Wednesday, October 03, 2007

Nobel Conference: Community Wind, Ethanol Investing

Yesterday was a long, but thoughtful day that ended with two excellent sessions: the first was a discussion of community-based wind energy and the last was gave a more global view of the energy sector in terms of venture capital investment.

Dan Juhl is a small wind aficionado that has worked extensively to bring community-based wind power to southwestern Minnesota. His information on community wind was really astounding, especially how much more a local community benefits from the wind power when they own the towers versus just leasing them.

Before community-based wind started taking off, most of the 600-700 turbines in the SW part of MN were owned by corporations like Florida Power & Light. Juhl and his consulting company estimates that $60 million each year was leaving the two county area where the turbines were located. So after years of lobbying and negotiating by many environmental, business, and ag groups, Minnesota now has a Community-Based Wind Energy Development law that structures loans in a way that makes it easier for communities to own the turbines.

The result has been about 130MW of community-based wind power and about $150 million in economic activity.

There's also been some really cool technology to assist with wind turbine maintenance: They now have small meters that sit on all the bearings of wind turbine. If something starts to slow down or acts funny, that meter will send a message to a computer telling you to "check on the bearing, otherwise if it keeps operating like this it will break down in 1.4 years." Is that amazing or what?

The next session was lead by Doug Cameron of Khosla Ventures (as in the Khosla who started Sun Microsystems). Khosla does venture capital funding in many energy sectors, but this lecture was about the future of biofuels and what the company thinks the next hot areas are. Here are some of his high level points:
  • Biodiesel's productivity per acre is unimpressive. Other fuels could be doing better. Dr. Lynd also agreed with this in his lecture, going so far as to say they should be completely taken out of the clean energy solution equation.
  • Adding hydrogen to the ethanol equation makes for a higher yield and emits no CO2 in the process. This is an area several companies are exploring. The catch is where you get your hydrogen (from natural gas or from splitting H20, which also requires energy to do).
  • There are 4 major areas of biofuels innovation that Khosla Ventures is tracking:
    • How much ethanol can we get corn or sugar (i.e. the yield)?
    • What are the byproducts?
    • What are the new feedstocks being used?
    • Are there even more efficient processes being developed?
Khosla Ventures is skeptical of the much-hyped "hydrogen economy" because of the massive infrastructure and storage issues. However, using hydrogen to improve the efficiency of ethanol is a very interesting investment area.

Cameron also highlighted two companies Khosla is currently investing in:
  • Verenium: The only public cellulosic ethanol company (public can invest in this one too)
  • LanzaTech: A New Zealand company tapping into waste streams to make ethanol - i.e. what is considered waste in other processes that we can use to make ethanol with?
The greatest challenge for ethanol is that it doesn't fit seamlessly into our infrastructure. Other fuels may be easier. When considering a new technology for investment or otherwise, ponder the perceived public crisis versus the perceived pain of adapting to that new technology.

Up next: Climate scientist James Hansen of NASA.

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