle on this front.
There are two issues at stake in this debate, price and quality of light. That the Edison’s bulb is dirt cheap is already acknowledged. What is often missed is the quality of light this bulb produces. Research says that the light from an incandescent bulb mimics the natural spectrum and produces light that is in best agreement with the human physiology. CFLs and other forms of lighting products are believed to produce light that is “unnatural”, to say the least and could potentially be harmful to our physiology. This is one argument that would be played several times in this debate.
The ride has not been smooth for these CFLs since their inception and any amount of subsidies or “green branding” has not made the light bulb obsolete. The price of a CFL could be the primary reason for its mild acceptance; the first CFLs sold for $25-$35 a bulb in the 1970s.
There is also active interest in using LEDs(Light Emitting Diodes) for lighting. Scientists at Phillips have put together a LED bulb that also produces light that nicely agrees with the natural spectrum. One such bulb is supposed to last anywhere between 17 and 22 years but the cost of one is an exorbitant $40. Getting this number to a price less than $10 apiece, the magic number reported for consumer acceptance, is only part of the problem. This product would also require intelligent marketing to sell a product that is supposed to last for a generation. Proponents of this technology claim that switching to LED bulbs from the traditional ones would eliminate carbon emissions by 200 million tons, about 3% of the total US carbon emissions.
The next time when you look at your bulb, if you still own one, make sure you remember the 150 year history it carries:)
Monday, May 30, 2011
Musings of an energy wonk II
Okay, as promised....time to look at the external challenges that utilities will face in the coming years. These are the challenges which, as described earlier, are extraneous to the industry and the industry will have to live with it.
Fuel Price Volatility: Fuel prices, especially gas and oil, have been highly volatile since 2007 and predicting fuel prices has been a minefield. 2007 is also the year since when oil and gas prices have ceased to show any correlation between them, thus further complicating any fuel price prediction methodologies. A major reason for this change has been the exponentially rising production of shale gas.
Fuel prices affect the electric power industry in various ways. When gas was going at its peak price in 2007, there was a lot of activity in securing long term contracts with foreign natural gas producers and constructing LNG terminals in the US to import gas in order to keep domestic natural gas price in check. Since then, the realization of large resources of shale gas has pushed down gas price and rendered the LNG plans ineffective. The unrest in the Middle East and the Japanese catastrophe has again caused gas and oil prices to spike. As the global economy gets more intertwined, a small change in one place can affect fuel prices globally, making life difficult for this industry.
Access to capital: To tackle the internal challenges discussed above, the power industry would require a lot of capital investments, be it sourcing capital to set up a wind farm or getting a demand side management program going. Getting access to capital in this economic climate is not terribly easy and money is not flowing as easily as it was about 4 years ago. To add to the problem, credit ratings of utilities and independent power producers have taken a beating lately, making it even harder to source funds. The economic recovery, and the pace of it, should be keenly observed by this industry.
Carbon/Climate Change Policy: Politically, climate change seems to be a non-starter in the current Congress. However, regulations limiting emissions for both carbon and otherwise, cannot be ruled out completely. The Environment Protection Agency (EPA) has been very active in setting forth a set of regulations that would restrict emissions from the electric power industry.
These regulations, if implemented in their entirety, would necessitate installation of emission control equipment and significantly increase the cost of producing power. Or, these regulations would force several older plants into retirement because retrofitting them with emission control equipment would be uneconomic. This will bring forth reliability challenges for some areas in the country and would require further capital infusion to build new plants to cover for the shortfall. All in all, the policy space can be expected to be abuzz with activity in the near future, either through the Congress or through one of the agencies.
Emission control technology providers stand to gain if stiff regulations are enacted by the regulatory agencies. There could, potentially, be a big market for these technologies.
The electric power industry has come a long way from the days when its sole purpose used to be providing customers with affordable and reliable power. In those days, all these companies had to do was to maintain the status quo. This last decade has really added more dimensions to their mandate, in the form of providing cleaner electricity and information to the customers to better use this vital resource. Maintaining the status quo is not enough in this changed environment.
Fuel Price Volatility: Fuel prices, especially gas and oil, have been highly volatile since 2007 and predicting fuel prices has been a minefield. 2007 is also the year since when oil and gas prices have ceased to show any correlation between them, thus further complicating any fuel price prediction methodologies. A major reason for this change has been the exponentially rising production of shale gas.
Fuel prices affect the electric power industry in various ways. When gas was going at its peak price in 2007, there was a lot of activity in securing long term contracts with foreign natural gas producers and constructing LNG terminals in the US to import gas in order to keep domestic natural gas price in check. Since then, the realization of large resources of shale gas has pushed down gas price and rendered the LNG plans ineffective. The unrest in the Middle East and the Japanese catastrophe has again caused gas and oil prices to spike. As the global economy gets more intertwined, a small change in one place can affect fuel prices globally, making life difficult for this industry.
Access to capital: To tackle the internal challenges discussed above, the power industry would require a lot of capital investments, be it sourcing capital to set up a wind farm or getting a demand side management program going. Getting access to capital in this economic climate is not terribly easy and money is not flowing as easily as it was about 4 years ago. To add to the problem, credit ratings of utilities and independent power producers have taken a beating lately, making it even harder to source funds. The economic recovery, and the pace of it, should be keenly observed by this industry.
Carbon/Climate Change Policy: Politically, climate change seems to be a non-starter in the current Congress. However, regulations limiting emissions for both carbon and otherwise, cannot be ruled out completely. The Environment Protection Agency (EPA) has been very active in setting forth a set of regulations that would restrict emissions from the electric power industry.
These regulations, if implemented in their entirety, would necessitate installation of emission control equipment and significantly increase the cost of producing power. Or, these regulations would force several older plants into retirement because retrofitting them with emission control equipment would be uneconomic. This will bring forth reliability challenges for some areas in the country and would require further capital infusion to build new plants to cover for the shortfall. All in all, the policy space can be expected to be abuzz with activity in the near future, either through the Congress or through one of the agencies.
Emission control technology providers stand to gain if stiff regulations are enacted by the regulatory agencies. There could, potentially, be a big market for these technologies.
The electric power industry has come a long way from the days when its sole purpose used to be providing customers with affordable and reliable power. In those days, all these companies had to do was to maintain the status quo. This last decade has really added more dimensions to their mandate, in the form of providing cleaner electricity and information to the customers to better use this vital resource. Maintaining the status quo is not enough in this changed environment.
Tuesday, May 17, 2011
Musings of an energy wonk
A long hiatus calls for a long blog. I thought long and hard, wrote long and hard and here it is: the result of all that time spent thinking:)
The American electric power industry has been in a state of flux in the last decade, ever since the sector has been opened to competition. This constantly evolving industry has interesting challenges ahead, which, broadly speaking, can be broken down into two categories: external and internal. External challenges are those that are not under the control of the industry itself. These can be further broken down into sub-categories of fuel price volatility, access to capital and climate change regulation. Internal challenges are those that are integral to the way in which this industry will evolve, both in the near and long term. These can be sub-classified into areas such as Demand Side Management and distributed generation, including incorporation of electric vehicles, and Low Carbon Technology Integration.
Let’s take a few minutes to look at each challenge in greater detail, starting with the internal challenges in the first section.
1.1 Carbon Footprint Reduction: There has been a general trend towards decarbonizing the electric grid, which has been independent of the political opinion on Climate Change. The sector has been reducing its carbon footprint primarily through standards and subsidies for renewable power. The energy sources mainly benefiting from this movement include solar, wind, biomass/biofuel and potentially carbon capture and sequestration (CCS), each having its own unique selling point.
