What’s the value of a home that can fine-tune EV charging in the garage, solar panels on the roof, appliances in the kitchen and thermostats on the wall to maximize its energy profile?
Ford Motor Co., SunPower and Whirlpool say it’s a lot, at least according to a new computer model they’ve developed with the Georgia Institute of Technology. And while they haven’t launched any commercial offerings on the front yet, Ford has already developed a database of EV charging rates from utilities across the country to give each home system some grid-pertinent data to make decisions with – and a cloud-based management platform to control it all.
That’s the gist of Ford’s “MyEnergi Lifestyle” partnership announced Tuesday, so-named after the automaker's new Ford Fusion Energi line of plug-in hybrids. The partners have a big display at the Consumer Electronics Show (CES) in Las Vegas this week, showing how Ford can schedule and control plug-in EV charging to reduce demand during grid peaks and take advantage of cheap, off-peak power, usually at night.
Next up will be some sort of contest to award a “typical American family” with products from each of the partners, including a Ford plug-in vehicle, SunPower solar arrays and Whirlpool smart refrigerators. Other partners include Eaton, which provides the EV charger, smart thermostat maker Nest, and building energy sensor maker Powerhouse Dynamics, according to Monday’s announcement.
All that technology should allow a typical U.S. home to save about 60 percent in energy costs, along with a 56-percent reduction in CO2 footprint, according to the computer model developed by Georgia Tech. While some of that is due to simple savings like replacing old fridges with more energy-efficient models, a significant portion of it is managed by telling devices in the home when to draw power from the grid, Mike Tinskey, Ford’s global director of vehicle electrification and infrastructure, said in an interview.
This is far from the first such experiment in linking plug-in cars and home energy management, of course. EV charger networking companies like ECOtality or ChargePoint (formerly Coulomb Technologies), private charging networks like NRG Energy’s eVgo network, and charger-making grid giants like Schneider Electric, Siemens and ABB, are including the ability to set charging times and rates according to power price signals or grid needs.
Plug-in cars themselves are also controlling their charging at the home. BMW and home energy startup Tendril have joined up to demo a home that charges its cars during off-peak hours, and Nissan is working on a system that can actually power a home via the battery in its Leaf electric sedan. General Motors has been plugging the Chevy Volt into all kinds of utility-consumer pilot projects, as well as opening up its OnStar platform to apps to link Volt charging to home energy management and utility data feeds, to name a few examples.
Ford’s MyEnergi approach, on the other hand, is essentially utility-agnostic, Tinskey said. That’s because Ford has built its own database of utility power rates, including both special plug-in vehicle charging rates and the more general on-peak/off-peak or time of use (TOU) pricing plans that can have a significant impact on household energy spending. Ford claims it is the only automaker to offer such a “value charging” data set for utilities across the United States, which it beams directly to its plug-in cars via cellular.
Ford has also built a cloud computing platform to connect its energy database and plug-in charging command system with software from its various partners, he said. That makes for much simpler integration of products from partners like Whirlpool, Nest and Powerhouse Dynamics, all of which require their own sets of commands and communications links to homeowners and the outside world.
Ford and SunPower have already been working together since the summer of 2011, when they announced a joint project to sell 2.5-kilowatt solar systems that could offset the power required to charge a Focus Electric plug-in car. But according to Tinskey, the partners quickly found that increasing the size of the solar array made more economic sense – a realization that sparked the MyEnergi partnership, he said.
What about linking to utility smart grid technologies, like smart meters? Ford actually tried connecting directly to smart meters at first, “but the amount of communications protocols, and the number of utilities that wouldn’t even open up their meters, just made it impossible,” Tinskey said. So instead, “we opened it up, and took it to the cloud.”
Right now, the MyEnergi partners aren’t saying much about how they plan to bring their combined technologies to market, though Tinskey said it’s set to be commercially available in the next 12 months. The biggest factor in the technology’s growth, of course, is how many plug-ins Ford can sell in the coming years. The automaker is launching a total of six EVs across the U.S. and Europe, and has a partnership with Eaton’s Leviton for its consumer car sales and GE’s Wattstation EV charger for commercial applications.
Lisa Jackson has announced that, after four years, she is leaving the post of head of the Environmental Protection Agency. Environmentalists claim Jackson didn't do enough on global warming and coal. On the other end of the spectrum, conservative journal National Review Online writes, "It is hard to imagine a bureaucrat who has done more comprehensive damage to American interests than Lisa Jackson."
The Seattle Post-Intelligencer reports that outgoing Washington governor Christine Gregoire may be nominated as EPA chief to replace Jackson, according to a "very senior source in Washington’s congressional delegation."
Cathy Zoi of Silver Lake Kraftwerk joined the board of Makani Power, a VC-funded developer of tethered wings serving as airborne turbines that is aiming for offshore utility-scale power generation.
Clean Power Finance, an online market for residential solar financing and provider of software for solar sales, named Greg Sellers as VP of Field Operations. Prior to joining Clean Power Finance, Greg started Burnham Energy, and during his three years as Director built the company into the nation’s largest residential solar inspections firm.
The California Public Utilities Commission (CPUC) added Carla Peterman as Commissioner. Peterman comes to the CPUC after serving as a Commissioner at the California Energy Commission.
David Groarke is the newest Senior Analyst on the smart grid research team at GTM Research and comes to the firm after seven years in the energy consulting practice at Accenture.
ThermoEnergy (OTCBB: TMEN) named James Wood, a former DOE Deputy Assistant Secretary, as Chairman and CEO. The company is developing wastewater recovery and power generation technologies. Wood was CEO of Babcock Power and from 1996 to 2001 served as president of Babcock & Wilcox (B&W).
Ceramic Fuel Cells' CEO Brendan Dow and Managing Director John Dempsey resigned as directors of the firm on Dec. 31, 2012. Circumstances were not disclosed. The Australian firm builds SOFC-based small-scale on-site micro combined heat and power (CHP) and distributed generation units. The firm disclosed that it has lost money in its most recent earnings report, as it has since its public listing on the AIM.
It looks like rumors of Cisco’s departure from the energy-connected home space have been a bit exaggerated. On Monday, the networking giant jumped right back into the home energy fray with AT&T, announcing at CES that it has built an all-wireless control panel for the telecommunication giant’s Digital Life service.
Cisco’s control panel comes with five radios (one-way and two-way radios, Z-Wave, Wi-Fi and 3G), along with HomePlug AV wire-line capability, making it about the most communications-versatile home energy device I’ve seen. It’s also a mini-computer, capable of advanced diagnostics and power management and 24-hour backup, and using Cisco’s OSGi software to carry out many of the computations that go into sensing and controlling a home’s energy use.
Of course, it’s also connected to the cloud. Cisco’s providing the back-office provisioning and applications life-cycle management system, which connects the various cameras, smart thermostats, light controls, smoke detectors, door locks and other such home security and automation gear, and allows homeowners to monitor and control them via smartphone, tablet or PC.
In short, it’s about the most interoperable piece of hardware deployed to date for home automation -- which brings up the question of how much it costs. Cisco and AT&T didn’t reveal pricing details for the device or the Digital Life service, though AT&T said it plans to launch it in eight U.S. markets in March, with up to 50 additional market rollouts planned in 2013.
AT&T is a bit late to the party here. Verizon has been offering home automation and security devices to its FiOS broadband internet customers since October 2011, and Comcast’s Xfinity home automation service launched in mid-2011 and has been expanding to new markets ever since.
Home security companies such as ADT are also getting into the business, though their customers tend to view energy savings as an afterthought to safety. Alarm.com raised $136 million in VC for its connected home services in July, and Vivint, a home automation company that has been adding third-party-financed solar to its offerings, was bought by private equity firm Blackstone Group for $2 billion late last year.
As for Cisco, it de-prioritized home energy management back in 2011 to refocus on commercial buildings via its EnergyWise line of business. That technology, based on its 2009 acquisition of building energy software company Richards-Zeta Building Intelligence, has mostly been applied in data centers to date.
