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1. iPod Creator Ditches Apple for Greentech
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2. Why Cloud Computing Leaders Need to Demand Clean Power
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3. How the Volvo-Geely Deal Plugs Into the Green Car Race
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4. Daily Sprout
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5. Thar She Goes: A123 Stock Drops as 6-Month Lockup Ends
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6. Tesla Taps First Loan Funds, Shrinks Roadster Gap with Lotus Deal
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7. The Billions of Dollars Behind Korea's Smart Grid
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8. 5 Things to Learn From Texas About the Smart Grid & Consumers
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9. Smart Meter Worries Crop Up In Australia
iPod Creator Ditches Apple for Greentech
Katie Fehrenbacher - Green IT
Welcome! The world of greentech sorely needs top-notch consumer-focused design, and more innovation to draw disinterested consumers into the fray. As Joel Makower put it in a blog post this week looking back on the 20-year anniversary of his book The Green Consumer, one thing that hasn’t changed over the last two decades has been the green consumer itself: “[T]here don’t seem to be that many more than today in 1990, in terms of people making significant changes to their shopping and consuming habits in ways that move markets toward greener products and services, never mind actually ’saving the earth.’”
Perhaps Fadell can help shake up the world of consumer greentech, the way he did so successfully with the digital music player almost a decade ago at Apple — He joined Apple as its director of the iPod in 2001. Fadell has been working on his move to leave Apple for awhile, and back in 2008 said he would be leaving the company for personal reasons.
It’s also not the first time that Fadell would be going out on his own (we’re looking into whether or not Fadell will be joining a firm and also more details of what he will be focusing on). Before joining Apple, he tried to start his own Silicon Valley consumer electronics company called Fuse which reportedly failed to get financing. It’s tough being an entrepreneur but it’ll probably be a little easier to pave your own path with the name recognition the second time around.
Despite the relatively small market for consumers that care about how green their electronics are, making gadgets more sustainable seems to have generated more attention from the manufacturers themselves. Dell, Nokia, and heck, even Apple, (with its greenest laptop claims) have been investigating how to offer greener products (my Green Guide to CES this year).
For more related content read GigaOM Pro (subscription required):
Interview: Tim Brown, CEO and President of IDEO
Report: Monetizing Digital Content
Image courtesy of Brianfit’s photostream.
Why Cloud Computing Leaders Need to Demand Clean Power
Katie Fehrenbacher - Green IT
According to a report published Tuesday from the environmental researchers at Greenpeace , the energy consumption and carbon emissions of cloud computing are already significantly higher than previously thought. Using data from The Climate Group’s Smart 2020 report, which came out in 2008 and relied on carbon emission projections from McKinsey, Greenpeace added in the energy consumption info for data centers reported by the Environmental Protection Agency. The result is that Greenpeace says that the energy consumption of cloud computing in 2007 was 622.6 billion kWh, which is 1.3 times larger than reported by the Smart 2020 report.
This new, larger estimate of energy consumption associated with cloud computing emphasizes just how big the problem will be as the sector grows over the coming years. Cloud computing is a trend that has just started (see our Structure 2010 conference) and business-focused cloud computing initiatives like Microsoft’s Azure platform have recently launched. Using the more aggressive cloud computing energy footprint, Greenpeace says that cloud computing will consume 1,963.74 billion kWh of energy by 2020.
All of this isn’t to say that cloud computing companies need to curb their growth. Rather, they need to focus on making data centers and servers more energy efficient and increasingly look to source more clean power. Greenpeace points to Facebook’s decision to build its first-ever data center in Prineville, Ore., which will primarily be powered by coal (GigaOM Pro, subscription required), as a major missed opportunity.
Instead, Internet giants like Google, Yahoo, and Apple should use their energy buying power to demand more access to economic clean power and to support policies that will help drive the proliferation of low-cost renewables. Greenpeace says:
The potential of ICT technologies and cloud computing to drive low-carbon economic growth underscore the importance of building cloud infrastructure in places powered by clean renewable energy. Companies like Facebook, Google, and other large players in the cloud computing market must advocate for policy change at the local, national and international levels to ensure that, as their appetite for energy increases, so does the supply of renewable energy.
