News Article | April 25, 2017
Michael Bloomberg, an outspoken environmentalist and former New York City mayor, had some harsh words for carbon capture and storage, the unproven technology that proponents say will turn fossil fuels into "clean" energy sources. "Carbon capture is total bullshit" and "a figment of the imagination," Bloomberg said on Monday, addressing a crowd at the Bloomberg New Energy Finance summit in New York. SEE ALSO: The Kentucky coal mining museum switches to solar power Carbon capture involves taking the emissions from coal and natural gas-burning power plants and industrial facilities, then burying the carbon deep underground or repurposing it for fertilizers and chemicals. The idea is that by trapping emissions before they enter the atmosphere, we can limit their contribution to human-caused climate change. Climate experts say it will be next to impossible to eliminate the world's emissions without carbon capture systems. The International Energy Agency has called the technology "essential," given that countries are likely to keep burning coal, oil, and natural gas for decades to come. But to Bloomberg and other critics, that's precisely the problem. By investing billions of dollars into carbon capture, countries can effectively delay the inevitable — the end of fossil fuels — and postpone investments in genuinely cleaner energy, such as wind and solar power. So far, only a handful of carbon capture projects even exist around the world, and many of them have faced steep cost overruns and delays. The Kemper Project in Mississippi — billed as America's "flagship" carbon capture project — is more than $4 billion over budget and still not operational. Yet President Donald Trump and many coal industry leaders talk about carbon capture as if it's already solved the nation's energy challenges. If we have "clean coal," why invest in alternatives? Bloomberg has also used aggressive language to express disdain for the coal industry. "I don't have much sympathy for industries whose products leave behind a trail of diseased and dead bodies," he wrote in his new book, Climate of Hope, which he co-authored with former Sierra Club executive director Carl Pope. "But for everyone's sake, we should aim to put them out of business," Bloomberg said. The billionaire media mogul has donated some $80 million to the Sierra Club to help the environmental group shut down coal-fired power plants as part of its Beyond Coal campaign. More than 250 U.S. coal plants have shut down or committed to retire since the campaign began in 2011. Many of those closures came as natural gas prices plummeted, prompting utilities to ditch coal, and as federal clean air and water rules made it too costly to upgrade aging coal plants. Of the nation's more than 500 coal plants, only 273 now remain open, and Bloomberg's philanthropy arm and the Sierra Club are working to shutter those, too. The former mayor also recently announced a new coal-related donation. Bloomberg told the Associated Press that he plans to donate $3 million to organizations that help unemployed coal miners and their communities find new economic opportunities. Bloomberg Philanthropies highlighted the struggles of miners in a new film, From the Ashes, to be featured at the Tribeca Film Festival in New York this week. Coal miners "have paid a terrible price," he told the AP. WATCH: Documentary 'From the Ashes' shows U.S. coal communities in a new light
News Article | April 17, 2017
« OSU team developing Gas and Biomass to Liquids (GBTL) technology for production of liquid hydrocarbons | Main | Honda introduces Clarity Plug-in Hybrid and Clarity Electric at New York show; targeting 75K Clarity vehicles in 4 years » ChargePoint, the world’s largest electric vehicle (EV) charging network, is rapidly expanding both its technical capability with the introduction of its modular Express Plus EV fast-charging platform (up to 400 kW) (earlier post) as well as its geographic reach with its expansion into Europe (earlier post). The recent expansions of both its charging equipment and its network—which integrates third-party EVSE manufacturers—is laying the foundation for what ChargePoint sees as an ecosystem that not only provides charging services for millions of electric vehicles, but also works in collaboration with utilities to provide valuable grid balancing services with support for the intermittent generation of renewables. Utilities are dealing with three major trends, Lonsdale noted: digitalization, decarbonization and decentralization. Electric vehicles can provide a big help, he suggested, all the while tied to driver needs. ChargePoint’s stance is bolstered by a new MIT study that suggests, in part, that electric cars that plug into the grid, could, collectively, act as a massive “virtual battery” for grid energy storage. ChargePoint envisions that at scale—i.e., with wide deployment of electric vehicles—80% of charging will be at home or at work, while 20% will be public—i.e., in parking lots, streetside or fast charging stations on the highway. EVs with more than 200 miles of range will accelerate already rapid EV sales growth, and are expected to reach 35% of global new car sales by 2040, according to Bloomberg New Energy Finance. Long-range EVs will need ultra-fast DC charging for long-distance trips, while electric buses and service trucks require high-power charging for their daily routines. ChargePoint’s new Express Plus platform can add 300 km (186 miles) of range in 11 minutes, Lonsdale noted. ChargePoint