Monday, February 26, 2007
Will Solar Electric Systems Hurt Utilities?
"Needless to say, electricity utilities are watching the solar revolution with horror. Companies in Japan and Germany have already seen an erosion of profits because of an effect known "peak shaving". In essence, the peak wattage of solar cells overlaps with hours of peak demand and peak prices for electricity in the middle of the day, crunching margins."
I believe the article. But as I write in my last posting - I forecast that space and water heating will be increasingly electric (hopefully using heat pumps), and transportation will be increasingly electric (using plug in vehicles and electric mass transit). So in general, we will be seeing electricfication and movement away from oil and natural gas. Thus I see electric utility's market/sales continuing to grow.
We are starting to see utilities wanting to own wind farms here in Wisconsin (rather than signing a power purchase agreement with a third party wind farm owner). A trend that suggests utilities are starting to get renewables. Perhaps utilities (or their non-regulated utility entities) will get solar electric systems one day and own solar electric systems on their customer's sites. That could be a great growth area for utilities.
If solar becomes common - the utilities peak will move away from the mid-day hours towards evenings, and towards cloudy winter days. Either a dispatchable power source will be needed (biomass plants?) and/or the batteries in plug in cars and other devices could be used to store power for periods of hours and a few days (given we have a smart grid).
So don't worry utilities - solar will not put you out of business, nor will carbon taxes, increases in natural gas prices, or more efficient homes. You will only need to get smarter - and let more happen at your customer's sites (generation, storage, load shifting, etc.)
Friday, February 23, 2007
The Futre of Energy - A forecast
1. North America is running out
2. We will import it at increasing prices
3. Resulting in huge trade deficits, all kinds of bad geopolitics...
4. Oil sands are but a drop in the bucket (oil shales not worth the effort)
5. Then the world will run out (could be some very rough times)
1. Lots of it around - but harder and more expensive to get at
2. Climate change/carbon trading (climate change will occur faster than they think)
3. Cheapest way of sequestering carbon will be to leave coal in the ground
1. The basis of wealth in the sustainable future
2. Will increase in value
3. Grows food
4. Grows energy (sugars, oils and cellulose)
5. Plant wind turbines
6. But with less and less petroleum based chemicals and fertilizers productivity will decline
1. Goes from natural gas and propane
2. To solar thermal, passive solar design and electric heat pumps
3. With increased efficiency (and smaller buildings)
4. Rural areas use more biomass/wood stoves (including grass pellets)
1. Goes electric
2. Goes rail
3. Plug in hybrid biofuel cars
4. Biofuels for longer travel and electricity for short trips
5. Smaller vehicles and less travel
6. Gets expensive (see the world while it is still cheap)
7. Rich will drive (while the poor starve)
1. Natural gas too expensive for power generation
2. Coal with carbon taxes declines
3. Wind farms move off shore and into the big windy areas (with beefed up transmission networks)
4. For about a decade or two nuclear returns (a transition fuel)
5. Solar electric farms in the southwest
6. Solar electric standard on commercial buildings and homes
7. Solutions found for large-scale electricity storage
Big general trends
1. Energy goes electric (from cars to space and water heating)
2. Solar electric, and solar thermal are huge
3. We will live smaller (homes, cars, refrigerators...)
4. Energy efficiency is huge and implemented through legislation5. We will live more locally (food, travel, work from home...)
5. Eventually the county with the best farm land (that is well above sealevel) per capita will do best (Canada or the US perhaps?)
Thursday, February 22, 2007
Solar Electric Boom - Applied Materials
Solar Electric stocks traded in the US have leapt in value over the last months. Take a look at these: First Solar (FSLR), Trina Solar (TSL), SunTech Power (STP) and SunPower (SPWR). I am an investor in STP and SPWR. I was not agile enough to get in on FSLR and TSL - and they are up about 80% in a month. Of course this cannot be sustained.
It is interesting that this surge occured just after Pres. Bush's mention of climate change in his state of the union address and the release of the IPCC report on climate change. I believe they are related.
OK, let's not pay so much attention to stock prices. Lets talk about the future of solar power. (It is gonna be huge - most people have no idea.) The future of solar power is all about reducing its cost per watt. And I mean significantly. While maintaining quality and hopefully 25-year module warrantees.
TSL and STP are in China and currently make fairly conventional crystalline silicon low-cost good-quality modules. To significantly reduce module prices they will need to significantly change how they make panels.
SPWR has their main factory in the Philippines and makes a complex crystalline silicon module with the highest efficiency of any module on the market (close to 20%). It is not a cheap panel. However the complexity of their panel shows (e.g., wire pickup on the backs of the modules) that they have both technical and manufacturing savvy. They may be better positioned than TSL and STP to make the technical leaps need to significantly reduce modules costs. (Q: But what do I really know? A: Not much.)
FSLR makes their modules out of Cadmium Telluride, which are rare 0r poisonous metals. However their cost is really low. I read somewhere, (Photon International magazine perhaps) that there manufacturing cost is under $1.60 per watt. FLSR’s conversion efficiency is also much lower than a crystalline module, around 10%. I did not buy the stock because I know nothing about this type of module. It has been on the market of less then five years. I do not envision a huge market for it (afterall telluride is rare) and they will be all on their own when it comes to R&D and improving their manufacturing process.
Now let me throw out my current favorite "solar" stock. They will not make panels but the assembly lines that make the panels. With their assembly lines any firm with money and the ability to run a large plant will be able to make either thin film or crystalline panels. The firm is Applied Materials (AMAT).
AMAT has a market capitalization of over $25 billion, sales of about $10 billion per year, and has been around for 40 years. AMAT "engages in the development, manufacture, marketing, and service of fabrication equipment for the semiconductor and semiconductor-related industries worldwide." Google "AMAT, Solar and Piper Jaffray" – to hear their recent, Feb 21, solar presentation.
