The Unexpected Perspective
The Implications of Darwin and the Big Bang for Christians ... and Everyone Else

Perspectives

LIthium ion batteries provide a way to provide electricity from solar power at midnight. Now there may be an even better way.

            The price of solar power keeps going down.  Increasingly, it looks like a great solution to the problem of greenhouse gas emissions and climate change. 

            And thanks to lithium ion battery technology from Tesla, it's even possible to generate electricity from solar power after midnight. Lithium ion battery technology has dramatically increased the potential for solar power.

            But there now may be an even better solution: concentrated solar power (CSP) with molten salt storage.  While not likely, this may even begin to keep Elon Musk awake at night. 

            So just what is CSP with molten salt storage?  The idea is to generate a great deal of heat via a solar farm.  However, instead of converting the solar radiation into electricity, the solar heat is stored in a molten salt solution.  At the appropriate time, the molten salt is converted into electricity.  This is possible through the use of a concentrated solar plant.  What's that?

            In a typical solar farm, arrays of photovoltaic cells capture sunlight and transform the light into electricity.  In a CSP plant, a large array of mirrors track the Sun, then reflect sunlight directly onto a tower.   The concentrated sunlight heats molten salt in a giant insulated tank to 1050 degrees Fahrenheit (566 degrees Celsius).  In one of the plants in Nevada where this technology is in use, the tank can hold up to 3.6 million gallons.  To put that in perspective, that's the equivalent of about 6 Olympic sized swimming pools, each 50 meters length (164 feet).

            The heat in the tank can be stored very efficiently.  In fact, it's reported that there is only 1 degree Fahrenheit loss/day, about 98% thermal efficiency.  At such a high temperature, the molten salt flows like water.  When it's time to generate electricity, the molten salt then can be converted to electricity.  Thus, the power of the Sun generates the heat that is then converted into electricity at night.  It can also be converted to provide power during the day when there is peak demand for electricity.  To give you an idea of how such a system works, click here

            The Crescent Dunes plant utilizes what is called a "power tower".  The National Renewable Energy Laboratory estimates that a power tower will be able to produce electricity at 5.4 cents/KWH, and a parabolic trough, an alternative design, will be able to produce at 6.2 cents/KWH by 2020.  These are clearly highly competitive rates.

            Several such plants have been constructed in Nevada, California, Spain and the United Arab Emirates.  The Crescent Dunes Solar Energy Facility, located in Nevada between Reno and Las Vegas, is rated at 110 Megawatts.  It can generate power for 10 hours without recharging, producing 1,100 megawatt hours of power.  That's 10 times what batteries can produce at this time.  And that's what might keep Elon Musk awake at night.

            The technology for concentrated solar power has been around since the 1980's.  The first plant was built in the 1990's.  Construction on Crescent Dunes in Nevada began in 2011 and was completed in 2015.  "All in" cost of the plant is about 1 billion dollars, so it certainly isn't inexpensive.  However, for example, the cost to construct a new nuclear unit is estimated to be $ 9 billion.  The plant will generate more power, but the capital cost/MW of capacity won't be much different. 

            Of course, the solar plant will be far safer.  Accidentally spill some of the molten salt in this system and the cleanup will be minimal.  Do the same at a nuclear facility and it will be a scene reminiscent of Chernobyl or Three Mile Island. 

            Interestingly, the technology was first developed using funding from the U.S. Department of Energy.  It represents an excellent example of how government can play such a critical role.  The best role, however, is to fund basic research.

            SolarReserve, the company that built Crescent Dunes, wants to build ten more comparable plants in the Nevada desert.  These plants will have a combined capacity of  2,000 MW and generate 7 million Mwh/year. 

            Sounds like a very promising technology, especially given the low costs to produce electricity, not to mention the highly favorable environmental impact.  Coal plants can't possibly compete at these prices.  So what could limit the acceptance of such plants?

            Four key factors tend to work against some of these types of plants: 1) capital cost; 2) aesthetics; 3) land use; and 4) high tension power lines.  Capital cost is clearly high, but that's offset by low operating costs.  Aesthetics clearly work in favor of these types of plants. 

            Land use probably also works in favor of these types of plants.  Consider just the deployment of such plants on Federal lands, certainly a hot button topic.  In 2010 the Bureau of Land Management (BLM), the Federal agency that controls a large part of the US West, approved nine large solar projects.  The "footprint" of these nine solar plants was about 40,000 acres.  That represents a square of 8 miles on each side (i.e., about 64 square miles).  By contrast, during the same year, the BLM issued 1,308 oil and gas leases that had a cumulative footprint of 3.2 million acres – 80 times as large a footprint!  In other words, the "footprint" of solar on Federal lands is far, far less than that of oil and gas.  That will likely be the case for CSP plants put on private land.

            High tension lines are another byproduct of such solar projects.  No one considers them particularly attractive - except maybe power engineers and utility executives – but one finds them all over the country.  Such high tension lines are needed for all types of power plants.  

            Thus, the key issue with such plants is their high capital cost of construction.  But as noted above, that's offset by low operating costs.  The question becomes, will capital markets provide companies with the funds to construct such plants?  My expectation is that they will.  As with other technologies, the cost of construction will likely decrease as more plants are built and the construction "knowledge base" increases.

            As such, there are really now two different technologies that can solve the problem of solar power at night – Tesla's battery solution and the CSP with molten salt solution.  Doubtless, other technologies will also emerge.  These two solutions make solar power truly viable on a national scale because they both solve the problem of accessing solar power at midnight. 

            Is molten salt a competitive technology to lithium ion batteries?  Will it keep really keep Elon Musk awake at night?  Most likely it won't.  That's because it's really a complementary technology to battery storage.  It's probably the better choice when it comes to large scale energy storage.  Lithium ion technology, on the other hand, is probably a much better "smaller scale" technology.  After all, is anyone realistically going to have a molten salt storage facility in the garage at home?  No, but they're very likely to have a lithium ion battery system.

            Just one more nail in the coal power coffin … and maybe even other fossil fuel power sources.

            And just that much more evidence that the solution to greenhouse gas emissions is on its way, brought to you not be Big Government and international treaties such as the Paris Climate Accord, but good old fashioned technological innovation.

           

 

 

 

 

 

While the USA won't be part of the Paris Climate Treaty, we're still generating lots of creative solutions to the problem. Here are two of them.

            The USA is the only country that is unwilling to participate in the Paris Climate Treaty.  Sad.  But all is not lost. 

            In fact, it might be a very good thing, but not for the reasons you're probably thinking.

            Instead, even though the USA won't be part of the Paris Accord, we could still maintain the role we've had for the past twenty years: the world leader in reducing greenhouse gas emissions. 

            Huh?  How could that be? 

            The USA has led the world in greenhouse gas reductions over the past 20 years, most likely because lots of people have been working on all kinds of possible solutions, both government and private sector based.

            Let me suggest a couple of new ways we could maintain our role as the innovator in ways to solve the problem.

            Economists generally maintain that the best way to deal with global warming is to impose some type of a tax on carbon released into the air.  Assuming that carbon release into the air is a bad thing – in my mind, a more than reasonable assumption – then penalizing those who do it certainly makes sense. 

            The idea of a tax on carbon has been around for a number of years, yet few countries seem to want to implement such taxes.  Among those few that have that are the United Kingdom, Ireland, Sweden, Australia, and Chile.  Here's the complete list.  Australia had a carbon tax, but then got rid of it. 

            As a solution to carbon emissions in the USA, the typical carbon tax is pretty much "dead on arrival".  Republicans find tax increases, in general, to be distasteful, but your typical carbon tax is especially repugnant. 

            An alternative to a straight carbon tax is a carbon trading scheme.  This has been tried out in various countries.  Unfortunately, some of the trading schemes have been poorly thought through, and clever arbitrageurs have found ways to circumvent the intent of the schemes.

            These ways to reduce carbon emissions haven't gained the desired traction, so what else might be considered?

            How about instead of penalizing carbon emitters we find a way to reward them instead?  Sounds ridiculous, but bear with me, because I'm going to propose a way to reduce carbon emissions by providing an unusual incentive to those who are presently the worst offenders.

            Here's the basic idea.  Take your typical coal burning power plant in the USA.  In any given year, the power plant will burn a certain amount of coal to generate electricity.  My proposal begins the same place that the typical carbon tax does: calculate the total greenhouse gas emissions of the plant over a given period of time, likely one year.  A good estimate of this can be determined by taking the total megawatt hours generated by plant into a year, then multiplied by 1640.7.  The 1640.7 factor was calculated by the US Environmental Protection Agency.  Having calculated this, the next challenge is to place an environmental cost on each ton of CO2 emitted.  That number is variously estimated to be between $ 37 and $ 200/ton.  Having then determined that, the effective environmental cost of running the coal plant can be determined.

