Monthly Archives: January 2012

Ensia

Peas on Earth: How PepsiCo is aiding Ethiopia’s chickpea farmers to secure its supply chain | Ensia

Say “Pepsi” and most folks think of the nose-tickling cola that has been Coke’s archrival for over a century. Or chips: About half of PepsiCo’s $58 billion in yearly sales comes from snack foods such as Lay’s and Doritos.

But chickpeas? Also known as garbanzo beans, the protein-rich legumes are a key ingredient in hummus, one of PepsiCo’s fastest-growing products. In 2007, the food and beverage giant inked a joint venture with Israel’s Strauss Group to sell Sabra-brand hummus and other foods in North America. Led by demand for the garlicky blend of chickpeas, olive oil and sesame, PepsiCo’s sales of dips in its Sabra line soared by 45 percent in 2010. In early 2011, the partners agreed to extend the deal to sell Sabra hummus and other spreads globally.

This lip-smacking growth gives PepsiCo a new challenge: How to secure a steady supply of chickpeas. In 2012, the company expects to buy several thousand tons; two years later, the shopping list calls for roughly twice that amount.

To help meet this need, PepsiCo is combining its business agenda with the development goal of helping 10,000 Ethiopian farmers double their production of chickpeas in a program it’s calling Enterprise EthioPEA. “This initiative will positively impact the livelihood of local farmers, address the critical issue of famine in the Horn of Africa and create sustainable business opportunities for PepsiCo,” said Indra Nooyi, chairman and CEO of PepsiCo in a statement.

The strategy is as unconventional as it ambitious. After all, Ethiopia is better known for famine than for food export. Enterprise EthioPEA aims to reverse that condition by bringing together international partners with local stakeholders. From overseas, PepsiCo, the United Nations World Food Programme and the U.S. Agency for International Development are joining forces. Within the country, the effort is led by the Ethiopian Institute for Agriculture Research, the Ministry of Agriculture and Omega Farms.

For Ethiopia, where half of all kids are stunted by malnutrition, chickpeas offer a familiar but underexploited dietary option, explains Tara Acharya, PepsiCo’s director of global health and agriculture policy.

With around 22 percent protein, chickpeas offer a nutritious alternative to meat and require fewer inputs to grow. The crop is also a rich source of complex carbohydrates, fiber, minerals and vitamins.

Ethiopian farmers routinely grow chickpeas today, but typically as a secondary crop between regular harvests of grains. In addition, dependence on less-productive seed strains and a paucity of irrigation limits harvests, says Acharya. As a result, yields have historically been too low to ensure stable market prices, and farmers tend to keep most of what they grow, for food and as seed stock for future crops. In 2008, Ethiopian farmers produced 287,000 tons of chickpeas, exporting roughly 14 per cent of that. For most farmers, chickpeas “haven’t had significant commercial importance,” says Acharya.

But with PepsiCo’s commitment to buy excess production, if all goes to plan, both output and prices will rise. Working with farmers in Ethiopia’s wetter, more fertile north, Enterprise EthioPEA is introducing more vigorous seed strains along with technical and financial assistance to deploy low-cost flood irrigation. “Irrigation would also allow farms to add a second crop of chickpeas, during the dry season,” Acharya says, “and once installed, irrigation will help other crops, too.”

As harvests grow, Enterprise EthioPEA is working with local food processors to create an affordable supply of chickpea-based ready-to-consume supplementary food that will be used to feed 40,000 malnourished Ethiopian children.

Famine continues to take a toll in Ethiopia and neighboring countries. Rains did not fall in southern stretches of the country or in neighboring regions in late 2010, nor did they come in time in 2011 to save spring plantings. In parts of Kenya and Ethiopia, 2010–11 was one of the driest years since 1950–51. The tragic result is that today, some 13 million people face famine across the region. In Ethiopia’s southern provinces, 3.7 million are receiving food assistance from WFP.

Making a dent in these numbers will take time. Enterprise EthioPEA started last fall, and is slated to last through August 2013. By the following year, PepsiCo hopes crop yields will have doubled, producing enough to not only supply Ethiopia’s domestic needs, but also allow for export of about one-fifth of the crop, thereby doubling export income to farmers. By that time, PepsiCo hopes it can count on Ethiopia for about a tenth of its global chickpea needs.

Should Enterprise EthioPEA succeed, PepsiCo hopes to copy and repeat the strategy with other crops in other developing markets, says Acharya. A recipe that successfully blends profit with sustainable development is one few would want to keep secret.

ADAM ASTON is a Brooklyn-based writer covering energy, environment and green biz. Follow his work at adamaston.com or on twitter at @adamanyc.

Please check out the original article at Momentum, here: http://environment.umn.edu/momentum/issue/4.1w12/connections.html

GreenBiz

Dan Hendrix: The Future of Interface is Bright & Greener than Ever | GreenBiz

Dan Hendrix: The Future of Interface is Bright & Greener than Ever

Because of the enduring green epiphany of its charismatic founder, Ray Anderson, the influence of Interface has always been outsized in the world of sustainability.

In the wake of Anderson’s death last autumn at age 77, following a nearly two-year battle with cancer, the focus has shifted to Daniel Hendrix, Interface’s CEO and president. Yesterday, at theGreenBiz Forum 12 in New York City, senior writerMarc Gunther caught up with Hendrix to see how the billion-dollar carpet maker is moving ahead with its founder’s eco-vision.

At Interface, sustainability continues to evolve from an operations focus into tool for innovation and market development, Hendrix reported. One example of this shift will soon be found up in the air.

After a four-year development process, the company’s carpet tiles were okayed for use on commercial jets. Developing the product required reducing the weight of the tiles by nearly half, while meeting stringent fire and toxicity standards as well as passing Boeing’s grueling performance tests.

Southwest Airlines will be among the first to start using the tiles as part of its Green Plane initiative, a project to outfit a Boeing 737 cabin with green products. “It’s a big win for us, and for the airline industry,” said Hendrix.

