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energy

Fred Wilson:

The Green Button is like OAuth for energy data. It is a simple standard that the utilities can implement on one side and web/mobile developers can implement on the other side. And the result is a ton of information sharing about energy consumption and in all likelihood energy savings that result from more informed consumers.

Here’s something I completely missed, but what on the face of it looks like a very good initiative indeed.

Opening up energy consumption data is one of the most important steps to bringing innovation into the energy sector. Giving data into the hands of the customer enables companies to directly work with them instead of having to negotiate with the utilities.

Details about the standardization can be found at the NIST wiki.

Juliet Eilperin for Wired:

Government coffers have been compensating for a number of market challenges solar faces, including the incumbency advantage of the fossil fuel industry and private investors’ distaste for capital-intensive enterprises that will take years to deliver a return. And in 2012, the solar industry may face a sudden reduction in these subsidies, as the post-Solyndra political climate grows less and less receptive to investments in clean energy. Despite the fact that renewable energy received only a quarter of the subsidies that fossil-fuel-based electricity received between 2002 and 2007, it’s wind and solar that are on the chopping block.

A sobering account on the clean tech industry in the US. The question becomes thus: can we accumulate the talent that is working on entertainment products now to tackle energy?

There are fundamental problems which contradict much of the firmly held beliefs on entrepreneurship in the digital age. The barriers to entry are massive in an industry tightly regulated and practically interwoven with government – in many countries the pillar of government even – and so fundamental to all of our lives. It’s hard to imagine “lean startups“ in the energy industry, and the “a couple of guys in the garage“ founding myth won’t work here.

As Eilperin puts it:

Venture capitalists tend to work on three- to five-year horizons. As they were quickly finding out, energy companies don’t operate on those timelines. Consider a recent analysis by Matthew Nordan, a venture capitalist who specializes in energy and environmental technology. Of all the energy startups that received their first VC funds between 1995 and 2007, only 1.8 percent achieved what he calls “unambiguous success,” meaning an initial public offering on a major exchange. The average time from founding to IPO was 8.3 years. “If you’re signing up to build a clean-tech winner,” Nordan wrote in a blog post, “reserve a decade of your life.”

The truth is that starting a company on the supply side of the energy business requires an investment in heavy industry that the VC firms didn’t fully reckon with. The only way to find out if a new idea in this sector will work at scale is to build a factory and see what happens. Ethan Zindler, head of policy analysis for Bloomberg New Energy Finance, says the VC community simply assumed that the formula for success in the Internet world would translate to the clean-tech arena. “What a lot of them didn’t bargain for, and, frankly, didn’t really understand,” he says, “is that it’s almost never going to be five guys in a garage. You need a heck of a lot of money to prove that you can do your technology at scale.”

One possible answer to this problem could be to start working on the demand side, not the supply side. The internet wasn’t meant to uproot industries; that was consequence of the shift in consumption patterns.

If you’ve been following the Smart Grids debate, you won’t have missed all the security implications it poses. There’s plenty of talk about the implications of intrusions into critical infrastructure, state-sponsored attacks and cyberwar. With all that, you’d think energy providers and utilities would take at least some measures to remedy potential vulnerabilities. Alas, no. Threatpost reports of a SCADA system of a Texas utility, which public facing interface was protected by a 3 (three!) character password. The hacker identifying the weakness has this to say:

“I’m sorry this ain’t a tale of advanced persistent threats and stuff, but frankly most compromises I’ve seen have been have been a result of gross stupidity, not incredible technical skill on the part of the attacker. Sorry to disappoint.”

IBM did a survey with a couple of people in a couple of countries, and now we have some data for that which anyone in the industry knows:

IBM’s survey found that 61% of people who are familiar with energy technology and pricing have a favorable view of smart metering, while only 43% of people with minimal knowledge view smart grid technologies in a positive light. Once people understand what the technology does, they think highly of it–and once that happens, it becomes more likely that they will pay attention to variable electricity pricing.

Here’s what I’d do if I was in a communications or advertising business: learn about the energy markets. Those guys need to learn how to communicate with their customers real fast, and they’re not gonna learn it on their own.

The White House has released a Clean Energy Report yesterday. While the three-pager offers not much in the way of new information, it nicely highlights the challenges and ambition. It states:

To drive investment and innovation in the electricity sector, the Administration has set an ambitious goal of generating 80% of our electricity from clean sources by 2035.

This is a remarkably ambitious goal. As a reminder, the current plan of the German Federal Government aims at 80% generation from renewable sources by 2050 – and, as shown in the report, we’re in an arguably better position to start from.