The home requires a much different approach than the instrumented and managed commercial building sector, however. Cisco has long talked about the need to distribute much of the intelligence for “endpoints” on the grid like homes and offices, to keep network traffic to a minimum and allow each home to more or less do the right thing on its own most of the time -- but that requires a good deal of computing power for in-home devices.
At the same time, companies like EcoFactor, Nest, Energate, Silver Spring Networks, Honeywell and a plethora of others are using cloud computing to do much of the heavy IT lifting, so to speak. That model collects data from semi-smart devices and multiple other sources, crunches it to figure out what the home devices should do, and then sends the commands back. No doubt Cisco will be applying both methods in its partnership with AT&T.
At the same time, Cisco has taken a lead in smart grid, networking everything from distribution substations to smart meters. But its Monday announcement didn’t make any connection between its smart grid work and the AT&T project -- which makes sense, since it’s a completely different channel to the home.
Few utilities have offered up the same kind of home automation gadgetry as the big telcos and home security providers have, though some are starting to enable third-party devices that connect to smart meters, demand response signals and other utility systems.
The big renewables winner in the fiscal cliff legislation was wind.
But the solar industry was also spared some pain.
Wind's $0.022 per kilowatt-hour production tax credit (PTC) was extended through the end of 2013. Crucial language changes allow wind and geothermal projects “under construction” by year-end to qualify for the incentive instead of only those “in production.”
But for solar, “the automatic federal spending cuts, termed sequestration and slated for January 2013, were postponed until March,” REC Solar Legislative Director Ben Higgins explained. “If sequestration had happened, it would effectively have taken still-pending 1603 grants, which provide cash upfront instead of a tax credit, from 30 percent of the investment down to about 27.7 percent.”
The 1603 provision, Higgins explained, “provides two benefits: One, you don’t have to have tax liability, and, two, you get the funds now in the form of a check instead later in the form of a tax credit.” Having it reduced, Higgins said, “would have been a major blow to investor and industry confidence.”
The two-month delay on sequestration “is probably the most important thing this package did,” agreed tax specialist CohnReznick’s Senior Manager Lee J. Petersen. “I would suspect the amount of safe-harbored 1603 projects was fairly robust,” he explained. “We’ve talked to folks in the process of safe-harboring up to $4 billion worth of projects. The bill has given them at least two full months of breathing room.”
There were two other important provisions in the legislation, Higgins said, “that will have a beneficial effect on commercial solar in 2013 for taxpayers that meet the eligibility criteria and have the tax liability.”
The most important, he said, “is the one-year extension of the bonus depreciation rule that allows commercial solar owners to depreciate 50 percent of the cost of the system in the first year rather than over the typical five-year MACRS schedule.”
Instead of expiring on December 31, bonus depreciation will be available to owners of commercial systems placed in service before January 1, 2014. Though more marginal than the 30 percent investment tax credit (ITC), Higgins said, it could be important because “70 percent or more of residential solar in prominent solar states is third-party-owned (TPO) and treated under the tax rules as commercial property.”
“Accelerated depreciation can be good or bad, depending on your tax position,” Petersen observed. “If you get a fairly substantial amount of depreciation in year one, that may be a good thing for you in year one. But if you're holding on to the investment for a number of years, and in the out years you have burned off all of your depreciation, you don’t have deductions to offset the income.”
Petersen agreed the depreciation provision will apply to TPO. “It is a valuable option; more options mean additional flexibility and flexibility is generally a good thing. It just comes down to a deal-by-deal basis.”
“The second provision of interest to the solar industry,” Higgins said, “was Section 179 expensing that allows for the immediate write-off of qualifying assets.” But, Higgins added, “bonus depreciation is fairly straightforward. Section 179 tends not to be.”
The limit on Section 179 expensing “was slated to drop from $125,000 in 2012 to $25,000 for 2013,” Higgins said. “The fiscal cliff legislation -- the American Taxpayer Relief Act of 2012 -- increases it to $500,000 for 2012 and 2013.”
Commercial solar owners, he explained, “may potentially write off up to $500,000 of the cost of their system.” The asset value limitation for Section 179 expensing is $2 million, Higgins said. “At $4 per watt, you’re talking about 500-kilowatt systems.”
This provision, Higgins and Petersen agreed, probably will not affect the TPO sector.
“You have to be careful with Section 179 expensing,” Petersen cautioned. “You can actually lose your ability to claim tax credits. With bonus depreciation, you still are allowed the full amount of the ITC. But with Section 179, “the rules don’t work that way because it is an actual expense, not a depreciation deduction.”
A two-year extension of the federal New Markets Tax Credit (NMTC) was also potentially important, Petersen said. “One of the most complicated provisions in the code,” he explained, NMTC money can be borrowed at extremely low rates to finance projects in economically depressed regions that might not otherwise find investors. “A developer might be able to borrow money at 1 percent rather than have to pay the local bank 7 percent. The value to the solar project is that it reduces the cost of financing.”
Because most investors are not familiar with solar and the NMTC is complex, Petersen said, it has been little used until the last two years. But “we have seen an increase in the number of renewable projects using New Markets and we expect that trend would continue.”
The bottom line, Petersen said, “is that this bill was not about solar. The ITC is available until 2016. Solar was in a pretty strong position going into this, so what we get are these residual impacts.”
Thin film solar vendor First Solar (FSLR) is experiencing a rejuvenated stock price and looking to rejuvenate its cadmium telluride (CdTe) photovoltaic solar module technology.
As Raffi Garabedian, First Solar's CTO, told us last year, "We've been focused on growth in the last few years -- we're now entering a time to really move the needle to accelerate performance."
First Solar has had a modest but consistent ramp in conversion efficiency of roughly 0.1 or 0.2 percentage point per quarter. It doesn't sound like a lot, but it starts to add up over time. The average line conversion efficiency for First Solar's modules was 12.7 percent in the third quarter of this year, up 0.9 percent year-to-year and the firm finished 2012 at a consolidated efficiency of 12.8 percent.
Module manufacturing cost was $0.67 per watt (not including the German factory) in the third quarter. That cost number should drop below $0.60 per watt in late 2013 according to the CEO.
In First Solar's most recent earnings call, the firm noted:
- Improvements in the semiconductor absorber material through changes in deposition technology -- with full volume production beginning in mid-2013.
- A module design change that will reduce active area losses and improve uniformity -- second half of 2013.
- Improvements to the back contact of the module -- second half of 2014
First Solar set a new world record for CdTe PV module efficiency with a 14.4 percent total area efficiency last year. That mark came after First Solar hit a CdTe solar cell efficiency of 17.3 percent. Both records were set at the firm's Perrysburg, Ohio factory.
So there's headroom and the potential to give c-Si a run for its money on efficiency. But First Solar has to keep hammering on the potential of the CdTe materials system, as well as the other pieces of the module stack, such as the Transparent Conductive Oxide (TCO) and the back contact.
As a testament to First Solar's desire to improve performance and cost, the firm announced a partnership with Intermolecular (Nasdaq:IMI) last year and has just announced a two-year collaboration and licensing agreement aimed at increases in conversion efficiency.
"The combinatorial approach to material and process screening has shown promise to augment First Solar's already world-leading research and development capabilities in CdTe solar technology," said Garabedian in a statement.
Intermolecular uses a combinatorial experiment technology that comes out of biotech firm Symx. First Solar looks to Intermolecular's High Productivity Combinatorial (HPC) platform to help develop more advanced, CdTe-based PV manufacturing processes. Intermolecular acts as an R&D accelerator, and in turn, Intermolecular typically gets a royalty from products sold that were developed with its technology -- although First Solar did not divulge the exact nature of the partnership.
We spoke with Raffi Garabedian about the partnership. Garabedian said, "The device we make is a semiconductor junction and very similar to a CMOS device -- and you can imagine that Intermolecular's process expertise could be turned to PV."
Higher efficiencies will reduce area-related costs and eliminate the balance of system penalty. According to a GTM Research model, CdTe must sell for $0.12 to $0.16 per watt less just to compensate for the BoS penalty.
