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Feed-In Tariffs and Why They Stink

Michael Kanellos: February 20, 2009, 3:36 PM
The U.S. doesn't have an ideal solar policy, but at least it avoided the mistakes of Germany and Spain when it comes to feed-in tariffs. Earlier this week I spoke to Travis Bradford of the Prometheus Institute (Travis also writes reports for Greentech Media) and he reminded me why feed-ins aren't the perfect vehicle for promoting alternative energy. It's a good reminder because states and several national governments are tinkering with their policies right now. The problem with feed-ins is that the government tend to set the price of power from alternative sources relatively inflexibly. If set too high, it creates a boom in solar panel sales. Thus, taxpayers fund a solar manufacturing boom in China. If the country later tries to repeal or limit the feed-in, crushing surpluses and other problems emerge. Spain created the worst possible scenario by setting high feed-in prices and then attempting to cap the program. If feed-in prices are too low, they don't achieve their objectives at all. "If you have a policy that sets price it is by definition not going to be able to set the correct price," he said. Just thought you should know.

China to Build Its First Solar-Thermal Power Plant

Ucilia Wang: February 20, 2009, 1:31 PM

China plans to start building its first solar-thermal power plant next month, a pilot project that the government hopes will pave the way for building at least 150 megawatts worth of solar thermal power projects by 2015.

The China Academy of Sciences will design the 1.5-megawatt project, reported China Daily this week. The academy, along with the Ministry of Science and the Beijing city government, will fund the 100 million yuan ($14.62 million) project in Beijing.

The country has been a hub for making and exporting solar panels, and it's been busy installing solar-panel based systems throughout the country. Now it wants to explore other types of solar technologies. A solar-thermal power plant, unlike a solar-panel installation, uses the sun’s heat instead of light to produce electricity.

Building a solar-thermal power plant is a more complex and time-consuming project, but its large scale promises to delivery electricity at far cheaper prices. It requires a lot of land, and many projects already built or under development in Europe and the United States are taking place in sparsely populated areas. BrightSource Energy, a U.S. solar thermal power developer, recently inked a 1.3-gigawatt deal with utility Southern California Edison.

China’s pilot project is set to occupy 13 hectares (32 acres). It will take 10 Chinese research institutions and companies to build and operate the power plant, said the China Daily.

There are several solar-thermal power plant designs, and China is interested in the one in which an array of 100 mirrors concentrate and direct the sunlight toward a 100-meter tall tower for boiling some kind of liquid and generating steam. The steam is then piped to a generator for producing electricity.

The power plant is scheduled to come online in 2010.

Improving Fuel Economy One Middle Finger at a Time

Eric Wesoff: February 20, 2009, 12:27 PM
Government and private automobile and trucking fleets invest enormous sums in equipment like tire sensors and aerodynamics for improved mileage and safety but  “there’s very little investment in driver behavior,??? according to Eric Weiss, VP of Worldwide Marketing at GreenRoad Technologies. GreenRoad is primarily about auto and driver safety but the same systems that discourage aggressive driving also help their customers harvest the low hanging fruit of improved auto and truck fuel usage. Innovative software and electronics target driver behavior and, according to their empirical data, can lower fuel usage by 11 percent.  According to, aggressive driving can lower gas mileage by 33 percent at highway speeds. Unsafe drivers also waste fuel and increase carbon emissions as vehicles burn 10 percent to 15 percent more fuel when driven aggressively. GreenRoad has won a number of customers in the U.S. and in the U.K. where occupational driving is the number three most dangerous job behind coal mining and deep sea fishing. GreenRoad’s business model is software as service -- the company leases its systems out to fleet owners and consumers for “a few tens of bucks per month per vehicle.???  Its underdash system combines a GPS unit, an accelerometer, a cellular modem, and its “secret sauce,??? the software that interprets the accelerometer data and avoids false positives and false negatives. The sensor system detects overly spirited acceleration and cornering as well as emphatic braking and speeding. The driver is provided with real time feedback in the form of a red, yellow or green light. If a driver violates the GreenRoad rules -- their employers and family are alerted and they are not allowed to have any pudding after dinner.  Nope, strike that -- GreenRoad absolutely tries to avoid the Big Brother is Watching You model in favor of a more positive approach. This VC-funded start-up has 60 employees, just had a record revenue quarter, and is currently selectively hiring.  Their customers include T-Mobile, the U.K. Ministry of Defense, and Ryder Trucks. The firm has received about $20 million in VC funding from Virgin Green, Amadeus Capital, Balderton Capital and Benchmark Capital.

