Merrill Lynch Calls Cleantech The Sixth Technology Revolution

Cleantech, the next investing boom?


Merrill Lynch Compares Cleantech To Computing In The 70's

History shows that technology revolutions occur about every 50 years.

"We believe cleantech is at the beginning of a high-growth period much like computing was in the early 1970s. The application of technology to resource problems should cause profound changes in the energy, utility, and automotive industries." says Mr. Steven Milunovich

Mr. Milunovich believes the sixth technology revolution will be driven by clean technology - the application of technology to optimize the use of natural resources - and biotech.

The current pressure on cleantech stocks may continue for now, but the combination of friendlier government policies and economic improvement should lead to investment opportunities in 2010-11.

Is The New Economic Indicator Signalling That Smart Grid Plans Are On Hold?

From W.S.J.
A drop in power use, disrupts utility industry.

An unexpected drop in U.S. electricity consumption has utility companies worried that the trend isn't a byproduct of the economic downturn, and could reflect a permanent shift in consumption that will require sweeping change in their industry.

compel major changes in the way utilities run their businesses. Utilities are expected to invest $1.5 trillion to $2 trillion by 2030 to modernize their electric systems and meet future needs, according to an industry-funded study by the Brattle Group.

However, if electricity demand is flat or even declining, utilities must either make significant adjustments to their investment plans or run the risk of building too much capacity.

But what has executives stumped is that recent shifts appear larger than others seen previously.

"Oil Is Finite But Information Is Infinite".. Google's CEO Eric Schmidt

Bits, bytes, megawatts and kilowatts...it's all just data to me, but Google sees it as content. We saw how they revolutionized content traveling over the Internet.

U.S. Department of Energy Secretary Samuel Bodman said “the cheapest and most available source of new energy is the energy we waste”.

Is an antiquated power grid the biggest form of waste?

Here comes the “next generation” Internet. Think of all of the computing devices that are connected (plugged in) to the

"EnerNet" (Energy+Internet=EnerNet)

Eric Schmidt gave a speech at the New America Foundation that outlined what the "next generation" Internet will allow.

How will Google use the power of information for the energy industry?

Energy is really just another form of bits and bytes (data) that travels across a network.

When an air conditioner is turned on, data (or content) is being created.

Millions of ACs, refrigerators, Ipods etc. There are probably fifty times the number of other "computing devices" in your house generating data (content) compared to PCs/laptops.

When Google joined the Demand Response and Smart Grid Coalition they signaled their intent to dominate handling "information" traveling over the "EnerNet"

Schmidt's first suggestion is to use some of the bailout funds to upgrade the electric grid, and make it smart. Broadband was required before people could really utilize the Net, a smart grid is necessary for the CleanTech boom.

Every structure that relies on heating or air conditioning will require a "new PC".

Are smart meters the next generation PCs? The grid is similar to the Internet.

How will Google utilize (and monetize) the data created by the grid?

Here's how I see the next generation Internet and the analogy of previous Net winners.

Smart meters (Dell), chips that make devices more energy efficient (Intel), software that connects these devices to the EnerNet (Microsoft) and managing the data (content) that is generated when these devices are connected (Google)....and Google again.

Thoughts?

WalMart Makes Commitment To Wind Power

Having a major retailer commit to a product or service can be as transformational as a government mandate.

From Wall Street Journal Blog

WalMart Commits To Wind Power

The Bentonville, Arkansas-based retailer just announced a deal with Duke Energy to use wind power for 15% of the electricity at hundreds of its Texas stores. The wind will come from a Duke wind farm slated to go operational next spring.

What’s interesting about Wal-Mart’s announcement is the company’s long-term bet that using wind power will be cost-competitive with traditional power sources. Wal-Mart’s vice-president of energy said in a statement, “We’re purchasing renewable power at traditional energy rates,” though the company didn’t disclose specific terms.


Wind Energy stocks

Energy Efficiency And Grid Reliability Represent $65 Billion Market

Lux Research report predicts that focus energy efficiency and grid reliability will drive a $65 billion market opportunity in 2013.

The advent of distributed generation, distributed storage, and distributed intelligence will change power infrastructure into an intelligent and more nimble power web, according to a new report from Lux Research, "Alternative Power and Energy Storage State of the Market Q4 2008: Weaving the $65 Billion Power Web.

"Smart grid technologies, like advanced metering infrastructure and demand response services, will enable the transformation of the current grid to a more reliable and intelligent power web," said Ying Wu, Senior Analyst at Lux Research.

