Plunkett's Renewable, Alternative & Hydrogen Energy Industry Almanac 2009: Renewable, Alternative & Hydrogen Energy Industry Market Research, Statistics, Trends & Leading Companies

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PLUNKETT’S RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY ALMANAC 2009 The Only Comprehensive Guide to the Alternative Energy Industry

Jack W. Plunkett Published by: Plunkett Research, Ltd., Houston, Texas www.plunkettresearch.com

PLUNKETT’S RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY ALMANAC 2009 Editor and Publisher: Jack W. Plunkett Executive Editor and Database Manager: Martha Burgher Plunkett Senior Editors and Researchers: Brandon Brison Addie K. FryeWeaver Christie Manck John Peterson Editors, Researchers and Assistants: Elizabeth Braddock Michelle Dotter Michael Esterheld Austin Hansell Kathi Mestousis Lindsey Meyn Holly Scarpinato Jana Sharooni Jill Steinberg Kyle Wark Suzanne Zarosky

E-Commerce Managers: Mark Cassells Heather M. Cook Emily Hurley Lynne Zarosky Cover Design: Kim Paxson, Just Graphics Junction, TX Special Thanks to: American Wind Energy Association BP plc, BP Statistical Reviews BTM Consulting APS International Energy Agency International Geothermal Association Renewable Fuels Association U.S. Department of Energy, and the editors and analysts at the Energy Information Administration and the Alternative Fuels Data Center U.S. National Science Foundation

Information Technology Manager: Wenping Guo Plunkett Research, Ltd. P. O. Drawer 541737, Houston, Texas 77254 USA Phone: 713.932.0000 Fax: 713.932.7080 www.plunkettresearch.com

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Published by: Plunkett Research, Ltd. P. O. Drawer 541737 Houston, Texas 77254-1737 USA Phone: 713.932.0000 Fax: 713.932.7080 Internet: www.plunkettresearch.com ISBN13 # 978-1-59392-480-5 End-User License Agreement, Limited Warranty & Limitation of Liability--Effective January 2003, Plunkett Research, Ltd. Important, read carefully: This agreement is a legal agreement between you (whether as an individual or an organization) and Plunkett Research, Ltd. By installing, copying, downloading, accessing or otherwise using the Plunkett Data, you agree to be bound by the terms of this Agreement. If you do not agree to the terms of this Agreement, do not install or use the Plunkett Data. The information (the "Data" or the "Plunkett Data") contained in this printed version or electronic file is the property of Plunkett Research, Ltd. Copyright laws and international copyright treaties, as well as other intellectual property laws and treaties, protect the Plunkett Data. LIMITED RIGHTS TO INSTALL DATA ON ELECTRONIC DEVICES: Plunkett Research, Ltd. grants you, as an individual or an organization, a non-exclusive license to use and and/or install this Data, including installation of electronic files on one individual desktop computer AND on one laptop computer AND one personal digital assistant or dedicated portable eBook reader (such as a Palm or iPaq). This is a limited license, which applies to a single user. Organizations desiring multi-user licenses may purchase additional rights at reasonable cost by contacting Plunkett Research, Ltd., 713.932.0000, http://www.plunkettresearch.com/, email: [email protected]. LIMITED RIGHTS TO EXPORT OR COPY DATA, SUBJECT TO CONTINUED COPYRIGHT NOTICE: Limited exporting or copying of certain limited amounts of Data for creation of mailing lists, summaries and contact lists is allowed, PROVIDED THAT: 1) The exported Data is for use by one organization, company or individual only. 2) The exported Data will not be re-sold, posted to an Internet-based file, commercially published, or broadly distributed outside of the organization/corporation that has purchased the Plunkett Data. 3) Broad use, multi-premises use, or sharing outside of the organization that purchased the Plunkett Data is not allowed. 4) Violators will be subject to all penalties allowed by law. Rights under this license may not be sold or transferred. Data which may be exported or copied under the rights conferred through this paragraph may consist of any of the following: i. Up to 400 words of text; ii. Company names, addresses, telephone numbers, and executives with job titles; iii. Up to 2 tables or charts, PROVIDED

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PLUNKETT’S RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY ALMANAC 2009 CONTENTS A Short Renewable, Alternative & Hydrogen Energy Industry Glossary Introduction How to Use This Book Chapter 1: Major Trends Affecting the Renewable, Alternative & Hydrogen Energy Industry 1) Introduction 2) Solar Power and Photovoltaics 3) Wind Power 4) Hydroelectric Power 5) Geothermal Power 6) Biomass, Waste-to-Energy, Waste Methane and Biofuels such as Biodiesel 7) Ethanol Production Soared, But a Market Glut May Slow Expansion 8) Microturbines and Distributed Power 9) Tidal Power 10) Fuel Cells and Hydrogen Power Research Continues 11) Governments Encourage Alternative Fuels and Conservation R&D 12) Electric Cars and Plug-in Hybrids (PHEVs) Will Quickly Gain Popularity 13) Hybrid Cars Gain Market Share 14) Clean Diesel Technology Gains Acceptance 15) Natural Gas Powered Vehicles Off to a Slow Start 16) Homes and Commercial Buildings Go Green 17) Fuel Efficiency Becomes a Key Selling Element/Stiff Emissions Standards Adopted in Several States 18) The Industry Takes a New Look at Nuclear Power 19) Nanotechnology Sees Applications in Fuel Cells and Solar Power—Micro Fuel Cells to Power Mobile Devices 20) Polymers Enable New Display Technologies with PLEDs (Polymer Light Emitting Diodes) 21) Coal Is Abundant/Clean Coal and Coal Gasification Technologies Have Promise 22) Canada’s Tar Sands Production Reaches 1.4 Million Barrels per Day, But Operating Costs Are High 23) Oil Shale Sparks Continued Interest 24) Superconductivity Comes of Age 25) Alternative Energy Attracts Significant Venture Capital Chapter 2: Renewable, Alternative & Hydrogen Energy Industry Statistics U.S. Alternative Energy Industry Overview Global Alternative Energy Industry Overview Approximate Energy Unit Conversion Factors Average Heat Content of Selected Biomass Fuels Biomass Energy Resource Hierarchy Comparison of Alternative Fuels with Gasoline & Diesel Energy Consumption by Source & Sector, U.S.: 2007 Total Electrical Power Generation by Fuel Type, U.S.: 1980-2008 Continued on next page

xii 1 3 7 7 9 12 15 15 16 17 20 20 21 24 25 27 28 29 30 31 34 37 38 39 40 41 42 43 45 46 47 48 49 50 51 53 54

Continued from previous page

Net Electricity Generation from Conventional Hydropower by Sector & Region, U.S.: 2007-2008 U.S. Historical Hydroelectric Generation Compared to 16-Year Average for 1992-2007 Share of Electricity Generation by Energy Source, U.S.: Projections, 1980-2030 Energy Production by Fossil Fuels & Nuclear Power, U.S.: Selected Years, 1950-2007 Energy Production by Renewable Energy, U.S.: Selected Years, 1950-2007 Renewable Energy Consumption by Source: Selected Years, 1950-2007 Renewable Energy Consumption in the Residential, Commercial & Industrial Sectors: 2001-2007 Renewable Energy Consumption in the Transportation & Electric Power Sectors: 2001-2007 Summary of U.S. Ethanol & MTBE Production: September 2008 The Top 40 Ethanol Plants in the U.S.: 2007 The 10 Largest Nuclear Power Plants in the U.S.: 2008 Shipments of Photovoltaic Cells & Modules by Market Sector, End Use & Type, U.S.: 2005-2006 Shipments of Solar Thermal Collectors, U.S., 1998-2007 U.S. Department of Energy Funding for Scientific Research: 2007-2009 Federal R&D & R&D Plant Funding for Energy, U.S.: Fiscal Years 2007-2009 Chapter 3: Important Renewable, Alternative & Hydrogen Energy Industry Contacts (Addresses, Phone Numbers and Internet Sites) Chapter 4: THE ALTERNATIVE ENERGY 250: Who They Are and How They Were Chosen Industry List, With Codes Index of Rankings Within Industry Groups Alphabetical Index Index of Headquarters Location by U.S. State Index of Non-U.S. Headquarters Location by Country Index by Regions of the U.S. Where the Firms Have Locations Index of Firms with Operations Outside the U.S. Individual Data Profiles on Each of THE ALTERNATIVE ENERGY 250 Additional Indexes Index of Hot Spots for Advancement for Women/Minorities Index by Subsidiaries, Brand Names and Selected Affiliations

55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 101 102 104 111 113 116 118 123 125 394 395


A Short Renewable, Alternative & Hydrogen Energy Industry Glossary 10-K: An annual report filed by publicly held companies. It provides a comprehensive overview of the company's business and its finances. By law, it must contain specific information and follow a given form, the “Annual Report on Form 10-K.” The U.S. Securities and Exchange Commission requires that it be filed within 90 days after fiscal year end. However, these reports are often filed late due to extenuating circumstances. Variations of a 10-K are often filed to indicate amendments and changes. Most publicly held companies also publish an “annual report” that is not on Form 10-K. These annual reports are more informal and are frequently used by a company to enhance its image with customers, investors and industry peers. Alcohol: The family name of a group of organic chemical compounds composed of carbon, hydrogen and oxygen. The series of molecules vary in chain length and are composed of a hydrocarbon plus a hydroxyl group. Alcohols include methanol and ethanol. Alcohol is frequently used in fuel, organic solvents, anti-freeze and beverages. Also see “Ethanol.” Alternating Current (AC): An electric current that reverses its direction at regularly recurring intervals, usually 50 or 60 times per second. Alternative Fuel: Includes methanol, denatured ethanol and other alcohols, separately or in mixtures of 85% by volume or more with gasoline or other fuels, CNG, LNG, LPG, hydrogen, coal derived liquid fuels, fuels other than alcohols derived from biological materials, electricity, neat biodiesel, or any other fuel determined to be substantially not petroleum and yielding substantial energy security benefits and substantial environmental benefits. It is defined pursuant to the EPACT (Energy Policy Act of 1992), alternative fuels.

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displacing imported oil; improving air quality through the development and widespread use of alternative fuels for transportation and increasing the production of alternative fuel vehicles. Alternative Motor Fuels Act of 1988 (AMFA): Public Law 100-494. Encourages the development, production and demonstration of alternative motor fuels and alternative fuel vehicles. Alternative-Fuel Provider: A fuel provider (or any affiliate or business unit under its control) is an alternative-fuel provider if its principal business is producing, storing, refining, processing, transporting, distributing, importing or selling (at wholesale or retail) any alternative fuel (other than electricity); or generating, transmitting, importing or selling (at wholesale or retail) electricity; or if that fuel provider produces, imports, or produces and imports (in combination) an average of 50,000 barrels per day of petroleum, and 30% (a substantial portion) or more of its gross annual revenues are derived from producing alternative fuels. Amorphous Silicon: An alloy of silica and hydrogen, with a disordered, noncrystalline internal atomic arrangement, that can be deposited in thin layers (a few micrometers in thickness) by a number of deposition methods to produce thin-film photovoltaic cells on glass, metal or plastic substrates. Anhydrous: Describes a compound that does not contain any water. Ethanol produced for fuel use is often referred to as anhydrous ethanol, as it has had almost all water removed. APAC: Asia Pacific Advisory Committee. A multicountry committee representing the Asia and Pacific region. Applied Research: The application of compounds, processes, materials or other items discovered during basic research to practical uses. The goal is to move discoveries along to the final development phase.

Alternative Fuels Data Center (AFDC): A program sponsored by the Department of Energy to collect emissions, operational and maintenance data on all types of alternative fuel vehicles across the country.

Barrel (Petroleum): A unit of volume equal to 42 U.S. gallons.

Alternative Fuels Utilization Program (AFUP): A program managed by Department of Energy with the goals of improving national energy security by

Barrels of Oil Equivalent (BOE): A measure of the energy of non-oil fuels. For example, a BOE of natural gas is roughly 6,000 cubic feet. The measure is derived by assessing the amount of a fuel required


to generate the same heat content as a typical barrel of oil. Basic Research: Attempts to discover compounds, materials, processes or other items that may be largely or entirely new and/or unique. Basic research may start with a theoretical concept that has yet to be proven. The goal is to create discoveries that can be moved along to applied research. Basic research is sometimes referred to as “blue sky” research.


Biomass: Organic, non-fossil material of biological origin constituting a renewable energy source. The biomass can be burnt as fuel in a system that creates steam to turn a turbine, generating electricity. For example, biomass can include wood chips and agricultural crops. Biorefinery: A refinery that produces fuels from biomass. These fuels may include bioethanol (produced from corn or other plant matter) or biodiesel (produced from plant or animal matter).

Bbl: See “Barrel (Petroleum).” Bcf: One billion cubic feet. Bcfe: One billion cubic feet of natural gas equivalent. Bi-Fuel Vehicle: A vehicle with two separate fuel systems designed to run either on an alternative fuel, or on gasoline or diesel, using only one fuel at a time. Bi-fuel vehicles are referred to as “dual-fuel” vehicles in the CAA and EPACT. Binary Cycle Generation: A method of geothermal electricity generation where lower-temperature geothermal sources are tapped. The geothermal steam source is used to heat another liquid that has a lower boiling point, which then drives the turbine. Also see “Flash Steam Generation.” Biochemical Conversion: The use of enzymes and catalysts to change biological substances chemically to produce energy products. The digestion of organic wastes or sewage by microorganisms to produce methane is an example of biochemical conversion. Biodiesel: A fuel derived when glycerin is separated from vegetable oils or animal fats. The resulting byproducts are methyl esters (the chemical name for biodiesel) and glycerin which can be used in soaps and cleaning products. It has lower emissions than petroleum diesel and is currently used as an additive to that fuel since it helps with lubricity. Bioenergy: Useful, renewable energy produced from organic matter, which may either be used directly as a fuel or processed into liquids and gases. See “Biomass.” Bioethanol: A fuel produced by the fermentation of plant matter such as corn. Fermentation is enhanced through the use of enzymes that are created through biotechnology. Also, see “Ethanol.”

Bitumen: A naturally occurring viscous mixture, mainly of hydrocarbons heavier than pentane, that may contain sulfur compounds. Also, see “Tar Sands (Oil Sands).” Boiling Water Reactor: A type of nuclear power reactor that uses ordinary water for both the coolant and the neutron moderator. The steam is used to directly produce electricity through generators. BRIC: An acronym representing Brazil, Russia, India and China. The economies of these four countries are seen as some of the fastest growing in the world. A 2003 report by investment bank Goldman Sachs is often credited for popularizing the term; the report suggested that by 2050, BRIC economies will likely outshine those countries which are currently the richest in the world. British Thermal Unit (Btu): The quantity of heat needed to raise the temperature of 1 pound of water by 1 degree Fahrenheit at or near 39.2 degrees Fahrenheit. Business Process Outsourcing (BPO): The process of hiring another company to handle business activities. BPO is one of the fastest-growing segments in the offshoring sector. Services include human resources management, billing and purchasing and call centers, as well as many types of customer service or marketing activities, depending on the industry involved. Also, see “Knowledge Process Outsourcing (KPO).” Butane: A normally gaseous straight-chain or branch-chain hydrocarbon (C4H10), extracted from natural gas or refinery gas streams. It includes isobutane and normal butane. Butanol (Biobutanol): Butyl alcohol, sometimes used as a solvent. In the form of biobutanol, it is an



ethanol substitute, generally derived from sugar beets to be used as a fuel additive.

part of their carbon allowances to firms that are less efficient.

Butyl Alcohol: Alcohol derived from butane that is used in organic synthesis and as a solvent.

Capacity Factor: The ratio of the electrical energy produced by a generating unit for a certain period of time to the electrical energy that could have been produced at continuous full-power operation during the same period.

CAFTA-DR: See “Central American-Dominican Republic Free Trade Agreement (CAFTA-DR).” California Air Resources Board (CARB): The state agency that regulates the air quality in California. Air quality regulations established by CARB are often stricter than those set by the federal government. California Low-Emission Vehicle Program: A state requirement for automakers to produce vehicles with fewer emissions than current EPA standards. The five categories of California Low-Emission Vehicle Program standards, from least to most stringent, are TLEV, LEV, ULEV, SULEV and ZEV. California Pilot Program: A federal program, administered by the Environmental Protection Agency under the Clean Air Act, which sets lower emission standards (relative to cars in the general U.S. market) for a set number of new passenger cars and light trucks sold in California. Beginning in 1996, the program required the sale of 150,000 clean vehicles in the state, increasing in 1999 to 300,000 annually. California must mandate availability of any fuel necessary to operate clean fuel vehicles. CANDU Reactor: A pressurized heavy-water, natural-uranium power reactor designed by a consortium of Canadian government and private industry participants. CANDU utilizes natural, unenriched uranium oxide as fuel. Because unenriched uranium is cheaper, this kind of reactor is attractive to developing countries. The fuel is contained in hundreds of tubes that are pressure resistant. This means that a tube can be refueled while the reactor is operating. CANDU is a registered trademark of the CANDU consortium. Cap and Trade: In an attempt to reduce carbon emissions by industries, some governments and analysts support a "cap and trade" system. First, an overall "cap" is placed, by government regulation, on total carbon emissions for particular companies and/or their industries. The "trade" part of cap and trade allows companies that operate efficiently on a carbon basis, and thereby emit a lower amount of carbon than law allows, to sell or trade the unused

Captive Offshoring: Used to describe a companyowned offshore operation. For example, Microsoft owns and operates significant captive offshore research and development centers in China and elsewhere that are offshore from Microsoft's U.S. home base. Also see “Offshoring.” Carbon Dioxide (CO2): A product of combustion that has become an environmental concern in recent years. CO2 does not directly impair human health but is a “greenhouse gas” that traps the earth’s heat and contributes to the potential for global warming. Carbon Monoxide (CO): A colorless, odorless gas produced by the incomplete combustion of fuels with a limited oxygen supply, as in automobile engines. Carbon Sequestration: The absorption and storage of CO2 from the atmosphere by the roots and leaves of plants; the carbon builds up as organic matter in the soil. In the energy industry, carbon sequestration refers to the process of isolating and storing carbon dioxide (a so-called greenhouse gas). One use is to avoid releasing carbon dioxide into the air when burning coal at a coal-fired power plant. Instead, the carbon dioxide is stored in the ground or otherwise stored in a permanent or semi-permanent fashion. Other uses include the return to the ground of carbon dioxide that is produced at natural gas wells, and the introduction of carbon dioxide into oil wells in order to increase internal pressure and production. Carcinogens: Chemicals and other substances known to cause cancer. Cast Silicon: Crystalline silicon obtained by pouring pure molten silicon into a vertical mold and adjusting the temperature gradient along the mold volume during cooling to obtain slow, vertically advancing crystallization of the silicon. The polycrystalline ingot thus formed is composed of large, relatively parallel, interlocking crystals. The cast ingots are sawed into wafers for further fabrication into photovoltaic cells. Cast-silicon wafers and ribbon-


silicon sheets fabricated into cells are usually referred to as polycrystalline photovoltaic cells. Cellulosic Ethanol: See “Ethanol.” Central American-Dominican Republic Free Trade Agreement (CAFTA-DR): A trade agreement signed into law in 2005 that aimed to open up the Central American and Dominican Republic markets to American goods. Member nations include Guatemala, Nicaragua, Costa Rica, El Salvador, Honduras and the Dominican Republic. Before the law was signed, products from those countries could enter the U.S. almost tariff-free, while American goods heading into those countries faced stiff tariffs. The goal of this agreement was to create U.S. jobs while at the same time offering the non-U.S. member citizens a chance for a better quality of life through access to U.S.-made goods. Cetane: Ignition performance rating of diesel fuel; the diesel equivalent to gasoline octane. CFL (Compact Fluorescent Lamp): In lighting, CFL stands for compact fluorescent lamp, a type of light bulb that provides considerable energy savings over traditional incandescent light bulbs. CIS: See “Commonwealth of Independent States (CIS).” Clean Air Act (CAA): A law setting emissions standards for stationary sources (e.g., factories and power plants). The original Clean Air Act was signed in 1963, and has been amended several times, most recently in 1990 (P.L. 101-549). The amendments of 1970 introduced motor vehicle emission standards (e.g., automobiles and trucks). Criteria pollutants included lead, ozone, CO, SO2, NOx and PM, as well as air toxics. In 1990, reformulated gasoline (RFG) and oxygenated gasoline provisions were added. The RFG provision requires use of RFG all year in certain areas. The oxygenated gasoline provision requires the use of oxygenated gasoline during certain months, when CO and ozone pollution are most serious. The regulations also require certain fleet operators to use clean fuel vehicles in 22 cities. Clean Fuel Vehicle (CFV): Any vehicle certified by the Environmental Protection Agency as meeting certain federal emissions standards. The three categories of federal CFV standards, from least to most stringent, are LEV, ULEV and ZEV. The ILEV


standard is voluntary and does not need to be adopted by states as part of the Clean-Fuel Fleet Program. CFVs are eligible for two federal programs, the California Pilot Program and the Clean-Fuel Fleet Program. CFV exhaust emissions standards for lightduty vehicles and light-duty trucks are numerically similar to those of CARB’s California Low-Emission Vehicle Program. Climate Change (Greenhouse Effect): A theory that assumes an increasing mean global surface temperature of the Earth caused by gases in the atmosphere (including carbon dioxide, methane, nitrous oxide, ozone and chlorofluorocarbons). The greenhouse effect allows solar radiation to penetrate the Earth's atmosphere but absorbs the infrared radiation returning to space. Coalbed Methane (CBM): A natural methane gas that is found in coal seams, while traditional natural gas deposits are trapped in porous rock formations. A small amount of CBM is already produced successfully in the Rocky Mountain region of the U.S. Cogeneration: See “Combined Heat and Power (CHP) Plant.” Combined Cycle: An electric generating technology in which electricity is produced from otherwise lost waste heat exiting from one or more gas (combustion) turbines. The exiting heat is routed to a conventional boiler or to a heat recovery steam generator for utilization by a steam turbine in the production of electricity. Such designs increase the efficiency of the electric generating unit. Combined Heat and Power (CHP) Plant: A facility that generates power via combined cycle technology. See “Combined Cycle.” Commonwealth of Independent States (CIS): An organization consisting of 11 former members of the Soviet Union: Russia, Ukraine, Armenia, Moldova, Georgia, Belarus, Kazakhstan, Uzbekistan, Azerbaijan, Kyrgyzstan and Tajikistan. It was created in 1991. Turkmenistan recently left the Commonwealth as a permanent member, but remained as an associate member. The Commonwealth seeks to coordinate a variety of economic and social policies, including taxation, pricing, customs and economic regulation, as well as



to promote the free movement of capital, goods, services and labor.

weighted by a manufacturer for either its car or truck fleet.

Compressed Air Energy Storage (CAES): A storage system that directs surplus electricity to a compressor, which pumps air deep into layers of porous sandstone underneath dense, almost impermeable shale. The sandstone expands, trapping the air, which is later released. As the air rushes upward, it fires a turbine on the surface, thereby producing energy.

CSP: See “Concentrated Solar Power (CSP).”

Compressed Natural Gas (CNG): Natural gas that has been compressed under high pressures, typically between 2000 and 3600 psi, held in a container. The gas expands when released for use as a fuel. Compressor: A device to increase gas pressure capable of causing the flow of gas. Concentrated Photovoltaic (CPV): A technology in which the use of mirrors, lenses or other items concentrate and thus vastly increase the intensity of sunlight during the photovoltaic process. Concentrated Solar Power (CSP): The use of solar thermal collectors to absorb solar heat and then heat water, oil or other substances with that energy. A good example is the Stirling Engine, which uses focused solar energy to heat liquid hydrogen in a closed-loop system. Expanding hydrogen gas creates pressure on pistons within the engine, which turns at a steady 1,800 RPM. The engine then powers an electric generator. CSP technologies include the use of parabolic troughs that focus solar energy, and the use of “solar towers” to attract and gather solar heat. Consumer Price Index (CPI): A measure of the average change in consumer prices over time in a fixed market basket of goods and services, such as food, clothing and housing. The CPI is calculated by the U.S. Federal Government and is considered to be one measure of inflation. Conventional Thermal Electricity Generation: Electricity generated by an electric power plant using coal, petroleum or gas as its source of energy. Corporate Average Fuel Economy (CAFE): (P.L. 94-163) A law passed in 1975 that set federal fuel economy standards. The CAFE values are an average of city and highway fuel economy test results

Denatured Alcohol: Ethanol that contains a small amount of a toxic substance, such as methanol or gasoline, which cannot be removed easily by chemical or physical means. Alcohols intended for industrial use must be denatured to avoid federal alcoholic beverage tax. Dendrimer: A type of molecule that can be used with small molecules to give them certain desirable characteristics. Dendrimers are utilized in technologies for electronic displays. See “OLED (Organic LED).” Direct Current (DC): An electric current that flows in a constant direction. The magnitude of the current does not vary or has a slight variation. Direct Methanol Fuel Cell (DMFC): A new energy concept for mobile electronic devices such as laptops and cell phones. Toshiba, the pioneer in this field, has exhibited tiny DMFCs capable of delivering up to 300 milliwatts for up to 35 hours of operation. A fuel cartridge can be replaced on an as-needed basis. Distributed Power Generation: A method of generating electricity at or near the site where it will be consumed, such as the use of small, local generators or fuel cells to power individual buildings, homes or neighborhoods. Distributed power is thought by many analysts to offer distinct advantages. For example, electricity generated in this manner is not reliant upon the grid for distribution to the end user. Distribution System: The portion of an electric system that is dedicated to delivering electric energy to an end user. E10 (Gasohol): Ethanol/gasoline mixture containing 10% denatured ethanol and 90% gasoline, by volume. E85: Ethanol/gasoline mixture containing 85% denatured ethanol and 15% gasoline, by volume. E93: Ethanol mixture containing 93% ethanol, 5% methanol and 2% kerosene, by volume.



E95: Ethanol/gasoline mixture containing 95% denatured ethanol and 5% gasoline, by volume.

on alternative fuels and installing refueling or recharging facilities by the private sector.

Electric Power Industry: The privately, publicly, federally and cooperatively owned electric utilities of the United States taken as a whole. Does not include special-purpose electric facilities.

Ethanol: A clear, colorless, flammable, oxygenated hydrocarbon, also called ethyl alcohol. In the U.S., it is used as a gasoline octane enhancer and oxygenate in a 10% blend called E10. Ethanol can be used in higher concentrations (such as an 85% blend called E85) in vehicles designed for its use. It is typically produced chemically from ethylene or biologically from fermentation of various sugars from carbohydrates found in agricultural crops and cellulose residues from crops or wood. Grain ethanol production is typically based on corn or sugarcane. Cellulosic ethanol production is based on agricultural waste, such as wheat stalks, that has been treated with enzymes to break the waste down into component sugars.

Electric Power System: An individual electric power entity. Electric Utility: A corporation, person, agency, authority or other legal entity or instrumentality that owns and/or operates facilities within the United States for the generation, transmission, distribution or sale of electric energy primarily for use by the public. EMEA: The region comprised of Europe, the Middle East and Africa. Emission: The release or discharge of a substance into the environment. Generally refers to the release of gases or particulates into the air. Energy: The capacity for doing work as measured by the capability of doing work (potential energy) or the conversion of this capability to motion (kinetic energy). Most of the world’s convertible energy comes from fossil fuels that are burned to produce heat that is then used as a transfer medium to mechanical or other means in order to accomplish tasks. Energy Information Administration (EIA): An independent agency within the U.S. Department of Energy, the Energy Information Administration (EIA) develops surveys, collects energy data and does analytical and modeling analyses of energy issues. Energy Policy Act of 1992 (EPACT): (P.L. 102486) A broad-ranging act signed into law on October 24, 1992. Titles III, IV, V, XV and XIX of EPACT deal with alternative transportation fuels. EPACT accelerates the purchase requirements for alternative fuel vehicles (AFVs) by the federal fleet, proposes eliminating the cap on CAFE credits that manufacturers can earn by producing dual- and flexible-fuel vehicles and requires fleets in large urban areas to purchase AFVs. EPACT also establishes tax incentives for purchasing AFVs, converting conventional gasoline vehicles to operate

Ethyl Ester: A fatty ester formed when organically derived oils are combined with ethanol in the presence of a catalyst. After water washing, vacuum drying and filtration, the resulting ethyl ester has characteristics similar to petroleum-based diesel motor fuels. Ethyl Tertiary Butyl Ether (ETBE): An aliphatic ether similar to MTBE (Methyl Tertiary Butyl Ether). This fuel oxygenate is manufactured by reacting isobutylene with ethanol. Having high octane and low volatility characteristics, ETBE can be added to gasoline up to a level of approximately 17% by volume. ETBE is not yet commercially available. EU (European Union): A consolidation of European countries (member states) functioning as one body to facilitate trade. Previously known as the European Community (EC), the EU expanded to include much of Eastern Europe in 2004, raising the total number of member states to 25. In 2002, the EU launched a unified currency, the Euro. See europa.eu.int. EU Competence: The jurisdiction in which the EU can take legal action. Executive Orders 12759 and 12844: Two Presidential orders which establish requirements for federal agencies to purchase alternative fuel vehicles. Order 12844 accelerates agency acquisitions by 50% beyond requirements contained in Section 303 of the Energy Policy Act for fiscal years 1993 to 1995, subject to the availability of funds.



Exempt Wholesale Generator (EWG): A nonutility electricity generator that is not a qualifying facility under the Public Utility Regulatory Policies Act of 1978.

found at the Columbus Air Force Base in Mississippi. Leading flow cell technology companies include Regenesys Technologies in Swindon, England, and VRB Power Systems in Vancouver, Canada.

Fast Reactor: An advanced technology nuclear reactor that uses a fast fission process utilizing fast neutrons that would split some of the U-258 atoms as well as transuranic isotopes. The goal is to use nuclear material more efficiently and safely in the production of nuclear energy.

Fossil Fuel: Any naturally occurring organic fuel, such as petroleum, coal or natural gas.