            Let's say that the last calculation yields a total cost of $ 100 million for running the coal plant.  Instead of penalizing the coal plant operator, I instead propose the following "reward".  To continue running the coal plant, its owner will then be expected to build a renewable energy facility somewhere in the world that costs the same amount as the emissions from the coal plant.  The coal power generator will own the new plant.  The company can build the renewables plant on its own, or have it built by another party.  Once complete, the coal power operator will be able either to operate the plant itself or sell it to another party.

            It may be unrealistic to expect the coal plant operator to spend that much on a clean energy plant each year.   Instead, I propose two possible solutions.  In the first, to continue operating the coal plant, the owner must build a renewables plant that can generate at least 5% of the capacity of the existing coal plant.  If the coal plant is operated for 20 years, it will mean the entire capacity of the coal plant will be replicated in renewables. 

            The second alternative is to require the coal plant owner to invest the same amount in a renewables plant that the coal owner claims in depreciation on the coal plant. A coal plant operator wants to claim as much depreciation as possible each year because that tends to reduce the tax burden without negatively affecting cash flow.  The bargain could then be, Mr. Coal Plant Operator, claim as much depreciation as you want, but you must offset that with an equivalent investment in renewables capacity … every year.

            What's the outcome of this?  First of all, the world will have just that much additional renewables capacity available.  It won't eliminate the original offending plant, but at least it will result in the addition of more clean energy.  In a sense, it's a penalty for the coal operator, but the coal operator can turn it into a financial win. 

            Faced with this, the coal operator has an incentive to build the best possible renewables plant that it can.  That's because if it chooses to sell the plant to a third party, it will want a very good plant so it can obtain the best possible sales price.  If it chooses to operate the plant, it will also want the plant to be very efficient because the coal company will want to make as much money as possible on its new investment.

            Let's try a real world example.  Duke Energy, one of the USA's largest utilities, and a major coal plant operator, owns a coal power plant at Belews Creek, North Carolina, not far from where my family used to live.  Belews Creek is rated to generate 2.24 gigawatts of power.  In 2016, it reportedly generated a little over 14 million tons of greenhouse gases.  If Duke is required each it operates Belews Creek to build a renewables plant, that means it will create a 112 MW solar or wind plant every year (i.e., a renwables plant that can generate 5% of the capacity of Belews Creek).  Cost of new plant construction will vary around the world, but a 112 MW plant would probably cost $ 100 - $ 150 million, something that's very realistic for Duke to be able to finance.  If the cost of the plant is $ 125 million, for example, that is equivalent to Duke paying approximately $ 7.81/ton of greenhouse gases emitted by the Belews Creek plant.

            Some environmentalists will howl, saying that this isn't getting rid of the original bad coal plant, and it's providing some type of financial reward to the coal operator.  Well, correct, the new plant won't get rid of the original coal plant, at least right away, but it will cause the coal operator to think very carefully about future coal plant investments.  This is because it will direct at least part of the coal company's capital budget to renewables.  It will result in greater renewables capacity, a definite benefit for all.  It will also force the coal company to devote managerial resources towards a renewables plant.  In effect, it will push the coal plant operator to direct future investments towards renewables. 

            The same principal might also be applied to other carbon emitting plants, for example, plants that burn oil: require the operator to invest in a renewables plant an amount each year equivalent to 5% of the generating capacity of the current plant, or the amount of depreciation claimed.

            If plant operators have to make these renewables investments each year, they'll effectively replace all of those greenhouse emitting plants within 20 years.  It will likely happen more quickly.

            Assuming this is a good idea, how might it be implemented?  It could be done on a state by state basis.  Alternatively, it could be legislated by Congress and apply to plants all across the USA.  Other countries could also employ the same strategy.

            Conservatives should like this solution because it does not involve any forms of tax.  It also doesn't stop companies from making decisions on their own.  It merely forces companies to make investments in renewable capacity, but the companies will own the improvements themselves. 

            Environmentalists should also like it, for two reasons.  First, it will force the companies creating greenhouse gases to make investments in renewables.  The companies otherwise might not make those investments.  Second, it will increase the overall base of renewables. 

            There's another interesting way to solve the problem, one that's more comprehensive than my idea.  It looks like a carbon tax, but it actually is a giant transfer payment, meaning the money collected as a tax is then re-distributed to someone else.

            The idea was developed by Ted Halstead and presented in his much watched TED Talk.  Halstead's idea is to impose a carbon tax, beginning at about $ 40/ton of greenhouse gas, then increase the "tax" each year.  You'd think that idea would be "dead on arrival", but there's an important twist.  At the end of each year, the amount collected in carbon tax is distributed equally to every US citizen.  Thus, it's not a tax, it's a giant transfer payment, much like Social Security.  It is definitely a clever idea and could be a great solution to the problem.

            There's something even more interesting about Halstead's plan.  It's a Republican one.

            Are either of these ideas panaceas?  Definitely not, but then the Paris Climate Accord isn't a panacea either, though you'd never know that based upon the hype surrounding it.  As Halstead noted in his TED Talk, even countries that are absolutely, totally committed the Paris Agreement – countries like Germany – are highly unlikely to achieve their greenhouse gas reduction goals.  It isn't for lack of desire, it simply is that government imposed mandates aren't likely to solve the problem. 

            Which is why it isn't necessarily terrible that the USA won't be part of the Paris Climate Treaty.  Apart from the Paris Treaty, the USA can pursue all kinds of alternative solutions, particularly market-based ones.  It already is, and while some people don't like to acknowledge it, the USA IS the world leader in greenhouse gas reduction.  As a government-based initiative, the Paris accord will likely lead to lots of top-down, government imposed solutions.  Some of those government imposed solutions will work, but lots will likely be pretty bad. 

            Yes, the USA is the only country not part of the Paris Climate accord.  But it could still lead the world in solving the greenhouse gas problem. 

                 

 

           

           

Recent studies suggest it's more complicated than we thought.

            Hurricanes have definitely been in the news this year.  Storms named Harvey, Irma, and Maria did billions of dollars of damage.  We still haven't counted up the full cost.  Four weeks after Hurricane Maria tore up Puerto Rico, the vast majority of the island is still without power. 

            Without question, these were terrible storms.   Many quickly proclaimed that these storms must have been the result of global climate change, and the public should get prepared for many more.  But is that an accurate assessment?  The funny thing is that the same thing was said after Hurricane Katrina pounded the Gulf Coast in 2005, causing incredible destruction, including an unprecedented flood of New Orleans.

            And then another funny thing happened.  Not a single hurricane struck Florida, and not a single major hurricane (Category 3+) hit anywhere in the USA, for a decade. Of course, what about Hurricane Ike and Superstorm Sandy? Both were terrible storms, but Ike was Category 2 when it hit, and Sandy wasn't even officially a hurricane.  

            So what's happening?  Greenhouse gas emissions are causing changes in our climate.  I don't question that, but what that means seems to be uncertain.   That likely means even more uncertainty in the future, unless and until scientists gain a better understanding of the relationship between climate change and hurricane frequency and intensity.

            As a starting point for this discussion, consider how and why hurricanes form.  The most basic reason is because of a combination of warm ocean water and certain types of intense thunderstorm activity.  The rule of thumb is that the water temperature must be at least 79.5 degrees Fahrenheit to form and/or sustain a hurricane.  The absence of warm water seems to prevent hurricanes from forming and from sustaining.  That's why hurricanes break up when the encounter land.

            Water temperature in the Atlantic Basin didn't dramatically decrease during the years between Katrina and the 2017 hurricanes, so why did hurricane intensity go down?  Most likely because hurricane formation, strength and durability depend upon multiple factors, not just warm water and thunderstorms.  So let's take a look at what those appear to be.  I think you'll see that this is indeed very complicated, and thus we should be careful about our predictions of hurricane intensity due to global climate change.  With that in mind, let's take a look at what else may at play.

            One very key factor is what is called wind shear.  It has to do with differential wind speeds between the surface and up to the troposphere, around 40,000 feet above sea level.  Wind shear is a factor in both hurricanes as well as storms on land.  The interesting thing is that on land, wind shear can make storms more dangerous, especially with what are called supercells, but wind shear is probably the worst enemy a hurricane can have.  Wind shear, if it comes from a certain direction, tears hurricanes apart.  Interestingly, if the wind shear is from a north/south direction, it doesn't seem to affect the hurricane, but if it is from the east/west direction, it can be deadly.

            A 2007 study done by researchers at the University of Miami said that wind shear would likely reduce the frequency and intensity of hurricanes in the Atlantic Basin and the Eastern Pacific.  The data for the ten years up to 2017 seems to bear that out, at least for the Atlantic Basin.  At the same time, the Miami researchers said wind shear would likely have little effect on the frequency and intensity of hurricanes in the Western Pacific and Indian Oceans.

