EcoLogic Blog

We all remember the great food vs. fuel debate of 2007. Many critics were quick to point at corn-based ethanol as the primary culprit for a rise in food prices. Although most experts will agree that higher fuel costs have a greater impact on food prices, it still forces renewable energy proponents to continuously look for improved sources of clean energy. As a part of this ongoing trend, recently a large step was taken toward the production of a cleaner burning ethanol that does not require any food-based inputs.

During this month’s American Coalition for Ethanol conference in Omaha, Neb, Poet – one of the world’s largest ethanol companies – announced it has neared completion on one of the country’s first cellulosic ethanol plants. [Poet is not a client of Tunheim Partners]

Although the plant will be considered a pilot operation, producing only 20,000 gallons, it is the first significant step toward the commercial production of cellulosic ethanol. Using corn cobs and stocks for its primary input, the plant is scheduled for completion by the end of the 2008 and will be adjacent to Poet’s already existing 9-million-gallon ethanol plant located in Scotland, S.D.

Why is this significant? Because with the rising demand for ethanol (a federally mandated 36 billion gallons per year by 2022), there simply is not enough corn to meet this need. Nearly 21 billion gallons per year will need to be produced by cellulosic ethanol. Also, creating ethanol from alternative inputs such as woods, grasses and non-edible plants parts will help alleviate high corn prices and allow farmers to market new inputs traditionally thought to be waste.

Once the technology is perfected, Poet plans to implement the same process to other plants across the Midwest. If successful, Poet’s new type of hybrid plants will be able to take corn into one side of the plant and corn stocks into another, and use both inputs to increase the overall plant production of ethanol. According to Poet, this new cellulosic technology is capable of producing 11 percent more ethanol from each corn bushel and 27 percent more ethanol from an acre of corn.

“It is no longer a question of if, but of when we will produce cellulosic ethanol,” commented Poet CEO and President Jeff Broin. “I don’t know if I could have said that even one year ago.”

According to the DTN Ethanol Center, Poet was one of six companies awarded a total of $385 million in grants from the U.S. Department of Energy in February 2007, to develop the first generation of cellulosic ethanol plants. [Full disclosure, DTN is a client of a Tunheim Partners]

Since that announcement only one other ethanol company, Canadian-based Iogen Corp, has made plans to build its first commercial wheat straw-to-ethanol plant in British Columbia.

Although analysts believe the complete introduction of commercialized cellulosic ethanol is still at least two or three year away, this first step by Poet will definitely be a push for the other major U.S. ethanol companies to speed up their own cellulosic research and development efforts.

[Click here to listen to an interview with Poet CEO Jeff Broin]

Tags:   American Coalition for Ethanol · Cellulosic · DTN · Ethanol · Iogen · Poet · Renewable FuelNo Comments.

Midwest Coca-Cola Bottling Company rolled out 10 hybrid electric delivery trucks in Minneapolis – St. Paul last month. Full disclosure: Midwest Coca-Cola is a client of Tunheim Partners and we assisted with this event. This is the start of its plan to have 142 hybrid electric trucks throughout the United States and Canada by August.

The hybrid trucks work by combining diesel and electric power and converting braking energy into supplementary electrical power. The trucks also don’t emit any fumes when idling for unloading.

The trucks are the largest hybrid electric delivery trucks in North America. They produce 37 percent fewer emissions and use 32 percent less fuel than standard trucks. They’re even customized for the regular stopping and starting needed in urban areas.

Check out the pictures and media coverage of the event that included Minnesota Governor Tim Pawlenty and Coca-Cola Enterprise CEO John F. Brock unloading the first cases! 

Coca-Cola Enterprise CEO John Brock addressing the crowd.

Pulling out in one of the new trucks!

Minnesota Governor Pawlenty loading up his dolly.

Media coverage included: Finance and Commerce, Star Tribune, Pioneer Press, ThisWeek, MPR, WCCO and KSTP.

Tags:   Coca-cola · electric vehicles · hybrid vehicles1 Comment

Perhaps you’ve seen the ads from wecansolveit.org, which feature unlikely allies like the Reverends Al Sharpton and Jerry Falwell agreeing that something needs to be done to fight global warming (video below).

Politicians and even some oil companies are part of this shift away from the question “Does global warming exist?” to “We have to do something about it.” That’s not to say everyone agrees on the solutions; for example, how coal or even nuclear power fit into our energy mix is a huge area of contention. We’re in to the nitty-gritty of the problem: which solutions are the best to use, who pays for what, how do we respond to markets or populations that are negatively impacted by our decisions?