Promoted to his post in 2001, Hendrix has been running Interface’s day-to-day business for over a decade. Hendrix, who will celebrate his 30th anniversary with the company next year, worked closely with Anderson through an acquisitive period in the 1980s to scale-up the business. A decade later, when Anderson had his green epiphany and declared this intention to transform how the company would make tiles, Hendrix recounted that he was a disbeliever: “I thought Ray had lost his mind.”

It didn’t take long for Anderson to convert Hendrix, or the rest of the company. To aid his effort, Anderson turned to a green “dream team” to make the case to his colleagues. A veritable who’s-who of sustainable manufacturing, the team included Paul Hawken, Bill McDonough, and Amory Lovins, among others. The case altered the thinking of Interface’s leadership, and re-set the company’s course towards a goal of making carpets using less oil, water, and other inputs, with less waste overall.

The company has tracked these metrics steadily since 1996. Since then, the company has lowered the oil intensity of its products to 60 percent from 90 percent, Hendrix reported. Roughly 40 percent of its carpet are produced from post-consumer recycled materials, remade from used carpet tiles where fiber is shaved off for reuse, and the heavy backing is re-melted to recapture its embodied energy. “We’ve seen an 82 percent reduction in water use, and a similar improvement in waste sent to landfill,” Hendrix said.

One of the latest efforts to deepen Interface’s green practices is a program to develop environmental product declarations, or EPDs, a sort of successor to a life cycle assessment (LCA). “It creates transparency,” said Hendrix, as a kind of environmental nutritional label for each product, showing key content such as carbon footprint, toxicity data, and water usage.

“It’s like an LCA but with more detail. It takes a lot of the mystery out of what impact this product has on the environment,” said Hendrix. “It’s far from being standardized. And we’re one of the first to pursue it in the U.S.”

After nearly 20 years of sustainability efforts, the process of extending green practices within the organization, born with Anderson, continues today. “Ray gave Interface a wonderful gift: There’s a tremendous emotional capital that continues to motivate our people to get up everyday and think there’s a higher purpose than just a paycheck,” Hendrix said.

Interface is looking to its employees for guidance on how and where to innovate. “We call the exercise ‘appreciative inquiry,'” said Hendrix. “We interviewed employees and a few customers, to help push towards a goal of zero emissions.” A lesson that emerged from this exercise was to cross-pollinate staff between offices, sending high performers from Bangkok to Europe, or from the U.S. to Australia, to learn and to exchange innovative ideas.

For more on Anderson’s legacy, check out Joel Makower’s memorial to the ” iconic and iconoclastic industrialist“. And in the first of an ongoing series called “Radical Industrialists” here at GreenBiz.com, read an essay contributed by Interface’s Lindsay James and Mikhail Davis, “Mind the Void: Interface after Ray.”

Photo by Sophia Wallace.

Check out the original story here: http://www.greenbiz.com/blog/2012/01/25/dan-hendrix-future-interface-bright-greener-ever 

GreenBiz

Why the Big Apple Can Be the World’s First VERGE City | GreenBiz

Why the Big Apple Can Be the World's First VERGE CityAs if recent football results weren’t enough to heat up the rivalry between New York, Boston, and San Francisco, add to the contest the quest for title of “greenest city.”

At the GreenBiz Forum 12 in New York City today, this rivalry took the form of a panel question: Can the Big Apple be the first VERGE city in the U.S., or maybe even the world?

Of course, New York has a long history of leadership in finance, media, and fashion. But green? Why not Masdar, or one of the new built-from-the-ground-up green utopias, asked session moderator Andrew Shapiro, co-founder of GreenOrder.

The city’s strength is partly its age, size and complexity. “The reality is that the majority of cities aren’t green field opportunities,” said panelist David Bartlett, IBM’s vice-president of industry solutions during the session. “Old infrastructures are where the opportunity for innovation lies. I think that makes New York the best candidate,” he added.

The city’s aged infrastructure is more opportunity than obstacle, said panelist Steve Cohen, Director and CEO of the Earth Institute at Columbia University, pointing out that it’s better for a city like New York to have an aged subway, in need of repair, than to have to build a new system from scratch, at nearly insurmountable costs.

“It’d be nice to have a computer controlled subway system, but I’d rather have what we’ve got, than to dig up the whole city today,” said Cohen. That said, the city has a track record of committing to billion-dollar scale green infrastructure, from the 3rd Water Tunnel, to the 2nd Ave Subway line. “This city is used to spending billions on capital. We’re not going to go through the anti-tax disinvestment cycle,” that has taken hold in other areas of the country, said Cohen.

In New York, the political leadership starts with Mayor Michael Bloomberg, who has led a sweeping effort to ready the city for the stresses of climate change and an additional million residents expected by 2030. The resulting blueprint, PlaNYC (pronounced plan-why-see) points the way to increased building efficiency, higher levels of renewable energy, less waste, cleaner air and water.

The technology tools that will make possible this smarter, more efficient future are entering service today. “There’s a huge proliferation of smart sensor technology where we can see — with much better x-ray vision — what’s happening with our building, with our transport system, with our energy networks,” said Bartlett. “Visibility, control, and automation, they’re the heart of smart.”

“No one is listening holistically to buildings,” said Bartlett. There’s automation device by device, or system by system, but no one is watching the sum of the systems, and doing do can deliver savings of 40 percent or more. “It’s a concept I call ‘the building whisperer,'” he said.

The city’s competitive edge also includes its “brain base”. “Boston is known as a college town,” said Cohen. “But we have more students in New York City than there are people in Boston,” said Cohen, implying perhaps this may be a reason the Giants will have an edge over the Patriots in Super Bowl XLVI.

The city is deepening its considerable R&D resources. Cornell University recently beat out Stanford University, winning a beauty contest to build a cutting-edge green campus for a new engineering school on Roosevelt Island.

Uptown, Columbia University is building a new satellite campus in northern Manhattan, which will be home to a brain and behavior research science center, along with additional capacity for engineering, business and continuing education. “The west side of Manhattan used to be full of factories and stevedores,” said Cohen, “And now those stretches are filled with brain workers.”

