From
GreenBeat:
Cleantech companies just can’t seem to get it right.
At least, that’s the notion Peter Thiel — a co-founder of PayPal and president of Clarium Capital — subscribes to when he looks at cleantech companies as potential investing opportunities. He made the comments at a Commonwealth Club event in San Francisco Wednesday.
Despite all his talk about a distinct lack of innovation that improves everyday life in silicon valley, Thiel has been surprisingly bearish when it comes to cleantech companies — those that specialize in producing more energy-efficient and environmentally friendly energy, transportation methods and others. That’s not because he doesn’t believe in the technology — he just doesn’t like the way the companies are run, he said.
“Most of the people who run cleantech companies are sales people, not engineers,” Thiel said. “Something seems to have gone quite wrong with cleantech.”
As a result, most cleantech companies that try to develop alternative energy forms are building power sources that are more expensive. Solar panels, for example, are still not a cost-efficient way to generate power because companies have made the assumption that people will pay more for more environmentally friendly ways of producing energy, Thiel said.
“We need something cheaper, not more expensive,” he said. “It doesn’t matter if the energy is cleaner, it doesn’t work if it’s more expensive.”
There is no doubt that unrealistic expectations about governments increasing the costs of energy through cap-and-trade legislation contributed to the notion that clean tech would become competitive by making the alternatives cost more. Thiel may be right about the need for more engineers in the industry, but they may need more pragmatic policy analysts as well. His bottom line is right on target -- we need less expensive energy.
16 comments:
"His bottom line is right on target -- we need less expensive energy."
I completely agree Roger. We need energy R&D to get cheaper energy (cheaper than coal).
LFTR (liquid fluoride thorium reactor) is expected to be 50% of the cost of current LWR nuclear (no high pressure plumbing for one thing) thus competitive with coal. That's one reason why China has launched a R&D program for LFTR.
Energy cheaper than from coal
http://energyfromthorium.com/2010/07/11/ending-energy-poverty/
China Takes Lead in Race for Clean Nuclear Power
http://www.wired.com/wiredscience/2011/02/china-thorium-power/
I'm beginning to wonder about nuclear power as a low-cost option to coal and natural gas. This is particularly true if natural gas prices not only do not rise, but actually fall.
One signficant problem with nuclear power plants today is that they are such big investments, it's impossible to make the kind of annual improvements in technology (e.g. costs declining by several percent per year) that are possible with smaller technologies.
For example, if a company builds a fuel cell for under $1 million that operates on natural gas, there are plenty of companies willing to take a bit of a gamble (that the technology might not work) because they can say they're committed to environmentally friendly technology:
http://www.fastcompany.com/1561428/is-the-bloom-energy-server-the-future-of-plug-and-play-electricity
But it's quite another matter to throw the dice with $5 billion for a nuclear power plant.
And so if people don't want to gamble with nuclear power plants, that encourages nuclear power plant designs not to change very fast. Which means that competitors that *can* change fast eventually catch up and pull far ahead.
The world needs cheap renewable energy, and I need a Lamborghini.
On the whole, I prefer my chances.
What is needed for nuclear power is legislation like what was done for cell phones. Congress strictly limited local interference of siting of cell towers. Without it wireless technology would have been severely hindered.
markbahner said... 2
"But it's quite another matter to throw the dice with $5 billion for a nuclear power plant."
There is an 'early adopter' cost for almost everything.
Areva's 1.6 GW nuke plant in Finland looks like construction will take 84 month project and the final bill will be something like $7 billion.
The same plant is being built in China and is on schedule to be built in 42 months for 40% less then the Finnish plant.
Some of that is cheaper Chinese labor costs, most of it is 'lessons learned' building the first one.
Cost savings aren't necessarily a result of creating a 'more efficient design', a lot of it is getting more efficient building the design you have.
The bloom boxes are reasonably competitive(with tax credits) for those applications where on site power backup is required anyway. They reverse the role, the grid becomes the backup.
"less expensive"!
Various methods of energy production involve different levels of CO2 footprints. CO2 footprints cause various damages with associated COSTS. But fossil fuels are priced low because these costs are INCORRECTLY IGNORED by both governments and energy producers.
Roger says: "His bottom line is right on target -- we need less expensive energy". But his bottom line is OFF TARGET so long as fossil fuel prices don't include their CO2 footprint costs!
Explicitly dealing with CO2 footprint COSTS should make the application of the "Iron Law" solve the mess generated by these kinds of misdirected discussions!
"The world needs cheap renewable energy, and I need a Lamborghini. On the whole, I prefer my chances."
I don't agree. Mainly because the world is going to live a long time. ;-)
But seriously, I'm 50+, and I expect/hope to see the day when photovoltaics produce electricity as inexpensively as coal-fired power plants. I expect that day to arrive within the next 30 years (at least for places like the U.S. Southwest).
P.S. There's an interview in January/February's MIT Technology review in which an MIT professor (who won a McArthur "Genius" grant) noted that research he's done--backed by field testing--appears to show that the energy density obtained from wind can be increased by up to a factor of 10 by using vertical blade ("egg-beater") wind turbines, lined up in a manner based on how schools of fish swim. If that completely pans out, it would be potentially revolutionary for wind.
-6-Len Orenstein
Thanks for the comment.
