July 29, 2005
Some useless facts from the past
Dear readers, sorry for the lapse in posting. Last weekend I moved into our new house that we have been building for 2 years. Still partially in boxes. Only got the internet and phones working today. Ouch. I have also been going through alot of boxes of stuff. Most of it is familiar having just moved from our most recent house. But some of it is much older. From the "storage locker" which I pledged to empty with the new house. Some of it I packed after college (86/7). Most of it is from my move with Microsoft to Germany (92) and hasn't been opened since. These are the little "treasures" that I have been keeping for "when I have enough room". Well now I do. So over the next week you may get a few of the more interesting ones here.
Just ran across a couple of useless but somewhat interesting tidbits.
1. A yellow legal pad on to which in 1988 I had drawn a grid with a ruler and made a manual spreadsheet of my income and expenses (I was a nobody without a computer at Andersen Consulting). There was a whole year of the budget vs actuals written in pencil with a colum for each week.
2. On page 4 was a list of my "long-term debt". To wit:
US National Bank Visa $1,700
First Interstate Bank Line of Credit $1,300
First Interstate Bank Visa $160
Seafirst Bank Line of Credit $2,000
Far West Bank Master Card $600
American Express $400
Ah the good old days.....
3. A tax delinquency notice from Washington State for a company I started called the "Triathlon Supply Store".
4. A Pacific Northwest Sleep/wake center intake form for sleeping disorders. I swear it was copied on mimeograph and written with a manual typewriter! It turns out I was just working out too much too late at night and getting my heartrate up. Silly boy.
Isn't this fun?
July 20, 2005
Another blueprint for energy independence
This one has been out since August 2004, but I just found a complete copy. It is 25x25 from the Ag Industry Working Group. Basically a blueprint for how 25% of our energy could be coming from agriculture by 2025 without any risk to the food supply or overfarming of land. You would expect the farmers to say this. And of course their 25 year plan is paved with lots of subsidies to get there. But the reality remains: It is possible. America has what it takes to get off the foreign oil dependency. But do we have the will?
Bomb factory found in Saudi Arabia
The first chapter of Sleeping with the Devil is probably the most frightening thing I have read in the last five years. The former head of the CIA in the mid east basically lays out how with less resources and planning than it took to pull off the 911 attack, terrorist could cripple the Saudi oil production capacity for a decade. It looks like the terrorist can read: U.S. warns of Saudi attacks, bomb factory found - Yahoo! News. Put this together with the recent analysis that loosing 3 million barrels a day production (we would loose WAY more than that in a Saudi attack) would mean $150 a barrel oil and $5 a gallon gas, and you have disaster not waiting to happen, but possibly averted. This time. It is only a matter of time though. Still think we can just negotiate with those who plan these sorts of things? Still think just leaving Iraq will keep the wackos in Saudi Arabia from blowing up their own oil fields?
July 19, 2005
One man's response to the poor science of Pimentel/Patzek
I was disappointed to read your article "Study: Biofuels a net drain on energy" (Monday, A4). The study you cited has been roundly dismissed in the scientific community. In fact, every other legitimate peer-reviewed study shows a positive energy balance for biodiesel. A comprehensive study published by the Dept of Energy and the USDA found 3.2 energy units gained for every energy unit used in production of biodiesel. This number is the accepted norm. Biodiesel production and use holds tremendous potential benefits for Washington state businesses and citizens. Publishing your article without proper editorial review does a disservice to your readers, who deserve unbiased facts about biodiesel, a rapidly emerging solution to our oil dependence and polluted air.
The study author's motives are suspect. As Joe Jobe, of the National Biodiesel Board, notes "The biodiesel energy balance paper by David Pimentel, an entomologist at Cornell, and Tad Patzek, director of the University of California Oil Consortium, is poor science and misleading.
The study concluded that biodiesel has a negative energy balance, which contradicts the wide body of sound scientific studies. Pimentel and Patzek appear to go so far out of their way to support their case that it borders on the absurd. For example, the study counts calories consumed by farmers as energy inputs for biodiesel, yet it does not give biodiesel credit for the value of glycerin produced as a co-product. While soybeans are approximately 80% protein meal and 20% oil, the study allocates 79% of the energy inputs for growing soybeans to the oil."
Washington farmers and biodiesel innovators have been dealt a set-back by The Times' lazy attitude picking up a poorly research filler article from the AP wire. Important issues including national security, health of our citizens, and economic growth are dependent upon a future of alternative fuels. Please do better next time.