In many ways, cities offer more fertile ground for VERGE technologies to flourish than national or regional efforts. City mayors are “among the least ideological people around because the do real things: making sure the garbage gets picked up,” Cohen said. “The best minds in the world want to be here,” and even if they don’t want to live here, “It’s never hard to have a meeting here,” he added.

The challenges facing cities mirror the larger test facing the nation. At the national level, pragmatism is painfully absent, and has led to the polarization of energy debates into debilitating over simplifications, most recently with the Keystone XL pipeline, about which Cohen writes at his blog at Huffington Post.

The issue we need to address is America’s role in a sustainable global economy. How do we compete and protect the planet that sustains us? How do we ensure that other nations join us in an effort to achieve global sustainability?

“We’re talking about a post-industrial way of living. It will require innovation and creativity,” said Cohen today. “This is a little bit like arguing about landlines for telephones 20 years ago.” Energy technologies now on the blackboard may make debates about pipelines quaintly obsolete in the near future.

The rivalry for greenest city continues next week, as the GreenBiz Forum 12 heads to San Francisco on January 30 to ask a similar question: Can San Francisco be America’s first VERGE city?

My friend and GreenBiz impresario Joel Makower suggested the Bay Area may be the natural leader of the greenest city race, at least until the final minutes of the contest, when it fumbles away its lead to lose by a hair to New York.

No hard feelings from here in Giants land: At least in the green race, both cities can be winners.

Manhattan photo via Shutterstock.

Check out the original story at GreenBiz.com, here: http://www.greenbiz.com/blog/2012/01/24/why-big-apple-can-be-worlds-first-verge-city

GreenBiz

Clean Energy Makes Big Strides, but Just How Sustainable is the Growth? | GreenBiz

Clean Energy Makes Big Strides, but Just How Sustainable is the Growth?

Global investment in clean energy capacity expanded by 5 percent in 2011 to $260 billion. The growth comes despite the considerable drag from economic crisis in Europe and weak growth in the U.S.

The new research, compiled by Bloomberg New Energy Finance, was announced yesterday in New York at United Nations headquarters building, site of the Investor Summit on Climate Risk & Energy Solutions.

Up from $247 billion in 2010, last year’s rise in spending on clean energy capacity offered reasons for optimism along with rising cause for concern. Note that this data includes spending on renewable energy technologies, but not advanced coal, nuclear or conventional big hydro.

The good news: Spending has quintupled in the past seven years, with outlays for solar power leading the expansion — soaring by 36 percent to $137.5 billion during 2011.

And in the global horse race for green energy leadership, the U.S. regained its lead over China for the first time since 2008. U.S. spending hit a record, at $55.4 billion, up 35 percent, as investment in China rose by just one percent to $48.9 billion.

“The performance of solar is even more remarkable when you consider that the price of photovoltaic modules fell by close to 50 percent during 2011, and now stands 75 percent lower than three years ago, in mid-2008,” Michael Liebreich, chief executive of Bloomberg New Energy Finance, said in a statement.

But lurking behind those big numbers are worries that U.S.’ resurgence in 2011 may turn out to be the lunge that precedes a stumble. Spending in the U.S. was buoyed by a big surge of stimulus funds, originally set aside in the 2008 stimulus bill, that will taper off sharply in the year ahead.

“The U.S. jumped back into the lead in clean energy investment last year,” Liebreich added. “However before anyone in Washington celebrates too much, the U.S. figure was achieved thanks in large part to support initiatives which have now expired.”

As those incentives shrink, the global wind and solar industries are set to consolidate. Supply in both the wind and solar markets exceeds demand significantly, leading to bankruptcies and pullbacks. In the solar space, Solyndra is the most visible, but one of a growing number of startups that crashed under pressure from falling solar cell prices.

Dominated by mature conglomerates such as GE and Siemens, the outlook for wind is dimmer than for solar: Global investment fell by 17 percent to $74.9 billion. To try to compete with lower-cost Chinese manufacturers Vestas, the world’s largest producer of turbines, yesterday announced it was shuttering a factory, and cutting 2,335 jobs, or about 10 percent of its staff.

Of course, oversupply means lower-cost energy systems for buyers. And even as subsidies are declining in the wealthy West, non-financial policy support remains resilient. In the U.S., renewable portfolio standards in 29 U.S. states represent a $400 billion investment opportunity, as other states finalize similar commitments.

Meanwhile, stepped up subsidies in emerging markets — especially Brazil and India — are upgrading energy services to virgin markets. Spending in these areas will replace some of the investment that is retreating in North America and Europe, said Ethan Zindler, Head of Policy Analysis at Bloomberg New Energy Finance.

Financial innovation remains a weak spot, however, especially in the U.S., where clever capital solutions could help fill the gap left by shrinking federal subsidies. Given the multi-billion dollar scale of many clean-energy investment projects, there’s been a dearth of the sorts of high-efficiency financial instruments that can bundle up batches of projects, and finance them at low cost in public markets, Zindler added.

There have been some promising precedents — such as PACE loans and solar lease-to-own programs. But nothing has yet emerged to substitute for large-scale, multi-billion federal subsidy programs. Proposals such as green bonds or a national infrastructure bank are stuck in the starting gate, said Zindler.

Institutional investors, meanwhile, are hungry for more diversified ways to put money into greener projects. “Investors need diversified, sustainable strategies that maximize risk-adjusted returns in a volatile investment environment,” said Ceres head Mindy Lubber, which directs the Investor Network on Climate Risk, a network of 100 institutional investors with collective assets totaling about $10 trillion.

The retreat of subsidies may enhance the competitiveness of products and strategies already honed to deliver higher efficiency and energy savings, said Marc Vachon, vice president of ecomagination at GE. He added that GE’s ecomagination product line is growing at twice the rate of the rest of the company, having already generated $85 billion in revenues to date.