envisions, however, that the EV market will evolve with a variety of pack capacities, all based on weight, distance and performance ratios for the particular vehicles and their intended uses. For example, he noted, “there will always be a place for 20-30 kWh packs.” Lonsdale suggested that there might be consolidation around three pack categories in the short- to medium term: 20-30 kWh; 60 kWh; and 100+ kWh. MIT: Utilities and the virtual battery. In the power grid, supply and demand need to match exactly. If consumers demand more power than producers can supply, or if producers provide more power than consumers need, the result can be rolling blackouts. Power producers usually keep turbines spinning at a few offline plants, so they can ramp up production if demand spikes. Or they maintain coal-fueled backup generators that can be fired up quickly. But these approaches are either costly, polluting, or both. In theory, the grid could employ a battery to keep supply and demand in balance, but existing battery technologies offer no cost savings over power production. In the new paper, the MIT team argues that “smart appliances” in homes and offices, such as thermostats that can be adjusted remotely and electric cars that plug into the grid, could, collectively, act as a massive battery, offering a lower-cost, lower-emission alternative to backup power generation in the grid. Getting power producers to trust that virtual battery, however, requires rigorously quantifying its capacity and charge and discharge rates. In the paper, the researchers take some initial steps in that direction. Madjidian and two of his LIDS colleagues—Mardavij Roozbehani, a principal research scientist; and Munther Dahleh, the William Coolidge Professor of Electrical Engineering and Computer Science and director of MIT’s Institute for Data, Systems, and Society—presented their preliminary answer to that question at the Institute of Electrical and Electronics Engineers’ Conference on Decision and Control. In treating a collection of flexible electrical loads as a single battery, the researchers identified a fundamental tradeoff between the battery’s capacity and the rates at which it can charge and discharge. That tradeoff, however, can be renegotiated on a daily or even hourly basis. If, one day, a power provider expects strong but erratic winds, it might want to privilege quick charging, in order to capture the output of its wind turbines. If, on another day, it expects almost all of its customers to begin turning on their home air conditioners in the evening, it might want to privilege capacity, in order to handle a surge of demand. Although conventional batteries can’t do this, devices with flexible charge rates—such as EVs—can, Madjidian said. “ For example, an electric car parked in an office building needs to recharge its battery, but the charge rate can be fast or slow, and the charging might take place at any time within, say, a four-hour window. Slowing the charging rates or deferring the charge times for a group of cars reduces demand on the grid (equivalent to a release of energy from the grid battery). The charge rate of this virtual battery is limited by the available capacity of the cars’ own batteries and by their individual maximum charge rates. The LIDS researchers first developed a very simple model of a grid with flexible loads, in which the loads were all the same size and came online —the equivalent of electric cars’ being plugged in—at regular intervals. That model suggested the tradeoff between the capacity of the virtual battery and its charge and discharge rates. But in investigating the reasons for that tradeoff, the researchers identified a fundamental principle they believe will hold for almost any collection of flexible loads. Suppose, for instance, that you have two batteries, one that can be charged or discharged quickly, the other slowly. Now suppose that you’re treating these two real batteries as a single virtual battery, and the virtual battery is half full. How do you distribute the virtual battery’s charge across the two real batteries? If you want to maximize the charge rate of the half-full virtual battery, you need to keep the faster-charging real battery more depleted than the slower-charging one; that way, it can handle the bulk of any incoming charge. The opposite is true, however, if you want to maximize the discharge rate; then, you need to keep the faster-charging battery fuller than the other, so it can handle the bulk of any discharges. To see how charge rates trade off against battery capacity, suppose that both of the real batteries are empty. To maximize the charge rate of the virtual battery, you need to use both real batteries; any two batteries can absorb charge faster than either of them can in isolation. But the faster-charging real battery will fill up before the slower-charging one does. So at the maximum charge rate, the capacity of the virtual battery is the capacity of the faster real battery, plus however much charge the slower battery can absorb by the time the faster battery fills. The remaining capacity of the slow battery must go unused. Lowering the aggregate charge rate, however, allows the slower battery to absorb more charge by the time the faster battery is full, increasing aggregate capacity. In the paper, the LIDS researchers were able to characterize this set of tradeoffs for their simple model. In ongoing work, they are developing more realistic models, in which both the size and the timing of the loads varies.
