The California Clean Tech Open (CCTO) 2008 competition was launched at the San Jose City Hall Rotunda last Wednesday, April 9th afternoon led by San Jose Mayor Chuck Reed and David Rodgers from the US DOE. What was significant about the event was that this was the first time since its inception that the event was held in San Jose.
Maybe San Jose wants to show that the center of gravity for clean technology is in Silicon Valley. The venue was appropriate. It was the steel and glass rotunda of the gleaming new San Jose City Hall. This was my first visit to the new building and I must say it is quite stunning. You can check out pictures of the new City Hall here. There was a glittering reception with the usual Silicon Valley crowd of entrepreneurs, VCs, investment banker, attorneys and the like.
Mayor Reed issued a challenge to solar installers to enable zero upfront cost solar installations for homeowners within 60 days. Seemed like a tall order to me. But, SolarCity seems to have responded to the challenge with a proposal today which eliminates all up front payment for new installations in San Jose. But, unfortunately, the program only lasts for slightly more than 60 days, till the end of July :-) Solar City is funded by Draper, Fisher, Jurvetson and Steve Jurvetson was one of the speakers at the event. Its always interesting to listen to Jurvetson speak. His rapid fire delivery has a high content density and you can lose a lot in a minute if you are not listening. :-) In any case, he believes that the future is clean tech from a VC perspective.
Marc Gottschalk gave an overview of the 2008 competition. Eric Cummings of Cool Earth Solar talked about his company's success and his team's experience during the 2006 CCTO competition. Cool Earth Solar was the first runner-up in the Renewable energy category in the 2006 CCTO competition. They just raised $21M in Series A funding in February 2008. Gunther Portfolio has an even more detailed writeup on them from February. Hopefully, GP will be back in action with more interesting posts soon.
I had a chance to talk with Eric Cummings at the CCTO event. He remembered our meeting during one of the CCTO events in 2006. They have come a long way since then and the competition has helped them build a successful company. There was a poster at the Cool Earth Solar booth which implied that current renewable energy technology was inefficient and would lead to losses by the utility companies who invested in them. Eric seemed to imply that Dr. Borenstein's comments along these lines, a few months back were valid and more efficient alternatives were a few years out.
Overall it was a fun event to kickoff an exciting 2008 competition. Maybe this year's competition will breed more companies along the lines of Cool Earth Solar. The stakes are huge, if the latest award by PG&E to Brightsource is an indicator. The award is for 900 MW of electricity from five solar thermal plants to be built in the Mojave desert. If several of the other clean tech startups in the Valley start delivering on their promise, Silicon Valley will drive yet another global industry after semiconductors and the internet.
Madan
Showing posts with label Solar energy. Show all posts
Showing posts with label Solar energy. Show all posts
Tuesday, April 15, 2008
Thursday, February 28, 2008
Solar Seismic Shift prediction
Green Tech Media's Jennifer Kho has an excellent post on the chances of a shakeup in the solar power industry and what that might mean. Greentech Media's Solar Market outlook panel seems to think a shakeup is inevitable and the only remaining question is one of timing. It almost seems like yesterday that the buzz started :-) Some of the predictions show the shakeout lasting two to three years and being driven by the massive capacity addition and subsequent price competition. The general feeling is that the companies which can ride out the shakeup will be in a great position five or so years out.
Jennifer Kho's post also identifies some of the largest trends affecting the industry such as aggregation, partnerships/acquisitions, cost reductions, cross over from semiconductors to clean tech and others. The posts covering these trends make interesting reading, especially the one showing executive crossover from high tech to clean tech including such luminaries as Bob Metcalfe(inventor of Ethernet) and Vinod Khosla.
Speaking of Vinod Khosla, he is making bold predictions, (again?). He predicts that India will be the next greentech hub, due to the availability of a large pool of scientists and technologists and a potential large market for clean energy. Since India has very little oil and gas resources within the country, historically they have made early attempts at building nuclear power plants and quite a few hydroelectric power plants. In fact, my father was an engineer who was involved in the construction of three or four major hydroelectric projects. As a kid I remember living near those construction sites in the rainforests of Kerala, and visiting several of the dams and the first underground powerhouse in India which he helped construct.