The event saw the release of two other reports of note for folks following investment trends in green business and clean tech:

• Global investment consultant Mercer issued a new report showing how leading global investors, including the nation’s largest public pension fund, CalPERS, are integrating climate change considerations into investment risk management and asset allocations. The report, “Through the Looking Glass: How Investors are Applying Results of the Climate Change Scenarios Study” comes on the heels of a Mercer report last year showing that climate change could contribute as much as 10 percent to portfolio risk over the next 20 years.

• Deutsche Asset Management also released a new report, “2011: The Good, The Bad, and the Ugly,” describing generally mixed results on climate investments and policy in 2011 but projecting long-term growth in cleaner energy markets to continue. Positive trends included China and Germany’s continued low-carbon leadership, the U.S. Environmental Protection Agency’s issuance of new rules on hazardous air pollutants, Australia’s new carbon legislation, and Japan’s commitment to supporting the deployment of more renewable energy.

The report also highlights negative trends such as the weak performance of cleantech public equity stocks in 2011 and the expiration of several U.S. federal renewable energy incentive programs, including the “highly successful” Treasury Grant Program that expired Dec. 31, 2011. The report noted that the TGP program, in 2 1/2 years, leveraged nearly $23 billion in private sector investment for 22,000 projects in every state across a dozen clean energy industries.

Last but not least, a plug. If you, like me, have concluded that the “end of coal” is all but inevitable to prevent catastrophic climate change, check out this remarkable presentation — which ended with a standing ovation — by Richard Trumka, President of the AFL-CIO at yesterday’s summit.

Trumka, a former miner, spoke with passion about how the “end of coal” message is landing on the ground in blue-collar coal country, even as he acknowledged the dire need to address climate risks and build a low-carbon economy.

His message is cause to reflect on how labor’s interests are often misunderstood and under-represented in climate policy discussions. Where coal miners see their jobs, housing values, and culture imperiled, it’s no surprise that the politics of climate change become hard to swallow — no matter how chaotic the climate change signals may be. The same labor issues vex the proposed XL Pipeline, about which Trumka says labor remains divided, and natural gas fracking as well.

Read the transcript here or watch his talk below, starting just before the 14-minute mark. It’s well worth the 15-minute running time. If the embedded player isn’t working, point your browser here: http://www.unmultimedia.org/tv/webcast/2012/01/2012-investor-summit-on-climate-risk-and-energy-solutions-2.html:

Wind turbine photo CC-licensed by Samuel Stocker.

Global CCS Institute

A recipe to jumpstart CCS in the US – the rewards of collaborating with China, 3 of 3 | Global CCS Institute

This is the third and final installment of a Q&A with John Thompson of the Clean Air Task Force. Previously we talked about Canada’s leadership in CCS and the problems posed by focusing on CCS liability in advance of scaling the technology. In this last part of the Q&A, Thompson outlines his vision of the benefits available to the American CCS agenda by collaborating with Chinese utilities and oil companies.

For context on how quickly China is emerging as a hothouse of CCS pilots, a recent report from Bloomberg New Energy Finance (BNEF) estimated that China is home to nearly one-third of active pilot-scale CCS projects globally, many of which are focused on carbon use. China, after all, coined the term carbon capture use and storage (CCUS), notes BNEF, adding that China offers US utilities a test bed with lower labor costs, lower regulatory hurdles, ultra-fast construction timelines, ample capital, and an appetite to learn from the West.

To spur EOR, how can we bring down carbon capture costs?

There’s where we think China comes in. China has very low‑cost capture technology, but they have no or little EOR experience. Texas and the Gulf states have lots of EOR experience, but to get more oil from their mature fields will require anthropogenic CO2. We see a huge opportunity to partner with China here, to bring lower‑cost Chinese CO2 capture technology to the US. A bigger supply of lower-cost CO2 will in turn help capture more of our oil. In turn, we can export EOR technology back to China.

CATF recently hired a new staff person in Texas to develop this vision, Dr. Frank Chou. He’s a 30-year veteran of various refining and chemical companies, most recently Shell. Our aim is to develop links between China and the Gulf states region as a way to promote carbon capture in both countries. China builds projects at twice the speed of the US, and at a fraction of cost. If we can harness these global synergies, we have the potential to really drive down costs globally.

How far has this collaboration gone?

We’ve already brought AEP into partnership with Huaneng, and linked Duke with Huaneng as well. I mentioned Southern Co’s Plant Radcliff earlier: the technology there is a TRIG gasifier, developed in Mobile, Ala., by KBR and Southern Co. That technology is being built in China first, in a small, 120‑megawatt power plant about two hours from Hong Kong. That operational data will help refine the design as Kemper is built.

How has China become a leader in low-cost carbon capture?

We’ve all heard that ‘China builds one coal plant a week’. That may or may not be quite true at the moment, but they’re building at an incredible rate (see chart below), and much of the capacity is at the cutting edge of coal technology. They’re building an advanced coal gasification plant about once a month, where the US has only a handful.

It’s no different than China’s experience with factory manufacturing: there are economies of scale taking place that lower the cost to build advanced coal plants. For example, there’s a plant called Shidonkou, outside of Shanghai. They’re capturing CO2 at about $30 a ton. That same project in the United States would probably be double or triple that cost.

And then there’s the potential appetite in China for EOR. We estimate they have the potential, easily, to build 30 gigawatts of CCS capacity to supply EOR in China. Yet right now, there’s maybe only one EOR project there. With more know-how from the US, there’s huge potential for that number to grow.

But why would China be better able to solve the problem of scaling up carbon capture than here?

The math suggests that China may be able to build CCS on power plants using EOR with little or no incentives. In China, they refer to EOR-CCS as ‘CCUS’ where the ‘U’ is for utilisation.

Keep in mind the value of CO2 for EOR purposes is set by the global price of oil. So whether you’re in Texas, Norway or Beijing, you’re basically paying the same global price for oil and that price establishes the same economic value of the CO2 used for EOR regardless of where you are doing it. On the other hand, capture costs do vary by region and country and in China they’re a fraction of the costs elsewhere.