We’ll be looking at the issues of energy consumption and the carbon footprint of information technology, data centers and servers at our Green:Net conference. Google’s Green Energy Czar Bill Weihl will be discussing some of the search engine’s industry-leading green data center work, and Greenpeace’s Casey Harrell, one of the authors of the report, will be discussing how the Internet leads to dematerialization, or replacing atoms with bits.
How the Volvo-Geely Deal Plugs Into the Green Car Race
Josie Garthwaite - Automotive
Volvo Electric C30
Zhejiang Geely Holding Group has just gone where no Chinese automaker has gone before: buying a major global car brand. Under an agreement announced on Sunday and slated to close in the third quarter of 2010, Geely — a company known for its low-cost compacts — will buy the loss-making luxury brand Volvo for $1.8 billion from Ford Motor.
In a statement about the deal, Geely noted that the board and management of Volvo, which will operate as a separate unit based in Sweden, “will have a mandate to develop Volvo Cars' leadership in safety and clean environmental technologies.” In terms of technology for greener cars, Volvo’s electric vehicle initiatives have “hardly been at the vanguard of the industry,” as Lux Research senior analyst Jacob Grose put it to us today. So how does Geely’s acquisition of the tech and brand play into China’s larger role in the nascent electric vehicle market?
Opening Doors for EnerDel?
Despite its relatively conservative approach to electric vehicles so far, Volvo has laid out plans to launch a 50-car test fleet of its first all-electric model, the electric C30 (pictured), in early 2011. And it signed on EnerDel, the battery making subsidiary of Ener1, to supply lithium-ion batteries for the initial run (check out our video interview with Ener1 CEO Charles Gassenheimer.)
This week’s deal comes on the heels of another agreement in which an overseas automaker decided to buy one of the Big Three’s loss-making brands — Dutch specialty car maker Spyker agreed in January to buy struggling General Motors subsidiary Saab for $74 million.
Battery maker Boston-Power at the time had just joined with Saab and several partners in Sweden for the first demonstration of its vehicle batteries, and Saab’s shaky status cast uncertainty around the project. By February, however, Boston-Power CEO Christina Lampe-Onnerud told us the project was plowing “full steam ahead” and the startup was “thrilled with Spyker coming in.”
According to Pike Research analyst John Gartner, EnerDel might also have reasons to be, if not thrilled, at least a beneficiary of the sale of one of its EV partners — but it will take time to see how it shakes out. Gartner emphasized that EnerDel has a very limited supply agreement with Volvo, and that, “It’s often the case that auto manufacturers switch battery suppliers when going from pilot to production.” (Just ask A123Systems and Advanced Lithium Power.) Still, he said EnerDel, “is likely to receive greater consideration for any higher performance Volvo vehicles that it would produce for the Chinese market.”
China’s Electric Transition
That high-end segment, which is Volvo’s niche, could hold sizable opportunity in China in coming years. According to forecasts cited by the LA Times today, China’s luxury vehicle segment is on track to double in size within five years. And Frost & Sullivan anticipates China’s vehicle fleet will begin a minimum 10-year transition to plug-in hybrids and battery-electric vehicles as early as this year.
All of this comes amid, “unprecedented cooperation between Asia, Europe and American companies in the automotive industries in producing electric vehicles,” Gartner told us on Monday, attributing the trend partly to a recognition among car companies that it’s “necessary to produce the widest variety of electric models in price, size and performance as the market ramps up during the next five years.”
Pike Research expects China to become the largest market for electrified vehicles (including all-electric and plug-in hybrid or “PHEV” models), with sales reaching 310,000 vehicles in 2015. By comparison, Gartner said the firm anticipates U.S. sales will reach only 284,000 plug-in vehicles in 2015 and in Western Europe they’ll hit about 284,000 that year. While China’s government and 10 largest automakers (by sales) have launched major efforts to develop and build electric vehicles and components, Pike predicts that batteries as well as high performance cars and luxury vehicles “are likely to be imported into China from Europe, Japan and the U.S.”
Hurdles for Geely to Sell Volvo EVs at Home
Not everyone holds a rosy outlook on the future of EVs in China. Lux’s Grose pointed out that China-based (and Warren Buffett-backed) BYD has seen “disappointing” initial sales of its plug-in hybrid model. “Our forecast for the Chinese PHEV and EV markets is pessimistic due to the ultra-low costs of competing internal combustion vehicles in that country combined with the national policy of subsidizing gasoline,” he explained.