Intermolecular's claim to fame is its ability to do many experiments on a single wafer -- up to 72 experiments per cycle. These are essentially miniaturized and site-isolated experiments. As an example, a wafer can be run with 18 different silicon wafer texturing processes, each with four different passivation techniques.
In a project that would take another company months to complete and likely tax its analytical capabilities, Intermolecular can have a throughput of hundreds of uniquely characterized solar cells per week. Intermolecular has the flexibility to change gases, targets, chemistries and integration schemes. This is combined with automated probing and an "Informatics" software system that in many ways is similar to the techniques employed in biotech.
Intermolecular has worked on projects aimed at improving alkaline texturing of monocrystalline silicon wafers and developing a more durable, lower-cost antireflective coating for PV glass.
Garabedian added, "Cadmium telluride is still in its infancy, and First Solar has just scratched the surface. We've been focused on growth in the last few years -- we're now entering a time to really move the needle to accelerate performance."
Craig Hunter, Sr. VP of Global Sales and Marketing, echoed Garabedian, saying, "What we exist to do here is accelerate learning curves. Look at the headroom on the CdTe device -- there is tremendous opportunity to improve. CdTe is still an immature technology -- like most of PV."
The following case study on deploying data analytics comes from GTM Research's latest smart grid report, The Soft Grid 2013-2020: Big Data & Utility Analytics for Smart Grid. In addition to the Oklahoma Gas & Electric's (OGE) data analytics deployment, the report provides case studies on analytics deployment for other leading North American utilities. For more information, click here.
Utilities have been analyzing data for years; from load forecasting to rate design, utilities have traditionally leveraged data for grid operations. That said, the bulk of utilities’ analytics have relied heavily on old technologies like basic spreadsheets, pivot tables, and business intelligence (BI) reports, and have only dealt with a small percentage of the volume and complexity of the data now generated by smart meters and other sensors.
The following case study is an example of what could be termed smart grid 1.0 analytical solutions. These 1.0 deployments can be regarded as both good and bad news. In one sense, it demonstrates that utilities like OGE are moving forward with their plans to put more comprehensive solutions into place, integrating and leveraging the massive smart grid investments which many have already made. On the other hand, some of these first stabs at implementing analytics may begin to look dated in a relatively short period of time, as they are built largely on legacy architectures and technologies which often are not equipped to handle big data and analytics, despite being marketed as such.
UTILITY DATA ANALYTICS CASE STUDY: OKLAHOMA GAS & ELECTRIC (OGE)
OGE's “2020 Initiative” prohibits it from building any new fossil-based generation plants until the year 2020. OGE is looking to fill the gaps via targeted residential and small commercial demand response programs, and is beginning to use dynamic customer segmentation analytics to target best bets.
- Consumer analytics and customer segmentation
- Peak load management/load shed (via demand-side management analytics)
- Grid optimization (voltage control and conservation)
- Geospatial and visual analytics for centralized view of multiple systems
The utility’s chief challenge is to leverage greater value and energy savings out of the 800,000 control points (i.e., smart meters) which were recently rolled out. OGE is also attempting to “break down departmental silos” by implementing a comprehensive and holistic data strategy that will provide the utility with actionable intelligence about its consumers and grid operations.
The utility forecasts daily system demand of 5,864 megawatts in 2020, a reduction of more than 500 megawatts. A reduction of 70 megawatts is slated to take place over the course of 2012, with 60 megawatts being saved via demand response and 10 megawatts via integrated volt/VAR. In order to achieve that ambitious goal, demand response will play a critical role.
OGE is preparing to receive data from 52 million meter reads per day, a figure that is expected to double in the years ahead. One way that OGE is planning to deal with the influx of data is with an integrated operations center that is now in the works, which the utility expects will receive approximately two million event messages per day from advanced metering infrastructure (AMI), data networks, meter alarms and outage management systems. Other areas in which OGE is driving big-data adoption include the planned deployment of a new distribution management system (DMS), as well as an OMS and an integrated volt/VAR control program.
OGE’s 2020 Initiative will require the utility to shed substantial load. To achieve this goal, the utility has developed a strategy that relies on segmentation analytics, which will allow it to gain visibility into individual customers’ responses to price signals, and as well as to identify the best customers to target with specific marketing campaigns. It will also allow the utility to perform the measurement and verification tasks necessary to develop and offer the most optimal rate structures. The utility’s smart grid investments in both smart meters and ZigBee-controlled thermostats have facilitated this dynamic segmentation capability.
OGE believes that it is important to break down organizational silos because correlations of time-synched data from multiple inputs (MDM, CRM, billing/CIS, asset management and outage management) all provide valuable data that can contribute to the process of developing effective demand response programs and rate structures.
OGE has selected Teradata’s enterprise reporting and analytics solution. The Teradata platform provides the backbone for smart meter data, and also helps the utility gain a clearer understanding of customer behaviors and preferences from an enterprise perspective.
OGE: Three Levels of Information Architecture
OGE’s approach to information architecture is quite similar to the model presented in GTM Research's soft grid taxonomy. A data warehouse serves as Layer 1, improved and expanded data integration and data management serves as Layer 2, and new analytics and presentation capabilities serve as the top layer (Layer 3).
The utility’s data warehouse is engineered to expand to accommodate hundreds of terabytes of data over the next two years. Its data integration and management layer will be improved by real-time messaging. Outputs from the new system will be configured so that employees with access will get a live look at a near-real-time version of the data; this solves the dreaded versioning problems that are widespread in the utility industry. While the analytics layer is still relatively new, the utility reports that the experience thus far has been a positive one. OGE is particularly impressed with the capabilities of its geospatial and visual analytics, which has granted the utility a new look at its assets.
In addition to OGE's case study above, The Soft Grid 2013-2020: Big Data & Utility Analytics for Smart Grid includes data analytics deployment analysis for Burlington Hydro, CenterPoint Energy, Florida Power & Light (FPL), Oncor, PECO, San Diego Gas & Electric (SDG&E), and Southern California Edison (SCE). For more information, click here.
In a marketplace with viciously plunging solar module costs, what strategy best serves a startup solar cell manufacturer?
Well, if you're Alta Devices, you stay away from rooftops and solar fields, at least for now, and go after military and portable markets -- where efficiency is crucial and price-per-watt is much less important.
Alta has made technical strides in flexible gallium arsenide (GaAs) photovoltaics, setting records for the materials system and able to boast NREL-verified 28.8 percent cell efficiencies for a single-junction solar cell. (The theoretical maximum solar cell efficiency limit for a single-junction device, the Shockley-Queisser limit, is 33.5 percent. SunPower's crystalline silicon Gen 3 cells have efficiencies in excess of 23 percent.)
Alta Devices uses an epitaxial lift-off (ELO) technique pioneered by Eli Yablonovitch that produces flexible layers of GaAs that are one micron thick. Substrate re-use and cost is an issue in this type of technology, as it is with Crystal Solar and Solexel. Alta still has to scale and scrub away cost in the face of technical and economic challenges with ELO and the firm's novel MOCVD processes.
Late last year, Chris Norris, the firm's CEO, spoke of a 10-watt iPad cover in the MIT Technology Review, which reported that Alta had "started selling solar panels to the military to power small unmanned aerial vehicles, and by the end of next year it plans to start selling an iPad cover powerful enough to make plugging in unnecessary."
This week Alta announced "reference designs" for solar chargers using the company's cells in portable power, military, automotive, and unmanned systems. Reference designs are presumably provided to ease integrating Alta's cells into an OEM's end product. So, Alta is now in the high-efficiency solar cell business. And maybe in the charger business.
These applications suit the high efficiency and light weight of Alta's thin-film solar cells. Recall that these are also applications pursued by CIGS vendor Global Solar, amorphous silicon vendor ECD, and organic solar cell vendor Konarka, may they rest in peace. What Alta does have that GSE or ECD or Konarka didn't is the potential to bring really high efficiencies to these applications.
