future clean tech

green business, policy and technology in australia and abroad

Better Place and the future of EV in Australia

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Much has been written already about Better Place and Israeli founder Shai Agassi’s plan to bring a mobile phone-style business model to the sale of electric vehicles (EV).  The Israelis, who are set to have their Better Place network installed by next year, have been effusive in their response to the company’s plan. The response elsewhere has been upbeat – in the US, here in Australia, and elsewhere. Inevitably, some have been less than sanguine about Better Place’s vision. Either way, Better Place is advanced in their rollout in Israel, with Denmark not far behind, and aims to have its Australian network ready 6 months after Denmark’s.

The outline of the model is fairly straightforward: since EV batteries are expensive, the company will lease the battery to the consumer for a monthly fee over a multi-year contract, much like mobile phone contracts work. So consumers need only purchase the vehicle itself for roughly the same price as its petrol-powered equivalent, and then enjoy the benefits of paying per kilometre driven. At least in Australia, all the power at the charge points will come from renewables, most likely wind power, which still has the distinct advantage of costing far less than petrol on a per-kilometre basis.

Electric carBetter Place installs its own charge points at the consumer’s place of residence and possibly at their place of work, and for longer journeys it will operate a network of battery exchange stations. Full charges by the consumer take too long to be viable on a long journey (say, from Sydney to Melbourne) and present other technical challenges, whereas Better Place claims that a simple battery exchange (for a pre-charged battery) will take all of three minutes.

I’ve thought for some time that plug-in hybrids (preferably LPG/electrics simply because gas is somewhat cleaner and cheaper than petrol) are the natural solution to the personal transportation problem. This is because most city drivers could survive on a fully juiced-up battery, leaving the LPG tank for longer journeys which are relatively infrequent for most people. But you are left with what remains an expensive car which is charged by traditional power outlets, which for most people means simply switching the carbon burden from petrol to coal.

This is why I like a lot about Better Place’s business model. As CNET points  out, it solves the issue of EV battery expense and the range problem (particularly with these early-generation batteries that are only capable of a 160 km range). It solves the chicken and egg problem of adoption by co-opting the “network” model of the mobile phone. It elegantly answers the critics who argue that EV isn’t necessarily clean because it relies on traditional black power – because Better Place guarantees that its power will be 100% sourced from renewables. Hence their partnership in Australia with AGL. This is a huge selling point at a time when consumers remain concerned about their environmental impact even in the midst of the GFC. And the net result of all of it, should the project be even moderately successful in Australia, will be cleaner air and a significant reduction in dependence on foreign oil which is a clear geopolitical advantage. And, if all goes to plan, consumers will be paying massively less for their personal “fuel” costs – even if the cost of petrol continues to fall, EV costs per kilometre run rings around the cost of oil.Charging an EV

The reason why Shai Agassi and his company has captured the public’s imagination is that it presents a comprehensive vision of how a country’s fleet can be electrified. Perhaps for the first time, we have a simple, reasonably elegant model of a clean, renewable, sustainable electric future. Inevitably, there are going to be challenges – for instance, the installation of charging points at every consumer’s home is understandably necessary to Better Place’s success (in large measure, to ensure that the network is providing only renewably-sourced power), but it detracts from the elegance of the solution.

Nevertheless, I am cautiously optimistic about Better Place. It could easily become an important part of the personal transportation sector’s mix in the next few years, and I say this largely because of a very simple test I have: I’d buy it. And I think a lot of other people will – because it has tremendous cost and branding advantages over hybrid vehicles and even questionably-fueled plug-in hybrids.

If I can have an electric car that will reliably get me around Sydney and up and down the NSW coast for a fraction of the fuel costs of a traditional ICE vehicle, and I know it’s powered by 100% renewable energy, surely it’s going to be as much of a no-brainer for many other consumers as it would be for me.

It will be fascinating to see what comes of this company. I suspect it’s going places. Better places. (I couldn’t resist.) Regardless, I suspect that we will be the last generation to suffer from the filthy air that has blackened our lungs, and the noise pollution of that dinosaur technology, the internal combustion engine.

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Security boon from distributed power generation

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hackersA postscript to this post from a little while ago about distributed power generation: the press recently reported that foreign spies had compromised the security of the US electric grid.

Two things emerge from this. First, I would argue that any move toward decentralising power generation inevitably increases the security of the system. Wind turbines on city streets and solar cells on residential and business roofs will manifestly reduce the load on our presently centralised power generation infrastructure. There are a plethora of ways in which this power generation infrastructure can be radically decentralised, as I’ve previously touched on, which I think will impact positively on our energy security.

Secondly, the article suggests that smart grids, which are a clean technology, increase the risk in the system by opened up more nodes for malevolent actors to infiltrate. I want to qualify this suggestion. While it is certainly true for the current, centralised system that smart grids increase the security risks, it is probably far less true for a more decentralised system. At the present time, if the grid fails in any particular region, all power is lost. However, should we decouple each local council area, even partially, from the main grid – that is, should we reduce our local reliance on the power generated by distant energy generation stations – we reduce the risks that attach to smart grid technology.