News Article | May 2, 2017
Lyndon Rive, president for global sales and service at Tesla's energy division, recently said that it makes "perfect sense to convert every island out there right now to solar and storage." Indeed, that is exactly what Tesla intends to do. Island microgrids currently represent 36 percent of Tesla's total power storage capacity deployed to date, according to a new report from Bloomberg New Energy Finance. Since November 2016, the company has deployed first or second generation versions of its grid-scale Powerpacks on five islands, researchers found. Four of the islands are in the Pacific: Ta’u in American Samoa, Monolo island in Fiji, and Kauai and Honolulu islands in Hawaii. The fifth project was on an island in North Carolina, where Tesla’s first generation Powerpacks were deployed in a solar-plus-storage microgrid to support the island’s 3-megawatt diesel generator. BNEF’s Energy Storage Project Database tracked a total of 157 megawatt-hours of energy storage capacity installed by Tesla in 2016 and 17 megawatt-hours installed in the first qurater of 2017, for a total of 174 megawatt-hours deployed in recent months. "The recent projects suggest that megawatt-sized island microgrids represent an important component of the company’s grid-scale storage strategy," the report states. However, "there is little to suggest that Tesla is seeking to become a full-service microgrid operators in underserved regions," the authors added. "Most of the islands where it has deployed its technology to date are well developed and served by local utilities." Tesla does not appear to be installing distribution grid technology or managing retail electricity operations, both of which are crucial to the successful deployment microgrids in frontier markets (as we've covered). Tesla is hardly the only company targeting the island microgrid market. Energy storage players Fluidic Energy and Electro Power Systems also deployed new microgrid projects in the first quarter of 2017, according to BNEF. In addition, the International Renewable Energy Agency (IRENA) and the Abu Dhabi Fund for Development (ADFD) recently committed $44.5 million for four projects in the Pacific and Africa, including 30 megawatts of new capacity for islands announced in January. BNEF tracked 48 megawatts of new generation assets commissioned or announced in Q1 of this year in the the Pacific and Indian oceans regions alone. Back on the mainland, technology giants have figured prominently on the microgrid map, including Schneider Electric and Engie, which signed an agreement last month to improve energy access in off-grid areas of Southeast Asia. Engie also signed an agreement with Electric Vine Industries to jointly develop, finance, build and operate solar-powered microgrids for 3,000 villages in Papua, Indonesia. The project is expected to reach 2.5 million people for a total investment of $240 million over the next five years. Internet tech giants are also getting in on the action. Last month, Facebook and Microsoft joined with investment firm Allotrope Partners to launch the "Microgrid Investment Accelerator," which will mobilize roughly $50 million between 2018 and 2020 to expand energy access in parts of India, Indonesia and East Africa -- with an estimated addressable market of 212 million people. In a study released along with the accelerator announcement, Allotrope found that market players in the three selected geographies are on track to develop 7 megawatts of microgrids -- serving approximately 300 villages, and 63,000 homes and community organizations -- within 12-18 months. Assuming half of that pipeline actually gets commissioned, the market would need $20 million to develop the projects this year. By 2020, that financing requirement could climb to more than $100 million. For Facebook, which is providing seed financing for the investment accelerator, deploying microgrids in frontier markets is about supporting energy efficient systems and expanding connectivity around the globe. "Ultimately, we anticipate these types of partnerships will assist in broadening access to our connectivity efforts," a spokesperson told GTM. For a number of reasons -- from technology cost declines, to new market entrants, to policy shifts -- BNEF notes "2017 is shaping up as an important year of groundwork-laying for microgrids in remote or unelectrified regions of the world."