All of this has to be done at a reasonable cost -- although one could imagine selling prices closer to $10 per watt in these niche markets instead of the current $0.75 per watt in the rooftop solar business. These portable power products don't have to carry twenty-year guarantees, either.
Norris, in an email, told GTM today that lifetimes for this type of product are "two or three years typically. For these types of applications, the method and materials used to encapsulate the films are the primary factors in how long the product will last. That's a choice of economics and requirements. Our films, as you know, have very long lifetimes and are fundamentally suitable for 25+ year lifetime utility installations and use in space."
The CEO said, "We have about 2 megawatts of capacity in place in our pilot line located in Sunnyvale. We have been shipping small volumes throughout 2012 and will be focused on fully ramping the pilot line in 2013." He had told GTM earlier that the firm remains "agnostic" about whether the end-product is a cell, a flexible module, or a rigid glass module.
Alta Devices has raised $120 million from investors including KPCB, NEA, August Capital, Crosslink Capital, DAG Ventures, NEA, Presidio Ventures, Technology Partners, Dow Chemical, Aimco, Good Energies, Energy Technology Ventures, and Constellation Energy.
Can GaAs and Alta ever transition onto the rooftop? Can GaAs production scale big?
Or is Alta limited to these niche markets? Can these niche markets provide the growth and heft that a VC-funded startup needs? Other solar startups with cell-level innovations such as Solexel or Silevo are going after module markets rather than portable power, a choice with its own set of challenges.
The CEO said, "Overall, we're pleased with the progress we've made technically. Our efforts are transitioning away from fundamental technology development and toward yields and equipment productivity. We're excited about the multitude of opportunities we've found (and continue to uncover) to solve problems and create value by generating energy solutions for things that move, can be carried or worn. While our current focus is airborne and ground-based solutions for the military, markets such as consumer electronics, transportation and other forms of portable energy generation are future opportunities."
Norris noted, "You would be surprised at how large these 'off-grid' markets can potentially be -- gigawatts. And there are dozens of sub-markets in this greater bucket of 'off-grid' energy, of different sizes and margin/pricing requirements. We think there's a way to systematically develop products for these markets that matches the market to the different levels of scale as we grow the company over the coming years. For a company like us, it's the holy grail -- the ability to profitably address a few unique markets while the technology is immature, and then methodically expand into larger markets as we gain learning and create more manufacturing scale."
Here are the specs for Alta Devices' 24 Percent Efficient Solar Charging Mat:
And the firm's GaAs solar cell.
In this week's podcast, Greentech Media CEO Scott Clavenna talks with Shayle Kann, Vice President of Research at GTM Research, about all things U.S. solar: the huge number of fourth-quarter solar installations in 2012, SolarCity's IPO, the landscape of residential solar financing in the U.S., and a first look at how the market will evolve in 2013.
Our weekly podcasts let you hear from GTM research analysts, editors, reporters and the occasional special guest. Stay tuned and thanks for listening.
Subscribe to the podcast series through iTunes. Click here to visit the iTunes store.
As the internet of things proliferates through the energy sector, the security needed to keep IP-connected devices safe is simply not keeping up, according to a new report from the Department of Homeland Security.
The Industrial Control Systems Cyber Emergency Response Team's (ICS-CERT) latest monitor report detailed a malware discovery at a power generation facility. A USB drive that was used to back up control systems configurations was to blame for spreading the virus. In this case, having a siloed network was not enough to keep it safe.
Although the issue was resolved largely without incident, the ICS-CERT team found that the facility could have taken several basic precautions to limit the risk of spreading such a virus. One option would have been an antivirus solution; another was to ensure that all engineering workstations were backed up, which they were not.
Regular reports of hacks at utilities make it crystal-clear that events like these are not isolated. The ICS-CERT also reported that there are more than 7,200 critical infrastructure devices connected to the internet that nearly anyone could easily locate and attempt to log on to. Some didn’t even require a password. “Once accessed, these devices may be used as an entry point onto a control systems network, making their internet-facing configuration a major vulnerability to critical infrastructure,” the report states.
The energy industry is not alone, but it holds the dubious distinction that in 2012, more than 40 percent of all incidents reported to ICS-CERT were against the sector. Many of those hits were trying to log into ICS/SCADA systems, including data that could control SCADA systems remotely. Not all of the targets are utilities; some were oil and gas pipelines.
The next closest sector was water, which accounted for 15 percent of the reported risks. Government, by comparison, was 4 percent and transportation was 3 percent.
Some of the notable disclosures in 2012 came from researchers that found significant vulnerabilities in SCADA field devices, such as programmable logic controllers from major vendors.
Another major disclosure came from researchers who identified the vulnerability of the Tridum Niagara AX Framework, which is used to integrate building devices.
The findings from 2012 have led ICS-CERT to update its Vulnerability Disclosure Policy to disclose issues 45 days after the initial contact with vendors. ICS-CERT says that 2013 will continue a focus on an ongoing flow of information exchange to reduce the risk of attacks.
The group implores critical infrastructure owners to develop and implement baseline security policies, but warns that the basics are no longer enough. “Defense-in-depth strategies are also essential in planning control system networks and in providing protections to reduce the risk of impacts from cyber events.”
CSP Alliance Executive Director Tex Wilkins believes that if utilities and other load-serving entities (LSEs) saw the value in owning CSP plants with storage, it would grow competition and economies of scale in CSP and its supply chain and drive prices down, just as such competition did in photovoltaic (PV) solar and wind.
For CSP and PV solar to gain utilities’ favor, the utilities that would obtain power from them must accurately value them.
The report An Evaluation of Solar Valuation Methods Used in Utility Planning and Procurement Processes, from LBNL researchers Andrew Mills and Ryan Wiser, looks at “a recent sample of U.S. LSE planning studies and procurement processes to identify how current practices reflect the drivers of solar’s economic value.”
Like other generation sources, solar PV and CSP with and without thermal storage have energy value and capacity value and getting them into utilities’ power mixes incurs integration costs.
Solar’s energy value is “the reduction in the present value of the revenue requirement (PVRR) from avoiding variable fuel and operational costs from conventional power plants in portfolios with solar.”
Utilities’ studies calculate the energy value of solar by analyzing “the ability of solar to reduce variable costs with detailed production cost models.” These models constitute “the right approach,” the researchers found, but the often crude approaches used to design the resource portfolios evaluated in the detailed models need to follow the models' more careful methods.
Where there is ample sun at peak demand periods, capacity value is a major factor in solar’s economic value. Capacity value is “the avoided costs from reducing the need to build other capacity resources, often combustion turbines (CTs), to meet peak demand reliably.” That reliability requires enough capacity “to meet the peak load plus a planning reserve margin.”
Solar’s capacity credit is “the primary driver” in its capacity value. Capacity credit is “the percentage of the solar nameplate capacity that can be counted toward meeting the peak load and planning reserve margin.”
It is what the LSE expects to avoid from other generation sources by adding solar to its portfolio. If an LSE gives solar a capacity credit of 50 percent, a 100-megawatt PV plant “can contribute roughly the same toward meeting peak load and the planning reserve margin as a 50-megawatt CT." Capacity credit varies with technology, project configuration, and the time of the LSE’s peak demand.
Mills and Wiser found that “many LSEs have a framework to capture and evaluate solar’s value, but approaches varied widely.” Few of the LSEs’ frameworks were based on “detailed analysis of key factors such as capacity credits, integration costs, and tradeoffs between distributed and utility-scale PV.”
The researchers essentially found Tex Wilkins’ point to be accurate. “Factors like the dispatchability benefits of CSP plants with thermal storage appear to be quantified only in terms of a higher capacity credit versus other solar technologies. As the cost of building solar decreases, it will become increasingly important to refine estimates of these factors for all solar technologies, refine study methodologies, and communicate those methodologies to developers and generating equipment manufacturers.”
