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1. FAQ: Smart Grid
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2. Offshore Wind: Costly, But Big Benefits
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3. Daily Sprout
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4. Todd Stern's Strategy for Climate Negotiations: Not Another Kyoto
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5. Lockheed, Ocean Power to Team Up on Wave Power
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6. Coulomb Technologies Charges Up With $3.8M for Electric Car Network
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7. Vote in Google's $10M Do-Gooder Ideas Contest
FAQ: Smart Grid
Katie Fehrenbacher - Energy
President Obama has called for the installation of 40 million smart meters and 3,000 miles of transmission lines. That means 2009 could be the year that we finally start seeing real attention being paid to “Power Grid 2.0” — basically turning the electrical grid of the 60s and 70s into a modern network that uses microprocessors and software to work efficiently and to connect to renewable energy generation.
A build-out of the smart grid could also be one of the largest creators of wealth in the decade. As smart grid analyst Jesse Berst said recently, the smart grid will “spawn new Googles and Microsofts,” and is “akin to the transcontinental railroad, the phone system, the interstate highway system and the Internet.” Still confused? Here are the key players, the background and the latest innovative technology:
What is smart grid technology?:
As Foundation Capital put it recently in a note on the market: “A true Smart Grid enables multiple applications to operate over a shared, interoperable network, similar in concept to the way the Internet works today.” That means turning the current electrical network that has 14,000 transmission substations, 4,500 large substations for distribution, and 3,000 public and private owners into a network that communicates intelligently and works efficiently.
The new smart grid will utilize wireless sensor networks, software, and computing to enable utilities to see how much and where energy is being consumed, and if there are problems or blackouts in the network. Homeowners will be able to see how much energy they’ve consumed and adjust their consumption habits accordingly. Two-way connected smart meters will be installed in every home — Obama is calling for 40 million, but as of 2006 less than 6 percent of the U.S. population had a smart meter.
Smart meters will pave the way for real-time pricing, where energy is priced at different rates depending on the time of day and much demand there is for the electricity. Utilities can use real-time pricing to better manage the loads on the grid, while home owners can use it to cut their monthly energy bills.
The smart grid will deliver clean power from areas of the country that have an abundance of sun or wind, which is why Obama has called for building out transmission lines. The smart grid will also be able to pull energy from distributed clean power projects, like solar panels and small wind turbines on rooftops, feed it back into the grid and compensate the power generators accordingly.
Ultimately we need smart grid technology because as the population grows the demand for electricity will only increase, but we need to cut our electricity consumption to fight global warming. As Foundation Capital puts it: “The world consumes 14 terawatts of energy every day. In another 50 years, we're going to need 28 terawatts. Where are we going to find another 14? We would have to turn on a new 1,000-megawatt power plant tomorrow, another the next day, and on and on, one a day for the next 40 years to get another 14 terawatts.”
Key Players:
Smart Meter Firms:
GE: GE makes a variety of hardware and software for smart meters, and the conglomerate has won several large utilities deals for smart meter deployments as of late. Northern California utility PG&E is installing 3.3 million GE smart meters in California, and American Electric Power plans to install an initial 200,000 smart meters, with an end goal of 5 million users by 2015.
Itron: Itron and GE have been battling it out for the large utility deployments. Itron scored a 5.3 million smart meter deployment with Southern California utility Southern California Edison, and is working with Connecticut Light and Power (CL&P), San Diego Gas and Electric, and Tucson Electric Power, among others. The 30-year-old Washington state-based company is also aggressively partnering with innovative startups.
Landis+Gyr: Century-old Landis+Gyr has 5,000 employees and is a forerunner in the advanced meter infrastructure market. The company announced in October that it will provide a portion of the 5 million smart meters set to roll out to PG&E (those that GE isn’t providing). Earlier, it inked a four-year, $360 million contract with Texas utility Oncor, a $10 million deal with Idaho Power, and a $52 million deal with Arizona utility Salt River Power. The company says it has annual sales of more than $1.25 billion in 30 countries worldwide.