However, India's energy needs are growing by leaps and bounds with the country's progress as also the environmental impact from fossil fuel use. India probably needs clean energy more than most other countries, but Khosla probably is right that mass adoption may not come till prices come down.
Madan
Jennifer Kho's post also identifies some of the largest trends affecting the industry such as aggregation, partnerships/acquisitions, cost reductions, cross over from semiconductors to clean tech and others. The posts covering these trends make interesting reading, especially the one showing executive crossover from high tech to clean tech including such luminaries as Bob Metcalfe(inventor of Ethernet) and Vinod Khosla.
Speaking of Vinod Khosla, he is making bold predictions, (again?). He predicts that India will be the next greentech hub, due to the availability of a large pool of scientists and technologists and a potential large market for clean energy. Since India has very little oil and gas resources within the country, historically they have made early attempts at building nuclear power plants and quite a few hydroelectric power plants. In fact, my father was an engineer who was involved in the construction of three or four major hydroelectric projects. As a kid I remember living near those construction sites in the rainforests of Kerala, and visiting several of the dams and the first underground powerhouse in India which he helped construct.
However, India's energy needs are growing by leaps and bounds with the country's progress as also the environmental impact from fossil fuel use. India probably needs clean energy more than most other countries, but Khosla probably is right that mass adoption may not come till prices come down.
Madan
Wednesday, February 20, 2008
Energy and the Future
Its been a while since I blogged and that has been, in part, due to a hectic schedule. Last Tuesday, February 12th, I helped put on an event on Energy and the Future with the MIT Club of Northern California Semiconductor Series. The speaker was Dr. Amit Kumar, CEO of Combimatrix, who did photovoltaic research at Caltech, Stanford and Harvard. I have written about a previous talk at PARC by Dr. Kumar in October 2007. He compares and contrasts various energy sources with a very analytical approach and presents a great overview of the global energy picture.
The talk was sold out and the enthusiastic audience posed several interesting questions. Since the data presented was very similar to the talk in October, I will not repeat it here. You can see my previous post in October, if there is interest. However, the questions the audience and Dr. Kumar himself posed and answered are interesting. Dr. Kumar feels that oil prices will continue to trend up in the future with some fluctuations as in the past decades. This is an interesting question in itself and I will look at it more closely in a future post, since much of the future of alternative energy sources may depend on the answer.
Dr. Kumar expects energy usage to double worldwide in 30 to 50 years from 15TW (Terawatts) to about 30TW. With fossil fuels as a primary source, cost goes up and carbon emissions increase with several complications. Solar energy provides a very viable way to address the whole energy issue, but several issues such as cost, storage and inverters have to be addressed with technological advances. The ultimate solution may be a combination of solar, hydro, wind and nuclear (fission and fusion). But, the effort required is bigger than the Manhattan or Apollo projects to effect serious change. Opportunities exist in solar in several areas - silicon supply or other materials, new types of cells, thin films, storage, catalysts for hydrogen evolution, inverters and electric vehicles.
Dr. Kumar sees plenty of employment opportunities in the Valley and beyond with the push for alternative energy, for both fresh graduates and experienced professionals.
But the Mercury News presents a dissenting view from the Director of the UC Energy Institute and UC Berkeley business professor, Severin Borenstein. Professor Borenstein is quoted as saying that we are throwing away money by installing current solar PV technology, especially on houses. He argues against Government subsidies and California's million solar roofs programs. As was to be expected, he met with a barrage of criticism from the solar industry :-) The post makes for interesting reading. But, the professor is not fazed and defends his views. You can find Professor Borenstein's bio here and his publications including the incendiary one noted above, "The Market Value and Cost of Solar Photovoltaic Electricity Production" here. Good to note Prof. Borenstein's MIT connections :-) (Thanks to Ed Gunther for suggesting I provide a link to the paper referred to ).
Regardless of the scientific or economic correctness of Professor Borenstein's views, I think the industry will be well served by all the activity and attention paid to alternative energy. Silicon Valley has always been characterized by risk and reward. Without the promise of reward, there would be very little risk taking. Just funding University or academic research in the hope of a scientific breakthrough eventually may make economic sense from one point of view, but, if you look at technology development in Silicon Valley, the industry and risk taking have pushed the edge much faster than traditional methods.