The range of methods used to estimate the capacity credit exemplified the inconsistency of utilities approaches. APS and Public Service of Colorado (PSCo) used detailed loss of load probability (LOLP) studies. Public Service of New Mexico (PNM), TEP, the California Investor-Owned Utility (CA IOU) process, NV Energy (NYSE:NVE), Idaho Power, and Tri-State had studies that estimated solar generation during peak-load periods. Portland General Electric (PGE) (NYSE:POR) used a “rule of thumb based on engineering judgment.” Los Angeles Department of Water and Power (LADWP), Imperial Irrigation District (IID), and SRP “did not specify the method.”
Mills and Wiser also found a “wide range of integration cost estimates” but a “scarcity of detailed analysis of solar integration costs.” LSEs, they concluded, need better and more detailed analyses to justify the assumptions they make in planning studies and procurement decisions. There are studies of the costs of integration operations and of the impacts of hour-to-hour variability, but too many LSEs rely on “rules of thumb, results from studies in other regions, or results from wind integration studies.”
Such analysis should include, Mills and Wiser noted, the costs of new transmission and distribution, but also the benefits to the grid of CSP with thermal storage or natural gas augmentation.
Asked to speculate on why utilities lack definitive valuations, Mills observed that where regulators and stakeholders drive the planning and procurement process, the details are more carefully analyzed.
In its first statement and guidance as a public company, SolarCity (SCTY), a provider of distributed energy, announced that the company deployed 156 megawatts in 2012 compared to a planned 146 megawatts. Here's the SEC filing.
The 156 megawatts deployed in 2012 shows growth of 117 percent over last year's 72 megawatts. Residential deployments were 85 megawatts for FY 2012, with 30 megawatts in the fourth quarter.
CEO Lyndon Rive, in a statement, guided FY 2013 deployments at 250 megawatts -- 190 megawatts of residential and 60 megawatts in the commercial sector. It's a healthy number and will serve as testament to the sales team at the firm if executed upon.
SolarCity's share price is trading at $13.02, close to its record high as a three-week-old public firm. SolarCity had originally intended to price its IPO at $13 to $15 but lowered the price to $8 per share.
Aclara, which is a member of ESCO Technologies’ (NYSE: ESE) utilities solutions group, will add cellular solutions to its communication offerings, which already include powerline and RF mesh.
"Metrum’s communication technologies are an excellent complement to Aclara’s network offering," Brad Kitterman, president of Aclara, said in a statement. "Adding Metrum's portfolio of products to our existing offerings allows Aclara to provide a more comprehensive solution that will enable our existing customers -- as well as new ones -- to optimize the economics of their smart grid deployment by balancing bandwidth requirements with cost."
Metrum’s assets will be integrated into Aclara’s Two-Way Automatic Communications System (TWACS), which is used to transmit data between electric meters and the utility. The acquisition also includes Metrum’s research and development center in Dallas. Dave Steidtmann, director of marketing for Aclara, likened the acquisition to bringing in a FedEx to its already-existing highway network. "We look at it as a surgical overlay," he said.
Aclara’s first deployment of Metrum’s IP-based solutions will be in rural electric and municipal utilities, which have been of increased interest to vendors for the past year or so, as large, investor-owned contracts are fewer and far between.
The addition of a cellular layer will allow for high-bandwidth and low-latency communications according to Aclara. The technology can also be used for distribution automation, demand response, bringing in SCADA data and commercial and industrial precision applications. Aclara already works with more than 500 utilities, more than 300 of which use TWACS, and Metrum also has a solid portfolio of more than 350 utilities in the U.S.
Increasingly, utilities are realizing that there is not one network that can provide all of their needs for everything from metering to distribution automation and backhaul. Cellular has long played a role in utility operations, usually as backhaul, but as the price has become more competitive, it is gaining more interest.
Nearly a year ago, Silver Spring Networks, which had long been a proponent of RF mesh networks, embedded cellular technology into its Gen4 networking technology. Last February, Itron purchased its cellular partner SmartSynch for $100 million. It is becoming increasingly important for networking players to have a cellular option along with mesh or powerline, and also for the different communications platforms to be integrated.
Cellular is increasingly part of the mix in the U.S., but it will likely be dominant in the U.K. and other areas of Europe. British Gas is already committed to a one-million-meter project with Trilliant using Vodafone’s cellular network. Smart grid communications networks in the U.K. could be worth up to $7.5 billion, which will primarily be cellular. In 2012, Ambient made a play to get into the European market by adding Vodafone to its smart grid node.
Aclara was named a top-10 vendor by Greentech Media in 2012, especially for its meter data management and consumer engagement expertise. But the company also has expertise in advanced metering infrastructure, which will be more robust with the addition of cellular -- and which has gone from a nice addition to must-have communications offering.
“Metrum not only significantly enhances our smart grid communications product offerings, but also allows us to broaden our industry-specific AMI expertise to better serve our utility customers,” Vic Richey, ESCO Chairman and Chief Executive Officer, said in a statement.
Terms of the deal were not disclosed.
PV module test facilities generally begin with procedures certifying that modules meet IEC or UL standards. PV Evolution Labs (PVEL), a small facility that began doing module evaluation in 2010, has been referring manufacturers seeking certification to other labs.
“We have the capability and will start offering the service soon,” explained PVEL CEO Jenya Meydbray, “but it is not a strategic focus.”
PVEL’s focus, Meydbray said, is the downstream PV market. “The needs of bankers and developers are different than those of manufacturers. They want more than just raw data test reports. They need higher-level advisory services.”
Advisory services are a PVEL differentiator, Meydbray said, setting it apart from more established testing labs.
PVEL’s testing may be different from the bankability testing described by Renewable Energy Testing Center and Intertek representatives in this series (see previous articles Testing and Ranking Solar Module Quality and What Do Solar Module Test Procedures Prove?).
“If bankability is the ability to get institutionally financed,” Meydbray said, “that is what we provide. But it is not enough to provide a third-party test report. PVEL services start with the test report to the manufacturer, they don’t end there.”
With its diverse relationships on the “buy side,” Meydbray said, “we can help established manufacturers access buyers. If they do well on our extended reliability testing, we can introduce them around, circulate their test reports, and support getting their product allocated.”
There are two key sets of PVEL test protocols, Meydbray said. The first set has to do with energy forecasting.
After a developer’s extensive -- and expensive -- effort to make a project happen, Meydbray explained, the majority of the return comes from a “development fee” when the project goes on-line. “That fee is determined by its forecasted lifetime output in kilowatt-hours made by an independent third-party engineering firm like Black & Veatch or BEW on behalf of the bank.”
A per-kilowatt-hour price determines the potential cash flow, the bank’s loan and the developer’s fee, Meydbray said. “Developers live and die on that fee. A 1 percent higher energy forecast can increase a developer’s profitability by 10 percent.”
PVEL’s first protocol characterizes panel performance in varying environmental conditions and therefore provides some certainty around the energy forecast. “[Just] 1 percent can mean millions of dollars. We can do these tests for around $15,000, depending on the details. It becomes a no-brainer.”
The first of the three tests in the energy forecast protocol is a PAN file.
“It is a software file used to project energy and cash flow,” Meydbray said. “It contains raw data from twenty-two varying temperatures and irradiances. Black & Veatch, with whom we have a strategic partnership, turns that raw data, using a software platform called PV Syst, into PAN file coefficients that characterize the panel’s output for energy forecasting.”
The second test is a third-party report on the light-induced degradation (LID) of a panel. “That can be a half percent to 3 percent of output, and every fraction of a percent really matters. The test is easy and not expensive.”
A third measurement done by PVEL is called the Incidence Angle Modifier (IAM). “A solar panel’s ratings are done with light at a normal incident angle, but in the field, a panel is hit by light from many angles, depending on the time of day, the season and the installation,” Meydbray explained. “We characterize performance as the light angle changes.”
The IAM measures output at ten different incidence angles from zero to 90 degrees, Meydbray said. The method was developed by PVEL’s David King when he was a Director at Sandia Labs. It is performed at PV USA, PVEL’s outdoor solar testing facility. “PV USA was built in 1986,” Meydbray said. “PVEL took it over in early 2011.”
