Mr. Dawes Sr. If you invest your tuppence wisely in the bank, safe and sound, soon that tuppence, safely invested in the bank, will compound! And you'll achieve that sense of conquest, as your affluence expands! In the hands of the directors, who invest as propriety demands!

The lyrics to the song that follows this bit of wisdom in the musical Mary Poppins can be found here. The next song, Step In Time is much more energetic and it is perhaps understandable that a song about compound interest would fail to catch on.

We are seeing a lack of propriety these days in a number of financial transactions. The slicing and dicing of risk seems to have led to a questions of what value many securities have if any at all. But, if you want to take on projects that extend over a substantial period of time, credit markets are likely to be a part of what you do.

One thing we need to do is transform how we get energy and a number of options include long term components. Nuclear power, for example, extends so far into a climatically uncertain future that it is seeking extra help with finance through federal loan guaranties.

While renewable energy is forever, its implementation can be taken in 10 to 25 year chunks so it fits much better with standard lending terms. Further, risk is low so while raising capital though venture mechanisms can happen, it is also attractive to banks, especially since renewable energy equipment can serve as insured collateral. This is why so much of the financing for renewable energy is coming from institutions like Credit Lyonnais and Morgan Stanley especially in the commercial sector. In the residential sector, solar power equipment is being rolled into mortgages for new home construction while installers for existing homes are getting savvy at helping customers find financing through secured credit based on increased equity.

But, what if you want to follow the commercial sector model of separating ownership of the equipment from the use of the equipment in the residential sector. Individually financing each deal, as might work for supplying Walmart with solar power, becomes time consuming and thus expensive. What is needed is an aggregate instrument. One way that aggregation has been used with propriety is the securitization of leases. CVS, for example, financed its eastern expansion based on the security provided by the fact that it had property leases to conduct its business. This brought them lower cost financing since the aggregated leases were more secure than individual leases.

One way to secure low cost credit to allow the long term use of solar power on homes is to secure the credit on the basis of an aggregate of rental contracts which assure repayment of the debt. So long as those contracts are sufficiently attractive that few of them are likely to be broken (they save customers money) then you have a low risk security that does not require high interest. This is the form of financing that Citizenre (discussed here in February) has adopted for its solar power equipment rental business. Shaving the cost of financing puts it in a better competitive position than attempting to work out deal-by-deal financing, so much so, that it can afford to ignore state-level rebates available to individual purchasers of solar power equipment.

There is certainly room for venture capital in the solar power business, especially for high risk new technology development. But, for deployment of proven technology, the model being adopted in the commercial sector using more traditional financing leads to cost savings that are important for market competitiveness. Carrying this over to the residential market, with its much larger roof space resource, will likely rebalance the solar market towards an acceleration of its current 30% annual growth.

The closets of fossil energy are crammed full of skeletons. It is long past time to clean them out and as it turns out, renewable energy may need the storage space, not for skeletons, but rather to smooth the transition to full conversion to renewable energy.

Two newspaper articles are out talking about storage of renewable energy. Both articles fail to notice that the US grid already runs on about 20% stored renewable energy through hydroelectric power. About 24 GW of that capacity can run backwards rather than just throttle so we already have quite a lot of what we might need. And, the articles don't notice that distributed renewable power is not very intermittent. The wind is always blowing somewhere and clouds rarely cover all of a continent. The trick is to shuttle the power from where it is produced to where it is needed. If you have enough capacity to meet the peak use, then you don't really care about storing the extra power you don't need when you are using less, you just find something fun and interesting to do with it. Remember, renewable energy is extravagant. Think of the amazing fecundity and diversity of a rain forest. It is about prosperity not scarcity.

But, before we get to the point where we produce more energy than we use most of the time, methods of storage can help to retire fossil energy plants more quickly. So, lets just list the kinds of storage that are covered in the articles and on the Real Energy blog so we know a few of the options. We'll organize it in the types of energy physicists like to use.

Thermal:

Hot or cold, thermal storage adds a certain amount of extra time to use the energy. In some cases like the high thermal mass house, you are just avoiding using energy that you don't really need. The daily fluctuations of external temperature are not important with good insulation and a high heat capacity. In one article ice is used to shift electricity use from day time to night time and also save on over-all use while in the another, molten salts are used to keep solar energy for use at night. You can see how these might work together.