They have already sold solar equipment to Q Cells of Germany, Nanosolar (a VC start up) of California and SunPower of California (source). AMAT is forecasting $500 million in solar sales by 2010. Their first generation thinfilm machine makes a large sized panels (the size of garage doors) with about 10.5% efficiency.
As far as I know, AMAT is the largest firm to step into the solar market in a serious manner. Here are some recent quotes from the media (source):
"Mike Splinter, chief executive of the US semiconductor group Applied Materials, told me his company is two years away from a solar product that reaches the magic level of $1 a watt."
"Cell conversion efficiency and economies of scale are galloping ahead so fast that the cost will be down to 70 US cents by 2010, with target of 30 or 40 cents in a decade.” We think solar power can provide 20pc of all the incremental energy needed worldwide by 2040," he said."
"Applied Materials is betting on both of the two rival solar technologies: thin film panels best used where there is plenty of room and the traditional crystalline (c-Si) wafer-based cells, which are not as cheap but produce a higher yield - better for tight spaces."
They also forecast using 7 grams of silicon for their crystalline panels. And "By 2010, crystalline silicon solar cells will sell for about $1.25 to $1.50 per watt, while thin-film solar cells will sell for 90 cents to $1.30 per watt. The thin-film cells, however, will be less efficient." (Source ) Note, they are talking "cells" in that last quote, and cells have to be assembled into modules or panels.
So today I purchased some AMAT stock.
Yes, at first solar will be a very small share of AMAT's business and their chip business may continue to falter. But with their business expertise, financial resources, and engineering might, I foresee that they will rapidly grow into and take leadership of the solar cell production line market place.
The question is, could the relatively small firms that purchase AMAT equipment do better than AMAT? The answer is probably yes.
Friday, January 26, 2007
Exreme Energy Efficiency
1. I rarely heat my home over 62 degrees. To stay warm I wear, undershirts, vests, wool socks and house shoes. Why over heat all 10,000 cubic feet of my home when only about 6 cubic feet (i.e. my body) needs to stay warm? At night my thermostat is set at about 52 degrees. I love sleeping cold under a warm down comforter (Mine is from Wisconsin's Company Store). Yes, if I had a partner, I would be fine turning up the heat.
2. My eight-year old son turns off lights when he leaves a room
3. I line up the items I want to place in the refrigerator beside the refrigerator - and then open the door part way and quickly put everything away
4. I wait until food cools off before I put it in the refrigerator
5. During the home heating season, I leave the hot dishwater in the sink until it cools off (yup, I do it with shower water too).
6. I used my clothes dryer once in the last 20 months (actually my German aunt used it). See right, I line dry instead
7. My outside doors are so well weatherstripped that my son has to work at opening them
8. I have a masonry house (i.e., rock walls (i.e., terrible r-value (i.e., no insulation))), but it is a beautiful 1100 square foot brick house. So I made my small bedroom even smaller - by studding out the walls, insulating, doing the electric, drywalling, etc.
9. I have some really cool fans (including a whole house fan) to keep me cool in the Summer. I got the floor fan in the picture from the University of Wisconsin's property disposal folks for $1. It was in the winter and my now ex-wife thought I was nuts. It is very 60ties and I dig it (can also be used as an ottoman)
10. Oh yeah, I grow a lot of my own food
If you have some good (or stupid) energy efficiency items - share them in the comments section (yeah, I know it is a pain to sign up.)
Wednesday, January 24, 2007
Icicles on the Roof - Equals a Poorly Insulated Home
I took these pictures yesterday morning, two days after a five inch snow fall. Temperatures have not been above freezing since. Many older homes are "cooking" the snow off their roofs and making icicles and ice dams.
Remember these are Cape Cod homes. In a Cape Cod the second floor rooms are built under the roof. They have a:
1. lower vertical wall, called the knee wall (with a craw space between the knee wall and the roof),
2. an upper angled wall (angled at the same pitch as the roof) and
3. a flat ceiling (with a small true attic above it).
The home in the first picture has a warm attic. Most likely, there is not enough insulation above the flat ceiling in the attic area. Note, the large beautiful icicles.
The second Cape Cod does not have enough insulation between the angled upper wall and the roof. This is common because the space is typically only six inches wide and also should allow air flow between the crawl space and the attic. Sadly this is not easy to fix (everything else that I mention here is relatively easy to fix). Meanwhile the attic looks pretty well insulated.
This house looks pretty good. But note the one area where the snow is melting just to the right of the chimney. In a Cape Cod the crawl space is often used for storage, either by building shelving units into the crawl space or by putting little entry hatches in the knee wall that allow people to store "stuff" in the crawlspace. If either the built-in storage units or the entry hatches are not air tight they will leak warm air and cause snow melt above them.
Also, note in the third picture that snow is melting from around the chimney. This means that inside-the-home air is running up the chimney chase and melting snow around the chimney.
Heat rises. So warm air is pressing against a Cape Cod's second floor ceiling with more "pressure" than anywhere else in the home. The ceiling and the walls need to be air tight.
All these houses were built in about 1950. It could be that for those fifty years they would have been 20% more efficient with better insulated and tighter second floor areas. That 20% heat losses would have heated the homes for about 10 years.
So look at your roof, after a snow or a frost, and see how it is doing. If you have icicles or is melting some areas before others it probably needs work and is wasting you money and wasting the planet's natural gas.
To get a better idea where the air leaks are, get a blower door test. In Wisconsin contact Focus on Energy to line one up (www.focusonenergy.com).
This is something real that you can do to reduce global warming and your energy bill. And everyone that lives in your house in the future will benefit as well.