More on demand response and smart meter

Google Joins Smart Grid Coalition

Google joins Demand Response and Smart Grid Coalition

The Demand Response and Smart Grid Coalition (DRSG) is the trade association for companies that provide products and services in the areas of demand response, smart meters and smart grid technologies.

DRSG works to educate and provide information to policymakers, utilities, the media, the financial community and stakeholders on how demand response and smart grid technologies such as smart meters can help modernize our electricity system and provide customers with new information and options for managing their electricity use

How will Google use the power of information for the energy industry?

IBM Proposes Technology Fueled Economic Recovery Plan

From NY Times IBM Proposes Technology Economic Recovery Plan

Sixty-seven percent of electrical energy, for example, is lost because of inefficient power generation and grid management.

I.B.M. is increasingly playing the role of lead contractor in these so-called smart infrastructure projects around the world, from a traffic management network in Stockholm to electric grids in Texas.

computerized grids, thermostats and appliances can sense and communicate line failures or automatically turn off air-conditioners during peak load times to save money and fuel

What Has As Much Capacity As U.S. Wind, Solar, Geothermal And Biomass Combined?

The media rush to highlight every major new renewable power project, but another clean energy resource gets far less attention, even though it's flexible, abundant, relatively inexpensive and valued overall at billions of dollars.

Next 100 highlights the Invisible Energy Resource

According to a recent report by the North American Electric Reliability Council (NERC), this unheralded resource is equal to 29,000 megawatts of capacity during periods of peak summer demand--as much as all U.S. wind, solar, geothermal, and biomass power combined.

The report calls it "an effective and efficient capacity resource, on equal footing with generation" and says it "will become a critical resource for maintaining system reliability over the next ten years."

I've discussed about this technology before.

Know what it is and who the players are?

Energy Internet Or Electronet...Two Terms To Get Used To

Thomas Friedman in Hot Flat and Crowded recognizes the core green truth that the future is all about clean electrons -- that is, carbon-free electricity -- and energy efficiency.

A smart electrical grid is when moving power use to the grid also opens up the full potential of an "energy internet,"

Al Gore speaking at the Web 2.0 Summit:

The nation needs to build “an electronet,” a unified national smart grid, with high-voltage, low-loss underground wires that deliver renewable energy from the places that produce it — like the sunny Arizona deserts or the windy Dakota plains — to the cities where the majority of it is used. Such a grid would require a $400 billion investment upfront, but would pay off in just over three years, he said, because the nation spends $120 billion annually on costs from power failures attributed to the existing grid.

7 Ideas To Watch With Upcoming Energy Infrastructure Build

A new report by the Brattle Group estimates that the U.S. utility industry will have to invest between $1.5 and $2.0 trillion between 2010 and 2030 just to maintain current levels of reliable energy service for customers throughout the country.


The Energy Road Map does a great job summarizing “Transforming America’s Power Industry: The Investment Challenge 2010-2030”

They also list seven ideas to watch.

1) Smart Grid- Software, Sensors & Storage
2) Distribute Power & Energy storage
3) Cleaner Coal conversation gets emotional, but coal wins
4) Next generation biofuels push corn aside
5) Solar grows, but real breakthroughs still waiting in the lab
6) Nuclear tries to reengage public and political leaders
7) Geothermal energy

In addition, the report states that EE/DR programs could significantly reduce, but not eliminate, the need for new generation capacity. And, implementation of a new federal carbon policy would significantly increase the cost and change the mix of new generation capacity.

Suggested CleanTech Reading

A record amount of VC money is going into the CleanTech, or GreenTech space.

Here are some books I have found that give great insight on where some of the next great investments might be found in the CleanTech space.




Nicholas Carr, the author of "Does IT Matter?" (a book that was way ahead of it's time) provides more of his visions.
This book discusses how cheap, utility-supplied computing will ultimately change society as profoundly as cheap electricity did.



Best selling author Thomas Friedman follows up his "The World Is Flat" with a great insight as to how the Green Revolution could provide America with a great opportunity. "The green revolution we need is is like no revolution the world has seen".



Highlights the various types of renewable energy opportunities (trends, pros/cons, timeframes, profitability potential and myths).

GE Smart Appliances Reshape Energy Use

GE Announces Program To Reshape Energy Usage With Smart Appliances

"Now that ENERGY STAR® appliances are recognized by 75 percent of American consumers, the next step is to reshape when energy is being used," said Kevin Nolan, Vice President Technology for GE Consumer & Industrial.

"Peak hour energy demand is growing faster than total energy demand.


It is imperative that we begin to shift some of the energy load from peak hours to other parts of the day -- helping to avoid the need to build new power plants to meet the demand," he explained.

