Viewing posts tagged "Vehicles"

Burning Ethanol, Guzzling Water

If you learned that someone had invented a car that runs on water, you’d probably be thrilled. But if you found out that the car consumes 50 gallons of water for every mile driven, you might wonder if it’s worth it.

Of course any vehicle that requires 50 gallons of any liquid fuel is a nonstarter given the volume and weight of the fuel, but for the purposes of this thought exercise the issue is using up all that water.

Something very like this scenario is rapidly becoming a reality, and is even mandated by law. It turns out that producing ethanol from corn uses an awful lot of water, and the Energy Independence and Security Act of 2007 requires the U.S. to produce 15 billion gallons of corn ethanol annually by 2015.

A study by researchers from Rice University, Clarkson University and Missouri University of Science and Technology found that it takes 500 to 4,000 liters of water to grow feedstock to produce one liter of ethanol, depending on the crop and where it’s grown.

Given an 800-to-1 water-fuel ratio and a car that gets 16 miles per gallon of ethanol (ethanol has a lower energy density than gasoline, which means lower mileage), you’d use 50 gallons of water per mile. This is the case for Nebraska-grown corn. You’d use 23 gallons per mile for Iowa corn and 115 gallons per mile for Texas sorghum.

The 15 billion gallons of corn ethanol mandated by 2015 is only about 10 percent of the transportation fuel the U.S. is likely to use that year, but producing it will require the equivalent of 44 percent of the corn grown in the U.S. in 2007. Agriculture today accounts for 80 percent of the water consumed in the U.S., and our freshwater supply is already under a lot of pressure.

The water-use scenario is very different for cellulosic feedstocks, particularly drought-resistant plants like miscanthus that require far less water. In theory, many types of grasses can be grown without any irrigation.

This makes efforts to come up with economical and scalable cellulosic biofuel production all the more urgent. Sorting out the land-use issues around biofuels is challenging enough without worrying about water.

Eric Smalley is the editor of Energy Research News. He has written about technology since 1987 and has freelanced for many publications including Discover, Scientific American, Wired News and The Boston Globe on topics ranging from quantum cryptography to global warming.

Follow the Money to Fisker

In flush times, the funding of a company is not necessarily indicative of the potential success of that company (witness the last dot-com boom). One of interesting effects of a severe downturn in capital markets is that market forces have a tendency to mercilessly cull the herd. The money that does flow in times like these tends to be much more discriminating.

That is why I received this morning’s news that Fisker has secured an additional $85 Million in financing with such interest.

I’ve been on record before with some skepticism about Fisker that went beyond the natural competitive sabre rattling that naturally happens when you are CMO of their competitor. My skepticism, which I think is fair and objective, mostly relates to the fact that they have not yet demonstrated a fully working prototype—which needs to be completed for crash tests to start—to journalists. This makes their previously announced schedules questionable, although they have recently slipped the expectation of customer deliveries to next spring.

So that is why the news of a significant round of funding for Fisker in this environment must force me to recalibrate my skepticism (I just IM’d a reporter telling him that I was writing a positive post about Fisker and he said it was a sign of the apocalypse.)

Incidentally, I don’t buy the argument that a company’s business plan is somehow viable just because a top-tier venture capital firm has invested. The nature of Venture Capital is to invest in a portfolio of companies with the expectation that most will fail.

But an $85 million investment with new outside money is a positive sign, no doubt, that things are progressing. Bringing the car to market still depends on successful development of a working prototype and successful crash testing and production ramp up. These are not minor challenges.

What makes this news all the more interesting is that Fisker’s nearest competitor (and my former employer), Tesla, has struggled to raise significant capital since the capital markets collapsed last September. An internal convertible round was eventually closed, but by the company’s own admission it has been difficult. This is despite the fact that Tesla has over 300 cars delivered to paying customers, who are reporting that the cars are working beautifully for the most part.

So what is going on here? It is difficult to say. An announcement of money raised in a private company rarely mentions an important piece of data—the valuation at which the investment was made. So we don’t know if the $85 Million was made at a higher valuation than the last round or in a down round (that is, until Quantum has to report the dilution of its stake in its next 10Q). Similarly, we don’t know if Tesla has been unable to raise capital or if they are just unwilling to raise capital at the valuations being offered.

In any case, if you follow the money, Fisker’s looking pretty good this morning.

DISCLOSURE: Although I was formerly the CMO of Tesla Motors, I have no continuing relationship with or financial interest in the company. Likewise, I have no relationship with Fisker Automotive or their investors.

Darryl Siry is the Senior Analyst for Cleantech at Peppercom Strategic Communications. He is also the former chief marketing officer for Tesla Motors. You can read more at his blog at http://www.darrylsiry.com or email him at (JavaScript must be enabled to view this email address).