            Why the difference?  The Miami researchers hypothesized that this difference is due to what's called the "Walker circulation".  This phenomenon has to do with the interplay between a high pressure system that tends to reside over the Eastern Pacific and a low pressure one that tends to reside around Indonesia.  These two systems create a pressure gradient, and the interplay between the two is dynamic.  From time to time, the pressure gradient weakens, or reverses, and causes a phenomenon increasingly described in weather reports: El Nino.  Conversely, the Walker pressure gradient periodically strengthens, causing the opposite phenomenon: La Nina.  El Nino tends to warm the waters of the Eastern Pacific.  In the USA, the downside of El Nino is that there tend to be more tornadoes and other bad weather in the Southeast in the wintertime.  But the nice side benefit of El Nino is that hurricane activity in the Atlantic Basin goes down.  Conversely, in a La Nina, it tends to intensify.

            The Miami researchers hypothesized that Walker was weakening, suggesting more El Nino events.  That may have been happening over the past few years, and might explain the respite Florida had from hurricanes for ten years.  However, another study, called the Twentieth Century Re-Analysis Project, calls that into question.  The Twentieth Century Project has been accumulating world wide weather data for the period 1851-2014.  Researchers involved in the project say that they do not see any long term weakening or strengthening of the Walker circulation.

            In studying wind shear, other scientists have made another interesting observation.  It appears that where hurricanes are gaining their greatest intensity may be shifting.  Historically, hurricanes have been strongest in the lower latitudes, both in the Northern and Southern Hemispheres.  That makes intuitive sense because water temperatures closer to the Equator are likely to be more intense.  That's probably still the case, but peak hurricane intensity seems to be shifting away from the Equator, both in the North and South.  The cause of the move: wind shear.  The researchers found that closer to the Equator, increasing wind shear is weakening hurricanes, but farther away from the Equator, wind shear may be weakening, at least in a relative sense.  That would suggest that the latitude where hurricanes are most intense would be increasing over time.  In fact, the researchers note, that's what seems to be happening.  The bad news about that is that population centers in higher latitudes can expect more intense hurricanes over time, other things being equal.  Once again, however, the key variable appears to be wind shear.

            Why were Hurricanes Irma, and Maria so strong?  The evidence suggests that wind shear was pretty weak this year in the Atlantic Basin.

            Strong wind shear also seems to explain why hurricanes don't form in places like the South Atlantic.  Dr. Bill Gray, the noted Colorado State meteorologist who has long been an authority on hurricanes, said this is clearly the case for the South Atlantic.  Only one known hurricane, Hurricane Catarina, has formed in the South Atlantic, that being in 2004, even though water temperatures there are very warm.

            When it comes to hurricanes, wind shear may be our best friend, or at least the best weapon against hurricanes.  The good news is the hypothesis that climate change may be increasing wind shear.  In that case, higher water temperatures would be offset by increased wind shear.  That could explain why we had ten years of relative calm in the Atlantic Basin, bookended by several years of bad hurricane activity.

            But wind shear isn't the only variable to consider besides water temperature.  Another factor is what is called the Atlantic Multidecadal Oscillation.  Researchers such as Rong Zhang and Thomas Delworth have studied not only Atlantic Basin hurricanes but also rainfall in the Sahel region of Africa and the Indian Monsoon. Incidentally, Gilbert Walker of the "Walker circulation", described above, became famous because of his identification of patterns in the Indian monsoon at the beginning of the 20th century.  Zhang and Delworth, as well as others, have noted the relationship between these seemingly disparate weather events.  Thus, the frequency and intensity of Atlantic Basin hurricanes, as well as Sahel rainfall and Indian monsoons, may depend upon the Atlantic Multidecadal Oscillation (AMO).   What impact is climate change having on the AMO?  Unclear.

            But an even more intriguing, and recent, study suggests even another variable in determining hurricane intensity.  Earlier this month, Michael Toomey published findings online in Geology that about 12,000 years ago, Florida was ravaged by severe Category 5 hurricanes. The USA mainland was struck by Category 5 hurricanes only about four times in the past 100 years, but Toomey suggests it may have been worse back then.  Here's the amazing thing: Toomey says that the water temperature was likely lower back then. 

            How could that be?  Toomey believes that the hurricane suppressing effects of cooler water were outweighed by the side effects of slower ocean circulation. So the water might have been cooler even than now, but ocean currents were such that extremely powerful hurricanes ravaged Florida.

            That was 12,000 years ago.  What evidence does Toomey have?  He studied sediment cores of what are called Turbidites from the Dry Tortugas, a series of islands near Key West, Florida.  Turbidite is a rock that forms when sediments are disturbed and flow down across the ocean floor.  Turbidites are often the result of earthquakes, but there is no evidence of earthquakes in the Dry Tortugas, so there must be a different explanation.  Toomey believes the Turbidites were formed as the result of intense hurricanes.

            Toomey was able to measure the size of the Turbidites.  Those from about 12,000 years ago averaged 23 microns in diameter whereas more recent ones average 19 microns in diameter.  Micron size thus served as a proxy for hurricane intensity.

            What are we to conclude from all of this?  I think the key takeaway is that the effects of climate change are clearly complicated, maybe more complicated than we ever thought.  Once again, I am not denying that greenhouse gases are causing climate change.  However, what exactly is the relationship between climate change and hurricane frequency and intensity is up in the air.   Warmer waters certainly would suggest greater frequency and intensity, but as noted here, wind shear, ocean circulation, rain patterns on other continents, and the Atlantic Multidecadal Oscillation, also seem to play important roles.

            Given the reality of climate change, perhaps the best we can hope for is that climate change will affect wind shear, ocean currents and the oscillation in ways that will tend to reduce hurricane intensity and frequency.  In the meantime, when disasters like Hurricanes Harvey, Irma, and Maria occur, let's focus on helping victims.  We know what difference that will make.

            But even if hurricanes are becoming more frequent, and stronger, there are things we can and should be doing.  However, as I pointed out in a recent blog post, what we should be focusing on actually doesn't have anything to do with climate change.   That's not because climate change is unimportant (it is), just that we can and should focus on things we can more immediately control.  Those include strengthening building codes, controlling construction in flood zones, and stopping the artificial subsidization of flood insurance.  Doing those things will help us to control, or reduce, the cost hurricane damage.  We're not going to eliminate hurricanes, even if we completely eliminate climate change, but we can significantly reduce the cost of hurricane damage if we pursue some of these policies.

           

 

Technology creates lots of surprises. The market for solar power may soon produce a new one, and there could be a nice financial benefit.

            As continuously improving technology is causing the price of solar power to drop dramatically, the idea of installing solar panels on a home or business makes increasing sense.  After all, goes the reasoning, why pay a utility to provide you power when you can generate it yourself?  Sounds eminently reasonable, except that just because you can do it, it still may make better economic sense to get your electric utility to provide it if you can. 

            Up until recently, if you wanted to have solar power, you had to generate it yourself because your local utility didn't have any solar generation capacity.  Because of that, an entirely new industry has appeared out of nowhere.  Not only that, but various tax credits have been available to make the cost of solar power more attractive.

            The very technology that is making solar so affordable for individual homeowners and businesses has now made it attractive for public utilities to build large scale plants.  The cost of building and operating a solar power plant is now less than the cost of a new coal-fired plant.  Given those better economics, as well as growing public opposition to coal-fired plants, more and more utilities are building out solar generation capability.  Not only that, but the improved economics of solar now makes it very competitive with natural gas fired plants.

            Not only is the cost of building utility scale solar power plants decreasing, but the potential of battery storage makes solar even more attractive for the typical utility to consider.

            All of this could result in a big surprise: the best place to get solar power may be the local electric power company you've come to hate!  Lots of people have a great disdain for the power company.  After all, they're the people who've built all the coal-fired plants that belch out not only noxious fumes but also loads of greenhouse gases.  Their "solution" to coal has been natural gas plants.  The latter admittedly have much less greenhouse gas emissions, but still quite a lot.  Not only that, but electric utilities normally are government granted monopolies.  The consumer doesn't have much of a choice.

            Better solar technology is creating the potential for surprise.  More and more utilities see that solar power makes sense and are replacing coal and natural fired plants with solar.  That means more and more utility customers will have a choice of generating their own solar power or relying upon a local utility to do it.  The can't do anything other than benefit the consumer.  Let's consider why.

            As previously noted, home owners and small businesses haven't had much of a choice.  If they wanted solar power, they had to invest in their own system, then get a contractor to build one for them.  In recent years, the market has seen to appearance of companies that install and finance complete turnkey systems.  One such company is Sunnova.

            Sunnova has 65,000 customers in 22 states plus Guam, Puerto Rico, and the Northern Marianna Islands.  The company has raised $ 2.5 billion from investor since 2012.  According to the company's website, the typical customer has saved 20% on energy bills after installing a system.

            Sunnova isn't so much a solar manufacturer and installer as it is a financier.  The company instead has established a network of what it calls "channel partners", companies that do manufacturing, sales, and installation.  Sunnova has created a profitable, fast growing business using this model.  Others have done the same.
            That model works very well until something goes wrong.  When the solar panels "leak", or there are unexpected charges showing up on bills, customers find themselves caught between the solar companies, which refer them to contractors, and the contractors advising them to call the solar company.  A little bit of good old-fashioned finger pointing!  Chances are, you've experienced the very same annoying, frustrating problem at other times with other products.