Tuesday, January 23, 2007
Bush's Words: Music to My Ears - OK a few notes
Our president in tonight's State of the Union speech: called global climate change a SERIOUS challenge. Give up all you nay sayers of global climate change (also known by its scarier name "global warming"). Give it up Mr. Exxon, you too Mrs. Peabody Coal.
The writing is on the wall... there will be a national carbon tax of one type or another soon. Mr. Exxon and Mrs. Peabody and boy Ford... you better start rethinking how you do business.
Other musical notes included this: "We must continue changing the way America generates electric power - by even greater use of clean coal technology ... solar and wind energy ... and clean, safe nuclear power.
Ok, well two of the notes were sour: "clean coal" (an oxymoron) and "clean, safe nuclear power" (that is a double oxymoron?). At least he didn't call nuclear power “renewable” as the president has in the past (thank you Mr. Speech Writer).
But he mentioned "wind and solar energy"! That is music to my ears.
Who opened our President's eyes to solar power? Why none other than Stanford R. Ovshinsky - genius, old guy, hero of many, and founder of UniSolar (a.k.a. Energy Conversion Devices or Ovonics ECD). Rumor is that President Bush met with him about a year ago at UniSolar's Michigan solar plant, and Stanley told him about solar electric systems and how they could be on the roof of a home and generate its power needs. Bush loved it and he has spoken about it since. That was a home run, Mr. Ovshinsky, Thank you.
Sadly, President Bush did not say: it is time we put a limit on the amount of carbon dioxide the US emits. But hey, he has come a long way. Remember last year he announced that we are "addicted to oil". Maybe next year he'll admit that we need to do something serious about climate change.
Wednesday, January 10, 2007
Back of the Envelop Calculations and Comments: CitizenRe
CitizenRe owns the system
Home owners pays monthly “based” on currently billing rate and systems production
For 25 years
Lets look at the economics.
Example Best Case Scenario
System cost per kilowatt
Anyone that is selling systems today must use today’s prices. This cost estimate is lower than anyone can get, for a small system, while covering their costs:
Balance of System: $500/kW
Additional payments to CitizenRe field staff etc: ~$250/kW
Total cost: $6750/kW
Let’s assume CitizenRe’s Corporate costs for are ZERO!
Marketing: $0/ kW
Contracts and Administration over 25 years: $0/kW
PV System data collection and billing over 25 years: $0/kW
PV system maintenance over 25 years: $0/kW
Cost of money over 25 years: $0/kW
My guess is that these costs equal the system’s cost.
If Citizen’s RE owns the system they get:
30% federal tax credit on installed cost of the system: $2025/kW of system
Accelerated depreciation over the first five years of systems cost
Assuming they are at a 35% tax bracket: $2010/kW
System cost after Federal tax credits: $2715/kW
Payments to CitizenRe: Madison Gas and Electric customers
According to their own calculator MGE power is: 11.7 cents/kWh
A one kW fixed mounted system in the full sun with no snow cover will generate about: 1250 kWh/year
So customer payments would be $146.25/year or $3,656 over 25 years
CitizenRe Return on Investment: MGE Customers
Based on all my assumptions (Zero CitizenRe corporate costs), CitizenRe would make a profit of about $940/kW over 25 years on an investment of $2715
That is a 35% return over 25 years, or less than 2% return per year
Payments to CitizenRe: North Dakota Ottertail Customers
According to their own calculator Ottertail’s power is: 7.2 cents/kWh
A one kW fixed mounted system in the full sun with no snow cover will generate about: 1350 kWh/year in ND
So customer payments would be $97.20/year or $2430 over 25 years
CitizenRe Return on Investment: Ottertail customers
Based on all my assumptions (Zero CitizenRe corporate costs), CitizenRe would lose about $285/kW over 25 years on an investment of $2715
Summary: When evaluating a business plan venture capital investors are looking for returns of 1000% over a three to seven years. CitizenRe does not look like a workable business model.
Second set of Comments
CitizenRe notes that they need a 7 cent/kWh net metered rate to break even. At the noted 7 cents/kWh for 25 years in Wisconsin – the customer would pay $2,1875 to CitizenRe per kW of system assuming a discount rate of zero.
If we assume a discount rate of 8% the customer's payments are worth $970/kW over 25 years. So simply the time value of money reduces their net income, be it from kWh or REC sales, by about 65% over the 25 years!!
Regarding CitizenRe’s claims of vertical integration: Check out Conergy - they have economics of scale and vertical integration today http://www.conergy.de/en/PortalData/2/Resources//investor_relations/pdf/CGY_CompanyPres_HVB_9-06.pdf see slide six, etc. It does not reduce system cost by 50%
Regarding CitizenRe’s claims of plug and play: Maybe "plug and play" could work on a row of identical homes as they are being built in a new sub-division, with the same roof exposure and all the homes getting solar at the same time (that is what CA's new PV program is about).
Talk to any installer about putting PV on existing homes - about plug and play - and they will laugh at you. Just about every system is different, no mater how hard they try to sell similar systems.
Installers would also laugh about a CitizenRe’s claimed 4 to 6 hour installation time (for a 2 kW system). That would about cover travel and being there for the utility interconnection testing.
Regarding their claim of reducing the production cost of modules and passing it on to consumers. Any business that sells modules, sells them at the market price. If you are a low cost producer, say SunTech Power, you sell them at roughly the same price as all the other producers, but you make a lot more profit.
Once you are able to do that, your stock prices goes nuts, and the owners, stock holders and venture capital investors all make a killing (again see SunTech Power). The CEO of SunTech Power is now the richest man in China.
CitizenRe's 1000 MW module production facility is only words - in other words hype. If they really had something they would go the way of SunTech Power (go the IPO route to make a quick killing) or NanoSolar (Use venture capital funding and stay private). Also, where is their silicon supply contract for the production facility, where are their investors, where will it be located (note, low cost production is in Asia), etc?
