Spam bombs

Sigh...I had been doing so well. I guess a symptom of a non-obscure blog is one where the spam bots descend. I may have to turn off comments for a while.

World Energy Council

The World Energy Council is the most representative body of the energy industry with members in more than ninety countries. Its mission is to promote the sustainable supply and use of energy for the greatest benefit of all. Every three years, the WEC holds the World Energy Congress, a major global energy event attracting 4,000+ delegates. The next Congress will be in Montreal in September, 2010 (from their website).

I had the privilege of representing Canada at the 1995 WEC Congress (thanks Canadian Gas Association!) I've set up a LinkedIn page for members of that congress to reconnect. If anyone of my readers would like to join and have attended a WEC event - either find the LinkedIn group, or email me.

Solar Grid Parity Calculation

I came across a post from a while back - April, 2008. In it the author describes the year at which residential rooftop solar reaches grid parity.


The post is brilliant in its simplicity. By taking NREL data, the average price of a solar module can be seen to be dropping at 6%/year. Extrapolating forward, while making the assumption that the installed cost will continue to be twice the module cost (which may not be true as improvements to module cost have seemed to be happening faster than installation improvements - but we can hope), as well as making a couple of other reasonable assumptions on interest rates and cost of electricity, he demonstrates through a pretty simple NPV analysis that by 2015, solar will have reached grid parity in Minnesota.

That's pretty striking, and he didn't provide what the solar resource was like in Minnesota (although, it might be pretty good - there is a latitude issue, but I bet that there aren't many clouds).


















I like this analysis because it is so simple, and it's fairly easy to change any assumptions that you might disagree with and see what there effect is. This graph from Solarbuzz shows that module prices have started to work through the silicon shortage (it had to happen sometime!) and prices have resumed their downward trek. This might push out the grid parity time an additional five years - or, due to the billions of investment dollars that have gone into solar in the last few years (and given First Solar's announcement of <$1/W manufacturing cost) the price reduction curve could accelerate from 6%/yr to 10%/yr or beyond. At any rate, this is exciting as I believe that since electricity is a commodity, there will be a sharp tipping point once the economics work out, and this is all foreseeable in the next few years.

NOAA Climate Change Report (and DocStoc)

NOAA, in conjunction with the National Science and Technology Council have recently released their report Global Climate Change Impacts in the United States. This report is very detailed, with lots of useful up to date graphs and charts. It's extremely data-heavy, which I like. I've seen snippets of it floating around the blogosphere recently.

If you'd like to have a read, I've included the embedded link.


Global Climate Change Impacts in the United States -

The second half of this post talks about the link and the service I used, called DocStoc. There are several file sharing websites out there - most of them focus on Powerpoint hosting (I've used Slideshare in the past). However, what I discovered I like about Docstoc is that it's really built a fantastic library of documents, beyond just presentations. I've used it to find technical documents, marketing brochures, legal templates, etc. Google can be great for finding a link to a published work, but you won't necessarily be able to get at the actual document. Whereas DocStoc's inventory is far less - anything you do find you have full access to, which is sometimes all you need. Having full access to a smaller pool of material can usually be more helpful than having partial access to a larger pool, and what they've put together is really neat.

Secretary Chu Announces Nearly $50 Million to Accelerate Deployment of Geothermal Heat Pumps

CleanEdge reported today on the DOE's commitment of $50m to Geothermal Heat Pumps.

Geothermal heat pumps are nothing new. In fact, I recall hearing about them way back in my first thermodynamics class in engineering. The idea is that you pump heat from the outside when it is cold and pump heat to the outside when it is hot is simple. Given that, you want your outside temperature sink to be as hot as possible when it is cold out, and as cold as possible when it is hot out. The temperature of the ground, several feet below the surface makes this a far more attractive reservoir than just the ambient air.

So what's the problem? Well, a big issue is the fact that installing a geothermal heat pump is a custom job, involving digging up and installing an underground network of plumbing. For many homeowners, the cost of installing isn't worth the payback period. Well, what about the initial builder? Surely it is much cheaper to install when the house is first being built? Well, yes, but as everything in the green building space, if the developer can't charge more for the building because of an installation, then it's not worth putting in the installation, no matter how cheap it is. This is the classic developer/owner market failure that plagues any kind of efficient building (ie, the developer isn't the one paying the utility bill, and yet can't capture the long-term value of putting in efficient systems).

So, could this spur innovation to reduce up-front costs of these systems? Let's hope so!

CafePress - Sign of the Times

I've known about CafePress for years. I think it's a genius way of running a "user generated content" business. They handle all of the logistics, manufacturing, customer relations and finance. You provide the content. I think it's a model of how to leverage a core competency of manufacturing, and I'd love to see similar businesses in other areas.

To try it out, I took a quote from a great artist and photographer friend of mine, Rob Shaer, and turned it into a collection of stuff. The quote, which I thought was a brilliant summation of how much things have changed in the past three years is:

"Is it possible to have work-life balance without the work?"