            Sunnova has had a number of problems in this regard.  The Houston Chronicle reported on problems Sunnova has had in Puerto Rico and Houston.  It got so bad in Houston that the local Better Business Bureau voted unanimously to revoke Sunnova's accreditation, a designation that a company adheres to the bureau's standards of business ethics.  Ouch!

            One might still want to give Sunnova the benefit of the doubt, or maybe attribute the problem to growing pains.  After all, the company has been growing rapidly, so service problems in any particular market are not necessarily unusual.  But even if this is a "one off" problem, and Sunnova is otherwise a very good company, the business model may not make sense in the long run, for two reasons.

            The first reason has to do with economics.  Utility scale solar power is likely much more economic than individual home solar installations, especially if the home installation is a retro-fit.  The per unit cost is likely to be much higher, and if the homeowner gets his or her own system, they'll have to cover the capital cost of the system.  If there's a choice, having the utility finance the system is likely more economical.

            The second reason gets down to the problem of service.  When something goes wrong, if the homeowner owns the system, he or she has to deal with the finger-pointing problem described earlier.  On the other hand, if the utility owns the system, they'll have to take care of it.  The good news is that electric utilities are generally very good with service.  Certainly not always, but most of the time. 

            Perhaps the best solution of all is to create a truly competitive marketplace.  That would mean giving the homeowner or small business a choice of purchasing solar power either from the local utility or from a company such as Sunnova.  Marketplace competition will help ensure customers get the best deal.  Now the local utility will probably oppose giving consumers a choice.  That's not surprising given that the average electric utility is a monopoly, and the people that run them still think and act like monopolists.  Unfortunately, monopolies always seem to produce less cost effective solutions for the customers.  As such, a better solution would be to give the customer a choice of getting solar power from the utility or from one's own rooftop via a supplier such as Sunnova.  Yes, there's a high probability the utility will produce at a lower cost, but there should still be a choice to make.

            The best outcome would be for the price of solar power to continue to decrease, and that will likely occur through ever better technology.  As solar panels and battery storage continue to get better, the price should continue to fall.  An ever lower price makes alternative energy ever more attractive.  As that happens, the likelihood that your local power company's next plant will be solar increases commensurately. 

            It won't take government regulation to make solar more attractive, but government regulation could get in the way.  Government can be most effective if it encourages ever better solar technology, does a good job regulating electric utilities, and letting a competitive marketplace for solar power emerge.  It might be surprisingly positive for everyone.

The first commercial airplane powered by electricity may soon be coming to your local airport.

            Electric vehicles are becoming pretty commonplace, so much so that you probably hardly pay attention when a Tesla or other electric vehicle pulls up next to you at a stoplight anymore.  Now imagine the same thing, but with the airplane next to yours, at your local airport.

            Flying on an electric-powered airplane is getting pretty close to reality.  In fact, at the recently concluded Paris Air Show, a US airline actually placed the very first order for electric powered planes.   It's a commuter airline, named Cape Air, which provides short haul flights, principally in Boston and St. Louis, but out of the Caribbean and Billings, Montana.

            The electric-powered plane is called Alice.  It comes not from Boeing or Airbus, the world's two big commercial airplane manufacturers.  Instead, it will be produced by an Israeli startup called Eviation.

            Eviation is another classic case of innovation coming from outside an industry.  The company was founded by Aviv Tzidon, a serial entrepreneur who has founded more than ten companies, three of which have been listed on NASDAQ and another on the Frankfurt Stock Exchange.  He's a named inventor on some 15 patents.  The co-founder, Omer Bar-Yohay, is a physicist with expertise in propulsion systems.

            The company has also developed a drone called the Orca.  It can cruise at about 150 knots and has a range of 500 miles.  It is three meters in length with a wingspan of 4.5 meters.

            Don't plan on reserving a seat on an upcoming Alice flight for a while.  The new plane  is only at the test flight stage now, but it's expected to receive commercial certification in 2021.  Eviation expects to deliver the first Alice planes in 2022.

            In contrast to a Boeing 777 or Airbus 380, boarding Alice should be very easy.  It will only seat 9 passengers and have room for two pilots.  While it will be small, each plane is expected to have a range of up to 650 miles, and Alice will cruise at 300 miles per hour.  According to Eviation, Alice could go to an altitude of 30,000 feet, but it will fly at a typical altitude of only 10,000 feet, in contrast to the typical 30,000 to 40,000 foot cruise altitude of a Boeing 737 or other large commercial aircraft. 

            Alice will have three propellers.  It will probably look a bit strange, as each wing tip will have one propeller, and the third propeller will extend out the rear of the plane.  The rear propeller will provide the main propulsion.  The wingtip propellers will help to reduce drag, as well as provide redundancy and additional propulsion according to the company.

            Powering each plane will be a 900 kW lithium ion battery.  The prototype battery will be approximately nine times the size of Tesla's largest current battery.  Alice's battery will come from a South Korea battery manufacturer called Kokam.

            In comparison to a Boeing 737, Alice is pretty small.   The 737 is nearly 4 times as long as Alice, and its wingspan is slightly less than 3 times that of Alice.  The truly big difference between the two planes is the maximum take off weight.   A Boeing 737 could have as many as 177 passengers, plus a crew of about 6, and have a total weight of about 175,000 lbs.  In contrast, Alice will have a maximum take off weight less than one tenth that of the 737.

            Fortunately, Alice's price tag will be commensurately lower.  Where a typical 737 costs about 100 million US dollars, Alice will cost about 4 million. 

            Cape Air presently operates about 90 Cessna 402's, an aircraft of similar size and capacity to Alice, but which is a pretty old plane, the last having been built in the mid-1980's.  Cape Air also operates several Britten-Norman Islanders, a British aircraft that has been in production for some forty years, but is reportedly still in production.  The Cessna's and Britten-Norman Islanders, however, cost Cape Air a fraction of the reported $ 4 million price tag of the Eviation's Alice.  The obvious question to ask is, will the lower maintenance costs, as well as elimination of fuel, make up for the higher capital outlay?

            Each Alice will, by virtue of being an electric aircraft, be much simpler to maintain for Cape Air, just as the expected maintenance cost on a Tesla should be much lower than on a conventional automobile.  This should be especially true since the newest of Cape Air's Cessna 402's is at least 30+ years old.  Britten-Norman Islanders are still in production, so presumably they are much newer than the Cessna's.

            Of course, Cape Air will no longer have to purchase fuel.  The airline should be able to save at least $ 900/day on fuel for each, assuming each plane operates 10 hours/day and fuel costs $ 2.50/gallon.  That works out to about $ 300,000 in fuel savings per year.  While that's a substantial savings on fuel, it probably won't be enough to justify the $ 4 million price tag on the plane.  Chances are, it will take 12 to 15 years of fuel savings to cover the capital cost differential.  Very few, if any, commercial enterprises can justify that length of payback period.

            Cape Air has other fuel-related costs.  For example, the airline has to pay the cost of fuel trucks, as well as the personnel to do the fueling.  Those savings will add up, but the payback will still likely be substantial.

            To make the Alice a commercial success, it will take other savings.  The likely place to look is maintenance.  Most likely, each new Alice will have a substantially lower maintenance cost than planes in the current Cape Air fleet, especially those 30+ year old Cessna's.   The cost of keeping 35+ year old planes running smoothly is substantial. 

            The ability of the Alice to be a commercial success will depend upon more than the technical merits. 

            The company may have some other ideas for the Alice besides shuttling passengers to and from places such as Logan Airport in Boston.  Chances are, Cape Air will only be flying passengers between the hours of 6 am and 10 pm.  Likely no passenger wants to be flying between 10 pm and 6 am, but maybe those planes could be used for cargo.  How about doing some sub-contract work for Amazon or UPS, especially if the plane could operate as a pilotless drone?  Sure, a lot of passengers won't be comfortable getting on a plane that doesn't have a living, breathing pilot at the controls, but the package you need the Postal Service to deliver probably isn't quite so particular.  So Alice might have a "dual personality": passenger ferry by day and package drone by night.    The economics might get a lot more attractive.

            While Alice will likely be the first electric commercial aircraft, other planes are under development.  Rolls Royce, the British carmaker and jet engine company, is working on its own electric aircraft.  The company hopes to set a speed record when it takes its maiden flight the next few years.  According to company reports, the Rolls Royce craft will feature three high-power density electric motors capable of generating more than 500 horsepower.           

            Will the Alice, or even the Rolls Royce system, become commercially viable?  At this point, it's too early to tell.   However, even if neither becomes successful, electric powered commercial aircraft should become viable in the next few years.  Getting electric powered planes will not only reduce operating costs, they should have a very positive impact upon the environment, too.  There's increasing concern about greenhouse gas emissions from aircraft.  This will be a small but important first step.