Sensus Metering Systems: Raleigh, N.C.-based Sensus announced last month that Hawaiian Electric, which provides electricity for 95 percent of Hawaii's residents, plans to install Sensus FlexNet smart meters for 430,000 residential and commercial electric customers, subject to approval of the Hawaii Public Utilities Commission. The technology provides automated meter reading, data collection, voltage monitoring, notification of outages and remote control of customer loads.
SmartSynch: One of the smaller innovative startups in the smart meter space, SmartSynch makes smart meters that communicate via IP networks like GPRS and Wi-Fi. The company founded in 1998 says it works with 75 power providers in the U.S. SmartSynch is backed by $80 million from Credit Suisse, Battelle Ventures, Beacon Group, JP Morgan Partners, Nth Power, Siemens Venture Capital and Duke Ventures.
Network Players:
Silver Spring Networks: Billed as the Cisco of the smart grid, Silver Spring Networks, sells IP-based software and hardware to connect utilities and customers across the power grid. Founded in 2002 the company has raised $75 million, led by the green VC folks at Kleiner Perkins Caufield & Byers.
eMeter: The San Mateo, Calif.-based company makes software to help utilities manage the grid connected to smart meters in homes and businesses. It claims 20 million meters under contract and has raised $12.5 million in a round led by German electronics heavyweight Siemens that included Foundation Capital and DBL Investors.
IBM: The computing giant has developed a variety of software to make the power grid smarter, giving utilities more intelligence on the network. In 2007 IBM created the Intelligent Utility Network Coalition, which includes a group of utilities that are interested in bringing computing to the electricity network.
GridPoint: GridPoint helps utilities balance energy loads through hardware and software on the power grid. The company has raised over $200 million from Goldman Sachs Group (GS), Susquehanna Private Equity Investments, David Gelbaum's The Quercus Trust, the Altira Group and Standard Renewable Energy Group. It also boasts a long list of advisers, which include R. James Woolsey, former director of the CIA, and Pulitzer Prize-winner Daniel Yergin.
Comverge: Comverge provides demand response services to utilities and boasts over 500 utility clients and 4.5 million devices installed. The company was one of the first cleantech firms to go public.
EnerNOC: EnerNOC also provides demand response services and has created a system whereby industrial and commercial building owners can reduce their energy consumption over a peak-demand time period for compensation.
Greenbox Technologies: The startup was founded by the team that developed Flash technology for the web, and is using its experience to build a dashboard to help energy consumers cut consumption. The company is working with Silver Spring on a pilot with an Oklahoma utility.
Trilliant: The Redwood City-based company founded in 1985 makes hardware and software to allow for time-of-use metering and two-way communication. The company uses open standards and raised $40 million from Mission Point Capital Partners and Zouk Ventures.
Tendril: The Boulder, Colo.-based company makes home energy management software and hardware from smart plugs, to energy displays to software for utilities. The company raised $12 million from RRE Ventures, Vista Ventures, Access Venture Partners, and Appian Ventures.
Positive Energy: The software and research startup develops research reports that utilities can offer to customers to help them reduce their energy consumption and receive more transparent energy bills. Positive Energy recently raised a $14 million round from New Enterprise Associates.
Utilities:
- Southern California Edison
- PG&E
- XCel Energy
- Austin Energy
- Sempra
- Oncor
- San Diego Gas and Electric
Venture Firms:
- Nth Power
- Foundation Capital
- New Enterprise Associates
- Kleiner Perkins Caulfield and Byers
- Siemens venture arm
- Quercus Trust
- Battelle Ventures
- DBL Investors
- Altira Group
- Mission Point Capital Partners
What the Smart Grid Needs: Smart grid analyst Jesse Berst has three rules for what the smart grid needs to make it work:
- 1) Open and interoperable standards, ike the Internet.
- 2) Dynamic pricing correct pricing models.
- 3) The right government policies.
