transportation

Snow on the San Gabriel Mountains (photo by Jerry Thompson1, CC 2.0 license)

On December 30 of last year (six days ago), my wife and I were in Pasadena, CA visiting the Greene and Greene exhibit at the Huntington Library. It was one of those glorious and rare smog-free days in the LA basin. The air sparkled, you could see for miles in every direction, and mountain range after mountain range was visible - all the way out to the snow-covered San Gabriels. Nowadays, the air is only ever this clear around the Christmas holiday, when the freeway traffic is substantially reduced and a lot of factories shut down for the week. It got me thinking about how the future - say ten to twenty years hence - may be unrecognizable in both dramatic and mundane ways. For example, smog-free days may no longer be rare in LA, once the economy has shifted off fossil fuels. (I suspect the traffic will remain, unfortunately!)

Like LA’s typical skies, the energy future is murky in the short term - this year and 2010 - and I’ll leave those predictions to others. But the big trends - sustainability, carbon fighting, and technological breakthroughs - enable us to make better sense of the mid- and long-term. Therefore, In the spirit of the New Year, the incoming administration, and the tipping point that the world has come to about climate change and sustainability, here are ten things I believe are very likely to happen in the next ten years.

1. Residential solar PV will be cost effective in most U.S. locations (via a combination of price reduction, new design thinking, much more efficient homes, and a carbon tax on fossil fuels).
2. Home energy storage - via batteries, hydrogen reforming, fuel cells, or other technology - will be available and installed in 10% of new homes in California, for when the sun don’t shine.
3. More than 10% of new homes in California will be zero-net energy.
4. 50% of new residential construction in California will be zero-net energy “ready.”
5. The current LEED standards will be considered obsolete.
6. More than 20% of peak grid electricity will come from excess capacity from residential solar PV.
7. There will be general consensus that efficiency and frugality alone will not provide enough CO2 mitigation to prevent major climate change - we will need a technological solution to actually reducing atmospheric CO2 or artificially cooling the earth.
8. There will be a mid-priced carbon fiber, plugin hybrid passenger car in production that gets more than 75 miles per gallon. The company making it will be the “next GM.”
9. 10% of the cars on the road will be powered by 100% renewable energy and will be essentially non-polluting.
10. New technologies for capturing carbon from the atmosphere will be available, powered by excess solar capacity.

What do you think? Am I off base here? Too optimistic? Too pessimistic? Let me know in the comments. I’d love to hear your thoughts, challenges, and predictions for 2018.

Zero-net Energy Series Coming Up

Over the next few weeks, I will be publishing a series on “zero-net energy” residences (related to predictions 1-6 above). This area is about to explode. We already have all the technology, and some people have the experience, to build “zero-net energy ready” houses cost effectively. And although there’s currently a premium to get to zero-net energy, over the next ten years this premium will go to zero, and probably it will be cost-effective to get to positive-net energy - where the house is generating more energy than it needs! Talk about a world-changing situation - it really is possible to have energy too cheap to meter, but it’s going to come off our roofs, not from a nuclear plant or one of those imaginary fusion reactors.

Old Windmill (image by waterwin, CC 2.0 license)

The results of this study on solutions to global warming, air pollution, and energy security, by Stanford professor Mark Z. Jacobson, are somewhat surprising, given the drumbeat from many areas on both nuclear and biofuels as necessary for the salvation of the world.

Jacobson analyzes 12 energy sources for their beneficial impact on global warming, air pollution, and energy security - the ten electricity sources are solar-photovoltaics (PV), concentrated solar power (CSP), wind, geothermal, hydroelectric, wave, tidal, nuclear, and coal with carbon capture and storage (CCS) technology; the two liquid fuel options are corn-ethanol (E85) and cellulosic-E85.

An article in Science Daily summarizes one of Jacobson’s conclusions:

Jacobson said that while some people are under the impression that wind and wave power are too variable to provide steady amounts of electricity, his research group has already shown in previous research that by properly coordinating the energy output from wind farms in different locations, the potential problem with variability can be overcome and a steady supply of baseline power delivered to users.

As the bottom line in the study, Jacobson writes:

In summary, the use of wind, CSP, geothermal, tidal, solar, wave, and hydroelectric to provide electricity for BEVs [battery electric vehicles] and HFCVs [hydrogen fuel cell vehicles] result in the most benefit and least impact among the options considered. Coal-CCS and nuclear provide less benefit with greater negative impacts. The biofuel options provide no certain benefit and result in significant negative impacts. Because sufficient clean natural resources (e.g., wind, sunlight, hot water, ocean energy, gravitational energy) exists to power all energy for the world, the results here suggest that the diversion of attention to the less efficient or non-efficient options represents an opportunity cost that delays solutions to climate and air pollution health problems.

Note that the study ranks the various energy alternatives without regard to cost. That’s going to be controversial. Jacobson says:

Costs are not examined since policy decisions should be based on the ability of a technology to address a problem rather than costs (e.g., the U.S. Clean Air Act Amendments of 1970 prohibit the use of cost as a basis for determining regulations required to meet air pollution standards) and because costs of new technologies will change over time, particularly as they are used on a large scale.

