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One of the biggest alternative fuel sources is what is called biogas, usually methane, that can be burned relatively cleanly to drive turbines and create electircity. And there are two big sources for biogas, and both are waste. One is landfills, which can capture the gases given off as garbage decomposes, and the other is animal waste, with methane captured in a similar process. Most of that methane tends to just be released into the atmosphere, a problem as most environmentalists see it because methane itself is not a very friendly chemical to have in the air, and the big waste lagoons of industrial farms tend to produce a ton of it.
Turns out Pacific Gas & Electric has devised a perfect solution, helping those farms set up sequestration and cleaning processes so that the released methane is stored in a relatively pure and usable form for transportation to nearby natural gas pipelines. PG&E splits revenue from the sale of the energy and carbon credits gained in using renewable energy with the farms.
In all, an elegant solution to the problem PG&E and many other California utilities face: offering at least 20% of their electricity from renewable sources by 2010--suddenly just two years away. And  biogas is at a competitive price point right now, just about a third of what it costs per kilowatt hour for photovoltaic solar (though you can expect that gap to narrow as solar ramps up in the next five years). PG&E estimates they can light 1000 homes with the energy produced by a 2,500 cow dairy farm. With a little less than 2 million dairy cows in California (not to mention other potential sources for methane from other agribusinesses), the potential for utilities out west to meet their goals is pretty significant at this point.
What's most exciting about this program is not so much the specifics, since those are actually not very pretty, but the creativity with which companies and entrepenneurs are approaching the question of alternative energy. Ten years ago, the idea of reducing our dependence on fossil fuels was met with one uniform suggestion: cut our usage of electricity. There was no other answer for it. And while a smart energy efficiency program is still part of any plan intending to reduce emissions and get us out of a fossil fuel economy, better ways of producing power keep coming up, and keep getting better the more we start to look into it.
The other lesson here is that, while too much government intervention can distort the free market and create economically unsustainable environments, just the right amount can help stimulate innovation and promote adoption of new technologies. Government's best role still tends to be as a large-scale consumer and early adopter of better technology--a role some corners of government like defense and space have long cherished--but these kinds of binding goals for renewable electricity seem to be having a positive effect as well.
In reality, it appears as though the biggest reason that utility companies did not adopt cleaner sources of energy, or work on innovation of such, is that they did not need to, and there was no external motivation. Now that the motivation is there, look for the innovation to accelerate.
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As with the internet boom before it, the cleantech explosion is inspiring unqiue investment schemes to help drive it and capitalize on it. The dramatic growth of the cleantech sector over the last couple of years, in response to steep gains in energy prices and growing awareness of climate change issues, makes the cleantech sector look rather inviting.
 One of the wrinkles in the investment growth, however, is that unlike the internet boom, which quite literally saw a number of start-ups making their million dollar IPOs from a garage workbench, a cleantech revolution is going to need much greater investment because the infrastructure requirements are that much greater. Competing with the current giants of industry won't necessarily need their record annual profits in the tens of billions of dollars, but they do need billions.
That's one of the concepts behind Steve Newcomb's drive to found a new VC fund, one that doesn't look to a few deep pocketed investors, but to what the IT industry calls "crowdsourcing," lots of little investments from the average investor. Newcomb is the co-founder of search startup Powerset, and sees great potential in both the small investments and collected wisdom of many looking to make a difference. He also envisions a sort of "American Idol" approach to choosing investments, letting investors vote to support what looks the most promising.
And while the "American Idol" comparison might be a bit frightening to some, there's an inherent value in polling a lot of average investors for investment ideas: if nothing else, it's likely to give a better idea of what potential products might be commercially viable. The dotcom bubble could have used a lot of that kind reality checking on some of the ghosts of concepts that earned multi-million dollar IPOs. Which is not to say that a large group of investors is are proof against smooth talkers and pitches filled with attractive buzzwords, but collected wisdom seems more likely to catch on than not.
In all, it's a very creative idea for VC funding. Other interesting sources are coming forward for cleantech investment, including a $15 billion fund out of Dubai called the MASDAR Initiative, which won an award at the Cleantech Forum as Cleantech Leader of the Year. Also, states continue to lead where the federal government lacks, as state treasurers and controllers start putting states' investments into cleantech. Moves like this are sure to bolster the cleantech sector and make 2008 another record-breaking year for investment. And hopefully, with concepts like Newcomb's, that money can be better targeted at ideas that will actually bear fruit.
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Last weekend most of the United States' 50 governors met in Washington, D.C. to discuss, among other things, the importance of clean energy to their states in the years to come. As has already been shown, the US is lagging badly on the federal level in providing direction for a clean energy economy, while the states and localities seem to be taking up much of the slack, from expected sources such as California and New England, and from the unexpected like Minnesota and Iowa.
 In fact, Minnesota's Gov. Tim Pawlenty's Securing a Clean Energy Future initiative formed the focus of Saturday's opening plenary session, where Thomas L. Friedman, New York Times columnist, and Jeffrey R. Immelt, Chairman and CEO of GE, answered questions from the governor on the roles of the states and business, respectively, in brining about that clean energy future. Gov. Jennifer Granholm of Michigan got in the first question on the panel, looking for a policy focus for the Governors to support to help Congress pass useful legislation.