As a result, Geely could face an uphill climb finding much of a market for plug-in models under the Volvo brand, no matter what battery maker gets in on the deal. Grose said, “I don't think another potential PHEV entrant, especially one that would be competing on quality, would unlock this difficult market.”
Daily Sprout
Josie Garthwaite - Misc
Relative Trust: According to a Washington Post-ABC poll, “Democrats hold the widest trust advantage” compared to Republicans on energy policy (17 percent), followed by health care (13 percent), Afghanistan (10 percent) and the economy (8 percent). — Grist
Deodorant Guns? Check: Beijing plans to install 100 “deodorant guns” at a landfill site on the edge of the Beijing. “China could build a slew of incinerators to burn all that trash,” and the central government plans to “increase the incineration rate to 40 percent by 2015. But….trash incinerators have a nasty habit of emitting mercury and dioxins, which are linked to all sorts of health problems and can waft across the Pacific.” — TNR’s The Vine
Suntech Eyes Big Year in North America: Chinese solar manufacturer Suntech Power Holdings says it “could sell close to 200 megawatts of solar panels into the North American market in 2010….That would potentially give it close to 20 to 25 percent of the U.S. market.” — Greentech Media
Hybrid Luxury: “Ford Motor Co. will unveil a hybrid version of its Lincoln MKZ sedan Wednesday at the New York International Auto Show….It will be the first luxury hybrid offered by the Dearborn automaker.” — Detroit News
Tension of EPA Emission Authority Grows: “EPA this week is planning to issue the first national greenhouse gas standards for automobiles, a rule that will ultimately require the agency to regulate stationary sources’ emissions of the heat-trapping gases.” At least 25 state legislators in 17 states “have introduced measures aimed at blocking or limiting EPA’s authority to regulate greenhouse gases.” — Greenwire via NYT
Thar She Goes: A123 Stock Drops as 6-Month Lockup Ends
Josie Garthwaite - Energy Storage
By mid-day on Monday, A123’s shares sank more than 5.9 percent to less than $14, after closing on Friday at $14.83 and falling off former highs above $20. Trading volume has climbed up to 4 million shares today, more than 2.6 times the average volume for A123’s shares since its September IPO.
The purpose of lock-up agreements is to prevent a company's stock from flooding too quickly onto the market in a short period, thereby putting a damper on the stock price. When these agreements expire, it’s not uncommon for a company’s share price to take a hit. As A123 noted in the risk section of its prospectus last fall, the simple, "market perception that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock."
A123 has generated a lot of excitement on the public markets on the bet that the nascent market for plug-in vehicles will take off, and carry A123 with it. The company has won battery supply contracts for Fisker Automotive’s planned plug-in hybrid Fisker Karma and the upcoming electric Fiat 500.
But as it stands now, while A123's revenue has grown in recent years, it has never turned a profit. Revenue and profits aren't expected to ramp up until after 2012, and investors have proven impatient, sending the stock has been up and down over the past several months.
A123's investors include General Electric, Procter & Gamble, Motorola, Qualcomm, North Bridge Venture Partners, Sequoia Capital, CMEA Ventures, FA Technology Ventures, OnPoint and the Massachusetts Institute of Technology. (Check out our chart showing the company's major shareholders and how much they own.)
Tesla Taps First Loan Funds, Shrinks Roadster Gap with Lotus Deal
Josie Garthwaite - Automotive
DOE Funds
Tesla won a conditional commitment from the Department of Energy last summer for $465 million in loans, including approximately $365 million to finance a manufacturing facility for the long planned Model S electric sedan and $100 million to help the company set up manufacturing for battery packs and electric drive trains. Tesla has now updated its prospectus to disclose that in February and March, it received a total of $29.9 million through the government-backed loan facility. So that’s at least seven months between the time of the initial loan announcement (late June 2009) and the first funds actually rolling out the door (February 2010).
Tesla explains that it has to meet several conditions in order to access additional funds over the course of three years, “as eligible costs are incurred.” According to Tesla’s filing, drawing funds for the planned Model S plant requires (among other things) DOE approval of an environmental assessment for the facility, for which the company has yet to announce a location. The loan that’s meant to support development of a new electric powertrain manufacturing facility, meanwhile, hinges in part on “the successful development of commercial arrangements with third parties for the supply of powertrain components.”