The Energy Balance of Biodiesel
There have been a number of news studies recently quoting bad science with claims that it takes more energy to make biofuels than petroleum fuels. Independent third-party, peer-reviewed studies show biodiesel has the highest energy balance of ANY fuel. A prominent USDA/DOE study shows for every unit of fossil fuel used to make biodiesel, 3.2 units of energy are gained in energy output. That's a 320% increase and includes soybean planting, harvesting, fuel production and transportation. I trust the USDA/DOE more than tenured professors who have been crying wolf for 20 years.
My new Tee-shirt
Just ordered it from RedHandMedia
They are back-ordered, so get your order in now!
July 18, 2005
Solar at a tipping point?
Well this thread below from SNS seems to point to one. In 2004 the industry grew 62%. And the cost of PV is only 2-5x per KWH than the grid. Andrew at Intel seems to suggest that the hardware doesn't need much more improvement, it is really the rest of the value chain. I wonder. I do like Mark's comments that a tree is more efficient than the best invention of man so far. Maybe because we are using the wrong tools? solar is only tipping due to subsidies (not that it's bad).
With appropriate disclaimers here (we're not in the photovoltaic (PV) business here at Intel); my knowledge in this space comes from extracurricular activity.
As recently as 1980, for residential consumers, PV cost per kWh was in the area of 20+ times more expensive than buying electricity from the local utility. It was mostly an interesting niche technology for some small off-grid applications with battery backup. Twenty five years later, the cost is 2 5 times more expensive than electricity purchased from the public utility (the multiplier depends on where you live, both for the cost of utility power, and for the cost/kwh of your solar array, given your particular sun conditions).
Most applications today are grid-tied systems which, if power is not consumed locally, it is sold to the utility (by turning your meter backward or net-metering), essentially turning the utility into your storage facility. When the sun is not shining, or your demand exceeds your PV arrays' capacity, you can draw power from the utility, running your meter forwards again. More than 75% of installations today are configured this way. Batteries are expensive and tend to require replacement periodically.
Every doubling of industry capacity sees a 20% decline of PV costs. Average utility electricity pricing is increasing 5% per year.
Virtually all new utility generating facilities that have been added to the US grid to meet demand during peak loads in the last decade have been gas-fired peaker plants. These are easy to bring on line, and I believe of relatively low capital costs, but their fuel is expensive and increasingly scarce. Our ability to meet our own natural gas demands via North American generated sources is at an end. (SNS readers may have noted the Bush administration's desire to build LNG ports to allow water-based transport of natural gas which will be required to meet forecasted US demand in the coming years.) So these peaker plants will become increasingly costly to operate.
Partially because of this peak generation cost picture, utilities are increasingly offering rate plans that allow you to pay for your electricity at the rate associated with its cost of production, then as a consumer you can have control over how you consume electricity: If it will cost you 2 to 3 times more to run your refrigerator in the afternoon hours, perhaps you will choose to set a timer that shuts it off between 1 and 4 when no-one is home anyway.
When is peak demand? Generally, it's during the summer months in the afternoon when people are turning on their air conditioners; exactly at the time when solar is generating power for the grid. So as a PV system owner, you're offsetting the most expensive electricity in the day. Indeed, you'll be selling excess electricity at the highest rate possible.
Now, as for Moore's Law: the number of microcomponents that can be placed in an integrated circuit at a given cost will double every 18 months. Why doesn't PV follow this rule? Quite simply, there are no microcomponents. Most of PV today is based on Si, but this is where the similarity between it and the microelectronics industry ends.
Silicon has a really neat property that when you shine light on it, it wants to convert that light to direct current. Yes, you need to give it some help, create a p-n junction and then enable electrons to flow in a circuit by applying metal fingers to the surface of the solar cell. But that's it. There's nothing to shrink. A cell = a wafer. In conditions most of us are familiar with (i.e. not in the middle of the Sahara), sunlight intensity is about 800 Watts/square meter. PV technologies convert some of this light energy into electric current. How well they do that is described as their conversion efficiency, which currently ranges in production from 5% to 25% with 12-15% most prevalent.
In other words, at present, the best you can hope to achieve is 200 Watts/square meter at peak sun, with most solar panels today getting 96-120 W/sq. meter. A six inch wafer will generate around 3 Watts. You need to lay a bunch of these side by side to get meaningful numbers. (Shrinking the size of the cell will limit its capability to generate electricity, unless you use a concentrator to focus the sunlight from a greater area onto your smaller cell. Doing so will add the cost of the concentrator, and largely any Si savings is offset by the additional costs.) PV cost is a tradeoff of installed cost against conversion efficiency with the goal of optimizing cost/kilowatt hour produced.