In the real world, costs do have a major impact, especially given that we do not have a Clean Air Act regarding carbon today. This is why it’s so important that the price/kW of solar panels, for example, is dropping and will continue to drop.

In fact, when you leave cost out of the equation, is it surprising which energy sources came out on top? Let me know your thoughts.

Some classic old GM cars (Image by thebi429, CC 2.0 license)

An article in today’s Seattle Times says that GM does know how to make good small cars, just not in the States:

Nearly three-fifths of General Motors’ employees make cars that are admired, popular and profitable. They just don’t work in the United States.

GM has a bigger presence and employs more people outside the United States than in it, and actually makes money selling cars around the globe. Its U.S. revenue has sunk 24 percent in the past three years, but in the rest of the world, GM can boast a 28 percent increase.

In Ford’s recent 2008 retrospective, they mention similar results - growth in Europe and Asia, production of lots of high mileage models outside the States, new fuel technologies, and so on:

• “Ford of Europe is offering its customers ultra-low CO2 alternatives for selected car lines with the launch of a new range of Ford ECOnetic models at the 2007 Frankfurt Motor Show”
• “Volume production of the new Ford Fiesta, the first of a generation of new global small Ford cars, started at the company’s Cologne plant in Germany”
• “Ford ranks highest in overall new-vehicle sales satisfaction in Indonesia, according to the J.D. Power Asia Pacific 2008 Indonesia Sales Satisfaction Index (SSI) Study”

So, my simple question is - why don’t they just make those cars here? Or at least ship some of them here and sell them?

The best pieces I’ve read on the auto industry bailout/failure/bankruptcy are Bob Sutton’s giant flame, “Thoughts About Why GM Executives Are Clueless And Their Destructive ‘No We Can’t’ Mindset” and Umair Haque’s “Detroit’s 6 Mistakes and How Not to Make Them.”

While neither of these articles are about green energy or hybrid cars or sustainability per se, they both get at some of the big issues that industry and finance worldwide have to overcome for the the world to change as it must.

Sutton is a measured and careful writer, whose primary beat as a teacher (at Stanford School of Engineering, B School, and D School), business consultant, and writer, is using effective techniques for creating innovation, and using evidence to understand whether the decisions you make are taking you in the right direction. His post, in a measured and careful way, excoriates GM for decades of practices that go against those precepts:

I could list hundreds of management, cultural, and operational reasons why I believe that GM is such a flawed organization, but to me, a pair of root causes standout: Most of the senior executives — and many of the managers — are (1) clueless about what matters most and (2) suffer from a “no we can’t” mindset.

Haque, on the other hand, looks to the good future of what he calls “the new rules of 21st century business,” using Detroit as the example of the old rules.

Old rule: Choose evil. Industrial era business is unrepentantly and almost sociopathically evil: shifting costs onto others, while striving to internalize benefits. Detroit chose lobbying, marketing wars, and low-cost hardball - to always and everywhere try to socialize costs and privatize benefits. Never was this truer than Detroit’s lobbying against public transport throughout the 20th century. Why does public transport in the States suck? Because Detroit’s lobbying machine doesn’t.

New rule? Choose good. In the 21st century, every moral imperative is also a strategic imperative: doing good - for customers, employees, suppliers, or society - is a radical strategic choice that unlocks new pathways to innovation and growth. The opportunity cost of defending evil for Detroit was never learning how to choose good - and that’s a crucial mistake other auto players didn’t make. Tata chose to make a car that was accessible to the world’s poor. Porsche and BMW chose to invest in talent, people, and imagination. Honda and Toyota chose to invest in renewables and partnerships with the public sector. All opened new avenues to growth for an industry at the brink of extinction.

Tomorrow I’ll be posting again about the auto industry, focusing on Obama’s pledge on Saturday for “public works on a massive scale” and Tom Friedman’s Sunday op-ed, in which he suggests we tie any bailout to a commitment by the car makers to having their entire fleets running on hybrid power plants in 36 months.

Garage of the Future (photo by Elsie esq., CC 2.0 Attribution License)

The Rocky Mountain Institute’s Andrew Demaria blogged a few weeks ago about “smart garages” that combine smart cars, a smart home network, and much smarter utilities into a synergistic system that optimizes power usage. After describing a “day in the life” of a smart garage:

Given the utility is experiencing a peak load period, it asks my house if it can use the spare power in the car’s battery and send that electricity elsewhere in the grid. What’s more, it will pay me for that power. Since I like being paid, I have already programmed the system to accept such requests.

The article then goes on to list the highlights of a recent Smart Garages conference organized by RMI. Attendees included representatives from auto manufacturers GM, Ford, and Nissan, utilities PG&E and Duke Energy, and consumer-focused companies Walmart and P&G.

Integrative design like smart garages requires all these organizations to work effectively together, based on official or de-facto standards. Although the cost of making such a transition will be hundreds of billions of dollars, the associated business opportunities, especially for those companies who can help tie all these disparate parts together, are commensurately huge.