Federal Energy Regulatory Commission (FERC): A quasi-independent regulatory agency within the Department of Energy having jurisdiction over interstate electricity sales, wholesale electricity rates, hydro-electric licensing, natural gas pricing, oil pipeline rates and gas pipeline certification. Federal Power Act: Regulates licensing of nonfederal hydroelectric projects, as well as the interstate transmission of electrical energy and rates for its sale at wholesale in interstate commerce. It was enacted in 1920 and amended in 1935. Federal Power Commission: The predecessor agency of the FERC, abolished when the Department of Energy was created. Feedstock: Any material converted to another form of fuel or energy product. For example, corn starch can be used as a feedstock for ethanol production. Flash Steam Generation: The most common type of hydroelectric power generation technique. Flash steam describes a system where a high temperature geothermal steam source can be used to directly drive a turbine. Also see “Binary Cycle Generation.” Flexible-Fuel Vehicles (FFVs): Vehicles with a common fuel tank designed to run on varying blends of unleaded gasoline with either ethanol or methanol. Flow Cell Battery: A massive electricity storage device based on a series of modules. Each module contains a large number of fuel cells. The flow cell battery technology receives electricity from a generating or transmission source, conditions it into appropriate format via transformers and stores it in the fuel cell modules using sophisticated technology. On a large scale, a flow cell battery has the ability to store enough electricity to power a small city. In the U.S., a large flow cell battery installation can be

Fuel Cell: An environmentally friendly electrochemical engine that generates electricity using hydrogen and oxygen as fuel, emitting only heat and water as byproducts. Fusion: See “Nuclear Fusion.” Gas Hydrates: Gas hydrates are solid particles of methane (which is normally found in gas form) and water molecules in a crystalline form. They are widely found in many parts of the world, including the U.S., South Korea, India and China, often offshore. Gas hydrates have immense potential as a source of energy and may possibly exist in much larger quantities than all other known forms of fossil fuels. Unfortunately, they are not stable except under high pressure. Gas hydrate reserves could be very expensive and difficult to develop as a commercial source of energy. Nonetheless, today's very high prices for oil and gas may eventually make them a viable energy source. Gas Turbine: Typically consists of an axial-flow air compressor and one or more combustion chambers where liquid or gaseous fuel is burned. The hot gases are passed to the turbine, in which they expand to drive the generator and are then used to run the compressor. Gas Turbine Plant: A plant in which the prime mover is a gas turbine. Gasification: Any chemical or heat process used to convert a feedstock to a gaseous fuel. Gasohol: A blend of finished motor gasoline containing alcohol (generally ethanol but sometimes methanol) at a concentration of 10% or less by volume. Data on gasohol that has at least 2.7% oxygen, by weight, and is intended for sale inside carbon monoxide non-attainment areas are included in data on oxygenated gasoline. Gas-to-Liquids (GTL): A special process that converts natural gas into liquids that can be burnt as



fuel. Major investments by ExxonMobil and others in the nation of Qatar, which contains massive natural gas reserves, will create an immense GTL plant capable of making up to 750,000 of GTL daily. The product will be GTL diesel, a very low emission alternative to standard diesel fuel.

Globalization: The increased mobility of goods, services, labor, technology and capital throughout the world. Although globalization is not a new development, its pace has increased with the advent of new technologies, especially in the areas of telecommunications, finance and shipping.

GDP (Gross Domestic Product): The total value of a nation's output, income and expenditures produced with a nation's physical borders.

GNP (Gross National Product): A country's total output of goods and services from all forms of economic activity measured at market prices for one calendar year. It differs from GDP (Gross Domestic Product) in that GNP includes income from investments made in foreign nations.

Generating Unit: Any combination of physically connected generators, reactors, boilers, combustion turbines or other prime movers operated together to produce electric power.

Grain Ethanol: See “Ethanol.”

Generation (Electricity): The process of producing electric energy; also, the amount of electric energy produced, expressed in watt-hours (Wh).

Green Building: A building that has energy conservation and renewable energy features designed to reduce energy consumption.

Geophysicist: A professional who applies the principles of physics to the field of geology. Geophysicists are involved in exploration for oil, gas, coal, geothermal and other underground energy sources.

Green Pricing: In the case of renewable electricity, green pricing represents a market solution to the various problems associated with regulatory valuation of the non-market benefits of renewables. Green pricing programs allow electricity customers to express their willingness to pay for renewable energy development through direct payments on their monthly utility bills.

Geothermal Electric Power Generation: Electricity derived from heat found under the earth’s surface. Also see “Flash Steam Generation,” “Binary Cycle Generation” and “Hot Dry Rock Geothermal Energy Technology (HDR).” Geothermal Plant: A plant in which the prime mover is a steam turbine. The turbine is driven either by steam produced from hot water or by natural steam that derives its energy from heat found in rocks or fluids at various depths beneath the surface of the earth. The energy is extracted by drilling and/or pumping. Gigawatt: Equal to one billion watts of power. It is also equal to one million kilowatts or 1,000 megawatts. Global Warming: An increase in the near-surface temperature of the Earth. Global warming has occurred in the distant past as the result of natural influences, but the term is most often used to refer to a theory that warming occurs as a result of increased use of hydrocarbon fuels by man. See “Climate Change (Greenhouse Effect).”

Grid (The): In the U.S., the networks of local electric lines that businesses and consumers depend on every day are connected with and interdependent upon a national series of major lines collectively called “the grid.” The grid is divided into three major regions: the East, West and Texas regions. The regions are also known as “interconnects.” In total, the grid consists of about 200,000 miles of highvoltage backbone lines and millions of miles of smaller local lines. Heat Pump: A year-round heating and airconditioning system employing a refrigeration cycle. High-Temperature Collector: A solar thermal collector designed to operate at a temperature of 180 degrees Fahrenheit or higher. Hot Dry Rock Geothermal Energy Technology (HDR): A technique that drills holes into the ground until rock of a suitably high temperature is reached. Pipes are then installed in a closed loop. Water is pumped down one pipe, where it is heated to extraordinarily high temperatures, and then is


pumped up the other pipes as steam. The resulting steam shoots up to the surface, which drives a turbine to power an electric generating plant. As the steam cools, it returns to a liquid state which is then is pumped back into the ground. The technology was developed by the Los Alamos National labs in New Mexico. Hybrid-Electric Vehicle (HEV): A vehicle that is powered by two or more energy sources, one of which is electricity. HEVs may combine the engine and fuel system of a conventional vehicle with the batteries and electric motor of an electric vehicle in a single drive train. Hydrocarbons: Organic compounds of hydrogen and carbon. Mixtures including various hydrocarbons include crude oil, natural gas, natural gas condensate and methane. Hydroelectric Energy: The production of electricity from kinetic energy in flowing water. Hydroelectric Plant: An electric generating plant in which the turbine generators are driven by falling water, typically located at a dam or major waterfall. Hydroelectric Power Generation: Electricity generated by an electric power plant whose turbines are driven by falling water. It includes electric utility and industrial generation of hydroelectricity, unless otherwise specified. Generation is reported on a net basis, i.e., on the amount of electric energy generated after deducting the energy consumed by station auxiliaries and the losses in the transformers that are considered integral parts of the station. ICE: Intercontinental Exchange. An electronic futures and commodities exchange headquartered in Atlanta, Georgia, focused on energy markets. IEEE: The Institute of Electrical and Electronic Engineers. The IEEE sets global technical standards and acts as an authority in technical areas including computer engineering, biomedical technology, telecommunications, electric power, aerospace and consumer electronics, among others. www.ieee.org. Independent Power Producer: A corporation, person, agency, authority or other legal entity or instrumentality that owns electric generating capacity and is a wholesale electric producer without a designated franchised service area.


Initial Public Offering (IPO): A company's first effort to sell its stock to investors (the public). Investors in an up-trending market eagerly seek stocks offered in many IPOs because the stocks of newly public companies that seem to have great promise may appreciate very rapidly in price, reaping great profits for those who were able to get the stock at the first offering. In the United States, IPOs are regulated by the SEC (U.S. Securities Exchange Commission) and by the state-level regulatory agencies of the states in which the IPO shares are offered. Investor-Owned Electric Utility: A class of utility that is investor-owned and organized as a tax-paying business. ISO (Independent System Operator): One of many independent, nonprofit organizations created by many states in the U.S. during the deregulation of the electricity industry. Its function is to ensure that electric generating companies have equal access to the power grid. It may be replaced by larger Regional Transmission Organizations (RTOs), which would each cover a major area of the U.S. ISO 9000, 9001, 9002, 9003: Standards set by the International Organization for Standardization. ISO 9000, 9001, 9002 and 9003 are the highest quality certifications awarded to organizations that meet exacting standards in their operating practices and procedures. Joule: The meter-kilogram-second unit of work or energy, equal to the work done by a force of one Newton when its point of application moves through a distance of one meter in the direction of the force; equivalent to 107 ergs and one watt-second. Just-in-Time (JIT) Delivery: Refers to a supply chain practice whereby manufacturers receive components on or just before the time that they are needed on the assembly line, rather than bearing the cost of maintaining several days' or weeks' supply in a warehouse. This adds greatly to the costeffectiveness of a manufacturing plant and puts the burden of warehousing and timely delivery on the supplier of the components. Kerogen: See “Oil Shale (Shale Oil).” Kilowatt (kW): One thousand watts.


Kilowatthour (kWh): One thousand watt-hours. Knowledge Process Outsourcing (KPO): The use of outsourced and/or offshore workers to perform business tasks that require judgment and analysis. Examples include such professional tasks as patent research, legal research, architecture, design, engineering, market research, scientific research, accounting and tax return preparation. Also, see “Business Process Outsourcing (BPO).” LAC: An acronym for Latin America and the Caribbean.


heating, which uses pumped liquid as the heattransfer medium. Load (Electric): The amount of electric power delivered or required at any specific point or points on a system. The requirement originates at the energy-consuming equipment of the consumers. LOHAS: Lifestyles of Health and Sustainability. A marketing term that refers to consumers who choose to purchase and/or live with items that are natural, organic, less polluting, etc. Such consumers may also prefer products powered by alternative energy, such as hybrid cars.

LDCs: See “Least Developed Countries (LDCs).” Least Developed Countries (LDCs): Nations determined by the U.N. Economic and Social Council to be the poorest and weakest members of the international community. There are currently 50 LDCs, of which 34 are in Africa, 15 are in Asia Pacific and the remaining one (Haiti) is in Latin America. The top 10 on the LDC list, in descending order from top to 10th, are Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde and the Central African Republic. Sixteen of the LDCs are also Landlocked Least Developed Countries (LLDCs) which present them with additional difficulties often due to the high cost of transporting trade goods. Eleven of the LDCs are Small Island Developing States (SIDS), which are often at risk of extreme weather phenomenon (hurricanes, typhoons, Tsunami); have fragile ecosystems; are often dependent on foreign energy sources; can have high disease rates for HIV/AIDS and malaria; and can have poor market access and trade terms. Liquefied Natural Gas (LNG): Natural gas that is liquefied by reducing its temperature to -260 degrees Fahrenheit at atmospheric pressure. The volume of the LNG is 1/600 that of the gas in its vapor state. LNG requires special processing and transportation. First, the natural gas must be chilled in order for it to change into a liquid state. Next, the LNG is put on specially designed ships where extensive insulation and refrigeration maintain the cold temperature. Finally, it is offloaded at special receiving facilities where it is converted, via regasification, into a state suitable for distribution via pipelines.

Low-E: A coating for windows that can prevent warmth from escaping from the inside of a building during the winter, while preventing solar heat from entering the building during the summer. Significant savings in energy usage can result. Low-Emission Vehicle (LEV): Describes a vehicle meeting either the EPA’s CFV LEV standards or CARB’s California Low-Emission Vehicle Program LEV standards. Low-Temperature Collectors: Metallic or nonmetallic solar thermal collectors that generally operate at temperatures below 110 degrees Fahrenheit and use pumped liquid or air as the heattransfer medium. They usually contain no glazing and no insulation, and they are often made of plastic or rubber, although some are made of metal. M85: 85% methanol and 15% unleaded gasoline by volume. Marginal Cost: The change in cost associated with a unit change in quantity supplied or produced. Marketing: Includes all planning and management activities and expenses associated with the promotion of a product or service. Marketing can encompass advertising, customer surveys, public relations and many other disciplines. Marketing is distinct from selling, which is the process of sell-through to the end user. Mbbl: One thousand barrels. Mcf: One thousand cubic feet.

Liquid Collector: A medium-temperature solar thermal collector, employed predominantly in water


Mcfe: One thousand cubic feet of natural gas equivalent, using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate and natural gas liquids. Medium-Temperature Collectors: Solar thermal collectors designed to operate in the temperature range of 140 degrees to 180 degrees Fahrenheit, but that can also operate at a temperature as low as 110 degrees Fahrenheit. The collector typically consists of a metal frame, metal absorption panels with integral flow channels (attached tubing for liquid collectors or integral ducting for air collectors) and glazing and insulation on the sides and back.


MOX Fuel (Mixed Oxide Fuel): A method of reprocessing spent nuclear material. Surplus plutonium is mixed with uranium to fabricate MOX fuel for use in a commercial nuclear power plant. Traditionally, fuel for commercial nuclear power plants is made of low-enriched uranium. MOX fuel contains 5 percent plutonium. European countries such as the United Kingdom, Germany, Belgium and France have been fabricating MOX fuel for many years. Commercial MOX-fueled light water reactors are used in France, the United Kingdom, Germany, Switzerland, and Belgium. In the U.S., MOX fuel was fabricated and used in several commercial reactors in the 1970's as part of a development program.

Megawatt (MW): One million watts. Megawatthour (MWh): One million watt-hours. Methane: A colorless, odorless, flammable hydrocarbon gas (CH4); the major component of natural gas. It is also an important source of hydrogen in various industrial processes. Also, see “Coalbed Methane (CBN).” Methanol: A light, volatile alcohol (CH3OH) eligible for motor gasoline blending. It is also used as a feedstock for synthetic textiles, plastics, paints, adhesives, foam, medicines and more. Methyl Ester: A fatty ester formed when organically derived oils are combined with methanol in the presence of a catalyst. Methyl ester has characteristics similar to petroleum-based diesel motor fuels. Methyl Tertiary Butyl Ether (MTBE): An ether manufactured by reacting methanol and isobutylene. The resulting ether has high octane and low volatility. MTBE is a fuel oxygenate and is permitted in unleaded gasoline up to a level of 15% by volume. Microturbine: A small, scaled-down turbine engine that may be fueled by natural gas, methane or other types of gas. Mmbtu: One million British thermal units. Mmcf: One million cubic feet. Mmcfe: One million cubic feet of natural gas equivalent.

Nanotechnology: The science of designing, building or utilizing unique structures that are smaller than 100 nanometers (a nanometer is one billionth of a meter). This involves microscopic structures that are no larger than the width of some cell membranes. Net Generation: Gross generation minus plant use from all electric utility-owned plants. The energy required for pumping at a pumped-storage plant is regarded as plant use and must be deducted from the gross generation. Net Summer Capability: The steady hourly output that generating equipment is expected to supply to system load exclusive of auxiliary power, as demonstrated by tests at the time of summer peak demand. Nonutility Power Producer: A corporation, person, agency, authority or other legal entity or instrumentality that owns electric generating capacity and is not an electric utility. Nuclear Electric Power Generation: Electricity generated by nuclear reactors of various types, such as heavy water, light water and boiling water. Generation is reported on a net basis and excludes energy that is used by the electric power plant for its own operating purposes and not for commercial use. Nuclear Fuel: Fissionable materials that have been enriched to such a composition that, when placed in a nuclear reactor, they will support a self-sustaining fission chain reaction, producing heat in a controlled manner for process use.


Nuclear Fusion: An atomic energy-releasing process in which light weight atomic nuclei, which might be hydrogen or deuterium, combine to form heavier nuclei, such as helium. The result is the release of a tremendous amount of energy in the form of heat. As of 2007, nuclear fusion had yet to be made practical as a commercial energy source, but several wellfunded efforts are attempting to do so. Nuclear Power Plant: A facility in which heat produced in a reactor by the fission of nuclear fuel is used to drive a steam turbine. Nuclear Reactor: An apparatus in which the nuclear fission chain can be initiated, maintained and controlled so that energy is released at a specific rate. NYMEX: New York Mercantile Exchange, Inc. (NYMEX Exchange). The company is a major provider of financial services to the energy and metals industries including the trading of energy futures and options contracts. Octane Rating: A number used to indicate motor gasoline’s antiknock performance in motor vehicle engines. The two recognized laboratory engine test methods for determining the antiknock rating, or octane rating, of gasoline are the research method and the motor method. To provide a single number as guidance to the customer, the antiknock index (R + M)/2, which is the average of the research and motor octane numbers, was developed.


Ohm: The unit of measurement of electrical resistance; the resistance of a circuit in which a potential difference of one volt produces a current of one ampere. Oil Shale (Shale Oil): Sedimentary rock that contains kerogen, a solid, waxy mixture of hydrocarbon compounds. Heating the rock to very high temperatures will convert the kerogen to a vapor, which can then be condensed to form a slow flowing heavy oil that can later be refined or used for commercial purposes. The United States contains vast amounts of oil shale deposits, but so far it has been considered not economically feasible to produce from them on a large scale. OLED (Organic LED): A type of electronic display based on the use of organic materials that produce light when stimulated by electricity. Also see “Polymer,” “PLED (Polymer Light Emitting Diode),” “SMOLED (Small Molecule Organic Light Emitting Diode)” and “Dendrimer.” Operation and Maintenance (O&M) Cost: Expenses associated with operating a facility (e.g., supervising and engineering expenses) and maintaining it, including labor, materials and other direct and indirect expenses incurred for preserving the operating efficiency or physical condition of utility plants that are used for power production, transmission and distribution of energy. Organic Polymer: See “Polymer.”

OECD: See “Organisation for Economic Cooperation and Development (OECD).” Offshoring: The rapidly growing tendency among U.S., Japanese and Western European firms to send knowledge-based and manufacturing work overseas. The intent is to take advantage of lower wages and operating costs in such nations as China, India, Hungary and Russia. The choice of a nation for offshore work may be influenced by such factors as language and education of the local workforce, transportation systems or natural resources. For example, China and India are graduating high numbers of skilled engineers and scientists from their universities. Also, some nations are noted for large numbers of workers skilled in the English language, such as the Philippines and India. Also see “Captive Offshoring” and “Outsourcing.”

Organisation for Economic Co-operation and Development (OECD): A group of 30 countries that are strongly committed to the market economy and democracy. Some of the OECD members include Japan, the U.S., Spain, Germany, Australia, Korea, the U.K., Canada and Mexico. Although not members, Chile, Estonia, Israel, Russia and Slovenia are invited to member talks; and Brazil, China, India, Indonesia and South Africa have enhanced engagement policies with the OECD. The Organisation provides statistics, as well as social and economic data; and researches social changes, including patterns in evolving fiscal policy, agriculture, technology, trade, the environment and other areas. It publishes over 250 titles annually; publishes a corporate magazine, the OECD Observer; has radio and TV studios; and has centers in Tokyo, Washington, D.C., Berlin and Mexico City that


distributed the Organisation’s work and organizes events. Outsourcing: The hiring of an outside company to perform a task otherwise performed internally by the company, generally with the goal of lowering costs and/or streamlining work flow. Outsourcing contracts are generally several years in length. Companies that hire outsourced services providers often prefer to focus on their core strengths while sending more routine tasks outside for others to perform. Typical outsourced services include the running of human resources departments, telephone call centers and computer departments. When outsourcing is performed overseas, it may be referred to as offshoring. Also see “Offshoring.” Ozone: A molecule made up of three atoms of oxygen. It occurs naturally in the stratosphere and provides a protective layer shielding the Earth from harmful ultraviolet radiation. In the troposphere, it is a chemical oxidant, a greenhouse gas and a major component of photochemical smog. Ozone-Depleting Substances: Gases containing chlorine that are being controlled because they deplete ozone. They are thought to have some indeterminate impact on greenhouse gases. Passive Solar: A system in which solar energy (heat from sunlight) alone is used for the transfer of thermal energy. Heat transfer devices that depend on energy other than solar are not used. A good example is a passive solar water heater on the roof of a building. Peak Watt: A manufacturer's unit indicating the amount of power a photovoltaic cell or module will produce at standard test conditions (normally 1,000 watts per square meter and 25 degrees Celsius). Pebble-Bed Modular Reactor (PBMR): A nuclear reactor technology that utilizes tiny silicon carbidecoated uranium oxide granules sealed in “pebbles” about the size of oranges, made of graphite. Helium is used as the coolant and energy transfer medium. This containment of the radioactive material in small quantities has the potential to achieve an unprecedented level of safety. This technology may become popular in the development of new nuclear power plants.


Photovoltaic (PV) Cell: An electronic device consisting of layers of semiconductor materials fabricated to form a junction (adjacent layers of materials with different electronic characteristics) and electrical contacts, capable of converting incident light directly into electricity (direct current). Photovoltaic technology works by harnessing the movement of electrons between the layers of a solar cell when the sun strikes the material. Photovoltaic (PV) Module: An integrated assembly of interconnected photovoltaic cells designed to deliver a selected level of working voltage and current at its output terminals, packaged for protection against environment degradation and suited for incorporation in photovoltaic power systems. PLED (Polymer Light Emitting Diode): An advanced technology that utilizes plastics (polymers) for the creation of electronic displays (screens). It is based on the use of organic polymers which emit light when stimulated with electricity. They are solution processable, which means they can be applied to substrates via ink jet printing. Also referred to as P-OLEDs. Plug-in Hybrid Electric Vehicles (PHEV): A PHEV is an automobile that features an extra highcapacity battery bank that gives the vehicle a longer electric-only range than standard hybrids. These cars are designed so that they can be plugged into a standard electric outlet for recharging. The intent is to minimize or eliminate the need to use the car's gasoline engine and rely on the electric engine instead. Polymer: An organic or inorganic substance of many parts. Most common polymers, such as polyethylene and polypropylene, are organic. Organic polymers consist of molecules from organic sources (carbon compounds). Polymer means many parts. Generally, a polymer is constructed of many structural units (smaller, simpler molecules) that are joined together by a chemical bond. Some polymers are natural. For example, rubber is a natural polymer. Scientists have developed ways to manufacture synthetic polymers from organic materials. Plastic is a synthetic polymer. Power (Electrical): The rate at which energy is transferred. A volt ampere, an electric measurement unit of power, is equal to the product of one volt and one ampere. This is equivalent to one watt for a direct


current system. A unit of apparent power is separated into real and reactive power. Real power is the workproducing part of apparent power that measures the rate of supply of energy and is denoted in kilowatts. PPP: See “Purchasing Power Parity (PPP).” Pressurized Water Reactor (PWR): A type of nuclear power reactor that uses ordinary water as both the coolant and the neutron moderator. The heat produced is transferred to a secondary coolant which is subsequently boiled to produce steam for power generation. Propane: A normally gaseous straight-chain hydrocarbon (C3H8). Propane is a colorless paraffinic gas that boils at a temperature of –43.67 degrees Fahrenheit. It is extracted from natural gas or refinery gas streams. Public Utility: An enterprise providing essential public services, such as electric, gas, telephone, water and sewer services, under legally established monopoly conditions. Public Utility District (PUD): A municipal corporation organized to provide electric service to both incorporated cities and towns and unincorporated rural areas. Public utility districts operate in six states. Public Utility Regulatory Policies Act of 1978 (PURPA): A part of the National Energy Act. PURPA contains measures designed to encourage the conservation of energy, more efficient use of resources and equitable rates. Principal among these were suggested retail rate reforms and new incentives for production of electricity by cogenerators and users of renewable resources. Publicly Owned Electric Utility: A class of ownership found in the electric power industry. This group includes those utilities operated by municipalities and state and federal power agencies. Pumped-Storage Hydroelectric Plant: A plant that usually generates electric energy during peak load periods by using water previously pumped into an elevated storage reservoir during off-peak periods, when excess generating capacity is available to do so. When additional generating capacity is needed, the water can be released from the reservoir through a


conduit to turbine generators located in a power plant at a lower level. Purchasing Power Parity (PPP): Currency conversion rates that attempt to reflect the actual purchasing power of a currency in its home market, as opposed to examining price levels and comparing an exchange rate. PPPs are always given in the national currency units per U.S. dollar. PV: See “Photovoltaic (PV) Cell.” Qualifying Facility (QF): A cogeneration or small power production facility that meets certain ownership, operating and efficiency criteria established by the Federal Energy Regulatory Commission (FERC) pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA). R&D: Research and development. Also see “Applied Research” and “Basic Research.” Rate Base: The value of property upon which a utility is permitted to earn a specified rate of return as established by a regulatory authority. The rate base generally represents the value of property used by the utility in providing service. Ratemaking Authority: A utility commission’s legal authority to fix, modify, approve or disapprove rates, as determined by the powers given to the commission by a state or federal legislature. Reformulated Gasoline (RFG): Gasoline that has its composition and/or characteristics altered to reduce vehicular emissions of pollutants, particularly pursuant to EPA regulations under the CAA. Refuse-Derived Fuel (RDF): Fuel processed from municipal solid waste that can be in shredded, fluff or dense pellet forms. Regulated Business (Utility Companies): The business of providing natural gas or electric service to customers under regulations and at prices set by government regulatory agencies. Generally, utilities have been required to operate at set prices and profit ratios because they have been granted monopoly or near-monopoly status to serve a given geographic market. Under deregulation, utility companies are being granted greater flexibility to set prices and to enter new geographic markets. At the same time,


consumers gain the right to choose among several different utilities providers. Renewable Energy Resources: Energy resources that are naturally replenishing but flow-limited. They are virtually inexhaustible in duration but limited in the amount of energy that is available per unit of time. Renewable energy resources include biomass, hydro, geothermal, solar, wind, ocean thermal, wave action and tidal action. Reseller: A firm (other than a refiner) that carries on the trade or business of purchasing refined petroleum products and reselling them to purchasers other than ultimate consumers. Resistivity (R): Measures a material's characteristic resistance to the flow of electrical current. Resistivity is the reciprocal of conductivity. It is denoted by the symbol R. Return on Investment (ROI): A measure of a company's profitability, expressed in percentage as net profit (after taxes) divided by total dollar investment. RTO (Regional Transmission Organization): See “ISO (Independent System Operator).” Rural Electrification Administration (REA): A lending agency of the U.S. Department of Agriculture. It makes self-liquidation loans to qualified borrowers to finance electric and telephone service to rural areas. The REA also finances the construction and operation of generating plants, electric transmission and distribution lines, or systems for the furnishing of initial and continued adequate electric services to persons in rural areas not receiving central station service. R-Value (R Value): A method of measuring the effectiveness of building materials such as insulation. Technically, it is the resistance that a material has to heat flow. The higher the R-Value, the better the insulation provided. It is the inverse of U-Value. See “U-Value.” Seismic Surveying: The recording of echoes reflected to the surface from pulses of sound sent down into the earth. Used to determine underground geological structures.


Semiconductor: A generic term for a device that controls electrical signals. It specifically refers to a material (such as silicon, germanium or gallium arsenide) that can be altered either to conduct electrical current or to block its passage. Carbon nanotubes may eventually be used as semiconductors. Semiconductors are partly responsible for the miniaturization of modern electronic devices, as they are vital components in computer memory and processor chips. The manufacture of semiconductors is carried out by small firms, and by industry giants such as Intel and Advanced Micro Devices. Silicon: A semiconductor material made from silica, purified for photovoltaic applications. Single-Crystal Silicon (Czochralski): An extremely pure form of crystalline silicon produced by the Czochralski method of dipping a single crystal seed into a pool of molten silicon under high-vacuum conditions and slowly withdrawing a solidifying single-crystal boule rod of silicon. The boule is sawed into thin wafers and fabricated into singlecrystal photovoltaic cells. Small Power Producer: A producer that generates electricity by using renewable energy (wood, waste, conventional hydroelectric, wind, solar or geothermal) as a primary energy source. Fossil fuels can be used, but renewable resources must provide at least 75% of the total energy input. It is part of the Public Utility Regulatory Policies Act, a small power producer. See “Nonutility Power Producer.” Smart Buildings: Buildings or homes that have been designed with interconnected electronic and electrical systems which can be controlled by computers. Advantages include the ability to turn appliances and systems on or off remotely or on a set schedule, leading to greatly enhanced energy efficiency. SMOLED (Small Molecule Organic Light Emitting Diode): A type of organic LED that relies on expensive manufacturing methods. Newer technologies are more promising. See “Organic Polymer” and “PLED (Polymer Light Emitting Diode.” Solar Energy: Energy produced from the sun’s radiation for the purposes of heating or electric generation. Also, see “Photovoltaic (PV) Cell,” “Concentrated Solar Power (CSP)” and “Passive Solar.”


Solar Thermal Collector: A device designed to receive solar radiation and convert it into thermal energy. Normally, a solar thermal collector includes a frame, glazing and an absorber, together with the appropriate insulation. The heat collected by the solar thermal collector may be used immediately or stored for later use. Typical use is in solar hot water heating systems. Also, see “Passive Solar” and “Concentrated Solar Power (CSP).” Solar Tower: See “Concentrated Solar Power (CSP).” Solar Updraft Tower: A proposed renewable energy power plant that heats air in a large greenhouse, thereby creating convection that causes air to rise and escape through a tall, specially-designed tower. The upward moving air drives electricity-producing turbines. Spot Price: The price for a one-time market transaction for immediate delivery to the specific location where the commodity is purchased “on the spot,” at current market rates. Standard Cubic Foot (SCF): A regulated measure of natural gas volumes, based on a standardized surface temperature of 60 degrees Fahrenheit and surface pressure of 14.65 psi. Steam-Electric Plant (Conventional): A plant in which the prime mover is a steam turbine. The steam used to drive the turbine is produced in a boiler where fossil fuels are burned. Structural Map: A contour map detailing elevations of sub-surface rock layers, calibrated either in linear measure of feet or meters, or in time measure based on seismic surveys. Subsidiary, Wholly-Owned: A company that is wholly controlled by another company through stock ownership. Substation: Facility equipment that switches, changes or regulates electric voltage. Superconductivity: The ability of a material to act as a conductor for electricity without the gradual loss of electricity over distance (due to resistance) that is normally associated with electric transmission. There are two types of superconductivity. “Lowtemperature” superconductivity (LTS) requires that


transmission cable be cooled to -418 degrees Fahrenheit. Even newer technologies are creating a so-called “high-temperature” superconductivity (HTS) that requires cooling to a much warmer -351 degrees Fahrenheit. Supply Chain: The complete set of suppliers of goods and services required for a company to operate its business. For example, a manufacturer's supply chain may include providers of raw materials, components, custom-made parts and packaging materials. Sustainable Development: Development that ensures that the use of resources and the environment today does not impair their availability to be used by future generations. Switching Station: Facility equipment used to tie together two or more electric circuits through switches. The switches are selectively arranged to permit a circuit to be disconnected, or to change the electric connection between the circuits. Syngas: The synthetic creation of gas to be used as a fuel, typically from coal. See “Gasification.” System (Electric): See “Transmission System (Electric).” Tar Sands (Oil Sands): Sands that contain bitumen, which is a tar-like crude oil substance that can be processed and refined into a synthetic light crude oil. Typically, tar sands are mined from vast open pits where deposits are softened with blasts of steam. The Athabasca sands in Alberta, Canada and the Orinoco sands in Venezuela contain vast amounts of tar sands. The Athabasca sands are now producing commercially in high volume. Tidal Energy: A source of power derived from the movement of waves. Tidal energy traditionally involves erecting a dam across the opening to a tidal basin. The dam includes a sluice that is opened to allow the tide to flow into the basin; the sluice is then closed, and as the sea level drops, traditional hydropower technologies can be used to generate electricity from the elevated water in the basin. Time to Depth Conversion: A translation process to recalibrate seismic records from time measures in millisecond units to linear measures of depth in feet or meters.