Orthogonal Vectors

Darryl Siry: February 20, 2009, 11:55 AM
When I decided to leave Tesla last October, I didn’t know what I was going to do next, and I had very little time to figure it out. I had committed to myself to make my exit as smooth as possible for the benefit of the company and there was a lot of work to be done, leaving no time for planning next steps. I did know a few things though: For starters, I was quitting a good job in perhaps the worst job market since I graduated college. But such is life. You can’t always pick the circumstances that you find yourself in, but you always have the choice of how to handle them and ultimately one’s character is defined by the decisions they make when confronted with tough choices. It is this philosophy that led to my leaving Tesla, but more interesting is how this philosophy led to what I am doing now. When I left my previous job as CMO at Fireman’s Fund Insurance Company to join Tesla, I knew that the risk associated with such a move would be hedged by the fact that the experience alone would be extremely valuable, regardless of the outcome. I felt this way for two reasons: First, it was clear that cleantech was going to be the next important sector for innovation and industrial growth. I had missed out on the last “big thing??? in Silicon Valley (for better or for worse) and felt that living in the Bay Area but working at a large financial services company was somehow incongruous. I felt the tug toward participating in what makes Silicon Valley extraordinary. Second, I believe that one’s growth, both personal and professional, is maximized when you pursue orthogonal vectors. There are incremental gains to be had by continuing to try to advance in the same direction. The gains are exponential when you strike out in an entirely new direction. Which brings me back to what I am doing now. I’ve been bitten by the entrepreneurial bug. Aside from starting a short-lived record label (don’t ask), I’ve never been an entrepreneur. While I have always done well working within someone else’s system, I have a strong predisposition to independence and originality. The idea of having a much more direct path between my effort and the outcome is very compelling. Once again, my timing is impeccable. As a first time entrepreneur, it isn’t the most opportune time to raise funds to start a new venture. This is why I concluded that I would need to try an innovative approach to starting this company. It was a tough choice to pursue this route rather than the comfort or safety of taking another job at an established company, but I believe it is the right choice. The announcement that went over the wire yesterday that I am joining Peppercom as their senior analyst in cleantech is a part of the story. I am going to do my best to help build Peppercom into a leading player in cleantech communications and at the same time will be launching my startup, with Peppercom’s support, while working out of their offices in downtown San Francisco. Peppercom is a great partner for several reasons. My startup is a software service aimed at journalists, media relations professionals and CEOs, so working closely with a leading communications firm will help me build a better company. My background in cleantech communications and branding will be a great addition to Peppercom’s already strong capabilities in that area. Also, Peppercom believes that the best way to provide value in the business of communications is to have a deep understanding of the clients’ business. I believe this is especially true in the cleantech business, and Peppercom definitely lives up to this promise. In fact, when I concocted the idea of developing my startup company out of a communications firm, the first and only firm I spoke to seriously was Peppercom. I think this certainly qualifies as an orthogonal vector, no? I’m looking forward to the next few years of growth. May they be as valuable as the last few have been! Daryl Siry is the former chief marketing officer for Tesla Motors. He now consults on marketing and the automotive industry. You can read more here:

Global Cleantech Race Quickens: SEZ to LCZ

William Brent: February 20, 2009, 9:47 AM
China’s amazing surge as an economic power started with the creation of special economic zones (SEZs) nearly 30 years ago, as did my “it’s complicated??? love affair with the country. The zones provided a blueprint for the rest of the country toward accelerated wealth creation. They also marked the beginning of a catastrophic decline in environmental capital. Now the country may be dusting off the SEZ concept and considering the creation of Low Carbon Zones (LCZs). My involvement in the U.S.-China Clean Energy Forum and JUCCCE has put China front of mind, as has my front-row seat in the international race to see who becomes the superpower of cleantech. In the resource-constrained world of the future, the economies that are most efficient (i.e., best at innovating and adopting clean technologies) will win. First proposed in 2007, the idea of Low Carbon Zones was an outcome of interaction between E.U. and Chinese think tanks, with the support of the U.K. Foreign Ministry and China’s National Development and Reform Commission (NDRC). The concept, thumbnailed here and here with even greater detail here, states:
LCZs would aim to stimulate transformational regional political leadership, endorsed at the national level, to create an enabling environment for large-scale innovative low carbon private and public investment. Just as SEZs provided China with a laboratory to shape its participation in the global market economy, the LCZs could pioneer approaches to decarbonisation compatible with Chinese institutions and development approaches.
It appears an initial pilot of the LCZ concept is planned for China’s heavy industrial province of Jilin. I hope the idea flies, as it’s clearly in the global long-term interest. But no doubt questions of IP, tech transfer and ultimately money could create concerns within the industrialized democracies that the West is once again funding China’s development, only to be left holding the bag. Another seemingly similar initiative in China has recently emerged from the Climate Group, outlined in a new report, which also focuses on developing low carbon cities. According to the Climate Group, the program aims to recruit, motivate, and engage 20 Chinese cities in a five-year campaign to transform and accelerate the local market for energy efficiency and renewable energy technologies. MOUs have already been signed with the cities of Guiyang and Dezhou. It’s unclear from the materials I’ve read what the specific funding mechanism for either of these concepts will be, although with the backing of groups like the NDRC at the central government level, it’s certainly within the realm of the possible. As I’ve written about before, China’s scale offers the greatest potential for any country (except for maybe India) to drive down costs of cleantech and make clean solutions truly commercially viable. But that doesn’t mean other countries aren’t trying to compete. Less developed ideas seem to be emerging in the U.S. and Europe. Cities like Seattle and Boston have been floating the idea of cleantech innovation hubs. Various states are also vying to attract cleantech investment and economic stimulus money, including Colorado, Pennsylvania, New Mexico and Michigan. In Europe, efforts are also under way to create the region’s first cleantech incubator, which if successful, might be followed by others. And of course, there is the Oz-like effort in Masdar in Abu Dhabi (“pay no attention to that man behind the curtain???), where the Wizard is oil money. It’s great to see a growing understanding that low carbon leadership will mean future political and economic leadership in the world. I just hope that those in the emerging Cleantech Great Game keep in mind the lessons of the original Great Game – that the fight for supremacy over a largely unmapped, strategic territory often leads to unnecessary pain and suffering at the expense of the common good. Let’s hope that the newly announced International Renewable Energy Agency (IRENA) can play a role in fostering the needed collaboration and help us put aside the myopia often caused by financial gain. A former foreign correspondent, William Brent is a public relations exec at Weber Shandwick. He started the firm’s cleantech practice. More can be found at

Tar Sands: How Much Is Out There and Can Nuclear Help?