Why offer they same deal cross the country when some people net meter at 40 cents/kWh and other 5 cents/kWh? And when there are different amounts of sunshine and state incentives, etc. This makes no business sense. Instead it makes business sense to go where the best opportunity is (see SunEdison, whose is in CA, NJ etc., and on commercial buildings.)
If CitizenRe argues efficiency of scale why go on residential homes? Boring flat commercial roof are much easier, larger, more common, sunnier, etc.?
CitizenRe claims significant income from Renewable Energy Credit (REC) sales. Today, there is no solar REC market in most of the US, so I have no idea what their value would be. I do know that some utilities in the country would say that because they provided net metering they should own the RECs (some incentive programs want to own the RECs too). This would need to be determined for all they states CitzenRe work's in before their business model is complete.
Investors/banks... have no interest in any business models that takes 25 years to cover costs.
That is about all I have to say about CitizenRe.
These are my opinions only.
Friday, November 03, 2006
Passive Solar in the Northern Tier
Passive solar homes seem to be getting some interest again. But the examples are always in the sunny-winter parts of the country.. not cloudy-winter parts of the country. That gets my ire up. Also, the general public think - "ahh, passive solar how cool, I will use it to heat my home" (with no other heat source). Up goes my ire again.
So after our raucous discussion here is what we came up with. First, passive solar will only met about 20% to 30% of a home's space heating needs. Second, a passive solar house needs to be "super insulated." (Yes, it is time to use that 7-'s phrase again.) But this time that super insulated home needs to have (third) a mechanical ducted fresh air ventilation system (with a air to air heat exchanger).
Oh yeah, and for passive to work, your need either really good, high R-value windows or really good window shades that are used religiously. And the windows need to have a high solar heat gain coefficient
And to quote one discussion group member:
"Thermotech, a Canadian window, is the only one I know that uses Libby Owens Ford Energy Advantage II hard coat low-e, U-0.3, SHGC 0.49 (whole window). So, with 100sf of south glazing here, a house would have a net gain of 4 MMBtu/yr."
"5-9% of floor area in south facing glass is an inexpensive way to get 20-25% of heat energy needs. On a 2,500sf house, that's 175sf, an ordinary looking amount of window."
The Germans have basically figured this out. They call it the "Passive House" they dropped the "Solar" (we should too). Google them; they are online.
Their passive house is built with whatever thermal shell that is needed to reduce the building's heating load to 10-watts/square meter. A house built to this standard in Northern Minnesota has R-70 walls and a R-100 ceiling with German made triple pane windows.
The German's passive house ends up meeting it space heating needs with 1/3 passive solar, 1/3 internal heat gain (people, appliances, cooking etc.), and 1/3 some heating source (they seem to dig pellet stoves). But the heating load is a small fraction of the average home - thanks to all the insulation.
So what we need now are decent high R-value and reasonably priced windows that allow the sun's warmth to enter a building. Time for some market transformation.
Recent Solar Electric Developments
1) SunPower - this firm is the cutting edge on crystalline modules. A few reasons include:
- The SunPower SPR 315, 315 watt module with 19.3% efficiency. The high module efficiency results in an area requirement of 55 ft2 per kW of modules. It also means lower installation costs - as fewer modules, less racking, and fewer connections are needed per kW. (The Kyocera D-blue panels require about 85 ft2 per kW of modules.)
- While increasing cell efficiency, they are also making the silicon wafers thinner and thinnner, from 325 micons (industry norm) in 2002 to 200 micorns today. The net result of improving efficincy and reducing cell thickness is that instead of using 15 grams of silicon per watt, they now use 7.5 grams per watt of cell. (Note thin film producer, UniSolar, uses about 6 grams silicon per watt)
- The SunPower CEO stated that there remains vast potential to improve cell efficiency, reduce silicon use and reduce cost. Forecasts of wafer thickness projects 120 micron cells by 2012.
- SunPower is using new cell designs to boost module efficiency (I saw a diagram of their cells somewhere on the web but was unable to find it). For example, by putting the electron pickup wires on the back of the cells and interweaving n and p type silicon on the back of the module. Wires ont he back reduces shading (and, yes, improving efficiency) while making them better looking.
2) Applied Materials (AMAT) enters the solar cell manufacturing business. They make the machines that make large flat screen TV's - where evey pixel has to work. AMAT is a huge company with a capitalization of over $25 billion. I believe that they will be in the thick of the world wide revolution of the solar cell manufacturing process. That revolution will dramatically reduce the cost per watt of cells. AMAT's enterance into the marker helps assure that we see radical new cell designs sooner rather than later.
3) Sanyo Bifacial solar module. As far as I know they are the first to combine crystalline and thinfilm photovoltaic materials in one cell. This trend, of layering different photovoltaic materials that respond to different wavelenghts of radiation (or materials with different bandgaps) is the path to higer efficiency cells.
The Sanyo bifacial panels produce power from both sides and thus have two "front" sides. As a result its efficiency is dependent on the incident light on both sides.
Summary: I am convinced that we will see solar prices per watt fall more rapidly than we have historically (Historically, the market saw about a 20% cost reduction will every doubling of cell production). With these new developments (and the cost of other energy resources increase) we will see solar electric systems take over the world's rooftops.
Forecasts: Solar will be cost effective in much of the world in the next seven years. Both demand and production will increase very rapidly. When demand outpaces production by too much, prices will increase, technical innovation will be pushed even harder, and the market will continue to grow. This is a boom market and will be so for decades.
The Big Question: Will solar electric beat out nuclear? The answer will depend on developments in electricity storage.
Stock pick: At the moment my favorite is SunPower - they seem to be constantly innovating - and now define cutting edge. But can they keep it up? What has Evergreen, UniSolar or the others really done in the last year or so. The companies that constantly innovate will win this race.
