My Greentech Questions

"I only know that I know nothing", Socrates.

This week I am exploring questions that I have about greentech. Some questions may have a simple answer and some may be just rhetorical questions. Perhaps by next week you (the reader) will provide some answers and shine some light into this darkness. So here it is:

When I heard the debate last week, as well as in previous debates, the subject about alternative energy was present. Both candidates agree that new sources of energy are needed (I don't want to start a political discussion, so let's focus on the big picture) with some differences here and there. Both candidates talk about Nuclear power, but NEITHER CANDIDATE ADDRESSES THE DANGERS of this kind of energy source.

It is my understanding that the biggest problem with Nuclear power is the use and disposal of the radioactive fuel. I have heard (and here is my first question) that nuclear plants use less than 5% of the radioactive material power, is this true? And then, we are left with highly dangerous waste that takes over 10,000 years to become safe? To make things more complicated I have also heard that if we increase the percentage of world power generated by nuclear plants we will have no space left to safely store this radioactive material, could this be?

Why is Belgium, a country that generates 54% of its electricity through Nuclear plants, trying to stop construction of new plants and setting additional tax to existing nuclear power generation. Belgium, as well as Germany, the Netherlands and Sweden have all pledged to phase out existing plants. Why?

I would very much like to know the answers to these questions before we embark on a journey that may lead us into a global disaster!

Let's forget about Nuclear power for a second, let’s focus on a wider subject. How are we going to find a way to generate energy without draining the resources that we have in Planet Earth and without polluting our environment?

I guess most of us agree that the current way we generate energy and dispose our waste is dangerous for our future (please note I said: "most of us". "Why is this so?" is a question I will not ask here, for now).

In order to search for an answer on energy efficiency we need to look at the laws of thermodynamics. The first law states that "Energy can neither be created nor destroyed. It can only change forms". Therefore, we will be better off if we try to use energy that comes from outside our planet: Solar energy. Right?

Well Solar energy is the direct consequence of the power of the sun that enters the earth. But waves, wind and tides (I'm not sure about geothermal) are also partly or wholly a consequence of the sun's effect. So, if we choose wind over solar power, are we selecting an indirect source of power and therefore sacrificing efficiency?

In evaluating an energy source we need to look at two factors: (1) how much energy can we "capture"? And (2) How much energy are we going to waste in the conversion process to its "final destination". And finally compare these numbers to the associated costs in order to find the best solution.

(1) Energy "capture": Solar energy is hard to capture, current solar cells can only attain around 8% efficiency. Other cells are able to convert up to over 40% of the sun’s power, but the cost of the materials used in such cells is prohibitive. Never mind that solar cells depend on the exposure to the sun and therefore are useless at night or with minimum light conditions. Why can’t we have both efficiency and low cost? Is 40% the best we can do?

Wind power has a theoretical limit of 59%. This means that the best wind and the best turbine in the world can only obtain 59% of the energy contained in wind (which already is a factor of the energy coming from the sun!). Can we have wind as our main source of energy with a ceiling of 59% efficiency?

(2) Conversion process: It's not enough that solar cells are inefficient within themselves, the process to convert direct current (DC) obtained with the cells into alternative current (AC) requires inverters which eat up between 5 and 50% of the electricity generated. Wind has a similar problem; the rotation generated by the wind has to be converted into a faster rotation speed to match the frequency on the electricity in the grid. This conversion lowers the efficiency of the turbine. Can we find a system that minimizes the loss of power in the conversion process?

Cost: No alternative energy source up to date has an associated cost that can compete with fossil fuels. Right? These sources depend on government subsidies; the idea is to promote economies of scale until they become competitive. Is there ever going to come a day when alternative, sustainable energy is less expensive than coal?

Wind and sun are variable sources; storage needs to be added to the system to make it work. Supposedly one of the most efficient ways to store energy is by pumping water into a high level storage, and later using the water's falling energy to regain the stored energy (this system achieves about 75% efficiency). Can we use such a system in a large scale alternative power generator?

As for Wave and Tide power generation technologies we have yet a long way to go, those areas are far behind wind and solar. Are we doomed to use fossil fuels until they run out?

In the alternative fuel vehicle arena, the argument of many proponents includes the following statement: "We use less than 25% of the gas in the car to generate forward motion" (the rest of the fuel is spent on noise, electric gadgets, pollution, etc). Can this be?

If the efficiency of current vehicles is so low, how come we have not been able to create a more efficient car in a shorter timeframe?

