Clean and Green 'aint gonna do it
Green is dead. Long live Green.
Most clean technology is a complete and utter waste of time.
And now it turns out, a complete and utter waste of money.
In 2005, VC investment in clean tech measured in the hundreds of millions of dollars. The following year, it ballooned to $1.75 billion. By 2008, it had leaped to $4.1 billion. And the federal government followed. Through a mix of loans, subsidies, and tax breaks, our lovely and almost completely misguided government directed roughly $44.5 billion into the sector between late 2009 and late 2011. The bill which allowed the government to do so was ironically designed to funnel money into nuclear, but the nuclear industry just never took off, due to the shortsightedness of mankind.
The investments did result in some real capacity: at the end of 2006, the total capacity of all the wind turbines installed in the US was 11,468 megawatts, enough to power 3.2 million homes. By 2010, it was nearly four times that much.
But... there were issues. And issues which caused issues. Because so many manufacturers had been getting into making solar panels, increased demand had driven the price of processed silicon from around $50 per kilogram in 2004 to well above $300 by 2008. When the higher production costs were factored in, the price of electricity from solar firms was 17 to 23 cents per kilowatt-hour, even after subsidies. That was about twice the average price of conventionally produced electricity at the time.
The ironic part is that the high price of silicone actually drove additional investment. Everyone took the transition from "dirty" to "clean" energy sources as a given. If you believed in thatwild assumption law from God, you then jumped to the next conclusion: the high price of silicone meant it was economic to invest in technology which was higher-cost, but also higher-efficiency. So all kinds of VC money and Govt. money was poured into technology which promised higher efficiency than good 'ol silicone.. *cough* *Solyndra* *cough*
The 2008 financial collapse erased a quarter of the gains VC firms had made between 2003 and 2007, and the sudden paucity of capital—combined with the difficulty of taking smaller companies public—hit renewable startups particularly hard. Venture investments in clean tech fell from $4.1 billion in 2008 to $2.5 billion in 2009.
But, the money the federal government delivered dwarfed what VCs had put into clean energy. The loan guarantee program alone provided a little more than $16 billion for 28 projects. The government pumped an additional $12.1 billion into the sector through tax credits. All told, federal subsidies for renewable energy nearly tripled between 2007 and 2010, rising from $5.1 billion to $14.7 billion. The federal largesse also made clean tech look like a safer bet to the VC world, whose investments rebounded after the 2009 dip.
But a long came asavior for America big ugly troll: fracking. Fracking fracking fracking fracked the clean energy industry.
(That line does not make sense unless you watched Battlestar Gallactica, where the word "frack" replaces the word "fuck"... try it out).
Basically, the price of natural gas peaked at nearly $13 per thousand cubic feet in 2008. It now stands at around $3. A decade ago, shale gas accounted for less than 2 percent of America’s natural gas supply; it is now approaching one-third, and industry officials predict that the total reserves will last a century. Because 24 percent of electricity comes from power plants that run on natural gas, that has helped keep costs down to just 10 cents per kilowatt-hour—and from a source that creates only half the CO2 pollution of coal. Put all that together and you’ve undone some of the financial models that say it makes sense to shift to wind and solar. And in a time of economic uncertainty, the relatively modest carbon footprint of natural gas gets close enough on the environmental front for a lot of people to feel just fine turning up the air-conditioning.
Another blow to the domestic clean-tech industry was a glut of processed silicon that sent prices back down below $30 a kilogram. That price, combined with the technological simplicity of manufacturing conventional solar panels, opened the door to relatively unsophisticated operators. For example, in 2007, a Chinese textile manufacturer approached Arno Harris, CEO of utility developer Recurrent Energy, to see if he’d be interested in buying solar panels that they hoped to begin making.
The "sure thing" was coming apart at the seams.
