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Archive for the ‘Economic Development’ Category

On February 16, 2012, technology news website Xconomy hosted a talk in Cambridge with renowned environmentalist and co-founder of the Rocky Mountain Institute (RMI) “think-and-do tank” Amory Lovins about the Institute’s Reinventing Fire initiative. Reinventing Fire provides a roadmap for moving the U.S. economy entirely off of coal, oil and nuclear energy by 2050 while at the same time sustaining vigorous economic growth. Unlike other climate change blueprints such as the Union of Concerned Scientists’ Climate 2030 report, the Reinventing Fire initiative does not count on aggressive federal policy initiatives and assumes that the price of CO2 emission will remain zero. It also does not pin its hopes on a technological “silver bullet”. Rather, RMI envisions a series of self-reinforcing cycles of technological improvement in existing technologies across the automotive, building, industrial and electricity sectors that will allow efficient, green technologies to outcompete inefficient, fossil-fuel driven technologies in the market.

In his talk, Lovins focused mostly on the automotive sector. In this area, RMI identifies three self-reinforcing technological learning curves leading to the super light-weight “Revolutionary+ Auto”. The first is whole-system design, where engineers take a holistic approach to automobile design with a view to reducing weight as much as possible. Supporting this are advanced materials, such as the carbon-fiber composites currently used in the new Boeing 787, which could produce massive weight reductions by replacing steel in automobiles. As part of his talk, Lovins passed around a carbon-fiber composite “hat” that was as light as plastic and yet (according to Lovins) had withstood a full-on sledge hammer blow without a scratch. While currently quite expensive and difficult to mass-produce, Lovins sees huge potential for technological improvements in the carbon-fiber manufacturing process eventually making it competitive with other materials. Finally, once weight has been significantly reduced, all-electric powertrains will become more feasible. Current all-electric vehicles such as the Nissan Leaf have a maximum range of about 100 miles on one charge. However, because most of a vehicle’s energy use comes from its weight, a significantly lighter vehicle would be able to go farther with fewer electric batteries and smaller motors (making the vehicle even lighter) than current models.

During the question-and-answer period, an audience member asked about improvements in energy storage technology. Holding up his cell phone, Lovins remarked that he believed that portable electronics would drive innovation in this area, and that it would be better for the automotive industry to focus on reducing weight and drag than on developing new batteries. Lovins also downplayed the need for extensive grid storage to handle a higher mix of intermittent renewable energy sources in our electricity supply. Noting that variability in the energy supply from renewable sources is predictable, Lovins expressed confidence that with sufficient expertise a stable electricity grid could be run with a diverse mixture of 80-100% renewables even in the absence of large-scale storage.

The Reinventing Fire initiative presents a hopeful view of an economy almost completely free of fossil fuels by 2050 based on evolutionary improvements in currently existing technology. Much more information on the initiative is available in the book Reinventing Fire: Bold Business Solutions for the New Energy Era by Amory Lovins and the Rocky Mountain Institute (available from Amazon). I am currently in the middle of reading it, and have found it to be well-written and insightful, with helpful color charts and illustrations and a writing style that is understandable for a non-engineer but not overly simplistic. The Reinventing Fire initiative grew out of the RMI’s 2004 book Winning the Oil Endgame, which is available for free in PDF form on the author’s website here. I encourage anyone with an interest in renewable energy and energy efficiency to take a look at these books, or check out Amory Lovins’ TED Talk on winning the oil endgame.

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Dr. Steven Chu, the U.S. Secretary of Energy, gave a talk on November 30, 2011 at MIT on how the U.S. can lead in the clean energy race. In addition to discussing several new technologies in renewable energy and energy efficiency that will have great impacts in the coming decades, he challenged MIT students to come up with solutions to barriers to energy efficiency as part of President Obama’s Better Buildings Initiative.

First up, Secretary Chu discussed several technologies of the past century that have drastically changed the way we live. The development of synthetic nitrogen fertilizer in the early 20th century and crop improvements during the Green Revolution of the 1950s and 1960s have so far enabled global food production to keep pace with the expanding population and averted a Malthusian crisis. The evolution from vacuum tubes to transistors to integrated circuits (popular computer processors in 2011 boast in the range of a billion transistors each) has led to a spectacular explosion of consumer electronics that has revolutionized the way we communicate and consume information. Assembly line manufacturing and the relatively rapid adoption of the automobile in the early 20th century changed the face of our cities and solved one pollution problem (mountains of horse excrement) while introducing others (smog, lead, and greenhouse gas emissions).