Solar and wind are front runners in this race owing to their practically zero fuel cost, both abundantly supplied by nature. The importance of this largesse cannot be overemphasized when we look at the trajectory of fossil fuel prices in the last few years. However, the unpredictability of these technologies poses planning issues for system operators, an issue most pronounced with wind power. Although leading the pack of low-carbon technology by the way of total installed capacity, equaling 40 GW and growing rapidly, wind cannot be counted upon when you might need it the most. Wind does not blow during the peak hours on hot summer days. Even on normal days, predicting wind patterns could be more complicated than rocket science, making resource planning for system operators a major headache. These technologies are also hobbled by their extremely low efficiency of electricity production.
Biomass makes for an interesting resource for the electricity sector due to the fact that it consumes carbon dioxide to grow. Thus any process of electricity generation through biomass can be designed to be carbon negative, taking in more carbon than it emits, or carbon neutral, taking in as much carbon as it emits. Despite the initial hiccups with integrating biomass energy into the system, there are all the indications that this resource could play a bigger role in the future.
The fate of CCS hangs in the balance. While there is a general consensus that the power sector would need some form of a technology that can capture carbon emissions from coal plants, the prohibitively high cost of CCS has made utilities dither until now. While reducing this cost would definitely help, having a carbon price through a tax or cap and trade would give a massive boost to the feasibility of CCS. Utilities and other players in the power industry would want to be informed of developments in this space.
This area is a hotbed for technology providers, in every shape and form. The push for more renewables through the renewable energy standards will keep demand for wind turbines and solar generation technologies high, in the foreseeable future. There would also be demand for niche solvent manufacturers who can provide chemicals that not only capture a higher percentage of carbon dioxide emissions from coal power plants but also get easily separated from that captured carbon dioxide.
1.2 Demand Side Management: The running joke in the power sector is that if Thomas Edison came back to life today, he would instantly recognize the current electric grid for it’s too similar to the one he had envisioned. There has been a steady movement for the past few years to modernize the grid and make it “smarter”. The obvious place to start is to make the grid a two-way street for information, which would not only keep consumers better informed about their usage and electricity price at different times but also help utilities track and correct faults in the system in a very timely fashion.
A “smart” grid would give better price signals to consumers, having peak hour prices rising steeply compared to the off-peak hours. The hope with all this is that consumers can shift their activities around to shave off the peak demand. A significant reduction in peak demand can obviate the need to build new power plants for reliability purposes, an activity which is not favored in this tight economic climate. We could end up seeing a new business model for utilities and power producers, one in which these companies encourage their consumers to use less of their product but make up the loss by charging higher for the electricity they provide.
The final aim of any smart grid, or the proverbial “smartest” grid, would not only be a two-way street for information but also for electricity. It would enable customers to generate power of their own, through rooftop solar PV or any other distributed generation technology, and allow the grid to feed in power from the other end. Another important technology in the distributed generation space is energy storage, and the role of batteries in storage. This would, however, be a long term vision for the grid, one that would entail that all preceding pieces fall into place.
Somewhere in this spectrum ranging from a smart grid to the smartest grid lays a grid that can enable electrification of the transportation sector. With the advent of electric cars, load on the power sector is bound to rise steeply. This industry would be ill-advised to allow electric car owners to charge their cars at the same flat rate that they charge the households, calling for a differential pricing mechanism. Still, electrification of this sector is a massive opportunity for the power industry. The advent of air conditioning was hailed as the transformational event for the electric power sector in the 20th century. There are enough signs to show that electric cars could very well have the same impact for the power industry in the 21st century.
While the current grid would need to be improved to make it smarter, it would also need to be expanded. There is a lot of activity underway in building transmission lines not only to bring electricity to more places but also to relieve congestion in places with high power prices.
This is another area of extreme importance for technology providers. The enhancements needed for the current grid to become a smart one necessitate installation of a lot of communication and monitoring equipment. This partly explains why all the major high-tech companies like IBM, Siemens and Cisco are so bullish about the smart grid. These companies have got the experience in the telecommunication business and can leverage this expertise to make the electric grid “talk”.
Actually, I had a lot of time to write and write and write. You may not have the time to read all of that in one go. So, lets look at the external issues with this industry next week. Stay tuned:)
The American electric power industry has been in a state of flux in the last decade, ever since the sector has been opened to competition. This constantly evolving industry has interesting challenges ahead, which, broadly speaking, can be broken down into two categories: external and internal. External challenges are those that are not under the control of the industry itself. These can be further broken down into sub-categories of fuel price volatility, access to capital and climate change regulation. Internal challenges are those that are integral to the way in which this industry will evolve, both in the near and long term. These can be sub-classified into areas such as Demand Side Management and distributed generation, including incorporation of electric vehicles, and Low Carbon Technology Integration.
Let’s take a few minutes to look at each challenge in greater detail, starting with the internal challenges in the first section.
1.1 Carbon Footprint Reduction: There has been a general trend towards decarbonizing the electric grid, which has been independent of the political opinion on Climate Change. The sector has been reducing its carbon footprint primarily through standards and subsidies for renewable power. The energy sources mainly benefiting from this movement include solar, wind, biomass/biofuel and potentially carbon capture and sequestration (CCS), each having its own unique selling point.
Solar and wind are front runners in this race owing to their practically zero fuel cost, both abundantly supplied by nature. The importance of this largesse cannot be overemphasized when we look at the trajectory of fossil fuel prices in the last few years. However, the unpredictability of these technologies poses planning issues for system operators, an issue most pronounced with wind power. Although leading the pack of low-carbon technology by the way of total installed capacity, equaling 40 GW and growing rapidly, wind cannot be counted upon when you might need it the most. Wind does not blow during the peak hours on hot summer days. Even on normal days, predicting wind patterns could be more complicated than rocket science, making resource planning for system operators a major headache. These technologies are also hobbled by their extremely low efficiency of electricity production.
Biomass makes for an interesting resource for the electricity sector due to the fact that it consumes carbon dioxide to grow. Thus any process of electricity generation through biomass can be designed to be carbon negative, taking in more carbon than it emits, or carbon neutral, taking in as much carbon as it emits. Despite the initial hiccups with integrating biomass energy into the system, there are all the indications that this resource could play a bigger role in the future.
The fate of CCS hangs in the balance. While there is a general consensus that the power sector would need some form of a technology that can capture carbon emissions from coal plants, the prohibitively high cost of CCS has made utilities dither until now. While reducing this cost would definitely help, having a carbon price through a tax or cap and trade would give a massive boost to the feasibility of CCS. Utilities and other players in the power industry would want to be informed of developments in this space.
This area is a hotbed for technology providers, in every shape and form. The push for more renewables through the renewable energy standards will keep demand for wind turbines and solar generation technologies high, in the foreseeable future. There would also be demand for niche solvent manufacturers who can provide chemicals that not only capture a higher percentage of carbon dioxide emissions from coal power plants but also get easily separated from that captured carbon dioxide.
1.2 Demand Side Management: The running joke in the power sector is that if Thomas Edison came back to life today, he would instantly recognize the current electric grid for it’s too similar to the one he had envisioned. There has been a steady movement for the past few years to modernize the grid and make it “smarter”. The obvious place to start is to make the grid a two-way street for information, which would not only keep consumers better informed about their usage and electricity price at different times but also help utilities track and correct faults in the system in a very timely fashion.