There was another factor driving down the cost of conventional photovoltaics. In recent years, China has worked aggressively to develop its domestic solar production capacity. National banks have given credit lines that dwarf the federal loans US firms enjoyed; local and provincial governments have provided tax incentives as well as land at below-market rates; and the national government recently established a so-called feed-in tariff, which compels utilities to buy electricity from solar developers at above-market rates to offset their production costs.
Understandably, American firms have struggled to remain competitive. In 1995, more than 40 percent of all silicon-based solar modules worldwide were made in the US; now it’s 6 percent.
Even while all this investment was going on, America's demand was growing, and the clean and green boom was failing to meet rising demand, let alone take over from fossil fuels. This was even more true in the rest of the world, especially China and India, where massive capital investments in coal dwarfed the current investment in green and clean.
Long story short: solar and wind have a long way to go: and they are not going to make it. A lot of the other alternatives, such as algal bio-fuels, are yet to graduate kindergarten.
Yet again, let me drive home one very important point. The only, and I mean ONLY, logical way for mankind to produce power is with nuclear energy. Yes, the Japanese disaster is worrying, but honestly had a very small impact even though it was a partial or full meltdown of three reactors. And new reactors just keep getting better.
The US isn't just falling behind in nuclear power, we are getting lapped. However, US companies still have a lot of expertise in the field, and we could take advantage of that to build a new generation of clean, cheap, safe nuclear power. But will we? No. We will sink billions and billions of dollars into economic inefficient technology because it looks, sounds and feels greener than nuclear.
In that way, I am inventing a new world. Just as Colbert created "truthiness" - the amount which something gives of the feeling of being true, regardless of fact, I over "greeniness" - the amount which something seems environmentally friendly, regardless of the reality of the situation.
A quick overview, from wired.com:
Most clean technology is a complete and utter waste of time.
And now it turns out, a complete and utter waste of money.
 |
| Fail. Epic Fail. |
In 2005, VC investment in clean tech measured in the hundreds of millions of dollars. The following year, it ballooned to $1.75 billion. By 2008, it had leaped to $4.1 billion. And the federal government followed. Through a mix of loans, subsidies, and tax breaks, our lovely and almost completely misguided government directed roughly $44.5 billion into the sector between late 2009 and late 2011. The bill which allowed the government to do so was ironically designed to funnel money into nuclear, but the nuclear industry just never took off, due to the shortsightedness of mankind.
The investments did result in some real capacity: at the end of 2006, the total capacity of all the wind turbines installed in the US was 11,468 megawatts, enough to power 3.2 million homes. By 2010, it was nearly four times that much.
But... there were issues. And issues which caused issues. Because so many manufacturers had been getting into making solar panels, increased demand had driven the price of processed silicon from around $50 per kilogram in 2004 to well above $300 by 2008. When the higher production costs were factored in, the price of electricity from solar firms was 17 to 23 cents per kilowatt-hour, even after subsidies. That was about twice the average price of conventionally produced electricity at the time.
The ironic part is that the high price of silicone actually drove additional investment. Everyone took the transition from "dirty" to "clean" energy sources as a given. If you believed in that
The 2008 financial collapse erased a quarter of the gains VC firms had made between 2003 and 2007, and the sudden paucity of capital—combined with the difficulty of taking smaller companies public—hit renewable startups particularly hard. Venture investments in clean tech fell from $4.1 billion in 2008 to $2.5 billion in 2009.
But, the money the federal government delivered dwarfed what VCs had put into clean energy. The loan guarantee program alone provided a little more than $16 billion for 28 projects. The government pumped an additional $12.1 billion into the sector through tax credits. All told, federal subsidies for renewable energy nearly tripled between 2007 and 2010, rising from $5.1 billion to $14.7 billion. The federal largesse also made clean tech look like a safer bet to the VC world, whose investments rebounded after the 2009 dip.
But a long came a
(That line does not make sense unless you watched Battlestar Gallactica, where the word "frack" replaces the word "fuck"... try it out).