Tokamak: A reactor used in nuclear fusion in which a spiral magnetic field inside doughnut-shaped tube is used to confine high temperature plasma produced during fusion. See “Nuclear Fusion.” Toluene: A basic aromatic compound derived from petroleum. It is the most common hydrocarbon purchased for use in increasing octane. Toluene is also used to produce phenol and TNT. Transformer: An electrical device for changing the voltage of an alternating current. Transmission (Electricity): The movement or transfer of electric energy over an interconnected group of lines and associated equipment between points of supply and points at which it is transformed for delivery to consumers or delivered to other electric systems. Transmission is considered to end when the energy is transformed for distribution to the consumer. Transmission System (Electric): An interconnected group of electric transmission lines and associated equipment for moving or transferring electric energy in bulk between points of supply and points at which it is transformed for delivery to consumers or delivered to other electric systems.


U-Value (U Value): A measure of the amount of heat that is transferred into or out of a building. The lower the U-Value, the higher the insulating value of a window or other building material being rated. It is the reciprocal of an R-Value. See “R-Value.” Value Added Tax (VAT): A tax that imposes a levy on businesses at every stage of manufacturing based on the value it adds to a product. Each business in the supply chain pays its own VAT and is subsequently repaid by the next link down the chain; hence, a VAT is ultimately paid by the consumer, being the last link in the supply chain, making it comparable to a sales tax. Generally, VAT only applies to goods bought for consumption within a given country; export goods are exempt from VAT, and purchasers from other countries taking goods back home may apply for a VAT refund. Vertical Integration: A business model in which one company owns many (or all) of the means of production of the many goods that comprise its product line. For example, founder Henry Ford designed Ford Motor Company's early River Rogue plant so that coal, iron ore and other needed raw materials arrived at one end of the plant and were processed into steel, which was then converted onsite into finished components. At the final stage of the plant, completed automobiles were assembled.

Turbine: A machine for generating rotary mechanical power from the energy of a stream of fluid (such as water, steam or hot gas). Turbines convert the kinetic energy of fluids to mechanical energy through the principles of impulse and reaction or a mixture of the two.

Waste Energy (Waste-to-Energy): The use of garbage, biogases, industrial steam, sewerage gas or industrial, agricultural and urban refuse (“biomass”) as a fuel or power source used in turning turbines to generate electricity or as a method of providing heat.

Unfinished Oils: All oils that require further processing, except those requiring only mechanical blending.

Watt (Electric): The electrical unit of power equal to the power dissipated by a current of one ampere flowing across a resistance of one ohm.

Uranium: A heavy, naturally radioactive, metallic element (atomic number 92). Its two principally occurring isotopes are uranium-235 and uranium238. Uranium-235 is indispensable to the nuclear industry, because it is the only isotope existing in nature to any appreciable extent that is fissionable by thermal neutrons. Uranium-238 is also important, because it absorbs neutrons to produce a radioactive isotope that subsequently decays to plutonium-239, another isotope that is fissionable by thermal neutrons.

Watt (Thermal): A unit of power in the metric system, expressed in terms of energy per second, equal to the work done at a rate of one joule per second. Watthour (Wh): An electrical energy unit equal to one watt of power supplied to, or taken from, an electric circuit steadily for one hour. Wind Energy: Energy present in wind motion that can be converted to mechanical energy for driving pumps, mills and electric power generators. Wind


pushes against sails, vanes or blades radiating from a central rotating shaft. Wind Power Plant: A group of wind turbines interconnected to a common utility system through a system of transformers, distribution lines and (usually) one substation. Operation, control and maintenance functions are often centralized through a network of computerized monitoring systems, supplemented by visual inspection. This is a term commonly used in the United States. In Europe, it is called a generating station. Wind Turbine: A system in which blades (windmills) collect wind power to propel a turbine that generates electricity. World Trade Organization (WTO): One of the only globally active international organizations dealing with the trade rules between nations. Its goal is to assist the free flow of trade goods, ensuring a smooth, predictable supply of goods to help raise the quality of life of member citizens. Members form consensus decisions that are then ratified by their respective parliaments. The WTO’s conflict resolution process generally emphasizes interpreting existing commitments and agreements, and discovers how to ensure trade policies to conform to those agreements, with the ultimate aim of avoiding military or political conflict. WTO (World Trade Organization): See “World Trade Organization (WTO).” Zero-Emission Vehicle (ZEV): Describes a vehicle meeting either the EPA’s CFV ZEV standards or CARB’s California Low-Emission Vehicle Program ZEV standards. ZEV standards, usually met with electric vehicles, require zero vehicle emissions. ZigBee: May become the ultimate wireless control system for home and office lighting and entertainment systems. The ZigBee Alliance is an association of companies working together to enable reliable, cost-effective, low-power, wirelessly networked monitoring and control products based on an open global standard, 802.15.4 entertainment systems.




INTRODUCTION

PLUNKETT'S RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY ALMANAC, the fifth edition of our guide to the alternative energy field, is designed to be used as a general source for researchers of all types. The data and areas of interest covered are intentionally broad, from the various types of businesses involved in alternative energy, to advances in renewable forms of power, to an in-depth look at the major firms (which we call “THE ALTERNATIVE ENERGY 250”) within the many industry sectors that make up the alternative and renewable energy arena. This reference book is designed to be a general source for researchers. It is especially intended to assist with market research, strategic planning, employment searches, contact or prospect list creation (be sure to see the export capabilities of the accompanying CD-ROM that is available to book and eBook buyers) and financial research, and as a data resource for executives and students of all types. PLUNKETT'S RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY ALMANAC takes a rounded approach for the general reader. This book presents a complete overview of the entire alternative energy field (see “How To Use This Book”). For example, advances in solar energy

technologies are discussed, as well as those in wind, hydroelectric, biomass, ethanol and geothermal. THE ALTERNATIVE ENERGY 250 is our unique grouping of the biggest, most successful corporations in all segments of the alternative energy industry. Tens of thousands of pieces of information, gathered from a wide variety of sources, have been researched and are presented in a unique form that can be easily understood. This section includes thorough indexes to THE ALTERNATIVE ENERGY 250, by geography, industry, sales, brand names, subsidiary names and many other topics. (See Chapter 4.) Especially helpful is the way in which PLUNKETT'S RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY ALMANAC enables readers who have no business background to readily compare the financial records and growth plans of alternative energy companies and major industry groups. You’ll see the mid-term financial record of each firm, along with the impact of earnings, sales and strategic plans on each company’s potential to fuel growth, to serve new markets and to provide investment and employment opportunities. No other source provides this book’s easy-tounderstand comparisons of growth, expenditures, technologies, corporations and many other items of great importance to people of all types who may be



conducting in-depth research, should contact the specific corporations or industry associations in question for the very latest changes and data. Where possible, we have listed contact names, toll-free telephone numbers and World Wide Web site addresses for the companies, government agencies and industry associations involved so that the reader may get further details without unnecessary delay.

studying this, one of the most promising industries in the world today. By scanning the data groups and the unique indexes, you can find the best information to fit your personal research needs. The major growth companies in alternative and renewable energy are profiled and then ranked using several different groups of specific criteria. Which firms are the biggest employers? Which companies earn the most profits? These things and much more are easy to find.

x

In addition to individual company profiles, an overview of alternative and renewable energy markets and trends is provided. This book’s job is to help you sort through easy-to-understand summaries of today’s trends in a quick and effective manner.

Tables of industry data and statistics used in this book include the latest numbers available at the time of printing, generally through the end of 2007. In a few cases, the only complete data available was for earlier years.

x

We have used exhaustive efforts to locate and fairly present accurate and complete data. However, when using this book or any other source for business and industry information, the reader should use caution and diligence by conducting further research where it seems appropriate. We wish you success in your endeavors, and we trust that your experience with this book will be both satisfactory and productive.

Whatever your purpose for researching the alternative energy field, you’ll find this book to be a valuable guide. Nonetheless, as is true with all resources, this volume has limitations that the reader should be aware of: x

Financial data and other corporate information can change quickly. A book of this type can be no more current than the data that was available as of the time of editing. Consequently, the financial picture, management and ownership of the firm(s) you are studying may have changed since the date of this book. For example, this almanac includes the most up-to-date sales figures and profits available to the editors as of late-2008. That means that we have typically used corporate financial data as of the end of 2007.

x

Corporate mergers, acquisitions and downsizing are occurring at a very rapid rate. Such events may have created significant change, subsequent to the publishing of this book, within a company you are studying.

x

Some of the companies in THE ALTERNATIVE ENERGY 250 are so large in scope and in variety of business endeavors conducted within a parent organization, that we have been unable to completely list all subsidiaries, affiliations, divisions and activities within a firm’s corporate structure.

x

This volume is intended to be a general guide to a vast industry. That means that researchers should look to this book for an overview and, when

Jack W. Plunkett Houston, Texas December 2008



HOW TO USE THIS BOOK

The two primary sections of this book are devoted first to the alternative energy industry as a whole and then to the “Individual Data Listings” for THE ALTERNATIVE ENERGY 250. If time permits, you should begin your research in the front chapters of this book. Also, you will find lengthy indexes in Chapter 4 and in the back of the book. THE RENEWABLE, ALTERNATIVE & HYDROGEN INDUSTRY Glossary: A short list of alternative and renewable energy industry terms. Chapter 1: Major Trends Affecting the Renewable, Alternative & Hydrogen Energy Industry. This chapter presents an encapsulated view of the major trends that are creating rapid changes in the alternative energy industry today. Chapter 2: Renewable, Alternative & Hydrogen Energy Industry Statistics. This chapter presents indepth statistics on production, usage and more. Chapter 3: Important Renewable, Alternative & Hydrogen Energy Industry Contacts – Addresses, Telephone Numbers and Internet Sites. This chapter covers contacts for important government

agencies, alternative energy organizations and trade groups. Included are numerous important World Wide Web sites. THE ALTERNATIVE ENERGY 250 Chapter 4: THE ALTERNATIVE ENERGY 250: Who They Are and How They Were Chosen. The companies compared in this book (the actual count is 267) were carefully selected from the energy industry, largely in the United States. 111 of the firms are based outside the U.S. For a complete description, see THE ALTERNATIVE ENERGY 250 indexes in this chapter. Individual Data Listings: Look at one of the companies in THE ALTERNATIVE ENERGY 250’s Individual Data Listings. You’ll find the following information fields: Company Name: The company profiles are in alphabetical order by company name. If you don’t find the company you are seeking, it may be a subsidiary or division of one of the firms covered in this book. Try looking it up in the Index by Subsidiaries, Brand Names and Selected Affiliations in the back of the book.


Ranks: Industry Group Code: An NAIC code used to group companies within like segments. (See Chapter 4 for a list of codes.) Ranks Within This Company’s Industry Group: Ranks, within this firm’s segment only, for annual sales and annual profits, with 1 being the highest rank. Business Activities: A grid arranged into six major industry categories and several sub-categories. A “Y” indicates that the firm operates within the sub-category. A complete Index by Industry is included in the beginning of Chapter 4. Types of Business: A listing of the primary types of business specialties conducted by the firm. Brands/Divisions/Affiliations: Major brand names, operating divisions or subsidiaries of the firm, as well as major corporate affiliations—such as another firm that owns a significant portion of the company’s stock. A complete Index by Subsidiaries, Brand Names and Selected Affiliations is in the back of the book. Contacts: The names and titles up to 27 top officers of the company are listed, including human resources contacts. Address: The firm’s full headquarters address, the headquarters telephone, plus toll-free and fax numbers where available. Also provided is the World Wide Web site address. Financials: Annual Sales (2007 or the latest fiscal year available to the editors, plus up to four previous years): These are stated in thousands of dollars (add three zeros if you want the full number). This figure represents consolidated worldwide sales from all operations. 2007 figures may be estimates or may be for only part of the year—partial year figures are appropriately footnoted. Annual Profits (2007 or the latest fiscal year available to the editors, plus up to four previous years): These are stated in thousands of dollars (add three zeros if you want the full number). This figure represents consolidated, after-tax net profit from all operations. 2007 figures may be estimates or may be for only part of the year—partial year figures are appropriately footnoted. Stock Ticker, International Exchange, Parent Company: When available, the unique stock market symbol used to identify this firm’s common stock for


trading and tracking purposes is indicated. Where appropriate, this field may contain “private” or “subsidiary” rather than a ticker symbol. If the firm is a publicly-held company headquartered outside of the U.S., its international ticker and exchange are given. If the firm is a subsidiary, its parent company is listed. Total Number of Employees: The approximate total number of employees, worldwide, as of the end of 2007 (or the latest data available to the editors). Apparent Salaries/Benefits: (The following descriptions generally apply to U.S. employers only.) A “Y” in appropriate fields indicates “Yes.” Due to wide variations in the manner in which corporations report benefits to the U.S. Government’s regulatory bodies, not all plans will have been uncovered or correctly evaluated during our effort to research this data. Also, the availability to employees of such plans will vary according to the qualifications that employees must meet to become eligible. For example, some benefit plans may be available only to salaried workers—others only to employees who work more than 1,000 hours yearly. Benefits that are available to employees of the main or parent company may not be available to employees of the subsidiaries. In addition, employers frequently alter the nature and terms of plans offered. NOTE: Generally, employees covered by wealthbuilding benefit plans do not fully own (“vest in”) funds contributed on their behalf by the employer until as many as five years of service with that employer have passed. All pension plans are voluntary—that is, employers are not obligated to offer pensions. Pension Plan: The firm offers a pension plan to qualified employees. In this case, in order for a “Y” to appear, the editors believe that the employer offers a defined benefit or cash balance pension plan (see discussions below).The type and generosity of these plans vary widely from firm to firm. Caution: Some employers refer to plans as “pension” or “retirement” plans when they are actually 401(k) savings plans that require a contribution by the employee. x Defined Benefit Pension Plans: Pension plans that do not require a contribution from the employee are infrequently offered. However, a few companies, particularly larger employers in high-profit-margin industries, offer defined benefit pension plans where the employee is guaranteed to receive a set pension benefit upon retirement. The amount of the benefit is determined by the years of service with the


company and the employee’s salary during the later years of employment. The longer a person works for the employer, the higher the retirement benefit. These defined benefit plans are funded entirely by the employer. The benefits, up to a reasonable limit, are guaranteed by the Federal Government’s Pension Benefit Guaranty Corporation. These plans are not portable—if you leave the company, you cannot transfer your benefits into a different plan. Instead, upon retirement you will receive the benefits that vested during your service with the company. If your employer offers a pension plan, it must give you a summary plan description within 90 days of the date you join the plan. You can also request a summary annual report of the plan, and once every 12 months you may request an individual benefit statement accounting of your interest in the plan. x Defined Contribution Plans: These are quite different. They do not guarantee a certain amount of pension benefit. Instead, they set out circumstances under which the employer will make a contribution to a plan on your behalf. The most common example is the 401(k) savings plan. Pension benefits are not guaranteed under these plans. x Cash Balance Pension Plans: These plans were recently invented. These are hybrid plans—part defined benefit and part defined contribution. Many employers have converted their older defined benefit plans into cash balance plans. The employer makes deposits (or credits a given amount of money) on the employee’s behalf, usually based on a percentage of pay. Employee accounts grow based on a predetermined interest benchmark, such as the interest rate on Treasury Bonds. There are some advantages to these plans, particularly for younger workers: a) The benefits, up to a reasonable limit, are guaranteed by the Pension Benefit Guaranty Corporation. b) Benefits are portable—they can be moved to another plan when the employee changes companies. c) Younger workers and those who spend a shorter number of years with an employer may receive higher benefits than they would under a traditional defined benefit plan. ESOP Stock Plan (Employees’ Stock Ownership Plan): This type of plan is in wide use. Typically, the plan borrows money from a bank and uses those funds to purchase a large block of the corporation’s stock. The corporation makes contributions to the plan over a period of time, and the stock purchase


loan is eventually paid off. The value of the plan grows significantly as long as the market price of the stock holds up. Qualified employees are allocated a share of the plan based on their length of service and their level of salary. Under federal regulations, participants in ESOPs are allowed to diversify their account holdings in set percentages that rise as the employee ages and gains years of service with the company. In this manner, not all of the employee’s assets are tied up in the employer’s stock. Savings Plan, 401(k): Under this type of plan, employees make a tax-deferred deposit into an account. In the best plans, the company makes annual matching donations to the employees’ accounts, typically in some proportion to deposits made by the employees themselves. A good plan will match onehalf of employee deposits of up to 6% of wages. For example, an employee earning $30,000 yearly might deposit $1,800 (6%) into the plan. The company will match one-half of the employee’s deposit, or $900. The plan grows on a tax-deferred basis, similar to an IRA. A very generous plan will match 100% of employee deposits. However, some plans do not call for the employer to make a matching deposit at all. Other plans call for a matching contribution to be made at the discretion of the firm’s board of directors. Actual terms of these plans vary widely from firm to firm. Generally, these savings plans allow employees to deposit as much as 15% of salary into the plan on a tax-deferred basis. However, the portion that the company uses to calculate its matching deposit is generally limited to a maximum of 6%. Employees should take care to diversify the holdings in their 401(k) accounts, and most people should seek professional guidance or investment management for their accounts. Stock Purchase Plan: Qualified employees may purchase the company’s common stock at a price below its market value under a specific plan. Typically, the employee is limited to investing a small percentage of wages in this plan. The discount may range from 5 to 15%. Some of these plans allow for deposits to be made through regular monthly payroll deductions. However, new accounting rules for corporations, along with other factors, are leading many companies to curtail these plans—dropping the discount allowed, cutting the maximum yearly stock purchase or otherwise making the plans less generous or appealing. Profit Sharing: Qualified employees are awarded an annual amount equal to some portion of a company’s profits. In a very generous plan, the pool of money awarded to employees would be 15% of


profits. Typically, this money is deposited into a long-term retirement account. Caution: Some employers refer to plans as “profit sharing” when they are actually 401(k) savings plans. True profit sharing plans are rarely offered. Highest Executive Salary: The highest executive salary paid, typically a 2007 amount (or the latest year available to the editors) and typically paid to the Chief Executive Officer. Highest Executive Bonus: The apparent bonus, if any, paid to the above person. Second Highest Executive Salary: The nexthighest executive salary paid, typically a 2007 amount (or the latest year available to the editors) and typically paid to the President or Chief Operating Officer. Second Highest Executive Bonus: The apparent bonus, if any, paid to the above person. Other Thoughts: Apparent Women Officers or Directors: It is difficult to obtain this information on an exact basis, and employers generally do not disclose the data in a public way. However, we have indicated what our best efforts reveal to be the apparent number of women who either are in the posts of corporate officers or sit on the board of directors. There is a wide variance from company to company. Hot Spot for Advancement for Women/Minorities: A “Y” in appropriate fields indicates “Yes.” These are firms that appear either to have posted a substantial number of women and/or minorities to high posts or that appear to have a good record of going out of their way to recruit, train, promote and retain women or minorities. (See the Index of Hot Spots For Women and Minorities in the back of the book.) This information may change frequently and can be difficult to obtain and verify. Consequently, the reader should use caution and conduct further investigation where appropriate. Growth Plans/ Special Features: Listed here are observations regarding the firm’s strategy, hiring plans, plans for growth and product development, along with general information regarding a company’s business and prospects. Locations: A “Y” in the appropriate field indicates “Yes.” Primary locations outside of the headquarters, categorized by regions of the United States and by international locations. A complete index by locations is also in the front of this chapter.




Chapter 1 MAJOR TRENDS AFFECTING THE RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY Major Trends Affecting the Renewable, Alternative & Hydrogen Energy Industry: 1) 2) 3) 4) 5) 6)

Introduction Solar Power and Photovoltaics Wind Power Hydroelectric Power Geothermal Power Biomass, Waste-to-Energy, Waste Methane and Biofuels such as Biodiesel 7) Ethanol Production Soared, But a Market Glut May Slow Expansion 8) Microturbines and Distributed Power 9) Tidal Power 10) Fuel Cells and Hydrogen Power Research Continues 11) Governments Encourage Alternative Fuels and Conservation R&D 12) Electric Cars and Plug-in Hybrids (PHEVs) Will Quickly Gain Popularity 13) Hybrid Cars Gain Market Share 14) Clean Diesel Technology Gains Acceptance 15) Natural Gas Powered Vehicles Off to a Slow Start 16) Homes and Commercial Buildings Go Green 17) Fuel Efficiency Becomes a Key Selling Element/Stiff Emissions Standards Adopted in Several States 18) The Industry Takes a New Look at Nuclear Power

19) Nanotechnology Sees Applications in Fuel Cells and Solar Power—Micro Fuel Cells to Power Mobile Devices 20) Polymers Enable New Display Technologies with PLEDs (Polymer Light Emitting Diodes) 21) Coal Is Abundant/Clean Coal and Coal Gasification Technologies Have Promise 22) Canada’s Tar Sands Production Reaches 1.4 Million Barrels per Day, But Operating Costs Are High 23) Oil Shale Sparks Continued Interest 24) Superconductivity Comes of Age 25) Alternative Energy Attracts Significant Venture Capital 1) Introduction U.S. energy production from renewable sources was a bit less than 10% of total energy production in 2007, at 6,800,000 billion BTUs out of total energy production of about 71,713,000 billion BTUs. (In this case, “renewable” includes conventional hydroelectric and geothermal, along with solar, wind and biomass.) This is up from about 7.6% in 1970. Meanwhile, nuclear generation accounted for another 11.7% of total U.S. energy production, or 8,415,000 billion BTUs in 2007. Globally, sources for worldwide generation of electricity in 2007 included about 16% hydroelectric; 16% nuclear; and 2% “renewables” including waste, wind, geothermal and solar.


Wind power has seen rapid growth worldwide, including growth in the U.S. Major technological advances in wind turbines (including much larger blades creating very high output per turbine, and blades that suffer very little downtime and are thus more efficient) and government incentives encouraging investment in wind generation in many nations have fueled very rapid growth in wind turbine installation. In the U.S., wind power generation grew dramatically from 29,007 billion BTUs in 1990 to 258,385 billion BTUs in 2006 and 317,000 billion BTUs in 2007. Another sharp spike upward was posted in 2008. However, growth may falter in 2009 as financing becomes harder to obtain. BP plc reports that global wind generation capacity was 74,306 megawatts at the end of 2006, and climbed to 94,005 megawatts at the end of 2007. The Global Wind Energy Council expects that number to climb to 240,300 megawatts by the end of 2012. However, it remains to be seen whether financing can be found for that much expansion. Meanwhile, solar power is enjoying significant technological innovation. The most important factor in solar is the percent of solar energy that is converted into electricity, and that ratio is climbing. The use of polymers is leading to exciting, flexible solar panels; and nanotechnology is creating breakthroughs in solar technology as well. BP reports that installed global solar photovoltaic capacity was 3,704,758 kilowatts at the end of 2005 within the IEA Photovoltaic Power System Program Member Countries. This was an increase of more than 100% over 2003. By 2006 (the latest year available) , that number had grown to 5,699,505 kilowatts. Biomass energy (including the use of energy from waste and the production of bioethanol and biodiesel) has been growing rapidly as well, both in the U.S. and elsewhere. Biomass power consumption in America grew from 1,562,307 billion BTUs in 1950 to 3,226,918 billion BTUs in 2006 and 3,584,000 billion BTUs in 2007. As for nuclear power, we are entering an era in which the construction of new nuclear generating plants will accelerate, particularly in China and India. Eventually, new nuclear construction will likely start in the U.S. and other fully-developed economies as well. It should be noted that the use of renewable sources does not always mean clean power generation. For example, burning wood or trash for energy under the wrong conditions can create significant pollution. Also, the clearing of land, such


as rain forests, for planting for biomass to be used in ethanol or biodiesel refining can be highly destructive to the environment while creating huge quantities of carbon emissions. In the U.S., emphasis on alternative energy and conservation has a varied history. More than 30 years ago, the 1973 oil trade embargo staged by Persian Gulf producers vastly limited the supply of petroleum to the U.S. and created an instant interest in energy conservation. Thermostats were turned to more efficient levels, solar water heating systems sprouted on the rooftops of American homes (including a system that was used for a few years at the White House) and tax credits were launched by various government agencies to encourage investment in more efficient systems that would utilize less oil, gasoline and/or electricity. Meanwhile, American motorists crawled through lengthy lines at filling stations trying to top off their tanks during the horrid days of gasoline rationing. While some consumers maintained a keen interest in alternative and conservative energy methods from an environmentally friendly point of view, most Americans quickly forgot about energy conservation when the prices of gasoline and electricity plummeted during the 1980s and 1990s. Gasoline prices as low as 99 cents per gallon were common for many years. As advancing technology made oil production and electricity generation much more efficient, a low commodity price trend kept market prices under control. As a result, Americans returned to ice-cold air-conditioned rooms and purchased giant, gas-guzzling SUVs, motor homes and motorboats. The median newly constructed American single-family home built in 1972 contained 1,520 square feet; in 2005 it contained 2,434 square feet. More square footage means more lights, air conditioning and heating to power. Meanwhile, federal and state regulators made efforts to force automobile engines and industrial plants to operate in clean-air mode, largely through the use of advanced technologies, while requiring gasoline refiners to adopt an ever-widening web of additives and standards that would create cleaner-burning fuels. Fortunately, the first energy crisis in the early 1970s did lead to the use of technology to create significant efficiencies in some areas. For example, prior to that time, as much as 40% of a typical household’s natural gas consumption was for pilot lights burning idly in case a stove or furnace was needed. Today, electric pilots create spark ignition on demand. Likewise, today’s refrigerators use about one-third the electricity of models built in 1970.


Many other appliances and electrical devices have become much more efficient. While the number of electricity-burning personal computers proliferated, computer equipment makers rapidly adopted energysaving PC technologies. Today, fluctuating (and at times extremely high) oil and gas prices have created a renewed interest in all things energy-efficient. Smaller cars, highefficiency homes and even solar power are once again part of popular culture. Sales of gas-guzzling SUVs have slowed to a crawl while the demand for light, high-efficiency cars is rising steadily. At the same time, renewable energy sources and cleanerburning fuels are of great appeal to the large number of American consumers who have developed a true interest in protecting the environment. For example, surveys have shown that some consumers would be willing to pay somewhat more for electricity if they knew it was coming from non-polluting, renewable sources. Hybrid gasoline-electric automobiles made by Toyota and Honda are selling well in the U.S. “Clean diesel” cars that deliver very high mileage are extremely popular in Europe. Meanwhile, some municipalities, such as the city of Seattle, Washington, are investing in buses and other vehicles that are hybrids or run on alternative fuels. Plug-in hybrid electric vehicles will soon soar in production and popularity. Alternative energy is also attracting rapidly growing interest from investors. Globally, venture capital has helped to support innovation at firms that focus on alternative energy or energy conservation technologies. Likewise, national governments are helping to fund many energy efficiency projects, ranging from fuel cell research to the design and development of high-efficiency buildings. Legislation at state and national levels will continue to boost renewable energy development and conservation technologies on a global basis. In the U.S., state governments have passed stringent legislation requiring that an ever-growing percentage of electric generation come from renewable means. In Washington, D.C., newly-elected President Obama is likely to follow through on his campaign pledge to boost investment in renewable energy and conservation measures. However, when analyzing plans, announcements and developments in renewable energy projects, it is best to keep an eye on a big challenge: where will the money come from? The global financial crisis of 2008 has made money extremely difficult to raise for organizations, corporations, utility firms and local


governments. At the same time, national governments are faced with their own, massive fiscal problems. Many alternative and renewable energy projects had already been delayed or abandoned by the end of 2008. Tar sands projects in Canada had been shelved, and some of the biggest wind and solar projects ever announced were cancelled or delayed due to funding constraints. The industry is struggling to justify and attract the investments required to develop renewable and alternative projects when oil and gas prices fall. Nonetheless, renewable energy remains a viable business for the long term, particularly technologies with reliable payback, such as hydroelectric. Conservation through advanced technologies such as smart electric meters remains a real possibility, as long as a reasonable return on investment can be shown. Alternative energy sources, such as tar sands and oil shale, harbor vast potential reserves, but means must be found to produce them at reasonable prices per barrel of oil equivalent. Bioethanol and biodiesel are questionable at the least, and perhaps extremely misdirected at the worst. Some production of bioethanol appears very efficient, particularly in Brazil where sugar cane is the feedstock. However, the diversion of corn and soy from the food chain to the energy chain for ethanol or biodiesel may be a very bad idea. Long term, the development of new geothermal energy projects, along with tidal energy, look very promising, but it will take many years to develop them to large-scale commercial energy production at reasonable cost. 2) Solar Power and Photovoltaics What could be more appealing than generating usable electricity from everyday sunshine? Ever since scientists at the famed Bell Laboratories first demonstrated a solar cell based on silicon in 1954, solar power has been seen as one of the most desirable, if elusive, means of creating electricity or heat. Solar power accounted for about 80 trillion BTUs (British thermal units), or 0.15% of all energy consumed in the U.S. during 2007 according to the U.S. Department of Energy. Installed solar power on a global basis rose from 4.184 million kilowatts in 2005 to 5.699 million kilowatts in 2006 according to BP and the International Energy Agency. Slow but steady growth should continue thanks largely to interest in solar power at city governments, such as the City of San Francisco, California, and in governments such as those belonging to the European Union. In late 2008, the U.S. government extended a 30% tax credit for the installation of solar panels in


homes and businesses through 2016. The government in Spain announced that it will continue subsidies for solar-power development though 2009, as did the government of Germany. Photovoltaics: Traditionally, photovoltaic (PV) technology is based on layers of silicon within panels that have been engineered to attract the sun’s rays and create a flow of electric current to electrodes (the “photoelectric effect”). Currently, solar generation equipment is too expensive to compete with conventional generation. However, immense amounts of effort and venture capital are being invested in solar technology, both in the U.S. and abroad, and significant progress is being made at the laboratory level. Solar power could begin to become reasonably competitive by to 2015. The industry’s goal is to greatly increase the efficiency and output of solar cells. Current PV technology converts about 15% to 20% of available sunlight into electricity. However, breakthroughs in technology and efficiency are occurring in the laboratory at a rapid clip, thanks to intense new investments in research, much higher efficiency may eventually be commercially feasible. High efficiency is important when you consider the fact that peak sunlight is available only a limited part of the day. Crystalline solar cells are heavy and expensive to manufacture. However, their efficiency in converting sunlight has historically been superior to thin-film. Crystalline cells are constructed with silicon semiconducting materials. Thin-film, also known as amorphous, can offer advantages in some installations, such as rooftops, because it is lighter in weight. It is somewhat flexible. Also, thin-film can be less expensive to manufacture. The U.S. Department of Energy has an official goal, called the “Solar America Initiative” of making solar power costs competitive by 2015. Solar America is based on more than $137 million in yearly (2008) grants for research focused on improved technologies for PV manufacture and installation. The Holy Grail of the PV industry is to be able to sell PV cells at about $1.00 per watt of electricity produced, which would make PV reasonably price competitive with traditional electric generation. (Watts are measured at mid day peak output of the cell.) Several advanced technologies for PV are under development. One such technology is concentrated photovoltaic (CPV) which uses mirrors, lenses or other items to concentrate and thus vastly increase the intensity of sunlight. Researchers at the


University of Delaware set a record, in mid 2007, of 42.8% efficiency in a CPV cell. Their goal is to hit 50%. Shell and BP are also active in solar cell technology. A leading manufacturer, Miasole (www.misasole.com), is doing research that demonstrates thin-film’s efficiency of 19.9%, or about that of traditional crystalline. If this occurs, it may be a major breakthrough in terms of cost. This is a dramatic reduction over the past couple of decades. In addition, solar panel installation is becoming more efficient as are cell and panel processing. According to analysts at the now defunct Lehman Brothers, costs for rooftop solar systems are likely to fall from $7.10 per watt in 2008 to $3.45 per watt in 2015. Some roof tile manufacturers are starting to incorporate solar cells into their roofing materials. As of late 2008, Wal-Mart had 17 stores and distribution centers equipped with solar panels in operation on under testing. The retailer plans to add the panels to and additional five stores over the near term. The firm’s hope is that PV can supply up to 30% of a store’s power needs. Likewise, retail chains Kohl’s, Safeway and Whole Foods Market are installing solar panels on their stores. Nanosolar, Inc. (www.nanosolar.com) is a leading new company in the thin-film field. It has received a total of $500 million in financing. The company’s unique technology enables it to deposit a nanoparticle ink onto a thin-film surface in a high speed process similar to printing. The firm claims that its thin-film solar cells can convert sunlight into electricity at a rate of up to 14.5% efficiency. High speed production lines should eventually enable the company to achieve a very low solar cell cost per watt of electricity delivered. Instead of silicone, Nanosolar relies on copper-indium-gallium-selenide as a semiconducting material. A well-funded competitor, HelioVolt Corp., uses the same material. Another exciting thin-film company is FirstSolar (www.firstsolar.com). First Solar claimed to achieve a manufacturing cost of only $1.08 per watt during the third quarter of 2008. The company uses cadmium telluride as a semiconducting material, which is a byproduct of the mining and production of base metals such as zinc and copper. First Solar has entered into many excellent long-term sales agreements with major electric utility companies.