How Big Is the Market?:
According to some reports, utilities will need to add an aggregate of nearly 40 gigawatts of clean energy generation by 2030, and to get all that power to customers, a total investment of as much as $2 trillion into transmission and distribution networks will be required. And that’s just the additional clean power — there will be even more investment in the software, hardware, and wireless networks to enable the power grid to intelligently manage all the additional capacity.
Smart meters can cost anywhere from $100 to $300 per meter to install depending on the sophistication of the meter. So, say there’s 40 million smart meters installed, that could costs a minimum of $4 billion.
Historically the investment into smart grid technology has been minimal, but venture capitalists have recently started to pump money into the sector. According to the Cleantech Group, smart grid startups brought in a record $202 million in the third quarter of 2008, which included $120 million for Gridpoint, $40 million for Trilliant, $23 million for BPL Global, and $18.5 million for Eka Systems.
We know this FAQ hasn’t covered all the firms involved in the smart grid, but if you have particular favorites, add them in the comment section.
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Offshore Wind: Costly, But Big Benefits
David Ehrlich - Big Green
With serious questions being raised about the costs of the world’s largest planned offshore wind farm, the London Array, and the never-ending saga that has crimped the controversial offshore Cape Wind project in Massachusetts, it’s easy to dismiss offshore wind as being too expensive and ultimately not viable.
After all, in a report on U.S. wind power potential last year, that country’s Department of Energy said the capital cost of offshore projects ranged from $2,400 to $5,000 per kilowatt, while onshore capital costs averaged $1,775 per kW. And a proposed offshore wind farm in Maine is being billed at $5 billion per gigawatt — or a whopping $25 billion.
But there are two big reasons to go offshore, particularly in the U.S: strong winds and location, location, location.
“The capacity factors are much higher, so the wind is actually stronger offshore than onshore,” Tyler Tringas, a wind analyst at New Energy Finance, told us. With more wind power, there’s more electricity that can be generated.
The Ocean Energy Institute — run by energy investment banker and energy adviser Matthew Simmons, as well as physicist George Hart — is banking on what they say are some of the strongest winds in the world in the Gulf of Maine.
“The second argument for offshore wind is that you can put the actual wind farms quite close to large metropolitan centers,” he said. And that could prove to be the linchpin.
Guess which states use the most electricity? The ones that are on the water. In the contiguous U.S., there are 28 states that have a coastal boundary, and they use 78 percent of the nation’s electricity, according to the Energy Information Administration. The DOE report said only six of those coastal states have sufficient onshore wind resources to generate more than 20 percent of their electricity needs.
And what about importing all that wind power potential from other states? One of the biggest hurdles, according to the DOE, is the lack of transmission lines that can get the power from the spots that have the best wind resources to the areas that need that power the most. The agency estimated that the U.S. could produce 20 percent of its electricity from onshore wind, but that it would cost at least $20 billion just to expand the transmission grid. And even if the money is there, there’s the headache of dealing with all the different states and municipalities which each control their little section of the transmission lines. Short of nationalizing the grid, it would be hard to get an expanded system in place anytime soon.
The idea of putting some turbines in the water, and just plugging them in to power, say, Boston, could actually be a reasonable idea, even in these troubled economic times.
And while Cape Wind has been waiting a long time to even start construction, regulatory hurdles abound for both offshore and onshore ind.
“I don’t think you can categorically say that it’s tougher to permit offshore, at least going forward,” said Tringas. “Maybe it was a few years ago, but you could easily run into just as many delays and difficulties trying to put a wind farm in Vermont.”
At least two more big offshore projects are on the way in the Northeast. Earlier this month, the governor of Rhode Island signed a final agreement with Deepwater Wind for a 400-MW offshore wind project for the tiny state, with construction expected to start in late 2010. Deepwater Wind is also working with the Public Service Enterprise Group on a 350-MW offshore wind farm in New Jersey.
And in the UK, a new report says there’s room for 5,000 to 7,000 more offshore wind turbines, which would be enough to power almost all of the homes in the country.