Against this backdrop, Dr. Chu discussed a number of promising advances that could play major roles in reducing our dependence on fossil fuels. He  focused on advances in materials science, such as the carbon fiber reinforced plastic used in the body of the Boeing 787, the introduction of high tensile strength steel in automobiles, substitutes being developed for rare earth metals used in electronics, more efficient and lower cost solar cells, and next-generation battery technology that shows promise of drastically reducing the cost of energy storage.

Dr. Chu also spoke about the DOE’s Sunshot Initiative, which aims to have cost-competitive solar power by 2020. Due mostly to large scale manufacturing in China, the price of solar photovoltaic panels has plummeted in recent years, outpacing even optimistic estimates. While this has been bad news for certain US companies trying to compete in the market, it has had the advantage of pushing solar ever closer to the magical break-even point where it becomes competitive with fossil fuels. To help people get past the up-front cost of solar installation, companies such as Simply Solar of Arizona offer programs that allow homeowners to lease solar cells for 20 years with a low initial down payment and fixed monthly payments thereafter. For those who are interested, Sun Run offers a similar program here in Massachusetts.

While I found Dr. Chu’s talk to be informative and enjoyable (if a bit technical in parts), I was hoping he would spend more time addressing the policy and business aspects of winning the clean energy race. As Dr. Chu himself noted, the mass production of solar panels in China has made the competitive environment difficult for US firms. Renewable energy policy in this country has largely been left to state and local governments with little leadership from the federal government. I had hoped that Dr. Chu would spend more time discussing the Obama Administration’s roadmap for clean energy over the next 20 to 30 years and the policy steps they are taking to make that happen. Nevertheless, Dr. Chu is an extremely engaging speaker, and the technologies he discussed were exciting.

A video of the talk is available here.

 

 

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With the recent high-profile bankruptcies of Solyndra, Evergreen Solar and Beacon Power, many are wondering about the future of renewable energy in the United States. Dr. Steven Chu, current U.S. Secretary of Energy and Nobel Prize winner in physics, will be giving a talk at 12:00pm on Wednesday, November 30 at the Kresge Auditorium at MIT on “Winning the Clean Energy Race.”  If you are interested in hearing Dr. Chu speak, you can sign up to attend the lecture here. It is expected to fill up, so those who are interested should sign up as soon as possible.

Dr. Chu’s family came to the U.S. from China in the 1940s, when his father and mother both studied at MIT. Dr. Chu received his B.S in Physics from the University of Rochester and his Ph.D. in physics from the University of California, Berkeley. He was the co-winner of the 1997 Nobel Prize in Physics “for development of methods to cool and trap atoms with laser light.”  The former Director of the Lawrence Berkeley National Laboratory, Dr. Chu was confirmed as Secretary of Energy in 2009 where he is currently responsible for helping to implement President Obama’s climate and energy agenda.

Among other professional organizations, Dr. Chu is a member of the Chinese Academy of Sciences. Given the recent concern about China’s dominance of the renewable energy sector and uncertainty about the ability of American firms to compete, I will be interested to hear Dr. Chu’s perspective on the situation.

Stay tuned for a follow up after the lecture where I will recap the main points of Dr. Chu’s speech and give my impressions.

I hope to see you there.

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With 30 miles of district heating steam pipes, Boston has one of the most extensive systems in the country.  Veolia Energy, the largest district provider in the area, services 240 buildings—or 44 million square feet of space—in the Boston Metro area.  Recently the GenOn Kendall Station combined heat and power facility connected to the district heating system.  In 2008, the EPA issued a permit allowing the station to install a second pipeline across the Longfellow Bridge.  Once constructed, this pipeline will save an estimated 275,000 short tons of carbon—the equivalent of taking 50,000 cars off the road—and will provide twice as much steam to Boston metro area customers.

We talked to Bill DiCroce, Executive Vice President and Chief Operating Officer of Veolia Energy, and Jim Hunt, Chief of Environment and Energy for the City of Boston, to find out about district heating and its contribution to Boston’s climate change planning.

Bill DiCroce explains the efficiency created by district heating and cooling systems.  District systems connect multiple energy consumers to centralized energy sources.  Combined heat and power (CHP) facilities burn fuel to produce electricity and steam, which is transferred to consumers using underground pipes.  Waste heat from power production is recycled into usable thermal energy rather than being released back into the environment, increasing fuel efficiency and minimizing environmental impact.  According to the International District Energy Association (IDEA), combined heat and power facilities operate at about twice the fuel efficiency of traditional electric-only generating stations.