A “smart” grid would give better price signals to consumers, having peak hour prices rising steeply compared to the off-peak hours. The hope with all this is that consumers can shift their activities around to shave off the peak demand. A significant reduction in peak demand can obviate the need to build new power plants for reliability purposes, an activity which is not favored in this tight economic climate. We could end up seeing a new business model for utilities and power producers, one in which these companies encourage their consumers to use less of their product but make up the loss by charging higher for the electricity they provide.
The final aim of any smart grid, or the proverbial “smartest” grid, would not only be a two-way street for information but also for electricity. It would enable customers to generate power of their own, through rooftop solar PV or any other distributed generation technology, and allow the grid to feed in power from the other end. Another important technology in the distributed generation space is energy storage, and the role of batteries in storage. This would, however, be a long term vision for the grid, one that would entail that all preceding pieces fall into place.
Somewhere in this spectrum ranging from a smart grid to the smartest grid lays a grid that can enable electrification of the transportation sector. With the advent of electric cars, load on the power sector is bound to rise steeply. This industry would be ill-advised to allow electric car owners to charge their cars at the same flat rate that they charge the households, calling for a differential pricing mechanism. Still, electrification of this sector is a massive opportunity for the power industry. The advent of air conditioning was hailed as the transformational event for the electric power sector in the 20th century. There are enough signs to show that electric cars could very well have the same impact for the power industry in the 21st century.
While the current grid would need to be improved to make it smarter, it would also need to be expanded. There is a lot of activity underway in building transmission lines not only to bring electricity to more places but also to relieve congestion in places with high power prices.
This is another area of extreme importance for technology providers. The enhancements needed for the current grid to become a smart one necessitate installation of a lot of communication and monitoring equipment. This partly explains why all the major high-tech companies like IBM, Siemens and Cisco are so bullish about the smart grid. These companies have got the experience in the telecommunication business and can leverage this expertise to make the electric grid “talk”.
Actually, I had a lot of time to write and write and write. You may not have the time to read all of that in one go. So, lets look at the external issues with this industry next week. Stay tuned:)
Thursday, February 24, 2011
Endorsement from President Obama!
What better endorsement on one’s thoughts than that from the President of United States of America! Obama announced his 2012 budget last week, close on the heels of my post on Small Modular Reactors (SMR) and he allocated $853 million dollars for research on SMR in 2012. I always knew Obama is smart enough to know where to get his energy information from:)
More on his budget today, for this is not your average-Joe government budgets but one that signals a clear move towards a clean energy revolution in the United States. The administration has sanctioned about $29.5 billion for 2012 for the Department of Energy, an increase in spending of about 4.2% in a climate where spending on defense has been slashed! About $8 billion of it has been siphoned to clean energy research, specifically wind, solar and advanced batteries. This is in addition to the $36 billion that the White House has asked in loan guarantees for the construction of new Nuclear plants in the US. Nuclear seems to be surely ensconced in this administration’s energy plans much as hydrogen energy was President Bush’s blue eyed boy! Now some people might give me credit for that, for I firmly endorsed Nuclear in all my posts. You know I am not one for taking credits:)
Oh, hydrogen energy! How often do you see a technology go through the cycle of boom and bust in terms of government support, within a decade! From being touted as the next big thing in energy under Bush to being completely stripped of all federal funding under Obama, this technology has seen a lot. I still feel eliminating all funding for hydrogen is a bit harsh. The viability of our fuel cell technologies depend to some extent on such government research funding for hydrogen. That is a topic for another day!
There are other positive tidbits from the budget, like increasing the budget of the government’s venture arm, Advanced Research Projects Agency-Energy (ARPA_E) to $550 million after the excellent work it has done to promote energy entrepreneurship last year. The budget also proposed 3 more Energy Innovation Hubs to solve challenging problems in this area. There is also a proposal to spend $588 million on vehicle technology and a $453 million budget for Carbon Capture and Sequestration projects. The latter proposal has brought a cheer to yours truly, an erstwhile researcher in the field of CCS:)
Finally, let’s discuss the most interesting point of the budget. Obama’s budget seeks to eliminate $3.6 billion in annual subsidies to the oil, gas and coal sectors, totaling to about $46.2 billion in a decade. This is a VERY interesting decision! For long, and especially for people in the renewable energy space, we have heard arguments from the oil, gas and coal lobbies, let’s collectively call them black energy, that renewables are not affordable and the price parity with of green energy and black energy shall never be reached. These aficionados of black energy would conveniently keep mum about the invisible subsidies provided to them by all governments around the world and cry foul whenever a subsidy is announced for green energy. We will be close to talking on a level-playing field with this proposal, by every sense of the word.
The reality is that this budget is too polarized and looks to break too many bastions to even pass the legislative process in the US. The firmly entrenched black energy lobby groups are already out to nip these budget proposals in the bud. Still, the “green” among us can bask in the realization that the most powerful man on earth, as of now, has his priorities right. However fleeting this realization will end up being, it is comforting to see that Obama has followed his talk, of producing 80% electricity here from renewable sources, with matching proposals. Only if Washington, DC could agree!
On a separate note, there is a personal goal for me here. Now that I have Obama in my list of blog followers, I will look to proselytize more world leaders, one at a time. That’s one goal worth striving for and all of you will make this happen:)
More on his budget today, for this is not your average-Joe government budgets but one that signals a clear move towards a clean energy revolution in the United States. The administration has sanctioned about $29.5 billion for 2012 for the Department of Energy, an increase in spending of about 4.2% in a climate where spending on defense has been slashed! About $8 billion of it has been siphoned to clean energy research, specifically wind, solar and advanced batteries. This is in addition to the $36 billion that the White House has asked in loan guarantees for the construction of new Nuclear plants in the US. Nuclear seems to be surely ensconced in this administration’s energy plans much as hydrogen energy was President Bush’s blue eyed boy! Now some people might give me credit for that, for I firmly endorsed Nuclear in all my posts. You know I am not one for taking credits:)
Oh, hydrogen energy! How often do you see a technology go through the cycle of boom and bust in terms of government support, within a decade! From being touted as the next big thing in energy under Bush to being completely stripped of all federal funding under Obama, this technology has seen a lot. I still feel eliminating all funding for hydrogen is a bit harsh. The viability of our fuel cell technologies depend to some extent on such government research funding for hydrogen. That is a topic for another day!
There are other positive tidbits from the budget, like increasing the budget of the government’s venture arm, Advanced Research Projects Agency-Energy (ARPA_E) to $550 million after the excellent work it has done to promote energy entrepreneurship last year. The budget also proposed 3 more Energy Innovation Hubs to solve challenging problems in this area. There is also a proposal to spend $588 million on vehicle technology and a $453 million budget for Carbon Capture and Sequestration projects. The latter proposal has brought a cheer to yours truly, an erstwhile researcher in the field of CCS:)
Finally, let’s discuss the most interesting point of the budget. Obama’s budget seeks to eliminate $3.6 billion in annual subsidies to the oil, gas and coal sectors, totaling to about $46.2 billion in a decade. This is a VERY interesting decision! For long, and especially for people in the renewable energy space, we have heard arguments from the oil, gas and coal lobbies, let’s collectively call them black energy, that renewables are not affordable and the price parity with of green energy and black energy shall never be reached. These aficionados of black energy would conveniently keep mum about the invisible subsidies provided to them by all governments around the world and cry foul whenever a subsidy is announced for green energy. We will be close to talking on a level-playing field with this proposal, by every sense of the word.
