May 13, 2007
Silicon Valley Investing In Clean Energy Companies

"Get 'er done" kinds of people are investing in cleaner energy technologies.

Most of Silicon Valley's current emphasis is on clean energy. Entrepreneurs here are aiming to transform solar, fuel-cell, and biofuel projects into viable industries with huge potential. Already, the market amounts to $55 billion – more than the entire Internet advertising market dominated by the high-tech region's current darling, Google. In 10 years, the clean-energy market by one estimate could quadruple. In the past year, for the first time, more silicon in the US has gone toward making solar panels than computer chips. More important, venture capitalists are pouring money into clean technology, thanks to a confluence of events.

We aren't going to go into a long economic depression due to Peak Oil. Nor are we just going to keep using fossil fuels as our biggest sources of energy. Solar photovoltaics, wind, nuclear, and other non-fossil fuels energy sources are going to displace fossil fuels.

The venture capitalists are placing many energy bets.

Silicon Valley is buzzing with optimism. Venture capital funding jumped sixfold to $300 million from the first to the third quarter last year.

Over a 25 year period the cost of photovoltaics fell by almost an order of magnitude.

The price for a watt of solar power, adjusted for inflation, went from $21.83 in 1980 to $2.70 in 2005, according to Applied Materials.

Within five years, a SunPower spokesperson predicts, the price of solar power will rival – without any subsidies – the price of conventional power.

Can the cost of photovoltaics fall much more rapidly in the future? What we've witnessed for decades were improvements in making photovolatics from silicon crystals. A shift to other types of materials using completely different fabrication methods (e.g. TiO2 nanotubes) will eventually lower costs by orders of magnitude. I can't say this will happen in the next 5 or 10 years. Maybe. But it will happen some day. Photovoltaics will not always come at too high prices.

Share |      Randall Parker, 2007 May 13 06:59 PM  Energy Policy


Comments
odograph said at May 14, 2007 6:26 AM:

I think the trend is good, currently. There is a lot of a lot of messy, disorganized, effort across society headed in the general directions of green power and greater efficiency. On that I would not disagree a bit. I mean we are a society for which front-loading washing machines are sexy.

But, while I enjoy the trend I'd caution anyone against naming an outcome ("non-fossil fuels energy sources are going to displace fossil fuels"). Yeah, maybe. But assertions are often made in other directions. What these assertions share is a great deal of gut feel and a real lack of concrete modeling or calculation. They come without any ghost of "percent confidence" or "error-bars."

Shorter: Re-read "Fooled by Randomness" by Nassim Nicholas Taleb, available at Amazon.

odograph said at May 14, 2007 6:34 AM:

And Ye Gods, why did you name the 1980 to 2005 price difference on solar without naming the shape of the trend? The 1990's plateau is very much part of the story.

cm said at May 14, 2007 12:03 PM:

Can you show stats on solar plateauing in the 1990s? The graphs I've seen show a pretty consistent 5% anual drop. If this continues, many solar designers expect the 2020s to be the start of widespread use. Also, solar my also be overinvested for now according to some business publictions.

odograph said at May 14, 2007 2:34 PM:

I see that the plateau was shown here before. Follow the link to "figure 7.3"

There is another long-term graph at at solar buzz.

This page has a nice sidebar with prices for the last few years. Note that demand has driven prices UP in that timeframe.

Nick said at May 14, 2007 3:05 PM:

Odograph, prices have gone up, but costs have gone down. Profits are up, but eventually silicon supplies will catch up (probably in 2008/09), and prices will crash. Many PV investors are worrying about this, but it will be great for consumers.

Randall, here's an example of technical improvements, in this case in wind turbines:

http://www.thestar.com/article/213475

"A local company has designed a new type of wind-turbine blade that mimics the aerodynamic performance of a humpback whale's flipper, allowing a turbine to capture more of the wind's energy at much lower speeds.

The odd-looking blades, which have teeth-like bumps along their leading edge, are a dramatic departure from the smooth and sleek design that graces most wind turbines.

But Stephen Dewar, co-founder of Toronto-based WhalePower Corp., says the new approach could have a profound impact on wind-energy economics.

It means turbines manufactured with WhalePower blades would be capable of capturing energy where the wind is less strong, as conventional turbines tend to stall when wind speeds fall too low. Not only would this improve the business case for individual wind farms, it broadens the natural geography suitable for large-scale wind generation."

I saw this first in Tyler Hamilton's blog, Clean Break.

It looks practical to me, though of course it's not proven yet.

Wolf-Dog said at May 14, 2007 8:35 PM:

The following article about the coming plug-in hybrid car batteries in 2008 is so relevant that I have completely pasted it below. In a nutshell, since 75 % of the people don't drive more than 40 miles per day, this means that we can cut down our gasoline consumption by 90 % by means of these cheap alternatives to pure electric cars. If we start enlarging the electric power grid by using every possible method such as photovoltaics, nuclear plants, burning biomass instead of coal, etc, we can get rid of gasoline in 10 years.


