Tuesday, July 22, 2008

From the Annals of The Rocky Mountain Institute

I begin this essay with no certain conclusions, but with some thoughts. The starting point for this essay is a investments by famous venture capitol firm Kleiner Perkins, and the possibility that Amory Lovins provided "Investment Advice" to Kleiner Perkins that lead to that investment choices. Whether it is a good idea for rely on Mr. Lovins for investment advice, ought to be a matter for some discussion in corporate board rooms.

First we must return to the August 25, 2007 birthday celebration for Lovins Rocky Mountain Institute. Present on the stage for the celebration along with Lovins were Bill Clinton, past CIA director R. James Woolsey, former New York Governor George Pataki, Sustainable South Bronx’s Majora Carter, Wal-Mart Chairman Rob Walton, New York Times columnist Thomas Friedman, technology luminary Bill Joy, Patagonia founder Yvon Chouinard, and British Sky Broadcasting CEO James Murdoch. In case you were wondering which Amory Lovins I am talking about, he is described as "an Oxford-educated physicist". We are also told. "Lovins uses hard data as the basis for making the world’s economy radically more energy efficient through better planning, design and day-to-day use in both buildings and industry."

Check with Rod Adams and David Bradish about the truth of those last two statements. It could be the case that the sentences actually describe a myth spawned by the Lovins propaganda machine about who Lovins is.

In the audience were represenatives of Kleiner Perkin, including Joy. Working who was quoted in a story on the gathering as saying that she and her company were working on "looking for something in green technology advances to make a factor-twenty change on a long-term basis."

Those investments appear to include super-efficient energy storage - think EEStor - solar energy production - as in desert Southwest - using non-exotic materials (current PV solar uses ample amounts of both silicon and crystal), and combustionless coal-to-energy production. Combustionless coal for energy production? Where did that come from. Now mind you all of this is mentioned at the The RMI's 25th birthday meeting. Was Ms. Working discussing investments that Lovins had not been consulted about, or known to approve?

Lovins' official biography also describes himself as a physicist, and an advisor too Kleiner Perkins Caufield & Byers.

Fortune Magazine recently released a story by Adam Lashinsky on Kleiner Perkins green investment plays. The Story reported that Kleiner had invested $200 Million in Bloom Energy. Bloom is developing a fuel-cell system that will power single-family homes, office buildings and businesses. The Bloom Energy idea is that when not producing power for local consumption, the fuel cells can deliver electricity yo the grid. Does that Idea sound familiar? Fortune's Adam Lashinsky describes a meeting with Bloom Energy founder and CEO K.R. Sridhar. On the wall of Sridhar's office are pictures of him with Al Gore, Colin Powell, Arnold Schwarzenegger, Michael Bloomberg, Bill Clinton, journalist Tom Friedman, and others. Obviously this Bloom'slight is not hidden under a bushel. Before I go any further, I would like to mention two words, Ballard Power. Ballard was a Canadian company that made an over 20 year attempt to develop a viable fuel cell technology, before calling it quits last year. There are other words that should be mentioned like "hydrogen economy", the word questionable is associated with that in my mind.

Let us now turn to a story about Kleiner Perkins written last week by Chris Morrison an eco-business writer. The story title is, "What the hell happened to Kleiner Perkins?" The story focused on some of Kleiner Perkins; green investments, but mentioned in passing some of Kleiner Perkins other investments that would not pass the "green" smell test, unless the smell of green cow dung was part of the test. True Morrison's story was was largely a rehashing of the Fortune peice, but It focused on the question of how these questionable "Green" investments came about.

In case you are wondering about what the the $200,000,000 Kleiner Perkins investment in Bloom is all about, here is the Bloom Web Page.

Adam Lashinsky tells us, "Bloom isn't ready to share many of the basic details of its business: who its customers are, what specifically it will sell, when it plans to bring its products to market, and so on. In other words, it has plenty of secrets to keep, yet it's a fixture on the green-is-good political tour of corporate America."

Well Bloom did not tell Adam Lashinsky what its business is, but CNN Money has the scoop. "The company's vision is to use solid-oxide fuel cells to allow homes to generate their own electricity. The fuel cells would use (but not burn) hydrocarbon fuel, and produce just half the carbon dioxide that today's power plants do. One fuel cell should be enough to serve a home; homes could sell excess power back to the grid. Bloom Energy's biggest hurdle is cost. It needs to get the price of its machines below $10,000 apiece."