Madan
The talk was sold out and the enthusiastic audience posed several interesting questions. Since the data presented was very similar to the talk in October, I will not repeat it here. You can see my previous post in October, if there is interest. However, the questions the audience and Dr. Kumar himself posed and answered are interesting. Dr. Kumar feels that oil prices will continue to trend up in the future with some fluctuations as in the past decades. This is an interesting question in itself and I will look at it more closely in a future post, since much of the future of alternative energy sources may depend on the answer.
Dr. Kumar expects energy usage to double worldwide in 30 to 50 years from 15TW (Terawatts) to about 30TW. With fossil fuels as a primary source, cost goes up and carbon emissions increase with several complications. Solar energy provides a very viable way to address the whole energy issue, but several issues such as cost, storage and inverters have to be addressed with technological advances. The ultimate solution may be a combination of solar, hydro, wind and nuclear (fission and fusion). But, the effort required is bigger than the Manhattan or Apollo projects to effect serious change. Opportunities exist in solar in several areas - silicon supply or other materials, new types of cells, thin films, storage, catalysts for hydrogen evolution, inverters and electric vehicles.
Dr. Kumar sees plenty of employment opportunities in the Valley and beyond with the push for alternative energy, for both fresh graduates and experienced professionals.
But the Mercury News presents a dissenting view from the Director of the UC Energy Institute and UC Berkeley business professor, Severin Borenstein. Professor Borenstein is quoted as saying that we are throwing away money by installing current solar PV technology, especially on houses. He argues against Government subsidies and California's million solar roofs programs. As was to be expected, he met with a barrage of criticism from the solar industry :-) The post makes for interesting reading. But, the professor is not fazed and defends his views. You can find Professor Borenstein's bio here and his publications including the incendiary one noted above, "The Market Value and Cost of Solar Photovoltaic Electricity Production" here. Good to note Prof. Borenstein's MIT connections :-) (Thanks to Ed Gunther for suggesting I provide a link to the paper referred to ).
Regardless of the scientific or economic correctness of Professor Borenstein's views, I think the industry will be well served by all the activity and attention paid to alternative energy. Silicon Valley has always been characterized by risk and reward. Without the promise of reward, there would be very little risk taking. Just funding University or academic research in the hope of a scientific breakthrough eventually may make economic sense from one point of view, but, if you look at technology development in Silicon Valley, the industry and risk taking have pushed the edge much faster than traditional methods.
Madan
Wednesday, January 16, 2008
Solar Energy thrives in the shade ?
That's essentially the hypothesis which Jim Jubak makes on MSN money. His column posted yesterday makes the case that US energy policy largely ignores solar energy, and that in turn will boost prospects for solar energy and for investors in solar energy companies ! Intrigued ? - I certainly was. I really enjoy reading Jubak's column. He translates complex economic theories into simple language and his stock picks aren't bad either :-)
In any case, the argument he makes is as follows. Today, solar energy is silicon wafer supply constrained. Worldwide solar power production climbed only 13% in 2007 compared to 57% in 2004 and 35% in 2006. Much of the demand today is driven by countries such as Spain, Portugal, Germany and others which offer subsidies. If the US too had offered subsidies, the excess demand would have pushed the price of solar power up even more. Hence the solar energy industry is better off now without US subsidies :-)
He further notes that the silicon shortage has had the effect of bringing many more companies into the solar panel business and has driven existing companies to expand their production. This in turn will increase silicon production 40 to 50% in 2008 and 2009. Solar cell efficiencies are also expected to increase. Maybe pure silicon alternatives from the likes of Nanosolar and others will also hit the market in this time frame ?
If the price of energy from fossil fuels continues to rise, they will soon reach parity with solar power and that would touch off a real boom in solar energy. This is projected to be in the 2012-2013 time frame. A most excellent theory from the perspective of all the solar energy companies and solar investors :-)
However, I am not sure that the assumption that the price of energy from conventional sources will continue to rise monotonically is a given. This is the only problem I see with the theory, though. This may somewhat affect the equation and timeframe, but overall its still good news for solar, unless oil prices drop dramatically.