Lotus Deal
Tesla explained in its original registration statement that it did not plan to sell its current generation Tesla Roadster model after 2011, and did not plan to introduce the next generation Roadster until a year after the launch of the Model S (scheduled for 2012), ”due to planned tooling changes at a supplier,” likely UK-based Lotus.
Lotus builds “gliders,” or partially assembled vehicles without an electric powertrain, for Tesla’s Asia and U.S. Roadster sales, and fully assembled Roadsters for Tesla’s EU sales. But Tesla says in its amended S-1 that it has now expanded the supply agreement, enabling it to build up to 700 additional current-generation Roadsters before it gets manufacturing up and running for the next-gen model.
Tesla intends to use gliders from Lotus for its Roadster until December 2011 — to fulfill orders placed in 2011 and into 2012, “until our supply of gliders is exhausted.” Tesla’s previous agreement with Lotus was set to expire in March 2011 and was good for a minimum of only 1,700 gliders or fully assembled vehicles. By the end of last year, Tesla had already bought about 1,000 of these. According to Tesla’s amended IPO filing, its new arrangement with Lotus provides for at least 2,400 gliders or vehicles through December 2011.
This filing sheds some more light on the deal that Tesla described in its latest newsletter to customers, saying it had “negotiated agreements with key suppliers that will increase total Roadster production by 40 percent and extend sales into 2012.”
The Billions of Dollars Behind Korea's Smart Grid
Katie Fehrenbacher - Smart Grid
Korea’s Smart Grid Institute, a government-backed group focused on the country’s smart grid strategy, says the government and industry plan to spend even more than that — over $24 billion — by 2030. The country’s “Smart Grid Roadmap” includes an investment of $6.16 billion on smart grid technology ($1.93 billion from the government and $4.23 billion from private industry) and $18.05 billion on a smart grid infrastructure buildout (including $440 million from the government and $17.61 billion from private industry).
The initial target for investment is the country’s smart grid pilot project on the island of Jeju, which is south of Seoul. The country has picked 10 companies including leading telecom and broadband firms — LG, SK Telecom and KT — along with KEPCO, GS Caltex, and Hyundai Heavy Industries, to build out the infrastructure. It’s not uncommon for a smart grid pilot to focus on an isolated community, like an island.
Korea will no doubt be able to use its long history in information technology, consumer electronics and wireless networks to build a sophisticated smart grid project. The big question at this point is this: How successful will Korean smart grid firms be at exporting their products to the rest of the world?
The consortium leading the Jeju island project said last November that they're shooting for 30 percent share of the global smart grid industry. Pike Research analyst Andy Bae said that Korean smart grid firms "[A]re now poised to take a significant leadership role in the Smart Grid market, both within Korea and on a global level."
Pike Research analyst Clint Wheelock told me back in January that he's seen a growing interest from Korean electronics and communications companies in the U.S. smart grid market. Wheelock told me that Korean firms like LG Chem (which is supplying battery cells for the Chevy Volt) and Samsung SDI "have strong ambitions for the U.S. market. I believe they will soon begin business development discussions with utilities, if not already."
For related research check out GigaOM Pro (subscription required):
Making Smart Meters the Must-Have Gadget of the Year
Smart Meters: Time for a Customer Service Reboot
5 Things to Learn From Texas About the Smart Grid & Consumers
Katie Fehrenbacher - Smart Grid
This week I’ll be moderating a panel at the KEMA Executive Forum in Irving, Texas, on how smart grid products will effect consumers in the state and the nation (KEMA is an energy consulting company owned by a bunch of Dutch utilities) and I expect to learn a lot at the event. And timed with the event this week, the folks at KEMA have created an interesting report on the smart energy market in Texas, which weighs in on some interesting myths, trends, and survey data about the smart grid and consumers. Here’s 5 things you need to know from the KEMA Texas smart energy report:
1). Customer Awareness and Interest are Low: Unless it has to do with raising or lowering their energy bill, consumers aren’t paying attention and don’t care. As a recent Harris Interactive poll found, 68 percent of Americans haven't even heard of the smart grid. KEMA finds that “Smart grid exuberance should be tempered to account for the challenge of engaging large numbers of residential customers.”
