No Magic In China’s Solar Industry

Sunday I picked up an actual print copy of the Washington Post. In the Business section was a feature by Steven Mufson on the rise and fall of Chinese solar firm Suntech – which was at one time the world’s largest producer of crystalline silicon solar panels. In mid March the firm defaulted on $541 million worth of convertible bonds. (The story of Suntech’s founder and now-former CEO, Shi Zhengrong, is also captured in the feature. A true rags to riches tale.) In the waning months of 2012, pundits were forcasting major financial problems for some of China’s humongous solar companies – but many expected that the government would prop them up with loans to keep them afloat. There were many reasons why it might have: China wants to hold on to its dominance in making solar modules for export, it has huge targets for domestic installations, it has a policy of subsidizing industrial expansion, and it can provide both cheap electricity and cheap financing. Mufson explains how Suntech was caught up in a very expensive race to the bottom in solar module production – overcapacity (in expensive facilities) and rapidly shrinking margins, fueled unhelpfully by China’s green economy plans. The U.S. added to the woe by slapping a tariff on solar modules imported from China (oversupply set the stage for what trade officials like to call dumping). Mufson writes: Until now, policymakers in China have used subsidies to create a world-leading “green tech” industry that would push the country up the economic value chain. But green tech doesn’t guarantee thriving businesses. In the race for global solar supremacy, world manufacturing capacity has grown to 60 gigawatts, most of it in China. That outpaced solar demand, which is expected to reach about 35 gigawatts this year, enough to power about 26 million homes. So prices of photovoltaic panels have plummeted, and it will take three to five years for overcapacity to shrink, says Bill Wiseman, managing partner of consulting firm McKinsey’s Taipei office. China has other very large solar producers in addition to Suntech and LDK. They also have Trina Solar and Yingli. Four huge vertically integrated module makers was at least two too many. Analysts will be watching margins and debt very carefully now that it is clear that China’s future financial support for solar companies is not...

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Science-y Advice for (potential) Entrepreneurs: Add this to your library

In addition to C&EN, Cleantech Chemistry’s household also receives Physics Today, the monthly magazine of the American Institute of Physics. The December issue contains an article – available free online – that is a must-read for any potential or current entrepreneur in the sciences. The authors* interviewed 129 out of 192 founders and 16 other company officers at 91 startups in entrepreneurial clusters in 13 states. They examine where the firms’ technology came from and where their funding came from (and in what order). The interviews unearthed fascinating observations about working with venture capital and angel investors and how they differ regionally. The article also covers the different types of technology transfer programs at Universities and what it is like to work with them. It also discusses regional start-up cultures across the U.S. As in this year’s C&EN special issue on chemistry entrepreneurs, the focus is on lessons learned. The Physics Today story includes a box titled “How to create an unsuccessful startup.” In case you think that the situation of physics R&D and start-up culture is different than in chemistry – read this excerpt and see if it sounds familiar: Because the large high-tech companies that once supported significant research have switched to development, the role of small startups as creators of innovative physics-based technology has become more important. Lita Nelsen, director of MIT’s Technology Licensing Office, describing the general decline of the once-great industrial labs, noted that “we’re dependent on the universities to be pushing the frontier of knowledge because the research labs in industry are largely shut down.” She added that more than half of the MIT patents for really innovative, early-stage technology are being licensed to startups. According to Nelsen, once a startup has proven an innovative technology, “the large companies will then buy either the product line or the company, and that is a conscious strategy for acquiring new technology now because it reduces their risk.” For a proven technology, large companies sometimes pay 100 or even 1000 times what they would have paid had they licensed the same technology from a university at an early stage. The article goes on to discuss the difference between what it calls “technology push” versus “market pull” companies and why the former is the more risky. Go check it out! *Orv Butler is a historian at the American Institute of Physics Center for History of Physics in College Park, Maryland. Joe Anderson is the associate director of the AIP history center and director of the AIP Niels Bohr Library and Archives in College Park. The DOI for the Physics Today article Risky business: A study of physics entrepreneurship is:...

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Testing Green Fracking Fluids

Natural gas company Cheasapeake Energy is testing new formulations of fluids for hydraulic fracturing that contain environmentally-benign ingredients, according to Bloomberg. This news caught my eye as I’ve been researching this and related shale gas development topics for many weeks. In hydraulic fracturing – or fracking – millions of gallons of water, mixed with proppants, usually grains of sand, and small amount of chemicals, are injected deep into a gas well. Forcing this mixture into the horizontal portions of a well and into the shale formation fractures the rock and allows the gas to flow to the surface. For the most part, the fluid’s job is to imbed the grains of sand into the fractures. The added chemicals do other things – for one thing, they prevent scale from forming in the fractures. In addition, well operators also use biocides to limit the amount of bacteria, which can clog up the works. Acid-producing bacteria can even damage the well casing. Another important element is friction reducers, to help the liquid and proppants reach farther into the shale. These are normally simple polymers. There has been much public concern about possible environmental or health impacts from fracking chemicals. Now, many providers of chemicals that are used in fracking are swapping earlier formulations for ones made up of food-safe or GRAS compounds. If you have any questions or comments about hydraulic fracturing or fracking chemicals feel free to put them in the comments – I’ll do my best to find answers or point you to helpful resources. One website that gives details about fracking chemicals is...