News Article | April 17, 2017
Consumers have seen flat or declining energy costs as renewable energy becomes a greater part of the energy mix of Minnesota and the nation. That’s one of the findings in the annual 2017 Sustainable Energy in America Factbook, published by Bloomberg New Energy Finance in partnership with the Business Council for Sustainable Energy.
News Article | April 26, 2017
Last year, Michael Liebreich, founder and chairman of the advisory board for Bloomberg New Energy Finance, stood in front of a packed room at BNEF ‘s Future of Energy Global Summit and spoke about the record investment in clean energy in 2015. The streak would not last. Global investment in clean energy in 2016 was down 17 percent overall, according to BNEF, driven by the slowdown of the Chinese economy and technology cost reductions. Despite the global downturn of cleantech investment in 2016 and concerns about changing political winds in the U.S., decarbonization is happening and momentum is accelerating on various fronts, according to Liebreich and others at this year's Future of Energy summit. This decidedly upbeat outlook was driven by the economics of renewables. Cost considerations by both utilities and customers are driving adoption of clean energy all over the world. Renewable energy installations are up in 2016 overall and investment in renewables out-invests fossil fuels by two to one. “This is not alternative energy,” said Liebreich. Green bonds, a market nonexistent about a decade ago, will be $123 billion this year according to BNEF, and could reach $150 billion, according to the Climate Bonds Initiative. Last November, Bank of America launched a single $1 billion green bond, nearly double the size of its previous bond of $600 million in 2015, and it underwrites scores of others. “We practice what we preach,” said Raymond Wood, managing director and global head of power, utilities and renewables at Bank of America. Beyond investment, the decoupling of the American economy from energy use also means that the U.S. is halfway to meeting its near-term Paris climate goals, according to Liebreich. As the U.S. has decarbonized, electricity and gas prices are down 20 percent in the past eight years, he noted. Liebreich wasn’t the only one with a positive view. “Maybe we should approach this and say the glass is half full,” said Michael Bloomberg, billionaire and former New York mayor, of action on climate change while pitching his new book, Climate of Hope, co-written with former Sierra Club executive director Carl Pope. The next four to eight years will provide “an age of plenty on steroids,” Liebreich said of the energy landscape. Cheap wind, solar, gas, coal and oil are a reality across much of the globe and energy storage costs are falling. Simply put: energy efficiency technologies and falling costs of renewables can drive decarbonization based on economics, and changes at the federal level in the U.S. will have limited impact, many at the summit argued. But cheap everything can also complicate the ability to radically decarbonize growing global economies. “It doesn’t matter how much you turn up the renewables knob; it’s very difficult to remove the last fossil fuels,” said Liebreich. That is particularly true in some developing nations where coal is still coming on-line at an impressive clip. Even so, in India, for example, some solar projects are coming in with prices cheaper than coal already. In developed nations, the key will be turning electricity capacity markets into demand-led flexibility markets, asserts Liebreich. The problem with capacity markets, as most are structured, is that they can lead to over-provisioning with inflexible load and are not incentivized to reduce peak demand. The conversation on energy market reform is already happening in some places, but there is still a long way to go. “We need to work harder on the markets and then let the markets do the work,” said Auke Lont, CEO of Statnett, Norway’s grid operator. Even with the monumental challenge of electricity market reform worldwide, significantly decarbonizing the electricity sector is probably the easy part. To meet Paris climate goals, everything else -- and transportation in particular -- needs to decarbonize. On the personal transportation front, Liebreich is also upbeat, though. “We’re very bullish,” he said. In particular, he said that once the sticker price of an electric vehicle is the same as an internal combustion engine vehicle, EVs and plug-in hybrids could meet 40 percent market share of new vehicles within five years. BNEF estimates that happening between 2025 and 2030. “This stuff can change fast,” he said.