Overall the process is pretty smooth, although it was several hours of work to come up with a design, do all the Photoshop fiddling, make two version (depending on landscape or portrait mode), and then create the right sizes for each of the scores of items offered.

I thought about taking silly things down (like the intimate underwear), but it was going to be more work to filter everything, and besides, maybe someone will want them.

Overall, I was impressed with the process and big thumbs up to the CafePress team for putting together a great site. I'll track the performance over the next few months, but if you are interested, or know of some soul run over by the train wreck of this economy who might be cheered up, be sure to purchase something and I'll let people know how it turned out.

WTF? The baddest green machine out there.

This weekend I came across the ultimate in mixed branding - the Hybrid Escalade. With a hybrid option to the standard Cadillac Escalade, it is now possible to eek out an astonishing 20 MPG out of this 8 passenger transport. With a base price of $74k (as opposed to the base of $63k for the regular Escalade) this might master from Detroit certainly targets the upper income range for car purchasers. From a fuel consumption point of view, the improvement, as I understand it, is somewhere from 14mpg to 20mpg - or about 6mpg. At 15,000 miles/year, this is 321 gallons/year savings. At $3/gallon, that's $963/year, which would probably not make this justify the price premium.

But the real question is: does the "Hybrid" badge do anything, from a marketing point of view? Most hybrids have a halo effect (and, if you can drive in the carpool lane, a time-saving benefit as well). With the MANY "Hybrid" badges plastered on this vehicle, clearly the hybridization matters, but reaction from many indicates that this vehicle is more one of amazement and scorn.

Too soon

Kyle Swanson, a co-worker of mine from AeroVironment, passed away recently. He was 43 years old.

Aside from the terrible shock of one so young being taken from us, Kyle in addition was one of the instrumental players in launching AeroVironment's unmanned aerial vehicle product line. I had the privilege of riding the tsunami that was the growth of this division when I first joined AV, and helped start up their production facility, their Logistics organization and their Training organization.

He was incredibly energetic and enthusiastic, and passionate about what he did. The greatest thing for a person to have done is to have done something that mattered, and to have made a difference in the world. Kyle has done this, and all those who remember him, and thousands who never met him have been, or will continue to be, affected by all that he has accomplished.

I was struck at how someone whose enthusiasm could even exceed my own, how someone so full of life could now no longer be with us. My thoughts are with those who remain, who struggle with their loss. May they find comfort in the knowledge that those of us fortunate enough to have known Kyle are all the better for it.

Fusion! Creeping back?

Watch CBS Videos Online
60 Minutes recently ran a very interesting story about Nuclear Fusion. While the science of the video is very thin (hey, they only had 12 minutes!) the clear story is that it is slowly becoming acceptable to work on nuclear fusion technologies.

Recently I spoke with the CEO of General Fusion, a Vancouver based company. The founders come from CREO, a company with impressive technical pedigree, and they are working on an interesting fusion concept, shown here.

Basically, as I understand it, they have a spherical container with many pneumatic rams. The rams all fire simultaneously, creating a spherical shockwave that implodes upon itself. At the center of the sphere, the wave collapses, creating astronomical pressures, and fusion.

Unlike many crackpot energy stories I hear involving perpetual motion machines, what intrigues me about nuclear fusion is that it actually works. It's just that the engineering is really, really hard. However, the difference between "really hard" and "impossible" is non-trivial.

So, I for one remain interested in this space. However, I don't know if it is going to be always decades away. I hope not, however, I'd welcome others' comments on viability and practicality.

X PRIZE Foundation

The X PRIZE Foundation is a fantastic organization. They launched the $10m Ansari X PRIZE, which was won in 2004. This prize rewarded the first private team to fly to 100km (twice in two weeks).

Now they are working on a prize for energy and the environment. I'm helping get this kicked off and it's a really interesting project. There are literally dozens of potential areas that might be appropriate for an X PRIZE. However, it has to be an area which $10m will move the needle, and so asking teams to compete for something there were going to do already is a waste of time.

If you have any thoughts as to what might be interesting for the X PRIZE Foundation to focus on for an energy prize, please drop me a line (at my aaronfyke email address at yahoo.com - my Turing test for spam bots). I'd love to get input! Also, providing input would not disqualify you from any future prize competition.

The momentum of a juggernaut

If you want to get an appreciation for just what a juggernaut the US driving public is, check out the following graph. I got it from Green Car Congress.

This graph goes back to 1983 and shows a steady, almost inexorable, rise from 1.6 trillion vehicle miles driven annually to peak at just over 3 trillion vehicle miles. There are slight periods where the graph goes horizontal for a few months (which seem to map to various recessions). However, the biggest actual drop EVER has happened at the start of 2008, when oil prices were pushing gasoline prices through the roof. This should allow economists to get some idea of the elasticity of gasoline. I'd assume it isn't much.