What part of my discussion of the "iron law" do you disagree with? It is not a theoretical concept but an empirical observation. I am fully aware of the rationale for pricing externalities, and its theoretical appeal. However, it is not in the cards in the manner that you describe.
I doubt there are any CO2 footprint costs at all, apart from the 5 billion or so spent in looking for such problems and not finding them. One caveat is the extra military protection cost for oil. While the US spends that money, the rest of the world also bears the burden via buying oil in dollars.
Generally though, as the comments demonstrate things are moving apace and good ideas are actually being funded. Both governments and venture capitalists are sifting these good ideas, ie those which aim at reducing costs for new tech, from the bad ones, ie those which rely on making existing fuels more expensive. And it seems they are doing not that badly so far.
Ergo I feel there's a little too much pessimism around. It's actually the most exciting period in alternative fuels development that we've ever had. Whether this is down to resource scaremongering, thermageddon scaremongering or commodity profiteering is a point to ponder. Maybe it was even that mystic "invisible hand" that some folk seem to worship.
"Explicitly dealing with CO2 footprint COSTS should make the application of the "Iron Law" solve the mess generated by these kinds of misdirected discussions!"
I don't think so. The net (costs minus benefits) present value costs of present CO2 emissions is very low.
A case could easily be made (and argued endlessly) that the benefits of CO2 emissions exceed the costs at present.
For example, I can easily argue that the average world temperature in this century has been better for the world than the average world temperature in the 19th century.
"His bottom line is right on target -- we need less expensive energy."
I think what we need is for alternative/renewable energy technologies to be able to produce electrical power at a cost less than electricity from hydrocarbon sources. Artificially dickering around trying to adjust the price is a mug's game.
The Great Greenie plan was to artificially add to the cost of hydrocarbon based electricity production and subsidize renewable energy sources so that their preferred energy sources ended up being "less" expensive.
All in all a dumb plan dreamed up by green utopian do-gooders, and promoted by rent seeking business types addicted to wealth through friendly government fiat . . . can you say General Electric.
Right now the world is awash in hydrocarbon sources, the Great Global Warming hysteria is dying off as the planet and Mother Nature simply refuse to cooperate with the Believer's computer models and forecasts and we are stuck in some kind of in-between energy policy time frame.
Anybodies guess what will happen next, but I wouldn't bet my money on "sustainable" energy companies who exist now only because of massive taxpayer funded subsidies.
Governments that give subsidies can very easily take them away and when bankrupt nations need to cut spending subsidies to rich corporations would a "target rich environment".
"Cost savings aren't necessarily a result of creating a 'more efficient design', a lot of it is getting more efficient building the design you have."
Perhaps, but even there nuclear plants suffer. How many 1600 MW nuclear plants are going to be built?
Not very many, compared, for example, to if residential fuel cells ever become competitive.
"The bloom boxes are reasonably competitive(with tax credits) for those applications where on site power backup is required anyway. They reverse the role, the grid becomes the backup."
The benefits of any fuel cells is that (potentially) the waste heat can be used to heat the buildings involved.
In contrast, 2/3rds of the heat from a nuclear plant is wasted.
-8- Roger:
Markets are incapable of dealing with long-term risks, like most of those associated with increasing atmospheric CO2. At present, governments are afraid to try to deal with such 'uncertain' risks of 'uncertain' magnitude.
I know you know this.
But these are crucial issues that need to be discussed explicitly EVERY time the comparative costs of different energy technologies is raised.
Otherwise, it never will be "in the cards".
Mark,
"In contrast, 2/3rds of the heat from a nuclear plant is wasted."
Actually LFTRs operate at higher temps so they are almost 50% efficient. The waste can be used to desalinate sea water if located on the coast (near the population centers)or for industrial process heat.
I'm not against generating electricity (and heating space/water) with the waste heat in a residential fuel cell (if it is cheaper). However, using nat gas does emit co2 doesn't it? For some, that's a big negative.
markbahner said... 12
"If residential fuel cells ever become competitive."
I grew up in a Pratt and Whitney company town, makers of the fuel cell that went to the moon.
I've been hearing about the benefits of 'residential fuel cells' since I was in grade school. The company would send engineers to our school to give presentations. Within 10 years we were going to have subdivision fuel cell power stations and we would all be able to heat our homes with the waste heat.
That was 40 years ago.
UTC(new name for pratt & whitney) has managed to sell 260 stationary fuels cells in 40 years.
Mostly to places that required on-site backup power.
http://www.utcpower.com/fs/com/bin/fs_com_Page/0,11491,0240,00.html
Maybe fuel cells finally catch on.
"Actually LFTRs operate at higher temps so they are almost 50% efficient."
Charles, I agree that LFTRs are definitely better than Generation III+ uranium reactors, or even most of the Generation IV reactors.
But the fact is that there presently isn't a single commercial LFTR in the whole world.
And most of the people with expertise in nuclear power (Westinghouse, Areva, General Electric) don't seem interested in trying to develop LFTRs.
I agree that LFTRs are much more promising than uranium light water reactors. But wind and photovoltaics are constantly getting less expensive. And natural gas appears to be much more plentiful than anyone guessed a couple decades ago.
Very densely populated countries like Japan, Taiwan, India and China seem to be more likely to be pioneers in LFTR than the U.S.
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