Low-Carbon: Venture Capital, Policy - at i4Energy

I was a bit disappointed with John Zysman talk at Citris/i4Energy last Friday (2/19/10) at UC Berkeley, entitled:

 "The Transition to a Low Carbon High Efficiency System: Implications for Venture Capital, Policy, and Climate Negotiations"

I am not a venture capitalist, whom I think was his target, and I did not understand some of the language or references.

And Prof. Zysman announced, a little too boldly, that he is not a scientist or engineer, and indeed I thought his talk showed a lack of data or evidence or causality that I would expect.

And at times I thought he was repeating, in a different vocabulary, what is obvious to all of us:  a change to low-carbon high-efficiency economy is going to be a big change, an "system systems transition."

So why write about this talk?

Because it needs to said, in every possible language and to every possible audience: the old rules must change, and this includes financing.

Unlike the IT/semiconductor revolution, which Prof. Zysman seemed to know well and  referenced several times in which VCs profit (or 'bet') on  'incremental' improvements, such as  transistor density or CPU power to an established base, the move to renewables is anything but clear and will be difference from IT.   It will  not be a bet on a specific product, not a bet on a specific technology, but more correctly:   a bet on whole suite of technologies, which won't work if one technology is missing.

He cited electric cars, for example.   Without a recharge grid, electric cars won't take off.   Without a truly smart grid, perhaps renewables can not take off.   And if you bet on wind, and then solar takes off, where does that leave the VC?

So it is more than a carbon price, more than optimizing an old technology in a new form.  (He cited the problems of building a lighter aluminum engine as replacement for internal combustion engine - tried and did not work.)

He mentioned the semiconductor industry road-map and urged a similar carbon road-map.  He stressed the need for policy to drive technology, i.e. choose a 'trajectory' and not discrete technologies alone, so multiple developments are completed correctly, and in parallel.  The old VC model isn't going to cut it.

And he argued, which we all know, that India and China are pursuing systems change and we are just not a player.

I'd like to see Prof.  Zysman rewrite his talk in a form and language non-VC professionals can understand and not use words with ambiguous meanings to laypeople (paradigm shift, transitions, hedge vs. VC models).   Perhaps he could draw more concretely on past energy transitions, wood to coal, which he said took 100 or so years.  

Then we can appreciate what he is trying to tell us, which may be of vital importance.

And what if the VC model fails?  Energy supply and climate change are world problems.   Surely we should consider that huge pools of capital, talent, ideas can be tapped with different rules.


Announcement
http://www.citris-uc.org/events/i4e-Feb19
Video
http://www.youtube.com/watch?v=p_3JMWJQMiI

PG&E and Renewable Energy

While on the subject of California electricity, this is a particularly useful Cleantech article on status of PG&E's renewable sourcing, officially known as RPS (renewal portfolio standard).

-solar
-using compressed air for storage ??
-pumping water to higher levels at night ??

PG&E says it is now at 14% renewable and will make its 20% goal, just not by 2010.

http://cleantech.com/news/5328/pge-rps-target-compression-brightsource

And is anyone familiar with Marin Clean Energy ?

Optimism .... Despite No Climate Treaty?

Speaking Friday in Berkeley after the announcement that a binding treaty would not be signed in Copenhagen, Dr. Niels Christian Nielsen gave a thoughtful but cautiously optimistic talk about recent trends that may mitigate climate change. However, he also pointed out there will be "winners and losers" and one loser may be the United States.

Citris is "Center for Information Technology and Research in the Interest of Society", a partnership industry and between UC Berkeley, UC Davis, UC Merced and UC Santa Cruz. Its goal is to spur research developments into viable companies and industries. One of Citris' main themes is "Energy and the Environment".

Dr. Nielsen is a leading worldwide expert on energy and climate change policy. The title of his talk was "Issues and Challenges Leading up to COP-15: The U.N. Summit on Climate Change." His logic is simple but compelling:

First, several parts of the world have already embraced renewable energy and built economies around it. Not mega solar or wind projects, just enough to be sustainable and encourage economic growth. He described a poor area in southeastern Anatolia (Turkey) that wanted wind powered electricity for villages. The Turkish government ordered enough new mid-size (75kW) high-performance turbines and asked the manufacturer to build some of the turbines in region. The manufacturer agreed.

The Turkish government ordered solar-powered pumps for drip-irrigation, and asked the manufacturer to build some of the pumps in region. A manufacturer again agreed. Next, the government asked textile makers if they wanted organic cotton and partnered with them.

Dr. Nielson's point is Turkey is a first adopter and is making economic progress while being committed to renewable. Parts of Chile and Argentina have similar programs to build their economies.

And in his native Denmark, if today every Dane had an electric car, the country now has sufficient wind energy infrastructure to recharge all the car batteries - at night and without adding one more turbine.

These areas could be the 'winners.'

His second reason for optimism is a shift in corporate thinking about climate change. Rather than sending lobbyists to Washington, corporations are now seeing a greater strategic 'risk' in the climate change 'uncertainty.'

This is not about 'corporate responsibility;' it is about a giant insurance company worrying about its core liability. Or about Siemens and GE, which joined in the past few weeks in a call for climate 'clarification' because they can not do long-term strategic planning. Dr. Nielson sits on 12 boards and said this trend is isn't just Google or Ben & Jerry's; it is new and about companies like IBM, Intel, BP, Shell, i.e. mainstream corporations. And, of course, the companies see opportunities in renewables.