Michael Kanellos: February 20, 2009, 9:27 AM
President Barack Obama and Canadian Prime Minister Stephen Harper this week have been enjoying each other's company. The two have discussed tar sands, the goopy, sandy and dirty source of fossil fuels up there in the Great White North. But how valuable are tar sands and can they be extracted? Hyperion Power Generation, the nuclear-in-a-box people, say yes. The company's sealed reactor can produce 70 megawatts of thermal energy, which can be used for separating the sand from the oil. The reactor, as the company has emphasized, is also not made to power condominium complexes and subdivisions. It is made to provide energy to remote, secure, and somewhat off-grid facilities like military bases and oil fields. The company expects to start delivering its reactors, developed at Los Alamos National Labs, in 2014. Using nuclear -- which does not generate fossil fuels -- could play a important role in improving the greenhouse gas balance with tar sands. Canada's tar sands contain 173 billion barrels of recoverable oil, according to proponents. (Critics put the figure much lower.) The world consumed 84.3 million barrels of oil a day in 2005. At that rate, tar sands could provide enough oil for 2035 days, or 5.58 years. (Oil consumption is expected to rise to 112.5 million barrels a day by 2030.). If you count the tar sands that can't be recovered by existing means, the estimate of the reserves jumps to 1.7 trillion barrels. That's quite a bit. U.S. manufacturers are expected to only produce 250 gallons (gallons, not barrels) of cellulosic ethanol a year by 2011 and that is if everything works as planned. So far, cellulosic ethanol providers are behind schedule. Total ethanol production in 2007 worldwide from all feedstocks comes to 13 billion gallons. Divide by 42 to get barrels and factor in a discount because ethanol doesn't provide the same energy per gallon that gas does and the figures for ethanol begin to look really small. Finding ways to produce tar sands cleanly would still, however, leave the problem that you are burning fossil fuel. True, but liquid fossil fuels still aren't our biggest problem. Transportation, where most liquid fuels go, account for only 26 percent of the total energy budget in the U.S. In other words, it might make more sense to tackle the coal problem first and use clean tar sand extraction as an interim step in what will be a decades-long quest for cleaner car fuels. And Canada is more democracy friendly than Kazakhstan. Just a thought.

Infringement Issues in an Emerging Wind Power Cottage Industry

Eric Lane: February 20, 2009, 6:45 AM
post on the Green Light blog led me to an interesting Green Inc. story about a new cottage industry -- refurbishing and reselling used wind turbines. As wind turbines have become larger and more efficient, 1980s era wind-farm owners have discarded their old turbines in favor of newer models. A bunch of companies that overhaul and sell used wind turbines have emerged, including Halus Power Systems (Halus), Energy Maintenance Service (EMS), Aeronautica Windpower and Nexion DG.

The first thing I thought of as a patent attorney was the potential infringement liability.  If indeed the turbines at issue are from the 1980s, to the extent they were patented, the patents have expired by now.

But if these companies are servicing turbines made more recently, infringement could be an issue.  Under U.S. patent law, once a patented article is sold, repair of the article is permissible, but reconstruction (making an essentially new article on the template of the original) constitutes infringement. The line between repair and reconstruction is not always clear and depends on the facts of each case.  The types of refurbishment that the U.S. Court of Appeals for the Federal Circuit has held to be permissible repair include re-applying a non-stick coating to a cooking device, replacing an inner container for medical waste, and replacing disks in a tomato harvester head. By contrast, when an entirely new cutting tip was created for a patented drill bit after the existing cutting tip could no longer be sharpened and reused, the Federal Circuit found the overhaul to be reconstruction. Two key issues run through the case law on repair and reconstruction.  The first is whether the entire patented article as a whole can be viewed as having completed its useful life.  In these cases, refurbishment typically is deemed infringing reconstruction. The second is whether the whole patented article consists of a combination of unpatented parts.  In those cases, even where refurbishment is extensive and includes disassembly, modification or replacement of many of the unpatented components, the process is likely to be viewed as permissible repair. So, assuming the possibility of overhauling patented wind turbines, if the used or broken turbines still have useful life in them and consist of unpatented blades, generator, gearbox, etc., these resellers are likely to be in the clear.  On the other hand, if the turbines are spent or have anything like the patent protection of Clipper Windpower’s Liberty wind turbine, an overhaul could rise to the level of patent infringement. Another factor, of course, is authorization from the patent holder.  Halus’s website says the company specializes in remanufacturing wind turbines originally produced by Vestas, but it’s unclear whether there is some type of partnering arrangement between the two companies. Eric Lane is a patent attorney and intellectual property lawyer at Luce, Forward, Hamilton & Scripps in San Diego, where he is in the Intellectual Property and Climate Change & Clean Technology practices.  Eric is the founder and author of Green Patent Blog, which provides discussion and analysis of intellectual property law issues in clean technology.