Hear Microsoft, IBM, Dell and Cisco experts at GigaOM’s Green:Net.
Daily Sprout
Josie Garthwaite - Misc
Biting Mad About Bus Emissions: A woman in New York City bit a driver’s arm (through three layers of clothing) because she was upset his bus was not a hybrid. Ouch and yikes. — New York Daily News
Cleaning Up Cement Production: Mexico-based cement maker CEMEX and Spain’s Acciona plan to build a $550 million, 250-megawatt wind farm in Oaxaca that will generate the equivalent of a quarter of the electricity CEMEX consumes in Mexico. — Fortune’s Green Wombat
Study: Ethanol Not So Bad After All?: A new study on corn-based ethanol finds U.S. corn ethanol reduces greenhouse-gas emissions by at least twice as much as previously thought, but overlooks the effects land-use changes. — WSJ’s Environmental Capital
Stimulus for Norway Clean Energy: Norway’s government said today it plans to increase spending on clean energy projects by 80 percent this year as part of a $2.9 billion stimulus package. — Reuters
Jon Wellinghoff, Energy Regulator in Chief: The new Federal Energy Regulatory Commission Acting Chairman’s history suggests he’ll promote energy efficiency, distributed electricity generation, and full integration of renewable resources into the national energy portfolio. — NYT’s Green Inc.
Todd Stern's Strategy for Climate Negotiations: Not Another Kyoto
Josie Garthwaite - Policy
This is no time to indulge in orthodoxies or in the kind of overextended discussion that marked too much of the six-year Kyoto Protocol negotiation. As the United Kingdom's climate envoy, John Ashton, said recently, "We now need to stop talking about talking and start deciding about doing." The next president should approach this issue the way President Franklin Roosevelt approached the Great Depression: in a spirit of restless experimentation.
Here are some of the basic guidelines that Stern, with co-author and Brookings Institution fellow William Antholis, offered for that experimentation:
- Create a group of eight key developed and developing nations, including Brazil, China, the EU, India, Japan, Russia, South Africa, and the United States. Together, this “E-8″ accounts for some 70 perent of global emissions. Negotiations should take place at a head-of-state level, rather than with technical-level bureaucrats.
- Partner with China, offering “environmental technology” and mobilizing investment while encouraging China to reform its regulatory system and incentive structure.
- Bottom line: Set binding emissions targets for developed countries and as many advanced developing countries as possible. The targets should be long-term (relative to the five-year timeframe used in Kyoto) and grow tighter over time.
Hear Microsoft, IBM, Dell and Cisco experts at GigaOM’s Green:Net.
Lockheed, Ocean Power to Team Up on Wave Power
Josie Garthwaite - Energy
Lockheed will construct the project and handle operations once it’s up and running, and New Jersey-based Ocean Power will provide the technology — so-called “PowerBuoy” (pictured) generators that convert wave energy into electricity, which can feed into a local power grid via underwater transmission lines. The 12-year-old company, one of the more established wave power developers in a growing field, claims that its 10-megawatt buoys can work in arrays of up to hundreds of megawatts.
Wave power technology, however, has yet to be tested on that scale. Even single-digit megawatt projects (”utility-scale” generally means generating capacity of at least 1 megawatt) remain in the early stages of development. As Finavera Renewables found out three months ago when the California Public Utilities Commission sunk a 2-megawatt project planned for the Pacific coast, it’s a long haul between an agreement like the Lockheed-Ocean Power one unveiled today and actual deployment.
California utility PG&E agreed to buy energy from the Finavera array back in 2007. It was slated to become the country’s first commercial wave power project — until state commissioners decided the technology was too new and the prices too high for a viable project. Approval for the energy procurement contract: denied.