So PV doesn't follow Moore's Law. Still, it's reasonable to ask why costs have not come down faster? My opinion: R&D Money. Until now, it just has not been there. Traditional energy companies are not interested in displacing the cash cow (yes some do play here, but as a % of their business it's irrelevant). Government investment (at least in the US) is laughable when compared to the other energy investments being made (Yucca mountain for one - there's a nice subsidy). And then there's how PV has grown up: It was an academic exercise first, then an environmental movement. On balance, it's never been driven by business interests with PROFIT as the driving force. Yes, some companies did (and do) play, but because of the cost disadvantage, they couldn't do it alone, so they went elsewhere and it has remained a boutique technology.
In 2004 this industry was $7B. From the prior year it grew in units shipped at 62%. Every bucket in the industry value chain was profitable: Si raw materials suppliers, solar cell manufacturers, solar panel manufacturers, DC/AC power inverter companies, system integrators and installers. On average, companies in every segment saw operating profit. Yes, some of this was due to subsidy, some due to the creation of green credits, but the growth speaks for itself and subsidy will soon be irrelevant.
In my view, a careful look at this value chain, thinking about the PV as a system, rather than a bunch of parts to be integrated by a 3rd party, should yield lots of opportunity to drive costs out. The day you cross-over with current utility peak electricity, it's a new ballgame. The day you can invest in electricity that costs the same as the utility charges you today and yet know that the cost of your PV electricity will be fixed for 30 years regardless of what happens to the costs of the underlying fossil fuels -- well, let's just say interesting things [will] happen.
At that point, the PV industry does not need drop PV system prices any lower. Any cost improvements from that point forward (for a LONG time) drop straight to the bottom line.
And the day you get there, is also the day the utilities decide it's economically preferable to build their own solar farms. And boom, Giga Watt PV factories (with their economies of scale) have real economic return.
Andrew B. Wilson
Your letter raised a couple of questions in my mind.
First, I wonder what we can do to get raw silicon power conversion rates higher? It seems to me that a leaf does better. Can we process an organic substrate that would be a 10x improvement? I suspect we can. Why don't we start a company called FakeLeaves, and do it?
Second, nature itself is the Great Systems Integrator. If what you're saying here is true, why not use the sun to produce, say, molecular hydrogen, or ATP (what leaves produce today). I wonder if anyone has considered why ATP (adenosine tri-phosphate) is nature's choice for a power currency, and whether we should give it a look as a society?
When we line up these huge fields of low-efficiency conversion units, battling against oil subsidies and other non-economic players, don't you think someone is going to step up and ask, How about a tree?
Thank you for a great review of our current status.
It's offical, VC AND CEO...
Regular readers have noticed my recent turn to alternative energy. It has gone much further than investing interest. I have drunk so much of the kool-aide that I have decided to leave the cushy confines of Venture Capital and head back into operations as CEO of Seattle Biodiesel. The Seattle Times did a good story about it today: The Seattle Times: Business & Technology: The future of fuel: It smells like popcorn. I will maintain my involvement with Ignition Partners as a Veture Partner on the boards of companies I have already invested in and when doing new technology deals.
I really believe that alternative energy has suffered from a lack of investment and real innovation. Hopefully in some small way, I can help with that by building the biodiesel industry.
July 13, 2005
Google adsense adding blog feed ads
It was just a matter of time: Google AdSense for Feeds. I am going to try it. Look out FeedBurner.
July 11, 2005
Kudos for Senate for passing energy bill
Energy Bill news. The Senate Energy Bill was approved 85-12 by the Senate and it currently moving to a House-Senate conference that aims to combine the Senate bill with the House bill that was passed in April, creating one comprehensive legislative package. Kudos to the following senators for passing amendments that could strengthen our energy security and bring jobs to America:
Sen. Hatch introduced incentives for efficient and alternative fueled vehicles and alternative refueling stations. We encourage the widening of eligibility for these credits to ALL non petroleum fuels approved by the Department of Energy, instead of picking winners.
Sen. Schumer, Cantwell and Lautenberg introduced an amendment requiring the Secretary of Energy to develop and carry out a national tire fuel efficiency program for tires designed for use on passenger cars and light trucks. The program is to include policies and procedures for testing and labeling tires for fuel economy to enable tire buyers to make informed purchasing decisions about the fuel economy of tires. Efficient tires can reduce gasoline consumption by 4%.
