Vinod Khosla's commentary - UPDATED

I wanted to point out a great set of posts over at Grist by cleantech VC Vinod Khosla. The backstory: at a conference last month, he drew a lot of attention (and criticism) for this comment regarding plug-in vehicles:

"Forget plug-ins," he said during a keynote address at ThinkEquity Partners' ThinkGreen conference in San Francisco. "They are nice toys. But they will not be material to climate change."

This perspective was subsequently challenged by a number of individuals in the online cleantech space for a variety of reasons.

However, much kudos for his 3 part set of posts at Grist during the past few days ("Pragmatist vs. environmentalist") that outline his thoughts in much greater detail.

Prius: Green or greenwash?
Hybrid emissions: Facts and numbers
Hybrids and biofuels: The road ahead

At the risk of simplification, it seems his argument focus essentially on two points: cost economics and emissions reductions.

According to Khosla, it is simply much cheaper for the consumer to go with biofuel powered vehicles. Plug-in electric vehicles and hybrids require thousands of dollars in additional up-front costs, while flex-fuel vehicles would have essentially the same cost as a "regular" vehicle. Further the predictability of long-term cost reductions in cellulosic ethanol on a dollar per gallon production cost are much greater compared to the limits on change in cost per kwh of battery capacity.

In addition, in comparing carbon emission reductions among the technologies, he concludes that exclusively cellulosic powered vehicles would have 75% lower emissions than a 2010 GM Volt.

Even though Vinod acknowledges that hybrids and biofuels are “complementary strategies”, he is first and foremost a venture capitalist, seeking investments with the least (knowable) risk and greatest (potential) profitability. Thus, the crux of his argument:

From my perspective, if I have to pick between a 5-10 times lower cost/performance battery and a cleaned-up electrical grid in the next 5-10 years (or even 20-25 years), or pick cellulosic fuels in 50 percent more efficient ICE engines, I consider the latter lower risk and significantly more probable.

I am confident that cellulosic biofuels without significant land-use impact or biodiversity impact can achieve costs of $1.25/gallon in less than five years and below $1.00 per gallon in 10 years (more details on that, especially on land use / biodiversity and sources of biomass, in a upcoming paper). At this price point, the technology will be adopted broadly and rapidly worldwide, even if oil prices decline substantially.

While I could raise several points to debate this perspective, I actually think many of the commenters on each post do a more effective job in challenging this argument. (just a sampling):

• Are the full life-cycle costs for the vehicle and fuel incorporated into the analysis?
• Is the comparison of current hybrid vehicles with futuristic cellulosic powered vehicles (nowhere close to commercialization) fair?
• How much does the build-out of a new ethanol distribution infrastructure costs?
• What about the life-cycle environmental impact of biofuels compared to electricity generation?

Still, I applaud Vinod for moving his argument forward, and his critics for responding in cordial and intelligent fashion (well most of them). But this is certainly not a debate that will end quickly. As AutoblogGreen pointed out, a lot is at stake here:

Flex-fuel plug-in hybrids are not impossible but these two technologies [battery and ethanol] are basically competing to be the green car solution of choice for government, industry and venture capital investment.

UPDATE: Great commentary on this subject from Marianne Lavelle who writes US News' energy blog - Beyond the Barrel. She also points to a prescient US News article she wrote back in 2006 that is a fun read.

Plug-in Buzz

A number of items to note in the electric vehicle space. Carmakers are falling all over themselves in demonstrating their newfound appreciation for all things clean and green. At least with the U.S. auto companies, I sense a faint whiff of desperation in some of the pieces, as GM and Ford try to reassure the investor community that “they get it”, and that while they missed the boat with ever larger SUVs throughout the late 90’s and early 00’s, they’re now firmly on board with electric vehicles and alternative fuel technologies.

The Detroit auto show is of course partly responsible for the sudden explosion of interest towards plug-in autos, and I’m just going to link to a few articles. For my previous recent posts on this topic, go here, and here.

Electric-Car Firms Get Star Investors: discusses Kleiner Perkins’ investment (with an assist from Al Gore) in Fisker Automotive, which is releasing an ’09 luxury plug-in hybrid which has all the requisite performance attributes (50 miles before charging, 125 mph, 0-60 in 5.8 seconds). The article also mentions a couple other bigger names in this space including Tesla, and Shai Agassi’s start-up

Closing the Power Gap Between a Hybrid’s Supply and Demand: highlights AFS Trinity Power which has developed a prototype for a plug-in hybrid with pre-existing lithium-ion batteries and ultracapacitors which gets 150 miles/gallon.