News Article | April 25, 2017
US Secretary of Energy Rick Perry says the United States and China were making a real impact on reducing emissions, but questioned the actions of France and Germany (AFP Photo/Brendan Smialowski) Washington (AFP) - The United States should stay in the Paris climate accord but renegotiate it, Energy Secretary Rick Perry said Tuesday, alleging that some European countries were not doing enough to curb emissions. A decision is expected by President Donald Trump next month on whether or not to stay in the landmark 2015 Paris Agreement limiting global carbon emissions, signed by 194 countries. "I'm not going to say I'm going to go tell the president of the United States, 'Let's just walk away from the Paris accord'," Perry said during the Bloomberg New Energy Finance conference in New York. "But what I am going to say is, I think we probably need to renegotiate it," he said. "We need to sit down and they need to get serious about it," he said. Perry offered no details about how he thought it should be renegotiated, but said said the United States and China were making a real impact on reducing emissions. He then questioned the actions of France and Germany. He gave no specifics on France, other than to say he gave French and German ministers a look that was meant to imply, "What are you all doing?" during a G-7 meeting in Rome earlier this month. Germany, he went on, has made a decision to "get out of the nuclear business" and "double down -- to hear them tell it -- on renewables," he said. "But the fact is their emissions have gone up because they are using more coal, and they are using coal that is, you know, not clean technologies," Perry added. "My point is, don't sign an agreement and then expect us to stay in an agreement if you are not going to really participate and be a part of it." During his campaign for the US presidency, Trump vowed that he would scrap US participation in the Paris accord. After his November 8 election, however, Trump has been evasive on the subject, at one point saying he had "an open mind." His secretary of state, former ExxonMobil chief executive Rex Tillerson, told lawmakers at a confirmation hearing that the United States should stay in the agreement, which was reached after years of negotiations. Although Trump cannot unilaterally dismantle the accord, he can initiate the process for a US exit from the agreement. The United States is the world's biggest economy and the second largest emitter of carbon dioxide after China, and its exit would be a major blow to global efforts to combat climate change.
News Article | April 21, 2017
John Kelly has said Thursday that the U.S.-Mexico border wall's construction will start by summer end. We look at the possible ecological damage that the border wall can cause. After months of speculation about when the construction of the U.S.-Mexico border wall proposed by President Donald Trump will start, Homeland Security Secretary John Kelly told Fox News Thursday that it will start by the end of summer. The announcement comes a day before the scheduled visit of U.S. Attorney General Jeff Sessions and Kelly to San Diego to observe federal operations at the border with Mexico, reports said. "Just in the last 60 to 90 days, the movement of illegal immigrants up from Central America through Mexico has dropped off 70 percent," Kelly told Fox News. "We’re at about a 15, 16 year low, and frankly, we haven’t done all that much yet," he added. Read: Why Is Trump's Mexico Border Wall Being Sued? Although there has been much debate about whether or not Trump's proposed border wall be able to curb the illicit flow of people and drugs, the environmental damage which it will cause cannot be overseen. The existing 654 mile wall and fences on the U.S.-Mexico border has harmed the local ecology already. The wall has cut off, isolated and reduced populations of some of the rarest animals in North America such as the jaguar and ocelot, which is also known as the dwarf jaguar. The wall has led to creation of roads through wild lands and has caused ecological imbalance, according to Vox. The new proposed border wall will threaten 111 endangered species as it passes through four key wildlife reserves on the U.S. side of the border and also several nature reserves on the Mexican side. Several migratory birds such as the bald eagle — America’s national bird — will be affected along with marine animals such as manatees or sea turtles. Another factor is the emission produced during the construction of border wall. Conservationists pointed out that the amount of concrete needed to build a solid wall across the whole border would produce huge amounts of carbon dioxide with Bloomberg New Energy Finance calculating a figure of up to 1.9 million tons depending on how high it might be.