Internet Research Tip: For excellent information on the photovoltaic industry, see Solarbuzz, www.solarbuzz.com. The site includes a survey of solar cell prices, along with general news and resources. Meanwhile, some consumers are willing to pay for solar installations despite high costs (around $40,000 per home). In the U.S., the number of new photovoltaic system installations in homes tripled from 2,805 in 2002 to 7,446 in 2006, according to the Interstate Renewable Energy Council, www.irecusa.org. BP reports that installed global solar photovoltaic capacity was 3,704,758 kilowatts at the end of 2005 within the IEA Photovoltaic Power System Program Member Countries. This was an increase of more than 100% over 2003. By 2006, that number had grown to 5,699,505 kilowatts. European nations are setting world records for the size of their solar power plants. U.S.-based PowerLight Corporation created a 10-megawatt photovoltaic plant in Bavaria in 2004. Dubbed the Bavaria Solarpark, the system consists of 57,600 photovoltaic panels in three separate groups on 62 acres. Meanwhile, a 62-megawatt project has broken ground in Moura, Portugal. Called Girrasol, it will be more than six times the size of the Bavaria Solarpark. A municipal enterprise in Moura named Amper Central Solar, S.A. is the lead organization for the plant along with BP Solar. Girrasol is expected to be completed in 2010. Also, in South Korea, a massive 19.6 megawatt project was announced in mid 2007. To be constructed by Suntechnics, a subsidiary of Germany-based Conergy AG, the system will use 109,000 solar panels. SunEdison and SkyPower broke ground in 2008 on a 50 megawatt plant in Ontario, Canada. Zhonghao New Energy Investment of Beijing, China has the most ambitious project. It is proposing to build a plant with up to 100-megawatts of capacity near Dunhuang City, China. Internet Research Tip: Solar Power To find out more about solar power and the Solar America Initiative, visit the U.S. DOE, Solar Energy Technologies Program at www1.eere.energy.gov/solar. Solar Thermal (or “CSP,” Concentrating Solar Power): Solar thermal generation has truly exciting potential. A good example is “Stirling Dish” technology, manufactured by Stirling Energy


Systems (www.stirlingenergy.com). This technology is based on large dishes that look somewhat like satellite television receivers. At 38 feet in diameter, these dishes are mounted on rotating stands that enable them to track the sun as it rises and falls during the day. Each dish, which is covered in flat mirrored panels, is connected to a Stirling Engine, which uses focused solar energy to heat hydrogen in a closed-loop system. Expanding hydrogen gas creates pressure on pistons within the engine, which turns at a steady 1,800 RPM. The engine powers an electric generator. Cost for the original prototype and engine was around $300,000, making the dish too expensive for use on a large scale. In recent months, however, Stirling has simplified its design using easily mass-produced dish frames, heat exchangers and mirrors resulting in a far more affordable $25,000 per dish system. Another solar firm, SolFocus (www.solfocus.com) has developed solar arrays that use just one-thousandth as much semiconductor material as standard solar panels. The arrays are set with curved mirrors that focus sunlight onto solar cells measuring one-square centimeter, which concentrates the light 500 times. These cells’ efficiency is greater than 38%, compared to the 13% to 19% efficiency for silicon photovoltaic cells. SolFocus projects that costs per kilowatt-hour will fall from 24 to 28 cents in 2008 to 13 to 14 cents by 2010. CSP is also used to heat fluids to extreme temperatures (up to 750 degrees Fahrenheit), which produces steam that then drives a turbine. A provider of this kind of solar power is Ausra, Inc. (www.ausra.com), which has commitments for 1,000 megawatts of solar power with Pacific Gas & Electric and Florida Power and Light. A landmark project in California is the Mojave Solar Park, which is to be built in the Mojave Desert. When complete, the 6,000 acre will use 1.2 million parabolic mirrors and 317 miles of vacuum tubing to capture the sun’s heat, generating 553 megawatts of solar power, enough to support 400,000 homes in northern and central California. The park uses technology developed by Solel Solar Systems of Israel. PG&E, a major California utility, will be the major customer when the system comes on line in 2011. Elsewhere, Spanish firm Acciona Energy opened a 64 megawatt plant using similar technology in Nevada in 2007. Projects like these are a major legup on California’s goal of requiring retail sellers of electricity to obtain at least 20% of their electricity


from renewable sources by 2010 (with a goal of 33% by 2020). According to Emerging Energy Research, more than 45 CSP projects with a combined capacity of 5,500 megawatts are in the planning stages worldwide, with four of those scheduled for completion by 2008 in the U.S. and Spain. Spain is especially suited to solar power generation due to its dry, sunny climate. Spanish solar firms of note include Abengoa Bioenergy and Acciona. . The global economic crisis of 2008 may scuttle new projects, as was the case for a proposed onemegawatt solar plant in California’s Mojave Desert that was to have been built by Clear Skies Solar. For the greatest efficiency, CSP can be combined with unique power storage technologies. For example, a system of heat storage based on pressurized water or molten salt allows energy to be captured for use in generation during evening hours. Researchers at the Massachusetts Institute of Technology (MIT) announced breakthrough technology in CSP in 2008. Solar concentrators collect light from windows treated with two or more dyes that absorb light and transport it across the pane to solar cells mounted at the windows’ edges. The focused light increases the electrical power generated by each solar cell by a factor of over 40. Researchers believe that solar concentrators could be used to increase the efficiency of existing solar panels by 50% for minimal cost, and may prove a viable alternative to rooftop solar panels entirely. Space Solar Power (SSP): First proposed in 1968 by then-president of the International Solar Energy Society Peter Glaser, collecting sunlight from a geostationary orbit high above the Earth enables the gathering of constant light that is eight times as strong as that on the ground. A solar panel on the orbiting structure would convert the light to electric current, which is then beamed to Earth by microwave to a specified antenna. The catch is that the final output, which is a measly few hundred watts per kilogram, is too low to justify the enormous costs related to such a project that was initially estimated to be $305 billion (in 2000 dollars). Since then, costs have fallen somewhat due to technological advances. In May 2006, the University of Neuchatel in Switzerland announced a technique using a film created for use in space that yields power densities of 3,200 watts per kilogram. There is also interest in SSP in Japan, where the JAXA space agency has hopes to launch a satellite that will spread into a sizable solar array capable of beaming 100-kilowatts of microwave or laser power to Earth.


Solar Updraft Towers: Yet another potential boon for solar power is a proposed renewable energy power plant that heats air in a large greenhouse, thereby creating convection that causes air to rise and escape through a tall, specially designed tower. The upward-moving air drives electricity-producing turbines. Although there are no updraft towers in operation as of 2008, there are projects on the drawing board in Australia, China, the U.S. and Spain. However, funding for such projects remains in question. In Australia, for example, a 50-megawatt Tapio Station plant is under consideration that would feature a tower that is 1,600 feet tall and 260 feet in diameter. The tower would be surrounded by a twomile diameter transparent canopy that will trap and heat air at ground level, which will naturally rise into the tower (which acts as a kind of vacuum). Inside the tower, wind is produced by the vacuum to power an array of turbines clustered around the tower. Proponents of the project, which is headed by Melbourne-based EnviroMission Ltd. (www.enviromission.com.au), hope to eventually power as many as 200,000 homes. Another plant with a tower that soars to half a mile is proposed for China. As of 2007, EnviroMission continued to seek development money. 3) Wind Power Mankind has utilized wind as a form of energy ever since the first sail was hoisted on a crudely built boat thousands of years ago. In the 12th century, it was used to power the first windmills. It is only natural that wind should be viewed as an attractive means of generating electricity. As of the end of 2008, wind was about at the point where it will generate 1% of electricity consumed in the U.S. That ratio has been rapidly thanks to the continual construction of new wind farms. Today, wind-powered generating plants are springing up in many parts of the U.S. and in Europe. Windmill manufacturers have continually enhanced technology. As a result, windmills are much taller than before, with vastly wider blade spans. Modern windmills have extremely high output and are less costly to maintain for a given amount of generation. New models also have much less downtime due to breakdowns. As a result, windmill farm development became more effective, both economically and in terms of total power created. Nonetheless, government incentives remain essential to make construction of such plants financially appealing. For example, the U.S. Congress has steadily extended the


Production Tax Credit (PTC) for wind power producers. In addition, electric utilities are more and more likely to be required by local or national governments to use renewable, sources such as wind, for a significant portion of their total power generation. Consequently, many major utility firms and energy concerns have been investing significant amounts in new windmill farms. By the beginning of 2008, America’s wind generating capacity had reached 16,818 megawatts, with growth expected to about 24,000 by early 2009. According to the American Wind Energy Association, during 2008, approximately 7,500 megawatts of wind-powered electric generating capacity was installed in the U.S., up from 5,249 in 2007. The greatest concentration of wind power in America is in Texas, where there were 4,356 installed megawatts of capacity as of the end of 2007, up from 2,768 at the end of 2006. California ranked second at 2,439. Wind turbine installation has been so brisk in the U.S. that foreign manufacturers have recently opened manufacturing plants in America. Intense worldwide demand for wind turbine equipment has created a serious backlog of turbine orders. Global wind generation capacity reached 94,112 at the end of 2007, up from 74,223 megawatts in 2006, and 59,091 megawatts in 2005, according to the Global Wind Energy Council. Wind power expanded at about the same rate in 2007. Wind energy is growing so quickly in Europe that by 2020 it will generate about 12% of all of Europe’s electricity needs. At the end of 2007, Germany had the world’s highest installed capacity with 22,247 megawatts, with the U.S. and Spain in second and third place, each with more than 11,603 megawatts installed. Wind energy is also growing rapidly in China and India, with installed capacity of 7,845 and 5,906 megawatts, respectively, at the end of 2007. Internet Research Tip: Wind Power For the latest on wind-powered electricity generation, see the American Wind Energy Association at www.awea.org. The cost of generating electricity from wind has fallen dramatically. In the 1980s, wind power generation cost as much as 30 cents per kilowatthour. Today, that cost has dropped closer to five cents to seven cents per hour, after factoring in tax credits and government incentives. The industry’s goal today is to enhance wind technologies and systems to the point that wind is competitive without


government aid. New technologies for capturing and storing excess wind generation for later use may be the answer. New technology is also enabling wind turbines to grow to massive size. For example, the GE model 1.5SL stands 262 feet tall to the center of the blade hub, featuring blades of 253 in diameter that spin at 18 RPM. The overall height of the unit is 389 feet. Energy companies are also creating economies of scale by building larger wind farms to reduce construction costs per unit. New, ever-larger wind turbines (of up to 460 feet across with the capability to generate up to 7megawatts of electricity) are being designed for use offshore. Two offshore wind farms, Egmond aan Zee in The Netherlands and Barrow in the U.K., are each 65 feet deep and already in operation as of late 2007. Scientists are hoping to find a way to anchor the platforms in deeper water past current limits. A professor at the Massachusetts Institute of Technology proposes using offshore oil well technology to anchor wind platforms to the ocean floor using tense metal cables. The process saves on building materials and makes installation far easier than the “monopiles” currently used to support offshore windmills. With the cable technology, wind platforms could be used in water of up to 600 feet. In addition to the larger and larger turbines under development, residential customers can also invest in small turbines of about 24-feet in diameter that stand on towers from 35 to 140 feet high. These systems have the potential to save users between 30% and 90% on their electric bills. Prices for the systems (including installation) run between $8,500 and $80,000, depending on the size and capacity of the equipment. Noteworthy projects include the 2006 completion of America’s largest wind farm to date: FPL Energy’s 736-megawatt Horse Hollow Wind Energy Center in Texas spreads across 47,000 acres and is comprised of 291 1.5-megawatt turbines and 130 2.3megawatt turbines. Irish wind power company Airtricity, in partnership with GE Energy, recently completed the Arklow Bank Wind Park in the Irish Sea. The park has seven GE 3.6-megawatt turbines and can power approximately 16,000 homes per year. In 2007, Farm Energy, a wind power company in the U.K., released plans for the Atlantic Array farm off the British coast that include 370 turbines capable of generating 1,500 megawatts. In India, wind-generating equipment manufacturer Suzlon Energy is ranked among the world’s largest wind energy producers by installed megawatts of


capacity. Suzlon is likely to continue to expand rapidly, since India’s historic shortages of electricity continue today. In addition to serving the Indian market, Suzlon also sells machinery to companies in the U.S., China and Australia. An exciting breakthrough in wind power technology may allow surplus energy to be stored for use during peak hours. More than 100 municipal utilities in Iowa, Minnesota, North Dakota and South Dakota in the U.S. are spending $200 million to build a 268-megawatt storage system 3,000 feet underground. The system, known as the Iowa Stored Energy Park, www.isepa.com, will direct surplus electricity to a compressor that pumps air deep into layers of porous sandstone underneath dense, almost impermeable shale. The sandstone expands, trapping the air, which is later released. As the air rushes upward, it fires a turbine on the surface, thereby producing energy. This technology is referred to as “compressed air energy storage” (CAES). If this prototype is successful, it could make wind generation significantly more efficient and more cost competitive. Wind power is not without its detractors. There are those who find the turbines to be noisy and unsightly, and others who have concerns about the blades endangering birds and bats. The fact that continued government subsidies and incentives have been required point out the inefficiencies of the technology. However, wind power saves millions of tons of carbon dioxide (CO2) emissions each year. For example, if wind power provides 12% of the world’s electricity needs by 2020, it will result in the reduction of 1,832 million tons of CO2 per year.


Spotlight: General Electric In a major leap for alternative power, General Electric, a top Fortune 500 company and one of the largest technology manufacturing firms in the world, has been investing in both wind and solar energy. After the collapse of Enron in 2001, many of Enron’s subsidiaries were put up for sale by bankruptcy trustees to relieve the corporation’s astronomical debt. In 2002, most of Enron’s wind assets, including turbine and generator technology, factories and a services segment, were picked up by GE Energy (formerly GE Power Systems), a subsidiary of global powerhouse General Electric. Using the existing 750-, 900- and 1,500-kilowatt systems as a model, the new GE Wind Energy division has developed wind turbines capable of generating up to 3.6 megawatts per windmill. GE has put these gargantuan, 340-foot-diameter wind turbines on the market for areas with very high wind speeds. Wind Energy is one of the fastest-growing divisions at GE. GE made its move into solar power with the acquisition of AstroPower, the largest American manufacturer of photovoltaic cells. With modules ranging from 30 to 165 watt capacity, GE now has a solid base of proprietary solar technology, and it has a keen interest in cutting edge photovoltaics based on polymers. In 2007, the company acquired a minority equity interest in PrimStar Solar, Inc., an emerging solar thin-film technology and manufacturing company. Although these acquisitions are minor for a global powerhouse like GE, the company’s interest has been piqued. GE and other multinationals that have shown interest in renewable energy (such as Siemens AG and Sharp Corporation), have the capital, expertise and marketing might to launch the alternative energy business to new heights of commercialization by rapidly advancing the technology, stepping up production and lowering costs. To highlight the company's newfound interest, GE recently opened a laboratory on the campus of the Technical University of Munich, Germany that focuses almost entirely on alternative and renewable energy, including hydrogen, fuel cell, wind and solar energy. The $52 million facility employs approximately 150 scientists. Mesa Power LLC, headed by legendary energy investor T. Boone Pickens, has been making headlines with its plans for a vast wind farm, the Pampa Wind Project, in the Texas panhandle that may eventually include 2,700 wind turbines generating 4,000 megawatts of electricity. Pickens is


a long time land holder in that part of the state, which is noted for its steady and powerful winds, along with wide open spaces. A large number of wind farms are already located in the area. As much as 400,000 acres of land may be involved. However, this extremely ambitious plan could easily cost $10 billion or more, and the difficult financing environment of 2008 has put future funding in doubt, according to a statement by Pickens in December 2008. Mesa earlier announced that it had placed an order with GE for 667 wind turbines in May 2008, with delivery expected in 2010 and 2011. Meanwhile, Texas authorities have expressed an interest in supporting development of wind turbines in the Panhandle area by assisting in the development of billions of dollars worth of transmission lines to bring the electricity into major Texas cities. 4) Hydroelectric Power Of all renewable energy sources, hydroelectric has proven to be one of the most reliable, controllable and cost-effective, as well as the most viable alternative for fossil fuel energy. Other forms, such as wind and solar, have incredible potential, but they have the handicap of being less predictable sources of energy that require greater capital investments to capture. In the U.S., there were 288 billion kilowatt hours of hydroelectric generation capacity in 2006, according to the Energy Information Administration. Unfortunately, potential locations for new hydrodams are limited, and there is little projected growth for the industry in the U.S. Also, conventional hydropower is subject to the availability of running water—recent droughts in the Western U.S. greatly reduced hydro output, and it can happen again. In other countries, it there is much new hydro development under consideration or construction. Although most industrialized countries have already realized their full potential for hydro generation, many developing countries are just getting started. For example, China, already a major producer of hydropower, completed structural work on the enormous Three Gorges Dam, which, when fully implemented in 2009, will have a peak generation capacity of 18 gigawatts. It will be the largest single source of electricity in the world. Due to China’s intense modernization and rapidly growing thirst for energy, this project is of great importance to the future development of the nation. Nonetheless, there is great protest worldwide over the fact that hundreds of thousands of people were displaced from homes in the path of the reservoir created by the new dam. Also, the project has been rife with controversy and


claims of corruption. Delays and costs have burgeoned. Upon completion, the dam is conservatively estimated to cost $25 billion, making it the largest civil construction in Chinese history, excepting perhaps the Great Wall. Many less grandiose hydro projects are also underway around the world. Meanwhile, by 2020, China plans to triple its total national hydroelectric generation to 300 gigawatts as part of its long-term goal to get 15% of the nation’s energy from renewable sources by that year. 5) Geothermal Power Like hydroelectric power, geothermal energy can be extremely reliable and cost-effective. It is a wellestablished technology that uses several different methods to harvest heat from underneath the earth’s surface. As with many other forms of renewable energy, geothermal energy plants must be located in appropriate areas. In this case, potential sites for traditional geothermal generation include areas with volcanic activity, tectonic shifting, major hot springs or geysers, where the earth’s heat is very near the surface. In the United States, most geothermal resources are located in the western portion of the country, along the numerous fault lines on the western seaboard and in the Rocky Mountains. The U.S. is a world leader in geothermal energy, with nearly 3,000 megawatts of installed capacity. (Nonetheless, geothermal generation is a very minor percentage of total electric power in the U.S. As of 2007, geothermal power accounted for a mere 0.49% of the country’s total power generation.) In many parts of the U.S., smaller geothermal resources are used to heat buildings or to provide commercial quantities of hot water, but are not used to generate electricity. This may change with the development of up to 74 new projects mostly in the western U.S. that could more than double capacity. Backed by federal tax credits, utility companies are looking to geothermal as a greater power source. The Massachusetts Institute of Technology conducted a 2007 study that concluded that as much as 100,000 megawatts of U.S. power generation could come from geothermal resources by 2050. There are two predominant techniques for traditional geothermal electricity generation, depending on the type of heat resource: flash steam and binary cycle. High temperature locations can be tapped directly, using steam coming out of the ground to drive a turbine in a technique known as flash steam generation. This is the most common


plant type in use. Where lower-temperature geothermal sources are tapped, hot water is used to heat another liquid with a lower boiling point (such as isobutene or isopentane), which then drives the turbine. This technique is known as binary cycle generation. The drawback of binary cycle generation is that it is much less efficient than flash generation. Engineers have also begun combining flash and binary generation, which together increase the efficiency of a plant. Binary cycle technology enables the construction of a plant at a geothermal water source that is substantially cooler than that used in flash steam generation. Technology developed at Los Alamos National Labs (LANL) in New Mexico may create new opportunities for the utilization of geothermal plants. In a 26-year-long project, LANL was able to develop the tools necessary to harvest heat from almost anywhere on earth. Called Hot Dry Rock Geothermal Energy Technology (HDR), the technique drills holes into the ground until they reach rock that is suitably hot at about 15,000 feet. (Such system is also referred to as an Enhanced Geothermal System or EGS.) Then, pipes are installed in a closed loop. Water is pumped down one pipe, where it is heated to appropriately high temperatures. The resulting hot water shoots up to the surface. This is used to create steam that drives a turbine to power an electric generating plant. (This may be either a flash steam or binary cycle plant.) As the water cools, it is pumped back into the ground. Geodynamics, Ltd., www.geodynamics.com.au, based in Milton, Queensland, Australia, has high hopes for this technology. It is drilling several test wells in the 15,000 foot depth range in central Australia. Binary cycle generation makes it possible to produce power from hot springs that were previously thought too cool to efficiently use for geothermal efforts. The Chena hot springs in Alaska average about 109 degrees Fahrenheit, but the springs’ owners and engineering conglomerate United Technologies (www.utc.com) have devised a method using a refrigerant called R134a (tetrafluoroethane) to drive turbines. Water from the hot springs is used to heat R134a, which has a relatively low boiling point. A gas similar to steam is produced, which drives the turbines. Cooler temperatures yield smaller amounts of gas, so the designers of the Chena plant compensated by slashing operating costs. Mass-produced air conditioner parts were substituted for standard geothermal components, a scheme that will might be adopted by geothermal plants the world over.


Iceland is a respected leader field in geothermal and hydroelectric power. Even though the country's capacity for both is less than that of some other countries, the low-population island nation of Iceland supplies more than 50% of its energy needs with geothermal energy and another 17% by hydroelectric. Generating such a massive amount of energy with these sources is made possible by the island nation’s incredible natural resources, but was brought to bear by a concentrated effort by the government and the people. The Iceland Deep Drilling Project (IDDP), funded by a consortium of three Icelandic energy companies, hopes to tap extremely hot steam in an existing geothermal well at depths of up to 2.5 miles, which is close enough to the Earth’s layer of magma to produce steam of over 1,100 degrees Fahrenheit. The drilling and collecting equipment necessary is more expensive than standard geothermal machinery, due to the higher pressures and temperatures found at great depths. However, proponents of the project believe that the extra costs (which might double or triple) will be easily regained because the amount of electricity produced is expected to multiply by as much as 10 times. The IDDP was in testing stages as of late 2008, with a core test drilled to 2,800 meters by November 25. (For additional information, see www.icdp-online.org.) Iceland’s current financial difficulties may put near-term funding in question. 6) Biomass, Waste-to-Energy, Waste Methane and Biofuels such as Biodiesel Biomass energy is the term describing the conversion of organic material into usable energy, either by burning it directly or by harvesting combustible gases or liquids. In some cases it can be referred to as “waste-to-energy,” because a common application is the burning of a city’s garbage or an industrial plant’s production scrap, such as wood chips or sawdust. Agricultural residues, such as rice straw, nutshells or wheat straw, are also useful as biomass fuels. Waste-to-energy plants have been in use in the U.S. for decades, frequently operating in tandem with municipal garbage systems. Biomass plants supply perhaps 2.8% of the energy consumed in America today. A significant advantage of wasteto-energy is the fact that it reduces the amount of material placed in overburdened landfills. The production of ethanol or biodiesel is another way to utilize biomass to create fuel. Today, several factors are creating heightened interest in waste-to-energy. One of the most important aspects of generating electricity in this


manner is the fact that burning garbage takes up a lot less room than compacting it in a landfill. Many municipalities are faced with severe restraints and high costs in their landfill operations. Also, industrial sites are extremely interested in capturing their on-site waste and excess heat as a way of generating electricity, sometimes referred to as cogeneration. Elsewhere, quantities of waste, such as sewage, manure heaps at feedlots and the garbage filling landfills, create large amounts of methane gas as they decompose. One form of biomass energy generation that utilizes this phenomenon has been affectionately named “cow power.” In this method of energy production, cow manure is placed in a holding tank, where it is heated to around 100 degrees Fahrenheit. This allows naturally occurring bacteria to break down the material, releasing methane, which is collected and burned in a generator. By this method, the manure from one cow can produce about 1,200 kilowatt-hours per year, meaning ten cows can power an average American house. Not only can cow power produce electricity, it can also be used to produce high quality (and noticeably less smelly) fertilizer. Though it has been around for decades, cow power has not seen serious interest until recently. It has grown much more efficient over the years, and cheaper to boot. Both California and Vermont have launched assistance programs to help farmers pay for the systems. A leading waste disposal firm, Waste Management, Inc., has begun to capitalize on waste methane at a handful of the numerous landfills that it operates. For example, working with energy management firm Ameresco, it is providing waste methane energy to a BMW automobile plant in Spartanburg, South Carolina, via a pipeline to a landfill ten miles away. One exciting development is the use of hydrogen converted from methane to power fuel cells. Many types of organic fats are currently used worldwide to make biodiesel, including soybean oil, rapeseed oil (the same oil that is commonly sold as canola), palm oil and beef tallow. Syntroleum Corporation of Tulsa, Oklahoma and Tyson Foods, Inc. have entered into an agreement to make biodiesel fuel from animal fat. As one of the world’s largest meat processors, Tyson’s annual production of beef, pork and chicken fat is about 300 million gallons. Unfortunately, the refining of biodiesel is not a sure way to profits. Many biodiesel refineries have failed. Costs of capital investment are high, and feedstocks,


particularly vegetable oils, can be extremely expensive. From an environmental impact point-of-view, salvaging chicken fat from a meat packing plant to use in fuels may be reasonably efficient. However, dramatically altering the usage of vast swaths of land to grow plants for fuel is another matter. Land displacement for biofuel use has turned into a global problem and a huge controversy. Farmers from the Americas to Brazil to Indonesia have been converting land that was previously used for food agriculture into acreage used for biofuel plant growth. At the same time, farmers elsewhere have been incentivized by high demand in the marketplace to destroy rain forest, woodlands or open plains in order to plant food crops to take up the slack in the market, or to plant high-value plants for biodiesel or bioethanol feedstock. In early 2008, studies were published in the respected scientific journal Science that attempted to quantify the net effect of these changes in land use. When woodlands or prairies are cleared and burned to make way for crops, vast amounts of carbons are released into the atmosphere. Among the biggest culprits are farmers clearing rain forest in Indonesia in order to plant palms for the harvesting of palm oil for biodiesel, and those clearing rain forest in Brazil for planting of soy for biodiesel. (Clearing grassland in the U.S. in order to plant corn for bioethanol is another problem.) The 2008 studies found that these activities create immense carbon emission problems, far in excess of any carbon saved over the short term by burning a plant-based fuel as opposed to a petroleum-based fuel in cars and trucks. 7) Ethanol Production Soared, But a Market Glut May Slow Expansion Soaring gasoline prices, effective lobbying by agricultural and industrial interests, and a growing interest in cutting reliance on imported oil has put a high national focus on bioethanol in America. Corn and other organic materials, including agricultural waste, can be converted into ethanol through the use of engineered bacteria and superenzymes manufactured by biotechnology firms. This trend has given a boost to the biotech, agriculture and alternative energy sectors. At present, corn is almost the exclusive source for bioethanol in America. This is a shift of a crop from use in the food chain to use in the energy chain that is unprecedented in all of agricultural history—a shift that is having profound effects on prices for consumers, livestock growers