Finally (I am running out of space), I have trouble understanding the logic behind Hydrogen. Why are some people proposing hydrogen as a fuel? Supposedly hydrogen is a great storage media for electricity. The simplified principle is as follows: add electricity to water and you get hydrogen; turn the system around and release the electricity and obtain water back. Well, using the second law of thermodynamics the amount of electricity released from the hydrogen can only be the as much as the electricity injected in the water. This is power storage not fuel!?

I know that many of you will disagree with some of the ideas explained above, please give me your point of view! I also know that some concepts are explained superfluously, unfortunately I have limited time for this blog, and if I get enough requests I may write a book in the future (just kidding!).

Before leaving, I have to announce this week’s big news: I am father of a baby girl, Dana! (my third child).

Until next week: SHALOM!

What the Future Holds

Last year I read a book called "Now, Discover Your Strengths" (by Marcus Buckingham). Together with the book there is an online assessment tool that finds your top 5 strengths. It turns out that my first strength is Strategic. In the results report Strategic Strength is explained as follows:

"The Strategic theme enables you to sort through the clutter and find the best route. It is not a skill that can be taught. It is a distinct way of thinking, a special perspective on the world at large. This perspective allows you to see patterns where others simply see complexity"

Now, I don't pretend to be a visionary extraordinaire or a Warren Buffet. But, sometimes (only some, few times) I am able to recognize future patterns, based on past events, where others don't see it as clear. I call this exercise "Connecting the Dots" after the beautiful Stanford Commencement speech of Steve Jobs (I strongly recommend watching it, if you have not seen it yet - click here)

OK, after this long disclaimer let's get into the main subject of this week: THE FUTURE.

Dot #1: Last month my sister sent me the link to this website called The Story of Stuff (http://www.storyofstuff.com/). Even though I don’t subscribe to ALL the content in the video (which is a bit long, but interesting), I found it very illuminating.

Dot #2: I went to Europe this summer and observed some key differences between them and the US in consumption habits. The Europeans are more moderate than their counterparts in the US. They drive smaller cars, restaurant portions are smaller, live in smaller houses or apartments, etc. If you ask for a glass with ice in Europe they bring you a glass a quarter full of ice; whereas here in the US the glass almost always is 100% full of ice and the glass itself is probably bigger (not to mention the "free refill").

Dot #3: The markets collapsed last week. The economy is facing a terrible crisis and even the very core of capitalism is being tested.

Dot #4: In several magazine and newspaper articles that I have read, as well as in many lectures that I have attended about the Environmental impact of the human activity, I have heard the following hypothesis: “If we don’t correct the damage we are causing the earth today. Then we will cause a major irreversible damage to the earth with unimaginable consequences”. Furthermore, we need to correct at a much higher pace than the pace of damage, because we are increasing pollution and natural resources consumption at an exponential rate and therefore we need to “catch-up” with the exponential curve in order to reverse its effects.

What is the connection between these dots? In my opinion we are about to enter into a new era. It is not something that is going to be announced and recognized right away, it may be a very subtle transition that will take several years. But the end result will be a major shift in consumption patterns.

Let me explain further (before you call me a nut job!).

The Story of Stuff tries to explain the mentality of the capitalist model we have working right now (both in Europe and in the US). True, it is analyzed from the environmentalist perspective and it may have some arguments that are inaccurate. But the fact of the matter is that we have been living in a “consumption based system” where inventory rotation is important and companies are valued based on sales volume (and not on product durability).

The comparison with Europe is important because it shows that we can live with less. I am not saying we SHOULD live with less, but, I am saying that: IF WE ARE UNABLE TO PRODUCE LESS THEN WE CAN SUBSIST.

Dot #3 about the economy is what gives me the impression we WILL need to learn to live with less than we have right now.

And, finally, the last dot in this line. The #4 about correcting the damage to the earth is what makes the line split in two. This hypothesis, if it holds true, may mean that we have two possible outcomes: (1) We will either reach the critical point of “undoing” the damage we have caused Earth, or (2) we will irreversibly damage our environment and therefore damage ourselves (I will let you use your imagination to visualize what this means).

So, in conclusion the new era we are entering into will be one of redefining the way the system works (it could be based less on consumption and more on basic needs). It will be an era of changes in our “standards”, where some of the things we take for granted today (like a glass full of ice) will no longer be. It will also be an era of financial shift, the value of things will change, perhaps a diamond will no longer be as precious and expensive, and water will no longer cost less than wine. And perhaps, it will be an era of becoming more conscious of our Spaceship called Earth, and what its needs are and what do we need to do to keep it in working order.