The first three tests are focused on increasing the accuracy of the energy forecast and characterizing the product’s out-of-the-box performance, Meydbray said. “But of course, the product does not perform over 25 years in the same way. It degrades. That’s what most labs are looking at: accelerated lifetime testing.”
Product certification “does not catch most panel problems seen in the field because it is performed before high volume manufacturing ramps,” Meydbray said. Most field problems are due to manufacturing quality control failures. “Once you start producing 10,000 modules per day, you start to get deviations in the process that impact product quality.”
Current UL and IEC certification requirements are limited and are done before manufacturing ramps up. “This regulatory regime doesn’t provide the protection investors need. That is the gap we are filling.”
PVEL has developed statistical models for randomly sampling modules, Meydbray explained. “If you want 100 percent certainty that all the modules are defect-free, you have to test every one. Nobody will do that because it is too expensive and takes too long. We have a statistical model that lets project owners decide their risk tolerance.”
The decision, Meydbray said, “has implications on cost of capital, insurance premiums, residual value, resale value -- real commercial things that influence the success and profitability of a project.”
The PVEL statistical model allows developers to choose a level of certainty and a cost. “The cost for 99 percent certainty," Meydbray said, is usually “between $0.005 cents per watt and $0.007 cents per watt.”
The cost for the first set of three tests is $15,000 to $25,000, depending on variables, Meydbray added.
PVEL and PV consultant SolarBuyer are developing an Approved Vendor Program “that puts this all together,” Meydbray said.
It's been a tumultuous year for greentech and renewable energy, as well as a big year for Greentech Media.
Even the makers of The Simpsons allow themselves the luxury of a clip show every so often, so we're going to indulge ourselves in this first week of the year.
Here are some of the listicles and trend pieces we compiled in 2012. Enjoy, and Happy New Year from GTM.
Top Ten Solar Projects Under Construction in the U.S.: A three-gigawatt pipeline
Concentrated Solar Power Review 2012: A year of building out
Ten Ideas for Thinner Solar PV Cells: Looking to lose some microns in 2013?
The Ten Biggest PV Solar Plants Operating in the U.S.: a dynamic list
Deconstructing Solar Industry Myths: Mehta the iconoclast
Smart Grid Year in Review: The smart grid is going to have to grow up.
2013 Smart Grid Wish List: For the smart grid family Christmas
Six Things Utilities Need to Get Right in 2013: Educating the consumer leads the list
Home Energy Management: 2012 Status Report
2012 Top Trends in Demand Response: Demand response is growing to include new technologies and business models.
The Networked Grid 100: The movers and shakers of the smart grid
Largest Greentech Venture Capital Deals of the Year: Fisker and GreatPoint close epic funding rounds.
12 Predictions for 2013: From greentech venture capitalist Rob Day
Looking Back on 2012 Cleantech Investing Predictions: Now with Mendoza Line-accuracy
Energy Generation and Energy Efficiency
Home Energy Management: 2012 status report
Wind’s Top Ten Stories for 2012: The best and worst of times
Geothermal's Big 12 Events of 2012: 128 megawatts of geothermal came on-line in the U.S. this year
Top Ten LED Lighting Developments of 2012: On the eve of the phase-out of the incandescent
Top Ten Greentech Media Articles of 2012: What readers read in 2012
Editor's Picks 2012: What our editors liked at GTM
Most Commented Articles 2012: Politics, Tesla, and CPV get people talking
Have you taken the Electricity Grid Test?
Just before ringing in 2013, Silver Spring announced that its smart energy platform would now support commercial and industrial natural gas users. The offering includes smart gas meters and an upgrade to its existing residential gas meter. Like electric meters, the smart gas meters have two-way communication and can be used for real-time alerts, leak monitoring and reducing meter tampering.
“Silver Spring’s IPv6 networking platform connects more than 13 million homes and businesses worldwide, so it’s a natural step for us to extend support to C&I natural gas customers and to broaden the communications options for residential gas users,” C.J. Boguszewski, head of AMI Solutions for Silver Spring Networks, said in a statement.
The market for smart gas meters and smart water meters -- and platforms that can increase efficiency -- is smaller than the electricity sector, but it's growing. In late 2011, Southern California Gas Company announced it would install more than six million smart meters in the next five years, the largest gas-only utility smart meter project in the U.S.
For vendors that are already busy in the utility space, finding synergies is increasingly important. Silver Spring has been enhancing its platform to be far more than just a smart meter communications system, and adding in capabilities to support other areas of a utility’s business is a natural fit.
Meter data management companies, like Aclara and eMeter, have made an effort to expand into gas or water markets. Many municipal and cooperative utilities provide at least one other service with electricity, and those utilities are increasingly looking for value and flexibility in the platforms they chose. Burbank Water & Power, for example, was only looking for a meter data management platform that could serve both its water and electricity sectors.
The smart gas meter market is still relatively young in the U.S., but there is more action in Europe. The U.K. government has mandated dual gas and electric smart meters for every home and business by 2020. Italy will install smart meters for all of its commercial gas customers and most residents by 2016. The worldwide smart gas mater market is expected to grow from 22 million annually in 2012 to 33 million in 2020.
As of the first quarter of 2012, Silver Spring Networks was the North American leader in advanced metering infrastructure, with 23 percent market share.
SunPower (Nasdaq: SPWR) started off the new year with a big sale.
The solar project developer and PV module manufacturer just announced the sale of its 579-megawatt Antelope Valley Solar Project (AVSP) to Warren Buffett's MidAmerican Renewables. The sale price, including interest in the project and engineering, procurement, and construction (EPC) services, looks to be in the range of $2.0 billion to $2.5 billion, according to Ben Kallo of Baird Equity Research. Shares of SunPower stock jumped 9 percent on the news.
Construction starts this year. The plant will provide power to Southern California Edison (SCE) under long-term power purchase agreements (PPAs) starting in 2015.
We spoke with SunPower CEO Tom Werner about the project.
"It's huge," said the CEO. "Because of the scale of this project, this is not something you start building unless you've got the financing or unless you've sold it. So, the transaction itself means that shovels will hit the ground pretty quickly -- because that's a prerequisite for something of this scale."
He added, "There is no other project of this size. This is the largest ever. And there aren't going to be many more of this size."
Here's a link to the Draft EIR and an EIR addendum for the project, which spans 3,230 acres across Kern and Los Angeles counties. The power plant has its final conditional use permits and has completed its CEQA-mandated environmental review.
Regarding MidAmerican, the buyer of the plant, Werner said, "This is the first time we've worked with [MidAmerican], but I will say we know them well. [...] It's a Buffett company and really credible. They have two gigawatts of renewables, they have tax capacity -- these guys know what they're doing, and they get deals done. This is a real stamp of approval on SunPower."
GTM Research notes that MidAmerican is the number one ranked owner and operator of utility PV capacity in the U.S. with a stake in over 1.5 gigawatts (DC) of solar projects under development or operating (see U.S. Utility PV Market Tracker) for much more info).
"A project of this scale is roughly a third of our revenues for the next few years -- if our revenues were similar to what we guided to last year. Which gives us the stability, the foundation for our employees and our suppliers and people we work with," said the CEO, adding, "And that also gives us the scale to get cost out further. Because we build the power plant in blocks -- generally speaking, one-megawatt blocks -- since we're building 579 megawatts, that means we have 579 opportunities to get cost out and improve things."
"It gives us cash generation that's very predictable from the project. So, counterparties who care about cash generation -- that is, financiers and banks -- do see us as being far more credit-worthy, which will have a positive impact on [for example] a residential lease program."
Kallo of Baird Equity Research saw the sale leading to "significant revenue generation opportunity, as well as improved sales visibility in out-years. Additionally, due to the large scale of the project, it gives SunPower a sizable captive demand channel for its modules, which should help ensure the company maintains healthy factory utilization levels even if the oversupply conditions in the industry take longer than expected to be resolved."
The project uses SunPower solar panels mounted on SunPower T0 Trackers. SunPower will serve as EPC contractor and will operate and maintain the site.