(where corn has long been a traditional animal feed) and food processors. In addition to the use of ethanol in cars and trucks, the chemicals industry, faced with daunting increases in petrochemicals costs, has a new appetite for bioethanol. In fact, bioethanol can be used to create plastics—an area that consumes vast quantities of oil in America and around the globe. Archer Daniels Midland is constructing a plant in Clinton, Iowa that will product 50,000 tons of plastic per year through the use of biotechnology to convert corn into polymers. Ethanol is an alcohol produced by a distilling process similar to that used to produce liquors. A small amount of ethanol is added to about 30% of the gasoline sold in America, and most U.S. autos are capable of burning “E10,” a gasoline blend that contains 10% ethanol. E85 is an 85% ethanol blend that may grow in popularity due to a shift in automotive manufacturing. Although only 800 or so of the 170,000 U.S. service stations sold E85 as of the middle of 2006, there may be an increase in demand for ethanol in the U.S. due to Detroit’s increased production of “flexfuel” vehicles than can run on E85 or on a mixture of gasoline and E85. Ford offers E85-capable F-150 pickup trucks, Ford Crown Victorias, Mercury Grand Marquis and Lincoln Town Cars. At GM, flexfuel technology is available in the Chevy Avalanche, Chevy Impala, Chevy Monte Carlo, Chevy Tahoe, GMC Yukon and GMC Sierra. Numerous other flexfuel cars are available in the U.S., including models from Chrysler and Mercedes. Yet despite the millions of vehicles on the road that can run on E85 and billions of dollars in federal subsidies to participating refiners, many oil companies seem unenthusiastic about the adoption of the higher ethanol mix. E85 requires separate gasoline pumps, trucks and storage tanks, as well as substantial cost to the oil companies (the pumps can alone cost about $200,000 per gas station to install). Many drivers who have tried filling up with E85 once revert to regular unleaded when they find as much as a 25% loss in fuel economy when burning the blend. Ethanol is a very popular fuel source in Brazil. In fact, Brazil is one of the world’s largest producers of ethanol, which provides a significant amount of the fuel used in Brazil’s cars. This is due to a concerted effort by the government to reduce dependency on petroleum product imports. After getting an initial boost due to government subsidies and fuel tax strategies beginning in 1975, Brazilian producers have developed methods (typically using


sugar cane) that enable them to produce ethanol at moderate cost. The fact that Brazil’s climate is ideally suited for sugarcane is a great asset. Also, sugar cane can be converted with one less step than corn, which is the primary source for American ethanol. Brazilian automobiles are typically equipped with engines that can burn pure ethanol or a blend of gasoline and ethanol. Brazilian car manufacturing plants operated by Ford, GM and Volkswagen all make such cars. In America, partly in response to the energy crisis of the 1970s, Congress instituted federal ethanol production subsidies in 1979. Corn-based grain ethanol production picked up quickly, and federal subsidies totaled about $11 billion through 2006. The size of these subsidies and environmental concerns about the production of grain ethanol produced a steady howl of protest from observers through the years. Nonetheless, the Clean Air Act of 1990 further boosted ethanol production by increasing the use of ethanol as an additive to gasoline. Meanwhile, the largest producers of ethanol, such as Archer Daniels Midland (ADM), have reaped significant amounts of subsidies from Washington for their output. The ethanol cause was further promoted by President Bush in his state of the union address in 2006, in which he chastised Americans for their “addiction to oil” and promoted the use of ethanol among other alternative fuels. The Bush administration claims that ethanol could provide more than one-third of the U.S.’s gasoline needs by 2025. The U.S. Energy Act of 2005 specifically requires that oil refiners mix 7.5 billion gallons of renewable fuels such as ethanol in the nation’s gasoline supply by 2012. Ethanol production it the U.S. was fast approaching that level in 2007. Capacity had doubled since 2005. Although grain farmers enjoyed high prices at the onset, a glut of ethanol supply in late 2007 was causing prices to drop and slowing expansion. Ethanol prices fell dramatically in mid2007. For example, ethanol was priced at approximately $2.51 per gallon at Omaha, Nebraska (the heart of the U.S. cornbelt) in July 2007. By October the price had fallen to $1.79, a big loser for biorefineries considering the soaring cost of corn. In other words, ethanol production was increasing faster than the adoption of ethanol. In mid-2006, prices had been as high as $3.58. Price volatility remained the norm in 2008. Next, the Energy Independence and Security Act of 2007 called for even more ethanol production, with a goal of 36 billion gallons per year by 2022 including 21 billion gallons to come from


cellulosic and advanced biofuel sources. A notable exception to government backing of ethanol is Texas Governor Rick Perry’s 2008 petition for a one-year reprieve from ethanol mandates, citing the escalating prices for feed paid by cattle ranchers. Although the petition was unsuccessful, it may spark other attempts to limit the mandate. Traditional grain ethanol is typically made from corn or sugarcane. In contrast to grain ethanol, “cellulosic” ethanol is typically made from agricultural waste like corncobs, wheat husks, stems, stalks and leaves, which are treated with specially engineered enzymes to break the waste down into its component sugars. The sugars (or sucrose) are used to make ethanol. Since agricultural waste is plentiful, turning it into energy seemed a good strategy. Cellulosic ethanol can also be made from certain types of plants and grasses. The trick to cellulosic ethanol production is the creation of efficient enzymes to treat the agricultural waste. The U.S. Department of Energy is investing $20 million per year in funding along with major chemical companies such as Dow Chemical, DuPont and Cargill. Another challenge lies in efficient collection and delivery of cellulosic material to the refinery. It may be more costly to make cellulosic ethanol than to make it from corn. In any event, the U.S. remains far behind Brazil in cost-efficiency, as Brazil’s use of sugar cane refined in smaller, nearby biorefineries creates ethanol at much lower costs per gallon. Iogen, a Canadian biotechnology company, makes just such an enzyme and is presently building production-size cellulosic ethanol facilities in the U.S., Canada and Germany, to start commercialization and determine how economical the process is. The company plans to construct a $300-million, large-scale biorefinery with a potential output of 50 million gallons per year. Its pilot plant in Ottawa is capable of producing 260,000 gallons per year from 20 million tons of wheat straw and corn stalks. In the U.S., the Department of Energy has selected six proposed new cellulosic ethanol refineries to receive a total of $385 million in federal funding. When completed, these six refineries are expected to produce 130 million gallons of ethanol yearly. Iogen’s technology will be used in one of the refineries, to be located in Shelley, Idaho. Partners in the refinery will include Goldman Sachs and The Royal Dutch/Shell Group. Construction of new ethanol production plants pushed total production capacity in the U.S. to about


5.4 billion gallons by the end of 2006 (about 3.4% of total U.S. gasoline consumption), up from 3.9 billion as of June 2005. As of early 2008, there were 139 ethanol biorefineries in the U.S. with another 60 under design or construction. However, increased capacity nationwide and high corn prices are slowing the expansion trend, and many new projects have been shelved. For example, proposed facilities in Minnesota, South Dakota and Iowa have put construction projects on hold as of late 2007. In late 2008, ethanol maker VeraSun Energy Corp. filed for bankruptcy protection. The Iowa-based company operates 14 ethanol plants in the Midwestern U.S. and is seeking reorganization. Other companies, such as Syngenta, DuPont and Ceres, are genetically engineering crops so that they can be more easily converted to ethanol or other energy producing products. Syngenta, for example, is testing an engineered corn that contains the enzyme amylase. Amylase breaks down the corn’s starch into sugar, which is then fermented into ethanol. The refining methods currently used with traditional corn crops add amylase to begin the process. Environmentalists are concerned that genetically engineering crops for use in energy-related yields will endanger the food supply through crosspollination with traditional plants. Monsanto is focusing on conventional breeding of plants with naturally higher fermentable starch contents as an alternative to genetic engineering. Another concern relating to ethanol use is that its production is not as energy efficient as that of biodiesel made from soybeans. According to a study at the University of Minnesota, the farming and processing of corn grain for ethanol yields only 25% more energy than it consumes, compared to 93% for biodiesel. Likewise, greenhouse gas emissions savings are greater for biodiesel. Producing and burning ethanol results in 12% less greenhouse gas emissions than burning gasoline, while producing and burning biodiesel results in a 41% reduction compared to making and burning regular diesel fuel. In addition, ethanol production requires enormous amounts of water. To produce one gallon of ethanol, up to four gallons of water are consumed by ethanol refineries. Add in the water needed to grow the corn in the first place, and the number grows to as much as 1,700 gallons of water for each gallon of ethanol. Other concerns regarding the use of corn to manufacture ethanol include the fact that a great deal of energy is consumed in planting, reaping and transporting the corn in trucks. Also, high demand


for corn for use in biorefineries has dramatically driven up the cost per bushel dramatically, creating burdens on consumers. 8) Microturbines and Distributed Power “Distributed power” is electric generation at or near the place where the power will be used. This can be as localized as a factory or even a single home. A microturbine is a source of distributed power based on local generation by small or “micro” electric generating plants. Since the power is generated on a local basis, availability of electricity is not reliant on the traditional grid system that blankets the U.S. In fact, many other parts of the world completely lack a grid system. Consequently, micropower could easily be the best solution for Third World communities. This is analogous to the rapid spread of cellular telephone usage in countries that lack landline telephone infrastructure. One popular “microturbine” is a tiny jet enginelike turbine coupled with a generator burning natural gas, spinning at 92,000 RPM to produce 20- to 65 kilowatts. The units can be used singularly or grouped into large capacity systems, depending on the user's needs. They are also much quieter and more efficient (and thus less polluting) than traditional gas-burning generators. An industry leader in this field is Capstone Turbine (www.capstoneturbine.com). It began developing the microturbine concept in 1988. Ten years later it began shipping fully commercialized versions. Capstone has marketed its generators mainly to the stationary market for supplemental and backup power, but has also made microturbinepowered buses for municipalities. The company has installed thousands of units around the world. Microturbines can take many forms. For example, researchers at Hong Kong University, working with Motorwave, Ltd., have developed a micro wind turbine. These light turbines are only 25 centimeters in diameter and may be appropriate for installation in sets of several turbines in a series. They are designed for use at individual homes or in areas where space and size are a consideration. In addition to engine-driven microturbines, newer designs are powered by waste heat from factories or furnaces. Also, “micro” may evolve into “nano” turbines for small, mobile energy needs. Researchers at the University of Maryland, at the MEMS Sensors and Actuators Lab in the School of Engineering, have created a tiny turbine that achieves speeds of 87,000 RPM. The U.S. Department of Defense sees promise


in tiny turbines that may eventually generate electricity for the wide variety of electronics carried by soldiers. Currently, such electronics are powered by lithium-ion batteries, which are heavy. 9) Tidal Power Despite the enormous potential of harnessing the movement of the tides to provide electrical power, the technology for tidal power generation is only beginning to take off. Only a handful of generating facilities exist worldwide, and half of those are tiny “test” projects. One of the largest projects is located in the La Rance estuary in France. Completed in 1966, the La Rance estuary project generates 540 million kilowatt hours per year. A tidal plant in the U.S. is located in Annapolis, Maryland, and generates a modest 30 million kilowatt-hours per year. The state of Oregon has exhibited significant interest in exploring tidal power. The main benefit of tidal power, in comparison with other forms of renewable energy, is its predictability. The timing and force of tides can be predicted with great accuracy, and thus so can the power produced by a plant. The main drawback of this power source is its high initial equipment cost, which runs many times that of conventional power sources. In a traditional tidal energy plant, a dam is constructed that captures tides as they flow inward. When the tide goes out, water behind the dam is released which powers a turbine in a manner similar to traditional hydroelectric power generation. These systems work best when there is a dramatic difference, at least 16 feet, between low tide and high tide. A 2007 report titled “Tidal Power in the U.K.” is calling for significant investment in tidal generation. In particular, the Severn Estuary could generate a large amount of the U.K.’s total electric needs, perhaps as much as 5%. Meanwhile, the government has given approval for a major wave generation project off the north coast of Cornwall. The intent is to develop a “Wave Hub” about 10 miles offshore that will act as a receptor for wave generation farms, gathering electricity and sending it ashore to be distributed in the grid. Promising news for tidal power is coming from a radical design—a tidal mill that looks a lot like a land-based windmill. The tidal mill consists of three 30-foot long blades and weighs 180 tons. This design can offer several benefits, including minimal interference with sea life. Hammerfest Stroem, the electric company in Hammerfest, Norway, has


constructed a 20-tidal mill site with a capacity of 32 gigawatt hours, at a cost of $100 million. Another tidal power development with real potential is the Archimedes Wave Swing (AWS), a large, submersed telescopic cylinder filled with air. Inside is a “floater” that moves up and down as pressure surrounding the cylinder changes due to waves. That movement, which corresponds with the ebb and flow of the water, is converted to electricity via a linear generator. Each AWS unit is about 39 feet in diameter and has an average output of 2.5 megawatts in a rough sea (producing about 5 gigawatts per year). The system has been tested in a pilot plant off the coast of Portugal. A company called AWS Ocean Energy Ltd. (www.awsocean.com) hopes to deploy a demonstration site in 2010, and have an operational commercial farm of AWS units the following year. Another ocean driven technology uses wave power generators, which are currently being tested in waters near New Jersey, Hawaii, Scotland, England and Western Australia. The generators, known as wave energy converters, are semi-submerged cylinders of almost 400 feet in length and more than 11 feet in diameter. The cylinders are jointed and undulate in wave action like snakes. The energy of the wave action is resisted by hydraulic rams in the joints. The rams then pump high-pressure fluid into chambers that feed the fluid to a motor. The motor, in turn, drives a generator that creates electricity. Power from all the joints is transported down an umbilical cable connecting the cylinder to a junction on the sea floor that consolidates the power and sends it to shore via another cable connection. The cylinders are designed to work in concert connected by mooring lines, forming a wave “farm.” A working example of a wave energy converter is the Pelamis, built by Pelamis Wave Power (formerly Ocean Power Delivery, Ltd.), www.pelamiswave.com, an Edinburgh technology company focused on ocean wave power generation. A Pelamis installation began commercial generation off the coast of Portugal in September 2008. Earlier, the company, in partnership with renewable generator company E.ON UK (www.eon-uk.com), announced plans to develop a five-megawatt wave power project off the coast of Cornwall called WestWave. It would consist of up to seven Pelamis converters connected to an existing offshore electrical “socket” called Wave Hub. Pelamis units communicate with operators onshore via fiber optic cables, backed up by wireless systems. This affords operators remote monitoring of power absorbed and generated as well


as system status. Webcams are embedded within the machines for visual monitoring. Each unit is about 460 feet long and capable of generating as much as 750 kilowatts. 10) Fuel Cells and Hydrogen Power Research Continues The fuel cell is nothing new, despite the excitement it is now generating. It has been around since 1839, when Welsh physics professor William Grove created an operating model based on platinum and zinc components. Much later, the U.S. Apollo space program used fuel cells for certain power needs in the Apollo space vehicles that traveled from the Earth to the Moon. In basic terms, a fuel cell consists of quantities of hydrogen and oxygen separated by a catalyst. Inside the cell, a chemical reaction within the catalyst generates electricity. Byproducts of this reaction include heat and water. Several enhancements to basic fuel cell technology are under research and development at various firms worldwide. These include fuel cell membranes manufactured with advanced nanotechnologies and “solid oxide” technologies that could prove efficient enough to use on aircraft. Another option for fuel cell membranes are those made of hydrocarbon, which cost about one-half a much as membranes using fluorine compounds. California-based PolyFuel (www.polyfuel.com) is a leader in engineered hydrocarbon membranes. Fuel cells require a steady supply of hydrogen. Therein lies the biggest problem in promoting the widespread use of fuel cells: how to create, transport and store the hydrogen. At present, no one has been able to put a viable plan in place that would create a network of hydrogen fueling stations substantial enough to meet the needs of everyday motorists in the U.S. or anywhere else. Many currently operating fuel cells burn hydrogen extracted from such sources as gasoline, natural gas or methanol. Each source has its advantages and disadvantages. Unfortunately, burning a hydrocarbon such as oil, natural gas or coal to produce the energy necessary to create hydrogen results in unwanted emissions. Ideally, hydrogen would be created using renewable, non-polluting means, such as solar power or wind power. Also, nuclear or renewable sources could be used to generate electricity that would be used to extract hydrogen molecules from water. The potential market for fuel cells encompasses diverse uses in fixed applications (such as providing an electric generating plant for a home or a


neighborhood), portable systems (such as portable generators for construction sites) or completely mobile uses (powering anything from small handheld devices to automobiles). The potential advantages of fuel cells as clean, efficient energy sources are enormous. The fuel cell itself is a proven technology—fuel cells are already in use, powering a U.S. Post Office in Alaska, for example. (This project, in Chugach, Alaska, is the result of a joint venture between the local electric association and the U.S. Postal Service to install a one megawatt fuel cell facility.) Tiny fuel cells are also on the market for use in powering cellular phones and laptop computers. Shipments of fuel cell-equipped mobile devices could grow very rapidly if they can eliminate the need for frequent recharging of current batterypowered models. The “Medis 24/7 Power Pack” in April 2007. It is a portable, disposable power source for small electronic devices such as cell phones and MP3 players. Manufactured by Medis Technologies, it is based on Direct Liquid Fuel cell technology, and may be of particular utility in military applications. Elsewhere, MTI MicroFuel Cells manufactures a power pack for portable electronics that is based on direct methanol fuel cell technology that it calls Mobion. Internet Research Tip: Micro Fuel Cells For more information on research involving fuel cells for small applications, visit: Medis Technologies www.medistechnologies.com MTI MicroFuel Cells www.mtimicrofuelcells.com PolyFuel www.polyfuel.com Tekion Solutions, Inc. www.tekion.com Nearly all of the major automobile makers have significant fuel cell research initiatives. GM has invested $1 billion in fuel cell vehicle research. The company leased 100 fuel cell-equipped Equinox crossover vehicles to customers as a test, starting in early 2008. The Equinox will go about 200 miles on a hydrogen fill up. Initially, the vehicles were provided to government officials, celebrities, journalists and business leaders in New York City, Washington D.C. and Los Angeles. GM has long had aggressive goals for commercializing and producing fuel cell vehicles. However, the financial and technical hurdles will be high, and GM has assigned itself a daunting task. For the long term, the firm has stated a goal of manufacturing 1 million fuel cell vehicles yearly at a cost comparable to that of cars with four cylinder gasoline engines. It may


never happen, unless GM can see its way to real profits from fuel cells. Nonetheless, in January 2008, the firm unveiled a fuel cell concept car, the Cadillac Provoq, at the Consumer Electronics Show, which is held in Las Vegas each year. One of GM’s thoughts for eventual commercial development is a wide variety of car and truck bodies that will mount onto a single, radical “skateboard” chassis design, which integrates the engine directly into the chassis. The skateboard stores fuel cell stacks and hydrogen supplies as well as circuitry that manages the flow of electric power through the various systems necessary to stop, start and maneuver the vehicle. The chassis will include a docking port that links the body above to the electronic control systems. Each vehicle will be equipped with software that corresponds to the type of driving associated with the selected body style. Sporty cars and light trucks will have software that provides rapid acceleration, responsive steering and rigid suspension. The software for family cars and touring sedans will provide less pickup, easier steering and a more comfortable ride, even though the underlying chassis will be the same. However, the firm may find it faster and more cost-effective to place fuel-cell technology in vehicles that have already been designed as gasoline engine platforms. GM is not the only manufacturer with significant interest in fuel cells. Honda has started leasing test models of its “FCX” fuel cell-powered car to small numbers of customers in the U.S. and Japan. Honda’s goal is to be able to offer fuel cell cars at a cost comparable to gasoline powered cars by 2020. Toyota began making a small number of fuel cell powered cars available on 30 month leases in July 2006. It is also leasing 12 such cars to universities and corporations in California. DaimlerChrysler invested about $1 billion in its own fuel cell initiative, and by the end of 2006 had about 100 such vehicles in operation. As of 2007, Ford had 30 fuel cell powered Focus compact cars in customer trials. Also in 2007, Chrysler (newly separated from Daimler AG) joined the California Fuel Cell Partnership, a consortium of automakers, energy providers, fuel cell technology companies and government agencies.


Electric Vehicles vs. Fuel Cells GM, Toyota and other leading automobile firms have ambitious plans for launching electric-drive vehicles in the near future (as opposed to today’s hybrid electric cars which run on electricity only part of the time, relying on a gasoline engine the rest of the time). Given the financial constraints that automakers are working under today, it is always possible that these car manufacturers may downgrade their focus on fuel cells. In particular, technical breakthroughs in advanced batteries for electric vehicles are likely to occur as early as 2010. This could easily spur a huge rush into the electric car market while lessening the near-term interest in fuel cells. Electric cars may range from 100% electric power vehicles that have short ranges and are plugged-in at home overnight to recharge—to cars like the Chevrolet Volt that will run on electric motors only, but will include a small gasolinepowered generator engine that will recharge the batteries when needed. The car will be designed to go up to 40 miles without recharging, and it will have the capability to be recharged by plug-in at home. Meanwhile, other challenges face 100% electric cars. In addition to adequate battery life, engineers are wrestling with the fact that conveniences such as air conditioning, heating and stereos drain a lot of electricity. Technical advances in these accessories may be necessary, since consumers will not buy such cars in volume without them. Meanwhile, plug-in hybrids (PHEVs) will likely be on the market soon. These will be similar to today’s hybrids, but will feature a larger battery with longer range. More importantly, they will enable the owner to plug-in at home overnight to recharge that battery. Today’s hybrids recharge by running the gasoline-powered side of the car, and by drawing on the drag produced by using the brakes. Meanwhile, BMW unveiled a hybrid of sorts in 2006 that allows drivers to use either hydrogen or gasoline at the flick of a switch. (The hydrogen is not used in a fuel cell. Instead, it is burned as a fuel in an internal-combustion engine that ordinarily would burn gasoline.) The car uses a V-12 engine that can be powered by either fuel. Since more hydrogen than gasoline is required to run an engine the same number of miles, the prototype has a hydrogen tank that utilizes space usually reserved for luggage or passengers. The use of hydrogen offers multiple technical challenges.


Marketability of fuel-cell-powered vehicles will depend both on their initial cost and the ready availability of hydrogen in convenient filling stations. Prototype cars are on the road in a few cities, and large-scale production may have the potential to eventually make such vehicles affordable and competitive, but the obstacles are significant. After the initial enthusiasm over fuel cells, during which many governments planned to introduce large numbers of fuel cell power plants and vehicles, energy agencies have scaled back their goals. The difficulties surrounding the technology are proving much more stubborn than they initially appeared to be. For example, Japan, one of the largest proponents of fuel cell technology, initially wanted 50,000 fuel cell vehicles on the road by 2010. Although the government is still putting substantial resources into fuel-cell-related efforts, it does not expect to have widespread use of fuel cells until 2030, and that may prove impractical. California, meanwhile, originally wanted 10% of all vehicles sold in the state to be zero-emission vehicles (ZEVs) by 2003. The state dropped its targets dramatically. Initially, GM was striving to have fuel cell cars on the market before 2010. Unfortunately, fuel cells remain grossly expensive due to their limited production and the industry’s current low-technology base. For example, the cost of one 200-horsepower fuel cell system runs around $75,000. Moreover, hydrogen is not readily available to drivers. GM’s head of strategic planning projects that 12,000 stations in the largest cities across the U.S. would put 70% of the population within two miles of a hydrogen filling station. The cost would be about $1 million per station. Honda is promoting a Home Energy Station in Southern California that it hopes will convert natural gas into enough hydrogen to power fuel cells that could run a family’s vehicle, as well as supply electricity and hot water for the family home. Another problem is that many people still have concerns about the safety of hydrogen. Naturally gaseous at room temperature, storing hydrogen involves using pressurized tanks that can leak and, if punctured, could cause explosions. It is also difficult to store enough hydrogen in a vehicle to take it the 300+ miles that drivers are used to getting on a tank of gasoline. To do so, hydrogen must be compressed to 10,000 pounds per square inch and stored on board in bulky pressure tanks. One idea for storage is cooling the hydrogen to a liquid state and storing it in a cooled tank, but this requires constant refrigeration. A mid-term solution


to the problem of creation and storage of hydrogen is to use existing fuels, such as methane, gasoline and diesel. These fuels can be broken down in the car, on-demand, to produce hydrogen, and then power the fuel cell. Although this would relieve the hydrogen storage problems, it would not remove the need for fossil fuels and it would still produce emissions such as carbon dioxide, though in reduced quantities. The next step would be to create hydrogen on-demand from ethanol, thereby creating less pollution. Meanwhile, UPS has been testing a fuel-cellpowered vehicle in Ann Arbor, Michigan, and another in Ontario, California. Honda and Toyota are both testing fuel-cell-powered cars in California and Japan. Ford built a hydrogen internal combustion engine as an interim step to fuel cells, as a V10 intended for trucks or vans. Government aid will be the key if fuel cell vehicles ever become widespread. GM is pitching the idea of fuel cell cars to the Chinese government as a long-term solution to China’s environmental challenges and needs for imported petroleum. Since China may soon lead the world in the construction of state-of-the-art nuclear power plants, it isn’t a far leap to see that nation using nuclear power to create hydrogen on a massive scale. The Bush administration launched a “Hydrogen Fuel Initiative” in 2003, and Congress has provided over $1 billion for research. In May 2008, the EU’s government funded 470 million Euros for fuel cell and hydrogen research, and Germany has promised as much as 500 million Euros. Will this be enough to bring fuel cells to the mass market? Probably not. There is still a massive problem in the manufacture and distribution of hydrogen on a scale suitable to serve the needs of vehicles. A U.S. Department of Energy study determined that it would take public funding of $45 billion to get 10 million fuel cells cars on the road by 2025, assuming that mass production would create a dramatic reduction in the cost of manufacturing fuel cells, and that public funding would encourage the development of a network of fueling stations. Meanwhile, electric cars are clearly the next wave. 11) Governments Encourage Alternative Fuels and Conservation R&D New York State already produces 19% of its electricity through renewable sources. It wants to increase that number to 25% by 2013. Likewise, the city of Austin, Texas has passed a resolution to get 20% of its electricity from renewables by 2020. In fact, the State of Texas passed legislation in 2005 that


set a goal for the entire state to get 5% of its electricity from renewable by 2015 and 10% by 2025. California is the leading U.S. state in terms of solar power generation. The capitol city, Sacramento, has solar generation totaling about 10 megawatts, including one of the world’s largest solar facilities, located at the Sacramento Municipal Utility District. San Francisco has also passed legislation seeking to build a similar amount over the short-term. Long-term, San Francisco planners hope to develop 40 megawatts of solar power, enough to meet about 5% of the city’s peak electricity needs. City residents have authorized the issuance of revenue bonds of up to $100 million to back the development of renewable power sources. For example, the roof of the city’s huge convention center has been layered with solar panels—enough to generate 675 kilowatts. (San Francisco’s long-range plans also call for the use of smaller, cleaner gas-fired conventional generating stations, and perhaps the use of tidal energy.) California’s legislature has set a statewide goal of requiring retail sellers of electricity to obtain at least 20% of their electricity from renewable sources by 2010, and 33% by 2020. The U.S. federal government is also pushing green initiatives. The Energy Policy Act of 2005 stipulates that oil refiners vastly increase the amount of biofuels added to gasoline and diesel fuel by 2012. Refiners are responding by blending ethanol with gasoline. Specifically, refiners were required to add 4.0 billion gallons of biofuels (ethanol and biodiesel) to gasoline and diesel in 2006, (up from 0.7 billion in 2005) increasing to 7.5 billion by 2012. Off the road, an energy-saving lighting standard proposed by the U.S. Congress would phase out common incandescent light bulbs by 2016 and replace them with compact fluorescent lights (CFL). GE is the biggest seller of these bulbs, which use 75% less energy than incandescent bulbs and last six times longer. In 2007, GE announced a new, more efficient incandescent bulb that is comparable to CFLs. At the same time, manufacturers are also working to reduce prohibitive costs of light-emitting diodes, which have the potential to save billions of dollars in electricity costs while greatly reducing pollution. PolyBrite International, www.polybrite.com, is one such company. Outside of the U.S., major initiatives in Germany, the United Kingdom, Japan, Spain and handful of other countries spur on technology research and implementation of renewable power. The European Union set a goal for its member countries to double the amount of power generated by renewable sources


to 12% by 2010 in accordance with the Kyoto Protocol on climate change. In a 2007 proposal, the EU called for cutting carbon dioxide levels from 1990 by 20% by 2020. Japanese firms, notably Sharp, Sanyo and Kyocera, have massive solar power research and development projects underway, and are significant competitors of American manufacturers of solar equipment. Sharp is the largest manufacturer of photovoltaic equipment in the world, with almost 30% of the world market. Consumers in Japan are encouraged to invest in solar power by government incentives, and the Japanese Government’s strategy is to get 38% of the nation’s total power needs from renewable sources by the year 2020—a logical goal for a country with high energy demands and major dependence on foreign supplies of fossil fuels. Citizens are encouraged to take energy conserving steps by the imposition of stiff gasoline taxes and generous subsidies to homes that use home fuel cells. Germany has been investing in both wind and solar power. The country is the world’s largest producer of wind power, and second in solar only to Japan. Through powerful incentives that include rebates and payment for excess power, German consumers and companies alike have been building nonstop. In Spain, government incentives are promoting the use of concentrating solar power (CSP). The Spanish government has set a goal of building 500 megawatts of solar-thermal generation capacity over the near term. To do so, it has instituted “feed-in” tariffs that require utility companies to buy CSP plant generated power at premium rates. 12) Electric Cars and Plug-in Hybrids (PHEVs) Will Quickly Gain Popularity The rise in gasoline prices is only one reason for a resurgence of concern regarding the consumption of fossil fuels, especially gasoline and diesel fuels used by cars and trucks. Environmentalists are also putting pressure on car and truck manufacturers to clean up emissions. Efforts to respond to these concerns are taking many forms, including hybrid gasoline/electric cars, clean diesel technology and the possible use of hydrogen to power vehicles. However, fully-electric, plug-in cars (and cars that have a backup gasoline-powered electric generator aboard) are about to make a massive push into the market. This is due to several factors, including: 1) technical breakthroughs in lithium-ion batteries making them safer and longer-lasting, 2) an electric car research, development and investment


focus at major car manufacturers and 3) proof of consumer acceptance of electric car concepts thanks to the stunning sales of the Toyota Prius. First, a little history: An all-electric car has long sounded logical to many people. GM launched the EV1, an all-electric vehicle, in 1996. Unfortunately, the car was a complete flop, and the $1-billion project was abandoned in 1999. In 2002, Ford announced that it would give up on the Think, an electric car model in which it had invested $123 million. These efforts were an attempt to satisfy government demands, not an attempt to fill early consumer needs. Times have changed, however, and in the face of expensive gasoline, many manufacturers are rethinking electric-powered cars. There are several low-production electric models currently on the market that run strictly on electricity. In the U.S., they include souped-up sports cars such as the $100,000 Tesla Roadster, which can go up to 125 miles per hour and run 220 miles per charge; and the $100,000 Wrightspeed X1, which can make 120 mph and run up to 200 miles per charge. With regard to acceleration, both of these models are comparable to top gasoline-powered sports cars such as the Ferrari Enzo and the Ford GT. The Tesla Roadster can accelerate from zero to 60 mph in about 4 seconds! Another notable high-end electric vehicle is the Tango T600, made by Commuter Cars Corporation. For $108,000, drivers can take the two-seater (one seat behind the other) from zero to 60 miles per hour in about four seconds, and reach a top speed of more than 130 mph. Tesla is a serious business startup, with more than $100 million raised in capital as of mid-2007. By March 2008, regular production of the Tesla Roadster was underway and 900 vehicles had been ordered. The firm hopes to introduce a second model, a five-passenger sedan, the WhiteStar, priced from $50,000 to $65,000, in 2009. Tesla has taken a simple route to solve the problem of storage batteries: the Tesla Roadster has 6,831 lithium ion, laptop computer batteries linked together in the trunk! Tesla Motors builds the Roadster at a Lotus Cars manufacturing plant in the U.K. The WhiteStar sedan will be built at a new, 150,000 square foot plant in Albuquerque, New Mexico, capable of assembling 10,000 cars yearly. On the affordable end of the electric-powered spectrum are small vehicles that began several years ago as glorified golf carts. Recent technological advances, such as the use of lightweight, long-lasting lithium-ion batteries (the type used in cellular phones


and laptop computers) have helped the vehicles evolve into marketable alternatives for short-trip driving. The ZAP Xebra, a three-wheel, four-door vehicle with a sticker price of $11,700, can reach speeds of up to 40 mph and have a range of 40 miles per charge. ZAP stands for “zero air pollution.” Chrysler’s Global Electric Motorcars LLC subsidiary offers several models, including vehicles with options such as heated seats, steel bumpers and cup holders. Prices start at about $6,795. Toyota sold an electric version of its RAV4 SUV for about $42,000 (it has a top speed of 78 mph and a range of between 80 and 120 miles) until 2003, while at one time Nissan offered an electric station wagon called the Altra. While the cars listed above are low production models, the era of high volume electric vehicle manufacturing is nearing rapidly. GM is backing a new electric vehicle for release in late 2010, the Chevy Volt. Although it will have a gasolinepowered generator which runs if the charge in the batteries is depleted, the Volt is designed to run fully on electricity using lithium-ion batteries. GM calls this system “E-Flex.” The $30,000 sedan will be able to run at full speed for about 40 miles (a range long enough to allow for typical city driving, with plug-ins at home or work between trips). This vehicle’s entry into the marketplace is so timely that it may turn out to be the car that saves GM. The Detroit firm hopes that at least 1 million E-Flex vehicles will be produced yearly by 2020. Renault-Nissan is heavily committed to electric vehicles as well. The company plans to launch an electric car in the U.S. market in 2010. The car will be designed to have a range of 100 miles and performance comparable to that of a V-6 gasolinepowered car. A quick plug in of about one hour will deliver a recharge of about 80% of the batteries’ capacity. GM is collaborating with utility companies in nearly 40 states to work out issues relating to power grids and the added demand that electric vehicles pose. GM and other manufacturers are working on computer chips and software to imbed in electric vehicles that will communicate with utility systems regarding the best times to recharge for the best prices. Recharging on a summer afternoon, for example, would put a strain on grids already powering air conditioners while off-peak charging would not only be cheaper but more efficient since power plants typically have excess electrical capacity at night. Some utilities are promoting electric vehicles. Austin Energy of Austin, Texas will offer a $1,000 incentive to plug-in car drivers.