It’s my belief that eventually, clean energy technology will allow us to build multiple redundancies into the system. For instance, if your local urban wind turbines run into trouble, backup energy generated by wind farms or other technologies will be available from a broader grid. And vice versa. If the grid goes down in your area, you may still be able to use locally- or individually-generated and stored power – and a smart system may be able to allocate that power on a priority basis until the main grid comes back online. Ultimately, then,  I see cleantech as a potent tool for increasing our energy security.

Written by Gabriel Sassoon

April 12, 2009 at 12:57 pm

When clean energy will kill coal

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windpowerToday I was discussing the future of hydrocarbons with a colleague whose family has been highly successful in the fossil fuel industry, and in addition to his skepticism on the anthropogenic nature of climate change, he raised the issue of cost. He was of the opinion that we will become steadily more, not less, addicted to oil, coal and gas in the medium- to long-term.

I disagreed strongly with him, and here’s why. Within a matter of seconds, I had him agreeing with me that vehicles are rapidly shifting from oil. We shared the belief that electric vehicles are the future. His objection? Where are we going to get the electricity from? And his definitive answer? Coal. And perhaps some nuclear.

Of course, if we’d had this conversation a mere decade ago, he would have laughed off the suggestion that our vehicles would run off batteries in a matter of a few years. The technology was unproven, expensive, heavy, and on and on. And yet, here we are in 2009, on the cusp of what is widely recognised as the next phase in vehicle production. The future, as they say, is now.

The same will be true of coal. Within the next few years, there will come a point when power generated by one or more renewable sources will be cheaper than coal-generated power. Ron Pernick and Clint Wilder have pointed out that this tipping point already occurred in Colorado after Hurricane Katrina caused natural gas prices to spike, and clean energy produced by wind power briefly became not just competitive with but in fact cheaper than hydrocarbon-derived power. Demand for the local green power program quickly outstripped supply that November in Denver and the rest of that state.

Of course, this was temporary, but it was a harbinger of things to come. Coal is cheap because it is an entrenched, old technology. It is financially “safe” and relatively plentiful. Wind happens to be the clean technology that has become most widespread and most cost-efficient – and as the technology improves and returns to scale increase, costs will dip even further. In the long-run, the same is likely to be the case for solar, tidal, geothermal, wave, and other renewables. And as soon as these technologies deliver energy more cheaply than dirty energy, the growth in takeup will be explosive.

This is the very reason why a price must be put on carbon today. Is pricing GHG emissions “artificial”? Perhaps. But it is simply a policy decision that must be taken to speed up the consumer uptake of clean energy. Rather than waiting for all smokers to die of lung cancer, we put a price on lung cancer by taxing cigarettes and funding public health with the revenue; rather than waiting for double-digit unemployment, we put a price on unemployment by taxing progressively and funding reskilling and work-finding programs; and now we will put a price on carbon to reverse the damage that dirty energy has hitherto caused. The reason in the short-term is that we must put a price on the externality of pollution and climate change, but in the long-term it is a no-brainer: burning fossils – literally – is a 19th century practice that will inevitably be replaced by clean energy.

It is my view that the tipping point will occur with or without what I regard as sufficiecoal_power_plantnt government intervention. The current ETS being considered by the Australian government doesn’t even begin to take the issue seriously. But even this scheme, the CPRS, will drive innovation, and the cost-efficiency of the technology will snowball, and we will rapidly come to the point where we view burning hydrocarbons to produce energy as quaint, if not downright barbaric. Like the mainstreaming of electric vehicles that is about to take place, renewable energy which is already competitively priced today will – inevitably – become cheaper than coal and extremely widespread.

As an aside, US Interior Secretary Ken Salazar today proclaimed that wind power off the East Coast could replace 3000 coal-fired power plants. This is just the very beginning of what is in store for clean energy over the next decade.

Written by Gabriel Sassoon

April 7, 2009 at 6:42 pm

An aside: Calvin Coolidge on persistence

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Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.

Calvin Coolidge

Written by Gabriel Sassoon

April 1, 2009 at 11:38 pm

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Opportunities in the midst of the “crisis”

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CrisisRegarding the global financial crisis (GFC): the Chinese word for “crisis” consists of two characters, which make up the compound word “problem-opportunity”.

While it is true that credit markets have seized up, and that there are undoubtedly rough economic times ahead, it must also be true that the GFC presents a tremendous “problem-opportunity” for those in the cleantech space.

This would in some sense be true even if governments didn’t provide regulatory and other stimuli for the industry. Good technologies and good business will bring the market to them because they will be appealing to the consumer (think Prius), and/or cheaper than legacy technologies and methods (think LPG).