Jubak goes on to pick some solar stocks which will benefit from this trend and interestingly they are all non-Silicon Valley companies. However, I will venture a guess that there will be a few companies from the Valley to pick from soon, given the attention the Silicon Valley technology industry and VCs are paying to alternative energy. :-)
Madan
In any case, the argument he makes is as follows. Today, solar energy is silicon wafer supply constrained. Worldwide solar power production climbed only 13% in 2007 compared to 57% in 2004 and 35% in 2006. Much of the demand today is driven by countries such as Spain, Portugal, Germany and others which offer subsidies. If the US too had offered subsidies, the excess demand would have pushed the price of solar power up even more. Hence the solar energy industry is better off now without US subsidies :-)
He further notes that the silicon shortage has had the effect of bringing many more companies into the solar panel business and has driven existing companies to expand their production. This in turn will increase silicon production 40 to 50% in 2008 and 2009. Solar cell efficiencies are also expected to increase. Maybe pure silicon alternatives from the likes of Nanosolar and others will also hit the market in this time frame ?
If the price of energy from fossil fuels continues to rise, they will soon reach parity with solar power and that would touch off a real boom in solar energy. This is projected to be in the 2012-2013 time frame. A most excellent theory from the perspective of all the solar energy companies and solar investors :-)
However, I am not sure that the assumption that the price of energy from conventional sources will continue to rise monotonically is a given. This is the only problem I see with the theory, though. This may somewhat affect the equation and timeframe, but overall its still good news for solar, unless oil prices drop dramatically.
Jubak goes on to pick some solar stocks which will benefit from this trend and interestingly they are all non-Silicon Valley companies. However, I will venture a guess that there will be a few companies from the Valley to pick from soon, given the attention the Silicon Valley technology industry and VCs are paying to alternative energy. :-)
Madan
Tuesday, December 18, 2007
A Great Day for Clean Tech in the Valley
Today was a great day for Clean Tech. NanoSolar announced that they are shipping their first commercial panels for field deployment at Luckenwalde in Eastern Germany. Of course, Gunther Portfolio had tipped us off about this in their post on December 10th. As the CEO, Dr. Martin Roscheisen, discusses in his blog they are expecting to enable 99c/Watt panels. It is interesting that they have donated one of the first three panels to the Tech Museum in San Jose. I am sure the NanoSolar IPO, when it happens, will be one of the best the Valley has seen.:-)
The other interesting news, which did not quite get as much coverage, was that PG&E had agreed to buy 2MW of power from wave energy from a Canadian company, Finavera Renewables. Wave energy has always been a promising and challenging source. As the data I presented from Dr. Amit Kumar's talk in October showed, the theoretical potential for geothermal and ocean power is 70 TW, but feasible capacity is expected to be on the order of 2TW and significant technical challenges remain. Good to see that PG&E is driving the leading edge of wave energy. Clearly compared to the practical possibility of 1200 TW from solar (again from Dr. Kumar's data), this is small, but we may need all the sources we can get, if we are to stem impending doom in the form of catastrophic climate change. :-)
Lest you think I exaggerate, listen to what NASA scientists had to say yesterday in San Francisco (video clip from ABC News). The report says that by 2012-2013 the Arctic will be ice free at the end of summers. This was not expected to happen till 2040, previously. Let us hope that alternative energy is still in time to save the planet.
Madan
The other interesting news, which did not quite get as much coverage, was that PG&E had agreed to buy 2MW of power from wave energy from a Canadian company, Finavera Renewables. Wave energy has always been a promising and challenging source. As the data I presented from Dr. Amit Kumar's talk in October showed, the theoretical potential for geothermal and ocean power is 70 TW, but feasible capacity is expected to be on the order of 2TW and significant technical challenges remain. Good to see that PG&E is driving the leading edge of wave energy. Clearly compared to the practical possibility of 1200 TW from solar (again from Dr. Kumar's data), this is small, but we may need all the sources we can get, if we are to stem impending doom in the form of catastrophic climate change. :-)
Lest you think I exaggerate, listen to what NASA scientists had to say yesterday in San Francisco (video clip from ABC News). The report says that by 2012-2013 the Arctic will be ice free at the end of summers. This was not expected to happen till 2040, previously. Let us hope that alternative energy is still in time to save the planet.