There are many obstacles to all-electric vehicles. The biggest potential problems are battery capacity and battery cost. Lithium-ion batteries are becoming more powerful and efficient thanks to technological breakthroughs like those of startup manufacturer A123Systems. Lithium ion batteries faced multiple technical problems as of late 2007. The batteries have shown a tendency to overheat, catch fire or explode. However, A123Systems is building batteries made of nanoparticles of lithium iron phosphate modified with trace metals instead of cobalt oxide. The result is a more stable power source with twice and much energy as nickel-metal hydride batteries. Over the long-term, watch for further advances in battery technology that may fuel vehicles for up to 300 miles per charge. That could make a tremendous difference in consumer interest. In France, electric cars are popular enough to inspire plans for models from manufacturers including Renault SA. and Societe de Vehicules Electriques (SVE, a part of Dassault Group), which ran a successful 2005 trial of eight experimental electric mail delivery vans for La Poste, the French postal service that now plans an all-electric fleet by 2013. Both manufacturers are using expensive and lithium-ion batteries. China is building electric-powered sedans as well. The Miles XS500 may go on sale at dealerships in the U.S. in late 2009. The $35,000 sedan has a 120-mile range and its American importer, Miles Electric Vehicles hopes to sell 30,000 of them in 2010. The big news in electric cars is a radical concept spearheaded by Shai Agassi, formerly of enterprise software giant SAP. Agassi’s startup, called Better Place, is promoting an electric grid that dispenses power in a business model similar to cellular telephone service. Drivers would plug into convenient power stations and pay for their choice of plans: unlimited miles, a monthly maximum or pay as they go. Under one potential business model, cars would be purchased from the grid operator at low cost or even for free (again, very similar to the way cellular phones are sold), and batteries would be replaced at no charge when needed. Profits would be generated entirely by the sale of electricity by the minute. Better Place calls its grid the Electric Recharge Grid Operator (ERGO). Its job is to not only supply the electricity, it would also monitor the electricity needs of the cars on the road, their locations, supply directions to drivers for the nearest power supply and negotiate with the local electricity utility with regard


to the current power supply and pricing. Add to that the manufacture of the fueling “stations” and the cars themselves, and Better Place has its work cut out for it. Agassi and his staff have made major strides in reaching their goal of independence from oil. As of early 2008, Better Place had negotiated with the Israeli government to alter its tax code to make electric vehicles attractive to consumers. The tax proposal calls for a 10% tax on zero-emission vehicles and a 72% tax on traditional vehicles that run on gasoline. Better Place hopes to have 500,000 recharge points throughout Israel, and has similar plans for Denmark and Portugal. Meanwhile, Agassi signed an agreement with Carlos Ghosn, CEO of Nissan and Renault, to develop the cars. In addition, Better Place raised $200 million in capital from Israeli investor Idan Ofer, U.S. investment bank Morgan Stanley and venture firms VantagePoint Venture Partners and Maniv Energy Capital. A prototype vehicle has been built using a Renault Megane sedan as a base, and the country of Denmark signed on in March 2008 when its largest utility, DONG energy, pledged to supply electricity largely produced by wind farms. The cost savings to drivers promise to be substantial. Better Place figures a driver getting 20 mpg in a traditional car and clocking 15,000 miles per year at $4 per gallon would spend about $3,000 for fuel. Better Place’s fuel costs for the same 15,000 miles is projected to be approximately $1,050. Stay tuned for more developments on Better Place’s grid operator and vehicles. Internet Research Tip: Electric Cars For the latest on electric car manufacturers see: Better Place, www.betterplace.com Commuter Cars Corporation, www.commutercars.com Electric Drive Transportation Association, www.electricdrive.org Global Electric Motorcars, www.gemcar.com Tesla Motors, www.teslamotors.com Wrightspeed, www.wrightspeed.com ZAP, www.zapworld.com 13) Hybrid Cars Gain Market Share Toyota and Honda have been selling hybrid gasoline/electric cars in the U.S. since 2001. Sales of Toyota’s Prius in the U.S. reached more than 100,000 for the full year in both 2005 and 2006. During 2007, sales soared to more than 178,000. Toyota reached an impressive milestone in 2007, when total global


sales of all of its hybrids during all of the years they had been available topped 1 million. For the longterm, Toyota hopes to further fuel hybrid sales through the introduction of advanced lithium ion batteries, as opposed to the nickel-metal-hydride batteries it now uses. However, lithium ion batteries are faced with safety problems when crushed or overheated. Therefore Toyota has delayed the release of the new model in the U.S. until early 2011. The delay also affects the release of hybrid versions of the Tundra pickup and the Sequoia SUV. In 2007, U.S. hybrid sales accounted for 2.2% of the U.S. market according to research and marketing firm R.L. Polk & Co. Overall, new hybrid vehicle registrations reached 350,289 in the U.S., up 38% over 2006. A typical hybrid design places two engines in a vehicle, one a traditional internal combustion motor and the other electric. The traditional engine powers the car at startup and when accelerating, and charges the electric engine’s battery (separate from the gasoline-powered motor’s battery). When slowing down or idling, the standard engine shuts down and the electric motor takes over. The batteries are also charged when a car is rapidly decelerating, bleeding off forward momentum to power the generators. Gas mileage of up to 60 mpg of city driving can be achieved in some models. The downside: hybrid cars can cost $2,000 to $10,000 more than their standard powered counterparts, and many drivers have found actual fuel efficiency to be vastly lower than EPA estimates. The base price for the 2009 Toyota Prius is $20,680. Toyota has enjoyed phenomenal demand for its Prius hybrid car. The Japanese firm responded by building a new, half-mile-long assembly line capable of turning out one Prius per minute. Toyota hopes to increase U.S. sales of the Prius to 600,000 vehicles yearly by 2012 or so. Honda is also hoping to get back into the hybrid market after discontinuing its Insight model due to poor sales. A hybrid Civic will hit showrooms in 2009, one of four hybrid models planned for release by 2015. Hybrids from the Big Three are on the roads and in the pipeline for additional releases. 2008 models included the Chevrolet Tahoe and Malibu hybrids, the Chrysler Aspen and Dodge Durango hybrids and the GMC Silverado, Sierra and Yukon hybrids. 2009 hybrid models include the Cadillac Escalade, the Chevrolet Silverado Crew Cab, the Ford Fusion and the Mercury Milan. Other successful hybrids are produced by Lexus, a division of Toyota. The Lexus RX400h, based on


the extremely popular RX330 crossover, was the first. The hybrid version was launched in the U.S. in spring 2005, powered by its high-performance Hybrid Synergy Drive system. A pair of electric motors powers both front and rear wheels, in a system that can be configured to boost either total power or fuel economy. For 2008, the RX400h had a base price of $43,480; a large increase, as much as $5,000, over the price of the standard-power RX350, but that hasn’t stopped it from selling quickly. Toyota is rolling out additional hybrid models, both in the Lexus and Toyota brands, including the $100,000 luxury LS600h sedan, which combines a 12-cylinder combustion engine with an electric engine. In December 2004, GM began a partnership with DaimlerChrysler and BMW in a hybrid technology joint venture. Instead of focusing on small models, the GM-DaimlerChrysler-BMW initiative is taking the technology GM developed for 335 buses currently on the streets of 18 U.S. cities and putting it into trucks before modifying it for smaller vehicles. Unlike the hybrid engines licensed by Toyota, the collaboration is developing “two mode” systems, which mount two relatively small electric motors inside the vehicle’s transmission housing. In addition, the system uses two sets of gears configured to assist large vehicles under highway driving demands such as quick acceleration and high loads and/or towing. The first models from this collaboration, the hybrid Chevy Tahoe and the GMC Yukon, launched in late 2007 as 2008 models. “Displacement on demand” features will disable some of the gasoline engines’ cylinders when decelerating or cruising, thereby further increasing fuel efficiency by up to 20%. Volkswagen, which has historically focused on clean diesel technology, is joining the hybrid party by collaborating with China’s Shanghai Automotive Industry Corporation in the development of a minivan. The hybrid Touran minivan is expected to be in mass production by 2010. Nissan also plans to enter the hybrid arena by 2010. The latest news in hybrids is Plug-in Hybrid Electric Vehicles (PHEV). Ideally, a plug-in hybrid automobile features an extra high-capacity battery bank that gives the vehicle a longer electric-only range than standard hybrids. These cars are designed so that they can be plugged into a standard electric outlet for recharging. The intent is to minimize or eliminate the need to use the car's gasoline engine and rely on the electric engine instead. Manufacturers are sitting up and taking notice.


Toyota recently announced a PHEV version of its popular Prius to be ready for delivery by 2010. Daimler has been testing 40 of its Sprinter delivery vans developed Europe that utilize diesel-electric plug-in technologies. 14) Clean Diesel Technology Gains Acceptance During the early 1980s, when U.S. drivers were still reeling from Arab oil embargos and fuel rationing, diesel-powered cars were particularly popular in the U.S. Mercedes-Benz made a very high-quality line of diesels at that time, and about 75% of its cars sold in the U.S. were diesel-powered. Diesel cars unfortunately proved to be noisy, polluting and unreliable in many cases. However, new, advanced diesel engines appear to be making a comeback in the U.S. In Europe, extremely fuel-efficient diesels, ranging from Volkswagens to BMWs, achieving from 40 to 99 mpg, account for about 55% of all cars sold. Diesels of this type tend to be small and very inexpensive to operate. This is important in Europe, where parking places are hard to find and fuel is quite expensive. European diesel fuel has long had lower sulfur content that that sold in the U.S., which makes the European version cleaner. New systems are also in place that utilize filters to reduce nitrogen-oxide emissions, such as Daimler’s BlueTec. U.S. environmental regulators, particularly in California, are beginning to make encouraging comments about diesel technology. In late 2006, the U.S. government began requiring oil companies to produce the low-sulfur diesel. That, combined with cleaner emissions provided by systems like BlueTec and 40% better mileage then conventional gasoline engines, is making diesel powered cars an attractive commodity in the U.S. Robert Bosch, a German components maker, forecast that the market for diesel vehicles will rise from 6% in 2008 to 15% of total U.S. vehicle sales by 2015. J.D. Powers estimates that the number of diesel-powered vehicles sold in the U.S. will more than double by 2012. The fact is that diesel vehicles can be very efficient, and the diesel option can add less cost per vehicle than a hybrid option. A diesel engine creates more power than a gasoline engine from a similar amount of fuel. Volkswagen, BMW, Mercedes-Benz, Honda and Kia, among others, are launching 20 new diesel models in the U.S. starting in 2008. However, high U.S. diesel fuel prices may put a spoke in marketing efforts. Adding insult to injury is the added costs of transitioning to low-sulfur diesel fuel and a higher federal excise tax (24.4 cents per


gallon or 6 cents higher than on regular gasoline). U.S. diesel drivers were paying more than ever before to keep their vehicles on the road. However, as fuel prices begin to drop thanks to falling crude oil prices starting in mid-2008, diesel drivers may once again enjoy lower overall fuel bills. European manufacturers have also been quick to point out diesel vehicles’ ability to go farther on each gallon of fuel. Volkswagen already offers a diesel engine option to U.S. consumers for its New Beetle, Jetta, Passat and Touareg models. The German company launched an updated diesel Jetta in markets from coast to coast in 2008. Jeep, a Chrysler vehicle, offers a diesel version of its small Liberty SUV as well as its larger Grand Cherokee. Honda is getting into the diesel act as well. It plans to introduce cleandiesel cars in the U.S., perhaps by 2009, that meet California’s soot and nitrous oxide emissions standards, and use 30% less fuel than gasoline engines. Honda’s 2.2 CTDi diesel-powered Civic is already sold in the U.K., and the firm hopes to bring them to the U.S. in 2010. It is rated at 55.4 mpg combined city-highway mileage per gallon, compared to only 50 mpg for a hybrid-powered Civic and 33 mpg for a gasoline-powered Civic. Clearly, since it costs only small amount more than that gasoline-powered model, the diesel offers true advantages. Honda engineers are also working on a larger V6 clean diesel that will power bigger cars than the Civic. Mercedes, a Daimler subsidiary, began selling its E320 CDI BlueTec diesel in the U.S. in 2004. With fuel economy rated at 23 mpg in the city and 32 on the highway, the car, which has a 2008 sticker price of about $52,000. It is not a pokey underperformer— this diesel Mercedes goes from zero to 60 miles per hour in a relatively quick 7.1 seconds. “CDI” stands for common-rail direct injection, a technology that also makes diesels allowable in the U.S. regulatory environment. It uses precise, electronic fuel injection that enables the engine to put out more power and less pollution while achieving better fuel economy. Toyota, hoping to join the clean diesel party, acquired a 5.9% stake in Isuzu Motors in 2006. The acquisition affords Toyota Isuzu’s clean diesel technology. Meanwhile, ultra-low-sulfur diesel fuel was introduced at retail pumps in October 2006 in the U.S. New EPA emissions rules will be in effect across America in 2009 requiring that diesel engines meet exacting standards for low air pollution. The new clean diesel fuel eliminates 97% of sulfur


emissions. While it has been impossible for automakers to sell diesel-powered cars in all 50 U.S. states in the past, due to tough state-level emissions regulations in five states including California, new technologies combined with the new clean diesel fuels should ease the problems. A recent study by the EPA projects that Americans would burn as much as 1.4 million fewer barrels of oil daily if one-third of all light-duty vehicles in America were running on modern diesel engines. Put another way, that amount is about equal to U.S. daily oil imports from Saudi Arabia. The advent of biodiesel, a fuel derived when glycerin is separated from vegetable oils or animal fats is altering the landscape in a small way. The resulting byproducts are methyl esters (the chemical name for biodiesel) and glycerin, which can be used in soaps and cleaning products. It has lower emissions than petroleum diesel and is currently used as an additive to that fuel since it helps with lubricity. A small, but growing, number of public filling stations are offering biodiesel, and it is also available from some petroleum distributors. 15) Natural Gas-Powered Vehicles Off to a Slow Start Cars and trucks that run on either compressed natural gas (CNG) or liquid natural gas (LNG) are already widespread, especially in municipal fleets and school buses. Approximately 130,000 vehicles run on natural gas in the U.S.; worldwide, it’s around 2 million. Natural gas is an attractive technology, not only because it is highly developed, but also because it is economically feasible and environmentally friendly. While initially costing as much as $8,000 more per vehicle than standard fuel equivalents, natural gas engines save 15% or more on fuel costs, making the investment potentially worthwhile over the long term. Emissions are 35% lower overall, and have much lower concentrations of polluting particles and harmful gases. Recognizing the possible economic benefits, UPS has put about 1,500 natural gas trucks in service to haul its packages, including test trucks running on compressed natural gas, liquefied natural gas or propane. Meanwhile, the 2009 Honda Civic GX is the only production natural gas-powered passenger sedan on the U.S. market. Its sticker price is a modest $24,590 and up to $7,000 in state and federal tax credits are available. The downside is that there are only about 1,600 CNG stations in the U.S., making refueling difficult; and the gas tank holds the equivalent of a mere eight gallons of gasoline. However, growing


numbers of driver are looking for economical as well as environmentally friendly alternative such as the Civic GX. 16) Homes and Commercial Buildings Go Green In an increasingly growing trend, many homebuilders across the U.S. are constructing homes in accordance with the National Association of Home Builders’ (NAHB) “green” specifications. These specifications require resource-efficient design, construction and operation, focusing on environmentally friendly materials. Today’s much higher energy costs are spurring this trend. In addition, local building codes in many cities, such as Houston, are requiring that greater energy efficiency be incorporated in plans before a building permit can be issued. There are several advantages to building along eco-sensitive lines. Lower operating costs are incurred because buildings built with highly energyefficient components have superior insulation and require less heating and/or cooling. These practices include using oriented strand board instead of plywood; vinyl and fiber-cement sidings instead of wood products; and insulated foundations, windows and doors. Low-maintenance landscaping demands less water and weeding. Heating and cooling equipment with greater efficiency is being installed, as well as dishwashers, refrigerators and washing machines that use between 40% and 70% less energy than their 1970s counterparts. Even toilets are more efficient than before. Current models use a mere 1.28 gallons of water per flush, as opposed to four gallons in the 70s. The main disadvantage is that this kind of building is often more expensive than traditional construction methods. Added building costs often reach 10% and more per home; however, some homebuyers are willing to pay the increased price for future savings on utilities and maintenance. In addition, some consumers are inclined to spend more when they feel they are buying environmentally friendly products, including homes. (Marketing analysts refer to this segment as “Lohas,” a term that stands for “Lifestyles of Health and Sustainability.” It refers to consumers who choose to purchase items that are natural, organic, less polluting and so forth. Such consumers may also prefer products powered by alternative energy, such as hybrid cars.) The U.S. government and all 50 states offer tax incentives in varying amounts to builders using solar technology. A handful of “zero-energy homes” that produce as much electricity as they use are being


built. (For examples, see www.zeroenergy.com.) By installing photovoltaic panels to generate electricity and using improved insulation and energy-efficient appliances and lighting, the zero-energy goal is achieved, at least in sunny climates such as those in the American West and Southwest. In the commercial sector, businesses may have several reasons to build greener, more energyefficient buildings. To begin with, long-term operating costs will be lower, which will likely more than offset higher construction costs. Next, many companies see great public relations benefit in the ability to state that their new factory or headquarters building is environmentally friendly. Many office buildings, both public and private, are featuring alternative energy systems, ultra-high-efficiency heating and cooling, or high-efficiency lighting. In California, many public structures are incorporating solar power generation. Even building maintenance is getting involved— building owners are finding that they can save huge amounts of money by scheduling janitorial service during the day, instead of the usual after-hours, afterdark schedule. In this manner, there is no need to leave lighting, heating or cooling running late at night for the cleaning crews. An exemplary green office building is Bank of America Tower (formerly One Bryant Park), a 54story skyscraper on the Avenue of the Americas in New York City. Scheduled to be completed in 2008, the $1.2-billion project will be constructed largely of recycled and recyclable materials. Rainwater and wastewater will be collected and reused, and a lighting and dimming system will reduce electrical light levels when daylight is available. The building will supply about 70% of its own energy needs with an on-site natural gas burning power plant. When the project is complete, it is expected to be the first skyscraper to rate platinum certification by adhering to the Leadership in Energy and Environmental Design (LEED) standards, set by the U.S. Green Building Council in 2000 (see www.usgbc.org). A growing number of buildings are being retrofitted to use energy more efficiently. One example is the initiative underway at Citigroup, Inc. The banking firm is turning off lobby escalators, incorporating more natural light and using recycled materials in dozens of its properties around the world. Citigroup says it can save as much as $1 per square foot a year by making its offices more efficient. Elsewhere, Google, Inc. installed a solar rooftop at its California headquarters in 2007, and retail chains


such as Wal-Mart and Kohl’s are installing solar panels on their California stores. LEED standards have been adopted by companies such as Ford, Pfizer, Nestlé and Toyota, which have all built LEED-certified structures in the U.S. In addition, the standards have been adopted by 25 states and 48 cities for government-funded projects, including New York, Los Angeles and Chicago. Industry analysts estimate the value of government-financed construction projects at $200 billion per year. The world’s largest green building is currently the Palazzo resort in Las Vegas, which is more than four times larger than the previous holder of the largest green building title, the 1.5 millionsquare-foot David L. Lawrence Convention Center in Pittsburgh, Pennsylvania. The Palazzo, a $1.9 billion, 3,000 room resort adjacent to the Venetian, boasts a 75% reduction in irrigation needs, a solarheated swimming pool system, room air conditioning controls that automatically set back by several degrees when guests are not present and interior plumbing fixtures that use 37% less water than conventional fixtures. The Green Building Council expects to certify as many as 5,000 U.S. homes as LEED by early 2008, with penetration into more areas of the country. Furthermore, the NAHB estimates that 10% of new homes in the U.S., at a market value of $38 billion, will be eco-friendly by 2010, up from 2% in 2005. LEED is not without competition. Another green verification program called Green Globes is backed by the Green Building Initiative, a group led by a former timber company executive and funded by several timber and wood products firms. As of 2008, 14 states had adopted Green Globes guidelines instead of those supported by LEED for governmentsubsidized building projects. Green Globes is more wood friendly than LEED, which is not surprising considering the involvement of the timber industry. It promotes the use of wood and wood products in construction with fewer restrictions than LEED, which approves of wood if it comes from timber grown under sustainable forestry practices approved by the Forest Stewardship Council, an international accrediting group. In a similar vein, the Environmental Protection Agency (EPA) established WaterSense, a voluntary public-private partnership program to promote waterefficient products and services; and EnergyStar, a program that promotes energy efficiency. WaterSense certifies low-flow toilets that use a mere 1.28 gallons per flush, creates standards for bathroom-sink faucets that flow a no more than 1.5


gallons per minute and offers a certification program for irrigation companies that use water-efficient practices. EnergyStar homes are at least 15% more efficient than homes built to the 2004 U.S. residential code. Since 2005, retail giant Wal-Mart has been pursuing an aggressive policy to reduce energy use in its stores. The company is investing $500 million to reduce greenhouse gas emissions from its stores and distribution centers by 20% through 2012. The firm also pledged to increase the fuel efficiency of its trucking fleet by 25% by the year 2008, and up to 50% by 2015. Moreover, Wal-Mart opened two high-efficiency test stores in McKinney Texas and Aurora, Colorado in 2005, followed by the opening of a store in Kansas City, Missouri in January 2007 that meets the 20% energy reduction goal. The firm plans to design a new store concept that is at least 25% more energy-efficient than its current stores by 2009. Wal-Mart started retrofitting some stores so that they use solar panels in 2007. Green building materials suppliers are enjoying booming business, while traditional material sales have slumped. According to the U.S. Census Bureau, sales of lumber and construction materials fell 12% in December 2006 from the same month in 2005. Meanwhile, Honeywell International, Inc. saw sales of its energy-efficient “expanding” foam insulation rise by 20% and Carlisle Co.’s Ecostar roof shingles made of recycled rubber jumped 35%. Internet Research Tip: Green Buildings For a look at government-sponsored projects in green commercial buildings, see: 1) Rebuild America, www.rebuild.gov 2) U.S. Green Building Council, www.usgbc.org In Europe, the EU has mandated that member states revisit building codes every five years and create standards of energy efficiency. Buildings are also required to submit an energy certificate that can be shown to prospective buyers and renters. Elsewhere, nations such as Japan that are focused on becoming much more energy-efficient are emphasizing the use of green methods in new construction. 17) Fuel Efficiency Becomes a Key Selling Element/Stiff Emissions Standards Adopted in Several States Prices at the pump averaged around $1.93 per gallon across the U.S. in the summer of 2004. By the summer of 2008, self-serve gas well exceeded $4.00


per gallon across the country, but eventually fell below the $2.00 mark when crude oil prices began to drop. The fluctuating market for gasoline has many consumers reconsidering the vehicles they are willing to drive. Light trucks, usually defined as minivans, pickups and sport utility vehicles (SUVs), are quickly losing share to smaller, more fuel-efficient vehicles. This is very bad news indeed for the Big Three (General Motors, Ford and Chrysler). U.S. carmakers in recent years have seen 60% or more of their unit sales in America to be in pickups, SUVs and minivans. Asian car manufacturers Honda, Kia, Hyundai and Nissan offer product lines comprised of more than 50% sedans or smaller vehicles. This is not to say that light trucks no longer sell in America. In fact, they remain a very large market, although much smaller than in the past. In mid 2008, light trucks were about 50% of the combined car/light truck market. The difference is that consumers are now more likely to buy a much smaller vehicle, unless they really need a truck, SUV or minivan in order to carry their typical loads. Light trucks are still needed by certain consumers and by many types of businesses, regardless of the fact that the cost of filling them with fuel has soared. To put this in perspective: In 2004, light truck sales hit their peak in the U.S., selling 8.49 million units or about 55.5% of car/light truck sales combined. For 2008, the number of light trucks sold will be down to about 7 million, at about 50% of the combined U.S. market. One maker, Ford, expects its sales of light trucks to decline from about 70% of its unit volume in 2004 to only 38% in 2010. Carmakers are suffering greatly, not only from a huge drop in total units sold, but also from a devastating drop in sales of those light trucks, where gross profits per unit were in the $10,000 to $15,000 range, many times higher than the profits made from small cars. In the U.S. market during August 2008, auto dealers offered huge incentives and discounts to customers who purchased light trucks. The Chevrolet Silverado pickup sold more than any other vehicle that month, at 55,765 units, but that was nonetheless a 17.4% decline from units sold in August 2007, not quite as bad as the 41.5% decline in sales of the Ford F-Series trucks, which sold 40,429 units in August 2008. The Camry and Accord were the number two and number three selling vehicles that month, at 44,064 and 43,614 units respectively. Ford F-Series light trucks came in fourth. The fifthbest selling vehicle was the Chevy Impala, at 30,271 units, up 21.4% over the same month of 2007. The


Impala offers a relatively large interior and trunk, while delivering as much as 29 mpg on the highway for the 2009 model. In December 2007, the U.S. federal government signed a fuel efficiency bill into law that requires automakers to raise their average combined gas mileage fleet-wide to 35 miles per gallon (mpg) by 2020 for all cars and light trucks. The government then established a further requirement of 31.6 mpg for all cars and trucks by 2015. The new requirements sparked a furor of protests from automakers, especially U.S. firms which currently produce large numbers of light trucks and powerful sports sedans with lower gas mileage. According to Global Insight, GM, Ford and Chrysler will have to invest nearly $31 billion to meet the 31.6 mpg fleet-wide standards by 2015 and 2020, an investment that they may not be able to afford. Toyota, Honda and Nissan need to invest about $15 billion since their vehicles are closer to meeting the new standards. Hyundai Motor Co. made headlines in late 2008 when it announced that its Hyundai and Kia cars will meet the 35 mpg, required by 2020, standard as early as 2015. According to the U.S. Environmental Protection Agency, the top fuel-efficient automotive models are hybrids produced by Toyota and Honda. The Toyota Prius (48 mpg in the city/45 mpg on the highway) tops the list and the Honda Civic Hybrid (40/45 mpg). The Honda Insight previously topped the list in 2006 and 2007 with mpg figures as high as 61 in the city. (Note: Hybrid vehicles tend to have higher mpg numbers for city driving than for highway driving due to their use of electricity when idling.) However, sales of the tiny Honda Insight were so slow that the company dropped the model, to be replaced with a new hybrid model in model year 2009. Not surprisingly, lightweight, advanced diesel models rank highly for mileage, including the Volkswagen Golf TDI, Jetta TDI and New Beetle TDI, which average 38 mpg in the city and 46 mpg on the highway. In Europe, about one-half of all new passenger vehicles sold are diesel-powered. CAFE (corporate average fuel economy) standards were first issued by U.S. federal regulators in the 1970s as a method of setting average fuel economy standards for carmakers. Currently, each manufacturer is required to achieve an average of 27.5 mpg on each passenger car they build and 22.5 mpg on pickups, minivans and SUVs. This means that an automaker could build a fleet of gas-guzzlers,


as long as its line of compacts brought the average for all models within the accepted range. The 2007 federal law comes after the State of California adopted stiff regulations on its own in September 2004. The California Air Resources Board voted unanimously to adopt regulations to improve average fuel economy by as much as 40% by 2016. Moreover, the state adopted greenhouse gas regulations that require a major reduction of automotive emissions. California standards have a decided impact on manufacturers since that state accounts for 10% of all new auto sales in the U.S. The state, long known for setting the strictest standards for emissions, is requiring new cars and light trucks to emit 30% less carbon monoxide, 20% fewer toxic pollutants and as much as 20% fewer smog-causing pollutants than current federal standards. A number of states, including Connecticut, New York, New Mexico, Oregon and Washington, have already passed similar legislation, while Arizona, Colorado, Florida, Illinois, Minnesota and Utah are actively considering imposing similar limits. Meanwhile, in 2008 the EU made a formal proposal for Euro VI emission standards to take effect starting in 2013. The proposal requires an 80% reduction of nitrogen oxide (NOx) and a 66% reduction of the particulate matter (PM) emission limit. Environmental groups lobbying for the new levels claim that these reductions can be accomplished by updating air conditioning refrigerants; designing more efficient transmissions, and making exterior designs more aerodynamic, while utilizing such things as turbochargers and cylinder deactivators in smaller, more efficient engines. These groups, spearheaded by an organization called the Union of Concerned Scientists, project that these changes can be made at a cost of $1,960 per vehicle, and that the costs will be recouped by savings at the gas pump. Auto industry spokespeople claim that many of the proposed changes are not feasible, and if they were, they would cost upwards of $4,360 per vehicle. Suits have been filed against California, charging that the state lacks the authority to implement rules that would impose such high costs. A study by the National Academy of Sciences projected that improvements of as much as 40% in gasoline-powered automobile fuel economy could be achieved within 10 to 15 years through the use of enhanced technologies. For example, advanced transmissions and fuel-injection systems could minimize fuel usage and curtail unwanted power loss.


