Block’s Indicator of Sustainable Growth

by Ray Block

I have never been as excited in alternative energy technologies, such as wind and solar, as I am about fuel cells, now powering hydrogen fuelled vehicles. My interest here is in small stationary fuel cells, a segment of the market, which is starting to take off in a big way, although total revenue numbers are still small (under US$ 1 billion).

 As a reference source puts it modestly: “fuel cells are the perfect melding of benefits from energy sources.” They combine the benefits of easy refuelling and continuous operation potential of internal combustion engines, and the efficient and quiet operation of batteries. So they are the ideal energy alternative.

 They don’t require recharging as batteries do, and they are pollution free, unlike batteries and combustion engines. However, they do require refuelling, although this can be as simple as using low cost biogas.

 “Fuel cells work via an electrochemical reaction that converts the chemical energy stored in a fuel directly into electricity. There are five types of fuel cells, which utilise different electrochemical reactions, but the general process is always the same. Fuel is oxidised at the anode, electrons flow through an external circuit to do electrical work, and then fuel is reduced at the cathode.”

 The different fuel cell technologies are PEM (polymer electrolyte membrane); PA (phosphoric acid); SO (solid oxide); AFC (alkaline); (MC) molten carbonate; DM (direct methanol)

 Fuel cells first came to light back in 1838, when “William Robert Grove arranged two platinum electrodes with one end of each immersed in a container of sulphuric acid and the other ends separately sealed in containers of oxygen and hydrogen, a constant current would flow between the electrodes.”

 Fast forward to the late 1930s, when Frederick Thomas Bacon began researching alkali electrolyte fuel cells. During the second world war, Bacon worked on developing a fuel cell that could be used in Royal Navy submarines. In 1958, he demonstrated an alkali cell using a stack of 10 inch diameter electrodes for UK’s National Research Development Corp. Bacon’s fuel cells proved reliable and attracted the interest of Pratt & Whitney. The US company licensed Bacon’s research work for the Apollo spacecraft fuel cells.

 United Technologies Corp is the parent company of  Pratt & Whitney, and today UTC Power is a world leader in fuel cells using  the phosphoric acid technology.

 UTC Power’s latest 400kW fuel cell system is to be installed in Whole Foods Market 50,000 sq ft store, currently under construction in South San Jose CA). This will be the third Whole Foods fuel cell supermarket installation. “The UTC Power fuel cell system will generate 90 per cent of the store’s electricity needs and its thermal energy waste heat will be used for store heating, cooling and refrigeration for an overall efficiency of approximately 60 per cent, nearly twice the efficiency of the US electricity grid.”

The market research firm Fuel Cells Today says that to date more than 80 per cent of the small stationary market is held by companies producing polymer electrolyte membrane fuel cells (PEMFC).

As to the new sensation of Bloom Energy, with the technology of solid oxide fuel cells, which Science Daily (May 29, 2009) says has great potential for stationary and mobile applications. Stationary uses ranges from residential applications to power plants. Mobile applications include power for ships at sea and in space, as well as for autos. In addition to electricity, when SOFCs are operated in reverse mode as solid oxide electrolyzer cells, pure hydrogen can be generated by splitting water.

“The flaw in solid oxide fuel cells, which has delayed commercial production is in the integrity of the seals within and between power producing units. Composed of ceramic materials that can operate at temperatures as high as 1,000C (1,800 degrees F). SOFCs use high temperatures to separate oxygen ions from air. The ions pass through a crystal lattice and oxidize a fuel. The chemical reaction produces electrons, which flow through an external circuit creating electricity.”

“To produce enough energy for a particular application, SOFC modules are stacked together.  Each module’s compartments must be sealed, and there must be seals between the modules in a stack, so that air and fuel do not leak or mix.”

Bloom Energy, unlike other fuel cell systems makes a distributed energy system replacing the electricity grid, with its solid oxide fuel cells. The unveiling of Bloom attracted  around 900 articles in February 2009 in “unprecedented publicity” across major TV, newspaper and internet blogs. According to Google News, Bloom attracted one of the highest ever hit rates for a single product launch.