With all of the solutions out there (many point out that there is no “silver bullet” to the global warming problem but rather “silver BBs”), we’re going to see an increasingly vocal debate on which technologies and policy mechanisms will create the most change, the best change, in the shortest amount of time. There are going to be growing pains as we transition to a clean energy economy. Successful points of view will come from those who frankly address how their technologies or ideas may impact certain sectors of the economy, how they plan to respond to those risks, how much the change will cost, who will pay for it and why.

Tags:   energy · global warming · trends · videoNo Comments.

After the morning panel discussion, AWEA held a news conference with the panelists. This is an excerpt of the questions from reporters and bloggers (including one from yours truly) and the panelists’ answers.

Q: General Clark, what would federal energy legislation look like to you?

General Clark:

“Big picture legislation would look like cap and trade legislation, benchmark goals and a timeline, incentives, research and funding, energy efficiency standards apart from the cap and trade system and incentives to promote energy efficiency. If you put those in and probably some other pieces like dealing with the strategic petroleum reserves, you could address energy security in terms of infrastructure and protection.”

Wood didn’t think government was the most effective way to create change. What it should do is create a market, he said, like with renewable energy standards, and then let the market work itself out.

But, Clark responded, you do need a regulatory piece when you’re talking about carbon sequestration or nuclear power. To launch technologies like these, we’ll have to have a public-private partnership.

“…There are winners and losers as you move forward. It’s who gets what, how much, how soon that determines whether these programs work or not. Emphasize the best technology and spread the profit opportunities around in a fair way. Spread it wide enough to pick up the little producers as well as the big producers.”

I thought about the American Petroleum Institute/Newsweek energy series last week at Stanford, and how a few of those panel members said the real test of renewables would come when the price of oil comes back down. And so I asked these panelists: “If the price of oil were to plummet tomorrow, how would this effect renewable energy markets and the political will to keep moving in this direction?”

General Clark answered first, noting that although we’re at a time when the price of oil and the awareness helps the drive towards cleantech, the fundamentals of energy policy – like the cost of oil extraction – don’t change with the price of oil exactly. Oil prices are certainly a stimulus to cleantech, but regardless of the price of oil, it’s still a matter of national security and climate change.

Podesta:

“When I was in the White House [as President Clinton’s Chief of Staff], oil was $13 a barrel…but we didn’t capture what the cost of that all meant to climate change, the economy, and the effect it had on national security like the regimes in the Mid-East. We need to learn from that experience.”

Wood:

“Even at $65/barrel, you could still do corn ethanol and other more efficient fuels profitably. I think we’re there and it’s going to take time to change out the auto fleet but I think we still will.”

Next, a reporter asked whether the climate bill in the Senate could put coal on the right track?

Wood was skeptical that Congress could deal efficiently with a topic as complicated as energy and global warming. Instead, he said, we should have a bill that either says “Coal, you’re over with” or “Coal, you have to get cleaner.” Although there have been a number of states who have just said “no” to coal, he questioned: can we do that as a nation?

Goodell completely agreed with Wood except he thought such a straightforward move on coal would be politically impossible:

“You’re asking politicians to put their finger on the red button…It’s easier to do it if it looks like you’re doing something else rather than to just say what you’re doing. It’s one of the hottest political issues right now.”

Then Podesta made an interesting point: If Congress can’t pass a bill to regulate CO2, the EPA now has the authority to directly regulate CO2 from power plants. “I think [that option] can be a backstop to partisan gridlock.”

****

But like the states that have put renewable energy standards in place and are now getting into the dirty details, the details of national CO2 regulation will get at least as messy, especially when we start talking about who’s going to pay for what. So how far down into this new cleantech market does government legislate? Yesterday afternoon, I arrived to a session late but just in time to hear a panelist practically yell:

“If government’s going to create the markets then they can’t set the prices! You either regulate [emissions] or you don’t, but a bill that creates a ‘free market’ and then sets a price or price limit will fail. That’s what Europe did and it didn’t work. Let the market decide.”

Tags:   Coal · public policy · renewable energy · windpower 2008No Comments.

Acciona Windpower, a Spanish manufacturer of wind turbines, introduced their new and enormous 3-megawatt (MW) wind turbine and had a full-scale nacelle on display. The nacelle is the part of the turbine that sits on top of the shaft and houses machinery like the gear box, low- and high-speed shafts, generator, controller and brake.

The AW-3000 turbine has the largest swept area of any 3 MW machine on the market. It comes with three rotor diameters options of 328, 358, or 380 feet and a concrete shaft of 328 or 394 feet high. Its nacelle has anti-slip surfaces (good thing from that height), noise insulation and fireproof materials.