This is just a reminder for myself. Maybe it is of interest for one or the other of you.

Currently, I see the following challenges in the broader energy markets:

  • Ramping up transmission infrastructure
  • Wide-scale roll-out of smart metering infrastructure
  • Electric Vehicles
  • Decarbonisation
  • Restructuring of the production capacities, esp. huge CAPEX required for build-out of renewables and high-efficiency/quick adaptability gas plants.
  • Reaching equilibrium for the gas markets
  • Germany: coping with the nuke phase-out

Of course, all of these aspects are interdependent; you can’t solve the EV-issue without solving the transmission infrastructure issue, for instance. And as you can see, the challenges ahead are gargantuan.

Google announced today it will buy a 49% stake in a 18.6 MWp1 photovoltaics plant just west of Berlin.

Today, we agreed to make our first clean energy project investment in Europe – a €3.5 million (ca. $ 5 million) investment in a solar photovoltaic (PV) power plant in Germany. The transaction still requires the formal approval of the German competition authorities and is subject to other customary closing conditions.

It’s an interesting move on Google’s part to extend their investment strategy in renewables to outside the United States, although one that could’ve been deduced from recent job openings at Google.

As to the question why Google would want in on that market, these are the strategic points I see and had originally posted over in a Quora thread on that topic.

The biggest reason Google is investing into “green” is, in my opinion, hedging against volatile energy prices. Energy prices are, talent acquisition and retention coming first, the second biggest external risk Google’s operations face. All those servers need to be powered somehow. So it makes sense to invest into this field and bring significant portions of this in house, therefore strengthening resilience and capturing more of the value stream. Second, Energy is to become very information-rich in the near-to-medium term (Smart Grid, Home Automation, Vehicle2Grid being the big buzzwords). Now that would open excellent business opportunities for Google as an information manager.

I’d love to hear your opinions on this matter.


1 That is 18.64 MW peak production under lab conditions. Wikipedia has a pretty good overview for the topic. Interestingly, this plant only represents roughly 15% of installed PV capacity in Q4 of 2010, according to regulatory filings.

Disclaimer: As is the case with all and any energy-related information on this blog, statements and opinions are mine and mine alone and do not represent my employers opinions on the matter.

Spot-On OpEd by Kurt Brown on why the conversation about energy is so hard, over at GigaOm.

Here’s the problem:  regular people don’t have any feel for the numbers. I mean, like zero feel. But in almost all cases, energy insiders use their “insider” units to talk to regular people. Regular people have an intuitive feel for one, maybe two, units. The one they all understand is dollars. Your average person on the street will likely be able to tell you if $200/month seems low, high, or about right for their monthly utility bill. They may have a sense for how many gallons of gas they use in their car (the second unit), but more likely they’ll only know roughly what it costs to fill the tank.

Wired has an interesting report about a Smart Meter rollout in Chattanooga, TN.

The network will serve as the conduit for 80 billion data points on electricity use per year that could help the utility run more efficiently, reduce outages, and give customers more control over their monthly electricity expenses.

Smart-grid management technologies from Bell Laboratories will enable EPB to harvest millions of data points on energy usage, helping it to better understand when and where energy is used. The utility has a distribution capacity of 3,000 megawatts but peak demand of just 1,320 megawatts, creating inefficiencies in the system, Wade said. EPB loses 3.5 percent to 4 percent of its energy in distribution and transmission, mostly due to transformers that are often larger than necessary for their load. Software can help EPB optimize equipment for actual usage patterns.

One should note that only about 500,000 people live in the metro area, yet this roll-out produces massive amounts of data. There’s interesting times ahead…

And did you read about that 1GB/s connection speeds? Can we get that in Europe, too, please?

Says Don Tapscott in the HuffPo:

In many ways, the argument for a smart grid based on open standards parallels the argument for an open Internet. The old power grid is analogous to broadcast media with its bias towards centralized, one-way, one-to-many, one-size-fits-all communication.

Building a smart grid on open standards would, for example, allow software developers to build applications just as developers build apps for the iPhone.

Nothing really new in that article, of course, but it’s rather thrilling to see the concepts being spread to a wider audience by people who are relatively trusted to spread new ideas.

As always, there are a couple of caveats, though. First off, 15% energy reduction by mere knowledge of consumption sound impressive, but this number rests on purely anecdotal evidence and short term studies. Additionally, those studies took place in the USA only, which is commonly known for wasteful electricity consumption.

Further, an open standards Smart Grid will inevitably conflict with the need for security and safety in the grid, thus even if an Apple App-Store modeled applications store would be thinkable, it would be further limited.