So, if you buy CO2 for EOR at roughly the same price in China and Texas, but your China capture costs are a third or half what they are in Texas, you may be able to do EOR‑CCS in China on power plants without any extra economic incentives, without any need for a price on carbon.

That’s not true in Texas yet, given today’s cost of capture. To develop power plant CO2 sources, you’re either going to need some kind of incentive or deep reduction in the cost of capture technology.

But we can lower capture costs with China’s help. We can harness that global synergy to scale up 30 gigawatts worth of CCS for EOR in China in a matter of years. That scale of development lowers costs of capture technology globally. Building that much CCS first in the West would take decades. China is a really significant strategic opportunity that we’re trying to exploit.

So a lot of what we’re trying to do in China is break down the barriers between Chinese CO2 suppliers and Chinese oil companies, because the oil companies have the knowledge. They understand the geology but they don’t produce the CO2. If we can create US-Chinese business partnerships, the transfer of technology both ways could take years off the time when CCS is widely deployed.

At the outset, I mentioned that for me, CCS can also mean ‘Copy Canada’s Successes’. Someday, it could also mean ‘Copy China’s Successes’ too. China could be the key to creating global synergies that allow us to develop CCS technology with little or no subsidies, and no price on carbon.

Global CCS Institute

A recipe to jumpstart CCS in the US – the liability barrier, 2 of 3 | Global CCS Institute

I started my three-part Q&A with John Thompson of the Clean Air Task Force by focusing on Canada’s leadership in CCS. In this installment, Thompson outlines the problems posed by focusing on CCS liability in advance of scaling the technology.

Outside of the Texas, Oklahoma and Louisiana oilfields, questions over liability of sequestered CO2 have distracted the discussion, and arguably slowed or even stymied projects. Do you see liability fears as a barrier?

My bias has always been to deemphasize those things because, while important and necessary, they’re not urgent at this stage. As soon as you start getting the incentives and a few pilots off the ground, then the people that matter come to the table and start figuring out what really works and what doesn’t work, including for liability.

Liability risks are very important, but they’re second tier at this stage. It’s a chicken and egg problem: there isn’t a reason to worry about these risks if we can’t develop the technology. It’s like deciding, in 1914, what are the speed limits and color of signs for the interstate highway system.

I’m a firm believer that the regulations on this have to evolve as we learn from projects. We have much of the necessary expertise to get these right, again, with the EOR industry, which is very comfortable with liability.

So a lot of the things that we’ve done in the United States — Class VI rules for saline injection, we’ve done by learning from rules developed for Class II wells for EOR. Certain states have accepted liability while others that have chosen different paths — all that’s well and good, and will become more important and will evolve as soon as we get real projects on the ground.

Do you see a difference in the liability outlook for CCS in oil formations versus in saline injection?

There is an advantage for the first round of CCS development to put CO2 into old oil fields instead of saline sites. EOR provides certainty and revenue needed to finance projects. The likelihood is strong that the cap rock must be pretty good. Otherwise, you wouldn’t have oil there or natural gas in the first place. The issue is whether you’ve punctured that geology with old wells, and whether those old wells are closed properly and won’t become a pathway to the surface. Saline is critical too, but often less is known about the geology and so more studies are needed.

The allure of saline injections, presumably, is that the geology is more common, which would minimize the CO2 transport networks. Isn’t that a good reason to explore saline first?

The challenge with saline is that everybody who has a power plant or a large industrial source wants to minimize the pipeline costs and inject directly beneath their site. So how do you set up a system that actually begins to develop the best saline sites first and discourages people from, say, injecting under their own property where geology might not be as good just because it’s the least costly option?

One of the things that we think would be really helpful on the saline side is something we call a geologic storage utility. It would be a utility charged with handling the CO2 in a one or two‑state area and figures out where the best sites are first and helps build out the pipelines, so that we actually develop what’s easiest to characterize, and avoid black eyes.

Speaking of black eyes, given rising public opposition to natural gas hydrofracking in the US, do you worry about resistance to CO2 injection trials?

Resistance will depend on the site and the scale and a lot of other things, but the risk is rising. And certainly, the last thing we want is one failed site — a CO2 leak — to discourage the whole industry. To reduce resistance, people need to feel the project is safe. They need to believe it is worthwhile. This is a point where better education is needed. Quite simply, it’s game over for avoiding the worst aspects of climate change if CCS isn’t widely used. Fossil fuels use worldwide is projected to rise 50 per cent by 2035. CCS is effective because it can capture 90 per cent of the CO2 from stationary sources — new, existing, gas, or coal.

In that sense EOR can turn the CCS story into a potential success story – it helps recover more oil – shifting the focus away from worry over what CO2 does in the ground. Is the EOR potential big enough to drive significant carbon capture investment?

I think that’s really the interesting, fun fact here. Policymakers don’t necessarily understand that if you want to really reach the full potential of domestic oil production in the lower 48, particularly in Texas, and Mississippi, you’ve got to capture CO2 from power plants.

We’re running out of low-cost natural sources of CO2. To really develop the residual oil zones that are in the watery layers below the traditional producing wells, you need high volumes of CO2 and it will have to come from industry. Some of that will come from low‑cost sources such as natural gas processing and chemical manufacturer refineries. But ultimately, it’s going to take power plants.

Thanks John. We will continue our conversation tomorrow with a focus on the Clean Air Task Force’s plans to spur collaboration between the utilities and the oil sector in the US and China to accelerate the development of CCS.

Next…

  • A recipe to jumpstart CCS in the US: the rewards of collaborating with China – A conversation with John Thompson of the Clean Air Task Force (Part III)
Global CCS Institute

To jumpstart CCS in the US, look to Canada and China, 1 of 3 | Global CCS Institute

To John Thompson, CCS is an acronym with more than one meaning. To anyone in the Global CCS Institute’s community it means ‘carbon capture and storage, or sequestration.’ As director of the Coal Transition Project at the Clean Air Task Force, Thompson’s career is committed to accelerating the development of technologies to help cut greenhouse gas emissions from coal. He sees other possibilities for the three-letter acronym too.