This is the “nose” of the nacelle, and those giant gaping holes are where the blades fit in.

In North America, the AW-3000 will be manufactured at a plant Iowa. Acciona says the wind turbine should be available in 2009.

Tags:   Acciona · wind turbine · windpower 2008No Comments.

Here are a few of the more innovative and interesting small wind turbines designs I’ve found at Windpower 2008.

This turbine is from Dallas-based BroadStar Windsystems (one of the new American turbine designers I found). This AeroCam turbine can be used on top of urban buildings (picture several of them across the top of a stadium, for example) and even in between typical turbines at a rural wind farm. What’s more, BroadStar claims that this turbine can achieve $1 per watt installed.

This small turbine is from IR Windpower. They currently manufacture both large and small designs throughout Asia, but they’re eying the European and U.S. markets next

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This turbine from KR Windpower stands only about 4-5 feet off the ground. The company is based in Korea, with offices in China and California:

And finally, the always attractive SkyStream turbine by Southwest WindPower. This is the model George Bush Sr. installed at his Kennebunkport home:

Tags:   wind turbine · windpower 2008No Comments.

The Tuesday morning panel was outstanding: Diverse opinions, common goals, wise thoughts. The following people addressed the question: What’s next in American energy policy?

• John Podesta, President of the Center for American Progress and former Bill Clinton Chief of Staff
• Pat Wood III, Principal of Wood3 Resources and former chairman of the Federal Energy Regulatory Commission
• Wesley Clark, former Supreme Allied Commander of NATO
• Jeff Goodell author of Big Coal

All panelists agreed that the issue of global warming has come a long way, but while American politicians are just coming around to supporting emissions cuts and the change to a cleantech system, foreign competitors have raced ahead: Japan and Germany are solar leaders and Europe has more wind power installed and better policies to support it.

In order for people to better understand the urgency of the issues, General Clark said, we have to connect the dots between cleantech, the price at the pump and national security. In other words, dependence on foreign imports and global warming. And both have foreign policy impacts: they affect U.S. relationships (our refusal to sign international agreements), enable potential adversaries (petrol dollars funding unfriendly regimes) and distort economic development abroad (China needs a lot of energy and will compete with us for it).

Pat Wood agreed, going on to explain his theory he calls “A tale of two Jihads.” The first “Jihad” is against petrol-totalitarians (transport fuels) and the second is against coal (power generation). Neither of these energy sources will be the future of our power supply. Instead, by 2100, Wood predicts wind, solar and nuclear to make up the electricity sector.

Jeff Goodell said that although we frequently hear we have 250 years of coal left in the ground, that number is based on decades-old studies and on current rates of consumption. But even besides all that, the easy coal is gone: what we have left to dig out is going to be far more expensive and environmentally harmful to get.

Carbon capture and sequestration (CCS), he went on, “is often talked about as a no-brainer, like it’s a technology that’s just about ready for prime time. But I think there are a lot of questions about the economics of it and about the scalability of it.”

Clark disagreed that CCS pie-in-the-sky. “It’s a proven technology; they have a facility up in North Dakota. But just as we’re talking about all the details needed to make wind power work, there’s a million and one details to deal with CCS.”

The General is working and advising cleantech investment firms, and explained that while renewables like solar energy are great, “If you go to the Street, [wind] is a really hot sector. They want opportunities in this field.” But we also can’t think we can exclude certain industries in energy policy negotiations:

“There’s something for everyone…as long as we don’t let ourselves get too narrowly focused in the wind energy business, then I think we can bring others with us and get what we need.”

Podesta explained what the wind industry and wind advocates need to do:

“Energy is still a regional issue….what this [wind] industry needs to do in order to really make progress is to break through that and create a national movement to support clean energy. The states that have embraced – including coal producing states – a clean energy future have done so with great results. People who embrace the future and who embrace a clean technology approach to their economy are succeeding politically and succeeding economically.”

Tags:   Coal · public policy · renewable energy · windpower 2008No Comments.

Due to a scheduling crunch, Steve Harvey from Cleantegrity and Newstreamz.com and I tag-teamed an interview with Ohio’s Lt. Governor Lee Fisher about renewable energy policy:

Maria Surma Manka: Congratulations on recently passing the advanced energy portfolio standard (AEPS)! Since 87 percent of your electricity currently comes from coal, how were you all able to come together and pass legislation that will so dramatically change Ohio’s electricity mix?

Lt Governor: Credit goes to the governor and energy advisor for this effort. They built a powerful coalition of the environmental and renewable energy sectors, the manufacturing sector, small business and labor. I think developing a broad-based coalition at the outset was key.