News Article | May 3, 2017
Speaking this week at the Bloomberg New Energy Finance conference in New York, Total SA’s chief energy economist, Joel Couse, forecasted that EVs will make up 15 to 30 percent of global new vehicle sales by 2030. Oil demand for transportation fuel see its “demand will flatten out,” after 2030, Couse said. “Maybe even decline.” Colin McKerracher, head of advanced transport analysis at Bloomberg New Energy Finance, sees Couse’s forecast as the highest EV sales margin yet to be forecasted by a major company in the oil sector. “That’s big,” McKerracher said. “That’s by far the most aggressive we’ve seen by any of the majors.” Royal Dutch Shell Plc sees a similar trend with oil demand in transportation flattening out in the near future. Chief Executive Officer Ben van Beurden said in March that oil demand may peak in the late 2020s. In November during an interview, Shell CFO Simon Henry said that demand is expected to peak in about five years. Shell and Total SA have been looking to diversify their energy assets through hydrogen as a transport fuel. In January, both companies joined a global hydrogen council that included Toyota, Liquide SA, and Linde AG. The companies will be investing about $10.7 billion in hydrogen products over the next five years. Like hydrogen fuel cell vehicles, electric vehicles have major walls to climb to find mass adoption in vehicle sales and infrastructure. One barrier is the cost of owning an electric vehicle versus a cheaper, comparable gasoline-engine vehicle. The battery pack in an EV can be quite expensive, making up half the cost of the car, according to BNEF. Backers of EVs point to two trends fast approaching the market; with one being the longer range, 200-plus-miles per charge EVs coming to market like the Chevy Bolt and Tesla Model 3. The higher-priced versions of the Tesla Model S and Model X are thought to be a sign of it, with consumers willing to finance or lease one of these EVs to gain access to more power and longer range. Automakers are feeling pressed by strict emissions reduction rules in Europe and China, with other markets like the U.S., Japan, and South Korea having similar standards. Auto Shanghai has been a showcase for existing and startup automakers launching several EVs to the China market, with some of them ending up overseas. It’s helping that lithium ion battery prices are dropping about 20 percent year, as automakers spend billions on electrifying their vehicle lineups. Volkswagen wants to see at least 25 percent of its vehicles sold in 2025 to be EVs. Toyota is moving toward selling zero fossil-fuel powered vehicles by 2050. Another sign that the Total SA report carries some weight is the diverse and broad portfolio of EVs that automakers till be rolling out on the market soon. “By 2020 there will be over 120 different models of EV across the spectrum,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “These are great cars. They will make the internal combustion equivalent look old fashioned.” Electric cars only make up about 1 percent of global vehicle sales, so making it to 30 percent in the short-term future would be a huge leap. Analysts point to a few market forces that need to be addressed before that technology takes off in sales. Among those issues are pre-incentive prices coming down, distance per charge going up beyond 300 miles, and the fast charging infrastructure becoming pervasive and cost competitive to gas pumps.
News Article | May 3, 2017
Following Shell, oil major Total has now also indicated it is expecting increasingly tough competition from electric vehicles (EVs), writes John LeSage of Oilprice.com. One significant trend is the wide range of EVs that will be available in a few years. Courtesy Oilprice.com. Speaking at a recent Bloomberg New Energy Finance conference in New York, Total’s chief energy economist, Joel Couse, forecasted that EVs will make up 15 to 30 percent of global new vehicle sales by 2030. Oil demand for transportation fuel see its “demand will flatten out,” after 2030, Couse said. “Maybe even decline.” Colin McKerracher, head of advanced transport analysis at Bloomberg New Energy Finance, sees Couse’s forecast as the highest EV sales margin yet to be forecasted by a major company in the oil sector. “That’s big,” McKerracher said. “That’s by far the most aggressive we’ve seen by any of the majors.” Royal Dutch Shell earlier projected a similar trend with oil demand in transportation flattening out in the near future. Chief Executive Officer Ben van Beurden said in March that oil demand may peak in the late 2020s. In November during an interview, Shell CFO Simon Henry said that demand is expected to peak in about five years. Shell and Total have been looking to diversify their energy assets through hydrogen as a transport fuel. In January, both companies joined a global hydrogen council that included Toyota, Liquide, and Linde. The companies will be investing about $10.7 billion in hydrogen products over the next five years. Like hydrogen fuel cell vehicles, EVs have major walls to climb to find mass adoption in vehicle sales and infrastructure. One barrier is the cost of owning an electric vehicle versus a cheaper, comparable gasoline-engine vehicle. The battery pack in an EV can be quite expensive, making up half the cost of the car, according to BNEF. Backers of EVs point to various positive trends. One is the longer range, 200-plus-miles per charge EVs coming to market like the Chevy Bolt and Tesla Model 3. The higher-priced versions of the Tesla Model S and Model X are thought to be a sign of it, with consumers willing to finance or lease one of these EVs to gain access to more power and longer range. Another is that automakers are feeling pressed by increasingly strict emissions reduction rules in Europe and China, with other markets like the U.S., Japan, and South Korea adopting similar standards. Then it’s helping that lithium ion battery prices are dropping about 20 percent year. Finally, automakers are spending billions on electrifying their vehicle portfolios. Volkswagen wants to see at least 25 percent of its vehicles sold in 2025 to be EVs. Auto Shanghai has been a showcase for existing and startup automakers launching new EVs to the Chinese and international markets. “By 2020 there will be over 120 different models of EV across the spectrum,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “These are great cars. They will make the internal combustion equivalent look old fashioned.” Electric cars only make up about 1 percent of global vehicle sales, so making it to 30 percent in the short-term future would be a huge leap. And there are still major barriers, related to price, driving range and availability of infrastructure. But the likes of Total and Shell clearly regard EVs as a major challenge now. This article was first published on Oilprice.com and is republished here with permission.
