Alternative Energy Technologies Perspectives and Comparisons

by

Tom KonradPresented at:

The Keiretsu Forum Cleantech Academy

October 23, 2007

Outline• Introduction

• Electricity Generation– Definitions & Metrics– Examples – Comparisons

• Energy Efficiency

Goals• Know which questions to ask:

– Is the presenter using valid metrics?– What is the potential market?– What are competing technologies?

CleanTech Investing 101• Today

– Electric Technologies• In depth: Solar, Geothermal

• Future Workshops– Electric with other focus topics

• Wind, Transmission, Energy storage, Smart Grid

– Transportation Technologies– Others: Thermal technologies, Green building

Outline

• Introduction

• Electricity Generation– Definitions & Metrics– Examples – Comparisons

• Energy Efficiency

Electricity Generation:Power vs. Energy

• Power– MW or kW

– Like horsepower for your car

– Answers question: how fast can I use it?

• Energy– MWh or kWh

– Like gallons of gas for your car

– Answers question: how much did I use?

500 MW wind farm and a 500 MW coal plant have the same power rating, but the coal plant will produce 3x as much energy over the course of a year because it runs most of the time.

Timing of Generation• Electricity is difficult to store, so electricity supply

has to be constantly balanced with demand• Baseload is “always on”

– Valued for reliability

• Dispatchable can be turned on and off– Worth the most to utility

• Intermittent– Only valued for Energy, not Power – lowest paid

sources of generation.

Reliability• Peak demand is the most amount of power that

users are expected to need at any one time• Peak usually occurs on hot summer

afternoons/evenings• Most utilities want enough Base Load +

Dispatchable capacity on the system to meet peak with a margin

• Most are unwilling to count more than a small fraction of Intermittent generation towards meeting peak

Location

• Generation must be connected to a load or the grid to be valuable

• Renewable resources are often located in areas without transmission

• Small distributed generation can often take advantage of “net metering” laws which allows sale to the grid at retail prices

Outline• Introduction

• Electricity Generation– Definitions & Metrics– Examples – Comparisons

• Energy Efficiency

Base Load TechnologiesStrengths Weaknesses

Coal Familiar, cheap fuel

Global warming, water use, emissions

Nuclear Cheap fuel Very expensive to build, proliferation, waste storage, water use

Geothermal Low impact, inexpensive

Location, limited but larger resource

Biomass & Waste to Energy

Free/cheap fuel

Has emissions, limited & distributed fuel supplies

Dispatchable TechnologiesStrengths Weaknesses

Natural Gas Generation

Low emissions, Can locate almost anywhere

Fuel cost/ volatility

Demand Response

Inexpensive, reduces emissions

Utility must think “beyond the meter”

Intermittent TechnologiesStrengths Weaknesses

Wind Inexpensive Far from cities, usually not timed near peak

Solar Photovoltaic (PV)

Useful anywhere, matches well with peak

Expensive

Concentrating Solar Power

Moderate price, can be stored, near peak

Only works well in cloudless areas

Ocean & Tidal Power

Near loads Developing, still very expensive

Shifting SupplyUsing the power we have more effectively

Pumped Hydropower

Inexpensive Limited by location environmental restrictions on water flows

Battery Storage Locate anywhere Expensive, developing technology.

Thermal storage Less expensive Used only with Concentrating Solar Power, few & small commercial experience

Compressed Air Energy Storage

Moderate Price Locate only near underground caverns/mines; requires natural gas

Fully dispatchable storage technologies

Shifting DemandUsing the power we have more effectively

Time based pricing

Pays for itself, also reduces total usage

Utility must think beyond the meter; often requires infrastructure upgrades

Long distance transmission

Diversification of supply and demand

Takes long time to build or upgrade; politically tricky

Note on Electricity Prices• On-Peak Power can be worth as much as 10x Off-

Peak power in wholesale markets• Quoted ¢/kWh numbers include assumptions:

– Fuel prices– Discount rate

• High discount rates favor technologies with high fuel costs

– Environmental & social costs are usually ignored- but they do have value

• Colorado has passed a law that explicitly includes these costs in the resource planning process for public utilities

Outline• Introduction

• Electricity Generation– Definitions & Metrics– Examples – Comparisons

• Energy Efficiency

Electricity Generation Comparisons

• Disclaimers: – The following charts are based on my opinion

from extensive reading in the field, is highly qualitative and represents a simplified picture

– Don’t expect scientific accuracy– Bubble size approximates the size of the

potential resource

Availability vs. Price

Emissions vs. Price

Outline• Introduction

• Electricity Generation– Definitions & Metrics– Examples – Comparisons

• Energy Efficiency

Energy Efficiency• Customers (except utilities) are not in the

market for kilowatts and kWh… they want light, refrigeration, etc.

• Efficiency is finding ways to deliver what the customer wants (the services electricity provides) while using less electricity

Barriers to Energy Efficiency

• Energy Efficiency is so cheap because of barriers to adoption– Perverse incentives: Landlord buys equipment, tenant

pays bill– High up-front costs / lack of capital– Attitudes/Awareness – not a social norm– Perceived riskiness – esp. on the part of utilities– Often require system level improvements – not just

products.

Demand Side ManagementOvercoming Perverse Incentives

• Refers to utility programs to promote energy efficiency or demand response

• Growing quickly in popularity due to government mandates

• Can be hard to measure results

• Requires shift to looking beyond the meter

Performance ContractingOvercoming high up-front costs and riskiness barriers

• Customer – Hires company to provide a fixed level of service

(temperature, light, etc)

– Pays the company an amount less than the current utility bill

• Company– Takes over utility bills

– Uses energy efficiency measures to save energy

– Keeps the savings.

Examples• Products:

– Geothermal Heat Pumps

– Compact Fluorescent Lights (CFL)

– Light Emitting Diodes (LED)

– Low-e Windows

– Insulation

• Design / Service:– Daylighting– Passive Solar Design– Servicing heating and

cooling equipment regularly

– Proper sealing of buildings

– Cogeneration / Combined Heat and Power

Final Thoughts• When and where electricity is delivered is

often more important than the price• The electricity market is inefficient in many

ways– Selling only on price seldom works well

• Small companies need a ready market for their products… they seldom can survive if they have to transform the market first