Monday, October 30, 2006
Energy is Cheap - futher reflections on the cost of energy
So what is the difference between me pushing my Honda Civic from Middleton Wisconsin to Mount Horeb Wisconsin and back (abougt 36 miles), and driving it at 65 miles per hour? Less than one gallon of gasoline. How much would I have to pay you to push my car to Mout Horeb and back? Much more than the cost of a gallon of gasoline. Maybe $1500 split among you and two friends.
As a measuring stick lets look at Floyd Landis’ energy output at the Tour de France. On his record breaking day (for which he was charged with doping) he rode 125 miles at 23 miles an hour. His total output during 5.3 hours of riding: about 1.5 kilowatt hours (kWh).
Madison Gas and Electric residential customers pay about 13 cents per kilowatt hour for their electricity during the peak of the summer. So the value of Floyd’s energy output is less than 20 cents. And that is for an amazingly hard day’s work.
The average daily household electricity consumption in Wisconsin is about 25 kilowatt hours. That would be equal to Floyd riding over 2000 miles for us per day.
If Floyd rides at that 125 mile Tour De France race every day of the year his energy output could either meet the electricity needs of the average home for about twenty days (about 500 kWh), or drive my Honda Civic about 2500 miles (about 55 gallons of gasoline). That effort would be worth $65 of electricity or $165 of gasoline. Meanwhile those corporate sponsors were going to pay him millions.
Most of us do not realize what amazing feats our society has managed with our amazingly cheap energy. What will we do once this cheap fossil energy is gone?
One more story. Last week I was driving down the highway at a respectable, and not very energy efficient, 75 miles per hour. Looming behind and gaining on me, was a huge Ford F350 pickup pulling a gigantic fishing boat. (That fishing boat will never go 75 miles an hour on the water, but it can on the highway.) Assuming they are getting ten miles per gallon it would take 270 Floyds to equal that F350’s gasoline use.
In the next generation oil and natural gas will be running out, and they will get more expensive. How much will you be willing to pay for energy?
Consider solar energy. It actually is not expensive when you realize the true value of energy. If my solar electric system lasts 20 years (it should last 40 to 50 years), my solar power costs 33 cents/kWh. That makes Floyd's effort worth about 50 cents of solar electric power. Still really really cheap.
At the Hybrid Car fest, in Madison, I learned that one kWh of power will propel a Prius about five miles. On a sunny day my little 1.25 kilowatt solar electric system makes enough power to drive a Prius (or Tesla) about 30 miles. That is about three times my average daily commute.
The Future of Coal
Almost 150 new coal fired power are planned for the US. Some feel that much of this is driven by the utility sector's desire to build plants before carbon trading becomes law. Remember, coal meets about 70% of Wisconsin's and the USA's electricity needs.
Here is the definition from the Wikipeda:
"Emissions trading (or cap and trade) is an administrativie approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. In such a plan, a central authority sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups that emit the pollutant are given credits or allowances which represent the right to emit a specific amount. The total amount of credits cannot exceed the cap, limiting total emissions to that level. Companies that pollute beyond their allowances must buy credits from those who pollute less than their allowances. This transfer is referred to as a trade. In effect, the buyer is being fined for polluting, while the seller is being rewarded for having reduced emissions. The more firms that need to buy credits, the higher the price of credits becomes -- which makes reducing emissions cost-effective in comparison."
Carbon trading is already happening in Europe and legislation has passed in seven North East States and California. Trading on the east coast market will start in 2009 and in the Californian market trading will be fully implemented in 2012.
In Europe carbon dioxide has been trading for about $20 per ton. Every ton of coal fired releases about three tons of carbon dioxide (C becomes CO2). Any new coal generation above the carbon emission "cap" would have to pay about $60 for every ton of coal fired (today).
In the US coal currently costs about $30 per ton at the mine mouth (which is commonly located in the powder river basin of Montana). Here in, Wisconsin it costs about $60 per ton of coal - once all the other costs are added (mostly transportation (70% of the US's rail traffic is coal)). So the cost of the carbon emissions would about double the cost of coal in states like Wisconsin (today). Khosla says carbon trading will increase coal generated power prices by three to six times!
We often hear that the US has a 200-year supply of coal. What we do not hear is that the first coal to be mined is the easy cheap coal. We also do not hear that the 200 years is based on current consumption.
The U.S. Geological survey, according to Vinod Khosla, reported that only 17% of the US coal resource could be mined without significant increases in production cost. With all the new coal power plants that coal would last ten years. After that the cost of coal mining will increase quickly.
Coal is dirty fuel and a serious source of carbon doixide. If we think that global climate change has even a small chance of occuring than the world must reduce coal firing (the Chinese are very busy building coal fired power plants as well).
In Wisconsin, people purchase a home insurance policy primarily to cover major events, such as the home burning down. These major events have a probability of less than one in a hundred of occurring. Is the likelihood of global climate change greater than one in a hundred?
In Britian a report on global climate change was released today. Two quotes: "failure to tackle climate change could push world temperatures up by 5 degrees Celsius (9 Fahrenheit) over the next century, causing severe floods and harsh droughts and uprooting as many as 200 million people" and "Failure to act could plunge the world into an economic crisis on a par with the 1930s Depression..."
Vinod Khosla recommends (that like farmers) we pay coal miner not to mine coal. It may be one of the cheapest ways available to society to "sequester" fossil carbon.
Solar Power 2006 Conference
Thanks you U.S. DOE for sending me! Note, I run what used to be called the Wisconsin Million Solar Roofs Initiative.
Information about the conference can be found here:
I particularly recommend the webcasts of the Keynote speakers
check out Vinod Khosla
The conference had about 1500 attendees in 2005 and over 7000 this year.