Commenced in 2002,   with sales of Bloom 100kW systems from 2009, the company will have its initial public offer in 2010, with John Doerr the doyen of venture capitalists of Kleiner Perkins Caulfield Byers, who floated Google so brilliantly, as the pivotal force behind the public float. Judging by the recent overwhelming successful IPO of Telsa Motors, Bloom Energy will be the big US float this year.

KR Sirdah, Bloom’s chief executive headed NASA’s fuel cells systems for use in the Apollo Mars probe, and when that mission was axed on the grounds of high costs, he took his scientific team with him. Bloom Energy located at Sunnyvale, Calif. first started raising venture capital in 2001, and was the first alternative energy company to be funded by Kleiner Perkins.

Four Bloom 100kV SOFCs have already been installed at Google’s Mountain View Californian headquarters. The 100-kilowatt modules are made of small flat 25-watt fuel cell wafers made of zirconium oxide that are stacked together.

This eliminates the problem of leaks, which as stated above, has slowed the development of this technology. The stacks are made of ceramics and metal. The Bloom box sells for US$700,000 to $800,000. Larger Bloom Boxes of 400 kW systems provides electricity to a Google building housing an experimental data centre, and similar systems are installed in Walmart’s stores.

 The company is also partnering with other blue chip companies,such as Bank of America; Coca Cola; Cox Enterprises (diversified media and communications group); eBay is said to have five Bloom Boxes; FedEx; Staples Center, (the Los  Angeles sports and entertainment landmark)  The Bloom box operates at high temperatures (over 600 C).

 by Ray Block

 It’s great to see the substantial growth in wind energy installations in 2009, as the international economy struggles to get out of recession. But what is disturbing is that if the rate of growth in new wind energy capacity continues to grow at its existing pace, China the spoiler and wrecker of the Copenhagen climate change meetings in December will end up as No 1.

 For the fifth year in a row, Chinese wind energy capacity continues to double. The global wind energy association (GWEA) reported (February 3 2010) that China was the world’s biggest market in 2009, increasing capacity from 12.1 GW (that is 12,100 MW) in 2008 to 25.1 GW at the end of last year.

 Along with newly added capacity of 1.27 GW in India, and smaller additions in Japan, Korea and Taiwan, more than 14 GW of new wind energy capacity was added in Asia in 2009.

 Last year also saw a significant increase in Australia’s wind energy installed capacity by 406 MW in 2008 to 1.712 GW at the end of last year. Australia has now legislated for a mandatory 20 per cent renewable energy level by 2020.

 United States continues to shine in new wind energy capacity of 9.922 GW in 2009 to reach a cumulative total of 35.159 GW, with Texas and California still well in the lead. Canada also did well in new wind energy additions of 950 MW to a new total of 3.319 GW installed capacity, while in Latin America total installed capacity doubled over 2009 to a new level of 1.274 GW.

 Europe, the original home of windmills, and where the modern wind energy market commenced in 1976 had a good year in 2009, with new wind energy installations of 10.526 GW, of which more than 95 per cent is in the 27 countries making up the European Union.

 Spain continued to lead over Germany in new wind energy capacity, followed closely by Germany. Then came in close order Italy, France and UK. Total installed wind energy capacity at the end of 2009 rose to 76.152 GW.

 As in wind energy, wind turbine manufacturing has become a very competitive battleground, with intense price competition from Chinese producers, upsetting the old leadership in which traditional world leader Vestas of Denmark was No 1 and Gamesa of Spain No2.

 With the US catching up and then outdistancing Germany, GE Energy came into the industry by acquisition, and then recently consolidated this with the takeover of Norwegian based Scan Wind, a novel producer of gearless turbines for use in the offshore wind market.

 Calendar year 2008 saw GE nearly catching up to the traditional world leader Vestas of Denmark. Gamesa of Spain was far behind in third place. Then followed in close order Enercon (Germany), Suzlon (India) and Siemens(Germany).