Jim Hunt comments that district energy systems are great for Boston, where 76% of greenhouse gas emissions come from buildings.  Connecting buildings to a system that uses less fuel and produces less harmful emissions is a promising path to mitigating the impacts of climate change.  Using off-site resources also frees up valuable on-site space where boilers, chillers, or other energy systems would have been.  In addition, buildings earn alternative energy credits by using CHP sources under the Green Communities Act, which may make them eligible for government incentives.  Leading by example, Boston currently uses district heating to service its 250 municipal buildings, which uses 200 million KW of electricity annually.

We asked Mr. Hunt and Mr. DiCroce why Boston and other cities don’t use district heating and CHP systems more, given the energy savings they allow.  They explained that while district heating and cooling systems have lower ongoing operation and maintenance costs, building or expanding district heating systems is extremely capital intensive.  Putting piping in is very expensive, and extremely difficult to do underneath an established infrastructure.  If it was not included in the original construction, it makes the most sense to add district heating when developing new areas or doing a major rehabilitation of an old area.

There is a lot Boston needs to do before it can catch up to district heating giants like New York City, whose 100 mile system serves over 18,000 buildings.  Among his current strategies to augment the system in Boston, Mr. DiCroce knocks on developer’s doors when they are building new projects to suggest they connect to the district system.  With decreased environmental impacts and increased energy efficiency, district heating is a smart option for buildings because it delivers what he calls “the most bang for your buck” in heating, cooling, and electricity.

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Life can be hard for clean tech start-up companies struggling to move from a good idea to a competitive business model able to survive in the marketplace. At the Clean Tech Open 2011 Global Forum in San Jose on November 15-16, one such company selected from a pool of finalists from around the country will be awarded the Clean Tech Open US National Grand Prize consisting of investment and services valued at up to $250,000. Since 2006, the Clean Tech Open has raised more than $280M in private capital and estimates that it has created over 2,000 green jobs in the US. In addition to the prize money awarded, the program provides extensive training and support to its participants, including developing a business plan and training in how to make a pitch to investors.

I had the opportunity to attend the 2011 Northeast Regional Finals Event on October 4 at the Microsoft NERD Center in Cambridge, where regional semifinalists made pitches to a panel of judges and three regional finalists were selected to attend the Global Forum in San Jose. Lesser prizes were awarded to various runners-up. While the prize money was obviously important to these companies, the event was also a networking event and an opportunity for the entrepreneurs to show off their carefully prepared sales pitches to any private investors who might be in attendance. From their questions to the presenters, the judges were clearly interested not just in good ideas but also in companies whose business models would allow them to be profitable in the short- to medium-term.

The three companies that were selected to represent the Northeast in San Jose were:

  • PK Clean, an MIT team that has developed a technology for turning waste plastic into oil that can be used as a fuel source. The company foresees two sources of revenue: one from being paid to dispose of the plastic and another from selling the oil that it produces. Even assuming that the disposal fee dries up and the price of oil falls well below the current level, CEO Priyanka Bakaya estimates that the company will still be profitable. PK Clean has a pilot plant in Pune, India and is currently seeking $4 million in investment to move into the U.S. market.
  • Arctic Sand, another team from MIT that has developed a way to drastically reduce losses due to power conversion in the electronics industry. The company would initially license its technology to manufacturers of servers for large corporate data centers, where it estimates that its technology will save companies millions of dollars per year in electricity costs. In the future, the company plans to expand into the telecom and mobile sectors, where its energy efficiency technology could enable smaller and more efficient mobile devices.
  • Qado Energy, a startup company that provides distribution grid analytic software to help with the completion of the interconnection studies that are necessary before new electricity suppliers can be connected to the grid. Especially for intermittent generators such as wind and solar, these interconnection studies are complex, expensive and time-consuming and can be a significant barrier to entry. The company sees a large market for its software platform as the smart grid takes shape and renewables begin to represent a greater proportion of the US energy mix.