Madan
Sunday, October 21, 2007
Solar Energy - Heat or Hype ?
There is so much written about solar energy these days, that it almost reminds one of the Internet days of 2000. Stocks like SunPower are at 400+ PEs and new startups are getting funded in the 10s of millions of dollars. It almost begs the question - how hot is it and will the trend continue for ever? I had been wondering about this question when I got an invite to a talk on "Current Status and Future of Solar Energy" from the speaker himself, Dr. Amit Kumar. Talk about coincidences. :-) The talk was on October 17th at the PARC auditorium in Palo Alto and was hosted by the MEMS Journal club.
Dr. Amit Kumar did his Ph.D research in Photovoltaics at Stanford and Caltech in the late 80s and early 90s, and is now CEO of a publicly traded biomedical company and is on the boards of several solar energy companies. The talk was well laid out and had a wealth of data drawn from a variety of sources including Dr. Kumar's own estimates.
Current worldwide energy use is 14-15 Terawatts (TW), with the US consuming about 4 to 5 TW. Of the total worldwide energy consumption, about 12TW is from fossil fuels, 1.5TW from hydroelectric and biofuels, 1TW from nuclear and 0.2 TW from all other including solar. In 30-50 years this 15 TW is expected to grow to 30TW from population growth, emerging nations consumption and economic growth. One of the estimates which surprised me was the fact that about 3.5TW of the 4TW US consumption came from transportation related energy consumption (planes, trains, ships and automobiles). The vast infrastructure put in place to deliver oil and gas worldwide from raw material to consumable gasoline enables it to be sold at prices cheaper than most other liquids except tap water. :-)
If fossil fuels continue to be the primary source we will continue to pump carbon into the atmosphere (currently estimated at 8 billion tons/yr) aggravating any existing problems. Dr. Kumar estimates resources for oil, gas and coal to be 120, 300 and 1500 years, respectively. He then considered each of the alternative energy sources in terms of their opportunities, challenges and potential to supply the global energy requirements.
Dr. Amit Kumar did his Ph.D research in Photovoltaics at Stanford and Caltech in the late 80s and early 90s, and is now CEO of a publicly traded biomedical company and is on the boards of several solar energy companies. The talk was well laid out and had a wealth of data drawn from a variety of sources including Dr. Kumar's own estimates.
Current worldwide energy use is 14-15 Terawatts (TW), with the US consuming about 4 to 5 TW. Of the total worldwide energy consumption, about 12TW is from fossil fuels, 1.5TW from hydroelectric and biofuels, 1TW from nuclear and 0.2 TW from all other including solar. In 30-50 years this 15 TW is expected to grow to 30TW from population growth, emerging nations consumption and economic growth. One of the estimates which surprised me was the fact that about 3.5TW of the 4TW US consumption came from transportation related energy consumption (planes, trains, ships and automobiles). The vast infrastructure put in place to deliver oil and gas worldwide from raw material to consumable gasoline enables it to be sold at prices cheaper than most other liquids except tap water. :-)
If fossil fuels continue to be the primary source we will continue to pump carbon into the atmosphere (currently estimated at 8 billion tons/yr) aggravating any existing problems. Dr. Kumar estimates resources for oil, gas and coal to be 120, 300 and 1500 years, respectively. He then considered each of the alternative energy sources in terms of their opportunities, challenges and potential to supply the global energy requirements.
Cleaning up fossil/bio fuel use with carbon sequestration methods allows continued use of fossil fuels with less of their problems. However, challenges here are entropy, cost, capacity and leakage. Without technical breakthroughs it does not look easy. Geothermal and ocean tides have the potential to supply 70 TW, but economically feasible capacity is on the order of 2TW and installed capacity is minimal.
Hydroelectric has a gross potential of 4.6TW and installed capacity of 0.6TW in 1997 and a possible 0.3TW more production increase. Problems include capital cost and issues like the relocation of a billion people (?) for the Three Gorges dam in China. In India, I am aware of some projects shelved due to environmental impact.
Wind energy has a theoretical land potential of 10 TW and practical potential of 2TW. Offshore potential can be up to 5TW. But, wind power is intermittent, needs storage and has distributed generation restricted to some areas only. It is viable, supplying at close to grid power rates where it is deployed.