News Article | April 30, 2017
It started with a crowdfunding startup, an investment from Prince, and the idea to help new solar companies tackle business challenges that can be hard to overcome on their own. Now, four years later, the idea has morphed into a group called Powerhouse, and notably, in a world flush with tech startups, it’s one of the only incubators out there focused on launching and growing solar companies. Powerhouse runs an accelerator and an incubator program. An accelerator typically provides a small amount of funding, free or low-cost office space, and networking opportunities with investors and customers for young companies that are still developing their first technology and business plans. Since its launch in 2013, Powerhouse has invested hundreds of thousands of dollars collectively into 15 startups, and this summer plans to welcome another few solar entrepreneurs into the program. The group’s incubator division rents office space to more established solar and energy startups across 15,000 sq ft and three floors in downtown Oakland, California. Sometimes the accelerator entrepreneurs graduate into rent-paying companies in the co-working space. Powerhouse now hosts about 15 companies and about 100 people across both groups. Its goal is simple. The organization wants to play a unique role in fostering a new wave of tech innovation in the solar market. Many of the Powerhouse companies are using software, data and the web to make selling or designing solar systems cheaper and easier. They rely on the advice and networking opportunities through Powerhouse to raise money, find customers or exit – through an initial public offering or acquisition. “Powerhouse gave us so much validation and credibility at the beginning, when we didn’t have much to show. It was just enough to get people to believe in us,” says Elena Lucas, the co-founder and CEO of UtilityAPI, an energy data startup. An earlier wave of solar startups was dominated by companies experimenting with different materials and designs for solar cells and panels. Many of those materials-focused solar startups failed in getting the desired technical performance despite large investments from the Bay Area’s venture capitalists. As the price of solar panels dropped dramatically in recent years, the new generation of entrepreneurs and startups are chipping away at other stubborn problems, such as shortening the time it takes to get permits or honing the sales pitch to homeowners. It’s like when fast internet connections finally got cheap and ubiquitous enough to attract the entrepreneurial-minded to build new websites and services on top of it. Tough challenges remain for solar startups. Big utilities and power companies, who are potential investors or customers, don’t generally have experience working with young, renewable energy companies. Meanwhile, US government funding for energy innovation is minimal, particularly with potential federal budget cuts looming and a lack of clean energy support in the White House. But as solar energy becomes cheaper, it’s attracting public and private investments worldwide, evidenced by the $116bn that flowed into solar projects, companies and technologies in 2016, according to Bloomberg New Energy Finance. “The ultimate mission of Powerhouse is to make solar energy the most accessible form of energy in the world,” says Emily Kirsch, co-founder of Powerhouse. Sitting on a bean bag in a nook of the seventh floor of Powerhouse’s headquarters, Kirsch says that despite the rise and success of Silicon Valley-style tech accelerators such as Y Combinator and Techstars, no one else has tried to do the same targeting only the solar industry: “We’re it so far.” The group’s model is showing some success, at least on a small scale, though it’s still early days. Powerhouse takes a small equity stake in its accelerator companies and makes money if they get acquired or go public. Currently Powerhouse gets the bulk of its investment money from a combination of grants, corporate sponsors, like SolarCity and SunPower, and office space rental fees. It’s considering raising money from angel investors so that it could make larger investments and in more companies. None of the companies in its portfolio has gone public or been bought yet, but some of them have attracted funding since going through the accelerator program and increased the value of the companies in the process. Kirsch says the top startups in the accelerator program have seen their values increase by as many as 40 times. Four of