The reality is that this budget is too polarized and looks to break too many bastions to even pass the legislative process in the US. The firmly entrenched black energy lobby groups are already out to nip these budget proposals in the bud. Still, the “green” among us can bask in the realization that the most powerful man on earth, as of now, has his priorities right. However fleeting this realization will end up being, it is comforting to see that Obama has followed his talk, of producing 80% electricity here from renewable sources, with matching proposals. Only if Washington, DC could agree!
On a separate note, there is a personal goal for me here. Now that I have Obama in my list of blog followers, I will look to proselytize more world leaders, one at a time. That’s one goal worth striving for and all of you will make this happen:)
Sunday, February 13, 2011
Good things come in small packets
Economy of scale. I love this phrase, bandied about by my economist friends as if there is no tomorrow. And the industrial age, the 19th and 20th century, has been a testament to the beauty of this phrase. Mankind figured that the bigger systems we build, the more efficient they are and the more we can harvest them. Eureka!
Nuclear power must have been one of the darlings of our economist friends, for no other system epitomizes enhanced efficiencies, from enhanced size, than nuclear. Thus, we ended up with behemoths, 1000 MW capacity units, and clubbed 2-4 of such units at one location. All of a sudden we had about 4000 MW of generation capacity to hook up with demand.
As with many 20th century legacies in the 21st century, the concept of economy of scale has also taken a beating. We have realized a whole new love for smaller, manageable things. Remember, too big to fail:) This exciting new paradigm has affected the thought around Nuclear power too and there is a movement towards making smaller, modular nuclear reactors. Reactors which can be placed in each township and managed directly by the people it serves. This not only obviates the need for intricate transmission networks to get this large amount power from God-forsaken places to civilization but also creates something that has never been thought before.
You might be amazed at the concept of a small, modular nuclear reactor in your township. And rightly so. Some of my readers would question, didn’t the Three Mile and Chernobyl nuclear disasters push these dangerous systems away from humanity’s faintest reach, for good? How on earth can we talk of getting them in the midst of townships this time? Fair questions and bear with me for a few more paragraphs for their answers.
One of the major impediments of large-scale installation of nuclear energy has been the enormous cost of financing such a plant. The total cost of starting a conventional nuclear plant is about $10 billion these days, an amount which is not easy to finance without huge government subsidies and other incentives. Small Modular Reactors(SMR), in the works, have capacities in the range of 25-125 MW, a fraction of the conventional designs. This also brings down the installation cost to a few hundred million dollars, which tremendously increases the affordability of such a reactor. The smaller size also reduces the amount of construction material that goes into a safe design, for the risks are much lower with a much smaller quantity of nuclear fuel being used. So much so that initial reports say that the amount of fuel in such a reactor is of no use for weapon grade application. SAFE!
Refueling of nuclear reactors is a process that takes up months and is not a plant operator’s delight. The technology of SMR can make such a reactor go for as much as 30-60 years without refueling. The operators will love this idea, no doubt about it!
All things said and done, it is not that easy to go about planting these reactos. As with every human being, technologies have a cycle of Karma too, and nuclear has not served its Karma well by those famous accidents mentioned in the beginning of this post. A proliferation of such reactors will cause many people to balk at the idea. There will be major delays in their sanctioning by regulatory commissions, which are not adept at handling such a technological shift. Nuclear waste is always a sensitive issue and this concept is not untouched by it. In fact, a number of smaller nuclear reactors will only compound the problem of distributed nuclear waste and ways of disposing it.
However, there are many examples currently to suggest that there is movement in a favorable direction. Several cities, for example the towns of Galena and Fairbanks in Alaska and many island cities, are going ahead with the installation of SMRs. Just keep an eye on this exciting technology in the distributed generation space.
It is exciting to watch how the concept of economies of scale has been turned on its head lately. We have figured that it’s better to work with smaller systems. In fact, this calls for a new phrase, which could be of the order of “Economies of De-Scale!”
Remember, you heard it here first:) 21st century will show us numerous situations where Economies of De-Scale will trump economies of scale.
Let’s not jettison the concept totally. There will always be instances where we cannot do away with scale. And one such instance is the number of followers I have on my blog:) The more followers I have, the more motivation I shall have to write and greater the efficiency of my blog. This economy of scale will always hold true:)
Nuclear power must have been one of the darlings of our economist friends, for no other system epitomizes enhanced efficiencies, from enhanced size, than nuclear. Thus, we ended up with behemoths, 1000 MW capacity units, and clubbed 2-4 of such units at one location. All of a sudden we had about 4000 MW of generation capacity to hook up with demand.
As with many 20th century legacies in the 21st century, the concept of economy of scale has also taken a beating. We have realized a whole new love for smaller, manageable things. Remember, too big to fail:) This exciting new paradigm has affected the thought around Nuclear power too and there is a movement towards making smaller, modular nuclear reactors. Reactors which can be placed in each township and managed directly by the people it serves. This not only obviates the need for intricate transmission networks to get this large amount power from God-forsaken places to civilization but also creates something that has never been thought before.
You might be amazed at the concept of a small, modular nuclear reactor in your township. And rightly so. Some of my readers would question, didn’t the Three Mile and Chernobyl nuclear disasters push these dangerous systems away from humanity’s faintest reach, for good? How on earth can we talk of getting them in the midst of townships this time? Fair questions and bear with me for a few more paragraphs for their answers.
One of the major impediments of large-scale installation of nuclear energy has been the enormous cost of financing such a plant. The total cost of starting a conventional nuclear plant is about $10 billion these days, an amount which is not easy to finance without huge government subsidies and other incentives. Small Modular Reactors(SMR), in the works, have capacities in the range of 25-125 MW, a fraction of the conventional designs. This also brings down the installation cost to a few hundred million dollars, which tremendously increases the affordability of such a reactor. The smaller size also reduces the amount of construction material that goes into a safe design, for the risks are much lower with a much smaller quantity of nuclear fuel being used. So much so that initial reports say that the amount of fuel in such a reactor is of no use for weapon grade application. SAFE!
Refueling of nuclear reactors is a process that takes up months and is not a plant operator’s delight. The technology of SMR can make such a reactor go for as much as 30-60 years without refueling. The operators will love this idea, no doubt about it!
All things said and done, it is not that easy to go about planting these reactos. As with every human being, technologies have a cycle of Karma too, and nuclear has not served its Karma well by those famous accidents mentioned in the beginning of this post. A proliferation of such reactors will cause many people to balk at the idea. There will be major delays in their sanctioning by regulatory commissions, which are not adept at handling such a technological shift. Nuclear waste is always a sensitive issue and this concept is not untouched by it. In fact, a number of smaller nuclear reactors will only compound the problem of distributed nuclear waste and ways of disposing it.
However, there are many examples currently to suggest that there is movement in a favorable direction. Several cities, for example the towns of Galena and Fairbanks in Alaska and many island cities, are going ahead with the installation of SMRs. Just keep an eye on this exciting technology in the distributed generation space.
It is exciting to watch how the concept of economies of scale has been turned on its head lately. We have figured that it’s better to work with smaller systems. In fact, this calls for a new phrase, which could be of the order of “Economies of De-Scale!”
Remember, you heard it here first:) 21st century will show us numerous situations where Economies of De-Scale will trump economies of scale.
Let’s not jettison the concept totally. There will always be instances where we cannot do away with scale. And one such instance is the number of followers I have on my blog:) The more followers I have, the more motivation I shall have to write and greater the efficiency of my blog. This economy of scale will always hold true:)
Sunday, February 6, 2011
Husk Power Systems: Innovation for the poor
If the last week’s post was bordering on science fiction type of innovation, with the NASA ring to it, this week we shall look at one which leverages existing technologies to affect the lives of millions. That would lie at the other end of the innovation-impact spectrum. We shall look at a small, but vigorously growing and infinitely exciting, company called Husk Power Systems (HPS).