What I find striking is how much it is rising. I'd like to compare this to population. I'd also like to have a current version of this graph - one that includes the financial and job-market meltdown of late 2008. Gas prices have fallen, but when people aren't working, they aren't commuting. The reason I find this so arresting is that it took $4+/gallon prices to push drivership down to 2006 levels! I moved to Los Angeles in 2002 - what is the likelihood that this graph will drop to those levels?

Nifty New Site - Wordle

The above image was created with Wordle. You can give it any jumble, or text, or point it to a blog and let it mine its own words. It seems to have sampled heavily from my previous two posts, but I like the fact that it's so accessible.

I decided to try this out on the blog of Daniel Sieberg, CBS Science and Technology Correspondent, and good friend. He's currently covering TED, so there's no surprise that this was the result:

The readers respond!

Wow. One well placed post and my readership increases 6x. There has been a lot of interest in my Type I/Type II characterization, and some interesting comments.

Some of the things that I've seen from the discussions I've recently had relate to competition. Type II companies may have a lot more competition than a Type I company would, and this is seen in the case of scripped.com, and various social networking sites. However, the key to making a Type II company work is to find other means, other than technological, to lock in a barrier to entry. Since there is bound to be lots of competition, other means can still establish a single market leader.

For example, there was a time that Hotmail ruled the roost. While there was no barrier to switching, Hotmail's viral marketing established them as the dominant web-based email solution by far. Had Hotmail continued to provide good quality service (rather than getting suffocated by ads and spam, as what happened), they could have held that position for some time. Nevertheless, the position of a Type II company can be precarious. Hotmail lost to Yahoo and GMail, Friendster lost to Facebook, etc. It does appear, though, that a Type II company that has succeeded in being the market leader, only relinquishes the title when they stumble. Otherwise, the market is happy, and actually prefers, to reward a dominant leader. I can't say that eBay has yet to stumble, and barring Craigslist (which, I believe has some relation to eBay anyway), there isn't another trading/auction site that has similar reach.

At any rate, thank you all who contacted me. Interesting discussions.

Type I vs Type II companies

I've spent a reasonable amount of time thinking, over the Christmas break, of what types of startup companies succeed, what types raise funding, what types are capital intensive. It's also been interesting to compare cleantech companies to IT companies, because in some ways there are similarities, and in other ways, the two sectors fall in distinct camps.

So, without further ado, here are my two categores:

Type I Companies - Value based on a technological breakthrough (Technology Push)

ie: "cure for cancer" type companies.

Examples (based on my observations):
NanoH2O
Various Biofuels companies
Sunpower (and other solar companies)
Ballard Power Systems
Viagra
X1
Google

I call these companies "cure for cancer" companies, because the main importance is the technology, not the marketing. If someone shows up with a cure for cancer, investors aren't necessarily going to say, "wait a minute...what's your marketing strategy?". The market is huge and obvious and the marketing plan isn't as important. I have to put a small caveat here - because X1 struggled due to marketing reasons, and Google only became a money machine once they figured out how to monatize search. But the main point is that the technology drives the value and thus the company.


Type II Companies - Value based on a marketing breakthrough (Market Pull)

Examples (based on my observations):
Facebook
YouTube
Dell
Scripped.com
Most internet companies

Here, the value of the company is not based on discovering a technological breakthrough, but rather it is from developing a clever business plan. Dell didn't really do much more than assemble commodity computer parts, but it does so with very low supply chain costs. Facebook is "nothing more" than a large database with various pointers, but it's genius has been how it has executed brilliant viral growth and user lock-in. YouTube has some technology in its video compression through Flash, but mostly it succeeded through opening up its comments, allowing videos to be posted on blogs, and basically out-marketing, virally, any other video site.

These companies are started by looking at the market and saying "what is the market need here", and then building the software. I recently came across Scripped.com. It's a great idea - take Screenwriting software (which has existed for ages), put in on the web with a SAAS model (a la Google Docs), charge nothing for it, and try to monetize the community. This idea didn't come about because of a technological breakthrough - heck Google Docs and Desktop screenwriting software proved it could be done. This idea came out by seeing a need and building a business to meet it.

So, which is better? Well, back in my days in the auto industry at Visteon, they would have said Type II is better. Visteon was forever inventing technology looking for a home, and was wanting to assess the market need and create products to meet it. True enough...however, technology push companies tend to be easier to get funding for (walk into any VC with a technology proven to produced zero-carbon energy at a lower cost than coal and you will almost certainly get a check). A type II company can be harder to sell the vision for (can you imagine the initial pitches for eBay? - "So...people are going to be selling used Smurf dolls and old socks online and you think that's a business?") Type II companies can be easier, technologically, to start, but can have a harder time getting traction and funding.

In my opinion, neither is better. Facebook is on one list - Viagra is on the other. While Type II might be easier to start; if you are finishing your PhD with a killer area of research, Type I might be an obvious fit. I'm now putting serious effort into seeking out fantastic opportunities, and I noticed that this framework seemed to be an interesting way of categorizing where your business falls.