Slimed, Pt. 1: Biofuels and the Aquatic Species Program

Scores of firms, startups and Fortune 500 companies alike, are working on algae-based biofuels.  Hundreds of millions of dollars have been invested.  And so far, maybe a few thousand gallons of algae oil have been produced. The question is: Can algae be economically cultivated and commercially scaled to make a material contribution to mankind’s liquid fuel needs?  The jury is still out. Ghosts of NREL Algae Programs Past The basement of the marine biology department at the University of Hawaii has a hallway lit by a dim incandescent bulb.  At the end of the hallway is a cardboard sign with the faded letters “ASP�? written on it.  A creaky door leads to a dank-smelling room crowded with beakers and algae scientists, milling aimlessly.  They share the same slightly green tinge and defeated look. This is the last remains of the Aquatic Species Program or ASP. These letters are spoken in hushed reverence by today’s crop of phycologists, NRELians and algae-fuel entrepreneurs. The Program identified hundreds of algae species that could potentially be farmed and cultivated for their lipids -- lipids that could be converted to biodiesel and used to wean the U.S. from its dependence on foreign oil. The Aquatic Species Program was launched in 1978 by president Jimmy Carter to explore the potential of algae as an energy source. About $25 million was put into the program until it was shelved by the Clinton administration in 1996.  They never found the "lipid trigger." The echoes of that program reverberate in today’s algae fuel renaissance. Why Algae? On paper, algae is perhaps the perfect feedstock for biofuels. It grows in a wide variety of climates. It can be used to mitigate carbon dioxide. The liquid fuels produced by these single-celled creatures are only one of their byproducts, and potentially not even the most valuable. Cosmetic supplements, nutraceuticals, pet food additives, animal feed, and specialty oils for human consumption may well fetch higher per-gallon prices. The tantalizing quality of algae is that some algal species contain up to 40 percent lipids by weight.  And therefore, according to some sources, an acre of algae could yield 5,000 to 10,000 gallons of oil a year, making algae far more productive than soy (50 gallons per acre), rapeseed (110 to 145 gallons), mustard (140 gallons) jatropha (175 gallons) palm (650 gallons) or cellulosic ethanol from poplars (2,700 gallons). More optimistic data from less informed people indicate the theoretical biodiesel yield from microalgae is in the range of 11,000 to 20,000 gallons per acre per year. But according to Dr. John Benemann, a cantankerous algae consultant whose research is widely cited in the field, the realistic potential production level (despite claims to the contrary) is about 2,000 gallons of algal oil per acre per year. VCs and Algae Farmers “VCs cannot come in here and just harvest ripened fruit, this is not shovel ready technology,�? said  Dr. John Benneman. Considering the immense technical risks and daunting capital costs of building an algae company, it doesn’t seem like a reasonable venture capital play.  And most if not all of the VCs I’ve spoken with categorize these investments as the longer-term, long-shot bets in their portfolio.  But given the size of the liquid fuels market, measured in trillions of dollars, not the customary billions of dollars, it makes some sense to take the low-percentage shot. These firms are going to continue to need capital.  According to Jennifer Fonstad of VC investor, Draper Fisher Jurvetson: “The current strategy of many of these companies has been to turn to the government stimulus plan – this is the risk capital we can rely on today.�? A Few Conclusions We need lots more time and more money Technologists tend to overestimate what can be accomplished in two years and underestimate what can be accomplished in ten to twenty years.  Algae as biofuel looks more like a ten to twenty year project.   DARPA is betting on three to five years, VCs are betting on three to five years, the algae roadmap from DOE takes a decade. The scope of the algae to large-scale biodiesel effort is more along the lines of the Manhattan Project or the Apollo moon shot, which cost $24 billion and $360 billion respectively.  A $25 million Aquatic Species Program or $300 million in venture capital is not going to get it done.  It will take tens of billions of dollars and decades. All of the process steps need to be addressed In the words of Courtney McColgan of DFJ, "There are many pieces to the algae puzzle that seem like afterthoughts, but are actually crucial to the economics -- co-products, nutrients, harvesting, drying, and conversion technology. System design and algae strain (which seem to be the focus of most discussions) are important, but not the only components." Algae producers admit that there’s a massive difference between growing large, consistent quantities of algae versus growing it on a fish tank wall. Standards for growth, strain selection, breeding, genetic modification, water extraction, oil extraction, and oil refining have yet to be established. Set realistic expectations for the technology Exploit near term, intermediate technology deployment opportunities such as wastewater treatment. Cost constraints restrict consideration to the simplest possible devices, which are large unlined, open, mixed raceway ponds. And finally a word from our favorite curmudgeon… "Engineering studies do not conclude that we can or will actually be able to produce algal oil/biodiesel. They conclude that the R&D to develop such processes can be justified, at least until it can be demonstrated to be impossible," said Dr. John Benemann.