Something happened in those 12 months. It is called the rebirth of the solar market place in perhaps the best of all places in the world for it: silicon valley California. In Silicon Valley they know silicon, they know venture capital, they know how to create new businesses, they know engineering and perhaps most importantly they know how to draw together the best minds in the world to meet technical challenges.
And the man behind it all - happens to be the "Governator". Yes, Arnold Schwarzenegger. He kicked started it all by creating a three billion dollar incentive program for solar electric systems.
I believe the Governator's investments in solar, green technologies in general and passage of California's carbon trading law, will be an economic boon to California. California now has a energy climate that the world will be forced to face in a few years. In those few years California's businesses will get a jump on most everyone else (like those of us here in Wisconsin).
Attendees of the Solar Power 2006 Conference tended to look like business people, including many bankers, and included large contingents from Germany, China and Japan. This is unlike the attendees of any other solar conference that I have attended over the last eight years: where the attendees tended to be older, more academic, and depressed that nothing was happening.
Tuesday, August 01, 2006
How to Buy More Sustainably
Conventional economics is not structured to guide our society to make the proper choices. It was developed when human activity was a small part of the total ecosphere. It places no value on maintaining the health of the plant on which we depend for survival.
Conventional economics does not consider global climate change. Much of the US is under drought conditions. Soon another hurricane season will be upon us. Large portions of North America forest are on fire. Climate change is transforming where and if plants and animals can live. The Gulf Stream is being pushed down into the ocean by a layer of fresh water coming off the melting Greenland icecap.
Conventional economics does not consider our rapid consumption of the earth’s treasury of mineral resources and fossil energy. The recent doubling of gasoline prices has not turned the behemoth global economy toward using less gasoline or toward sustainability. Instead gasoline use continues to increase.
We have created a lifestyle dependent on cheap mineral and energy resources. A life style that is dependent on imports of energy, food and products from the other side of the world, from often politically unstable portions of the world. A lifestyle where a neighborhood, city or state can no longer survive on its own. A lifestyle that has plunged all American’s deep into debt.
Individuals, governments and businesses of the world must begin making choices based on sustainability rather than economics.
To make your own or your businesses purchases more sustainable, here ten questions to ask:
1. Will it be thoroughly used? Perhaps you do not really need it.
2. Could you borrow or get a used one instead?
3. Was it made or produced by someone in your community?
4. Will it last long? If not can it be reused, recycled or composted?
5. Is it maintenance free or low maintenance? If not can you or someone in your community easily fix it?
6. Does its production, operation, maintenance and recycling keep air, water, and land clean?
7. Could you get a smaller one?
8. Does it bring joy to those who made, sold, used, and recycled it?
9. Does it require a lot of space?
10. Does it support the strengthening of your community
A few purchases are relatively easy from a sustainable standpoint: such as locally grown- food or locally-brewed beer. Others are much more difficult: such as a new car. Subjecting your purchases to these questions will show you how far we have to go to get to real sustainability.
We have been trying to ask ourselves these ten questions during our recent purchases. It is hard. The ten questions are beginning to change how we purchase goods. But it will take some time.
If you ask yourself these ten questions, you will purchase less… and then you can work less – which is good for the environment.
Sunday, July 30, 2006
Thoughts on Energy and Climate
Soon we will be able to grow fine French wine grapes here too. Meanwhile polar bears are left without ice and can no longer get to their seal hunting grounds.
2. Madison and much of America and Europe is in a major heat wave. Much of the country, including Wisconsin, is in drought. Friends from Spain mentioned Spain is on its third year of drought. Madison isn't. We just had five inches of rain on Thursday - cars were almost floating away. Kids were canoeing in the streets.
3. So far I have not used my air conditioning (all I have is one window unit - it is still in the basement). Instead I am opening windows in the evening, putting fans in two windows - pushing air into my home, and running my undersized whole house fan (or maybe my attic is poorly vented?).
Then in the morning I close up the house, turn off all fans and drop the shades on all windows that get sunlight. It has been working well.
I begin to see the importance of having thermal mass in the home. With it you can store some of that night cool - and keep the house cool longer into the day. The only challenge is when night temperatures stay in the 80ties or upper 70ties.
Then I resort to wearing a swimsuit, visiting our local pool, and sitting/sleeping with fans blowing on me. I maybe sticky - but I have not lost any sleep.
And I cannot be blamed for all the new transmission lines that are being called for around Madison.
4. Madison's need for transmission lines - is driven by late afternoon/early evening (about four to six p.m.) air conditioner load on hot (always humid) summer business days. I am sure Madison is breaking new peak load records on the recent hot summer afternoons.
The problem is compounded because electric wires (e.g., transmission lines) loose their efficiency as the get hotter. And the lines get hotter on hot days and when they are fully loaded. They measure how loaded they are by how much the transmission lines sag.
So if you do not want to be the cause for Madison's new transmission lines, here are few things you can do:
1. Don’t run your air conditioner between about four and six
2. Turn off all electric appliances (lights) that you really do not need
3. Don’t open your refrigerator or freezer
4. Get an Energy Star (and smaller sized) refigerator, freezer, compact florescent lights, dehumidifier, ceiling fan, laptop computer, etc.
5. Find a cool spot, I like the neighborhood pool, and relax
6. Eat a late dinner
7. Empty and unplug that freezer and extra refrigerator
8. Put solar electric panels on your home. (Alas in the late afternoon they will only perform at about 25% of their rated capacity. Because the late afternoon sun is at a high angle to them. And because when the panels are hot they have higher internal losses.)
9. Unplug that dang wine cooler!
5. During these hot "global warming" days with floods and a threatening hurricane season - I see my car is a global climate change machine. So I ride my bike more.
6. I have set my self up with a pretty cool city bike. The fine wooden fenders were made by Cody Davis of Bend Oregon (I found him and the fenders on E-Bay). Another reason not to drive my (climate change machine) car.
six is enough.