These "smart" or Energy Management Enabled Appliances and the utility "Smart Meters" help consumers manage their utility bills by enabling them to avoid peak hour energy usage and benefit from pricing.

For example, the automatic defrost feature on GE refrigerators is initiated by the internal electronics based on the number of refrigerator door openings and other input signals. If the refrigerator can delay the defrost cycle from occurring during peak energy usage hours, consumers will save money by paying for the same amount of energy, later in the day and at a lower rate.

A pilot program is already underway with Louisville Gas & Electric.

WiFi Thermostats Eliminate Need For Smart Grid

The "Information Superhighway" will connect all types of devices and deliver ALL types of data.

Energy efficiency through telematics is here.

Toronto-based Ecobee thinks it has a winning plan for reducing everyone's cost of heating and air conditioning, while giving utilities greater interaction with customers when needed

From ARS Technica WiFi thermostats set to change energy industry

The Ecobee connects to a thermostat through a standard HVAC interface, and hooks in to the Internet via a home WiFi network.

The thermostat regularly synchronizes its data with a secure Web portal.

Once networked, the thermostat can receive alerts, too, from whoever installed the device.

Previous smart thermostats required a smart grid, an electrical network also capable of passing data. Ecobee goes out of band, using the ubiquity of WiFi to pass data. The system can tie into home meters that track usage.

The kicker:

Because utilities pay for more power during peak periods—whether they generate that power themselves or buy it on the open market—being able to send an alert to a customer asking them to participate in backing off usage could have a disproportionate effect.

A Smart Grid Relies On Demand Response

SmartGrid offers an Industry News summary
Their take: That new transmission has to be smart and self-healing to better accommodate the stresses of intermittent wind.

NERC cites improving Demand Response and lagging grid

Highlights I found in the 2008 Long-Term Reliability Assessment from the North American Electric Reliability Corp

To consistently validate and measure the results of the demand response programs, NERC is inaugurating a demand response event analysis system (Demand Response Data Task Force), expected to be launched in 2010.

Significant increases in demand response programs over the next ten years are projected to reduce growth in demand and provide ancillary services across North America.

Demand response will become a critical resource for maintaining system reliability over the next ten years.

Though demand continues to grow, new development of supply-side options are becoming increasingly limited – many coal plants have been deferred or cancelled, nuclear plants are becoming more and more expensive, and transmission lines increasingly difficult to site.

Further, demand response also has an important role to play as more variable resources (such as wind) are added to the system. Variable resources, for example wind generation, often need a “dance partner” which can provide operational flexibility to maintain reliability during resource down-ramps that can be ssociated with them.

Demand response can provide all or a portion of the flexibility required for this integration.

Brattle Group consultant Ahmad Faruqui revealed that his firm has updated its 2007 assessment of DR’s present value. The previous assessment, called The Power of Five Percent, concluded that if DR could reduce peak demand by five percent it would produce a benefit stream over twenty years with a present value of $35B.

Since then, says Faruqui, the cost of providing peak energy has doubled. Meanwhile, DR technology costs have come down and regulators have started promoting faster adoption. Even at a five percent reduction, the present value jumps to $66B.

If DR can reduce peak demand by 25%, says Faruqui, the present value is $332B.

2008 Long-Term Reliability Assessment from the North American Electric Reliability Corp

CleanTech Opportunities Offer Inflection Point For American Economic Turnaround

M.R.Rangaswami at Earth2Tech outlines 3 opportunities to set America on a new path.

The resolution of the presidential election next week will be an opportunity for a fresh start.

1. Rebuild the national grid
2. Stimulate the Green Economy
3. Move to a sustainable economy

--------------------------------

America is at a Tipping Point and here are my 6 points (with some government incentives).

1. Reduce our dependence on oil..oil supply is finite. Solar and wind are free and supply is infinite.

2. Utilize our own natural resources (offshore drilling, ANWR) that buys us time (and lowers prices) until renewable energy becomes grid parity or competes with coal.

3. Reduce money going to oil producing countries (terrorist nations) and keep the money within our country (massive trade deficit reduction)..higher GDP,

4. Create millions of jobs (some that include manufacturing)

5. Allow people to be producers of energy in addition to consumers of it (HUGE transformation)..imagine the income change when Joe Consumer can sell power back to the grid while he's working at his job

6. Renewable energy technologies can be licensed to other countries...instead of buying oil, we can sell our own "oil" to other countries.

7. Profits generated by renewable energy companies (instead of foreign countries) can be put back into R&D and the economy.....the money stays here in the U.S.

The Land of Eco-Opportunity

U.K Creates Smart Meter Mandate

The U.K. Government announced yesterday that it will require all households to have smart meters installed over the next decade.