Friedman's initial answer (Windows Media video) focuses on the role of utilities in the clean energy economy and how Congress can incentivize green measures on the part of utilities. Immelt, meanwhile, offered that governors such as Granholm, who are concerned about replacing manufacturing jobs lost over recent years as the manufacturing economy has taken a severe hit, should focus on jobs for export--that is, green technologies such as photovoltaic solar panels, wind turbines, and coal gassification plant components. Such technologies are the lifeblood of a clean energy economy, of course, and not every state is going to be equipped to help produce them.
The meeting was not quite an unmitigated success, however, despite the good discussion that the governors were able to engage in. Montana Gov. Brian Schweitzer, for instance, was frustrated by the lack of consensus on clean energy policy. It seems less than likely that the 50 governors will reach any better consensus than, say, the US Senate on any contentious matter, especially one impacting the economy so strongly, but it's not hard to see how Schweitzer could be disappointed. The meeting is a rare opportunity for the states to stand as one and declare their needs to the President and Congress, and a majority statement with minority dissent would seem to be a weak and unconvincing tool for pushing policy change.
That all said, what's heartening is the will of the Governors Association to address these issues and devote a significant portion of their winter meetings to the topic. Look for more discussion in the future as clean energy becomes more of a necessity than obviously some governors are willing to admit at this point.
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One of the great things about the cleantech boom of recent years, like with the information technology boom of years past, is the number of cool ideas being flown out there as inventors and entrepenneurs come out of the wood work to try to capitalize on the growing market. Some of the ideas are decidedly uncool, of course, one of the pitfalls for investors who aren't familiar with the lay of the land but still want to get in on the boom, but it seems like with cleantech and alternative energy it is getting easier to pick out the speculators and charlatans from those who something serious to offer.
Aptly named Cool Earth Solar seems to be one of the latter, promoting a new balloon-based solar concentrator package for grid-level energy generation. Combining existing technology with an inexpensive manufacturing and deployment process, Cool Earth Solar promises an energy package that is competitive with natural gas power plants in price and output.
 The downside to their offering is that they're not looking to sell to consumers and third parties. Though the deployment would seem to be scalable from rather modest installations to large-scale arrays, the company has elected to position itself as a producer of alternatives to our current grid providers. Smart, in many ways, because that's where most of the money is right now in solar. From concentrator farms in the American southwest to big parking-lot sized arrays for Google or Wal-Mart, the trend right now seems to be in replacing or supplanting big power plants, rather than angling for the microgeneration market.
Microgeneration has the potential to be extremely transformative, one of the reasons why many of the solar providers are being lured away from it; the big energy companies see the potential for their being cut out of the loop in the future of energy, and they would rather maintain their current position than be rendered obsolete by an effective micro solution. From an alternative business standpoint, microgeneration is also a likely very volatile and uncertain market even now. A competitive price point, especially in an environment of low consumer confidence, might not be enough to promote enough consumer interest to make the company viable.
Focusing on the grid-level provides another option, and that is of high altitude solar collection. A compromise between ground-based arrays, with their near horizon and susceptibility to cloud cover and orbital solar installations, with the expense of installation and difficulty in transmitting power to the ground, a high altitude lighter-than-air solar collection mechanism could provide for enery needs cheaply and effectively. Certainly one of the very exciting possibilities that the cleantech boom is providing.
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This year at the International Builders Show in Orlando, Florida, the National Association of Home Builders kicked off its Green Building Program, a competitor of sorts to the US Green Building Council's LEED (Leadership in Energy and Environmental Design) standards on the residential front. While LEED is mostly focused on public and commercial buildings, they do have a residential standard, though obviously not one backed by the NAHB. Still, their focus has largely been, well, large-scale and commercial over residential.
So the NAHB decided to do their own thing, and cornerstone to the show and their own announcement was the first certiifed home under the Green Building Program, right in Orlando and open to attendees of the show.
 The home combines "smart home" high-tech gadgetry, such as programmable lighting with built-in presets and backlit control panels for easy access, and low-tech design elements such as a solar chimney, cleverly designed as a soaring cupola, that draws up hot air in the house and helps ease the burden on the Florida home's cooling system. Of course, at over 6000 square feet the home is far larger than practical for most people, and greater savings could certainly be achieved in a smaller footprint.
But the home is most critical as a demonstration model. Coined the New American Home, just about every conceivable feature is jammed into this futuristic home with the traditional look as a way of making a point about the Green Building Program, and that is that builders and designers need not sacrifice aesthetic or modern features for a green ethic. Much of it is in fact impractical, as the Orlando Sentinel reporter points out. The tub is conceivably too large to use regularly, for instance.
The value comes through in its visibility and utility as a test bed. As the first home certified under the NAHB's new program, it's going to stand as a kind of flagship for the program, and to do that it needs to be highly visible and heavy on the wow factor. It couldn't have been the tenth or fifth or even the first home in an average development in a random suburb; the home had to make a statement.
And this new home certainly did. Is it the New American Home for real? Only time will tell, but it's to be hoped that it will at least influence new home construction in the coming years.
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Cleantech investing has been strongly driven by the growing public concern over climate change, global warming, and other environmental and energy-related issues.
The Cleantech Greentech expert blog discusses developments in clean technology investing and green building practices, with a focus on clean tech venture capital investments and energy stocks, sustainable development, government rebates and programs, and energy efficiency strategies. |
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