Social enterprise and social responsibility initiatives have a vey noble picture attached to them. However, where most of these initiatives fail is that the blueprints are designed in air-conditioned halls and well equipped research labs, which cannot hope to mimic the actual conditions. Hence, such initiatives fail to take flight, having lost the battle in the initial designs conditions itself. One of the biggest, and most prolific, disasters is the path-breaking village stove, or ‘chulha’, made by the Corporate Social Responsibility (CSR) of a major oil giant, whom I shall not aim here The “stove” was supposed to ease the lives of village folks by ridding them from the wood burning stoves, which were a major cause of environmental pollution and health hazards. However, the essential working of the “stove” consisted of a fan which required electric power to operate! In villages!! While most of the distinguished people in the team that designed the “stove” were fixated on the efficiency of it, they missed the most basic design flaw. That villages don’t have power! Thus, this product of a major social initiative ended up being a space-guzzling furniture in an already space-crunched village household.
Husk Power Systems treaded this path rather dexterously, by designing a product in a local setting, for the local people. And the region we are looking at is the state of Bihar, the state that sports the dichotomy of being the second fastest growing state in India, while being the poorest at the same time. Power in Bihar is much more than a luxury, it still has the science-fiction feel in most parts of the state. 85% of people in Bihar have no grid-connected electricity, a shocking statistic that takes time to settle on you. This is one more reason why we need to move beyond the grid, depending on the situation. This supply-demand chasm cannot be hoped to be covered by the conventional electric grid. The astute founders of this company saw that there are two running motifs in Bihar, lack of electricity and abundance of agricultural waste. It did not take long for their sharp minds to conjure a plan to connect the two, and come up with a biomass-driven electric plant. Their technology generates electricity from rise husk and the cost of the power is cheaper than the cheapest form of electricity available, as claimed by their website. And you can start to see an angelic halo around this initiative when I tell you that HPS has managed to replace 42,000 liters of kerosene and 18,000 liters of diesel per year in regions which depended on their diesel gen-sets for basic functions. And hold your breath, biomass electricity is carbon neutral too. So they are not adding to the carbon in the atmosphere, ideally speaking!
That they have gone from their first installation in 2007 to 60 such small-scale plants in 250 villages, serving 25,000 households, in 2010 is a testament to the solidity of their local engineering method. They saw that farmers in the area already used a dual-fuel system that could handle a fuel mix of biomass and diesel. The real challenge was replacing a dual fuel mix with just the biomass fuel because the amount of dirt in biomass clogged the engines producing electricity. HPS has made a fix that makes such an operation possible and is leading to a heady phase of growth. A business plan on this idea won almost all the business plan competition at the US B-schools and brought in more than the required funding for the scale-up. And now for the killer punch, the company also runs schools that train local people to run these systems, install them, own them and make a healthy sum out of them. They plan to create over 7,000 local jobs in the community by 2014. I am running out of adjectives to describe this initiative, and I hope this company achieves what they set out to achieve. Anything less than that will be a letdown for this story almost seems like a fairytale.
Oh, did I tell you that one of the founders of this company left a successful life in the US to start HPS. I think I should stop here lest you start thinking of this as a Bollywood movie script:) At the end of it all, I will indulge myself a little by saying:
Jai Bihar:)
Please check out the company’s website at http://huskpowersystems.com/index.php
Social enterprise and social responsibility initiatives have a vey noble picture attached to them. However, where most of these initiatives fail is that the blueprints are designed in air-conditioned halls and well equipped research labs, which cannot hope to mimic the actual conditions. Hence, such initiatives fail to take flight, having lost the battle in the initial designs conditions itself. One of the biggest, and most prolific, disasters is the path-breaking village stove, or ‘chulha’, made by the Corporate Social Responsibility (CSR) of a major oil giant, whom I shall not aim here The “stove” was supposed to ease the lives of village folks by ridding them from the wood burning stoves, which were a major cause of environmental pollution and health hazards. However, the essential working of the “stove” consisted of a fan which required electric power to operate! In villages!! While most of the distinguished people in the team that designed the “stove” were fixated on the efficiency of it, they missed the most basic design flaw. That villages don’t have power! Thus, this product of a major social initiative ended up being a space-guzzling furniture in an already space-crunched village household.
Husk Power Systems treaded this path rather dexterously, by designing a product in a local setting, for the local people. And the region we are looking at is the state of Bihar, the state that sports the dichotomy of being the second fastest growing state in India, while being the poorest at the same time. Power in Bihar is much more than a luxury, it still has the science-fiction feel in most parts of the state. 85% of people in Bihar have no grid-connected electricity, a shocking statistic that takes time to settle on you. This is one more reason why we need to move beyond the grid, depending on the situation. This supply-demand chasm cannot be hoped to be covered by the conventional electric grid. The astute founders of this company saw that there are two running motifs in Bihar, lack of electricity and abundance of agricultural waste. It did not take long for their sharp minds to conjure a plan to connect the two, and come up with a biomass-driven electric plant. Their technology generates electricity from rise husk and the cost of the power is cheaper than the cheapest form of electricity available, as claimed by their website. And you can start to see an angelic halo around this initiative when I tell you that HPS has managed to replace 42,000 liters of kerosene and 18,000 liters of diesel per year in regions which depended on their diesel gen-sets for basic functions. And hold your breath, biomass electricity is carbon neutral too. So they are not adding to the carbon in the atmosphere, ideally speaking!
That they have gone from their first installation in 2007 to 60 such small-scale plants in 250 villages, serving 25,000 households, in 2010 is a testament to the solidity of their local engineering method. They saw that farmers in the area already used a dual-fuel system that could handle a fuel mix of biomass and diesel. The real challenge was replacing a dual fuel mix with just the biomass fuel because the amount of dirt in biomass clogged the engines producing electricity. HPS has made a fix that makes such an operation possible and is leading to a heady phase of growth. A business plan on this idea won almost all the business plan competition at the US B-schools and brought in more than the required funding for the scale-up. And now for the killer punch, the company also runs schools that train local people to run these systems, install them, own them and make a healthy sum out of them. They plan to create over 7,000 local jobs in the community by 2014. I am running out of adjectives to describe this initiative, and I hope this company achieves what they set out to achieve. Anything less than that will be a letdown for this story almost seems like a fairytale.
Oh, did I tell you that one of the founders of this company left a successful life in the US to start HPS. I think I should stop here lest you start thinking of this as a Bollywood movie script:) At the end of it all, I will indulge myself a little by saying:
Jai Bihar:)
Please check out the company’s website at http://huskpowersystems.com/index.php
Saturday, January 29, 2011
Bloom Energy
Last week we broached the topic of distributed generation, of unleashing an energy democracy of unimagined proportions. Let take the next step in this dream, of looking at a few players in this space. The company we shall be discussing today is Bloom Energy.
Bloom Energy is one of the hottest cleantech startup currently, having been valued at over a billion dollars and having backers as powerful as Kleiner Perkins, Google and Amazon, to name a few. More than the strong credentials of the backers and the Solid Oxide fuel cell technology, the most exciting aspect of Bloom Energy is the concept it envisages. That concept draws me to the firm.