 The three largest Chinese producers Sinovel, Dongfang and Goldwind were a little behind, but growing very rapidly, to take advantage both of China’s leap ahead in wind energy, and a preferential tariff favouring local producers. This has enabled Chinese producers to gain a 70 per cent share of the Chinese wind turbine market.

 Even in 2008, one of every eight wind turbines produced were Chinese. But 2009 is another story again, with Vestas facing eroding market share, its share price in February 2010 falling 60 per cent from its peak 2008 value. Gamesa went backward in 2009, losing market share and falling into losses.

 The ever expanding domestic Chinese wind turbine market has enabled the domestic wind turbine producers to both expand aggressively offshore with substantial price competition, and to produce larger capacity wind turbines.

 The average Chinese wind turbine  was  until recently a 1.5 megawatt unit, with Sinovel Wind Group, the largest Chinese producer in 2009 accounting for an output of  2,400 1.5 MW wind turbines and 100 300 MW turbines.

 Sinovel commenced a production line for its 5 MW wind turbine in January, and this is expected to come on line at the end of 2010. The 300 MW and 500 MW turbines are destined for the offshore and near offshore wind power markets.

 Dongfang Turbine Co., a subsidiary of China’s largest provider of power generating equipment has a contract with American Superconductor Corporation (AMSC) to develop a 5 MW wind turbine for the offshore wind market, having already supplied a 2.5 MW prototype to the Chinese.

by Ray Block

It’s becoming readily accepted in the community that energy efficiency is important. But it isn’t really understood that the No1 priority on the road to a low carbon economy is achieving energy savings.

Investment in energy savings in buildings, industry and transportation ranks above investment in new energy sources including wind, solar, biomass and biofuels. The International Energy Agency (IEA), in its World Energy Outlook November 2009, says that end-use efficiency is the biggest contributor to the cutting back of CO2 emissions.

The agency also said that energy efficiency investment has a short payback period in fuel cost savings. Expressed as a fuel source in its own right, the American Council for an Energy-Efficient Economy (ACEEE), says in its report on the cost of saved energy September 2009, that energy efficiency would cost the equivalent of 1.6 cents/kilowatt hour (kWh) to 3.3 cents per kilowatt hour kWh, averaging 2.5 cents/kWh.

This compared with pulverised coal at 7 cents/kWh to 14 cents/kWh, combined cycle natural gas 7 cents/ kWh to 10 cents/kWh, and wind energy 4 cents/kWh to 9 cents/kWh.

This led the authors of the ACEEE report to say that “energy efficiency is by far the least cost resource option. They went on: “it appears to be a resource that continues to renew itself- the more energy efficiency opportunities we look for, the more we find.”

The biggest area for energy savings is in buildings, adding together industrial, commercial and residential, which collectively amounts to 38 per cent of energy use.

This is one and half times energy use in transportation. The figures are derived from a four year international survey by the World Business Council for Sustainable Development (WBCSD.

Energy codes and standards are largely ineffective, and safety standards are not much better. So how do you bring about change? A price on carbon, with appropriate tax incentives helps. There is a big role for research and development. But no matter how much is achieved in R & D, both with new technology and incremental change, the biggest problem remaining is the overwhelming tendency of inertia, clinging to traditional ways of doing things.

George David, chairman of the privately funded Peterson Institute for International Economics in Washington (September 2009) said that “higher carbon costs and improved efficiency technologies will increase the attractiveness of investments and lessen the economic drag of otherwise lower returns. But we still need the stimulus of regulation to get us started”

Two ways of achieving energy savings provide a transformational way of approach.

The first example comes from George David. He quoted the example of newer elevators, which recapture and make available for re-use the energy on descent that was expended on ascent. Reducing energy consumption by 75 per cent for the same speed and load, compared to older models, with non-regenerative elevators.