In our rush to eliminate coal plants and gas-powered vehicles, we may be overlooking other very important sources of greenhouse gases

            In our collective quest to solve a very important problem, we sometimes miss the proverbial boat.  That very thing may be happening with the battle against climate change.  In this case I am not talking about climate change denial.  That's clearly a problem, but an already well understood one.  Instead, I'm talking about a case where those of us who strongly believe in the need to address the climate change problem may also be "missing the boat".

            The evidence for this comes in the recently released Renewables 2019 Global Status Report (GSR 2019).  It's been published annually for the past 15 years by a think tank called the Renewable Energy Policy Network for the 21st Century, sometimes referred to as REN21

            Like most reports coming out of think tanks, this one is pretty wonky, to the tune of 250+ pages, including heavily footnoted details.  According to the organization, its

mandate has been to collect, consolidate and synthesize a vast body of renewable energy data to provide clear and reliable information on what is happening in real time. This mandate still holds today.

            Overall, the report shows that we continue to "miss the boat" on reducing carbon emissions worldwide.  Despite some important progress, especially with respect to the growth of alternative energy in power generation, global carbon emissions with up 1.7% worldwide during 2018.

            It could have been a lot worse.  After all, economic growth worldwide was 3.7% last year.  Along with that growth came an increase in global energy demand of 2.3%.  There are two somewhat positive aspects to this.  First, energy demand is growing at a much slower rate than total economic growth, meaning that worldwide energy usage is getting more efficient.  Further, carbon emissions went up at less than half the rate of economic growth (1.7% versus 3.7%), another positive.  Unfortunately, we've got to find a way to achieve economic growth but someone get total carbon growth to be negative - very negative!

            So we continue to "miss the boat" on reducing carbon, something we already know.

            The report, however, shows another way we're missing the boat, depicted in the following graphic:

 

            The graphic divides worldwide energy usage into three broad categories -  power generation, transportation, and heating and cooling - and shows where the world has been collectively successful in utilizing renewable energy.  The greatest success, not surprisingly, has come in power production.  After all, solar and wind energy have become very cost competitive worldwide, and an increasing percentage of electric power comes from these sources.  That's certainly good news!

            What's striking is that 51% of total worldwide energy usage, according to the REN21  authors, is used for heating and cooling.  Yet virtually all of the attention has been paid to transport and power generation.  The efforts of 7 billion people worldwide to keep warm in cold weather, and to keep cool in hot weather, actually represent more than half of total energy usage.  More importantly, they represent a huge part of the greenhouse gas problem.

            You already know of the efforts to replace coal fired electric generating plants with wind and solar, and you also know about all of the efforts to switch to electric-powered vehicles.  Yet that represents only half of the problem.  Why haven't we heard much about the other half?  More important, what can we do about it?

            As shown in the graphic, 9.8% of heating and cooling worldwide is supplied by renewable energy.  Certainly, that's encouraging.  What about the balance, which represents 46% of total energy (i.e., 90.2% times 51%)?  As noted in the report, its mostly natural gas and oil.          

            Just as the problem of greenhouse gases in transportation and power generation has created a huge opportunity for entrepreneurs, in the form of solar and wind power, as well as electric vehicles, the same is true for heating and cooling.  After all, if the REN21 numbers are correct, there's a huge opportunity to provide heating and cooling using renewables.

            The REN21 report notes that, "renewable energy faces certain challenges to growing its share in the heating and cooling sector.  Heat supply is highly localized and often is produced directly at the point of demand, such as steam generation in industrial processes or hot water boilers in residential and commercial buildings.  As such, firms in the sector operate mainly in local, diverse markets, meaning that a global industry does not exist and that reliable, consolidated data on the heating and cooling sector are largely unavailable.  In addition, there are technical challenges to growing shares of renewables in the sector.  Thermal energy can occupy a wide range of temperatures and pressures that complicate the pairing of thermal demand with a (renewable) heating or cooling supply.  Heat demand also is dispersed over many individual sites, and infrastructure to transport thermal energy is often lacking or uneconomical to construct, especially covering large distances. 

            Despite these challenges, national and sub-national governments around the world are increasingly acknowledging the urgency of growing the shares of renewables in heating and cooling, although few have taken ambitious steps."

            Definitely sounds like an opportunity for an Elon Musk to take on heating and cooling!

            As noted in the REN21 report, most heating around the world is powered by natural gas and oil, resulting in lots of greenhouse gases.  A good alternative is heat pumps, which have become much more efficient in recent years.  A modern heat pump can eliminate fuel oil or natural gas.  True, the power requirement for the heat pump may generate some greenhouse gases, if the power source is conventional, but it should be much less of an impact than what it is replacing.   Developing ever more energy efficient heat pumps that could replace current heating/cooling sources is an opportunity for big business and budding entrepreneurs alike.

            A study done for California utilities shows big potential for heat pumps just in the USA.  According to a report by the Department of Energy, heat pumps "offer an energy-efficient alternative to furnaces and air conditioners", but in 2015, they were used in just 10% of American homes.  In recent years, improvements in heat pump technology have also made them a "legitimate space heating alternative in colder regions", such as Vermont, according to the DOE

            The question we should be asking is, what would it take to get the 90% of American homes that use some other fuel source - especially those using fuel oil and natural gas - to switch to a high efficiency heat pump?  It's one thing to create a highly efficient heat pump useful in North America.  What someone needs to do is develop something similar that will be cost effective and at an attractive price point in Africa, Asia, and Latin America.

            Besides heat pumps, another opportunity noted in the REN21 report is what are called distributed renewables for energy access (DREA) systems:  "These are energy systems that are either stand-alone or off-grid systems, as well as micro- or mini-grids that can generate and distribute energy independently of a centralized electricity grid.  DREA systems provide a wide range of services" including lighting, electricity for appliances, cooking, heating and cooling - in both urban and rural areas of the developing world.  They can play a key role in fulfilling energy needs and improving the livelihoods of millions of people living in rural and remote parts of the world."

            The biggest opportunity for such systems is in places such as Africa and Asia.  For example, in Africa, nearly half of the people on the continent, or around 600 million people, lack access to electricity, with the majority living in sub-Saharan Africa.

            Here's what I call the next big "landline opportunity."By this I'm referring to the fact that in much of the developing world, the first telephones people have had are mobile phones.  They never have had traditional landline phones, managing to skip an entire generation of technology.  Instead of building traditional big, centralized power systems to provide heating and cooling, places like sub-Saharan Africa could go directly to DREA systems, especially ones built on renewable technology.  All that's needed is the next Mo Ibrahim.  Ibrahim is a Sudanese-British billionaire who brought much of mobile telephony to a phoneless Africa.

            Another potential area has to do with cooking.   Besides heating and cooling of homes and residences, a significant part of the "heating and cooling" use of energy is for cooking.  There's a huge opportunity to provide clean energy cooking solutions throughout the world.

            Unfortunately, overall the REN21 report paints a fairly gloomy picture.  As noted earlier, it points out that the amount of greenhouse gases being dumped into the atmosphere continues to grow, and it identifies a whole range of reasons for it.  It correctly notes that things such as huge subsidies around the world to oil and gas are retarding the transition to clean energy.

            They're correct.  At the same time, they note that these subsidies are spread throughout countries around the world, and it is very difficult to bring change.  That may be the case, especially in the short run.  All the more reason that attention should be focused on the places where change can occur.  To the extent that we spend our time bemoaning things we cannot easily fix, such as eliminating subsidies for oil and gas, we are actually wasting time focusing on the things that can be changed!

            It's already obvious that entrepreneurs like Elon Musk have created new technologies that have made renewable power not just a viable option, but even the low cost option, in power generation, even in transport.  Now what's needed are entrepreneurs who can extend new technology into the heating and cooling sector.  If we don't, we really will be "missing the boat".

 

We're divided by tribe on issue after issue. We can't seem to persuade the other side that their positions are unreasonable. Maybe we need a totally different strategy!

A guest post this week from my good friend Richard Smith:

 

Most everyone thinks they're open-minded, and willing to consider different viewpoints.  Sadly, it just isn't the case.  Instead, we find ourselves dividing into two opposing tribes.

 

One tribe will hurl insults at the other only to have those insults be reframed and hurled right back! Not many of either tribe appear open to real dialog.

 

Very few Americans disagree about the importance of protecting the country, having a robust and healthy economy, healthy citizens who are free to choose their way in life, and a democratic government that allows all citizens to participate in guiding the country.

 

Yet even though we believe these things, we find ourselves dividing into opposing tribes on a range of issues: climate change, abortion, gun control, the proper role of government, foreign policy, and the relationship between religion and science.  To name just a few.  Gridlock everywhere you look.

 

How did we get to this place?  How do we overcome the gridlock?