On eyeing the progress being made by Canada, Thompson quips that the US might benefit if we took the acronym to mean ‘Copy Canada’s Success.’ He contends our northern neighbor has gotten the mix of incentives, policies, and industry concentration just right, so that programs are gaining momentum, at a time when US efforts are off-again than on-again.

China offers another variant of the acronym: ‘Collaborate with China’s System.’ Thompson sees huge potential gains for the US by collaborating with China, as its huge energy sector continues to binge new coal-fired power plants. With its deep capital resources, fast construction timelines, and willingness to demo cutting edge carbon capture systems.

My introduction to Thompson’s views came in New York last fall at the Institute’s roundtable for Climate Week. Intrigued by his vision of the promise of cross border collaboration, I spoke with him more recently at greater length to learn more about his take on CCS in the US, Canada and China. I’ve broken down our conversation in three parts. This first part, below, touches on US and Canadian efforts. In Part II, due tomorrow, Thompson opines on the barrier posed by a premature focus on CCS liability. In Part III, due Wednesday, he outlines an ambitious collaboration his organisation is developing between utilities and enhanced oil recovery (EOR) players in the US with their peers in China.

There is a lot of criticism saying that CCS efforts in the US are foundering. You’ve suggested we look to the north for a better way. Why?

It’s my version of CCS: ‘Copy Canada’s Successes.’ There are three things that Canada has done well that are key to making CCS work. One is incentives — the carrot part. For example, Alberta has put C$2 billion on the table to move a number of projects that will probably sequester about five million tons annually of CO2 by 2015. Some of those are going to break ground in 2012 or even this year.

The second thing: they’ve done regulations right, in a way that provides a reason to do CCS. These aren’t final, admittedly. But they’re taking shape. In the fall, Canada issued draft federal regulations that will set, for the first time, CO2 emission limits on coal plants. These rules set emissions at the level of an uncontrolled natural gas plant — so, call it a 65 per cent reduction. The key thing is you have to meet that standard whether you’re a new or an existing plant. But if you’ve certified that you’re going to put on carbon capture and storage, you can meet the new standard in 2025. That timing is important. It sets up an achievable standard — what I call a ‘partial capture’ level — and offers enough time to actually get the planning and construction completed. That’s a really good formulation that the US could learn from.

Then the third thing that they’ve done right is what I call the ‘nucleus’ of a CCS industry: the ICO2N network, which brings together coal, oil sands, and power utilities, all of whom have a strong interest in developing CO2 capture and storage in Canada.

What makes for a CCS nucleus area?

Look, this is no different than the car business. If you wanted to start manufacturing autos 50 years ago, you needed a lot of other industries assembled around you, to give you the component parts, the engineering services, and so on. It’s not quite a perfect analogy, but with CO2 there is a similarity.

For a one‑off CCS project, that’s an approach that can be done once, practically anywhere. But if you really want to do two or three projects, you need to create a community of skills and resources that is more sustainable, to build pipeline infrastructure, develop regulatory knowhow, nurture a critical mass of specialized engineers and geologists, and so on.

It’s the combination of incentives, rules, and an industry nucleus that make up the ‘secret sauce,’ so to speak, that we need to be replicated elsewhere around the world for CCS to thrive.

Some have said the US experience has suffered for being spread too thin, with projects in the South, Midwest and Northeast. Does the concentration of resources help?

Yes. Creating a density of projects in a certain area facilitates other things, like pipeline development, or developing regulations and regulatory expertise that enable projects to move ahead.

I think the Department of Energy has put forward something like US$8 billion over the years on CCS projects in various locations. But imagine if you had focused all that money, say, in Texas, where there’s a lot of EOR. You might have seen a faster, bigger bang for your buck. Canada, for its part, is concentrating more of its efforts in its middle section, though there are other projects farther afield.

Here in the US, we have a similar nucleus in the Gulf states, where oil and CO2knowhow are deeply rooted. What’s the potential there?

[We] just hired Dr. Frank Chou, a 30-year veteran of the petrochemical industry, in Texas to facilitate what we call the Gulf States-China Initiative. Think about Louisiana, Alabama, Mississippi, Texas: they’re all places with either a lot of oil fields, a lot of EOR — or a lot of potential EOR — and a lot of expertise. You have many of the key resources in place, such as the Texas Bureau of Economic Geology. You have companies like Denbury that build pipelines. You have a billion tons of CO2 injected over the last 30 years in the Permian Basin alone. There is a lot of real, hands-on experience there, ranging from the drilling, to the pipeline, to the monitoring.

It’s interesting to look where US CCS integrated projects are happening at the highest rate. There was a lot of flurry in the Midwest, initially, over the last 10 years, but it’s really been places like Mississippi and Texas where the projects are actually breaking ground. You have the Kemper Plant in Radcliffe, Miss., Southern Co.’s 582 megawatt IGCC plant with 65 per cent capture that broke ground last December. And there’s Summit Power’s Texas Clean Energy Project, too, which looks to be on track to break ground next year.

Both of these plants are globally important. Kemper is a big deal: this isn’t a pilot-scale project. It’s the real deal, a full-scale IGCC plant, approved by the Mississippi Public Service Commission to be funded out of the utility’s rate-base. And, it’s selling the CO2 for use in EOR, via a pipeline being built by Denbury. Likewise, TCEP’s model is all about commercial viability, by converting some of the CO2 into urea and other chemical by-products, and selling the remainder of the CO2for EOR.

This ends part I of my chat with Thompson. Tomorrow he discusses how worries over liability of CO2 storage are putting the cart before the horse.

Next…

** For more on the Texas Clean Energy Project, check out my recent Q&A with Summit Power’s Laura Miller, who is championing the TCEP project.

GreenBiz

How EnerNOC is Evolving Smart Grids and Building Energy Management | GreenBiz

How EnerNOC is Evolving Smart Grids and Building Energy Management

When I first met EnerNOC co-founder Tim Healy back in 2007, he was riding high on the results of a successful IPO. Catching up with Healy just a few weeks ago, I was struck by the dimming of the outlook for cleantech in the intervening years.