The other example comes from Green Inc, the environmental blog of the New York Times. It involves the installation of a stationary fuel cell in a 69,000 sq ft supermarket in upstate New York, which has largely supplanted the electricity grid supply for the store’s lighting, heating and cooling requirements.

As the fuel cell supplier, UTC Power says fuel cells don’t have the energy waste of traditional power generation, where more than half of the energy goes up the stack as greenhouse gas. By contrast, fuel cell systems convert heat exhaust into cooling and heating, turning potential waste into usable energy, with an energy conversion efficiency exceeding 85 per cent.

by Ray Block

by Ray Block

Despite the global recession, solar PV (photovoltaics) continued to grow in calendar 2009, increasing by an estimated 5 per cent. However, it largely took to the fourth quarter before the market became revitalised.

Global market estimates from forecaster Solarbuzz, is for an expected 6.37 GW PV in calendar 2009, with European demand accounting for 71 per cent of the market. Germany’s third quarter (July-September) demand of 980 MW was eclipsed by a more robust 1680 MW fourth quarter.

Germany regained the world lead from Spain, after losing the top spot in.2008, with an estimated 2.5 GW installed. After a record Spanish demand of 2.5 GW in 2008, with the inducement of an exceptional level of feed- in-tariff (FIT), the government capped demand for 2009 at 500 MW and reduced the FIT subsidy. As a result, solar companies downsized their staff from 40,000 to 4,000. With a reduced FIT, demand in 2009 fell to only 150 MW.

The Italian government has set a goal of 3 GW PV by 2016, with 2009 demand expected at 400MW. France wants to achieve PV demand of 1GW a year by 2013, with an installed capacity of 5.4 GW by 2020.

US PV demand for calendar 2009 is estimated by Solarbuzz at 556 MW up from 290 MW in 2008. Enterprise Florida and Greentechmedia, in a study of emerging trends in the US market point to the beginnings of a cost based feed-in-tariff, with California supporting a FIT of up to 750 MW total demand. A major growth factor is the enthusiasm for power utility scale PV systems. 16 states currently have a renewable portfolio standard, with specific provisions for support to solar power.

In the next four years, the utility-scale market will begin to rise markedly, outdistancing the residential market. Enterprise Florida and Greentechmedia expect with falling PV system prices to see the “gradual achievement of price convergence between utility-scale PV and wholesale peak electricity prices.” The study suggests that price convergence could occur as early as this year, initially in the No1 PV market in California.

The most remarkable solar PV company so far is First Solar of Tempe, Arizona, with its outstanding success in thin fim cadmium telluride (CdTe) modules, challenging the traditional dominance of crystalline silicon. CdTe modules don’t have the energy efficiency of silicon, but First Solar makes up for that with the ability to decrease radically the cost of solar cells per unit of generated power.

In 2009, First Solar was able to reduce the cost of solar cells to 85 cents (US) per watt, which had been never before achievable.  2009 module production was 1.1GW, almost catching up to industry leaders Q-cells of Germany and Sharp of Japan.

iSuppli forecasts that the thin-film PV module share of the overall market will rise from the 2008 global level of 14.2 per cent to an impressive 34.5 per cent by 2013. First Solar, with nearly 28 per cent of the global market in 2009 is well placed to benefit from this expected growth.

Japan, which had an installed PV capacity of 2.1 GW in 2009 aims to have 28 GW of installed PV by 2020. The government introduced a FIT taking effect on November 1 2009, requiring power utilities to purchase PV generated electricity at Y48/kWh for 10 years.

by Ray Block

By all accounts, geothermal resources in the world are immense. The Union of Concerned Scientists says that within 10 km (about 33,000 feet) of the Earth’s surface, the amount of heat contains 50,000 times more energy than all the known oil and natural gas reserves in the world.

Greater effort is now being made to exploit these resources, as the need to create low carbon economies becomes more urgent. Although there is a small volume of greenhouse gases involved, geothermal energy is available 24 hours a day, providing base load power at a price almost competitive with coal.