The third reason for optimism of global action is China. They have been a 'brilliant' negotiator, in solidarity with developing countries and in solidarity with BRIC (Brazil, Russia, India and China):

We in the US use 5 times the energy per capita as the Chinese (and twice EU or Japan). Are we going to cut consumption or is China going to cut growth?

There are some 170 countries who are already to make a treaty, many simultaneously preparing their infrastructures, but they will sign only if the developed countries who made this mess act first.

Dr. Nielsen didn't say it, but the implication is the worldwide pressure on the US is going to become intense.

Which brings this to the final point, winners and losers. Turkey, Chile, Argentina, Denmark and others who make the leap to renewable sources will be poised to grow economically. And China.

China has 'gotten religion.' They certainly do have a polluted country; they are opening a new coal-fired electric plant almost once per week and they do make mistakes, but they are also committed - at the highest levels - to developing a leadership position in batteries, electric cars, smart grid and renewables. By leadership, Dr. Nielsen means they may come to dominate whole industries in the way the US dominates in IT: jobs (white, blue & green), investment, expertise, markets, marketing, security, research and development - but manufacturing alone.

The United States is "playing a weak hand very badly." Every day that Congress does not act on climate treaty, or developing renewable infrastructure, or stimulating demand for non-fossil fuels is a day we will not get back.

On the one hand, he is optimistic a fundamental change is underway with renewables and corporate attitudes climate change. But, on the other hand, there will be "winners and losers." Where do you think the new Texas turbines are being built? (Ask me about Shenyang, China.)

We are close to the 'tipping point' where the US will not be able to catch up and the ramifications for this country will be enormous.


Citris Events

Video of Dr. Nielsen's talk

"Seal the Deal" - 86 days to Copenhagen Climate Conference

Copenhagen Climate Conference

Formally known as COP15, the Copenhagen Conference (December 7-18, 2009) must unite the world on emissions reduction post-2012.

Arguably, this will be one of the most important world conferences ever to be held. But, no deal is guaranteed.

Something can and must be done at every level.

For us, as individuals, please sign the UN petition "Seal the Deal"

It's quick and the UN won't spam you.

Next, check on your local government. Santa Cruz (city and country) are members of ICLEI (Local Governments for Sustainability).

In preparation for Copenhagen ICLEI has world-wide City Climate Catalog (background info)

Here is Santa Cruz's entry in ICLEI

Here is Entire city catalog (your city listed?)
More information about California.

More about Santa Cruz, more about Santa Cruz County

Thanks to Ross Clark, city of Santa Cruz Climate Coordinator, who the also provided information below.
==

Santa Cruz (City of Santa Cruz) California, USA City

Inhabitants (2000): 54.593 Territory size: 40 km2

Baseline year used: 1996

Targets: Water savings target: 282 million gallons per year by 2010 (community)

30% reduction below 1996 by 2020
80% reduction below 1996 by 2050
All new buildings zero net energy by 2030

Steps implemented:

Conducted a GHG emissions inventory Yes (1996, 2000,2005,2008)
Adopted an emissions reduction target(s) Yes
Developed a Local Action Plan In progress
Implemented policies and measures In progress (many implemented)
Monitored and verified results Monitoring in progress.


Community wide results to date:

Local Renewable Energy Summer Research Program (at UCSC)

For the past 4 weeks, students from Denmark, Iceland and several European countries have joined with students from UCDavis and UCSC for a program of lectures, field trips and final project on the topic of renewable energy.

Last evening at Ecology Action's "Green Drinks", several students gave us a glimpse of their team projects. They are young, articulate (in a 2nd language!) , focused and clear eyed. We need to listen to what they have to say and we'll have an opportunity to do this Friday morning at UCSC. Here are some of their wide ranging projects:

• Desalination - in Jordan and California
  
• Solar - from Sahara to Europe
• Rentable electric bikes on UCSC - can't wait!
• Data centers - backup electricity stored in molten salts!
• Airships in LA - yes, it's can be true - hop/skip/jump between airfields around the city
• Methane in barns - capturing and using it
  

Special thanks to Ali Shakouri, Associate Professor, Electrical Engineering, Baskin School of Engineering, UC and his staff and counterparts in Denmark and the US for organizing this.

Ross Clark (or here) City of Santa Cruz Climate Action Coordinator, also spoke about 31% reduction in residential green house gas emissions since 1990 levels, but stopped short of discussing in detail other segments of Santa Cruz's efforts, including transportation, which he later acknowledged has been no better than California's overall increases of 1.5%, in response to a question.

I know Mr. Clark is a good guy, but as a political leader we must look to him for straight facts, good or bad, and an honest assessment of what must be done and the WILL- not just optimism. Hope to hear more of his plans soon.

Green Drinks

Next Green Drinks, arranged by Ecology Action, is scheduled for September 2, 2009

BUT this coming Monday, August 17th, 5-7 pm there presentations at the Cypress Lounge from students/researchers attending the a summer UC-Denmark program on renewable energy. Free (but no bar I guess.)

More details.