Thursday, July 27, 2006
Solar Electric Power is Cheap & A Vision of the Solar Home and Car
From Randy Udall (Via Michael Vickerman of Renew Wisconsin)
"Interesting numbers about Floyd Landis amazing ride through the Alps.
He rode 125 miles at 23 miles an hour, much of it alone. His total output during 5.3
hours of riding: about 1.5 kwh.
Average daily household electricity consumption in the US: about 30.
Daily per capita energy consumption in the US, expressed in kwh: 270."
2. kWh Cost of that Ride
I pay my utility 13 cents per kWh of power - so Floyd's effort was worth about 20 cents. If my solar electric system lasts 20 years, my solar electric cost of power is 33 cents/kWh. That makes Floyd's effort worth 50 cents of PV power.
Still really really cheap
3. Plug in Prius and Solar Electric
At the Hybrid Car fest, in Madison, I learned that one kWh of power will propel a Prius about five miles.
So on a sunny day my little 1.25 kW solar electric system makes enough power to drive a Prius about 30 miles. That is much more than my average daily commute.
4. Solar Powered Homes and Cars
I envision a future where home Solar Electric Systems will
1. power home electricity needs
2. power a heat pump for home heating and cooling (low temperature air sourced perhaps)
3. charge up the plug in hybrid
Solar thermal would provide most of the hot water needs (and perhaps some space heating).
For an efficient moderately sized home, and car, I am thinking it would require six to twelve kW of PV per home. If costs get down to $4,000 per kW.. we are talking $24,00 to 48,000. Or 10% to 20% of the cost of the average home here in Madison WI.
So, I see a growing market for Solar Electric Systems.
Wednesday, July 12, 2006
Midwest Zero Energy Homes
Several challenges facing the American economy encourage the construction of new homes able to meet their own energy needs using locally available renewable energy resources. These challenges include: high and highly variable fossil energy prices, global climate change, state and national energy trade deficits, reduced energy supply reliability, and increasing dependence on fossil energy imports.
A true Zero Energy Home (ZEH) is defined as a home able to offset any import of fossil energy by generating and exporting an equal amount of renewable energy over the course of a year. Homes that get close to this goal are considered zero energy homes.
Homes on the path toward zero energy:
1) Are sited, designed and built to use as little energy as possible while providing the comforts of home,
2) Use energy efficient appliances
3) Install high efficiency heating ventilation and air conditioning systems (HVAC),
4) Have occupants that are careful about how they use energy,
5) Produce onsite renewable energy (or purchase renewable power or credits),
6) Are designed and constructed so that in the future the home can meet all of its energy needs with onsite renewable energy.
ZEH homes and experts can be found employing ZEH technologies and designs across the Midwest. Links to Midwest ZEH case studies and experts are included in this report.
The greatest challenge is providing reliable space (and water) heating during the Midwest’s cold and cloudy winter months. A ZEH cannot rely solely on standard solar thermal systems or passive solar for winter space heating. Instead, it must rely on renewable energy that can be stored for weeks to months such as wood, thermal energy, or net-metered (banked) renewable kilowatt-hours (kWhs).
If ZEHs are to rely on renewable kWhs for heating, then the electrical heating systems must be very efficient. Ground source heat pumps (GSHP) are the most efficient space heating systems suited to the Midwest’s climate (they also provide very efficient cooling).
There are two general ZEH types, based on their method of space heating. The Urban ZEH that has a GSHP for space heating and cooling, a solar electric system for power generation, and a solar water heating system backed up by an electric hot water heater. The rural ZEH has a wood stove and solar thermal system for space heating and water heating and an onsite solar electric system or wind turbine for power generation.
The Urban ZEH would add about $55,000 to the price of a new energy efficient home while reducing its natural gas use by roughly 95% and electricity use by 75%. The price includes federal but not state incentives. The solar electric system is responsible for the majority of the added price.
Many new single-family homes built today are large. By reducing the size of new homes by 400 square feet, the home’s construction costs would reduce by about $36,000. These cost savings would cover much of the cost of making the home zero energy.
ZEH economics will improve if: fossil energy prices increase; energy system prices decline; utility’s encourage ZEH with incentives (through tariffs, buy back rates, financial incentives, financing, etc.); or States and/or the Federal government provide incentives for ZEH or ZEH technologies.
Key ZEH barrier reduction strategies include:
1. Target wealthy green innovator home buyers
2. Target successful Energy Star® home builders
3. Education through mainstream demonstration homes and detailed case studies
4. Ensure homes have curb appeal
5. Offer home builders market differentiation by offering new labels/logos such as “Green” Energy Star® home
6. Offer new ZEH services such as: guaranteed savings, maintenance agreements and system commissioning
7. Begin mainstream market transformation by promoting the “zero energy ready home”
This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The view and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.
Low Termperature Air Sourced Heat Pumps
Basically I am very worried about the future cost of natural gas and global climate change... as well as an expanding trade deficit as we import more natural gas. And lastly the ports needed to import liquefied natural gas are vulnerable to hurricanes.
Heat pumps are the most efficient electric means of space heating. In our, Wisconsin, climate normal air sourced heat pumps loss their efficiency when you get near freezing.
There is a new option.. and it is just entering the market: Low Temperature Air Sourced Heat Pumps. Apparently they have a coefficient of performance (COP) of 2.23 at zero degrees F (unlike an air sourced unit that has a COP of ~1).
Here is a great link for more information from the Architectural record
"It does seem like they are poised to hit the market. If and when they do, it seems to me it could really hurt the GSHP market, since they will no doubt cost considerably less." (quote from Scott Pigg of the Energy Center of Wisconsin.) No ground loop would be needed.
Their inventor as a company that just started selling them on June 19th.