While the manufacture of lighter vehicles could improve mileage, weight is not the single overriding factor. Technologies are available that could do wonders for fuel efficiency, although they would take considerable time, money and effort to fully deploy. A study, prepared in part by John DeCicco at Environmental Defense, declared that the adoption of current and emerging technologies could drive the average efficiency of U.S. cars to 46 mpg and SUVs to 40 mpg. The study was co-authored by Feng An of the Argonne National Laboratory and Marc Ross, a physicist and automobile expert at the University of Michigan. They propose that two-thirds of the improvement would come from powertrain technology, while one-third would come from cutting three important factors: vehicle weight, air resistance and rolling resistance. Hyundai is focusing on technologies such as gasoline direct injection, dual continuously variable valve timing and eight-speed automatic transmissions in order to dramatically enhance mileage. A proven gas-saving measure is an inexpensive shift to a six-speed automatic transmission. The cost for the addition is a mere $400, but the measure can add one to two miles per gallon in efficiency. This kind of transmission is already being used in many new vehicles as of 2008. GM claims that an improvement of between 6% and 12% in fuel economy can be achieved through cylinder deactivation technology. In these systems, one-half of an engine’s cylinders stop firing once a steady cruising speed is reached. Another promising project is in the hands of MIT’s Plasma Science and Fusion Center. By combining turbo charging and direct fuel injection, plus mixing in the use of a small amount of ethanol, scientists working on the project believe that test engines’ power could be tripled. The idea is to increase the efficiency and power of small engines to the extent that they could be used in large vehicles such as trucks and SUVs with fuel economies equal to that of today’s hybrids. A bright spot on the fuel efficiency horizon is a new hydraulic-hybrid system that is being tested on large service vehicles such as garbage trucks and UPS delivery vans. The EPA’s National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan has designed a hybrid garbage truck that uses a diesel engine, assisted by a hydraulic pump and storage tank system, that replaces the drivetrain and transmission. The pump and tanks makes it possible to store and reuse energy normally lost when brakes are applied, thereby increasing fuel efficiency as much as 60%


and reducing carbon monoxide emissions by more than 40%. UPS is currently testing two hydraulichybrid vehicles. The EPA projects that the cost per vehicle to add the hybrid components is less than $7,000, while fuel savings over a 20-year lifespan could exceed $50,000. Internet Research Tip, Hybrid Commercial Trucks: Hybrid trucks and buses will soon be in high demand by major truck fleet operators such as UPS. For the latest information on pilot projects, technologies and fleet purchases, see the Hybrid Truck Users Forum. www.calstart.org/programs/htuf/ Another new technology of note is an artificial neural network. The network, which is composed of hardware or software models of neurons embedded on standard silicon chips, detects cylinder misfires and controls idle speeds, thus increasing fuel efficiency. These networks are already in use in large-engine vehicles such as Aston-Martin’s 12cylinder DB9 and Ford’s Econoline full-size van. DaimlerChrysler, GM and Audi are also working on implementing the technology for use in issues relating to variable valve timing and engine performance improvements. Serious measures such as these will have to be taken across the board by automakers in their vehicle designs in order to meet future emissions and efficiency stipulations. 18) The Industry Takes a New Look at Nuclear Power The first man-made nuclear fission reaction was achieved in 1938, unlocking atomic power both for destructive and creative purposes. In 1951, the first usable electricity was created via the energy produced by a nuclear reactor, thanks largely to research conducted in the Manhattan Project that developed the first atomic weapons during World War II. By the 1970s, nuclear power was in widespread use, in the U.S. and abroad, as a source of electricity. As of 2007, nuclear power provided about 19.3% of the electricity generated in the U.S., created by 104 licensed nuclear reactors. Nonetheless, the potential for accidents, meltdowns and other disasters has never been far from the minds of many consumers (after all, for many of us the first image that comes to mind upon hearing the word “nuclear” is a nuclear bomb). The 1979 Three Mile Island nuclear power plant accident in the U.S. led to the cancellation of scores of nuclear projects across the nation. This trend was later reinforced by the disaster at


Chernobyl in what was then the Soviet Union. Regulatory agencies took an even harder line on U.S. nuclear power plants, and the popular movie The China Syndrome highlighted the terrifying possibility of human error and hubris leading to a nuclear power plant meltdown on the California coast. During the 1980s, cost overruns on constructing and/or maintaining nuclear power generation plants got so out of hand that billions of dollars were lost on such plants by utility companies and their contractors. Bitter lawsuits resulted, and interest in nuclear power all but evaporated in America. However, skyrocketing and fluctuating prices for oil and natural gas in 2004-2008, combined with growing demand for electricity and concerns about the environmental dangers of fossil fuel emissions, have brought about renewed interest in the potential of nuclear power. Also of interest, the highly regulated and traditional nation of France was an early adopter of nuclear power. The French approved a single, very cost-effective nuclear plant design and built it over and over again around the nation. France currently gets about 80% of its electricity from nuclear sources. Many other nations create significant portions of their power from nuclear plants, including Belgium, Sweden, South Korea, Switzerland and Japan. South Korea’s electricity demand is expected to increase by 40% from 2006 to 2030. In order to meet that demand, it will have to add from nine to 13 new reactors. France’s use of nuclear power (along with extremely high taxes on fuel for automobiles and trucks) contributed greatly to the fact that it reduced its total use of petroleum by about 10% from 1980 through 2003.


SPOTLIGHT: AREVA Group 2007 Sales: $14.3 billion 2007 Profits: $860 million Employees: 71,000 Headquarters: Paris, France AREVA Group was created through the merger of AREVA T&D, COGEMA and FRAMATOME ANP, which combined the French Government’s interests in several nuclear power and information technology businesses. The CEA (Commissariat a l’Energie Atomique), the French atomic energy commission, owns 79% of the company. The firm has manufacturing facilities in over 43 countries and a sales network in over 100 countries. AREVA operates in four divisions: front-end; reactors and services; back-end; and transmission and distribution (T&D). Through the front-end division and whollyowned subsidiary AREVA NC, the company provides uranium ore exploration, mining, concentration, conversion and enrichment, as well as nuclear fuel design and fabrication. The reactors and services division offers design and construction services for nuclear reactors and other non-carbon dioxide emitting power generation systems. Through AREVA NP, which is 66%-owned by AREVA and 34%-owned by Siemens, the firm offers the design and construction of nuclear power plants and research reactors, instrumentation and control, modernization and maintenance services, components manufacture and the supply of nuclear fuel. The back-end division provides treatment and recycling of used fuel, as well as cleanup of nuclear facilities and nuclear logistics. The T&D division and whollyowned subsidiary AREVA T&D supply products, systems and services for all stages in the transfer of electricity, from the generator to the large end-user. In 2007, AREVA acquired mining company UraMin and a 51% stake in Multibrid, a German manufacturer of wind turbines. In January 2008, AREVA’s T&D division agreed to acquire Nokian Capacitors, Ltd., to reinforce its position in the ultra high-voltage market. Also in January, AREVA acquired a 70% stake in Koblitz, a provider of renewable source power generation solutions. Furthermore, in April 2008, AREVA acquired RM Consultants, Ltd., a nuclear safety consulting company. Later that year, AREVA sold its 30% stake in wind turbine manufacturer Repower. The company is also proposing to build a $2 billion centrifuge enrichment plant in Idaho that could break ground by 2010.


In the late 1990s, the U.S. Nuclear Regulatory Commission (NRC) began to extend nuclear reactor license periods from 40 years to 60 years, thereby significantly extending the life of existing reactors. Nuclear technology has progressed significantly since most U.S. reactors were built in the late 1960s and early 1970s. Modifications made to existing reactors, such as key systems upgrades, digitization and highefficiency mechanization, are helping many sites qualify for NRC relicensing. For example, a typical U.S. nuclear plant is online 90% of the time today, compared to less than 50% in the 1970s. The most recent reactor in the U.S. was built in 1996 at Watts Bar in Tennessee, after 23 years of planning and licensing and an investment of $7 billion. (Engineering giant Bechtel has been selected to complete Unit 2 at Watts Bar. The project will cost $2.5 billion and be online in 2012, with generating capacity to serve 650,000 homes.) In 1992, federal law changes streamlined the NRC licensing process, combining construction licenses with operating permits. The streamlined license is called a Construction Operating License (COL). There are dozens of new U.S. reactors currently under licensing review by the NRC, more than there have been since the 1970s. Many of these sites would be additions to existing nuclear generating facilities, such as those at Turkey Point near Miami and Comanche Peak in Texas. Each would cost between $4 billion and $12 billion, due to high costs for building materials including cement, steel and copper as well as shortages of skilled labor. In a bill signed by President Bush in August 2005, the U.S. federal government offers several incentives for the construction of new reactors. For example, government loan guarantees protect potential investors from risk premiums required by banks. Production tax credits are available, as well as up to $8 billion in federal subsidies. The first two new reactors built in the U.S. will receive as much as $500 million in risk insurance. Later projects will receive smaller amounts. Subsidies such as these are causing a boom in new reactor proposals, and some companies are skipping NRC mandated steps in their rush to get approval and break ground. More U.S. government news on the nuclear front includes the U.S.-India Nuclear Energy Accord, passed by the U.S. Congress in late 2006. The pact affords India access to U.S. civil nuclear technology so that India may reach its stated goal of producing 20,000 megawatts of nuclear power by 2020. The U.S. faces competition, however, for the estimated $100 billion budget set to build 30 reactors in India


by 2018. In September 2008, India signed an agreement similar to the U.S.-India Accord with France, opening the door for industry leader AREVA Group. Meanwhile, two Russian firms are helping to build a new Indian reactor. The proposal for the establishment of the $6billion Yucca Mountain nuclear waste repository in Nevada may very well make or break the nuclear power industry in the U.S. Proponents of the Yucca Mountain site, which would store waste 1,000 feet underground above another 1,000 feet of solid rock, maintain that one central depository is far safer than the current method of storing waste underwater near each reactor site. Waste would be transported to a central repository by truck and rail, and it would be sealed in armored casks designed to withstand puncturing and exposure to fire or water. It should be noted that in the more than 30 years of the nuclear age, more than 2,700 shipments of waste have been delivered to dump sites without incident. Even if final licensing is approved, the Yucca Mountain facility would take several years to complete and open. In October 2008, AREVA Group signed an contract with the U.S. Department of Energy to complete the facility design, provide consulting regarding licensing application and operate the existing facilities. The five-year contract, valued at $2.5 billion, has an option for an additional five years. Another underground disposal site project is in Finland at the Olkiluoto Nuclear Power Plant. The proposed waste site will store spent fuel rods in iron canisters sealed in copper shells to resist corrosion. The canisters will be placed in holes surrounded by clay far below ground. The project is slated for completion in 2020. The alternative to the storage of nuclear waste is reprocessing, in which spent fuel is dissolved in nitric acid. The resulting substance is then separated into uranium, plutonium and unusable waste. The positive side of reprocessing is the efficient recycling of uranium for further nuclear power generation. In addition, surplus plutonium can be mixed with uranium to fabricate MOX (mixed oxide fuel) for use in a commercial nuclear power plant. Traditionally, fuel for commercial nuclear power plants is made of low-enriched uranium. MOX fuel contains 5% plutonium. Commercial MOX-fueled light water reactors are used in France, the United Kingdom, Germany, Switzerland and Belgium. In the U.S., MOX fuel was fabricated and used in several commercial reactors in the 1970’s as part of a development program. The negative side of


reprocessing is that the resulting plutonium may be used for nuclear weapons; additionally, environmentalists are extremely concerned about the potentially high levels of radioactivity produced during reprocessing and the transportation of reprocessed waste. The Bush Administration unveiled the Global Nuclear Energy Partnership (GNEP) in 2006. This sizeable research partnership promotes the cooperative use of technologies such as reprocessing among nations that agree to employ nuclear energy for power generation uses only. GNEP is a long-term project that begins with $250 million in U.S. federal funding to study new nuclear technologies and estimate future costs. The U.S. Department of Energy predicts that 1,000 nuclear plants will be running worldwide by 2050, up from 439 in 2008. New technologies may enable construction of nuclear generating plants that are much less expensive to build and much safer to operate than those of the previous generation. Although nuclear power plants are far more costly to construct than plants producing energy from fossil fuels, they have lower operating costs. At one time, the Electric Power Research Institute (EPRI) projected that new reactors will be capable of producing electricity at about $49 per megawatt hour, compared to $55 per megawatt hour for gasified coal and $65 per megawatt hour for energy made from pulverized coal from plants that sequester carbon dioxide. However, fluctuating prices of oil, natural gas, coal and uranium make long term operating costs hard to predict. An international consortium, PBMR, Ltd. (www.pbmr.co.za), hopes to build “pebble-bed modular reactor” (PBMR) technology in a test project in South Africa. The plant would be a small, 110megawatt unit. Funding for this project is uncertain. Pebble-bed technology utilizes tiny silicon carbidecoated uranium oxide granules sealed in “pebbles” about the size of oranges, made of graphite. Helium is used as the coolant and energy transfer medium. This containment of the radioactive material in small quantities has the potential to achieve an unprecedented level of safety. The South African plant is slated for completion by 2014 at the earliest. A similar project is being carried out at the Tsinghua Institute of Nuclear and New Energy Technology in China. China is far ahead of the South Africans in this technology and actually has a working model. Even though this test prototype generates a relatively minute 10 megawatts (tested in January 2004), it is theoretically only a matter of


scaling up the design to create a commercially viable project. The best part of the Chinese design is modularity. It consist of small 200-megawatt reactors that can be grouped and chained into a single plant, making a more distributed energy model possible, where capacity can be upscaled as needed. In December 2006, Westinghouse, a major maker of nuclear power plants (and owned by Toshiba in Japan), announced a multi-billion dollar deal to sell four new nuclear plants to China. The deal, worth about $5 billion, includes work to be performed by U.S. engineering giant Shaw Group, Inc. AREVA Group also has a deal with China for two reactors and approximately 20 years worth of atomic fuel. Thanks to the nuclear efforts in China and other countries in the Far East, more than 20,000 megawatts of nuclear capacity have come online globally since 2000. In the U.S. a consortium called NuStart Energy was founded in 2003 that includes energy companies including Duke Energy, Entergy Nuclear and the Tennessee Valley Authority (TVA), as well as reactor builders Westinghouse and General Electric. The consortium’s mission is to obtain a Construction and Operating License (COL) from the NRC that was the result of the 1992 federally mandated change in licensing procedure. NuStart (www.nustartenergy.com) is also committed to the completion of engineering design for new reactors in the U.S., the first since the 1970s. NuStart made its start in September 2005 with the selection of two potential sites for new reactors: Grand Gulf, located near Port Gibson, Mississippi and owned by a subsidiary of Entergy; and Bellefont, located near Scottsboro, Alabama and owned by the TVA. Rather than using pebble-bed technology, NuStart is promoting the use of water-cooled reactors. Its next step is to seek COLs for the sites from the NRC. SPOTLIGHT: Fusion Power As opposed to nuclear fission, nuclear fusion is the reaction when two light atomic nuclei fuse together, forming a heavier nucleus. That nucleus releases energy. So far, fusion power generators burn more energy than they create. However, that may change with the construction of the International Thermonuclear Experimental Reactor (ITER) in Southern France. To be completed in 2016 at a cost of about $11.7 billion, the reactor is a pilot project to show the world the feasibility of full-scale fusion power.


SPOTLIGHT: Hyperion Power Generation Santa Fe, New Mexico startup Hyperion Power Generation (HPG, www.hyperionpowergeneration.com ) is working on utilizing technology from nearby Los Alamos National Laboratory for a nuclear battery. The unit, which is a little less than five feet wide, can produce more than 25 megawatts for five years, or enough to power about 25,000 homes. The battery runs on uranium hydride which, in addition to providing fuel, regulates power output so the possibility of a meltdown is almost nil. There are no moving parts, and the unit can be buried underground for additional safety. The company claims that the cost of each unit will be far less than the price for building and operating a natural gas plant with the same capacity. HPG has backing from venture capital firm Altira. 19) Nanotechnology Sees Applications in Fuel Cells and Solar Power—Micro Fuel Cells to Power Mobile Devices Potential methods of generating energy with nanotechnology are nearly boundless. However, the most immediately promising possibilities are for solar power and fuel cell power. Michael Graetzel, a Swiss scientist, invented a new kind of solar cell that uses dye molecules and titanium dioxide. This enables manufacturers to place highly efficient and versatile solar cells in flexible plastic sheets, rather than the traditional glass and silicon cells. Konarka Technologies, Inc., with U.S. offices in Lowell, Massachusetts (www.konarkatech.com ), has a portfolio of more than 200 global patents and patent applications for its technology. Its solar cells, based on Graetzel’s work, are literally printed out on long sheets of plastic that can be cut into virtually any shape or size, making them ideal for a variety of applications, including large architectural installations and in the field with portable electronics or in places where there are no power lines. Another player in the solar power arena is Nanosolar, Inc. www.nanosolar.com, a Palo Alto, California-based company that secured 647,000 square feet of solar cell and panel manufacturing space in early 2007. By December 2007, the company shipped its first product, the Nanosolar Utility Panel, for use in a power plant in Eastern Germany. The firm has an advanced technology that prints nanodots onto thinfilm solar cells. Also in 2007, researchers at Rensselaer Polytechnic Institute in New York unveiled an energy technology that can be used as a battery (used to power devices slowly and steadily), a capacitor (used


for quick charges such as those used in camera flashes) or both. The device mixes carbon nanotubes with cellulose, creating a sheet of two layers of nanotubes with a lithium coating. The result is a power source that works in extreme heat or extreme cold and can be rolled, folded or cut like paper and still operate at maximum performance. Another plus is that the device uses a solvent rather than poisonous chemicals, which makes it a potential power source for medical applications. Watch for further developments in cellulose nanotube manufacturing which will make practical applications possible. Another way that nanotechnology may impact solar cells is the use of quantum dots instead of silicon. Quantum dots, which are nanoscale semiconductor crystals, could significantly lower the cost of photovoltaic cells. In 2006, Victor Klimov of Los Alamos National Laboratory in New Mexico demonstrated that quantum dots have the capability to react to light and store energy more efficiently than silicon. Although scientists are years away from actually manufacturing usable quantum dot solar cells on a commercial scale, the technology has been established. Meanwhile carbon nanohorns, a variation of carbon nanotubes, are being used in fuel cells to make them lighter, cheaper and more efficient. Smart Fuel Cell AG (www.smartfuelcell.ag), based in Germany; NEC, the giant Japanese electronics firm; and several other companies are creating such fuel cells for use in mobile phones and laptops. As these fuel cells become more compact, powerful and longer lasting, many other applications will become available for both mobile and set devices. In June 2004, Toshiba announced the world’s smallest directmethanol fuel cell (DMFC). Capable of delivering 100 milliwatts, the tiny fuel cell could power a portable MP3 player, for example, for about 20 hours without refueling. By September 2005, Toshiba had developed a 300-milliwatt fuel cell that could run a small mobile device for 35 hours. Toshiba unveiled its latest prototype fuel cell powered laptop in late 2007. 20) Polymers Enable New Display Technologies with PLEDs (Polymer Light Emitting Diodes) State of the art LEDs (light emitting diodes) have the potential to greatly reduce energy usage while providing very high quality lighting and displays. In addition, solar power is now being combined with the latest LEDs to create fully-renewable energy light sources.


The LED was first developed in 1962 at the University of Illinois at Urbana-Champaign. LEDs are important to a wide variety of industries, from wireless telephone handsets to signage to displays for medical equipment, because they provide a very high quality of light with very low power requirements. They also have an extremely long useful life and produce little heat output. All of these characteristics are great improvements over a conventional incandescent bulb or the LCD (liquid crystal display). On a groundbreaking day in 1989 at Cambridge University, researchers discovered that organic LEDs (OLEDs) could be manufactured using polymers. The plastic substance known as PPV (polyphenylenevinylene) emits light when layered between electrodes. The resulting product is referred to as a PLED (polymer light emitting diode). Soon, many industries realized the advantages of PLEDs as display devices that emit their own light. In contrast, the older LCD (liquid crystal display) technology works on a system whereby a separate light source has to be filtered in several stages to create the desired image. PLED is more direct, more efficient and much higher quality. PLED is also an excellent system for the manufacture of extremely thin displays that can work at very low voltage. The useful life of a PLED can be 40,000 hours. Advanced displays utilizing PLED can be viewed at angles approaching 180 degrees, and they can produce quality images in flat panels, even at very low temperatures. Cambridge Display Technology (CDT, www.cdtltd.co.uk), points out several exciting uses for these polymer LEDs that may develop over the mid-term. For example, the low energy requirements of PLEDs could be used to create packaging for consumer or business goods that have a display incorporated into the front of the package. This display could provide a changing, entertaining and highly informative description of the product to be found within the package. In 2006, the technology was put to use in ink jet printing applications developed in a partnership between CDT and H.C. Starck, an international conglomerate of chemicals and electronics companies. Toshiba used CDT’s technology in a 20.8-inch full color PLED television in 2007. Since PLEDs can be incorporated into flexible substrates, displays for advertising or information purposes can be built in the shape of curves. The possibilities are nearly endless. Most likely, new uses will develop as larger and larger numbers of PLEDs are manufactured and higher volume leads to lower prices. CDT was acquired by Sumitomo Chemical Company in 2007.


For example, Canadian technology firm Carmanah Technologies Corp. (www.carmanah.com) combined LEDs with solar panels for use in marine buoys. It has expanded further into lighting products for airfields, railways and general outdoor lighting, providing lights that are easy to install as well as powered entirely by renewable solar energy. 21) Coal Is Abundant/Clean Coal and Coal Gasification Technologies Have Promise In 2006, global production of coal rose 4.5% to 3.03 billion tons of oil equivalents, while coal consumption rose a mere 0.7%, according to BP plc. In 2007, global production rose to 3.17 billion tons of oil equivalent and consumption jumped a significant 4.5%. While coal is an abundant resource in many parts of the world, it is generally burned in a manner that creates significant amounts of air pollution. On a global scale, coal produces more carbon dioxide than any other fossil source. “Clean coal” technologies are in the works, but such technologies are difficult for small projects or Third World nations to afford. In the U.S., coal comes from several different regions. The Northern Appalachian area of the Eastern U.S. and the Illinois Basin in the Midwest produce coal that is high in sulfur, which produces more pollutants. In contrast are the enormous stores of coal in Wyoming and Montana, which burn at lower temperatures and produce less energy than high-sulfur coal, but create less pollution. In existing mines, the U.S. has about 250 billion tons of recoverable coal. Combined with coal seams outside of mines, the U.S. has 500 billion tons of recoverable coal. Demand in Europe is rising. In 2008, Italy’s major electricity producer, Enel, began converting a major power plant in Civitavecchia from oil to coal to save on costs. Between 2008 and 2013, Italy may double its reliance on coal. In other European countries, as many as 50 coal-fired plants will be constructed in the next five years, sparking mounting concern about climate change. The market for higher-sulfur coal is on the rise, since advanced filtering units called scrubbers are in use by a growing number of electric generating companies. Scrubbers are multistory facilities that are built adjacent to smokestacks. They capture sulfur as the coal exhaust billows through the smokestack and sequester it for storage before it can be cleaned. In a similar vein, scientists at the University of Texas are developing a new technology that blasts sound waves into the flue ducts of coal-fired power


plants. The noise, which registers at more than 150 decibels (about as loud as a jet engine at takeoff) causes tiny ash particles in the emission stream to vibrate and stick to larger ones, thereby making larger particles that are easier to capture by pollution control equipment like scrubbers. Yet another technology to reduce emissions is the use of photosynthesis to capture exhaust gases, such as CO2, from power plants. A company called GS CleanTech developed a CO2 Bioreactor that converts a concentrated supply of carbon dioxide into oxygen and biomass in the form of algae, which can then be converted into fuel (GS CleanTech was acquired by GreenShift Corporation, www.greenshift.com in 2007). Competitor GreenFuel Technologies (www.greenfuelonline.com) uses a different method of recycling carbon dioxide from flue gases, achieving the same end result: algae. An early test of GreenFuel’s reactor at the Massachusetts Institute of Technology promised the removal of 75% of the carbon dioxide in the exhaust sampled. Clean coal or coal-gasification plants could become a trend for electric generation plant construction over the long term. However, costs remain a significant obstacle. Such plants use a process that first converts coal into a synthetic gas, later burning that gas to power the electric generators. The steam produced in the process is further used to generate electricity. The process is called Integrated Gasification Combined Cycle (IGCC). While these plants are much more expensive to construct than traditional coal-burning plants, they produce much less pollution. Since the coal isn’t actually burnt, these plants can use lower-cost coal that is high in sulfur. In addition, such plants reduce the amount of mercury emitted from the use of coal by as much as 95%. Two existing “demonstration” plants use IGCC technology, built and operated with federal subsidies. They are located in Mulbery Florida, in operation since 1997, and West Terre Haute, Indiana, in operations since 1995. Japan has constructed a demonstration plant, the Nakoso Power Station at Iwaki City. American Electric Power (AEP), a Columbus, Ohio electric utility, reached an agreement in late 2005 with General Electric and Bechtel to design an IGCC plant. The first such plant could be operating by 2012 to 2013 at the earliest, at a cost of $2.23 billion. The firm received regulatory approval to build this plant in March 2008, for a New Haven, West Virginia location. AEP has also announced interest in building a similar plant in Ohio.


GE, Siemens and Mitsubishi are among major corporations active in IGCC technology. An additional step that can be added to IGCC plants is the capture or “sequestration” of carbon. The technology to do so already exists, as Norway’s Statoil has used it for years at its natural-gas wells in the North Sea. The sequestered carbon can be pumped underground, under the sea or mineralized for burial. It can also be used by oil and gas companies to force oil out of wells. However, the process of sequestration is extremely expensive, adding as much as 50% to the overall cost of a coal plant. South African fuel company Sasol Ltd. has had great success in making liquid fuel from coal that powers gasoline, diesel and jet engines. The Nazi party first used the technology, which is called Fischer-Tropsch after the German scientists who developed it, during World War II. In the decades since then, the technology has been refined and improved to the point that Sasol provides 28% of South Africa’s fuel needs and is expanding with gasto-liquids plants in Qatar and Nigeria. Many U.S. utility companies are waiting for federal regulations that require limited emissions before expending the capital on new plants that are capable of carbon sequestration. For example, Dallas, Texas-based utility company TXU planned to build 11 coal-burning plants in Texas by 2011 hoping to avoid costly restrictions on coal plant emissions and/or enjoy “allowances” due to the fact that the plants are to be built before the restrictions take effect. However, in 2007, eight of the 11 plants were scrapped when private investors acquired TXU for $45 billion. The reason? Traditional plants emit too much carbon dioxide and clean coal technology is too expensive. In a similar vein, more than 50 coal plant projects in several U.S. states have been cancelled or delayed since 2006, according to the National Energy Technology Laboratory in Pittsburgh. FutureGen, a project involving a utilities consortium funded by subsidies from the U.S. government, hopes to build a plant in Mattoon, Illinois to test cutting-edge techniques for converting coal to gas, capturing and storing pollutants and burning gas for power. Originally endorsed by President Bush, the project lost its government support in early 2008 when estimated costs almost doubled to $1.8 billion. By late 2008, efforts were being made to save the project in the U.S. Senate, and a great deal depends on the appointment of a new Secretary of Energy under President-elect Barack Obama.


