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Category → Incentives

Little Green Feedstocks

It sounds like something from a greenskeeper’s nightmare – certain folks have plans to grow algae and dandelions on purpose, and in large quantities.

Algenol's Paul Woods and his cyanobacteria. Credit: Algenol

Algenol’s Paul Woods and his cyanobacteria. Credit: Algenol

Firstly, in the golf course-choked state of Florida, Algenol CEO Paul Woods is scouting a location for a $500 million algae-to-fuels plant. The company was founded and has been operating in the southern part of the state for years now. Its claim to fame is cheap ethanol made from cyanobacteria in a custom-designed bioreactor. Woods does not, as far as I know, have plans to re-purpose stagnant water traps for the purpose of growing his feedstock.

But Florida, though it is sunny and warm, might have missed out on this slimy opportunity. In recent months, Woods questioned the state’s commitment to biofuels. For example, Governor Rick Scott repealed a state law requiring 10% ethanol in gasoline. But now, according to Fort Myers ABC 7 News, the company has been persuaded to build in its home state – apparently the estimated 1,000 jobs was just the ticket to getting a warmer welcome. Algenol needs to be sited near a major CO2 source (i.e., factory or power plant emissions) and says potential partners have come forward.

Meanwhile, it’s called the Russian Dandelion, though it grows in Germany. This common lawn scourge is bringing about not curses, but praise, for its rubber producing capability. Tire makers are enthused about its white latex sap. The goo is expected to give the subtropical rubber tree a bit of competition. Making rubber from dandelions is not a new idea, but has been given new life by a project at the Fraunhofer Institute for Molecular Biology and Applied Ecology.

Russian dandelions, growing in Germany. Credit: Fraunhofer Institute

Russian dandelions, growing in Germany. Credit: Fraunhofer Institute

Fraunhofer scientists, in a collaboration with folks from tire firm Continental are working on a production process for making tires from the dandelions. In addition to the manufacturing process, the researchers are also using DNA markers to grow new varieties of the plant with higher rubber yields.

The project sounds kind of cute but the researchers behind it are dead serious. The partners have already begun a pilot project and plans are afoot to move to industrial scale. According to them, the first prototype tires made from dandelion rubber will be tested on public roads over the next few years.

You can read an earlier post on the history of dandelion rubber here.

EPA’s Magic Number for Cellulosic Biofuels

It’s going to be 6 million gallons. That is how much cellulosic biofuel EPA’s research (crystal ball?) shows will be produced in the U.S. this year, and what fuel blenders, who live by the Renewable Fuels Standard, will have to put in their product.

EPA’s final rule on this question was published today. And the text includes a remarkable figure: “From 2007 through the second quarter of 2012 over $3.4 billion was invested in advanced biofuel production companies by venture capitalists alone.”

Egads. Anyway, for at least one more year, cellulosic biofuel will be the black-footed ferret of fuel types, which is to say, exceedingly rare. By comparison there will be over 16 billion gal of regular biofuel (like the stuff made from corn and soybeans) this year.

The 6 million figure comes from output from two sources – the largest is Kior’s Columbus, MS plant, which is projected to make between 5 or 6 million gal of gasoline and diesel from woody biomass using a special kind of catalytic cracking technology. The remainder will be produced by Ineos Bio (see the below post).

I note that the Kior facility’s output is not ethanol and so nicely side-steps the issue of the “blend-wall”, which affects ethanol producers. For 2014, however, the fact that most advanced biofuels are ethanol will cause the EPA some RFS problems. EPA is now saying that there will be changes:

EPA does not currently foresee a scenario in which the market could consume enough ethanol sold in blends greater than E10, and/or produce sufficient volumes of non-ethanol biofuels to meet the volumes of total renewable fuel and advanced biofuel as required by statute for 2014. Therefore, EPA anticipates that in the 2014 proposed rule we will propose adjustments to the 2014 volume requirements, including the advanced biofuel and total renewable fuel categories.

We expect that in preparing the 2014 proposed rule, EPA will estimate the available supply of cellulosic biofuel and advanced biofuel volumes, assess the ethanol blendwall and current infrastructure and market-based limitations to the consumption of ethanol in gasoline-ethanol blends above E10, and then propose to establish volume requirements that are reasonably attainable in light of these considerations and others as appropriate

Solar Trade Tariffs Are A Drag

Remember that old school-yard comeback? “I’m rubber and you’re glue…”? It looks like the unfair trade  claims that the U.S. and Europe lobbed at China’s solar industry have bounced back and stuck.