 

Let me offer an example.  For the past 100 years many people have adopted the belief that the Bible and modern science are in conflict.  The disputants have lined up, facing off against each other.  In one camp are those who believe only in science, and further think that if one accepts modern science, then the Bible cannot have either truth or value.  In the other camp are those who believe that based upon their reading of the Bible, modern science clearly is in error.

.

Each side would line up its facts and beliefs, then attack the arguments of the other side.  Sometimes it would get even more heated, with the attacks extending to the character of the people on the other side.

 

Endless sound and fury, but absolute zero change in anyone's viewpoint.

 

We all cling to the idea that if we present a logical, well thought out argument, then present it to the other side, our intellectual opponents will change their minds.  After all, we believe our arguments, and our persuasiveness, are compelling!

 

Sadly, nothing could be further from the truth.  Research has shown that when someone vigorously opposes you, you tend to cling to your position even more strongly. Your goal is to convince the other person to agree with your position. But the more forcefully you make your case, the less likely it is they will agree.  This is particularly true when insults are included.  After all, how many times have you changed your mind after someone tells you that you must be stupid because you hold the beliefs you do?

 

After 100+ years of trying to persuade the other side, each "tribe" is more entrenched than ever. 

 

The answer isn't to search for ever better, more persuasive arguments.  Instead, it is to adopt a heart of peace.

 

I've been reading a book, titled The Anatomy of Peace, whose prescription isn't more compelling arguments, it's to adopt a heart of peace.  To have a heart of peace means to see others as people and not objects. It also means one needs to be willing to admit he or she might be wrong in thought or belief; and be willing to consider a change of mind, a change of heart.  Sounds blindingly obvious, except we all seem to have lots of trouble doing it.

 

The Anatomy of Peace helped me to understand that I needed to open myself up to different viewpoints. In other words, have a heart of peace.  

 

Opening oneself to consider alternative viewpoints is a first step.  Where does one turn next?  In my case, I've found another textbook, this one titled Understanding Scientific Theories of Origins, written by a group of professors at Wheaton College.  This is a pretty weighty science textbook that surveys the broad range of the latest scientific theories concerning the origins of the Universe, as well as Darwin's theory of evolution by natural selection.

 

Reading the Wheaton College textbook led me to realize I'd been making a fundamental mistake.  The mistake was something called Concordism.

 

Briefly stated, Concordism "is an interpretive framework that presupposes biblical text and scientific statements are correlated. Concordism believes that biblical text has scientific import or that we should expect to find close parallels between biblical text and scientific statements."

 

I told myself I was merely seeking the truth, seemingly a reasonable position to take. But then the book took an interesting turn: Non-concordIsm. "This is an interpretive framework where no correlations or parallels between biblical text and scientific statements are required."

 

I don't want to spend more time listing the differences - that'll be the subject of a future post. The thing that I do want to say is I had to have my mind open in order to realize that a different  belief was possible.  This is where The Anatomy of Peace gets really interesting: "the more sure that I am right, the more likely that I will actually be mistaken."

 

The more I want peace, the more likely I'll have war. Paul in Romans 7:15 says, "I do not understand what I do. For what I want to do I do not do, but what I hate I do."

 

Why is this so? Justification. We want to justify ourselves; make ourselves straight when we know we're crooked. When a wall is crooked, to make it appear straight is merely the work of some well-placed wood. Unfortunately justifying isn't easy with a human being. If we betray our own moral principles, we begin to justify ourselves by making the other person an object. To quote the book we "horribilize" them. Rachel Maddow or Rush Limbaugh become the problem. Depending on your worldview, one or the other is the most horrible person ever.

 

But are they? 

 

If I see myself as better than you then it follows that I deserve better treatment than I get from you. If I see myself as worse than you then it follows that I need to be seen in a better light in order to feel justified. In neither case am I seeing you as a person but as an object.

 

The answer - as simple as it is - is difficult to do.  Each of us first has to understand that everyone is a person and not an object. We are the same. And so, the well known Biblical admonition: "do unto others as you would have them do unto you."

 

When you ignore the sense that you should apologize to someone or help someone or do some some other positive action, you begin to see them as an object. And that's when the examination begins to prove that there is something wrong with the other person.

 

Except that if we are honest with ourselves, we'll realize there is nothing wrong with the other person.

 

Which leads to the second thing we each need to do: acknowledge that there may be good reasons why the other tribe holds its beliefs.  Before going any further, we need to understand what those good reasons are, and then incorporate the other tribe's viewpoint into our own.

 

We all like simple, neat solutions to problems.  Overcoming our tribalism and gridlock is no different.  Unfortunately, there is no quick answer.  The closest thing that approaches such is that our belief we can get others to change their minds due to our compelling arguments is flat wrong.  If we're going to do it, it will have to happen another way.

 

The starting point for that "other way" is to adopt a heart of peace.

 

My father once said that there's two things you need to do when deciding how to behave: 1) decide what the right thing is; then 2) do the right thing. That's too simplistic you say. That is of the real world you say. But one thing of which you should be certain. There is one person preventing this from happening. You.

 

Think about it.

Some folks think the government needs to take the lead in helping develop better alternative energy technology. There are better ways to get there.

            Your country is falling behind in alternative energy technology.  Your best companies run the risk of being left in the dust by fleet-footed foreign competition.  It isn't that your government is filled with climate science deniers.  What's your solution? 

            A classic one, especially favored by liberals and progressives, is called industrial policy.  It's the idea of getting government to intervene, providing much-needed support to a flagging domestic industry, and/or directing investment towards promising new technologies and companies expected to be winners in the future.

            Conservatives generally oppose industrial policy, but have been known to accept it when seemingly convenient.

            You might remember a fairly recent example of it closer to home.  The company was called Solyndra, a manufacturer of solar panels.  It was a product of Silicon Valley, but somehow  things didn't go well when the Obama Administration undertook a bit of good old fashioned "industrial policy" by investing.  Some think it was a case of governmental fraud.  I think it was a reminder that "the road to Hell is paved with good intentions."

            Governments make good investments when it's things like highways and bridges, but they don't seem to be very good with emerging technology companies.

            Notwithstanding disasters like Solyndra, at the moment the idea of industrial policy in alternative energy looks like a desirable solution in a surprising place – the German auto industry.  Surprising because, after all, Germany's  the home of Mercedes, BMW, and Volkswagen.  Not exactly "slacker" companies!  Except that the auto industry is quickly changing due to the rise of electric-powered vehicles.   Lots of vaunted German engineering technology is suddenly less relevant in a world of "electrics". 

            The Germans realize they may have a problem.  Last February Germany published a report titled "2030 National Industrial Strategy".  Somewhat ominously, the report said, "if the digital platform for autonomous driving with artificial intelligence were to come from the USA and the battery from Asia for the cars of the future, Germany and Europe would lose over 50% of value added in this area."

            These concerns are not unfounded.  After all, the Chinese presently dominate battery technology, along with major players from South Korea and Japan.  Tesla, the heavyweight in electric vehicles, relies upon Panasonic, which also happens to be Toyota's partner.  LG Chem and Samsung SDI are major Korean players.

            How should the Germans respond to such a challenge?  Not surprisingly, some say it's time for some good old-fashioned industrial policy.  In fact, the German government is creating a one billion Euro fund for German companies to develop batteries.

            Is this a good idea?  I don't think so.

            Also in opposition is Ferdinand Dudenhoffer, a professor of automotive economics at the University of Duisburg-Essen.  As reported by Fortune magazine in the 1 May 2019 issue, Dudenhoffer thinks the creation of the battery fund is mis-guided. 

            What is the right answer?  While independently developed, we have the same advice for the Germans: if you're behind in your technology, change the rules of the game.

            The Chinese, Japanese and South Koreans appear to have a solid lead in battery technology and manufacturing capability for batteries.  How could the Germans – or anyone else for that matter – change the rules of battery game?  Two ideas to change the rules come to mind, and neither involves governmental industrial policy.

            Answer #1: come up with a better technology.

            Lithium ion batteries – the current standard for electric vehicles – aren't necessarily the best solution.  For one thing, they don't perform well in cold weather.  So the obvious answer is, develop the next new technology for batteries.  At least one company – Sila Nanotechnologies – is taking Dudenhoffer's advice and focusing attention developing better batteries out of different materials.  They're also pursuing funding from a source other than government, leading to the second answer.  Another such company is Farasis, based in Silicon Valley.

            Answer #2: get funding from venture capital, not the government

            The German government's proposal to provide a billion Euro fund for battery technology sounds like a lot, until you consider that US venture capital alone in 2018 raised 130.9 billion, more than 100 times the amount of the German fund.  Of course, that's the amount raised for all venture capital, not just batteries.  The point, however, is that huge sums are available in the private sector for innovative technology.

            In 2018, venture capital and private equity firms invested more than $ 1.3 billion in energy storage technologies according to Wood Mackenzie

            Chinese and other Asian investors see the potential of energy storage.  For example, China's Skio Matrix raised $159 million for lithium-ion battery and electric vehicle development

            It's apparent there is a lot of private money available for the right battery/energy storage investment opportunity.  How could the German companies – or anyone else for that matter – create something new and better to challenge the current dominant players?