Bloom Energy manufactures Bloom Boxes, which are containers the size of a single car’s parking space and provide a power of 100kW. This power is sufficient to light up 100 average homes, or a small office building. The technology driving this power generation is a solid oxide fuel cell, which is a stack of ceramic plates coated with zirconium oxide, found in beach sand. The fuel cell converts natural gas to electricity and is a very clean source of electricity. The reaction is carried out at 800 degree Celcius, which means very high efficiencies but also increased engineering challenges. The bloom boxes can be stored in your basement and can provide clean, reliable power which is right in your backyard and not exposed to the transmission and distribution red tape.
This is why a lot of business are “blooming” with the possibilities of bloom boxes, most notable being Google, ebay and Adobe, which are all looking to use bloom energy for their data centers. The cost of a bloom box is in the vicinity of $750,000 and the cost of electricity that one gets from this box, including its capital cost is 14 cents/kWh. The average cost of commercial electricity from conventional sources is 10 cents/kWh in some regions in the US. California, where the company is headquartered, is a big blooming ground for this company, pun intended, purely because the power prices in California are one of the highest in the world. The bloom boxes are liberating these electricity guzzling data centers from the shackles of grid electricity and at a reasonable cost.
As with everything in life, there are two sides to the Bloom story as well. Bloom boxes are heavily subsidized at the moment, with about 20% subsidy provided by the state of California and another good chunk coming from Federal subsidies. Hence, the proliferation is California and absolutely no growth outside. The boxes are also deemed too costly, which increases the cost of electricity. To tackle this issue, Bloom Energy has started offering just the electricity as a service, cutely labeled as Bloom Electrons. So you just sign a contract with them for electricity and you don’t need to buy the box anymore. This should ease the price significantly. Also, the low cost of natural gas should reduce the price even further.
In a nutshell, this company is doing something that is very radical with a technology that was considered very radical. The distribution generation aspect of this company is riveting and merits a serious look.
Back in 2005, I had decided that my final year thesis at IIT would be on Solid Oxide fuel cells. It didn’t take me long, with my brilliant reasoning, to figure out that the problems associated with this technology would not carry it beyond the confines of a lab. Swiftly, I changed my topic to studying catalysis instead. One BIG missed opportunity, some would say. To which I say, I have stopped counting missed opportunities:)
Bloom Energy is one of the hottest cleantech startup currently, having been valued at over a billion dollars and having backers as powerful as Kleiner Perkins, Google and Amazon, to name a few. More than the strong credentials of the backers and the Solid Oxide fuel cell technology, the most exciting aspect of Bloom Energy is the concept it envisages. That concept draws me to the firm.
Bloom Energy manufactures Bloom Boxes, which are containers the size of a single car’s parking space and provide a power of 100kW. This power is sufficient to light up 100 average homes, or a small office building. The technology driving this power generation is a solid oxide fuel cell, which is a stack of ceramic plates coated with zirconium oxide, found in beach sand. The fuel cell converts natural gas to electricity and is a very clean source of electricity. The reaction is carried out at 800 degree Celcius, which means very high efficiencies but also increased engineering challenges. The bloom boxes can be stored in your basement and can provide clean, reliable power which is right in your backyard and not exposed to the transmission and distribution red tape.
This is why a lot of business are “blooming” with the possibilities of bloom boxes, most notable being Google, ebay and Adobe, which are all looking to use bloom energy for their data centers. The cost of a bloom box is in the vicinity of $750,000 and the cost of electricity that one gets from this box, including its capital cost is 14 cents/kWh. The average cost of commercial electricity from conventional sources is 10 cents/kWh in some regions in the US. California, where the company is headquartered, is a big blooming ground for this company, pun intended, purely because the power prices in California are one of the highest in the world. The bloom boxes are liberating these electricity guzzling data centers from the shackles of grid electricity and at a reasonable cost.
As with everything in life, there are two sides to the Bloom story as well. Bloom boxes are heavily subsidized at the moment, with about 20% subsidy provided by the state of California and another good chunk coming from Federal subsidies. Hence, the proliferation is California and absolutely no growth outside. The boxes are also deemed too costly, which increases the cost of electricity. To tackle this issue, Bloom Energy has started offering just the electricity as a service, cutely labeled as Bloom Electrons. So you just sign a contract with them for electricity and you don’t need to buy the box anymore. This should ease the price significantly. Also, the low cost of natural gas should reduce the price even further.
In a nutshell, this company is doing something that is very radical with a technology that was considered very radical. The distribution generation aspect of this company is riveting and merits a serious look.
Back in 2005, I had decided that my final year thesis at IIT would be on Solid Oxide fuel cells. It didn’t take me long, with my brilliant reasoning, to figure out that the problems associated with this technology would not carry it beyond the confines of a lab. Swiftly, I changed my topic to studying catalysis instead. One BIG missed opportunity, some would say. To which I say, I have stopped counting missed opportunities:)
Sunday, January 23, 2011
Energy Democracy
Long weekends spent indoors get you thinking about stuff. Especially when it is -30 degree Celsius outside; all you can do is drink a cup of tea and think.
So I thought. And what better topic to mull over than the electricity grid system! It has been well documented that in many ways the current electric grid resembles the rigidity of landline telephones. The advent of cell phones has revolutionized the telecom sector in more ways than can be described here. This impact has been even more dramatic when you look at the revolution, mildly put, in the developing world. Individual people have been empowered to customize the cell phone to suit their needs and there ARE more than 6 billion needs in the world. What a distance we have come from those days of privileged landline connections to now when having a cell phone comes along with having a name!
The similarities between this and our wonderful grid are striking. Power is produced at a remote location, wires transfer electricity over long distances and bring it to our homes. More than anything else, the most disturbing fact is that electric cables still divide the world into haves and have-nots the same way telephone wires did about 2 decades ago. Electricity is still considered a luxury in most parts of the world, the enviable status telephones had back then. This is not just morally wrong, in a world which has more than 500 million facebook users, but technically inefficient as well!
Electricity generation, at a conventional power plant, is a very inefficient process. For every 100 units of energy that is fed into a plant, 62 units are lost in plant inefficiencies. The remaining 38 units are then sent across the transmission lines which ensure a loss of another 2 units. Of the 36 units entering our homes, 2 units are used to light a typical incandescent bulb and 34 units are lost in heating of the filament used in the bulb. Overall, the efficiency of this process is 2%. This efficiency is criminal in a world, again, inhabited by 500 million facebook users. Facebook has really provided us with a nice sense of perspective to drive any point home:)
It’s about time a cellular phone should appear and break this ossified system of generation and transmission. And I’ve got two words for you: distributed and generation! Distributed generation breaks the monopoly of the big power companies and utilities by placing many different sources of power. Think solar power, the solar panel on your roof could make you self sufficient in electricity and you can break the shackles of the power plants, electric suppliers and electric wires. Obviously, this does not mean putting a tiny coal fired plant in your house; there are some fuels for which economies of scale still make sense. My contention is that we need a mixed approach of power generation from now on: distributed generation for some fuels and centralized ones for other. Solar power is a classic case of the former, and a few more notable examples come to my mind:
-Generating localized power from biomass
-Bloom energy, one of the hottest energy start ups selling fuel cell boxes
-Small Nuclear, a miniscule reactor for a locality(surprise, surprise!!)
I intend to cover each one of them in m y subsequent posts and, hopefully, engage you in a dialogue that can shape the way we view electricity. As solar is already extensively covered I will start with the remaining items in the list above.
History has it that electricity was not always meant to be produced in this centralized fashion. Thomas Edison, arguably the father of electricity, started with DC generation, in which the power sources were placed in vicinity of the people consuming them. It was later that his protégé, Nikola Tesla, developed AC generation. Economies of scale of large, centralized generation and a desire to move these ogreish, polluting sources away from mankind made AC the technology of choice. It’s time to take a cue from the father of electricity!