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http://www.myninjaplease.com/green/?p=581&akst_action=share-this

A123Systems to Market PHEV Conversion Packs in 2008

Posted in: green, eco-friendly products, zero-emissions and hybrids, whips, batteries

Want to make your hybrid a plug-in? We’ve got some good news:

The PHEV conversion modules will be available in 2008 - here’s the info:

It will be certified to meet all applicable new car test standards and will be installed by trained mechanics in less than 2 hours, without any changes to the underlying electronics, mechanics or materially useable space of the production hybrid other than the installation of the plug in the rear bumper.

The applicable market in the US for standard production hybrids will be approaching 1 million through the course of this year. With almost two dozen hybrid models expected by the end of 2008, there will be 5 million standard hybrids on the road by 2010. At an initial 40 mile module installed price of $10,000 supported with a $3,500 tax credit, the payback period for a fleet owner with $3.00/gallon gas is 2.5 years, against an expected life of 10 or more years. The payback period for the average commuter driving 11,000 miles per year would be 5.5 years. These calculations place no value on the net reduction of approximately 100 tons of carbon dioxide and other emissions over the life of the vehicle and take no account of the cost reductions which could accrue from additional materials research and increasing production volumes.

Nick said at May 15, 2007 12:04 PM:

Wof-dog,

The logical partner for Plugin hybrid (PHEV) charging is wind power, as charging can be scheduled to match wind's availability.

I like the conversion kit, but I think it voids the warranty. I'm more hopeful about OEM PHEV's. IIRC GM is promising a parallel PHEV in 2008 (model year 2009), and a serial PHEV in 2009 (Chevy Volt, model year 2010). I think a lot of asian companies have similar plans in stealth mode (because they're not desperate for the PR, as GM is, so they're not going to reveal their plans in detail to the competition).

Wolf-Dog said at May 15, 2007 2:49 PM:

In a couple of years, there will already be pure electric full size (5 seats)
cars with 350 mile range, which can be charged in 10 minutes.
This goes beyond the Tesla Motors sports car that can only seat 2 people.
The price will be too high initially, but in 5 years, the price would drop
to very low levels, because such cars are very simple internally, only
the battery is expensive, which would be cheaper when mass-produced.

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http://www.zapworld.com/ZAPWorld.aspx?id=4560

High Performance Electric Car - COMING SOON

The drive system alone is enough to excite driving fanatics, featuring an innovative all-wheel drive option with revolutionary electric motors inside each of the wheels, potentially delivering 644 horsepower and speeds up to 155mph.

An advanced battery system will enable the car to travel a range up to 350 miles between charges, with a rapid charge technology that can recharge the batteries in as little as 10 minutes.


Ken said at May 15, 2007 6:21 PM:

Thermal solar is also getting a kick start from Silicon Valley capital - Ausra Inc (formerly Solar Heat and Power) will be building 50MW of their low cost version of trough reflectors in New Mexico, with funding from Vinod Khosla, Sun Microsystems founder. Whether this will initially include thermal storage to have 24hrs a day electrical output (something they claim to be able to do) is unclear.
I think PV will ultimately become ubiquitous. Whether the Storage systems will keep pace is yet to be seen, however there's been a lot of progress their too. Ultimately storage with high densities can make electricity transportable in much the way coal and oil is shipped around, however significant improvements in electrical transmission could see the grid crossing oceans and bypassing much of the storage problem. More radical approaches to this could include the transmission aspects of proposed space solar arrays, or even under ocean piping of Vanadium Redox electrolytes. More likely the use of High Voltage DC transmission will widen the grid significantly. Between continents? Maybe.

cancer_man said at May 15, 2007 9:31 PM:

I don't see a plateau in the 1990s (Fig 7.3) as much as a steady percentage cost decrease which isn'bt obvious on that graph. A 10% reduction over two years was larger in absolute dollars in the 1970s than 1990s.

Randall Parker said at May 16, 2007 7:13 PM:

Wolf-Dog,

If gasoline prices remain as high as they are now then I expect the demand for plug-in hybrids to grow rapidly.

But plug-in hybrids are problematic for those who living in apartment buildings or who can't park very close to their home. Ditto for people who live in rough neighborhoods.

Still, large numbers of people live in suburbs where running an electric cable to your car in your driveway would be easy. I can picture a lockable external box attached to the outside of the house where a homeowner could put out an extendable electric cable that is on a spring-loaded unwinder that lets the cable out.

Wolf-Dog said at May 16, 2007 7:26 PM:

Randall Parker wrote:
But plug-in hybrids are problematic for those who living in apartment buildings or who can't park very close to their home. Ditto for people who live in rough neighborhoods.
-----------------------------------------------

Correct, but it is very easy to install metered rental outlets in the street. In fact, the municipal administration can arrange these in every parking space since they can collect a very small 0.1 % tax for providing this service.
In fact, every parking meter can have this service in the street. By the way, many New Yorkers do not have cars.

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