• This is a small excerpt from the April issue of the Greentech Innovations Report which dives deep into the algae pond.  You can subscribe to it here.

No Sweat at 16 Cents Per Mile

The A2B electric bike from Ultramotor has been around since August last year, but it is still getting a lot of attention whenever tested. I had the opportunity to take it for a spin and the summarizing feeling from the experience was: smooth.

It looks cool, it’s easy to use and it seems sturdy. Even for me, a 6’5” foot, 260 pound Swedish reporter, the bike was surprisingly quick and easy to get moving. Once I straddled the bike I got the same feeling as when I tried out a scooter for the first time: Will it bark off out of control and how do I stop it?

But once I got moving, handling was no hassle. The twist grip throttle was easy to use and the acceleration was smooth, but not too slow. While pedaling, I felt like I could climb any steep hill without getting exhausted or even puffed. The top speed is said to be 20 mph, but I didn’t reach it during my short test run.

So, it’s basically a bike with an electric motor. You can ride it just by pedaling, or just by running the motor or you can do both at the same time.

But what about charging it? My first question to Douglas Schwartz, a sales representative from ELV Motors selling the bike, was if I could charge the battery by pedaling. That would be the ultimate eco-friendly solution, I thought. But, no, the bike can only be charged from an outlet.

The price of a brand new A2B is around $2,700 making it the most expensive electric bike from Ultramotor with models Europa and Portia costing about $1,900 and $1,000. The A2B actually looks more like a scooter than a bike. That’s a cool look, but it also makes the bike heavy with it’s battery, thick wheels and sturdy frame. It seems that only pedaling without the engine is not an option once you’ve experienced the convenience of the throttle. And because the A2B weighs in at 73 pounds, it is even less alluring.

Another interesting feature of the bike is that you don’t need a license to drive it. You don’t even have to have an insurance according to ELV Motors.

My overall feeling is that it was a nice ride, a nice-looking bike and good alternative to gas-driven scooters, but not to my regular bike since I really like the “free” exercise I get from taking my bike to different activitites. Would I by a A2B bike myself? Probably not for $2,700. It’s too pricey for me, but not far away from where it would get interesting.

Features (according to its dealer ELV Motors and manufacturer Ultramotors):

Range: Up to 20 Miles (extendable to 40 miles with extra battery)
Top Speed: Up to 20 mph
Wheel size: 20 X 3.0
Brake type: Hayes MX4 V7 Cable Disc
Electric Motor: Motor Power BLDC hub motor 500 watts
Voltage: 36 V
Charging Time: 3 to 5 hours
Charging Cost: 5 to 8 cents for full charge
Manufacturer’s Warranty: Lifetime (frame), 2 years (battery)
Battery Type: Lithium ion
Weight: 73 pounds
Front Suspension: Front shock
Rear Suspension: Rear swing arm
Age to Drive: 16 years or older
License: Not required
Registration: Not required
Helmet: Yes
Insurance: Not required

Another attendee at the event tests out the A2B Bike:

‘Detroit 3’ Pressures Will Impact EV Startups

Much has been written about the potential impact of Big 3 bankruptcies on the hundreds of suppliers that sell parts and assemblies to them. Part of the logic of the auto bailout was that if any one of the Big 3 were to fail, it would bankrupt some of the tier 1 suppliers. This, in turn, could put additional pressure on the auto companies they supply. Hence, if GM were allowed to fail, Ford could be put in danger. The interconnectedness of the automakers, suppliers, dealers meant that any one failure could set off a catastrophic chain reaction, resulting in the loss of millions of jobs.

A separate meme has also emerged, especially as it relates to the allocation of DOE grants and loans. This meme is can be summed up as “Silicon Valley vs. Detroit,� but more broadly, it is a debate as to whether taxpayer money is better used to support the struggling traditional automakers or to support the innovative startups (Tesla, Fisker, Aptera, etc.)

What is becoming clear is that these two ecosystems are more linked that many realize, and that the pressures on the traditional automakers and suppliers threaten the viability of the startups as well. Ironically, if GM fails or causes their suppliers to fail, they may inadvertently kill the electric car again.

In spite of the government support given to GM and Chrysler, the fundamentals of the automobile industry are continuing to weaken. With sales slowing and inventories building, it isn’t clear that “bridge loans� alone will solve the crisis. Suppliers, which have always operated on thin margins and intense pressure, are raising the warning that they too, may need government support or face collapse. One recent example was American Axle, which (according to Reuters) warned that problems at GM and Chrysler may force them out of business.

Many of the startups in the automotive space rely on the same supplier base for key components, such as driveshafts, transmissions, interiors, suspensions and electronics. The failure of these suppliers, or the pressures of near-failure, could easily ripple to the startups, whose small size makes them less equipped to deal with supply chain disruptions.