Five years ago, EnerNOC’s IPO was a bellwether in all-too-brief moment of exuberance for cleantech that marked that year. Listing in late May 2007 at a price of $26, EnerNOC’s IPO was a hit. The share price surged 20 percent in its first day of trading, and nearly doubled to $50 within six months.

At the time, EnerNOC offered something counterintuitive amidst all the breathless coverage of next-gen solar panels and complex batteries recipes. Rather than generate clean energy, EnerNOC was helping to solve energy shortages by reducing demand.

By taking control of commercial customers’ big equipment — think office building air conditioning systems — and turning them down briefly during periods of peak demand, EnerNOC could cut its customers’ bills by negotiating discounts with utilities. The plan helped utilities too, by giving them a way to cut the risk of costly blackouts.

These days, the atmospherics around cleantech are decidedly less exuberant, damped by partisan bashing, cheap natural gas and especially economic recession. EnerNOC’s stock has settled into a range just above $10 in recent months. Yet its business model has thrived and evolved, establishing demand response (or demand reduction, DR) as a fast-growing business and attracting a raft of competitors.

“We were among a small pack at the beginning competing for a land grab in the demand response market,” said Healy, the company’s CEO and chairman.

By most measures, EnerNOC scored well in that land grab. From a few dozen utility partners in 2007, the company now has contracts with hundreds and has expanded internationally, most recently to the United Kingdom and New Zealand. And its technology has evolved dramatically.

In the early days, said Healy, demand reduction amounted to relatively simple on-or-off decisions. During times of peak demand, equipment would simply be shut off.

“We call that DR with a machete,” he said.

These days it’s more like DR by microscope and tweezers. The combination of EnerNOC’s remote management software and advances in customers’ equipment — from freezers to digital lighting — make it possible to throttle down demand incrementally, following complex priorities. This ultra-fine control minimizes disruptions to operations, while delivering maximum dollar savings and maintaining grid stability.

This evolution toward automatic response technologies has accelerated DR’s business, and opened new opportunities. Where requests for reductions used to arrive a day or hours ahead of anticipated needs, these days contracts call for response times of minutes or seconds.

This is drawing EnerNOC and its peers into the role of automated grid management. The company’s recently-inked 150-megawatt DR project with the Alberta (Canada) Electric System Operator delivers not DR per se, but rapid response to grid variations to help maintain stability in the regional grid.

The fast-growing scale of wind and solar in recent few years has opened up a surprising variant for EnerNOC’s technology that works in reverse to demand reduction. In the Northwest, the Bonneville Power Administration has experienced periods when its dams and windmills spin out too much power, which can overload the grid. So the BPA has been searching for a way to increase demand on short notice.

EnerNOC is helping it to do so. In a pilot project, EnerNOC can push excess power to commercial facilities to heat up ceramic brick room heaters and/or boost the temperature of water heaters. The technology essentially stores excess electricity as heat, which can be drawn down later.

“We’re not just curtailing load. We’re ramping load up too,” said Healy. In addition to making more heat, making more cold also works. Cold storage facilities, for instance, can pull in surplus juice to chill their facilities to lower temperatures or make more ice, essentially storing excess load as cold.

Next Page: EnerNOC’s move into grid management, ‘persistent commissioning’ and more.

In addition to grid management, EnerNOC is also using demand reduction as a stepping stone to enter the broader field of energy management, to run the buildings and campuses of its clients. This gives EnerNOC a broader marketplace, for sure, but also brings it into head-on competition with bigger, deeper-pocketed incumbents such as Johnson Controls, IBM and Siemens.

It’s been a natural extension of EnerNOC’s expertise. As the company has grown, its software engineers have had to master an increasing diversity of software standards, control protocols, and other arcana — the code that runs offices, buildings, and the machines inside them. Expertise in these software layers has opened up a new frontier the EnerNOC: smart building systems.

“We want to drive towards a goal of ‘persistent commissioning,’ ” said Healy, where EnerNOC provides not just demand reduction services but real-time management of building systems.

The approach permits on-the-fly performance optimization, as well as the ability to detect faults. By mapping regular user patterns — escalators are always off from midnight ’til 6 a.m., for example — software can learn to take action if, for instance, an escalator motor energizes at 3 a.m.

“Managers have information systems for their finances, sales, manufacturing, practically every aspect of their operations,” said Healy, “Everything except energy. There needs to be better intelligence for the customer and utilities.”

Meanwhile, the DR market continues to mature.

“We’re seeing sectors coming to us that weren’t on our radar a few years ago,” said Healy. EnerNOC has recently begun to develop DR services for big farms, orchards and vineyards. They’re a natural fit. Big agriculture operations use lots of power to run remote irrigation pumps and other machines. These can be temporarily turned down with little harm to the crops. Installing intelligent sensors and controls on this network of pumps can deliver energy savings and other benefits too, such as reduced labor needs and fault detection.

Another potential growth segment is commercial sites that have until recently been too small to invest in DR: drug stores, convenience shops and gas stations. With all the fridges and display cases, these sites, in aggregate, face sizeable energy bills, yet are often too small to invest individually in smart energy management systems.

“If you could bring a packaged solution to these guys,” said Healy, “bundling up a series of outlets, you could see 10 percent or better savings at each site.”

I asked if the slow growth of power demand poses a drag on EnerNOC’s outlook. After all, during the recession, U.S. electricity consumption actually shrank and has grown only very slowly since. Healy told me overall electric demand growth is secondary to other trends.

First, there’s a coming wave of power plant retirements. With the EPA’s adoption of mercury rules on Dec. 21, utilities across the nation must shutter scores of their oldest, dirtiest plants, and will have to find alternatives. Secondly, the renewable energy standards now in place in most states drive demand for the sorts of grid stabilization services that EnerNOC is expanding into. Next, utilities continue to scale up spending on efficiency programs, an area where EnerNOC is positioned to help meet goals.