Does anyone see any problems in this? Aren't we looking at a business plan straight out of the Rocky Mountain Institute playbook? Notice that the technology reduces CO2 emissions by 50%, not eliminates, mind you. So basically Bloom plans to use increasingly expensive natural gas to produce electricity in a process that emits CO2. So implementation of the technology would would be subject to a carbon tax. Very pretty, very pretty indeed. I mean the Bloom Webpage of course. I have to wonder if CNN Money did any analysis before it decided to run the story. Erick Schonfeld and Chris Morrison described Bloom as one of "10 businesses with the potential to rewrite the rules of existing industries or open up entirely new markets."

There is more!. The plan requires the use of a solid-oxide fuel cells, an new technology, always the easy path from idea to reality. Here is Schonfeld and Morrison's description of the process, "At high temperatures, fuel on one side attracts oxygen ions on the other. As these ions are pulled through the solid core, the resulting electrochemical reaction creates electricity." That is not all, "Bloom Energy's fuel cell does not require combustion and therefore produces half the greenhouse gas emissions of more conventional energy sources. One of its by-products, in fact, is hydrogen that could be used in a different type of fuel cell, the hydrogen-powered version imagined for propelling cars."

Again I ask, does anyone see a problem here? First where does the heat to run the process come from? Secondly, the process involves not only the generation of electrical energy but also the operation of a mini-hydrogen factory. Isn't hydrogen dangerous? Doesn't it burn? You are going to produce hydrogen in the house? Thirdly not only is hydrogen produced, but it must be concentrated. Bloom is going to accomplish that for under $10,000? Fourth, the hydrogen is going to have to move from the mini factory to the car. Can't you picture Colin Powell lugging a hydrogen tank from from his hydrogen mini factory out to his car, replacing his old tank, and lugging the old tank back to the house? Charming, utterly charming. I wonder if Bloom's K.R. Sridhar told Powell about that during his visit.

Now the next question I have to ask is who walked Bloom Energy through the door at Kleiner Perkins? Who put in the word for this, shall I say, some what risky investment? Why is it that no one knows about Bloom, and indeed no one appears to have really looked at Bloom's business plan, yet we have a $200,000,000 investment? And we have Al Gore showing up. Bill Clinton showing up. Colin Powell showing up. What is going on here?


Anonymous said...


Charles Barton said...

From this little piece of Ion - now Bloom Energy - propaganda
Important for the government to provide a helping hand for these technologies to take off and become commercial
successes with huge positive impact to the environment and economy.

In other word, "We want government subsidies." I would like to have a large government subsidy too.

nekote said...

Sure are a number of alternative ways to skin the current high price of oil.

One would be if EEStor's ultracapacitor "battery" works out. Economically storing a whole lot more electricity (10 times the energy, at 1/10 the weight of lead acid?). In some sense, it would effectively allow electricity from coal, nuclear, wind, solar, tidal ... to be *effectively stored* and available for later use (like driving to work).

Another would be these (usually high temperature) solid oxide fuel cells. They convert about 50% of the fuel's energy directly into electricity electro-chemically, rather than via inefficient mechanical (Carnot) cycles. Problems that need to be surmounted are the use of rare (and *very* expensive) metals, along with difficulties in making and operating "ceramic" objects from cold to their very hot running state.

Achieving that, though, would get about 50% of the energy value of hydrocarbon fuels to be directly transformed into DC electricity. A great match with EEStor's ultracapacitor "battery"? What's even better, thermodynamically speaking, is that the exhaust heat is very hot. Almost as if the fuel had been conventionally burned. So that's very valuable / useful - say for more electricity via the less efficient conventional steam cycle. And then that residual "left over" lower temperature exhaust heat can be further used for space or district heating. And also toss in DHW (Domestic Hot Water).

Essentially cutting CO2 emmisions in *HALF* by "doubling" fuel efficiency.

Getting twice as much useful work out of existing fossil fuels cuts their effective price in half.

It's like going from 30 MPG to 60 MPG. A fill-up still costs as much. But you get twice as many miles.

Cutting demand in half.
Would certainly have an astounding effect on both the price and need for oil.

And then there are the usual alternative energy possibilities - solar, bio-fuels, wind, tidal, geothermal, ...

Bottom economic line is not always as simple as $/BTU or $/KWH. Rather $/purpose - say $/mile.


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