A case in point can be found in the public filings of Fisker Automotive’s technology partner, Quantum Technologies (QTWW). Quantum is the other side of the joint venture that formed Fisker Automotive in 2007, and is responsible for the development of the drivetrain for the Fisker Karma. Aside from the contract revenues Quantum receives from the Fisker JV for the development of the drivetrain, a significant part of their core business was supplying high pressure hydrogen storage bottles and other related services for GM’s fuel cell vehicles.

In Quantum’s press release on Thursday, March 12, Quantum’s CEO hints at weakness in that line of business:

“Total revenue in the third quarter of fiscal 2009 was $5.9 million compared to $7.1 million in the third quarter of fiscal 2008, a net decrease of 17%. The decrease in consolidated net revenue is primarily related to a decline in product shipments and engineering services provided to General Motors in fiscal 2009 compared to fiscal 2008.�

Later in the release:

“Contract revenue for the Quantum Fuel Systems segment increased $1.1 million, or 24%, from $4.6 million in the third quarter of fiscal 2008 to $5.7 million in the third quarter of fiscal 2009. The increase was primarily due to higher development program revenues related to development of the “Q Drive” propulsion system for the Company’s affiliate - Fisker Automotive. This increase was partially offset by a decline in hydrogen and fuel cell system programs with General Motors.â€?

What is not stated in the press release, but can be seen in the first line of the income statement on their recent 10Q, is that revenue from “net product sales� has collapsed from $7.2M for the 9 months ending Jan 31, 2008 to only $814,134 for the same period ending Jan 31, 2009.

While I don’t know for sure, I suspect that this collapse in product sales revenues relates to their hydrogen fuel cell business with GM. While contract revenues from affiliates (the Fisker JV), jumped from $1M to $9.3M, more than offsetting the decline in product sales, this revenue is not really customer revenue. The revenues from the Fisker contract is cash from equity investors in the Fisker/Quantum JV that then shows up as revenue for Quantum as they do the work to build the drivetrain for the Karma (It would be interesting to have been a fly on the wall for that contract discussion.)

CEO Alan Niedzwiecki sums up the situation this way:

“The Company’s third quarter operating performance was impacted by the downturn in the economy and especially the challenges faced by our automotive OEM customers. Despite uncertain times, we remain optimistic that the continued focus on hybrid and “green vehicle” technologies will benefit Quantum as dramatic change continues to take place in the automotive industry.â€?

Which leaves me wondering what risk Fisker Automotive faces as their JV technology partner struggles with pressure in their core business. A possible survival strategy appears to be the same as their competitor, Tesla Motors, and seemingly every automotive company today:

“We continue to advance technologies under funded Department of Energy programs and additionally have applied for a $175 million loan in connection with the Department of Energy’s $25 billion Advanced Technology Vehicles Manufacturing Loan program. … We are also in the process of applying for grants under the 2009 Economic Stimulus Package and other government programs available to the Company.”

Darryl Siry is the Senior Analyst for Cleantech at Peppercom Strategic Communications. He is also the former chief marketing officer for Tesla Motors. You can read more at his blog at http://www.darrylsiry.com or email him at (JavaScript must be enabled to view this email address).

Fast Batteries

The news that MIT researchers have developed a lithium material that dramatically shortens battery charging times changes the equation for electric cars. It’s a long way from the lab to the showroom, but the battery breakthrough is a big step toward making electric cars eminently practical.

Even though most of us drive fewer than 40 miles each day, the ranges allowed by today’s battery technologies are a major psychological barrier. And most of us do drive several hundred miles at a go now and then.

Eventually batteries will store enough energy to give electric vehicles the ranges we expect from our cars. Fast-charging batteries could solve the problem before then.

Imagine an electric car with a 100-mile range, something that’s likely to be widely available within five years. If it has a fast-charging battery — say something that allows 10-minute pit stops — the perception of electric cars could change dramatically. The recharging stops would be more frequent and a few minutes longer than today’s refueling stops, but I think the experience would be similar enough that people will stop thinking of electric cars as range-limited.

Highway refueling stops usually involve answering nature’s call, buying snacks and/or stretching legs. Behaviorally, the only difference would be that instead of doing these activities before or after refueling, people will do them while their cars are recharging.

It’s clear that liquid fuels will be the dominant power source in the transportation sector for years to come, if for no other reason than the time it takes to replace the installed base of internal combustion engine vehicles. And plug-in hybrid vehicles are an important transition technology. But the best option is electric vehicles powered by renewable energy sources, especially with the expected boom in the global car population thanks to China and India. Fast battery technology could be a critical factor in establishing electric vehicles in time to make a difference.

Eric Smalley is the editor of Energy Research News. He has written about technology since 1987 and has freelanced for many publications including Discover, Scientific American, Wired News and The Boston Globe on topics ranging from quantum cryptography to global warming.