Let a billion reactors bloom!
So I thought. And what better topic to mull over than the electricity grid system! It has been well documented that in many ways the current electric grid resembles the rigidity of landline telephones. The advent of cell phones has revolutionized the telecom sector in more ways than can be described here. This impact has been even more dramatic when you look at the revolution, mildly put, in the developing world. Individual people have been empowered to customize the cell phone to suit their needs and there ARE more than 6 billion needs in the world. What a distance we have come from those days of privileged landline connections to now when having a cell phone comes along with having a name!
The similarities between this and our wonderful grid are striking. Power is produced at a remote location, wires transfer electricity over long distances and bring it to our homes. More than anything else, the most disturbing fact is that electric cables still divide the world into haves and have-nots the same way telephone wires did about 2 decades ago. Electricity is still considered a luxury in most parts of the world, the enviable status telephones had back then. This is not just morally wrong, in a world which has more than 500 million facebook users, but technically inefficient as well!
Electricity generation, at a conventional power plant, is a very inefficient process. For every 100 units of energy that is fed into a plant, 62 units are lost in plant inefficiencies. The remaining 38 units are then sent across the transmission lines which ensure a loss of another 2 units. Of the 36 units entering our homes, 2 units are used to light a typical incandescent bulb and 34 units are lost in heating of the filament used in the bulb. Overall, the efficiency of this process is 2%. This efficiency is criminal in a world, again, inhabited by 500 million facebook users. Facebook has really provided us with a nice sense of perspective to drive any point home:)
It’s about time a cellular phone should appear and break this ossified system of generation and transmission. And I’ve got two words for you: distributed and generation! Distributed generation breaks the monopoly of the big power companies and utilities by placing many different sources of power. Think solar power, the solar panel on your roof could make you self sufficient in electricity and you can break the shackles of the power plants, electric suppliers and electric wires. Obviously, this does not mean putting a tiny coal fired plant in your house; there are some fuels for which economies of scale still make sense. My contention is that we need a mixed approach of power generation from now on: distributed generation for some fuels and centralized ones for other. Solar power is a classic case of the former, and a few more notable examples come to my mind:
-Generating localized power from biomass
-Bloom energy, one of the hottest energy start ups selling fuel cell boxes
-Small Nuclear, a miniscule reactor for a locality(surprise, surprise!!)
I intend to cover each one of them in m y subsequent posts and, hopefully, engage you in a dialogue that can shape the way we view electricity. As solar is already extensively covered I will start with the remaining items in the list above.
History has it that electricity was not always meant to be produced in this centralized fashion. Thomas Edison, arguably the father of electricity, started with DC generation, in which the power sources were placed in vicinity of the people consuming them. It was later that his protégé, Nikola Tesla, developed AC generation. Economies of scale of large, centralized generation and a desire to move these ogreish, polluting sources away from mankind made AC the technology of choice. It’s time to take a cue from the father of electricity!
Let a billion reactors bloom!
Friday, January 21, 2011
India's National Solar Mission
They say new year resolutions are meant to be broken. I say, who are 'they'?:)
Before moving ahead, let's recap what was discussed in the previous post for these are connected. The last post broached the role of government policies in encouraging a new technology, with particular focus on the Indian Government's massive solar ambition, a plan they are investing close to 20 billion dollars in. The target is for India to have a total installed capacity of 20 GW (GigaWatt, equal to a billion watts) by 2020, a 100 fold increase in solar capacity in a decade. To put this number in perspective, this is equal to the power requirement of 200 million 100 watt electric bulb, the omnipresent unit of everyday home. If we replace the incandescent bulb with the new compact fluorescent lamp (CFL), which uses about 20 watts of average, you can do the math to figure out that this installed solar capacity can light up 1 billion CFLs. That amounts to almost 1 lit CFL per Indian, or about 4 lit CFLs per household, if I assume that the number of people per household is 4 in India. It would be kosher to add a caveat that all these calculations are theoretical in nature for the installed capacity of 20 GW does not translate to a total power production of the same amount. That discussion is beyond the scope of this post.
The plan target also includes setting up a solar manufacturing capability of 4-5 GW by 2017. Of the 20 GW of installed solar power, off-grid applications shall amount to the tune of 2 GW by 2020, and roof-top solar capacity shall sum up to 3 GW by the same yar. Off-grid applications denote the applications for which we need not draw power from the electric grid, say for example if you are not charging your cell phones, batteries, laptops, etc. by plugging the plug in your home's socket you are using off-grid power. If the charging is being done with the energy generated form solar panels installed on your roof, that comes under the purview of rooftop solar and will be encouraged by the government.
If we look at the historical development of solar power in India, we will find the main driver has been the highly unreliable, at best, and completely absent, at worst, nature of electric power in India. 40% of India lives without access to grid electricity. Over 15% of the villages in India are still not electrified, which is the first step. How many electrified villages receive power is a topic for another day:)
In the absence of reliable, or any, power, people had taken to diesel generators, which are about 7 times the cost of power provided by the grid. Solar energy fit the bill for those bravehearts who wanted a cheap and reliable source. The total installed capacity of solar energy in India is around 200 MW currently.
Solar projects will be doles out in auctions phased over the next 10 years and the first such auction was held only last month. This was a much awaited event in the global renewable industry, as is expected by the sheer size of the plan. A total of 620 MW of solar capacity has been sanctioned by the government, which is about 3% of the total target. The auction was a major success, purely by the number of companies bidding in it. However, the prices at which companies won projects were too low, which might affect the sustainability of these projects. One general theme among the winners was the obvious lack of experience of more than a few of them in the energy industry, the list includes a woolen yarn maker and an industrial pipe supplier. We will have to wait and see their capacility in uncharted waters.
One major outcome of this auction was the obvious concentration of projects in the Indian state of Rajasthan. While it could be expected, given the solar irradiance of that state, other state governments might feel left out of this massive subsidy. One such state, none other than Gujarat, has already acted in this regard by having their own state's solar plan. If the national plan has auctioned off 620 MW of solar capacity, Gujarat alone has sanctioned about 1300 MW of solar plants and plans to have another 1700 MW in the next 4 years.
Well, if there is one key takeaway amidst all the numbers thrown in this post, it is that you will see a lot of excitement and activity around solar power in India. I am feverishly excited about the rollout of this plan. Given a choice, I would fast forward 10 years of my life and see where it stands in 2021.
On second thoughts, maybe not:) Oh, and the other key takeaway, the next time you crib about excessive heat in Delhi, you might want to turn around and install solar panels on your roof. Look at the glass half full! Now, who can argue against that:)
Before moving ahead, let's recap what was discussed in the previous post for these are connected. The last post broached the role of government policies in encouraging a new technology, with particular focus on the Indian Government's massive solar ambition, a plan they are investing close to 20 billion dollars in. The target is for India to have a total installed capacity of 20 GW (GigaWatt, equal to a billion watts) by 2020, a 100 fold increase in solar capacity in a decade. To put this number in perspective, this is equal to the power requirement of 200 million 100 watt electric bulb, the omnipresent unit of everyday home. If we replace the incandescent bulb with the new compact fluorescent lamp (CFL), which uses about 20 watts of average, you can do the math to figure out that this installed solar capacity can light up 1 billion CFLs. That amounts to almost 1 lit CFL per Indian, or about 4 lit CFLs per household, if I assume that the number of people per household is 4 in India. It would be kosher to add a caveat that all these calculations are theoretical in nature for the installed capacity of 20 GW does not translate to a total power production of the same amount. That discussion is beyond the scope of this post.