I CERTAINLY DON’T HAVE THE CRYSTAL BALL THAT TELLS THE FUTURE, BUT I HOPE YOU ENJOYED THIS MIND EXERCISE AS MUCH AS I DID.

Until next week (when I will hopefully be a Dad for the 3^rd time), Shalom!

The Race for The Electric Car

As I was relaxing at home after a busy weekend (my wife, who is 9 months pregnant, had a false alarm Saturday afternoon) I channel surfed my TV until I found an interesting program: "60 Minutes" (CBS 7pm). The lineup for this week's stories: "A Look At Wall Street's Shadow Market" (Trying to explain Wall Street's financial crisis), "Elite Officer Recalls Bin Laden Hunt" (an ex-Delta Force tells the story of how close the US was to killing Mr. Terror himself) AND "THE RACE FOR THE ELECTRIC CAR" (don't watch the segment now, read first, then watch. I provide a link at the bottom of this entry. Thanks!).

I can imagine the editorial meeting for this week's "60 Minutes". "We can't have a full hour of such depressing news!"; "Let's find something people can look forward to" ; "here it is! let's talk about the electric car!". So, in spite of the falling economy and the disaster of the war on terror, The Electric Car takes the stage!

Two things came to mind watching this story:

1- How is the new economic reality going to impact Greentech economics?

On one side, I suppose, the general belief is that Greentech will suffer as the rest of the economy will. Although this may be true, I also believe investments are going to look for new markets and they are going to find that Greentech has gained attractiveness if compared to Real Estate, to Wall Street and to many other current-day options. Therefore, I would not call this downturn "a blessing in disguise" for Greentech, but I would call it a "potential opportunity"

2- Silicon valley vs Detroit. GM's Volt and the Electric Car Business Model

In the "60 minutes" segment the main story is about Tesla Motors. The narrator talks about this company from Silicon Valley that is challenging old-school car manufacturers like Detroit's GM. The story begins with Elon Musk the CEO of Tesla who is a co-founder of PayPal, the reporter asks bluntly who will pay a fortune for these cars ($110,000), Elon response: "It's a deal!". The story then turns to Tesla finally yielding to Detroit. The company that started by challenging Detroit is now massively hiring traditional motor-heads.

[Tesla Roadster]

Something that really caught my eye was the part where they interviewed GM's Vice Chairman of Global Product Development Bob Lutz. My impression of Mr. Lutz was of the Plant Manager recently promoted, with his hands still dirty from the grease and his attitude of constantly dealing with Union workers. Nothing wrong with this, except, if you want to have a radical new product and break away from old vices, then Mr. Lutz may be a liability. He goes as far as to say that global warming is a "Pile of Horse Sh--". His product reflects his personality. The Volt is a car that has been promoted as an electric car for over two years now, and it is supposed to come out to market in 2010. It has a 25 mile range with pure electric charge and a small Engine to charge the battery for longer trips. The design of the Volt is nothing that will turn heads (at least not in my opinion). Just as a comparison point take the much less promoted Mitsubishi i MiEV this car is expected to arrive to market at the end of 2009 and has 100 miles of travel with electric power (four times that of the Volt!). Not to mention that the i MiEV is expected to cost around $28k whereas the Volt had a price of $30 and it was recently announced that it will be more like $35k. If you ask me, GM is no competitor in this race.

[GM's Volt]

[Mitsubishi i MiEV]

At the end of the day, the conclusion that I draw from this segment, is that the next breakthrough vehicle will have to come from a traditional car maker using technologies from smaller specialized hi-tech companies. The large car maker has the muscle to assemble and market the vehicle, there are too many barriers to entry to be competitive in that arena. But, they will have to buy or pay royalties to smaller (more agile) companies that will bring the innovation. Mitsubishi partnered with GS Yuasa for their batteries (a young Japanese company established in 2004). The other conclusion (and this one I feel much more confident in) is that the Japanese are better suited for these innovations than Detroit. I am yet unsure about what the Europeans are doing to stay on top of this race (I think they are waiting to see where the market leads, except that they may be running the risk of being too late into the race). Below you may now watch the "60 Minutes" segment. For now I say "SHALOM"

Watch now "60 Minutes"... THE RACE FOR THE ELECTRIC CAR