Biofuels like Ethanol need large land areas for cultivation and have energy densities close to half of gasoline and cost more in energy to make than we can get out of them. They are also water resource limited for cultivation. If all available land is cultivated 8-10 TW is possible, but practical potential is 1-2TW. Their primary attraction is being able to use the existing fossil fuel distribution infrastructure and subsidies.
Nuclear fission is a viable alternative, and much capacity is deployed worldwide and even in the US. Estimate that 20% of US power is nuclear. Waste disposal, uranium availability and weapons and terrorism concerns are major issues. To get 10TW we need 10000 plants, which seems like quite a lot to build. So, delivered capacity from nuclear is limited to the number of 1GW plants that will be built.
Solar has a theoretical potential of 120,000 TW if irradiation of the whole earth's surface is considered. Practical possibility is about 1200 TW. To deliver 3-4 TW at 10% solar cell efficiency needs land area of about 250miles x 250 miles or 62500 sq miles. Currently we have about enough solar modules to cover 50-100 sq. miles. Even this is a $30B market. So, we have a long way to go :-) Maybe, the high PE of the solar panel makers are justified :-) But, there's more to this story. One of the limitations of solar energy is that its not very concentrated. Rooftops and other viable sources can only provide about 10% of the surface area required. The rest has to come from generating installations which can be capital intensive. One can see why many startups are targeting this space. Capacity is increasing, but nowhere near what is required. Silicon may be a limitation even at current levels.
One main issue with solar energy has been the cost. While coal, gas, oil, wind and nuclear have generating costs between 5-8 c/kWh, (with coal the cheapest at 5c/kWh), solar energy costs about 25c/kWh. This does not even include the costs for storage and distribution. Dr. Kumar quoted his thesis advisor, who compared funding solar energy generation to funding the Apollo mission if Southwest were to provide $29 shuttle missions to the moon. Clearly, in spite of these economics, many VCs are pumping billions of dollars into solar energy. Other challenges for solar include inverters for DC-AC conversion and storage.
Cost may be reduced with scale, manufacturing improvements and new types of cells. Efficiencies range from about 25% for crystalline silicon to about 15% or lower for CIS/CIGS, CdTe, amorphous silicon and nano TiO2. The market is dominated by single crystal silicon (92+ %). followed by CdTe, CIGS and particle based cells. Exotic structures like tandem cells and paints are in their infancy. Most of the non-Si technologies have still not achieved the scale of manufacturing capability that is required. Till they do, its too early to make a call on their viability and scaling possibility.
New opportunities in solar include new types of cells and structures, storage and inverters, thin film material and cells, silicon supply and other materials, installation and repair, electric vehicles and catalysts for hydrogen evolution. Cost reduction is a major challenge. The environmental impact of some of the technologies used is another.
Dr. Kumar concluded that in the midst of a global energy crisis we are forced to look at alternatives to fossil fuels and solar is clearly one of the better alternatives. But, we also need massive changes to our way of life, conservation and more efficient products for lighting and transportation and an effort in alternative energy bigger than the Manhattan and Apollo projects. Dr. Kumar can be contacted at amitoptigon (at) hotmail (dot) com.
I am glad that I attended this talk, because it gave a broad overview of many different alternative energy methods and their relative impact and potential. However, the answer to the question of how much of the solar buzz is hype and how many bumps there will be in the road between now and when solar energy is a viable energy alternative to fossil fuels, is still elusive. With oil close to $90/barrel, its easy to fund alternative energy work. But, what happens if oil were to go back to $20/barrel ? Maybe with the impact of global warming being felt worldwide, there would still be an impetus to drive alternative energy. But, with more oil accessible from the less ice-locked Arctic and Greenland, does it drive a vicious cycle of more oil based economies ? :-)
If I were to guess, the VCs will fund more solar energy companies. Silicon Valley will continue to be at the center of much of this action. There will be a few phenomenal successes, as there were in the Internet boom days, and there will be a few fadeouts. However, there will be much energy generated(pun intended :-)), lots of action and excitement and a few millions to be made for the entrepreneurs and investors. The valley will have contributed to global development in yet another realm, maybe with more impact than the previous semiconductor and internet cycles. The more things change, the more they remain the same :-).
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