            One emerging technology is what's called the solid-state battery.  A San Jose, California company called QuantumScape has such a battery.  Volkswagen has already invested in the company.  As reported in a company publication, "Solid-state battery cell technology is seen as the most promising approach for the next-but-one generation of e-mobility.  This battery technology has several advantages over the present lithium-ion technology: higher energy density, enhanced safety, better fast charging capability and a much smaller space requirement."

            Fast charging of batteries is clearly an important way in which an upstart competitor might challenge the incumbents.  As recently reported in Greentech Media, David Snydacker of Dosima Research notes that today, most fast-charging EV's can reach an 80 percent charge in 30 to 40 minutes.  But he points out that Porsche's recently announced Taycan EV can charge to 80 percent in 15 minutes.  According to Snydacker, "Presumably, this 15-minute charging is being done with conventional lithium-ion cells that have been made especially think so that the lithium can move more quickly from the cathode to the anode during charging.  The tradeoff with this approach is that these thin cells contain less active material and therefore have lower energy density."

            How can you achieve such rapid charging without sacrificing the energy density?  The answer may be something called silicon anodes, which have much greater density than graphite.

            Focusing on new materials and technology, as well as funding from places like Silicon Valley, should be a far more fruitful opportunity for the German automakers that believe they're falling behind.  Not only that, but they'll avoid all of the baggage that typically comes with government funding.

            It's not that getting venture and angel funding will be easy – far from it – but it's clearly quite plentiful if someone can come up with a truly great idea, and truly great ideas are what will be necessary to advance battery storage.

            Once again, a governmental solution – in this case, the German government fund – sounds like something that will help advance efforts to get better "green technology", until you realize that the far better solution will be to rely upon new technology, as well as far more plentiful venture funding. 

            Industrial policy sounds like a good idea – until you dig into it and realize there are far better alternatives.  We clearly need technology if we're going to solve the greenhouse gas problem.  Government could help a great deal to underwrite the necessary research, but if we ever hope to commercialize that research, governmental industrial policy is probably the worst choice we could make.

            Auto titans of Germany, please pay attention to Professor Dudenhoffer!

A Look at Three Companies Employing a "Harvest" Model to Solve the Greenhouse Gas Problem

            The "Unexpected Perspective" has advanced the idea that if we really want to solve the problem of greenhouse gases, rather than rely upon governmental entities to solve the problem, we should do two things: 1) look to universities, other research institutions, and the private sector for solutions; and 2) look to create a portfolio of solutions, not a single "magic bullet".  Yes, governments could play an important role, but mainly by creating policies that foster innovation in the private sector.

            This week I offer three more companies that are demonstrating these two points.  While the three companies are in widely different fields, each is attempting to make money using what I call a "harvesting" strategy.

            The first is a six year old Chicago-based firm called Lanzatech.  Lanzatech is a perfect example of the idea that solutions to the carbon problem already exist in Nature, we simply have to discover the solutions and adapt them to the problem at hand.  In the case of Lanzatech, the solution lies in the guts of rabbits!  What Lanzatech's founders discovered was that a key bacterium in the rabbit gut could convert carbon in the air into other forms of carbon, specifically into ethanol.  The company is "harvesting" waste gases into something both useful and profitable.         

            Jennifer Holmes, the CEO of Lanzatech, uses the analogy of a brewery.  Whatever your favorite brew, it is the result of the transformation of a sugary substance called wort into alcohol.  The agent of transformation is yeast and fermentation.  In Lanzatech's case, the instead of wort, the "feedstock" is industrial gas waste, and instead of yeast, the "agent of transformation" is that special bacterium found in the guts of your favorite bunny rabbit. 

            Following Lanzatech's logic, all of the excess carbon dioxide we're dumping into the air, the byproduct of combustion, could change from a problem to something valuable.  Valuable because it becomes the feedstock for making ethanol.

            Virtually all of the gasoline produced in the USA today contains some ethanol, usually about ten percent.  Originally seen as a way to help solve the problem of lack of oil in the USA, ethanol has instead become a liability.  This is because it takes up agricultural acreage, thus driving up the cost of food, and also because of the environmental footprint it creates.  Ethanol is not exactly the kind of "alternative" fuel that wind and solar are.   By creating ethanol from industrial gas waste, Lanzatech solves two important environmental problems.

            Lanzatech has installed its bioreactor technology in a Chinese city to produce ethanol industrial gas waste.  It's done something similar at a Belgian steel mill owned by Arcelor-Mittal, the world's largest steelmaker.  In Japan it has a pilot program to produce ethanol from garbage.  The technology has also been applied to aviation fuel. In the fall of 2018, Virgin Atlantic powered one of its 747's with Lanzatech-created fuel, flying from Orlando to London.

            Lanzatech's CEO estimates that if the technology is put in place in all of the largest steel mills in the world – representing about 65% of worldwide steelmaking capacity – it would have the equivalent benefit of taking 55 million automobiles off the road.

            The company predicts it can have three plants up and running in the UK by 2025, capable of producing a total of 125 million gallons of aviation fuel/year.  Given that in all of 2018 airlines worldwide consumed 94 billion gallons of fuel, that's not a lot, but it's an important beginning. 

            Lanzatech looks like it will be a high tech startup success.  We're accustomed to hearing about start ups that develop revolutionary technologies, but the second company profiled here may actually be more significant.  That's because the company will in just three years celebrate its 100th year anniversary.  Not only that, but it remains a family business.  The idea of a family business, approaching its centenary, as highly innovative sounds quite unusual. 

            The company is called Freres Lumber and is based in Portland, Oregon.  Freres Lumber employs a more conventional "harvesting" strategy, but one that includes an important innovation.  What's gotten the company lots of attention recently is called cross laminated timber (CLT).

            Cross laminated timber looks like other lumber, except that it has strength and other characteristics that make it suitable as an alternative to concrete and steel.  In fact, cross laminated timber can be used to build structures up to 18 stories.  From an environmental standpoint, that could be very beneficial, for two reasons.  First, concrete and steel create very negative environmental footprints.  In fact, both create significant amounts of waste carbon dioxide.   On average, 1.83 tons of carbon dioxide are produced for each ton of steel produced.  Likewise, concrete production generates about 8% of worldwide greenhouse gas emissions. 

            Second, wood is an excellent storehouse of carbon.  Substituting wood for concrete and steel has a very positive impact on carbon emissions!  Such substitution is certainly not a panacea, but it could be another offering in the portfolio of tools to reduce greenhouse gases.

            While Frere Lumber has received recognition for its work with CLT, it can't claim it as a home-grown invention.  The technology for cross laminated timber actually came from academia.  CLT was first developed and used in Germany and Austria in the early 1990's.  An Austrian-born researcher named Gerhard Schickhofer obtained a PhD in 1994 based upon his research in CLT.  The Austrians then established the first building guidelines in 2002 based upon that research.  Schickhofer, himself, received the Marcus Wallenberg Prize earlier this year for that groundbreaking research.  Freres Lumber, however, has improved technology and is moving it beyond Schickhofer's lab to a commercial reality.

            The obvious question is, how could lumber have comparable strength and rigidity properties that would make it a good alternative to concrete and steel?  The secret is in combining sheets of wood and gluing each sheet at a right angle to the adjacent sheet.  Lumber is normally anisotropic, meaning that the properties of the lumber change depending upon the direction to which force is applied.  Gluing adjacent sheets together, each at a right angle to the next sheet, overcomes this weakness.  It's similar in that regard to plywood except that the sheets are much more durable.  Obviously, very durable if such lumber could be used to erect an 18 storey building! 

            As previously noted, timber is an excellent place to store carbon.  After all, it's the result of photosynthesis, wherein plants transform carbon dioxide into wood.  As such, a building constructed of cross laminated timber offers the dual benefit of reducing the carbon footprint of concrete and steel, as well as providing a good place to store carbon.

            The third example is a company "harvesting" good old fashioned sunlight.  What makes it noteworthy is that it adapted an existing carbon reduction strategy to a new market.  The company is called Brooklyn Solar Works and is based in Brooklyn, NY.  Brooklyn Solar has installed solar panels for homes for a number of years.  Home installation of solar panels is hardly newsworthy, but doing the same in apartment buildings is.  In fact, Brooklyn Solar has developed technology to facilitate apartment building installations.  In a city densely packed with apartment buildings of all shapes and sizes, that's an important innovation. 

            Brooklyn Solar's solution is to place the solar panels on a nine foot high aluminum frame, which allows an entire flat roof to be covered in solar panels.  The canopies, of course, make the panels more expensive than on a typical pitched roof, but it affords a solution to the problem. 