Werner said, "This is almost the size of a coal-fired power plant. Just think: four or five years ago, if we would have said that was going to happen, people would have thought you and I were crazy."
The evidence is piling up that when the real value of energy is considered, electricity generated from concentrating solar power (CSP) plants with storage capability outperforms solar photovoltaic (PV) and wind power.
Rigorous research studies cited throughout The Economic and Reliability Benefits of CSP With Thermal Energy Storage: Recent Studies and Research Needs, a report from the CSP Alliance, show that the services derived from CSP with storage add value not only to CSP, but to PV and wind as well.
This may be intuitively obvious, but a grid operator responsible for keeping the lights on and aware that the lights failing would be a career-defining moment will prefer this study to intuition. Cited studies from NREL, LBNL, and others document added energy value and capacity value from CSP with storage.
“When comparing CSP with thermal energy storage to alternative renewable technologies (including CSP without storage),” the CSP Alliance summary of studies said, “there are several primary categories of additional benefits provided by thermal energy storage, as well as lower system integration costs when compared to other variable energy resources.”
The benefits of a renewable energy plant can be quantified, the assessment argued, by a metric that measures the total economic value of each benefit per year divided by the total energy output from the plant in dollars or euros per megawatt-hour. The sum of these values allows for calculation of the net system cost, which is the sum of the costs minus the sum of the benefits. The net system cost required for a given level of output, operational performance, and reliability provides a basis for comparing energy sources, the report said.
Cited studies published from 2010 through 2012 concluded that CSP with storage offered an added market energy value of from $6.60 per megawatt-hour to $14 per megawatt-hour.
Energy value is the market price of the electricity sold into the power market.
Cited 2012 studies concluded it offered an added capacity value of between $11.70 per megawatt-hour and $30.50 per megawatt-hour.
The capacity value is the avoided cost of alternative capacity, whether procured from existing or new generation, typically the avoided cost of electricity from a natural gas or coal plant.
The set of services to grid operators that CSP with storage provides -- services that cannot be obtained at the same levels from PV and wind without large storage capability -- can be used on a scheduled or unscheduled basis to balance variable resources and standard fossil and nuclear plants.
PV and wind without storage, among the renewables, lack the flexibility that CSP with storage has, and therefore cannot necessarily generate on a fixed schedule or in a sudden unscheduled event. In that sense, CSP with storage has the kind of value more commonly associated with a natural gas plant.
The CSP Alliance study pushed for utilities and regulators to use net system costs for valuing renewables. “Each renewable technology needs detailed simulations of its operations under a range of future scenarios for the grid, including comparison with the performance of alternative renewable technologies,” the study concluded.
The report’s most noticeable shortcoming was inconclusiveness, which it acknowledged: “Nearly all of the referenced studies identified further analysis needed to better understand the implications to grid operation and performance due to variable solar and wind.”
The discussion of grid integration of renewables was an example. “The costs of integrating wind and solar generation have been assigned a wide range of values,” it reported, depending on region and the penetration of renewables. “In the northwestern U.S., several utilities charge wind balancing charges, which currently range from $3.60 per megawatt-hour to about $9.50 per megawatt-hour.” Other estimates, it added, range between $2 per megawatt-hour and $8 per megawatt-hour, but can be as high as $11 per megawatt-hour.
A basic question that has not been answered, the report explained, is how much of imbalance needs should be attributed to renewables and how much to modern grid needs that are extraneous to the emergence of renewables.
There are plenty of specific applications in Europe and in wind-rich U.S. regions that indicate that the integration of renewables need not be burdensome to grid operators. But there are few if any examples of the use of CSP with storage to manage grid operations. In short, nothing was proved.
“The purpose of this report is to synthesize the current study findings and identify some additional research needs. A robust body of research is available and demonstrates that CSP with storage provides additional economic and reliability value to utilities and grid operators when compared to other renewable investments,” said BrightSource Energy’s Dr. Udi Helman.
As renewables reach 33 percent penetration on the grid, the assessment assumed, there will be an increasing “need for additional ancillary services, increased operational flexibility, and improved forecasting of wind and solar CSP with storage fits these forthcoming needs.”
Despite a push of advertising and education, the average American driver is still relatively uninterested in electric vehicles, according to a new study.
There are some bright spots of the findings from the Indiana University School of Public and Environmental Affairs, including which cities have the most receptive car buyers when it comes to plug-in cars.
The study surveyed more than 2,300 drivers in 21 U.S. cities. The survey, however, was conducted more than a year ago, when there were just two major EVs -- the Nissan Leaf and Chevy Volt -- available to consumers.
Fully electric and plug-in hybrids cost more than conventional cars, and sticker price was cited as the major barrier by more than half of the respondents. Range anxiety was the second concern, although the interest was not much stronger for a plug-in hybrid versus and all-electric car.
"Although many engineers, environmentalists and politicians are enthusiastic about electric vehicle technology, this survey reveals that new car buyers, based on early impressions, have little interest in purchasing plug-in vehicles," John D. Graham, dean of the School of Public and Environmental Affairs and a co-author of the study, said in a statement.
Many respondents said that fuel economy was a major advantage of plug-in vehicles, but that didn’t outweigh perceived negatives, such as charge time and sticker price.
It is well known that car purchases are often emotional, not rational, decisions. The vehicle appearance had a negative effect, and even if people knew their travel behavior was well within the range of the car, it didn’t make them more likely to be interested. The only positive awareness variable was that people who had seen recharging stations were more likely to consider an electric vehicle.
There are more than 11,000 commercial charging stations deployed, and while some visible chargers are important for public awareness, the vast majority of charging still happens at home.
The issue of adopting electric vehicles comes down to cost, as well as other issues such as vehicle design. Around the time of the survey, Travis Bradford, president and founder of the Prometheus Institute for Sustainable Development and co-author of the recent GTM Research report, Electric Vehicles 2011: Technology, Economics, and Market, offered six big thoughts on what will and won’t happen in the electric vehicle market in the coming years.
Bradford noted that one of the most important factors for the EV market is the price and efficiency of regular cars. Fuel economies continue to rise, which make it hard for most people to justify the cost increase of an electric car, especially if they don’t intend to own a car for more than five years.
Many of the reservations of car buyers can be addressed. San Jose and San Francisco had the highest intent-to-purchase ratio, which were two of the cities with early adopters. Like any other new technology, just seeing the cars or knowing someone who has one will help buyers understand the technology better. Each state also has its own incentives, or lack thereof, which can make a difference in terms of final sticker price. In Washington state, lawmakers recently passed a $100 annual tax on EV drivers to make up for the money that would usually be collected through gasoline taxes.
The increased offerings from the big automakers will also give shoppers more options at dealerships. But without a significant drop in the cost of EVs, the success of electrified cars is still anyone’s guess.
Congress extended wind energy’s vital production tax credit (PTC) for one year as part of the midnight deal resolving some of the tax issues dubbed “the fiscal cliff.”
More importantly, the bill’s tax extenders package granted the $0.022 per kilowatt-hour tax credit to the electricity wind projects generate over the first ten years of their production service to wind farms “under construction” by the end of 2013.
This is an historic change from language in previous PTCs, which have been available to the wind industry since 1992 and renewed eight times, that required projects to be “in production” by the end of the incentive’s specified term.
The language change will be crucial because wind developers, in the absence of certainty the tax credit would be extended for 2013, did not place orders for the massive turbine machinery after the middle of 2012, and it will take at least six to nine months for manufacturers to take orders and gear up to meet them again.
The rush to get projects “in production” by the end of 2012 has caused a level of wind installation in Q4 expected to result in a record 12-plus gigawatt installed capacity for the year. It was a level of activity that built 44 percent of all new U.S. electricity generating capacity for the year, more than the natural gas industry’s 30 percent and much more than that of the coal or nuclear industry’s small contribution to new capacity.
Industry watchers were forecasting a drop-off of as much as 75 percent in 2013 and a loss of almost half the industry’s 75,000-person workforce because of uncertainty surrounding the PTC’s extension.