Basically, the price of natural gas peaked at nearly $13 per thousand cubic feet in 2008. It now stands at around $3. A decade ago, shale gas accounted for less than 2 percent of America’s natural gas supply; it is now approaching one-third, and industry officials predict that the total reserves will last a century. Because 24 percent of electricity comes from power plants that run on natural gas, that has helped keep costs down to just 10 cents per kilowatt-hour—and from a source that creates only half the CO2 pollution of coal. Put all that together and you’ve undone some of the financial models that say it makes sense to shift to wind and solar. And in a time of economic uncertainty, the relatively modest carbon footprint of natural gas gets close enough on the environmental front for a lot of people to feel just fine turning up the air-conditioning.
Another blow to the domestic clean-tech industry was a glut of processed silicon that sent prices back down below $30 a kilogram. That price, combined with the technological simplicity of manufacturing conventional solar panels, opened the door to relatively unsophisticated operators. For example, in 2007, a Chinese textile manufacturer approached Arno Harris, CEO of utility developer Recurrent Energy, to see if he’d be interested in buying solar panels that they hoped to begin making.
The "sure thing" was coming apart at the seams.
There was another factor driving down the cost of conventional photovoltaics. In recent years, China has worked aggressively to develop its domestic solar production capacity. National banks have given credit lines that dwarf the federal loans US firms enjoyed; local and provincial governments have provided tax incentives as well as land at below-market rates; and the national government recently established a so-called feed-in tariff, which compels utilities to buy electricity from solar developers at above-market rates to offset their production costs.
Understandably, American firms have struggled to remain competitive. In 1995, more than 40 percent of all silicon-based solar modules worldwide were made in the US; now it’s 6 percent.
Even while all this investment was going on, America's demand was growing, and the clean and green boom was failing to meet rising demand, let alone take over from fossil fuels. This was even more true in the rest of the world, especially China and India, where massive capital investments in coal dwarfed the current investment in green and clean.
Long story short: solar and wind have a long way to go: and they are not going to make it. A lot of the other alternatives, such as algal bio-fuels, are yet to graduate kindergarten.
Yet again, let me drive home one very important point. The only, and I mean ONLY, logical way for mankind to produce power is with nuclear energy. Yes, the Japanese disaster is worrying, but honestly had a very small impact even though it was a partial or full meltdown of three reactors. And new reactors just keep getting better.
The US isn't just falling behind in nuclear power, we are getting lapped. However, US companies still have a lot of expertise in the field, and we could take advantage of that to build a new generation of clean, cheap, safe nuclear power. But will we? No. We will sink billions and billions of dollars into economic inefficient technology because it looks, sounds and feels greener than nuclear.
In that way, I am inventing a new world. Just as Colbert created "truthiness" - the amount which something gives of the feeling of being true, regardless of fact, I over "greeniness" - the amount which something seems environmentally friendly, regardless of the reality of the situation.
A quick overview, from wired.com:
Power Struggles
For each unique green-tech sector, a unique set of challenges.
Solar
Promise: Enough sunlight hits Earth in one hour to power the world for a year. In 2010, the solar industry predicted that as many as 500,000 people would be directly or indirectly employed in the US solar sector by 2016.
Reality: As we head into 2012, the number is more like 100,000. Prices for conventional solar cells have fallen 40 percent in the past year, due largely to a flood of panels from Chinese manufacturers, which have benefited from plunging silicon prices and government support. The price drop has eviscerated the US solar manufacturing industry.
Outlook: China’s 54 percent share of the global panel-making market will grow, and we’ll remain locked into older technology. But cheap panels mean more of them on rooftops, which is good.
Wind
Promise: The US has the potential to generate enough wind energy to meet the nation’s total consumption 12 times over.
Reality: At $35 a megawatt-hour, wind looked like a good deal back in 2007, when wholesale electric prices ranged between $45 and $85 per megawatt-hour. But the natural gas boom, plus the 2008 recession, drove prices under $30 by 2009, eliminating wind’s financial edge. Also, NIMBY protests have made getting approval for a wind farm in the US as difficult as getting it for a coal-fired plant.