the startups in its incubator program have been acquired so far, says Kirsch, though the company doesn’t take a stake in those. But their exits help to build Powerhouse’s reputation among entrepreneurs and investors. Kirsch has been involved since day one. Years ago, when Kirsch was working for Van Jones, an environmental and human rights activist who briefly served as a green jobs adviser to former President Obama, he asked her if she would be interested in helping the then new startup called Solar Mosaic, which provides financing to install solar panels on rooftops, pilot a solar program in Oakland. Meanwhile Jones’s friend Prince was looking to invest a quarter of a million dollars into solar projects in Oakland, and ended up funding Solar Mosaic’s first four solar buildings. Based on that experience – connecting a young solar startup with partners and capital – Kirsch and Danny Kennedy, a former Greenpeace campaign manager who co-founded solar installer Sungevity, launched a company to try to see if the model could work for many more young solar companies. They changed the name of the company, SFunCube, to Powerhouse two years ago. On a visit earlier this year to Powerhouse’s headquarters, dozens of entrepreneurs were heads down working on their products and mingling with potential partners during a weekly open house event. The Powerhouse team connected UtilityAPI with its first investor, Better Ventures, as well as an adviser, Jon Wellinghoff, who is a former chairman of the Federal Energy Regulatory Commission. After going through the accelerator program, UtilityAPI, which creates software to collect data about a building’s energy use and deliver it to customers such as solar or energy storage installers, has grown to nine people from the two co-founders. It now has an office space on the sixth floor of Powerhouse after previously using shared desks. Lucas says the co-working space served as a “brain trust” because all the entrepreneurs brought with them different types of expertise. That allowed her to get quick answers about energy policy or technical standards. Another accelerator program graduate, BrightCurrent, which works with big box retailers and solar companies on marketing solar panels and installation services, now employs 120 people and became profitable last year, says John Bourne, the co-founder and CEO of the five-year-old company. Bourne says Powerhouse helped his company connect with investors (like Better Ventures) and customers and hone his sales pitch. During the accelerator program, Bourne met with Kirsch or Kennedy once a week to walk through BrightCurrent’s plans and brainstorm for ways to overcome obstacles. “It can be really isolating, lonely and tough being an entrepreneur. You’re working alone and trying to build something,” Bourne says. When he joined, Powerhouse was operating out of Sungevity’s offices and, he says: “It was a warm great environment, and I found people who cared about what I cared about. That was a huge win for me.” Solar Mosaic’s co-founder and CEO, Billy Parish, says that his company – which is now six years old and employs more than 150 people – has partnered with at least three of the Powerhouse startups on projects, including UtilityAPI, Sunible and BrightCurrent. “Powerhouse is one of the hubs of the solar ecosystem and they are helping bring breakthrough ideas for the industry into existence. Being close to them keeps us in touch with those new ideas and entrepreneurs,” says Parish. In total numbers, Powerhouse is still pretty small. Its companies have contributed to the installation of 242 megawatts of solar, employ 386 people, and have generated $52m in revenue. That’s probably the group’s biggest drawback – it’s limited, it’s very narrowly focused and it’s still operating on a tiny scale. But they’re part of a larger movement to invest and nurture new companies in low-carbon energy. Other companies running energy-related accelerator programs include Cyclotron Road, which has partnered with Lawrence Berkeley National Laboratory, and Otherlab in the Mission District of San Francisco. Last year, Bill Gates and a group of investors launched Breakthrough Energy Ventures to spend $1bn on early stage breakthroughs in energy. Powerhouse co-founder Danny Kennedy, who now heads up the California Clean Energy Fund, describes the importance of ventures like Powerhouse and the California Clean Energy Fund like this: “We need early-stage energy investing programs now more than ever to enable the energy transition. It’s critical.”