Announcing the mandatory smart meters roll-out, Lord Hunt said: “This is a major step forward; no other country in the world has moved to an electricity and gas smart meter roll-out on this scale.

What Happens When Electric Motors Go Green?

Each year billions of dollars and electricity are wasted from electric motors electricity that can only run at 2 speeds, ON or OFF.

Their inability to adjust power to varying loads, makes them one of the biggest “wasters” of electricity.

Improving motor efficiency is a huge and the easiest to implement untapped “green resource” and represents a multi-billion dollar opportunity.

Power Efficiency has developed a patented and patent-pending technology platform, called E-Save Technology™, which has been demonstrated in independent testing to improve the efficiency of electric motors by up to 35% in appropriate applications.

Electric motors consume over 25% of the electricity in the U.S., and many operate inefficiently.

Power Efficiency is also developing a new product based on E-Save Technology™ for the tens of millions of small motors found in applications such as residential air conditioning, pool pumps and clothes dryers.

The company is working with manufacturers to incorporate this technology directly into new motors and appliances.

Read our complete report on how Electric Motors Go Green

Google's Energy Ideas...What Is A Kilowatt Worth?

Do you roughly know what the price of kilowatt per hour (kWh) is, and that it fluctuates daily?

Would your your consumption habits change if you did?

Informed consumers are efficient consumers.

The N.Y. Times has a piece titled Google's Energy Ideas Might Emerge Under Open Source Licenses

Ed Lu, who works in advanced projects at Google said “the big area that we are looking at is energy information,”.

Buying electricity today, he said, is a bit like going to a grocery store where the items have no prices and where you get billed a month later for your purchases. Some engineers in Mr. Lu’s team, are working on tools to turn energy buyers into more informed consumers, he said.

VCs Discuss Cleantech At Seattle’s Renewable Energy Finance Forum

Gregory Huang at Xconomy gives us his highlights at the Top 10 Takeaways from VCs At Renewable Energy Forum

Key points I found of interest:

Record investment levels in energy

Cleantech isn’t a sector. It’s many different sectors with very different markets

Solar is dead. “We’ve placed our bets in solar already,” said Atluru of Draper Fisher Jurvetson. “You’re going to see solar drop off.

Smart grid is getting a lot of attention from info-tech investors, in part because it’s capital-efficient.

Waste, water, and recycling aren’t getting as much investment as they deserve, but that may change given the enormous market opportunities worldwide

time horizons for exits have increased to 7-9 years, up from 5-7 years not too long ago

The needle has moved from optimism to skepticism in cleantech

The enthusiasm of entrepreneurs in this sector is an order of magnitude higher than any other sector.

the panelists agreed that entrepreneurs are ahead of investors when it comes to dealing with the economic downturn

The full story.

700Mhz..The Frequency For Energy Efficiency?

I've discussed how I think the smart meter will be The Next PC.

Smart meters give energy consumers the ability to better manage their individual power consumption. It is the management of energy consumption by individuals that will bring one of the largest sources of carbon emissions in the world under control.

These "mini computers" will need to be connected to the Net continuously,

The question is....Who or what will be the service provider for them?

Data and energy-consumption choices are being offered to consumers like never before.

Utilities are investing in smart meters and advanced metering infrastructure (AMI) at a rapid pace. Engineering giants are partnering with smart grid start ups.

Utilities are deploying smart meter technology at a rapid rate to avoid the difficulty of building and permitting new power plants, to prepare for impending carbon regulation and more importantly because managing electricity use at a granular level opens up new business opportunities with customers.

Efficiency gains achieved by upgrading to a smarter grid from a conventional one would be like switching from a typewriter to a word-processor.

The smart grid is not “one” product, but rather, a solution suite of products and software technologies improving the grid’s overall performance. Thomas Friedman calls it the "Energy Internet".

As the Smart Grid grows, with digital devices (meters, relays, switches, routers, circuits) sending out more and more data, unlicensed spectrum could be the Achilles heel of your communication backbone.

In order for this data to be accurate, it has to be delivered over the Net without latency.

The real problem is that utilities have no dedicated spectrum.

700 MHz spectrum, a former television frequency, can carry between 20-25 miles without relays and requires less power to carry the signal (approximately 1250 sq miles per base station.)

Arcadian Networks provides “last mile” wireless carrier services to the energy sector (electric, water, and gas utilities and oil and gas companies). The company’s 700 MHz licensed spectrum delivers a converged IP network with voice and data communications for fixed and mobile applications.

The real-time broadband communications platform reduces operational costs, improves resiliency, and transforms electric grids into efficient “smart grids” and oil fields into optimized “smart fields”.