Outlook: Cheaper prices for turbines should result in lower costs for wind power by 2014. Though growth has slowed since 2008, this sector is still expected to cover about a third of any increased energy consumption in the US between now and 2035.
Algae
Promise: Algae is, by some measures, up to 30 times more energy-dense than other biofuel crops. It ought to yield cheaper fuel, saving huge swaths of arable land.
Reality: A recent Department of Energy road map includes a 33-item list of R&D challenges—from assessing environmental risks to creating efficient conversion methods—that must be overcome for algae to be viable. In fact, researchers still aren’t able to cultivate the stuff on a large scale.
Outlook: In 2010, the DOE cautioned that “many years of both basic and applied science and engineering will likely be needed to achieve affordable, scalable, and sustainable algae-based fuels.”
Fuel Cells
Promise: Zero-emission energy for everything from laptops to cars to power stations, all fueled by the most abundant element in the universe, hydrogen.
Reality: To compete with fossil fuels, the electricity from fuel cells needs to sell for around $30 per kilowatt. Right now, that figure is about $49. Also, there are only about 60 hydrogen refueling stations in the country, serving around 200 small vehicles and 15 buses. Industry leader FuelCell Energy lost $56.3 million in 2010 and has never turned a profit.
Outlook: Even if fuel cells become cheaper and more reliable, a workable hydrogen infrastructure is still decades away.
Batteries
Promise: Zero-emission vehicles (assuming that the power for recharging the batteries comes from zero-emission sources).
Reality: The federal government injected $2.4 billion into the battery industry in 2009, under the American Recovery and Reinvestment Act, with the stated goal of getting more electric cars on the road. But expensive materials means that advanced lithium-ion batteries still cost about $650 per kilowatt-hour of usable energy. At that level, the 24-kWh battery pack for a Nissan Leaf costs more than some cars.
Outlook: Despite a White House call to get battery prices down to $100 per kWh by 2020, the rosiest predictions foresee nothing cheaper than $300 per kWh over the next decade.
Cellulosic Biofuel
Promise: Biodiesel derived from stalks, trunks, stems, and leaves—rather than plant oils or the edible parts of crops—would supply cheap renewable energy without hitting the food supply.
Reality: In 2010, the US produced 88 million gallons of cellulosic biofuel—less than a year’s output from a single corn ethanol plant. Large-scale commercialization is still not viable, because the sugars in biomass are harder to tease out than those in corn. Building a cellulosic ethanol plant costs up to four times as much as building a first-gen biofuel plant.
Outlook: In 2007, the government set a target of 100 million gallons of cellulosic biofuel reaching pumps annually. In 2010, that target was revised down to just 6.6 million gallons.
Smart Meters
Promise: Replace analog meters with digital devices that provide real-time feedback to both customers and utilities, which would help build more efficiency and stability into the grid.
Reality: Smart meters are being widely deployed. But fringe groups have voiced concerns about privacy and health that have slowed or canceled rollouts in several communities. And faulty meters that led to higher bills have caused several local governments to require independent reviews of the systems.
Outlook: Smart meters are the linchpin of the smart grid—computer-based automation of electricity delivery. None of these early glitches are likely to get in the way for long. Analysts predict 250 million smart meters will be installed worldwide by 2015.
Charging Stations
Promise: A network of 240- and 480-volt charging-station kiosks could dot roadsides and parking lots, like ATMs for electric cars.
Reality: The fastest charge for a Nissan Leaf takes about 30 minutes at 480 volts. Unless we could suddenly install enough stations to guarantee no waiting (there are currently only 1,800 nationwide), the time commitment means that recharging on the go just isn’t feasible. For the most part, electric-car owners are limited to as much driving as they can get from a single at-home charge.
Outlook: The cost of kiosks (up to $35,000 each) plus relatively low demand means they’ll be limited to metropolitan areas for years to come.
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