Green Technologies For the Future
Eco-friendly innovations from a variety of companies are already making inroads in lives of average Americans. For instance, smart lighting and high-tech recycling are commonplace today. Average citizens already have conviction that technology will solve many environmental problems. Scientists and venture capitalists are rapidly pursuing these solutions in much the same way that our society embraced the computer revolution. Companies are racing to invent revolutionary new batteries and ultra-efficient solar panels.
In our day to day lives, there are many emerging green technologies that are functioning today and are already lowering energy consumption, reducing usage of finite materials and cutting costs for businesses and consumers alike. The following are some examples of technologies, business processes and innovations that are ready and are having an impact.
This is a brief view of alternative energy sources such as wind, solar and ethanol and the challenges of businesses in those fields.
The pioneers of green technology are focusing on handling shortages of materials, labor, and manufacturing capacity. They are working diligently on building new plants and reducing costs to make their products and services more competitive. In the U.S., the renewable-energy and energy-efficiency industries generated almost $1 trillion in revenue in 2007 and employed over 8 million workers base upon a study by Management Information Services in 2007.
Those numbers are growing exponentially. There is a stream of new eco-oriented companies, products and technologies from laboratories worldwide. The green sector continues to incubate new entrants rapidly. During the first half of 2007, according to Cleantech Network, venture capitalists invested $1.9 billion incubator money in U.S. and European startups, 10% more than during that period in 2006.
New energy technologies, especially in solar and biofuels, constitute the most common fields, incubating over $1 billion in new ventures in the first half of 2008. A new hot spot involves software utilized to locate and eliminate waste in various items such as lighting systems, manufacturing operations and utility grids. The following touches upon the main green sectors and the challenges that green companies face.
In the wind sector, the key issues are operational. Inspired by green power mandates and federal tax credits, wind power is the utility industry's prime choice for an environmentally friendly source of power. The Energy Department expects wind-generated power to reach 46,200 megawatt hours in 2008, increased from 14,100 megawatt hours in 2004.
The boom in demand generated a wave of new factory construction in the U.S. Siemens, which is the number 2 turbine manufacturer in the U.S. following GE, has booked production well into 2009. Four turbine makers opened new U.S. plants in 2007 and three more are scheduled to open production in 2008.
The strong demand is placing pressure on the supply side. Due to 30% annual growth rates, the turbine manufacturers have strained supply chains, manufacturing capacity and installation crews.
At the same time, prices for key materials such as steel used to build windmill towers have increased substantially. As a result, there has been a substantial increase in prices up to 40% for installed windmills, including the construction of bases, fabricating and erecting steel towers and making and transporting the turbines.
The price of power generated by these new windmills has escalated. Prices for natural gas power plants have increased significantly as well due to shortages of the same materials. Wind power appears to be the most cost-effective renewable energy source, especially in high-cost markets such as California and the Northeast where state regulations require that up to 25% of electricity be derived from green sources.
Solar energy is increasing rapidly from a relatively smaller base than wind energy. As a result of state rebates in California and the Northeast, U.S. residential installations are anticipated to grow at 64% annually through 2010.
Solar generation is expected to total 1,000 megawatt hours in 2008 (roughly 2% of the output from wind). However, the growth in demand for solar energy has stressed the industry's supply chains. In Germany, which has a much larger scale of investment, government incentives increased demand so rapidly that a global shortage emerged in the silicon used to manufacture photovoltaic cells to power solar energy systems.
In the U.S., California is the largest solar market. California utility rates are among America's highest and blackouts occur on hot, sunny days. Financing terms are significant because utilities will re-purchase surplus power from solar-powered homes and substantial rebates and tax credits from state and federal sources help defray up-front costs.
For example, a homeowner in Santa Clara, California who spends $50,000 on a 5.8-kilowatt rooftop solar system receives roughly $15,000 in state rebates and federal tax credits. After realizing the savings of $2,600 per year in lower power costs, such a system will be paid for in 10 years.
Currently, the key focus is to lower the cost of converting the sun's energy into electricity in order to encourage more consumers to place solar energy on their roofs. As the efficiency of conventional solar photovoltaics continues to increase, the next major enhancement may be lower-cost thin film solar materials. Because they are produced continuously on enormous rolls, thin film is a central focus of utilities' objective of developing large-scale solar farms.
Ethanol is the most controversial of all the green initiatives under way. Critics state that converting corn into fuel requires too much energy to generate ethanol, has increased food prices, risks depleting aquifers and is exacerbating farm-field runoff that is creating dead zones in the ocean.
The industry is led by a few well-capitalized startups and large energy and agriculture conglomerates such as Archer Daniels Midland and Cargill. Because billions have been invested in new facilities, total U.S. ethanol capacity has tripled to 6.2 billion gallons per year over the past five years and is expected to double again by 2009. Ethanol producers are expected to supply between 5% to 8% of total U.S. fuel demand by 2010.
By 2022, under the Energy Independence and Security Act of 2007, it is anticipated that 8-10% of the nation's transportation fuel supply will be derived from corn ethanol. It is expected that 12-15% will come from advanced biofuels such as ethanol derived from cellulosic biomass such as wood waste, grasses and agricultural waste.
The company VeraSun has been building and acquiring new ethanol plants steadily. VeraSun is expected to own nine plants with the capacity to generate a total of 1 billion gallons of ethanol by 2008. The main concerns are operational improvements, including how to recycle water and heat in distillers to reduce costs and how to increase output by utilizing starchier corn hybrids.
VeraSun is generating oil from post-processed corn to sell as higher value biodiesel. In terms of delivery, VeraSun has acquired 100-car-long unit trains, which railroads can haul to either coast from the Midwest in six days. The prime goal is to increase operational efficiency.
There are areas of major potential breakthrough in the ethanol industry. For example, more efficient enzymes may convert more corn starch per pound into sugars that yeast transforms into alcohol. Yeast cells may be improved to survive at higher temperatures in higher concentrations of alcohol in order to generate more ethanol.
These R&D efforts may help create the ultimate biofuels, i.e. cellulosic ethanol. While conventional ethanol is derived from soft starches, e.g. corn, cellulosic ethanol is derived from a wide variety of sources of cellulose or cell wall plant fiber. These range from stalks and grain straw to switchgrass and quick-growing trees e.g. poplar and willow and even municipal waste.
In addition to making available lands that would normally be dedicated to growing feedstock, this method of ethanol production is quite efficient because it utilizes a resource that would otherwise be designated as waste to create a new and useful fuel.
By generating several times more energy than today's corn-based fuel, cellulosic ethanol is derived from new techniques that convert a higher portion of each plant into ethanol, not just seeds such as corn, as well as a wider variety of plant types, including corn leaves and stalks, trees, and unwanted weed plants.
In order to achieve future green objectives, several basic problems must be solved first. In cellulosic ethanol, startups are creating new biological techniques at the same time that current corn ethanol manufacturers are improving manufacturing methods to generate barrels of fuel from plant matter. The long term goals are to make ethanol cheaper than gas by generating cellulosic ethanol.