Clearly a new webpage... it has some interesting test result data.
Hey you HVAC contractors - perhaps you should consider becoming a distributor?
Tuesday, July 11, 2006
What Does Sustainability Mean
This post is based on the thoughts of John Ikerd. John is an agricultural economist who has spent a lot of time thinking, writing and talking about sustainability.
There were two previous transformations of social structure on the same order of magnitude. The first was the Agricultural Revolution, during which human society transitioned from hunter – gatherers to farmers. The second was the Industrial Revolution in which fossil fuel combustion replaced muscle power.
Sustainability will be the third fundamental transformation of human social structure. The fundamental shift in sustainability is a shift to permanence. Today we are optimizing for maximum production. After the sustainable transformation, we will optimize a balance between meeting the needs of the present and ensuring that the future has a sound resource base from which to meet its needs.
The fundamental thing in both industrial and sustainable society is energy. Industrial society is optimized to extract energy. It extracts energy from human and natural capital. Industrial society does not expend energy to restore or renew itself. There is no economic benefit, in the classic industrial worldview, to expending energy on restoration or renewal. That is why the industrial age is coming to an end. It has depleted its resource base and is becoming increasingly nonfunctional.
A sustainable society is optimized to balance energy between extraction for use today and investment in restoration and renewal. It deliberately chooses to invest some energy that could be used today in restoration in renewal. As we begin investing in restoration and renewal we face strong resistance from parts of society firmly locked into the industrial mentality.
Fundamental transformations require fundamental shifts in worldview. In the industrial worldview the world is a factory. It is optimized to extract, exploit, specialize, standardized and control. This is the way industrial society provides more and more stuff that is cheaper and cheaper. That's the goal of industrial society. More cheap stuff.
In the sustainable worldview the world is a living system. It is optimized to interact, balance, invest, diversify, communicate and relate – much like the natural world’s web of life. Creating this web of relationships is not driven by a desire to give everyone a warm fuzzy feeling. Rather it is a necessity for permanence.
A permanent society is more difficult than an extractive society. It requires a more advanced worldview. The interrelationships and interdependencies between a field mouse and a prairie ecosystem are orders of magnitude more complex than an industrial fertilized corn field growing in that same prairie top soil.
Social transformation won't happen unless people think it's in their best interest. Why is a sustainable society better than an industrial society?
Let's compare the two. In an industrial society the primary goal is the accumulation of wealth. In a sustainable society this is replaced by a desire for permanence.
In industrial society everyone wants to be independent. In a sustainable society people are capable of functioning independently but deliberately choose to depend on each other. This is termed interdependence and it requires both the ability to be independent and the ability to relate in mutually beneficial ways.
In industrial society everyone wants to get rich, then they will live a good life. In sustainable society people decide to skip the get rich step and jump directly to living a good life.
In a sustainable society you are willing to give up a fair amount of cheap stuff in return for getting a better life for yourself and future generations.
(Thanks Mark - I hope you do not mind me posting this on my blog)
Solar Thermal Seasonal Storage for Space Heating
picture from the website below
See http://www.dlsc.ca/ and http://www.sterlinghomesgroup.com/drake/northamerica.html
Solar experts in Wisconsin are thinking once again about seasonal thermal storage for homes in Wisconsin.
Mark Klein of Gimme Shelter is thinking about setting aside a "room" in the basement that would hold a several thousand gallons of water in a very well insulated tank. The water would be heated during the summer and used for space heating during the winter.
Alex DePillis of Seventh Generation Energy Systems did these calculations.
Residential customers in Wisconsin use ~ 1000 therms each, annually. The room would need to hold ~ 40,000 cubic feet of water; about 5400 gallons. A cistern of size 8' x 20' x 200'+
Here are the calculations (corrections please!)
1 Btu per # per degree F.
Raise the water from 60 to 100 F (delta T = 40)
8.3 pounds per gallon water
So raising the temperature of one gallon of water by 40 degrees stores 333 Btu, or 0.0033 therm
(one gallon per 0.0033 therm) x (1000 therms per customer) = 1000/0.0033 = 303,030 gallons
(7.5 cubic feet per gallon) x (303,030 gallons) = 40,404 cubic feet
If this is a cistern in the basement of a house, limited at 8' height...
8 high by 20 wide by... 252 feet long. Or pick your tank/cistern dimensions.
Now my 1100 square foot home, with about R-4 (concrete) walls uses about 600 therms per year (for hot water, cooking and space heating). So lets say it uses 500 therms per year for space heating. (Yes I am working on insulating those walls from the inside - which means studding up new walls and making my home even smaller.)
If the thermal envelop of the home is improved, have the house solar tempered, and
assume some solar thermal heating during the winter season (as there is sun
in the winter)... and maybe that tank can be reduced to: 8' by 20' by 100'
Humm, that is more square feet than my entire home.
Solar Hot Water Systems are Back IN!
Solar hot water is now officially booming in Wisconsin. During the month June 2006 the Focus on Energy Renewable Energy program (focusonenergy.com) approved 95 Solar Hot Water System Cash Back Reward Applications. The poor image of solar hot water left over from the 1970's is fast disappearing.
This dwarfs the number of solar electric systems (nine), wind turbines (four) or biogas systems (two) approved during June.
The large number of approved solar hot water system is partly due to the fact the Focus on Energy incentive declined starting July 1.
One of the more fascinating developments is occurring in Madison at a lower income multifamily project (Troy Gardens) where:
1. Every unit was made solar ready
2. The condo purchasers were shown that the cost of the solar thermal system when included in their mortgage was less than their natural gas savings.
3. Last I heard every condo buyer decided to include solar water heating in their home.
Eighteen of the solar thermal systems approved in June were from the Troy Gardens project.
Remember, we are only at the start of the Solar Decade