The new language, introduced in August legislation passed out of the Senate Finance Committee that only got to the Senate floor with the current fiscal cliff action, could save some of the year for the wind industry.
Manufacturing and development lead times of eighteen to twenty-four months would make it almost impossible to get projects in production by the end of 2013, but getting some started by December 31 is not beyond reach.
Competition for limited inventories and manufacturing capacity could, however, threaten wind’s latest cost-cutting advances.
“I am terribly disappointed that political brinkmanship caused such a long delay in this renewal process, as it truly has a negative impact on the U.S. wind energy supply chain. A number of great companies have exited the market due to policy uncertainty, and those that have stayed in the game are going to need to ramp up operations very quickly,” explained MAKE Consulting Partner Dan Shreve.
Extension of the PTC was stalled throughout 2012 by election-year politics. Conservatives supported Republican presidential candidate Mitt Romney’s opposition to the extension, while a bipartisan force supported President Obama’s advocacy for it.
“On behalf of all the people working in wind energy manufacturing facilities, their families, and all the communities that benefit, we thank President Obama and all the Members of the House and Senate who had the foresight to extend this successful policy, so wind projects can continue to be developed in 2013 and 2014,” said retiring American Wind Energy Association CEO Denise Bode, who led the fight for the PTC extension and the new language.
The U.S. geothermal industry also gets the PTC and will benefit from the new language. “Congress’ action will spur significant new employment,” noted Geothermal Energy Association CEO Karl Gawell. “Consumers and utilities will benefit, as well, because developers will have greater certainty about whether the credit will be available for their project.”
Epic-sized VC rounds were plentiful in greentech in 2012.
But energy generation, fuel, and automotive markets have proven challenging investment sectors for the VC asset class. Some of these large rounds flowed into startups that are long-in-tooth yet still not on a path to profitability.
Global cleantech investment dropped to $1.6 billion in the second quarter of 2012, down 14 percent from the first quarter, according to the Cleantech Group. Green VC investment stood at $1.6 billion in the third quarter, level with the second quarter’s tally. Deal count is down. Cleantech Group is projecting 2012 will end up seeing $6.8 billion in green VC, a 28 percent decline from $9.4 billion in 2011.
With that as a backdrop, it turns out that greentech dominated in the large-size VC deal department in 2012 -- five of the ten largest VC deals sent later-stage funds to cleantech startups. Here's the list:
1. GreatPoint Energy: GreatPoint, a small firm, received a $420 million investment from Wanxiang for a minority stake in the coal-to-natural-gas firm as part of a bigger deal involving construction in China. Wanxiang is China's largest maker of auto parts and a major supplier to Ford and General Motors. (There was some hesitancy including GreatPoint on this list, as Wanxiang is not exactly a VC investor, but GreatPoint is certainly a VC-funded startup.)
Call it a strategic investment from Wanxiang, the new owner of auctioned battery maker A123. GreatPoint has also received VC investment from KPCB, DFJ, Khosla Ventures, Citi Capital Advisors, Peabody Energy, ATV, SunCor and AES.
2. Fisker Automotive: Fisker raised $380 million from KPCB, NEA, Advanced Equities, et al. for a total of more than $1.2 billion. First quarter saw $129 million raised with $147 million in the second quarter, according to VentureBeat. The firm raised $103 million of a $150 million round from Advanced Equities in the third quarter, according to this SEC filing.
3. Sapphire Energy: Sapphire hopes to produce drop-in fuels generated from genetically modified algae in open ponds at an economically attractive price. The firm's $139 million round from ARCH Venture Partners, Monsanto, and Venrock expands production at the firm's New Mexico site and brings its VC funding total to near $300 million.
4. Alarm.com: Alarm.com is a home security company and arguably a greentech firm. The firm's reach into hundreds of thousands of homes allows it to offer energy management as part of a suite of connected-home services including remote connections to lights or HVAC. The company raised $136 million from Technology Crossover Ventures. Alarm.com is also a key partner of Vivint, another of the country’s larger home alarm system companies and a third-party-financed residential solar vendor as well.
5. Harvest Power: Harvest Power, based in Waltham, Mass., is a developer of mulch and fertilizer products from organic waste. The firm closed a $110 million financing led by True North Venture Partners and American Refining and Biochemical. True North is helmed by Michael Ahearn, the founder of First Solar (Nasdaq:FSLR). Harvest raised a $51.7 million round B from Generation Investment Management, DAG Ventures, Keating Capital, Kleiner Perkins Caufield & Byers, Waste Management, Munich Venture Partners, and TriplePoint Capital in 2011.
"Biomass is the silent hero in renewable energy," according to Paul Sellew, the CEO of Harvest Power.
6. Elevance Renewable Sciences: Elevance Renewable Sciences, a developer of specialty chemicals from renewable oils, raised $104 million in a Round E from Total Energy Ventures, the VC arm of French oil giant Total and Lacustrine Limited on behalf of Genting Genomics Limited. The Woodridge, Ill.-based firm had to back off its original plan to raise up to $100 million in an initial public offering, according to a September 2011 S-1 filing. But with the public markets soured on biofuel and biochemicals, the firm went back to private equity.
7. Bloom Energy: Bloom raised $100 million of a potential $150 million from Apex Venture Partners and an undisclosed firm. The twelve-year-old Bloom builds and sells solid oxide fuel cells (SOFCs). The devices run on natural gas and produce electricity with fewer emissions than a diesel gen-set.
Bloom has raised in the range of $1 billion in venture capital from GSV Capital, Apex Venture Partners, DAG Ventures, KPCB, Mobius Venture Capital, Madrone Capital, NEA, SunBridge Partners, and Goldman Sachs. Bloom has a stellar list of high-profile customers, including Apple, Adobe, and Google, and has suggested that it will turn a profit in 2013.
8. Protean: Armed with $84 million in VC from U.S. and China-based investors, Protean Electric is looking to build a manufacturing facility in China to bring its in-wheel electric drive for EVs to commercial scale.
An electric vehicle equipped with in-wheel motors no longer needs the functions of the internal combustion engine, clutch, and transmission -- instead, power from the motor is delivered directly to the wheel, making for a more-efficient system. Protean is going after light-duty vehicles in China, and its technology can be bolted onto existing designs.
The firm is still in the development stage. This round was led by GSR Ventures, along with Oak Investment Partners and Jiangsu New Times Holding Group.
9. Nanosolar: Nanosolar raised more than $70 million from Mohr Davidow, OnPoint Technologies, Aeris Capital and Ohana Holdings for its CIGS thin-film photovoltaic factory. (We reported on Mohr Davidow's pivot in greentech VC here.)
Nanosolar prints CIGS solar inks on aluminum foil in a roll-to-roll process without using high-vacuum manufacturing equipment.
10. NanoH2O and Blu Homes: With $60 million from Khosla Ventures and BASF, NanoH2O is developing better reverse osmosis water treatment and desalination technology. Blu Homes also won $60 million for its modular prefab homes.
Greentech VC achievers that didn't make the top ten still scored big in 2012: Soladigm raised $55 million from Khosla and DBL Ventures for its electrochromic windows. Climate Corp. won $50 million from Khosla Ventures and Google Ventures. Coulomb Technologies raised $48 million from Kleiner and Siemens. A total of $41 million went to Genomatica, $40 million to Lilliputian Systems, and $33 million for EcoMotors, a developer of opposed-piston diesel engines, in a round led by Braemar Energy Ventures, along with Bill Gates and Khosla Ventures. Transonic Combustion won $32 million and $31 million went to Solix for algal biofuel production.
Here's a view of VC totals in the sector, according to The Cleantech Group:
- 2006: $4.64 billion
- 2007: $6.58 billion
- 2008: $9.68 billion
- 2009: $6.24 billion
- 2010: $8.04 billion
- 2011: $9.03 billion
- 2012: $6.8 billion (estimated)
VC data from VentureBeat, Cleantech Group, and Greentech Media.