Chemical:

Batteries have the potential for large scale storage and are mentioned in both articles. The anticipated sizes run up to 6 MWh. The batteries mention in the article are not exactly flow batteries which are also used together with wind farms and run up to 12 MWh. The blog also looked at using ammonia as a chemical storage method and producing hydrogen for later use is also a chemical method though it experiences high thermal loses. Aluminum can also be used for chemical storage and used to produce hydrogen on demand.

Mechanical:

Here we have two choices, potential energy or kinetic energy. Both articles mention gas pressure storage, essentially a form of of potential energy similar to damming a river. The size of the facility mentioned is about 100 MW and presumably can run for a day or two. About half the energy comes from compressed air and half from natural gas. One article mentions flywheels which store kinetic energy. In this case the flywheel stores 18 MWs or 5 kWh. One can reduce the tensile strength requirements for a flywheel and increase its capacity by usinging a magenetic track. Then the strength requirements are compressive and much simpler.

Electrical:

Capacitors are used to store power when very large currents pulses are needed as for example in inertial confinement fusion. These capacitors store about 3 kWh. Super capacitors are less bulky and are being developed for transportation applications.

Magnetic:

Superconducting Magnetic Energy Storage is used in some applications with capacities moving toward 20 MWh.

Electromagnetic:

For very high energy density, excited nuclear states might be used. This is actually a new listing, but not very practical just now.

The complaint in the articles is that power storage adds cost to the the electric power distribution system. But, pretty clearly, the decreasing cost of renewable energy is making storage more attractive to utilities. Thermal storage in solar plants that work with thermal energy anyway is a natural extension to their capabilities. Similarly, those that work using chemical energy are designed to store energy from the beginning. It is clear that flywheel and magnetic storage are already being used for power conditioning. Very shortly, the cost of renewable power will drop well below the cost of other sources. For wind, it is already the cheapest way to produce power in many places. As it turns out, once we're ready to chase the skeletons our of the fossil energy closet, we'll be able to put in a great new closet organizer with slots for all kinds of storage that will make the dumping of the fossils all the more rapid. Energy storage is not an Achilles' heel for renewable energy, but rather a stepping stone to full deployment. Daniel Arvizu should know better.

The US negotiated the Montreal Protocol http://en.wikipedia.org/wiki/Montreal_Protocol in the 1980's to control chlorofluorocarbons which had been shown to disrupt the Earth's ozone layer, allowing ultraviolet radiation to penetrate to ground level. This treaty has, until recently, been considered one of the most successful international treaties ever made. Control of these chemicals has reduced the rate of destruction of the ozone layer, preserving both health and the productivity of agriculture.

The Montreal Protocol was taken an a model for the Kyoto Protocol, aimed at limiting the emissions of greenhouse gases which cause global warming. The problem of greenhouse gases is considered to be more difficult because the mechanism of replacement of chloroflurocarbons needed to make the Montreal Protocol work is not so clearly available for the most important greenhouse gas, CO2. Further, there was a large disparity in the level of greenhouse gas emissions between developed and developing countries and reducing greenhouse gas emissions was thought to impact economic development. So, developing countries were left out of the first round on emissions reductions and had no responsibility, on their own, to limit the growth of greenhouse gas emissions, but rather were to be a testing ground for the efforts of developed nations to assist in economic development while also helping to avoid some of the worst emissions.

While the US negotiated this treaty, there were clear indications that it could not be ratified without stronger commitments from developing countries. In essence, the US negotiated in bad faith.

Now, the problem of economic development is catching up with the Montreal Protocol as well. The substituted materials worked when the demand for them was limited largely to the developed nations, but now economic development has brought in a larger pool of demand http://www.nytimes.com/2007/02/23/business/23cool.html. The substitute chemicals, while better, do not bode well with a much increased load. The solution for this problem may well end up being further substitution such as magnetic refrigeration http://en.wikipedia.org/wiki/Magnetic_refrigeration. But the fact of the problem raises another issue. If the Montreal Protocol needs revision, who can provide the leadership to bring this about?

US leadership was crucial to both the Montreal and the Kyoto Protocols but US credibility now lies in shambles because in never intended to implement the second protocol. Yet, the US has most at risk should the first protocol not succeed since mid-latitude food production will be at risk. I would suggest that it is time to end the patronizing attitude that divides the world into developed and developing countries and admit that leadership could come from those who have been left out. China is already taking a lead on renewable energy http://www.earthtimes.org/articles/show/33389.html, and perhaps India could bring us together again on ozone depletion. Hey, Ross, what's that great whooshing sound?