Toyota Will Offer a Plug-In Hybrid by 2010: in an effort to outdo GM’s Chevy Volt and Saturn Vue efforts, Toyota will be offering an entire fleet of plug-in hybrids, and extend the initiative to the Lexus line. Another take on these competing efforts is here.

A PHEV - EV Demand Curve: Meanwhile, AltEnergyStocks takes a look at the demand curve for mileage range by household, and comes to some interesting conclusions about PHEVs (plug-in hybrid electric vehicles) vs. EVs (electric vehicles).

Six Major Pre-Production Electric Vehicles Compared: and through the previous link at AltEnergyStocks, I found DIY Electric Car’s very helpful grid comparison of electric vehicles. Although a couple months old, key similarities and points of difference are already beginning to appear.

And finally, there’s been a lot of attention given GM’s investment in Coskata, a cellulosic ethanol company still in pilot stage. As always, Earth2Tech was on the scene months ago, and has a great first-hand account of the technology and company.

Morning links - wind, PEVs, green business, transportation and smart-grids

Various items I've come across this morning that I thought I'd share.

Size Matters: Good round-up on wind development and investment in the U.S. from the WSJ's free blog "Energy Roundup". Several new developments are noted in this post, including the first-time use of 3MW turbines in the U.S., competitor collaboration among Enel and GE, and increasing industry consolidation.

Race to Make Electric Cars Stalled by Battery Problems: Long front-page story on the challenges plug-in hybrid and electric vehicle makers face in sourcing batteries that are safe and reliable. Very good overview, and adds some necessary context to my post yesterday on PEVs.

Wal-Mart faces hurdles in green electronics: Wal-Mart's sustainability push, and the sizable impact of that decision on manufacturers, other retailers, supply chains, and ultimately consumers, has been reported and debated ad naseum. This article discusses some of the challenges electronics manufacturers (and Wal-Mart) are facing in meeting Wal-Mart's objectives. Depending on the outcome of next year's elections, we may finally see some kind of federal legislation that consolidates the wide-ranging standards for energy efficiency, sustainability and recycling.

27 electric cars companies ready to take over the road (h/t Earth2Tech): An interesting list of electric car manufacturers. There are enough cars here for every taste and desire imaginable.

Moving Billions of People on a Still-Green Planet?: Rather fascinating piece from the NYT's blog on environment, focusing on broad trends and scenarios in transportation. A lot of links and research here to digest.

News Flash: 110% of Consumers Shop Green!: Joel Makower is one of my favorite thought-leaders in this space, and his new post on the environmental consumer and greenwashing has far-reaching implications. I covered a similar topic (sparked by an earlier Makower post) here.

What's so smart about smart metering?: Its a couple weeks old, but an informative interview with the CEO of smart-grid-focused company. I thought it wrapped up a lot of what I've been discussing recently here, here and here.

Plug-in Electric Vehicles

For whatever reason, I came across a number of developments today in the plug-in electric vehicle space. In that PEVs are another example of technology that empowers the individual energy user, (and I just posted on a similar theme), I thought I'd highlight them here. Apologies for the lack of structure or continuity in this post.

"Smart charging" plug-ins

Some estimates place the number of plug-in vehicles by 2015 at 500K to 1.5 million. Unfortunately, for utilities, if plug-in electric cars achieve anywhere near this level of penetration, the electricity usage could be enormous.

For example, in an ACEEE study last year, a typical electric-only car might have an efficiency of 4 miles per kWh. If you assume an average 1,000 miles per month driving (and possibly more with the anticipated reduction in fuel prices) one car could “consume” 250 kWh per month. According to the EIA, the average household used about 900 kWh back in 2001 (their most recent data). Thus, acknowledging the multiple caveats associated with back of the envelope calculations such as this, switching from a gasoline-powered car to a pure electric would increase household energy usage by over 25%.

Therefore, while the actual fuel savings (and accompanying emissions reductions) would be significant, plug-in electric cars would need large amounts to draw large amounts of electricity from already over-stretched utilities and infrastructure.

This is where companies such as V2Green come in. V2Green is an early-stage venture focused on developing both the hardware and software necessary for utilities to efficiently manage the rate, pace and timing for charging plug-in vehicle. Its technology would allow thousands of vehicles to wirelessly communicate with utilities in order to determine the optimal charge time. The company faces a number of challenges (need for outside capital, partnering with both utilities and vehicle manufacturers, small current market size), but believes it is poised as the leader in a new market opportunity. Today, it announced a transition to a new CEO who will focus on V2Green’s growing business responsibilities (a typical process for most new technology ventures).