2). Very Early Days for Smart Energy: Once companies come to terms with the fundamental challenge with engaging large amounts of customers on energy, they need to realize that the market that is there, is still in a very early state. KEMA says: “Value propositions are evolving quickly, but are currently underdeveloped. Wait at least 6 to 24 months to see more movement in this space, says KEMA.
3). Most People Don’t Want to Actively Manage Energy Consumption: Despite what many startups in Silicon Valley are screamin’, the majority of consumers just don’t want to spend any time managing their home energy consumption. KEMA says: “For mainstream customers to adopt and use home energy technology, offers [products] must demonstrate value without active management.” Check out what smart thermostat software startup EcoFactor is proposing, they have been advocating this position for months.
4). If It’s Not About Saving Money, Consumers Don’t Care: The main thing that consumers care about when it comes to energy is: how can they save money? A successful consumer-facing smart grid application will have to focus on saving the customer money first and foremost, not on green aims, or consumer electronics, or competing with peers to lower energy consumption. KEMA’s take: “With limited exceptions, lower prices and bill savings will be the fundamental drivers of mainstream adoption.”
5). Texas Will Be a Proving Ground: As we mentioned above, companies and entrepreneurs that are trying to sell into the smart grid and energy services markets will be wise to closely watch the Texas market. KEMA: “Texas energy providers will find out sooner and more clearly what customers want and don't want.”
For related research check out GigaOM Pro (subscription required):
Making Smart Meters the Must-Have Gadget of the Year
Smart Meters: Time for a Customer Service Reboot
Smart Meter Worries Crop Up In Australia
Katie Fehrenbacher - Smart Grid
The Victorian government says it still plans to go forward with the smart meter project and will be specifically studying the effect of variable pricing on consumers. Victorian Energy and Resources Minister Peter Batchelor called for the halt on the time of use pricing associated smart meters after he met with charities and social services lobbying groups including the Utilities Advocacy Centre (CUAC), Victorian Council of Social Service (VCOSS) and St Vincent de Paul.
Updated: Eric Dresselhuys, executive vice president of markets for smart grid network provider Silver Spring Networks, which is selling into the Victorian market, tells us this afternoon that the moratorium was only placed on the time of use pricing, and not the installation on the smart meters.
On one hand, it’s a good idea for the Victorian government to recognize — and fully study — how potential bill increases could effect its residents. In the U.S., it seems like there’s been very little discussion about the fact that a smart meter and variable pricing (prices change at different times of day depending on peak and off peak usage) could actually increase a monthly energy bill for a population that can’t shift electricity use to off-peak times of day. In comparison the discussion in Bakersfield and Dallas has been around whether meters are accurate or not.
It’s a big mistake for utilities to over promise what smart meters can do for their customers, because — in these times of economic insecurity and grass roots politics (Tea Party!) — customers will react badly to unexpected price increases. Customer have naturally abstracted smart meters (let’s face it, most people don’t care about electricity consumption) and as Pedro pointed out on Friday the new consumer outreach-focused Smart Grid Consumer Collaborative's (SGCC) that launched last week will have its work cut out for it.
But the halt of Victoria’s smart meter pricing program is the latest blow to the consumer confidence surrounding the smart grid. Victoria’s plan was one of the most aggressive by a government, and as of November there were more than 10,000 smart meters rolled out in Victoria, installed by utilities Jemena, United Energy Distribution (UED), CitiPower and Powercor. SP AusNet was supposed to start its smart meter installations in January.
The delay will be a worry for the vendors that have signed on to those Victorian smart meter rollouts. SP AusNet announced in October that it would be building a smart meter network based on the wireless technology WiMAX, with partners smart meter software maker Grid Net, network hardware maker Motorola and using Unwired Australia's wireless spectrum.
The halt, and the original project itself, has also been highly-political. Victoria has been bidding to receive $100 million from the Australian federal government to test out energy-efficiency and smart grid technology (the winning state is supposed to be announced in April). In addition it’s an election year in Victoria and the smart meter program has been caught up in political posturing by Victoria’s parties.
For related research check out GigaOM Pro (subscription required):
Making Smart Meters the Must-Have Gadget of the Year
Smart Meters: Time for a Customer Service Reboot
Image courtesy of juverna's photostream Flickr Creative Commons.
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