It's everyone else filling the vacuum we've left in credibility space.

The NYT is reporting that the recent job loss in Silicon Valley is turning around. The reason: clean energy technology http://www.nytimes.com/2007/01/29/technology/29valley.html?_r=1&ref=science&oref=slogin. From the article:

After five years of job losses, Silicon Valley is hiring again. The turnaround coincides with a huge increase of investment in the emerging category of clean environment technology.

Now, slashdoters have certainly beat them to market in the residential sector http://mdsolar.blogspot.com/2007/01/slashdot-users-selling-solar.html but the larger commercial sector is wide open. The bandwagon is rolling owing to economic realities. The article also covers some Silicon Valley Blight issues.

As material from the web site of Sen. James Inhofe makes Slashdot's front page http://science.slashdot.org/article.pl?sid=07/01/18/0421242 in what is basically an ad hominum attach on a Weather Channel meteorologist, the tactics of ExxonMobil in using smoke, mirrors and hot air http://www.ucsusa.org/assets/documents/global_warming/exxon_report.pdf to slow our response to global warming is revealed by the Union of Concerned Scientists. From the Executive Summary:

In an effort to deceive the public about the reality of global warming, ExxonMobil has underwritten the most sophisticated and most successful disinformation campaign since the tobacco industry misled the public about the scientific evidence linking smoking to lung cancer and heart disease.

It goes on to say that information laundering was used to attempt to confuse the public.

If you don't know that fear, uncertainty and doubt (FUD) is being fed to you, how can you be sure your opinion is your own?

I've come across this site http://www.grassrootsfreedom.com/ which hopes to stop the lobbying reform, which is part of the first 100 hours package the democrats are passing, from applying to normal political organizing. Basically, you'd have to report to the government if you asked people to contact their representatives. So, on issues like net neutrality, or GPL'd software or intelectual property slashdot might be considered a lobbyist. The National Review http://article.nationalreview.com/?q=NDUxMzM5NmNiMjFkMThhMjgzZjhmMDkyZGVmYzBhZjk is up in arms as are a number of conservative groups that organize letter writing campaigns. Should slasdot organize a letter writing campaign about this?

Michael and Justine Willis Toms have been broadcasting for years on public radio and shortwave. Their program, New Dimensions, consists of hour long interviews in depth with people from all over the map. When I was in Hawaii I made time for two programs, both on the radio. One was a series of lectures by Alan Watts and the other was New Dimensions. When I came back to the East Coast, I missed those left coast salients into Hawaii's placid culture. Google helped me get back a bit of that when I found New Dimensions streamed at http://www.newdimensions.org/ with a program every week.

Recently, New Dimensions has expanded it's on line offering with a rotation of 6 programs, refreshed every week. This is called NDIR, New Dimensions Internet Radio. At the same time it has required a registration for the previous free offer of the program of the week. As I am writing, an interview with David Bohm ends and Larry Dossey begins. Later the Dali Lama will be followed by the pretty funny Swami Beyondananda. You can check it out at http://www.newdimensions.org/ndir-pop.html.

Now, why is this a slashdot topic? Real Player is very annoying. It does not work well as a radio. Especially, is does not have a timed off switch. So, because New Dimensions is something you want to listen to when you actually have the time to listen, and one of those times might be just before you go to sleep, here is a bash script to shut it down after an hour. This works with Fedora Core 6. It is crude, and it will mess with you're use of crontab so I've tied it to the gnome-cromagnon.png icon in it's applet launcher. Enjoy adding functionality to the intentionally broken Real Player.

date --date='1 hour' +%M' '%H' '%d' '%m' '%a' kill -9 ' > ctab2
ps x | grep real | grep Sl > ctab3
read realproc realprocext < ctab3
read killtime < ctab2
echo $killtime $realproc > ctab
crontab ctab

American vital interests in the Middle East, cited in the President's speech last night http://www.nytimes.com/2007/01/11/us/11ptext.html are really two fold. The first is that uninterrupted oil supplies be available and the second that theocratic states not become so powerful that they pose a challenge to our position as the only superpower. Our military presence in the region is related to the first interest while our support of Israel, Saudi Arabia, Egypt, Jordan, Lebanon, Pakistan, and a number of smaller Arab states is related to the second. They are also intertwined in the sense that our support of those states enables our military presence in the region through bases and ports which support logistics.