Last October, the U.S. Commerce Dept. made good on a months-long threat to impose a 24-36% tariff on solar panels imported from China. And last week, China completed the tit for tat by putting a tariff on U.S.-made polysilicon, the main raw material used for solar cells. [h/t Washington Post]

Suntech solar panels

The U.S. slapped a tariff on Chinese-made solar panels. Suntech’s was the highest. Credit: Suntech

Originally, the U.S. accused China of unfair trade practices – saying the government heavily subsidized the industry and manufacturers were selling modules at less than the cost of production, a practice known as dumping. The EU took similar action early this summer.

China pretty quickly started to point out that the U.S. has given large grants to polysilicon producers, which has helped them quickly build huge new, more efficient production facilities. Those facilities export a lot of polysilicon to China. C&EN has covered this part of the industry pretty closely – both Hemlock Semiconductor (majority owned by Dow Corning) and Wacker Chemie had big expansion plans, some of which are now on hold.

So let’s review. Tariffs don’t tend to take an unfair situation and make it fair. What they do reliably produce is uncertainty and higher prices – at a time when what the world needs now is not love, sweet love, but cheap, renewable energy (well, and love, too).

The general idea is that the solar panel tariff will protect U.S.-based manufacturers of solar panels, but frankly, we lost that war a long time ago. At the time the original complaint was lodged, China already had a 2/3 global market share. Will any of the solar companies that folded because they couldn’t compete on price now re-open their doors?

It has truly been an awful downward spiral for developed-world solar makers. Trying to stay in business while panel prices plummeted was like trying to catch a falling knife. But in the time that was happening, guess what industry was booming in the U.S.? Solar power! That is, the projects built to create electricity from the sun. Cheap panels plus renewables mandates and tax incentives magically created several utility scale solar farms. [Take that, shale gas!]

And while the U.S. doesn’t compete very well with China on commodity crystalline silicon solar panels, we do lead the market in new and efficient types of inverters, which convert DC current from the panel to the AC current that runs your TV. More demand for cheap solar panels has meant a boom time for makers of inverter equipment.

U.S. companies that innovate can still make a buck in solar these days. But it is a mature, consolidated industry and not every player is going to stay afloat, regardless of where they do their manufacturing.

 

IEA Looks To Fossil Fuel Industry to Control Climate Change

Today, the International Energy Agency put out a report saying that CO2 emissions in 2012 grew by 1.4%, or 31.6 gigatonnes. This increase means that the chances of constraining emissions to cap global warming at 2 degrees C are narrowing.

When I first started covering the cleantech/renewables space for C&EN back in 2008, there was a common belief among technologists and some policy makers that within a few short years, a price would be put on carbon with policies (such as cap and trade or a carbon tax) that would act like jet fuel, powering demand for renewable fuels and related industries.

But as IEA Executive Director Maria van der Hoeven points out, ““Climate change has quite frankly slipped to the back burner of policy priorities.” The good news in the report is that the growth in renewable energy production in the U.S. and Europe has helped those regions decrease carbon emissions. However, it was the switch to shale gas from coal that had the biggest impact on U.S. emissions. In contrast, growing energy demand from China and other developing nations has more than made up for those changes.

(You can read C&EN’s recent coverage of the EU Carbon Trading scheme here: http://cen.acs.org/articles/91/i7/EU-Carbon-Emissions-Trading-Scheme.html)

IEA is pushing four policies that are all outside of the renewables space. The organization’s plan would shave 8% off the carbon emissions compared to no further constraints by:

1. Making buildings, industry, and transportation more energy efficient, to get 50% of the cut.
2. Limiting construction of the least efficient types of coal-fired power plants, for 20% or more of the cut.
3. Halving methane emissions from upstream oil and gas operations (18% savings)
4. A partial phase-out of fossil fuel consumption subsidies (12%)

It’s Actually Happening: Military biofuels grants

Never has such a small government payout generated such a busy PR reaction. Late last weeek – and very quietly – the Defense Department awarded three biofuels firms $16 million to craft plans for biorefineries that would produce fuels meeting military specifications.

Jim Lane at Biofuels Digest has been tracking this development closely and he points out that “A coalition of Advanced Biofuels Association, the Air Line Pilots Association, Airlines for America, the American Council on Renewable Energy, the American Farm Bureau Federation, the American Security Project, the Biotechnology Industry Organization, the National Farmers Union and Operation Free was swift to applaud the DoD.”

Great Green Fleet

U.S. Navy’s Great Green Fleet. In July 2012 it ran on a 50/50 biofuel and petroleum blend.