Sen. Harkin, Lugar, Obama, Coleman and Bayh introduced an amendment on biomass research and development intead to increase production of biofuels that can run in flexible fuel vehicles.
Sen. Bayh and Obama passed the "Joint Flexible Fuel/Hybrid Commercialization Initiative" directing the Energy Secretary to "establish an applied research program to improve technologies for the commercialization of a combination hybrid/flexible fuel vehicle; or a plug-in hybrid/flexible fuel vehicle" - a multi-fuel car that can run on any combination of alcohol, gasoline, and electricity.
Watch this. One minute video clip: Senators say: plug in for America.
July 7, 2005
Man arrested and charged with stealing WiFi signal
CNN.com - Man charged with stealing Wi-Fi signal - Jul 7, 2005 wow, I hope the police don't find better ways to catch these "thieves", half of my friends would go to jail. I wonder if this is a crime in a large city where lots of businesses leave open WiFi access points?
July 6, 2005
Trumba: not ready for prime time
i have been looking for some time for a simple to use group calendar program. Was quite excited reading the press on: Trumba OneCalendar. Unfortunately they have committed the ultimate STARTUP SIN. They release a product that SUCKS today but promises to be better tomorrow. Basically if you only use Trumba and everyone you know only uses Trumba, it might solve 10% of your calendar issues in it's current form. But who actually lives like that? What I want is SIMPLE guys:
1. keep my main calendar in Outlook as I have always done on my own desktop.
2. Have that automatmagically synced with an on-line calendar so other people can track my schedule.
3. Choose who can update my calendar on-line from whatever client calendar program they are using (should not have to be Outlook or Exchange).
Basically I want the exchange server calendar function I have inside the firewall, but open to all clients (mac, etc.) and mediated by a hosting provider that can translate stuff.
I-cal doesn't work because it doesn't put calendar items into MY calendar on Outlook. It puts them into a separate calendar window in outlook.
Gosh, guys this isn't that hard. Why hasn't someone figured it out?
(Trumba says they will have a calendar sync thingy for Outlook, but it is not ready - I say why launch without it?)
July 5, 2005
$80 oil futures being traded today
One interesting way to game markets is to look where the option traders are placing their bets. On the NY Mercantile Exchange there are 6,900 contracts open for buyers to buy oil at $80 per barrel in December. Bloomberg.com: Canada. Someone thinks it will be there.
July 2, 2005
The Clear and present danger
Of our dependence on foreign oil is laid out in a report by none other than James Woolsey and George Schultz: Committee on the Present Danger. No slouches to foreign affairs or international economics. You want to REALLY understand what deep doo we are in. Read this report.
Well GM confirms Americans have caught up with me
Back during the first Bush campaign I started saying that a President who put as his #1 priority, energy independence would do very well by the American people. Now GM (of all people) has come out with a study that says the top energy policy priorities that Americans want their politicians to tackle is...drum roll... "Reduce dependence on foreign oil: 43%": hart_research.pdf . Now the researcher was really trying to gin up support for GM's PR around Hydrogen (while they are actually selling LOTS of gas guzzling SUVs - up 40% last month!!!!!! The conclusion of the report is that GM is not getting it's fair share of credit for their "pioneering" work on fuel cells. come on guys. Americans are smart. They see right through the smoke. Fuel cells won't provide a significant transportation source for 20 years. Get that through your thick marketing heads.
My comments at CleanTech
Well at least one person was blogging it: Cleantech Investing: Energy Tech Investor Conference. I will make my own summary of the conference this weekend between beers probably.
Buying a TerraPass
So I have two 100% biodiesel cars now. That makes me feel better since they put out 78% less carbon than their dinodiesel equivelants. But I still have the Avalanche. And I don't want to get rid of it. In fact I had to take a bunch of stuff to the dump today and it was invaluable. It sure makes those long road trips with the whole family more comforatable too. So what to do?
Buy a TerraPass: TerraPass - Clean up after your car, fight global warming. This start-up will tell you how much carbon your car or SUV pumps into the environment each year. When you buy the appropriate sized TerraPass, the company goes out and funds a project or buys carbon credits on the national exchanges to offset your bad habit. Presto, you have just eliminated your car as a source of global warming! But you have to do it next year as well.
Great idea. Wish I had invested. Maybe I still can. Carbon credits are sold in blocks that are too large for individual consumers to participate today. The market was set up for heavy industry. This is a classic bulk breaking strategy.
I like it.