Over the past few months, Earth2Tech has written a number of smart posts focused on the company, and the broader challenges and opportunities in managing the electricity needs of plug-in vehicles and the potential for this new technology. Recommended if you're interested in learning more, and also here (h/t Earth2Tech).

Rapid charging of plug-in electric vehicles

Along a similar vein comes this commentary from Leonardo Energy today.

When screening the data sheets of prototypes electric vehicles and electric vehicle batteries, you often come across some spectacular recharging speeds…What the data sheets don’t say is that the electric connection must be capable of supplying sufficient power for this rapid recharging....Consequently, rapid charging would be impossible at home. Moreover, it would create a serious challenge for any grid connections for electric recharging stations located along the road…

…That is why some experts, like Andrew Burke, an electric vehicle engineering pioneer at the University of California, see the rapid charging of plug-ins as a technological dead end. Others, like Alan Gotcher, CEO of Altair Nanotechnologies, see those barriers merely as challenges that need to be overcome. Watch this space to see which of these two visions prove right.

The articles and study within the post add context, and are an informative read if this is of interest.

Boosting batteries

Finally, I wanted to close on a couple of developments that involve the actual batteries with the vehicles. While this should be a much longer post, I am including these two links here to highlight the fact that many technological advances that could impact PEV's are coming from parallel industries. This article (from several months back) helps explain the value of the two potential advances below:

Nanowire battery can hold 10 times the charge of existing lithium-ion battery

Stanford researchers have found a way to use silicon nanowires to reinvent the rechargeable lithium-ion batteries that power laptops, iPods, video cameras, cell phones, and countless other devices.

The new technology, developed through research led by Yi Cui, assistant professor of materials science and engineering, produces 10 times the amount of electricity of existing lithium-ion, known as Li-ion, batteries.

Cui said that a patent application has been filed. He is considering formation of a company or an agreement with a battery manufacturer. Manufacturing the nanowire batteries would require "one or two different steps, but the process can certainly be scaled up," he added. "It's a well understood process."

A Better Battery for Laptops

Boston-Power says that it's poised to enter the market for portable power, with a notebook battery the company claims is safer, lasts longer, and can be charged faster. The Westborough, MA, startup recently announced that it is more than tripling production of its high-performance battery, called the Sonata, after receiving $45 million in a third round of venture financing. The move puts the company in a position to mass-produce and commercialize its next-generation lithium-ion battery within months…

While focused on laptop computer batteries, there are hybrid-electric vehicle applications as well:

The unmatched safety benefits available from Boston-Power's technology apply in …other applications such as hybrid electric vehicles (HEVs). With existing notebook computer batteries containing roughly the same power as hand grenades -- and HEV batteries representing far greater than that -- Boston-Power's proactive, preventative safety features overcome the issues challenging current Lithium-ion batteries.

News and notes - electric cars, solar, CCS, ethanol, marketing and more

Charged up by electric cars: Tyler Hamilton's interesting new column on electrification of cars covers what large automakers and small entrepreneurs are doing in this space, and also speculates on the accompanying importance of load management software. More here on his blog. (he's a one person media conglomerate)

SunPower’s solar power plant building boom: details on SunPower's multiple new solar installation deals in Europe (especially Spain). Given that Spanish PV sector grew 500% in the last year, perhaps this is not surprising.

Solar-energy sector seems primed to grow. Nothing new, but some good P/E numbers on some very highly valued solar stocks - First Solar is at 130 time earnings, SunPower 60x, while others are lower (e.g. Trina at 18x).

Archer Daniels Midland to Bury Carbon From Ethanol Plant: ADM is working with a number of state and national government agencies to inject 1 million tons of carbon underground. Project is expected to cost $84 million, with almost $67 million coming from the Department of Energy.

Canon Unveils "Generation Green" Brand: at first, I was writing a snarky little post about this, until I remembered that Canon ranked number one on the Climate Counts scorecard, put together by Clean Air. Perhaps it was the company's environmental bona fides, that explained why a rather plain announcement got quite a bit of media attention.

Open Source Free Energy Tech: given my interest in leveraging successes from the Information Age, I thought this a wonderful example of energy technology development using the open-source method.

Deeya Energy Raises $15 Million Series B Financing for Energy Storage: yesterday, I linked to a great interview with two DFJ VC's. Deeya is one of their cleantech investments.

Switchgrass shows promise for ethanol production study: finally, some good news for pro-ethanol folks on the cellulosic ethanol front. Apparently, native North American prairie grass produces 540% more energy than energy consumed, compared to previous estimates 343% net. According to the article, this is due to higher yields from new breeds of switchgrass.