There are two main reasons why these tiny grants (each requires matching funds from the contracting companies) are fairly big news. One is that military spending on biofuels is a very touchy subject in Congress and there were some doubts about whether the program would move forward in this time of austerity and sequestration.

Secondly, U.S. airlines (and those around the world) are extremely keen to see the development of drop-in biobased jet fuel. To have the military join them on the demand side may make the difference between getting the stuff and not getting the stuff.

You can read C&EN’s exploration of bio-based jet fuel efforts. My colleague Andrea Widener wrote about House members’ attempts to block military spending on biofuels.

It is important to note that the funding comes out of the Defense Production Act Title II program and was not, in the end, successfully blocked. The program also would contain funds for a phase II portion of the program though money would have to be appropriated from the FY2013 budget.

In lieu of a press release (the DoD did not issue one), here are further program details that I received from a DoD spokesman.

There were three awards totaling $16.0M in government funds, which will be matched by $17.4M in private sector funds for Phase I of the project.

The first awardee is Emerald Biofuels LLC, which is located in Golf, IL – a northern suburb of Chicago. For this project, Emerald has agreed to match $5.4M in government funding with $6.4M of their own. Second, we have Natures BioReserve LLC of South Sioux City, Nebraska which will match $6.0M in government funding with $6.2M of company funds. The third awardee is Fulcrum Brighton Biofuels of Pleasanton, CA which will receive $4.7M in government funding and match that with $4.7M of their own funds.

Phase I of the project involves validation of production technology, verification of technical maturity, site selection, plant design, permitting, and detailed cost estimation, all of which will require 12-15 months to complete. Following Phase I, interagency technical experts will evaluate the projects to determine if they will move on to Phase II, which is for biorefinery construction

If all Phase I projects successfully complete the second phase of this project, awardees project that this would represent more than 150M gallons per year of drop-in, military-compatible fuels with initial production capacity by 2016 at an average cost of less than $4 per gallon.

For now, the U.S. military is sailing in relatively safe waters when it sticks with research and testing projects. But it would need a political mine sweeper ahead of any plans to build its own biorefineries or make large purchase contracts for pricey biofuels such as the $26/gal algae fuel used to power the Navy’s recent exercises off the coast of Hawaii.

Speaking of the Navy, one way to track the progress of biofuels in the military is to keep an eye on the Navy’s Great Green Fleet.

 

Never Mind All That: Solar on the upswing

I’m going to have to start posting more frequently. My last post was about solar firms going bankrupt in China and now my cleantech news is about how solar is set to rebound. Seems like something should have happened in between that post and this one.

Actually, a few biobased chemical deals were announced. Thanks BASF and Evonik!

Stuttgart solar cell project

Making a better solar cell. Credit: University of Stuttgart Institute of Photovoltaics

Anyway – back to solar. Earlier this week, Lux Research (a rather skeptical gang generally) put out a summary of a new research report titled “Solar’s Great Recovery: Photovoltaics Reach $155 Billion Market in 2018.”

Actually, solar had a great 2012 – at last in the U.S. – but that was mainly due to installations of several large utility projects. The business of producing those solar modules had hit some major potholes. Around five years ago, solar demand was hindered by high prices – held up by shortages of key polysilicon raw material, but balanced by huge subsidies in Europe, especially in Spain and Germany. Then – in the nature of boom and bust cycles – the high prices prompted huge polysilicon capacity increases. Then prices fell, Europe cut subsides, the recession hit… and all that new capacity made solar prices tank and inventories piled up. Whew – what a tale.

In a fun new twist, according to Lux analyst Ed Cahill, the solar crisis will become a boon as record low prices boost demand. (And after that what will happen? Stay tuned).

The rise will take place as those cheaper installations (especially utility and commercial rooftop) become routine and spread into new markets. U.S., China, Japan, and India are expected to speed up installations. That will help to power (no pun intended) a compound annual growth rate in the industry of 10.5% over the next three years.

A few other things might help – according to this New York Times article, the U.S. and Europe are both working to smooth over trade disputes with China. Regional pricing schemes may take the place of tariffs. China had been accused of exporting solar modules at prices less than the cost of production (a practice called “dumping”). China, in turn, accused polysilicon makers in the U.S. and Europe of doing the same thing.

All of this fun news is not likely to help revive solar module manufacturing in the U.S. or in Germany. But new technology might. My colleague Alex Scott flagged a news item from the University of Stuttgart’s Institute for Photovoltaics. Researchers there have tested a crystalline silicon solar cell with a 22% sunlight conversion efficiency. It is difficult to say how much a module made of these cells would convert, but a traditional module is normally around 15%.