Plus, with overall growth flat, companies are working to shave costs: “One of the common refrains we’re hearing from customers is, ‘My top line isn’t growing, what can I do to cut costs to improve my bottom line?’ ”

And lastly, even if some factories have eliminated one of three shifts, for instance, they’re typically running daytime shifts at max, such that peak demand is still high.

“Even though overall usage is down or flat in some areas, we still continue to see peak records being set,” said Healy.

EnerNOC has some $1.3 billion in projects in its pipeline, Healy said. That’s roughly five times last year’s revenue of $280 million. The healthy pipeline has led many analysts to tag EnerNOC’s shares as undervalued. Thinking back to the IPO, Healy couldn’t agree more.

For more on EnerNOC, check out this podcast of Chrissy Coughlin’s conversation with Tim Healy here for GreenBiz.com.

GreenBiz

How SolarReserve Navigates Darkening Prospects for Big Solar in the US | GreenBiz

How SolarReserve Navigates Bleak Predictions for Solar in the US

On the sun-baked plains outside Tonopah, Nevada, a huge white pillar is inching upwards, as concrete piles up towards an ultimate height of some 60 stories. The slender structure is evidence of the tangible progress — and rising risks — facing a dwindling number of developers of large-scale power plants in the deserts of the western U.S. slated to make electricity by converting the sun’s heat into power.

I recently caught up with Kevin Smith, the Chief Executive Officer of SolarReserve. The Santa Monica, Calif. company is building the tower that will sit at the heart of its $900 million Crescent Dunes Solar Energy Project. Smith emphasized that while the tower attracts a lot of attention, it may be that the project’s ability to store the sun’s energy will become its most competitive virtue, particularly at a time when as the solar market is being rocked by plummeting prices for photovoltaic panels, a competing technology.

Topping out at over 600 feet, the Crescent Dunes solar tower will rank among the tallest structures in Nevada. It has to be that tall to absorb the reflected light from some 10,000 billboard-sized mirrors that will be installed in concentric half circles around its base. Once complete, the pillar will be capped with a collector, at which all those mirrors will point, focusing the sun’s rays. Where the reflected rays converge, temperatures will hit over 1,000 degrees Fahrenheit.

To make electric power, this thermal energy can be used immediately to generate steam in a turbine. Or the heat can be stored, absorbed in molten salts kept in insulated containers. This trick solves the intermittency problem that bedevils most renewables. Drawing on this stored heat, the facility can control when and how much electricity to make, and command a higher price from utilities by supplying power when demand is highest.

This ability to deliver power on demand makes the Tonopah project different from all but a very few large-scale renewable energy installation in the U.S. Windmills and other kinds of solar farms can store energy only by using costly battery banks, or pumped air storage or pumped hydro, both of which require relatively rare sighting conditions. Tonopah’s design is the largest of its kind, building on precedents set by a pair of smaller solar towers that have been operating in Spain and Arizona.

Since construction started in Tonopah last August, Smith would seem to have plenty to celebrate. Once the tower is complete, laying out the field of reflecting mirrors will follow. Come December 2013, the project is slated to begin feeding up to 110 megawatts of power into the western grid. What’s more, Tonopah is just one of a backlog of some 3,000 megawatts of energy projects SolarReserve has in its pipeline, including contracts to build two other solar towers in Spain and California.

But, when asked there would expect to see more projects in the U.S. further out, Smith was pessimistic. While financing for current projects is locked in, the Dec. 31 expiry of the so-called 1603 Treasury grant program — which offers a 30 percent federal cash grant to qualified renewable energy projects — threatens to stall the development of future large-scale solar plants.

The grant, along with many other renewable energy subsidies has been drawn into the toxic politics stemming from the failure of Solyndra, which was granted $535 million federal loan guarantee to commercialize a novel design for tube-based solar panels. Critics have gone on the warpath, questioning practically all renewable-energy projects that have received federal funds. SolarReserve was offered a $737 million loan guarantee by the DOE last May to help build the Tonopah project.

The hostile partisanship, together with shrinking federal funding, is souring a hot market here. “Unfortunately, U.S. policy is going in the opposite direction of much of the world,” Smith told me. “We’d love to have our home market continue to develop, but it looks like the next 12 months will be pretty flat.” In response to this uncertainty, SolarReserve has been expanding its development efforts overseas.

Were SolarReserve to de-emphasize U.S. projects, it would be another in a series of setbacks for U.S. solar technology and developers. Beyond the partisan backlash and broader economic recession, a key cause for these woes has been the plummeting cost of conventional photovoltaic panels, which have collapsed by roughly half over past two years.

The downward price spiral was the key culprit and Solyndra’s crash, and others have followed suit. U.S. players Evergreen Solar and SpectraWatt have likewise gone under. Just before Christmas, energy giant BP, once famous for a commitment “Beyond Petroleum”, fully exited the solar business, saying it “can’t make money” selling panels. Analysts agree that this brutal shakeout will continue, jeopardizing mature and startup solar players alike.

Plummeting PV prices are affecting SolarReserve’s competitors too. Indeed, its progress in Tonapah is all the more notable given the attrition rate of other efforts to build very large concentrated solar thermal (CST) projects. Once regarded as a low-cost way to capture the sun’s energy, many CST facilities have been done in by the tumbling price of conventional solar panels. To date, solar farms totaling 3,000 megawatts of capacity have switched from CST to conventional panels. That SolarReserve has avoided having to make such a switch is partly due to the edge offered by its ability to store energy.

Complicating any discussion on the future of solar is that, for all the harm ultra-cheap PV panels have done to some U.S. manufacturers, they have provided windfall savings for many panel buyers and many project developers. In the U.S., the industry is closing out its biggest ever year, with upwards of 1,700 megawatts worth of solar brought on-line, nearly double the 887 megawatts installed in 2010. Blue-chip investors continue to pile into new projects, too. Last week, Google laid out $94 million to fund four new solar power farms near Sacramento, Calif.

Come 2013, when SolarReserve’s solar tower starts to glow, the sight will surely attract tourists, press and industry attention. Here’s hoping the tall tower won’t mark the nadir of home-grown U.S. solar technology, as well.