At September 2009, United States with the largest known geothermal resources in the world, is generating geothermal electric power in eight western states. California is the long time leader, with more than 40 geothermal plants providing nearly 5 per cent of the state’s electricity.

The state’s renewable energy requirement of 33 per cent by 2020 will spur more development. Nevada, the second largest geothermal producer has a 25 per cent renewable energy target by 2020, and this will also facilitate increased production. Soon another five states will also be generating electricity.

Total US installed geothermal capacity is currently 3.1 GW. Although representing less than 1 per cent of total US electricity capacity today, the aim is to reach at least 5 per cent of US power needs by 2020, and 10 per cent by 2030. The US Geothermal Energy Association says that 144 projects are now under development in 24 states, which could provide additional electricity capacity of 7 GW.

Up to $338 million in Recovery Act funding was allotted by the Obama Administration in 2009 for the exploration and development of new geothermal fields and research into advanced geothermal technologies. These grants matched on a one-for-one basis with private and non-federal cost share funds will support 123 projects in 39 states.

Conventional US geothermal resources on private and accessible public lands has a mean estimate of 33 GW, while the latest study by the US Geological Survey of geothermal resources in hot rock technology suggest an additional mean estimate of 518 GW available.

While the capacity factor in conventional geothermal production, (the amount of electricity produced) is at least 73 per cent, and may be only 30 per cent in hot rock technology, the overall resources are so large, that one day they may be able to supply much of the country’s electricity needs.

European geothermal resources are mainly in heating and cooling, directly exploiting the aquifers (Paris leads in low and medium energy resources), where the temperature ranges between 30 degrees C. and 150 degrees C. The second way is to produce heat using geothermal ground source heat pumps. The major European producers are Sweden, Italy, France, Hungary, Germany, Denmark.

The EU-27 country geothermal electricity target for 2020 is 6 GW, and for geothermal heating installed 39 GW. Outside the EU, Iceland with about 300,000 people is the geothermal standout,with 17 per cent of its electricity and 87 per cent of its direct heating from geothermal energy.

Everywhere on Earth, the deeper you go, the hotter it gets. Some of the regions are within the “Ring of Fire,” characterised by volcanoes, hot springs and fumaroles, (vents emitting hot gases), where the heat is close to the surface. These areas are around the rim of the Pacific Coast on the US and Canadian west coast – California, Nevada, Alaska, Hawaii, and down the Asian coast to include Japan, China, Philippines and Indonesia.

There is also the Mid-Atlantic Ridge, an underwater mountain stretching from Iceland and the Azores to Antarctica, the East African Rift Valley mainly around Kenya, the East Pacific Rise paralleling the west coast of South America, the Rio Grande Rift running up through New Mexico and Colorado and the Juan de Fuca Ridge (tectonic spreading centre off the coast of Washington state and the adjoining province of British Columbia.)

There are two additional levels of geothermal resources. One of these is a steady supply of milder heat available for direct space heating, at depths down to 200 metres or so, which is available in parts of Europe and North America.

There is also the very large resource at depths of 3 km to 10 km (about 2 to 10 miles), where enhanced geothermal systems (EGS), also known as hot rock technology, has opened up a virtual Pandora box of energy treasures. In addition to the US, Australia, France, Germany and Japan have R&D programs to make EGS commercially viable.

In the EGS process, a fractured reservoir is created at a depth where the rock is hot. Water is continuously injected down a well into the engineered fractures, where the water heats as it flows through. The water is then brought to the surface via production wells, and its heat is extracted to generate electricity in power plants. Finally, the water depleted of its heat, is re-injected to be heated again.

Susan Petty, President of AltaRock Energy, whose company is exploiting an EGS project in Oregon gave evidence to the US Senate Committee on Energy and Natural Resources in 2007.She discussed the economics of the cost of geothermal electricity at depths of 3 km, and temperature of 300 degree C.

Her experience is that EGS at current technology could be generated for a cost of about US$74 MWh. This price includes financing costs and amortising the capital investment of the well field, but before profit. With incremental technology improvement, the cost of power could be cut in half