Could renewables supplant 100% of traditional electricity generation?

As I first wrote here, managing intermittency of renewable energy through geographic diversification could be a key driver of large, utility-scale adoption of renewable power beyond the 10%-15% threshold typically assumed. It also featured in my predictions for 2008.

Now, the Combined Power Plant in Germany is putting all of the theory into practice. (via The Sietch Blog, h/t Gristmill)

In an pilot experiment featuring 36 renewable energy power sources (11 wind, 4 biogas CHP units, 20 solar systems and a pumped storage power plant) all linked by a central control unit, the Combined Power Plant project demonstrates that most, if not all energy demand can be met exclusively by renewable energy. From the background paper:

Wind turbines and solar modules help generate electricity in accordance with how much wind and sun is available. Biogas and hydropower are used to make up the difference: they are converted into electricity as needed in order to balance out short-term fluctuations, or are temporarily stored….

…Cutting edge technology is already able to forecast energy yields reliably. The Combined Renewable Energy Power Plant makes use of this technology and regulates electricity needs just as securely as conventional, largescale power stations…

...These power plants are intended to meet one ten-thousandth of Germany’s electricity needs – roughly equal to the electricity requirements of a small town with 12,000 households (such as Stade in Germany). The Combined Power Plant therefore shows in miniature what is also possible on a large scale: 100 per cent provision with renewable energy sources at all times.

The Technical Summary has more.

I recommend first starting with the 7 minute video which does a wonderful job explaining the program and underlying reasoning.

Certainly, a national roll-out of this project would require the development of several enabling and ancillary technologies, including the build-out of an extensive high voltage power transmission infrastructure, and sophisticated demand response technology and networks. But coupled with improved energy efficiency and individual power management initiatives, this could potentially represent a quantum leap in a renewable energy powered future.

Links

Given time constraints, only passing on a few stories and links I've enjoyed recently:

Who has the oil? Picture = 1000 words

The success of solar depends on storage. Will the technology underlying various energy storage solutions become the new "latest, greatest" technology in 2008?

There are innumerable barriers preventing the large-scale implementation and adoption of renewable energy technology. Certainly the past few years have knocked down the obvious easy barriers, such as "no one will invest in unproven renewables", "grid parity of renewables will never match traditional energy", "supporting green policy is political suicide". [and by 'knocked down', I don't mean to imply discussion has ended. Just that the impossible has been made possible]

Now the more complicated barriers are next. One, the challenge of overcoming "intermittency", could become a bigger topic of debate in 2008. I covered it partially here, but developing efficient and cost-effective storage solutions is going to be a key. Which is a horrendously long-winded way of describing the relevancy of this article.

Questions about biofuels, for the records. Pay attention to #1 and #7.

Power revolution. Good overview of some key renewable technologies. You'll be seeing a lot of discussion and writing around each of these in 2008 and 2009.

UPDATE: Corrected a few typos and a sentence that was really bothering me.

GM's Electric Car - Version 2.0

As I wait for this flick from Netflix, news comes of General Motor's latest attempt at being a responsible automaker (and by "responsible", I mean trying to match consumer demand with products that can be profitable and brand-enhancing).

General Motors Chairman G. Richard Wagoner Jr. on Sunday unveiled an innovative prototype, the Chevrolet Volt -- a plug-in vehicle that derives its power primarily from electricity rather than gasoline -- as the world's automakers take on global warming and U.S. dependence on foreign oil.

Wagoner's announcement underscores the depth of GM's previous miscalculation on alternative vehicles and the degree to which the U.S. automotive landscape is changing. In 1990, GM introduced the concept of an all-electric car, the EV1. The vehicle made it to U.S. consumers but didn't survive through the decade.

GM hasn't given a date when consumers can buy the Volt because the advanced lithium-ion batteries needed to power the vehicle -- similar to technology used in cellphones -- are still years from widespread use in automobiles.

Are they even trying at this stage? To me, it sounds as though that whole "strategy" thing is pretty absent from the process. The scent of desperation hangs heavy in the air. Just sayin'... as these batteries might have a wee bit of importance to the ultimate success of this venture. But oh, don't worry, the CEO's on it.

Though the battery technology is still early in development, GM officials say they are pushing ahead. "We are taking a calculated gamble on this," said Robert A. Lutz, GM's vice chairman of global product development. "We are making the bet that the batteries will be available."

Ladies and gentlemen. We're not America's largest potentially bankrupt company for nuthin.