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A Graphic Illustration of the Target on the Back of the Chemical Industry
Oct02

A Graphic Illustration of the Target on the Back of the Chemical Industry

Several days ago I received an e-mail from the press office (press person?) at the Energy Information Administration (EIA). At the time I looked at it, thought “hmm… interesting” and set it aside. Been thinking about it off and on since. The crux of the information was this graphic:                         A few thoughts that came to mind immediately were 1) Wow, look what a monster recession did to our industrial energy consumption and 2) That brick-colored stripe is rather tall. The other two categories of energy consumers aside from industry are residential (people at home), commercial (businesses) and transportation. In 2011, industry was responsible for over 30% of total energy consumption, according to the EIA. Transportation is approximately a similar amount, and residential and commercial users split the rest. The more I thought about it, though, the more I reflected on basic chemicals’ place in the lifecycle of a finished good – maybe a shampoo, or a carpet or a car – and the chunk of energy use it represents. A branded goods manufacturer that does a lifecycle analysis – say to measure energy use or emissions – would no doubt zero in on chemical inputs as a large contributor to its overall footprint. Of course, mining and agriculture have their own energy footprints, as shown in the graphic. Obtaining any raw material will bring energy baggage with it. The graphic also reinforced a message that my C&EN colleague Alex Scott recently wrote about in the magazine. He attended an event in Brussels called the Global Chemical Industry Sustainability Summit. In his report, he writes that chemical industry representatives were chided for their “business-as-usual model” and told that other industries, including customers of the chemical industry, were beginning a trek toward zero targets for things like oil use and CO2 emissions. Should someone hold a similar event in the U.S., this illustration might appear in the presentation....

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Ingredients of Consumer Backlash

Angry customers. No consumer products company or brand wants to be in a position of having to face consumers who have been told that their health and safety has come in second to company profits. Firms can argue, with scientific studies in hand, that their products are perfectly safe, but once a company is forced to have that conversation, they are already at an uncomfortable disadvantage. This week, the Twitterverse has served up controversies over cleaners, food, and personal care products. Though consumers often say they are concerned about global issues like climate change and water pollution, what really raises the temperature of debate is issues about products that people put in or on their bodies, or use in their homes. They may hear about something that sounds alarming first from activist groups – though often, news organizations pick up and amplify the criticisms. Early in the week, the Environmental Working Group launched its 2012 Guide to Healthy Cleaning. Many, many mainstream cleaning products received grades of D or F. The American Cleaning Institute, a trade group for companies that make cleaning products, responded with a statement decrying “scare tactics” and a link to its own database of cleaning ingredients. Also this week, Reuters reported on a skirmish in California over genetically modified sweet corn. Around a dozen anti-GMO protesters “stopped trucks from entering or leaving Monsanto’s Oxnard, California-based Seminis for nearly six hours.” Seminis is a seed company owned by Monsanto that has introduced the GM corn seeds. Meanwhile, Seventh Generation, a green-targeted firm that sells mainly cleaning and paper products, is launching two lines of personal care products –first one for babies and another one for adults. Green ingredients supplier publication newhope360 has a feature on the new lines. The story makes it clear that Seventh Generation is moving into a market space that was created, in part, by recent plans by Johnson & Johnson to remove ingredients that can release 1,4-dioxane or formaldehyde from its products. This week also brought news of a backlash about a backlash. Meat supplier Beef Products, Inc. is suing ABC News for a whopping $1.2 billion in a defamation lawsuit. The company says it was defamed by ABC reports about its “lean finely textured beef.” News reports had borrowed the unlovely term “pink slime” from a USDA employee, and Beef Products says that news programs falsely said the product was unsafe. None of these controversies are particularly  new, but they are clearly not simmering down, either. The article about Seventh Generation’s products made several mentions of green chemistry and bio-based chemicals. Advocacy organizations know that consumers are likely to adopt the precautionary...

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Algae Ponds: the lovers and the haters
Sep05

Algae Ponds: the lovers and the haters

This week’s issue of C&EN includes some news from algae-based biofuels firm Sapphire Energy. The company is reporting its first harvests of algae biomass from a large, outdoor algae farm in New Mexico. Sapphire has grown and gathered 21 million gallons of algae biomass totaling 81 tons. Eventually, the plan is to make a kind of crude oil from the algae. They grow the stuff in very large outdoor ponds. According to the press release, “the cultivation area consists of some of the largest algae ponds ever built with groupings of 1.1 acre and 2.2 acre ponds which are 1/8 of a mile long.” You’d think that the promoters of algae for biofuels would be clinking glasses filled with spirulina-enhanced juice at the news. But you’d be wrong. In fact, a trade group of algae firms calling itself the National Algae Association says the kind of ponds used by Sapphire – known as raceway ponds (you can see why looking at this image) – will not scale up commercially. Instead the NAA supports the development of photobioreactors (PBRs for short). Similarly, algae researcher Jonathan Trent, writing in a New Scientist magazine piece that also appears in Slate is arguing in favor of photobioreactors. Specifically, Trent says PBRs should be deployed offshore. I’ll quote from his article where he summarizes the raceway/PBR tradeoffs: There remains the question of how and where to grow the algae. A few species are cultivated commercially on a small scale, in shallow channels called raceways or in enclosures called photobioreactors (PBRs). Raceways are relatively inexpensive, but need flat land, have lower yields than PBRs and problems with contamination and water loss from evaporation. PBRs have no problems with contamination or evaporation, but algae need light, and where there is light, there is heat: A sealed PBR will cook, rather than grow, algae. And mixing, circulating, and cleaning problems send costs sky high. Trent doesn’t mention what industry analysts complain about the most. When it comes to algae, though PBRs might be the best bet, they require too much capital expenditure for the equipment. Meanwhile, Solazyme, which started life as an algal fuels firm but now is manufacturing oils for use in skin cream and other high value applications, grows its algae in a third way – its algae live in bioreactors, but in the dark. They eat sugar and make oil. Is there a best way to commercialize algae for fuels and chemicals? Is there any way? It seems that it is still too early to...

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