The bonus for the cleantech industry is that governments around the world are banking (so to speak) on cleantech as the new economic driver. As I’ve mentioned previously, the Obama Administration has put its money where its mouth is. Barack is fair dinkum about cleantech. The Australian government is lagging behind, but in the event that the Rudd Government’s Carbon Pollution Reducation Scheme (CPRS) is passed, and some of the other regulatory elements make it through (such as the new renewable energy production target of 20% by 2020), the cleantech sector will probably boom.

We’re still waiting for the first big cleantech success story in Australia, but it will come. In the meantime, I will mention some of the overseas success stories and local hopes in the next couple of posts. Forget the Global Financial Crisis; think of it as a Global Financial Opportunity.

Written by Gabriel Sassoon

April 1, 2009 at 12:33 pm

Bleeding edge ideas for distributed power generation

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CleanTechnica posted a story yesterday about an MIT professor who argues that, even in the best case scenario, we will still be unable to meet our energy needs by 2050 using the centralised model of today. His solution, according to CleanTechnica:

Nocera said that MIT will announce its patent next week of a cheap, efficient, manufacturable electrolyzer made from cobalt and potassium phosphate. This technology, powered by a 6 meter by 5 meter photovoltaic array on the roof, is capable of powering an entire house’s power needs plus a fuel cell good for 500 km of travel, with just 5 liters of water.

Glass of water

The new electrolyzer works at room temperature (”It would work in this water glass right here”) to efficiently produce hydrogen and oxygen gases from water in a simple manner, which will enable a return to using sunlight for our primary energy source.

These sorts of technologies offer the hope for a kind of radical decentralisation of the power supply. It is also the sort of opportunity that is ripe for venture capitalist involvement (hence MIT’s patent announcement) because it does not require large-scale government funding and won’t face the kinds of bureaucracy that, say, building a new wind farm entails (development consent, NIMBY opposition, and so forth).

urbanwind31

Urban wind power

Everybody is thinking about what the energy infrastructure of the future is going to look like. In the medium-term, we are going to see a partial decentralisation of the power supply alongside a significant increase in traditional, centralised renewable energy generation. While in the long-term (10-20 years from now) we will be aiming for fully renewable baseload power generation, in the medium-term baseload power will continue to be generated primarily, in Australia, by dirty coal. Nevertheless, while the broader transition to renewables gathers pace (a trend that I expect will result in not merely exponential but explosive displacement of fossil fuels with clean energy sources), it is entirely possible for peak power generation to be subsumed by, say, local councils using, say, urban wind turbines on main traffic arteries.

This week’s cleantech forum in Melbourne will be a welcome opportunity to hear where Australia’s cleantech industry sees the local energy sector going over the next few years. Watch this space.

Written by Gabriel Sassoon

March 29, 2009 at 10:35 am

The Big Picture

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There is no reason why clean energy growth cannot be hyperaccelerated over the next few years. The Australian government has set a goal of 80% greenhouse emissions cuts by 2050, and 5-15% cuts by 2020. “Inadequate” and “short-sighted” are words that do not begin to describe these targets. Not to mention counter-productive: governments around the world imagine that reducing emissions will cost the economy, while quite the opposite is likely to be the case. Bill Clinton put paid to that false notion on Letterman way back in 2007:

For both the sake of the planet and for the sake of jobs, our goals (as a society and, more specifically, as the clean tech industry) ought to be far more visionary. Perhaps something approaching the following:

  • 90-95%+ emissions cuts by 2020;
  • Greenhouse gas extraction methods by 2025 to bring CO2 PPM back to an acceptable level and therefore avoid unpredictable runaway greenhouse effects. Methods could include rainforest expansion and possibly some light geoengineering like iron fertilisation of algae blooms;
  • Satisfying nearly 100% of our energy needs from renewable sources. Studies have shown this to be feasible in Europe (Realisable Scenarios for a Future Electricity Supply based 100% on Renewable Energies, Effects of Large-Scale Distribution of Wind Energy in and Around Europe); in a large continent like Australia with relatively low absolute power consumption, this should be a cinch. We should set ambitious goals for this; 2025 would provide a reasonable timeframe. The only naysayers would be the fossil fuel industry.
  • The removal of the vast majority of petrol-powered vehicles from the road by 2020. With plugin LPG/electric hybrid cars due out in Australia any day now, there is no reason – economic, environmental, and least of all geopolitical – why this is not well within our reach. And we’re already building the infrastructure for it.
  • The monetisation of old-growth forests in their pristine state, which is economically sound based on their value as carbon sinks, and, above all, a clear moral imperative.

There are a plethora of other goals, to be sure, but these illustrate the kind of paradigm-changing thinking we need to start engaging in – both at an industry level and at a political level. The coal and oil industries are the tobacco companies of the early 21st century; they will be unable to maintain their grip on market and government for very much longer. Green is not merely trendy; it is fast becoming clear to people at all levels of society that it is the only way forward – particularly at a time of economic uncertainty when the clean tech industry provides one of the strongest glimmers of hope for long-term recovery.

Written by Gabriel Sassoon

March 26, 2009 at 8:28 am

Posted in Uncategorized