The plan target also includes setting up a solar manufacturing capability of 4-5 GW by 2017. Of the 20 GW of installed solar power, off-grid applications shall amount to the tune of 2 GW by 2020, and roof-top solar capacity shall sum up to 3 GW by the same yar. Off-grid applications denote the applications for which we need not draw power from the electric grid, say for example if you are not charging your cell phones, batteries, laptops, etc. by plugging the plug in your home's socket you are using off-grid power. If the charging is being done with the energy generated form solar panels installed on your roof, that comes under the purview of rooftop solar and will be encouraged by the government.
If we look at the historical development of solar power in India, we will find the main driver has been the highly unreliable, at best, and completely absent, at worst, nature of electric power in India. 40% of India lives without access to grid electricity. Over 15% of the villages in India are still not electrified, which is the first step. How many electrified villages receive power is a topic for another day:)
In the absence of reliable, or any, power, people had taken to diesel generators, which are about 7 times the cost of power provided by the grid. Solar energy fit the bill for those bravehearts who wanted a cheap and reliable source. The total installed capacity of solar energy in India is around 200 MW currently.
Solar projects will be doles out in auctions phased over the next 10 years and the first such auction was held only last month. This was a much awaited event in the global renewable industry, as is expected by the sheer size of the plan. A total of 620 MW of solar capacity has been sanctioned by the government, which is about 3% of the total target. The auction was a major success, purely by the number of companies bidding in it. However, the prices at which companies won projects were too low, which might affect the sustainability of these projects. One general theme among the winners was the obvious lack of experience of more than a few of them in the energy industry, the list includes a woolen yarn maker and an industrial pipe supplier. We will have to wait and see their capacility in uncharted waters.
One major outcome of this auction was the obvious concentration of projects in the Indian state of Rajasthan. While it could be expected, given the solar irradiance of that state, other state governments might feel left out of this massive subsidy. One such state, none other than Gujarat, has already acted in this regard by having their own state's solar plan. If the national plan has auctioned off 620 MW of solar capacity, Gujarat alone has sanctioned about 1300 MW of solar plants and plans to have another 1700 MW in the next 4 years.
Well, if there is one key takeaway amidst all the numbers thrown in this post, it is that you will see a lot of excitement and activity around solar power in India. I am feverishly excited about the rollout of this plan. Given a choice, I would fast forward 10 years of my life and see where it stands in 2021.
On second thoughts, maybe not:) Oh, and the other key takeaway, the next time you crib about excessive heat in Delhi, you might want to turn around and install solar panels on your roof. Look at the glass half full! Now, who can argue against that:)
Saturday, January 8, 2011
A sunny start!
Any new year starts with a host of resolutions and 2011 has been no different for me. Foremost among them is my resolution to be more active with my blogging this year. When the energy world is agog with such frenetic activity, it's almost criminal for an enthusiastic reporter like me to shut the shop as frequently as I do. Clarion call: time for action!
There can be no topic more fitting for a blog in this biting cold, snowy night than the topic of the sun. Oh, just the thought of the sun brings a smile:) The area of solar energy has been hogging the limelight a lot lately and deserves a discussion.
Solar energy has for long been the holy grail of scientists and researchers around the globe. Historically, solar energy has been harnessed by mankind in a range of ways, from orienting architectural designs to the position of the sun to installing solar panels on NASA space missions. Active use of solar power in our day to day life is a very recent phenomenon, and an area of avid interest. The biggest challenge in the mass deployment of solar energy for electricity production is its massive cost of generation. The cost of producing electricity from solar is about one order of magnitude higher than from conventional sources.
Deployment of solar power is mostly a byproduct of goverment policies around the world. Many countries have taken the leap of faith on solar; Germany, Spain, US being the forerunners, but the two most exciting solar deployment plans come from the two most exciting developing countries: India and China. India, in 2009, announced an audacious plan to aim for a solar installed capacity of 20 GW in a decade, from about 200 MW right now. That's a 100 fold jump in the installed capacity in a decade. Off-grid applications have a target of 2 GW by 2020 and rooftop solar will have to meet a stiff target of 3 GW in the same time frame. Not just this, solar manufacturing is one area of prime importance in this plan: it is aimed to jump from a meagre 700 MW capapcity currently to about 4-5 GW in a decade. Using a slew of incentives, including tax breaks, no import duties etc, the government plans to increase the manufacturing base by 2 orders of magnitude in a decade! I don't remember the last time India was so bullish on manufacturing something!
Now, before the familiar high sounding talk by the Indian government forces you to have a hearty laugh at its audacity and switch off, consider this: according to estimates, 19-20 billion USD has been committed in government subsidies to make this plan a success. That is something! The first set of auctions were held 3 weeks ago and about 620 MW of solar plants have been sanctioned, 150 MW of solar PV and 470 MW of solar thermal. Looking good so far, right!
That India should be a prime location for harnessing solar power should be rather commonsense, given that about 5000 trillion kWh of solar energy is incident on India per year, these targets are taking this commonsense to a whole new level.
I could ramble on about the merits and demerits of India's plan and the way the first auction panned out but I will save all that for subsequent posts. Afterall, who doesn't like to keep talking about warm, benevolent things:)
Hope to see you more often in 2011!:)
There can be no topic more fitting for a blog in this biting cold, snowy night than the topic of the sun. Oh, just the thought of the sun brings a smile:) The area of solar energy has been hogging the limelight a lot lately and deserves a discussion.
Solar energy has for long been the holy grail of scientists and researchers around the globe. Historically, solar energy has been harnessed by mankind in a range of ways, from orienting architectural designs to the position of the sun to installing solar panels on NASA space missions. Active use of solar power in our day to day life is a very recent phenomenon, and an area of avid interest. The biggest challenge in the mass deployment of solar energy for electricity production is its massive cost of generation. The cost of producing electricity from solar is about one order of magnitude higher than from conventional sources.
Deployment of solar power is mostly a byproduct of goverment policies around the world. Many countries have taken the leap of faith on solar; Germany, Spain, US being the forerunners, but the two most exciting solar deployment plans come from the two most exciting developing countries: India and China. India, in 2009, announced an audacious plan to aim for a solar installed capacity of 20 GW in a decade, from about 200 MW right now. That's a 100 fold jump in the installed capacity in a decade. Off-grid applications have a target of 2 GW by 2020 and rooftop solar will have to meet a stiff target of 3 GW in the same time frame. Not just this, solar manufacturing is one area of prime importance in this plan: it is aimed to jump from a meagre 700 MW capapcity currently to about 4-5 GW in a decade. Using a slew of incentives, including tax breaks, no import duties etc, the government plans to increase the manufacturing base by 2 orders of magnitude in a decade! I don't remember the last time India was so bullish on manufacturing something!
Now, before the familiar high sounding talk by the Indian government forces you to have a hearty laugh at its audacity and switch off, consider this: according to estimates, 19-20 billion USD has been committed in government subsidies to make this plan a success. That is something! The first set of auctions were held 3 weeks ago and about 620 MW of solar plants have been sanctioned, 150 MW of solar PV and 470 MW of solar thermal. Looking good so far, right!
That India should be a prime location for harnessing solar power should be rather commonsense, given that about 5000 trillion kWh of solar energy is incident on India per year, these targets are taking this commonsense to a whole new level.
I could ramble on about the merits and demerits of India's plan and the way the first auction panned out but I will save all that for subsequent posts. Afterall, who doesn't like to keep talking about warm, benevolent things:)
Hope to see you more often in 2011!:)
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