I was impressed by the level of polish of the pitches I saw, and excited by the possibilities of some of these technologies. Despite recent concerns about competition from China in the renewable energy sector, the U.S. in general and the Boston area in particular are still very competitive when it comes to innovation. The Clean Tech Open encourages competition between entrants hoping to win the big prize, but it also provides support and publicity to help all participants bring their innovative ideas to market. The Northeast Regional finalists all have technologies and business models that promise to make significant environmental contributions while also being profitable, and the Clean Tech Open has helped them fine-tune their message to sell their ideas to investors. While we will be hoping for a win by one of our teams, it was clear to me that whoever wins the prize, all of the teams have benefited from their participation.

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Boston’s Government Center program is a great example of both local government action and federal support in sustainable matters. This type of interaction can also have a productive role outside of renewing government property, into individual communities. On a more local level, the Sustainable Chinatown project is characteristic of Boston’s private/public partnership approach to green efforts. Granted $100,000 by the Barr Foundation, the project represents cooperation between the Boston Redevelopment Authority, City of Boston, Asian American Civic Association, utilities and community businesses in Chinatown. According to our friends at the BRA,

The goals of the project are to help Chinatown businesses address the issues of rising energy, water, and solid waste management costs by providing practical and affordable solutions to help business owners save money and reduce environmental impacts, while building long term sustainable business expertise capacity in the community.

Sustainable Chinatown also demonstrates how sustainable changes aren’t just good for the environment, but very much good for business as well. Building efficiency is a natural starting point for efficiency gains both environmental and economical, so Sustainable Chinatown will offer energy efficiency upgrades, waste management and renewable energy solutions. Already, Chinatown businesses have undergone over 50 audits and 25 upgrades, indicating positive local buy-in.

The process starts with Sustainable Chinatown  Program Director Emily Damiano (who herself has worked in Chinatown for over 11 years) approaching a local firm with the proposal to perform an energy audit. Then, a written agreement is signed, and the audit takes place to determine what the building’s upgrade needs are. Needed materials like light bulbs are then delivered to the site for installation.

The ultimate goal is to help local business manage costs in an efficient, sustainable way that also contributes to their continued economic success. While it can be difficult for local businesses to know where to start, organizations like Sustainable Chinatown serve a important role in both informing and assisting these communities in their sustainability efforts.

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Like many other cities and states, Boston is focusing job creation and training efforts on green industry.  First, Green Jobs Boston seeks to coordinate government sponsored green training programs with its efforts to create green jobs.  For instance, it seeks to align efficiency and weatherization training with Renew Boston, the city’s energy efficiency retrofit program.  Also, in developing Boston’s Innovation District, the city hopes to attract more green business. As mentioned in BRA post Oasys Water Lands in Innovation District, the district is already home to several cleantech businesses including Oasys Water, Next Step Living, and FastCap Systems.

As Boston continues to work to build its green industry, Massachusetts just learned it will lose the Evergreen Solar manufacturing plant in Devens.  Evergreen Solar is a developer and manufacturer of PV modules and solar cells and also has plants in Midland, MI and a new plant in Wuhan, China, where the company sent its Massachusetts panel assembly operation in 2010.  In this month’s announcement, Evergreen solar reported that the Deven’s plant will close because of continued downward pressure on price, increasingly competitive Chinese solar products (due partially to generous Chinese subsidies), and a believed “disadvantaged” American climate for manufacturing.  This announcement comes after a November report that the company’s “net loss for the third quarter of 2010 was $27.2 million. . . .”  Also, just weeks ago, the company instituted a 1-for-6 reverse stock split that reduced the company’s shares from 209 million to approximately 35 million.  Despite receiving $58 million in subsidies from Massachusetts to build the Deven’s plant, Evergreen Solar was unable to thrive in Massachusetts.

The up and down experience with solar manufacturing in Massachusetts is not an unusual story.  For Austin, Texas, the story recently moved in the opposite direction.  Despite considerable effort to attract solar manufacturers, Austin only seemed able to lose them.  In 2009, New Mexico lured Solar Array from Austin with deep subsidies.  Also, Austin lost wind farm developer Renewable Energy Systems to Colorado, where the company is developing a large wind farm. But things are looking up now. In December 2010, Sun Power, a manufacturer of solar cells, panels, and systems, announced the expansion of its corporate operations into Austin, which will create 450 jobs over the next four years.  To undertake the expansion, the company received $2.5 millions dollars from the state of Texas and a $900,000 grant from Austin. This is considerably less than the $58 million Massachusetts invested in Evergreen.  In addition to Sun Power, Austin has been home to the thin film solar module manufacturer HelioVolt since 2001.  Time will tell if the solar sector takes hold in Austin.

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