The strategic picture changes substantially if our interests change. The ability of theocraticists to imagine a strategically significant state is enabled by the presence of ready cash available through the sale of oil at prices much higher than the cost of production. Saudi oil income is easily diverted to theocratically minded organizations while Iranian oil income is already attached to such a system. In Iraq, oil revenues, such as they are, are also available to those who are sympathetic to the theocratic movement both legitimately and through massive corruption. In short, the theocratic movement is well funded because there is such a large cash flow to skim.

Changing this situation by eliminating our use of Middle East oil can only help. Oil is a global market, so eliminating our use of Middle East oil really means eliminating our use of oil altogether. Taking US demand for oil out of the market reduces the price of oil to much closer to its cost of production which is going up in the Middle East as more elaborate extraction methods are needed. The cartel structure for Middle East oil sales would have a hard time surviving a market with slim profit margins since production quotas would be difficult to allocate.

If America has no demand for oil, then our interests in maintaining the flow of Middle East oil devolve to support of our allies' needs for such a flow. However, our most important allies are already committed to reducing their use of fossil fuels generally (apologies to those down under) so it is not so hard to envision a world where the free navigation of the waters near the Middle East are of little strategic importance.

The technology is available now to eliminate our use of oil and to save money at the same time, so it seems like a strategic approach to the Middle East and Iraq would be preferable to the tactical approach the President is advocating.

Renewable energy is intermittent. Solar is in the day time, wind is available when it is available. But, one fine sunny cool breezy day our renewable capacity is going to meet total demand. What is a regulator to do? The renewables will be too dispersed to tell them to shutdown. All the rapid response generating capacity will already be shutdown because the renewables are free and who wants to compete with that. Hydro is in the middle of a mandated water allocation flow.

So, rather than blow the grid, the regulators will call the nuclear plant and tell it to go off line. But to do that, it has to shut down so it won't be up again for three days. A week later it happens again, and so it goes that spring and the next fall and all of a sudden, the cost of operation of the reactor just went through the roof. The nuclear industry whines about base load and all that but shortly the economics take over and that plant is decommissioned because it just isn't flexible enough to work in a renewables dominated grid.

At this point, or a little sooner, it is realized that what we really need is energy storage, fast in to handle over production, and slow out as a reservoir to handle night time. Any thoughts on what that technology would look like would be appreciated.

Solar photovoltaic power is competitive with retail electricity. If you could borrow at 3% and your electric bill were about $200 per month, you could buy a $30K solar PV system that produced all your power usage over the course of a year for the same amount that you pay for electricity now with a 30 year loan. This works in the states that have net metering laws. http://www.eere.energy.gov/greenpower/markets/netmetering.shtml

But, borrowing at 3% is little difficult to come by. Another way to look at it is that at today's retail rates for electricity, you get a 3% return on investment in a solar PV system. You'll get a higher effective rate of return if electric rates go up. This ties into inflation which might make borrowing even at a higher rate (than 3%) make sense but I'm not going to try to calculate that.

That said, venture capital has been moving into the solar PV market because solar is competitive at the retail level. One example where FedEx went solar is here http://www.powerlight.com/success/fedex.php.

At the corporate level that's fine. Big systems and big deals with risk management and all that. At the residential level, things are a lot slower. Enter a new player: http://www.citizenre.com/ which plans on renting solar PV systems to home owners for what their utility currently charges them for electricity. Their model for coming to market is like that of Amway: Multilevel marketing. They plan to begin installing in the Fall of this year (2007) and they are signing up customers now through a word-of-mouth campaign. How far will this go? I'm not sure, but they've doubled their customer base in a very short time (about a week) and they are approaching 3000 contracts now. That could be 3 million contracts in ten weeks if the viral marketing model works. I doubt that this can happen for practical reasons like server overload and the ability to build production facilities fast enough, but the eventual number of customers is not so unrealistic.

Another limit is the amount of net metering that states will allow as a percentage of total energy use. In Maryland, it looks like there is an out for the utilities at 34.7 MW of capacity http://www.energy.state.md.us/programs/renewable/solargrant/netmetering_statute.pdf which is not a lot.