            The common element for these three companies is the development or adaptation of technology that will help reduce the carbon footprint.  In each case the technology was either "home grown" or adapted from academia.  More important, each solution involves a form of "harvesting" - waste gas, timber, and sunlight - on a commercial basis, at a profit; and in each case, adding something to the portfolio of solutions to the greenhouse gas problem.  

Methane Is a Far More Potent Greenhouse Gas Than Carbon Dioxide. Finding a Way to Control It Deserves More Attention.

            In all of the discussion about greenhouse gases, the fact that certain gases are far more dangerous than others is often overlooked.  Methane (CH4), in particular, is far more potent than carbon dioxide (CO2).  Few realize that methane warms the atmosphere as much as 84 times more than CO2 over a 20 year period.  Given this disparity, researchers have been looking for ways to mitigate the methane problem.  Reducing carbon dioxide emissions is very important, but methane may be even more important. 

            The chemistry of getting rid of methane is well understood.  All that's necessary is to combine one molecule of methane with two molecules of oxygen, the result being one molecule of carbon dioxide and two of water.  It's recently been reported that zeolites – a type of microporous mineral - might be used to achieve the conversion.  The result, of course, is changing one type of greenhouse gas into another, but given the potency of methane, it may well make good sense.  In fact, researchers have recently proposed some ways to do just that.

            Sounds like a great idea, except that it isn't yet practical.  Unfortunately, it may never be practical as the proposed technology depends upon implementing a tax on carbon.  That doesn't make it a bad idea, just a somewhat unlikely one.

            If our goal is to get rid of methane, there's a much better way to do it.  Actually, two ways.  Sixty percent of methane emissions are human caused; well, human and animal caused.  The best way to reduce methane emissions is either to control the number of humans on the planet, the number of cattle, or both.

            From Thomas Malthus onward, there have been repeated calls to control population growth.  Hasn't happened yet, and it probably isn't going to happen in the future.  If the goal is to control methane emissions, the better strategy is to control the amount of livestock in the world.  It's an idea which sounds appealing, just very hard to do.  The reason it's so hard isn't so much because the world's population is increasing, it's because of changes in the typical diet around the world.

            The problem isn't in advanced countries such as the USA, Canada, the European Union, and Japan.  Instead, it's in the developing world of Africa, Asia, and South America.  Incomes are rising rapidly in these countries.  When incomes rise, two things happen: 1) the average person consumes more calories each day; and 2) the typical diet includes more protein.  The source of all of the additional protein?  More and more cattle.  The problem is that more cattle generate more greenhouse gases, especially methane. 

            The attached table from the UN's Food and Agricultural Organization shows what happens as countries develop.  Total average daily calorie intake increases (T in chart), but calories from animals (A in chart) also increase.  You can see that the average person in a developing country consumes far fewer calories from animal products than in places such as the USA.  As countries advance from developing to industrialized (think places like China), the demand for animal protein grows significantly. 

Table 2. Vegetable and animal sources of energy in the diet (kcal per capita per day)

Region

1967 - 1969

1977 - 1979

1987 - 1989

1997 - 1999

T

V

A

T

V

A

T

V

A

T

V

A

Developing countries

2059

1898

161

2254

2070

184

2490

2248

242

2681

2344

337

Transition countries

3287

2507

780

3400

2507

893

3396

2455

941

2906

2235

671

Industrialized countries

3003

2132

871

3112

2206

906

3283

2333

950

3380

2437

943

 

            We end up with a three-part problem: 1) population increases; 2) increasing incomes result in higher demand for calories from animals; and 3) more cattle generate lots more greenhouse gases, especially methane, the most serious type for the environment.

            The real problem is to figure out how to provide animal protein to all of these new, wealthier consumers in the developing without the need for all the additional methane-spewing cattle. 

            A number of companies are already pursuing the concept of "meatless meat".  Two well known ones are Impossible Foods and Beyond Meat.  You may already have tried some of their products.  They're using a number of different strategies.  In this post I profile a company called Sustainable Bioproducts.  It's already gotten backing from prominent investors such as Breakthrough Energy Ventures.  Among Breakthrough's investors are Bill Gates, Jeff Bezos of Amazon, and Michael Bloomberg, the former mayor of New York. 

          Sustainable Bioproducts fits the classic model of a startup business spun out of a university, in this case, Montana State University.  Nothing especially unusual about that except the nature of the research done at the school.  Montana State operates the Thermal Biology Institute (TBI).  The Institute focuses its research on bacteria found in geysers and springs at Yellowstone National Park. 

          As reported by National Geographic, the research originated in 1965 when Thomas Brock, a researcher from Indiana University, noticed "pink gelatinous masses of material, obviously biological, at surprisingly high temperatures" in Octopus Spring in Yellowstone National Park.  The stringy organisms were growing at 180 degrees Fahrenheit, a complete surprise because previously it was thought that bacteria couldn't survive above 140 degrees Fahrenheit. 

          A year later Brock returned to Yellowstone with a student named Hudson Freeze, and the two collected a different organism that Brock named Thermus aquaticus.  When Brock and Freeze cultured Thermus aquatius, they found a DNA-copying enzyme that made polymerase chain reaction (PCR) possible.  PCR is a critical technology in molecular biology, especially for copying DNA. 

          In the early 1990's a University of Colorado microbiologist named Norman Pace led a team doing additional research in Yellowstone.  They gathered samples in Obsidian Pool that showed many new life forms within Archaea, a domain of life distinct from bacteria.  These organisms capable of surviving extreme temperatures are referred to as extremophiles.

          Montana State has created an entire institute to study the extremophiles.  According to the school's website, "TBI has produced an aggressive research thrust focused on geochemistry and geothermal biology. The breadth of our research programs reflects the diversity of thermal environments found in Yellowstone, including projects focused on thermotolerant plants, fungi, protozoans, bacteria, archaea and viruses and the understanding of biochemical mechanisms and geochemical processes occurring at high temperatures."  It goes on to say that researchers at TBI are doing research on "genomics, metabolic engineering, biofilms, hydrogen metabolism, sulfur reduction, nuclear magnetic resonance structural biology, proteomics, metal reduction and many others centered around microbes found in Yellowstone and other extreme environments."

          An important characteristic of some of these extremophiles is when "fed" certain common substances, they multiply rapidly, in a polymerase chain reaction-fashion.  Mark Kozubal, a researcher at the school, found that the extremophile bacteria could be an "engine" to grow protein.  He and a fellow named Thomas Jonas then formed Sustainable Bioproducts to exploit the discovery.  Kozubal has obtained at least one patent and has a number of additional patent applications on file.  The company has already raised a $ 33 million Series A round.  Breakthrough Energy Ventures is one of the participants in the round.  The company now operates out of the Polsky Center for Entrepreneurship at the University of Chicago.

          According to the company, to create the product, "it feeds common components of food such as starches or glycerin to the already high-protein microbes, which then quickly multiply. The resulting protein, like meat or soy, contains the nine amino acids considered essential to the human diet. But the end product wouldn't necessarily resemble meat. "It could be some things that are more meat-like," said Jonas, Kozubal's co-founder and CEO. "It can be savory; it can be sweet; it can be liquid; it can be dairy-like.

         While the product could take various forms, the key is that it is a high protein product that could provide a way to fulfill the demand for protein by the growing populations in the developing world.  More importantly, it could provide that protein without the need to grow the world's livestock herd, and thus could avoid growing the world's methane footprint.

          The fact that the resulting product could take various forms could be a real advantage.  It could be shaped into a range of tasty foods that aren't trying to be "pretend" meat, so there may not be the need to overcome the obvious objection from diners who already have well-formed ideas of what "meat" looks and tastes like.  Of course, Sustainable Bioproducts may be able to create a tasty "meatless meat" version of the product, but it won't be essential.

          This is what I refer to as a "greenhouse gas avoidance strategy".  Lots of efforts are underway around the world to convert existing energy generation away from sources such as coal, oil and natural gas to reduce greenhouse gas emissions.  These are certainly very necessary, but they aren't sufficient.  That's because, as noted in previous posts, the developed world could do a great job of eliminating existing greenhouse gas emissions, but still not solve the problem because all the emissions eliminated from the developed world will be replaced by new emissions in the developing world.  Preventing new greenhouse gas emissions in the developing world is equally important, especially preventing growth in methane emissions given their incredible potency.

          Approaches such Sustainable Bioproducts are really important for greenhouse gas avoidance. 

          Like any early stage investment, Sustainable Bioproducts could easily "flame out", even if Jonas and Kozubal are successful at scaling up the technology to use extremophiles to produce mass quantities of edible protein.  Only time will tell.  The important thing to note, however, is that the underlying strategy – take university-based research and spin it out into start-up businesses – is a critical element in developing the portfolio of solutions to the huge problem of greenhouse gas emissions, and possibly a great way to reduce the methane greenhouse gas problem.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Carl Treleaven is an entrepreneur, author, strong supporter of various non-profits, and committed Christian. He is CEO of Westlake Ventures, Inc., a company with diversified investments in printing and software.

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