The secret to the team’s work is a design that puts the metal contacts on the back layer of the cell, using a laser. While hanging out on the back of the cell, the material will not block light hitting the front of the cell. Ta-da! More electrons.

 

 

What the Election Means for Climate, Energy & Cleantech

Update: Here’s a link to C&EN’s election story – including new House & Senate leaders in energy-related roles.

It’s been a quiet time in cleantech news lately, what with Sandy and the election happening in back-to-back weeks. But the election – and the superstorm – are likely to have meaningful long-term impacts on energy policy. I took a tour around the internets to see what analysts and cleantech-ers are saying in their reaction to the election results.

Though it was past my usual bedtime, President Obama’s victory speech caught my ear when he remarked “We want our children to live in an America . . . that isn’t threatened by the destructive power of a warming planet.”

With Congress still divided, most policy wonks suggest that any energy and environmental policy changes will have to be led by the White House. Things to watch include any movement to block the Keystone Pipeline or push forward with EPA regulations on smog that were delayed due to cost concerns.

Environmentalists have signaled that they will be putting pressure on the President to use national policy to address climate change. Look for Bill McKibben, activist, author and co-founder of climate change group 350.org to be very vocal. He was quoted in three articles I read.

Energy and cleantech activists are pressing for a national renewable portfolio standard that would require power generators to obtain 30% of electricity from renewables by 2030. Nearly 30 states and D.C. have such a standard, the most well-known and successful is California’s, which is headed to 33% by 2020. Wind energy backers will work to return the production tax credit.

The Washington Post points out that Obama recently spoke about upgrading energy efficiency standards for buildings – codes are currently set by state and local governments.

And renewables businesses will be looking for government action that might help them gain financing for facilities or adjust subsidies on competing oil and gas producers. On the other hand, Obama has been pursuing an “all of the above” energy strategy that is likely result in further development of domestic oil and gas (including hydrofracking) resources.

Perhaps most fascinating to me, though also the most far-fetched, is discussion about whether the fiscal cliff, tax reform, and the deficit will drive Congress to think about introducing a carbon tax. Hmmmm…

My favorite takes so far on the election and energy policy:

From the Washington Post: Obama to continue efforts to curb greenhouse gases, push energy efficiency

Politico: Obama’s green cred on the line in second term

Marc Gunther: For green business, blue skies ahead. For climate policy, who knows?

Huffington Post: Ron Pernick on Five Cleantech actions for President Obama

The Daily Climate: The “Flat Earth Five” – House Members and Climate Change

For an international take, check out Click Green, which compares the horizon for climate change action in the U.S. versus China. China will have new leadership in Xi Jinping

 

A123 Systems Files Chapter 11, Johnson Controls to Buy Assets

It looks like it’s pretty much all over for A123 Systems. The advanced battery company announced today that it would file for Chapter 11 bankruptcy in order to reorganize its debts. Johnson Controls, which also makes large-format lithium ion batteries for the auto industry, will purchase facilities and other assets for $125 million. A123 was earlier mulling an offer to sell itself to Chinese auto part maker Wanxiang Group.

A123 Systems makes advanced lithium ion batteries. Credit: A123 Systems

A123 was one of a host of battery, battery materials, and electric drivetrain companies to receive government money as part of the Recovery Act. The goal was to set up a full manufacturing supply chain to for U.S.-made advanced batteries. Those batteries were intended to go into U.S.-made electric vehicles. A123 received $249 million in government grants. It also has shareholders, who will likely lose their investment in the re-org.

Overall, Recovery Act funding for the advanced battery industry totalled $2 billion. A123 Systems stood out – and was most vulnerable to market forces – because it was a tech-driven, pure-play battery company. Unlike Dow Kokam, or Johnson Controls, it has no deep pocketed parent or additional technologies and markets to sell into. (A123 will license back techology for batteries used for stationary storage).

And the market A123 sells into is the hyper-oversupplied market for electric car batteries. As we’ve mentioned recently in this blog, electric cars are selling very, very slowly. A recent article in MIT’s Technology Review says battery production capacity in 2013 will greatly outpace demand with 3,900 MW hours of capacity to serve 330 MW of demand, based on estimates from Menahem Anderman at the consulting firm Advanced Automotive Batteries. Needless to say, many production lines are sitting idle at the moment.

When A123 was still a young firm, it was selling batteries for power tools to Black & Decker. Indeed, when it went public its S1 filing was based on that partnership. The company certainly had its sights set on what was to be a huge automotive market.

But one has to wonder, what would have happened if A123 hadn’t received the “free” money? What if it hadn’t been swept into the government’s big plans to create a new advanced manufacturing industry from nothing?