To be sure, wave power has bulked up its utility-scale track record recently, and the Lockheed-Ocean Power project may fare better with regulators. The companies have already worked together on maritime surveillance projects for the U.S. government. And last fall, Spanish utility Iberdrola deployed a PowerBuoy off the coast of Spain in the first phase of what Ocean Power said would be the first commercial utility-scale wave power generation venture. (A 10-buoy, 1.39-megawatt array is planned for the site.) If Lockheed and Ocean Power can bring down the cost of a power-purchasing agreement, the West Coast may be home to the second.
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Coulomb Technologies Charges Up With $3.8M for Electric Car Network
David Ehrlich - Automotive
Richard Lowenthal, founder and CEO of Coulomb — which up till now has been backed by angel financing — told us late last year that the company was planning to enter the European market in 2009. In a statement today, Lowenthal said he considers Estag not only an important investor, but a partner in delivering Coulomb’s vehicle charging infrastructure worldwide.
Founded in 2007, Coulomb is pushing a subscription-based service for its charging networks, similar to the system touted by the higher-profile, and more well-funded, Better Place, based in Palo Alto, Calif.
Having a local partner in Europe could be helpful, but Coulomb faces some big-name competition once it heads overseas, even in Estag’s hometown of Berlin. Last September, Germany’s Daimler announced that it would work with utility RWE to set up a car charging network in the capital city. Daimler plans to put more than 100 electric cars on Berlin’s roads by 2010, including cars from its Smart and Mercedes-Benz lines, with RWE handling the installation of 500 charging stations.
Coulomb, which installed its first demonstration systems in San Jose, Calif., earlier this month, also faces competition at home and abroad from Better Place, which has yet to make a deal in Germany, but already has projects planned for Israel, Denmark, Australia and California.
The Renault-Nissan Alliance — a Better Place partner on some projects — is also making car-charging infrastructure deals, announcing most recently that it plans to work on a charging network in Switzerland. Renault-Nissan also has projects in Portugal, Monaco, France, Japan and the U.S.
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Vote in Google's $10M Do-Gooder Ideas Contest
Katie Fehrenbacher - Energy
Is it possible that the best ideas to fight global warming will come from the garages of the masses, not cultivated in universities or by elite venture capitalists? Google thinks so, and the search engine giant is asking the public to start voting on Tuesday for the do-gooder ideas that have been submitted to its contest “Project 10 to the 100th.”
Google asked inventors to start submitting ideas via YouTube video clip to the contest back in October, and after receiving over 100,000 submissions, tomorrow Google will release 100 of the top ideas — things like a new wind turbine and energy-efficient buildings materials. It’s our job to whittle those ideas down to 20, and then a Google advisory board will select five semi-finalists that will split $10 million to get the ideas implemented.
The inventions don’t necessarily have to do with fighting climate change, but looking through the submissions, many of them do. Google has divided the submissions into a variety of categories: community, opportunity, energy, environment, health, education, shelter and “every else.” The best ideas will be selected based on how many people the invention can help, and how quick and easy it is to implement the idea.
Google has spent more than its fair share on philanthropy with Google.org, as well as investing in clean energy projects — in one quarter Google was the second most active investor in cleantech after funding five startups.
But it’s also particularly interesting that Google is using its massive search engine and YouTube user base to deliver a new way of finding entrepreneurs, and the submissions are meant to be from individuals, not organizations. While contests, like the Auto X prize, are becoming increasingly common, Google is in the unique position of already having a network that can deliver a cheap and efficient way to connect with budding entrepreneurs. And the voting process is cheap too: us.
As Google says:
Never in history have so many people had so much information, so many tools at their disposal, so many ways of making good ideas come to life.
So the upside of this method is a greater access to ideas and entrepreneurs across the globe, as well as the project being pretty cheap. The downside is the quality of the ideas. These are basically everyday people submitting inventions, like Uncle Larry’s big idea that he won’t stop talking about during the holidays. But ultimately Google is hoping that with over 100,000 submissions, there’ll find at least five elegant, simple ideas that can help people. (For more on how/if the web can effect social change to fight global warming, come to our Green:Net conference in San Francisco in March).
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