The only part of the coalition that I think it’s fair to say was probably not involved was the utility industry. But in fairness to them they certainly were willing to engage in spirited debate. I think regular communication to coalition members was key to getting the legislation passed. Also, it had bipartisan support in the legislature (we have a Republican Senate and a Republican House).

Steve Harvey: Was there any contention on the energy efficiency piece [requiring utilities to achieve energy savings of 22.5 percent by 2025 and reduce peak energy demand one percent in 2009, then .75 percent per year through 2018]?

Lt. Governor Fisher: It was very important to have energy efficiency as part of the AEPS. We had pretty broad-based support on this and leading that effort was Duke Energy. In fact I think their CEO has described energy efficiency as “the fifth fuel.”…So while there was a general feeling that expanding and diversifying our energy portfolio was important, conservation and energy efficiency was indispensable in achieving our success and our self efficiency.

Steve Harvey: What are some of the best practices to help start-ups or new energy companies get going? Is there an infrastructure beyond taxes?

Lt. Governor Fisher: We have Edison centers in Ohio to help companies be more entrepreneurial and provide mentoring and coaching. We partner with nonprofits who have entrepreneurs in residence and who provide coaching and assistance to any young company in the state. Many are early-stage manufacturing companies but we’re starting to see more renewable energy ones.

Maria Surma Manka: Do you think renewable energy can help revitalize small, rural communities in Ohio and the Midwest? How?

Lt. Governor Fisher: Ohio’s manufacturing and agriculture base, as well as our strategic location and well-built infrastructure, gives us a home court advantage when it comes to growing and attraction renewable energy industry. We are number four in railroads, number four in highways, we have a huge amount of freight that goes along Lake Erie and the Ohio River…and our number one industry is agriculture. All of this intersects well with biofuels, wind, solar. Add access to the largest bodies of fresh water in the world and you have a unique advantage. On top of that, we’re making economic stimulus investments, so rural, urban and suburban areas stand to benefit.

Maria Surma Manka: What’s your favorite renewable energy?

Lt. Governor Fisher: My favorite color is green. So any renewable energy that’s considered “green” is my favorite one.

Photo credit: Ohio.gov

Tags:   Lee Fisher · Ohio · windpower 2008No Comments.

Carpe Ventem: “Seize the Wind”

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The American Wind Energy Association (AWEA) held a press conference about the growing investment in wind energy and the Department of Energy’s report that 20 percent of America’s energy can come from wind by 2030.

Panelists included: Kansas Governor Kathleen Sebelius, Andy Karsner from the DOE, Randy Swisher of AWEA, Vestas CEO Ditlev Engel, GE Energy’s vice president for renewables Vic Abate, FPL Energy’s senior vice president of development Michael O’Sullivan, Horizon Wind Energy’s chief development officer Gabriel Alonso and Hunter Armistead of Babcock and Brown.

In his opening remarks, Engel explained why the United States is such a big market for Denmark-based Vestas, the world’s largest producer of wind turbines:

“The U.S. is our largest market, but having [wind energy] potential and realizing it are two different things. The U.S. has great potential. So this 20 percent report from the DOE is very important to plan what needs to be done. We need more long-term views. ”

He also noted that we need to stop calling wind power “alternative energy:” “What’s the alternative if you don’t go in this direction?” he asked, alluding to the dramatic energy changes that need to take place to slow global warming.

Gabriel Alonso from Horizon agreed that the U.S. is still very attractive despite the obstacles. We have some of the best wind resources in the world and we have a good infrastructure (although it needs improvement) and 29 states with renewable energy standards. So the fundamentals of the industry all come together: The resources, demand and need.

Again, a big topic of discussion was the production tax credit (PTC) that’s in a bill President Bush won’t sign (for other reasons; he supports the PTC). An AP reporter asked whether the uncertainty of the PTC effects the investments of foreign companies in the U.S. Abate responded “clearly it does.” For example, because there’s policy instability in the U.S., GE focuses on building capacity in Europe, China and India. They need to diversify the technologically across the globe to offset uncertainty at home.

A reporter from Reuters asked whether the PTC could drive too much investment in wind and drain subsidy money from the Treasury. Andy Karsner from the DOE answered that the more we scale the wind power industry, the more it will cost the Treasury. “So if we want to scale wind, we’ve got to have policies that aren’t based on a particular technology. That’s why policy has to be technology-neutral.”

The representative from Babcock and Brown chimed in that incentives are a good thing. Besides, the government also incentivizes the oil, gas, nuclear industry and wind is a relatively small cost. “There may be a better way, but this is what we have to work with now.”

Photo courtesy of AWEA

Tags:   PTCNo Comments.