An interesting side note to the use of coal is the recent use of jet fuel that is derived from coal. The U.S. Air Force, which spends billions of dollars each year on jet fuel, has been testing a blend of conventional petroleum-based jet fuel and synthetic fuel derived from gasification in aircraft since 2006. 22) Canada’s Tar Sands Production Reaches 1.4 Million Barrels per Day, But Operating Costs Are High The tar sands (also referred to as “oil sands”) found in Canada, Venezuela and other locations throughout the world were historically regarded as unrecoverable assets by many members of the energy industry. However, through a combination of decades of work, starting in the 1970s, and a rise in oil prices, the process of turning tar sands into crude oil has become a viable business. In the Athabasca field in the province of Alberta, Canada (due north of Montana on the U.S./Canada border), immense cranes wield vast scoops of tar sands. These scoops dump the sands into monstrous trucks nearly as tall as three-story buildings. The trucks burn 50 gallons of diesel per hour as they lumber along, each hauling 360-ton loads of tar-laden soil to giant tumblers and superheated cookers. A mixture of oil and sand with the texture of tar results, which morphs into heavy crude oil. This labor-intensive work is turning the black dirt of Athabasca into one of the greatest sources of oil in the world. Additional Alberta fields are in the Peace River and Cold Lake regions. The process and the technology used in tar sands has been a long time in coming. By 2003, a collection of startups and joint ventures, including major oil company partners, managed to streamline the process of mining, transportation and processing these tar sands so that the cost of turning two tons of tar sand into a barrel of crude oil was about $25. The price of harvesting the tar sands was still high, but it became an acceptable cost to help supply the voracious energy needs of the U.S. Unfortunately, the tar sands industry became something of a victim of its own success. Billions of dollars were poured into new facilities to mine and convert the sands to usable crude. Thousands of people were hired and moved to remote areas where workers were scarce, and housing and other services were even scarcer. Costs soared quickly, to the extent that the newest tar sands operations need lofty market values per barrel of oil in order to operate profitably. Tar sands contain bitumen, which is a tar-like crude oil substance that can be processed and refined


into a synthetic crude oil. Typically, tar sands are mined from vast open pits where deposits are softened with blasts of steam. The tar-like product that is mined from the sands is processed to yield synthetic light crude. At tar sands mines, natural gas is often used both to run large electric generating plants and to generate steam that is used to loosen deep deposits. However, the fact that large quantities of natural gas are used creates potential problems. First, this high-volume tar sands production is beginning to use a large portion of Canada’s natural gas output. Next, when natural gas prices rise significantly, tar sands production becomes less viable in economic terms. Fortunately, new technologies have the potential to greatly reduce the use of natural gas in this process. The tar sands industry is evolving, and the introduction of new energy sources and new technologies for these plants will take many years. One solution under consideration is the construction of a small nuclear generating plant in the tar sands region. The late-2008 slump in oil prices is deflating the tar sands boom, and prices for building and operating these plants may decline as a result. Royal Dutch Shell, for example, decided in late 2008 to delay a multi-billion dollar investment in tar sands plant expansion, hoping that shortages and costs will decline. How much of this mineral-rich black dirt is there? In Canada alone, where most of the tar sands projects are located, there may be as much as 1 trillion barrels of oil equivalent. (The U.S. Department of Energy estimated in 2005 that recoverable Canadian tar sands reserves amount to 174.5 billion barrels, which would rank in the same league as world-leading reserves in Saudi Arabia and Russia.) By 2008, Canadian tar sands companies were producing 1.4 million barrels of oil per day, up from about one-half million in 1996. Production in the province of Alberta alone grew by 61% between 2002 and 2006. Future production growth depends on whether oil prices remain high and environmental concerns are managed. The costs for developing a new tar sands operation had become so high by 2008 that market prices of at least $80 per barrel of crude could be required to justify the investment. At one time, Canadian and international energy companies were planning to invest almost $87 billion in oil sands development from 2005 through 2016. By 2008, costs had risen so steeply that even those figures were not sufficient to cover the facilities that were planned. For example, Petro-Canada


announced in September 2008 that estimated costs for Phase One of its Fort Hills project had soared to $28 billion, up 50% from mid 2007. However, many of those plans have been postponed due to 2008’s falling oil prices and global financial crisis. The Canadian Association of Petroleum Producers estimates that Canada’s tar sands production could reach 6 million barrels daily by 2030, an amount equal to more than one-half of Saudi Arabia’s current production. Massive tar sands deposits also exist in Venezuela. SPOTLIGHT: Tar Sands Operations at Suncor Energy Suncor Energy, www.suncor.com, is a unit of Sunoco with a history of production in the Alberta, Canada tar sands since 1967. Today, it has about 6,500 employees, and a wide variety of energy activities including natural gas, wind power, ethanol production and downstream operations. For 2008, it estimated oil sands production at 235,000 barrels per day, at a cash operating cost of $36.50 per barrel. It was near completion of a $2.3 billion expansion to one of two oil sands operations, which will give it capacity of 350,000 barrels daily by 2009. Capital spending in 2009 will total $6 billion, per an October 2008 announcement. Previously, the firm had budgeted $9 billion in capital expenditures, but market conditions led it to make a substantial reduction. Long term, the firm plans a $20.6 billion expansion to oil sands capacity, in a project called “Voyageur.” By the third quarter of 2008, the firm had already invested about $5.3 billion in Voyageur, but announced plans to delay targeted completion to about the end of 2012. When fully implemented, the Voyageur project will give Suncor an oil sands capacity of 550,000 barrels per day. 23) Oil Shale Sparks Continued Interest While the U.S. has much smaller tar sands deposits than those of Canada, it is rich in a different unconventional oil formation: oil shale. Oil shale is a rock formation containing the oil precursor kerogen, which can be processed into synthetic oil of very high quality, similar to sweet crude. Oil shale yields between 15 and 50 gallons of oil per ton of rock. Vast reserves are in the Green River Formation in the Western U.S., including parts of Colorado, Wyoming and Utah. The state of Ohio also contains large reserves. Oil shale poses huge implications for American consumption and for the world’s energy industry as a whole. For example, an area known as the Bakken Formation in North Dakota and Montana


was recently estimated to hold between 3 billion and 4.3 barrels of oil by the United States Geological Survey. While oil shale deposits can be found outside the U.S., including in China, the American deposits are of gargantuan size. By some estimates, U.S. shale may hold an astonishing 2 trillion barrels of oil equivalent. During the 1970s, after the oil embargo crisis, the federal government strongly encouraged both energy conservation and alternative production. In 1979, it established the U.S. Synthetic Fuels Corp., endowing it with billions of dollars for research and development of new fuels. As a result, major oil companies attempted to commercialize oil shale, but those efforts were largely abandoned by the 1980s as oil prices fell. There were also concerns about environmental damage from shale mining, and there were many technical hurdles to face. Commercial production seemed impossible. By 1985, Congress killed the Synthetic Fuels Corp. Today, producing oil from shale remains a major challenge, but the immense oil needs of Americans combined with fluctuating prices for petroleum means that oil shale will receive a new look by the industry. As long as the price of crude oil remains above $40, oil shale production may become attractive. For example, Shell Exploration & Production has a well-advanced test site in Colorado where it is attempting to perfect a technology that warms the kerogen while in the ground, by using heated rods that are sunk into layers of shale and then pumping out the resulting liquid. The system is called the In Situ Conversion Process (ICP). (See www.shell.com/us/mahogany/ for details.) ExxonMobil is researching similar technology called Electrofrac which cracks shale deposits with hydraulic pumps and then pours in electrolytic fluid to separate the kerogen from the rock. Shale deposits can be deep—up to hundreds of feet below the surface. Shell’s technology is moving ahead rapidly, with more than 200 oil shale development patents filed, it is the firm’s biggest R&D investment. Shell has even announced that it will work with the government of China to develop shale deposits there. Other firms seek to “mine” the rock and then process the oil from the shale using high heat in furnaces. There are vast ecological problems with this method, however, as the process is very similar to strip mining. To encourage production in the U.S., the Pentagon hopes to direct as much as one-fourth of its $5+ billion annual fuel budget toward oil produced from shale. More than 70% of the U.S.’s oil shale is


on federal land. The Energy Policy Act of 2005 opened the door to future oil shale development on this land, for companies willing to risk hundreds of millions of dollars in research and development for a potential production of millions of barrels of oil per day. 24) Superconductivity Comes of Age Superconductivity is based on the concept of using super-cooled cable to distribute electricity over distance with little of the significant loss of electric power incurred during traditional transmission over copper wires. It is one of the most promising technologies for upgrading the ailing electricity grid. Superconductivity dates back to 1911, when a Dutch physicist determined that the element mercury, when cooled to minus 452 degrees Fahrenheit, has virtually no electrical resistance. That is, it lost zero electric power when used as a means to distribute electricity from one spot to another. Two decades later, in 1933, a German physicist named Walther Meissner discovered that superconductors have no interior magnetic field. This property enabled superconductivity to be put to commercial use by 1984, when magnetic resonance imaging machines (MRIs) were commercialized for medical imaging. In 1986, IBM researchers K. Alex Muller and Georg Bednorz paved the path to superconductivity at slightly higher temperatures using a ceramic alloy as a medium. Shortly thereafter, a team led by University of Houston physicist Paul Chu created a ceramic capable of superconductivity at temperatures high enough to encourage true commercialization. In May 2001, the Danish city of Copenhagen established a first when it implemented a 30-meterlong “high temperature” superconductivity (HTS) cable in its own energy grids. Other small but successful implementations have occurred in the U.S. Internet Research Tip: For an easy-to-understand overview of superconductivity and its many current and future applications, visit the Superconductivity Technology Center of the Los Alamos National Labs: www.lanl.gov/orgs/mpa/mpastc.shtml Today, the Holy Grail for researchers is a quest for materials that will permit superconductivity at temperatures above the freezing point, even at room temperature. There are two types of superconductivity: “low-temperature” superconductivity (LTS), which requires temperatures lower than minus 328 degrees Fahrenheit; and “high-temperature”


superconductivity (HTS), which operates at any temperature higher than that. The former type requires the use of liquid helium to retain these excessively cold temperatures, while the latter type can reach the required temperatures with much cheaper liquid nitrogen. Liquid nitrogen is pumped through HTS cable assemblies, chilling thin strands of ceramic material that can carry electricity with no loss of power as it travels through the super-cooled cable. HTS wires are capable of carrying more than 130 times the electrical current of conventional copper wire of the same dimension. Consequently, the weight of such cable assemblies can be one-tenth the weight of old-fashioned copper wire. While cable for superconductivity is both exotic and expensive, the cost is plummeting as production ramps up, and the advantages can be exceptional. Increasing production to commercial levels at an economic cost, as well as producing lengths suitable for transmission purposes remain among the largest hurdles for the superconductor industry. Applications that are currently being implemented include use in electric transmission bottlenecks and in expensive engine systems such as those found in submarines. In 2008, SuperPower, Inc., an electric power component manufacturer in Schenectady, New York, produced a 1,311 meter (.814 mile) length of HTS wire, a new record for the industry. SuperPower recently completed the Albany Cable Project in which a 350 meter (1,148 feet) HTS underground cable was installed in the National Grid power system connecting two substations in Albany, New York. Another major player in HTS components is Sumitomo Electric Industries, the largest cable and wire manufacturer in Japan. The firm has begun commercial production of HTS wire at a facility in Osaka. Sumitomo is focusing its initial marketing efforts on U.S. utility companies, and has already made a bargain with Niagara Mohawk Power Corp., a utility company in upstate New York. In addition, Sumitomo has developed electric motors based on HTS coil. The superconducting motors are much smaller and lighter than conventional electric motors, at about 90% less volume and 80% less weight. Sumitomo is also part of the Japanese Frontier Research Group along with Fuji Electric Systems Co., Hitachi, Ltd. and the University of Fukui among others. As of 2007, the group was constructing the world’s first superconducting propulsion unit for use in driving propellers for marine engines.


Another leading firm, American Superconductor (www.amsuper.com), won a $90 million contract with the U.S. Navy for the design and optimization of the world’s first 36.5 megawatt HTS motor. The firm, along with its partner Northrop Grumman, announced the successful completion of factory acceptance testing of the unit in 2007. In addition, the firm is working closely with the Department of Energy’s Tennessee Valley Authority to utilize the same technology to deliver electricity grid stabilization products. The SuperVAR dynamic synchronous condensers are the result of the collaboration, and they serve as reactive power “shock absorbers” than can generate or absorb power from the electric grid as needed. In 2007, American Superconductor, along with French cable company Nexans, successfully tested the first power transmission cable made with second generation HTS wire. An approximately 98-foot cable transmitted 435 mega-volt-amperes (MVA) of power, or enough electricity to power 250,000 homes. As of 2008, American Superconductor was scaling manufacturing capacity for its second generation HTS wire, branded 344 superconductors, and projecting manufacturing costs for the new wire of up to five times less than first generation wire. Superconductive wire and systems have seen renewed interest from utilities and government alike after the August 2003-U.S. power outage. Superconductors have the ability to effectively replace overworked portions of the electric grid that contributed to the outage. Second-generation (2G) HTS cable has been developed, utilizing multiple coatings on top of a substrate. The goal is to achieve the highest level of alignment of the atoms in the superconductor material resulting in higher electrical current transmission capacity. This is a convergence of nanotechnology with superconductivity, since it deals with materials at the atomic level. Leading Firms in Superconductivity Technology: Sumitomo Electric Industries, Ltd., www.sei.co.jp American Superconductor, www.amsuper.com Nexans, www.nexans.com SuperPower, Inc., www.superpower-inc.com 25) Alternative Energy Attracts Significant Venture Capital Since 2001, clean technologies such as solar, wind, geothermal and fuel cells have attracted significant amounts of venture capital. Figures from


the National Venture Capital Association show U.S. venture capital investments in clean technology (“cleantech,” including alternative energy, pollution control, recycling and energy conservation) deals at about $500 million in 2002, growing to about $3 billion in 2007. Third quarter 2008 investments totaled $1.03 billion, with 2008 looking like a very strong year for such investments, despite the financial market meltdown. The largest venture investments in this field in 2008 included $300 million for Nanosolar, $200 million for SoloPower, $176.5 million for WinWind Oy of Finland and $140 million for Solar Reserve. The most promising companies continue to get the funding they need. However, funding in 2009 will be harder to come by for firms that do not have proven business models. If the Obama administration follows through with significant U.S.-government investment in conservation and renewable energy, investment in this sector will get a significant boost. Meanwhile, most publicly-held companies in the sector saw their stocks plummet in 2008. By early December 2008, for example, the WilderHill index of 43 cleantech stocks was down about 70% for the year. Clean, renewable energy startups will continue to be of prime interest to investors of all types, including venture capital firms (“VCs”). For example, respected VC management firm Battery Ventures reported in early 2008 that it was targeting 20% of its investments in cleantech. This is typical of other leading U.S.-based companies. However, the global financial crisis of 2008, combined with plummeting oil prices, will diminish the amount of money going into new cleantech companies over the short- to mid-term. While oil at $145 per barrel and natural gas at $14 per MCF made investors see immense potential in renewable energy and energy conservation, the vastly lower prices of late 2008 are a different matter. Using renewable supplies such as wind and solar still cost a great deal more for the energy delivered than using conventional oil, gas and coal-based power sources. Also, venture capital firms have suffered to some extent along with the rest of the global financial community. Many organizations that put large amounts of cash into VC pools have opted out of further investments due to their own concerns or shortages of cash. At the same time, it has become extremely difficult to sell a company or stage an IPO in order to reap an “exit” from an investment in a startup.


Meanwhile, companies that are receiving funds from venture capital managers may be forced to retrench, in many cases, as VCs are calling for lower overhead and tightened purse strings at startup firms in their portfolios.



Chapter 2 RENEWABLE, ALTERNATIVE & HYDROGEN ENERGY INDUSTRY STATISTICS Contents: U.S. Alternative Energy Industry Overview Global Alternative Energy Industry Overview Approximate Energy Unit Conversion Factors Average Heat Content of Selected Biomass Fuels Biomass Energy Resource Hierarchy Comparison of Alternative Fuels with Gasoline & Diesel Energy Consumption by Source & Sector, U.S.: 2007 Total Electrical Power Generation by Fuel Type, U.S.: 1980-2008 Net Electricity Generation from Conventional Hydropower by Sector & Region, U.S.: 2007-2008 U.S. Historical Hydroelectric Generation Compared to 16-Year Average for 1992-2007 Share of Electricity Generation by Energy Source, U.S.: Projections, 1980-2030 Energy Production by Fossil Fuels & Nuclear Power, U.S.: Selected Years, 1950-2007 Energy Production by Renewable Energy, U.S.: Selected Years, 1950-2007 Renewable Energy Consumption by Source: Selected Years, 1950-2007 Renewable Energy Consumption in the Residential, Commercial & Industrial Sectors: 2001-2007 Renewable Energy Consumption in the Transportation & Electric Power Sectors: 2001-2007 Summary of U.S. Ethanol & MTBE Production: September 2008 The Top 40 Ethanol Plants in the U.S.: 2007 The 10 Largest Nuclear Power Plants in the U.S.: 2008 Shipments of Photovoltaic Cells & Modules by Market Sector, End Use & Type, U.S.: 2005-2006 Shipments of Solar Thermal Collectors, U.S., 1998-2007 U.S. Department of Energy Funding for Scientific Research: 2007-2009 Federal R&D & R&D Plant Funding for Energy, U.S.: Fiscal Years 2007-2009

46 47 48 49 50 51 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69



U.S. Alternative Energy Industry Overview Energy Production

71,713

Tril. Btus

2007

DOE

By Fossil Fuels

56,499

Tril. Btus

2007

DOE

By Renewable Energy Power Sources

6,800

Tril. Btus

2007

DOE

Wood, Waste, Alcohol (Biomass)

3,584

Tril. Btus

2007

DOE

Conventional Hydroelectric Power

2,463

Tril. Btus

2007

DOE

Geothermal

353

Tril. Btus

2007

DOE

Wind

319

Tril. Btus

2007

DOE

Solar

80

Tril. Btus

2007

DOE

8,415

Tril. Btus

2007

DOE

By Nuclear Net Electricity Generation from Renewable Energy Sources

351.3

TWhs

2007

DOE

Conventional Hydroelectric

248.3

TWhs

2007

DOE

Biomass

54.7

TWhs

2007

DOE

Wood & Wood-Derived Fuels

38.6

TWhs

2007

DOE

MSW/Landfill Gas/Sludge Waste, Byproducts, Other Biomass

16.1

TWhs

2007

DOE

Wind

26.6

TWhs

2007

DOE

Geothermal

14.8

TWhs

2007

DOE

Solar

0.5

TWhs

2007

DOE

Estimated Renewable Electricity Generation Conventional Hydroelectric

461.5

TWhs

2010

DOE

297.5

TWhs

2010

DOE

Wind

74.2

TWhs

2010

DOE

Biomass

53.0

TWhs

2010

DOE

Municipal Solid Waste/Landfill Gas

21.7

TWhs

2010

DOE

Geothermal

17.5

TWhs

2010

DOE

Solar

2.4

TWhs

2010

DOE

Petroleum

39.3

%

2007

DOE

Natural Gas

23.3

%

2007

DOE

Coal

22.5

%

2007

DOE

Percent Share of Energy Consumption

Nuclear Power

8.3

%

2007

DOE

Renewable

6.7

%

2007

DOE

Biomass

52.5

%

2007

DOE

Hydroelectric

36.1

%

2007

DOE

Geothermal

5.2

%

2007

DOE

Wind

4.7

%

2007

DOE

Solar

1.2

%

2007

DOE

U.S. Wind Generating Capacity

1,300

MWs

1990

AWEA

U.S. Wind Generating Capacity

21,017

MWs

3Q 2008

AWEA

Number of U.S. Onroad Alternative Fuel Vehicles Made Available

1,017.8

Thous.

2006

EIA

352.3

Thous.

2007

EIA

Hybrid Electric Vehicle Sales DOE = U.S. Department of Energy

Btu = British Thermal Unit

AWEA = American Wind Energy Association

TWhs = Terawatt-Hours

PRE = Plunkett Research estimate

MSW = Municipal Solid Waste

MW = Megawatt Source: Plunkett Research, Ltd. Copyright© 2008, All Rights Reserved www.plunkettresearch.com



Global Alternative Energy Industry Overview Number

Unit

Year

Source

240,300

MWs

2012

GWEC

94,005

MWs

2007

BP/BTM Consult

74,306

MWs

2006

BP/BTM Consult

59,398

MWs

2005

BP/BTM Consult

47,912

MWs

2004

BP/BTM Consult

Global Wind Power

Cumulative Installed Wind Turbine Capacity, End of Year (2012 is a projection.)

Global Geothermal Power

Cumulative Installed Geothermal Power Capacity, End of Year (2010 figures are projections.)

13,500.0

MWs

2010

GEA

10,700.0

MWs

2010

IGA

9,720.4

MWs

2007

BP/IGA

9,574.2

MWs

2006

BP/IGA

9,302.7

MWs

2005

BP/IGA

8,878.5

MWs

2004

BP/IGA

25,972

TTOE

2007

BP

20,328

TTOE

2006

BP

16,562

TTOE

2005

BP

14,190

TTOE

2004

BP

709.2

MTOE

2007

BP

697.2

MTOE

2006

BP

670.4

MTOE

2005

BP

644.7

MTOE

2004

BP

622.0

MTOE

2007

BP

634.9

MTOE

2006

BP

627.0

MTOE

2005

BP

625.4

MTOE

2004

BP

5,699,505

KWs

2006

BP/IEA

4,184,318

KWs

2005

BP/IEA

2,861,180

KWs

2004

BP/IEA

1,828,224

KWs

2003

BP/IEA

Global Fuel Ethanol Production

Production

Global Hydroelectric Power Consumption

Consumption*

Global Nuclear Power Consumption

Consumption*

Global Solar Power Cumulative Installed Photovoltaic (PV) Power (IEA Photovoltaic Power System Program Member Countries)

* Based on gross generation and not accounting for cross-border electricity supply. Converted on the basis of thermal equivalence assuming 38% conversion efficiency in a modern thermal power station. MWs = Megawatts

GWEC = Global Wind Energy Council

TTOE = Thousand Tonnes Oil Equivalent

BP = British Petroleum

MTOE = Million Tonnes Oil Equivalent

BTM Consult = BTM Consulting APS

KWs = Kilowatts

GEA = Geothermal Energy Association

IEA = International Energy Agency

IGA = International Geothermal Association

Source: Plunkett Research, Ltd. Copyright© 2008, All Rights Reserved www.plunkettresearch.com



Approximate Energy Unit Conversion Factors Crude oil1 To convert: tonnes

From Tonnes

2

kilolitres

Multiply by: 1

2

Kilolitres

barrels

US gallons

tonnes/year

1.165

7.33

307.86

–

1

6.2898

264.17

–

0.8581

Barrels

0.1364

0.159

1

42

–

US gallons

0.00325

0.0038

0.0238

1

–

–

–

–

–

49.8

tonnes to barrels

kilolitres to tonnes

tonnes to kilolitres

11.6

0.542

1.844

Barrels/day 1

2

Based on worldwide average gravity.

tonnes = metric tons

Products To convert: barrels to tonnes

From

Multiply by: 0.086

Liquefied Petroleum Gas Gasoline

0.118

8.5

0.740

1.351

Distillate fuel oil

0.133

7.5

0.839

1.192

Residual fuel oil

0.149

6.7

0.939

1.065

trillion British thermal units

million barrels oil equivalent

Natural Gas and Liquefied Natural Gas (LNG) To convert: billion cubic meters NG

From

billion cubic feet NG

million tonnes oil equivalent

million tonnes LNG

Multiply by:

1 billion cubic meters NG

1

35.3

0.90

0.73

36

6.29

1 billion cubic feet NG 1 million tonnes oil equivalent 1 million tonnes LNG

0.028

1

0.026

0.021

1.03

0.18

1.111

39.2

1

0.805

40.4

7.33

1.38

48.7

1.23

1

52.0

8.68

1 trillion British thermal units 1 million barrels oil equivalent

0.028

0.98

0.025

0.02

1

0.17

0.16

5.61

0.14

0.12

5.8

1

Units 1 metric tonne = 2204.62 lb.

1 kilocalorie (kcal) = 4.187 kJ = 3.968 Btu

= 1.1023 short tons

1 kilojoule (kJ) = 0.239 kcal = 0.948 Btu

1 kilolitre = 6.2898 barrels

1 British thermal unit (Btu) = 0.252 kcal = 1.055 kJ

1 kilolitre = 1 cubic meter

1 kilowatt-hour (kWh) = 860 kcal = 3600 kJ = 3412 Btu

Calorific equivalents: One tonne of oil equivalent equals approximately: 10 million kilocalories

Solid fuels

42 gigajoules

Heat units

40 million Btu

1.5 tonnes of hard coal 3 tonnes of lignite

Gaseous fuels

See Natural gas and LNG table

Electricity

12 megawatt-hours

Note: One million tonnes of oil produces about 4,500 gigawatt-hours of electricity in a modern power station. Source: BP, Statistical Review of Energy, June 2008 Plunkett Research, Ltd. www.plunkettresearch.com



Average Heat Content of Selected Biomass Fuels Fuel Type

Heat Content

Units

Solid Byproducts

25.830

Million Btu/Short Ton

Paper Pellets

13.029


Spent Sulfite Liquor

12.720


Railroad Ties

12.618


Utility Poles

12.500


Black Liquor

11.758


Sludge Wood

10.071


Wood/Wood Waste

9.961


Municipal Solid Waste

9.696


Agricultural Byproducts

8.248


Peat

8.000


Sludge Waste

7.512


Biodiesel

5.359

Million Btu/Barrel

Waste Alcohol

3.800

Million Btu/Barrel

Ethanol

3.539

Million Btu/Barrel

Methane

0.841

Million Btu/Thousand Cubic Feet

Digester Gas

0.619


Landfill Gas

0.490


Btu = British Thermal Unit Source: U.S. Department of Energy, Energy Information Administration Plunkett Research, Ltd. www.plunkettresearch.com



Biomass Energy Resource Hierarchy

Source: U.S. Department of Energy, Energy Information Administration Plunkett Research, Ltd. www.plunkettresearch.com



Comparison of Alternative Fuels with Gasoline & Diesel (Average Prices as of July 2008) Gasoline Octane Number

86 to 94

No. 2 Diesel

8 to 15

~25

Main Fuel Source

Energy Content per Gallon Energy Ratio Compared to Gasoline Physical State

Environmental Impacts of Burning Fuel

Compressed Natural Gas (CNG)

Electricity

120+

N/A

Underground reserves

Coal; however, nuclear, natural gas, hydroelectric and renewable resources can also be used.

Crude Oil

Crude Oil

Soy bean oil, waste cooking oil, animal fats and rapeseed oil

109,000 - 125,000 Btu

128,000 - 130,000 Btu

117,000 - 120,000 Btu (compared to diesel #2)

33,000 - 38,000 Btu @ 3000 psi; 38,000 - 44,000 @ 3600 psi

N/A

N/A

N/A

1.1 to 1 or 90% (relative to diesel)

3.94 to 1 or 25% at 3000 psi; 3.0 to 1 @ 3600 psi

N/A

Liquid

Liquid

Liquid

Compressed Gas

N/A

Produces harmful emissions; however, gasoline and gasoline vehicles are rapidly improving and emissions are being reduced.

Produces harmful emissions; however, diesel and diesel vehicles are rapidly improving and emissions are being reduced, especially with after-treatment devices.

Reduces particulate matter and global warming gas emissions compared to conventional diesel; however, NOx emissions may be increased.

CNG vehicles can demonstrate a reduction in ozoneforming emissions compared to some conventional fuels; however, HC emissions may be increased.

More than 1,100 CNG stations can be found across the country. California has the highest concentration of CNG stations. Home fueling has been available since the fall of 2005.

Electric vehicles have zero tailpipe emissions; however, some amount of emissions can be contributed to power generation. Most homes, government facilities, fleet garages, and businesses have adequate electrical capacity for charging, but special hookup or upgrades may be required. Over 600 electric charging stations are available in California and Arizona.

2.34

N/A

Fuel Availability

Average Retail Price (US$ per gallon)

Biodiesel (B20)

Available at all fueling stations.

Available at select fueling stations.

Available in bulk from an increasing number of suppliers. There are 22 states that have some biodiesel stations available to the public.

3.91

4.71

4.69 (Continued on next page)



Comparison of Alternative Fuels with Gasoline & Diesel (cont.) (Average Prices as of July 2008) Ethanol (E85) Octane Number

130+

Environmental Impacts of Burning Fuel

Fuel Availability

Average Retail Price (US$ per gallon)

Liquefied Petroleum Gas (Propane, LPG)

Methanol (M85)

120+

104

100

Corn, grains or agricultural waste

Natural Gas, Methanol and other energy sources.

Underground reserves

A by-product of petroleum refining or natural gas processing

Natural gas, coal or woody biomass

~80,000 Btu

Gas: ~6,500 Btu@3,000 psi; ~16,000 Btu@10,000 psi; Liquid: ~30,000 Btu

~73,500 Btu

~84,000 Btu

56,000 - 66,000 Btu

1.42 to 1 or 70%

N/A

1.55 to 1 or 66%

1.36 to 1 or 74%

1.75 to 1 or 57%

Liquid

Compressed Gas or Liquid

Liquid

Liquid

Liquid

E-85 vehicles can demonstrate a 25% reduction in ozoneforming emissions compared to reformulated gasoline.

Zero regulated emissions for fuel cell-powered vehicles, and only NOx emissions possible for internal combustion engines operating on hydrogen.

LNG vehicles can demonstrate a reduction in ozoneforming emissions compared to some conventional fuels; however, HC emissions may be increased.

LPG vehicles can demonstrate a 60% reduction in ozoneforming emissions compared to reformulated gasoline.

M-85 vehicles can demonstrate a 40% reduction in ozoneforming emissions compared to reformulated gasoline.

Most of the E-85 fueling stations are located in the Midwest, but, in all, approximately 150 stations are available in 23 states.

There are only a small number of hydrogen stations across the country. Most are available for private use only.

Public LNG stations are limited (only 35 nationally), and LNG is available through several suppliers of cryogenic liquids.

Propane is the most accessible alternative fuel in the U.S. There are more than 3,300 stations nationwide.

Methanol remains a qualified alternative fuel as defined by EPAct, but it is not commonly used.

3.27

N/A

N/A

N/A

N/A

Energy Content per Gallon

Physical State

Hydrogen

100

Main Fuel Source

Energy Ratio Compared to Gasoline

Liquefied Natural Gas (LNG)

N/A = Not applicable or not available. Source: U.S. Department of Energy, Alternative Fuels Data Center Plunkett Research, Ltd. www.plunkettresearch.com



Energy Consumption by Source & Sector, U.S.: 2007 (By Percent; Latest Year Available; Total Energy: 101.4 Quadrillion Btu) Sector, by Source Petroleum1: 39.8 Quad. Btu Transportation Industrial Residential & Commercial Electric Power Natural Gas2: 23.6 Quad. Btu Transportation Industrial Residential & Commercial Electric Power Coal3: 22.8 Quad. Btu Industrial Residential & Commercial Electric Power Nuclear Electric Power: 8.4 Quad. Btu Electric Power Renewable Energy4: 6.8 Quad. Btu Transportation Industrial Residential & Commercial Electric Power

70 24 5 2 3 34 34 30 8

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