Clean tech closing in on energy storage
Last Updated: 10:54 March 26, 2014
Gone are the days, he said, where the field is looking for major leaps in discovery to advance the technology. Minor tweaks, improvements and "step changes" can get to the critical point where such battery technology is a reality.
"We're so close right now," Jaffe said.
Jaffe was speaking at BizWest's CEO Roundtable on clean technology Tuesday sponsored by Boulder law firm Berg Hill Greenleaf & Ruscitti LLP and accounting firm EKS&H. Clean tech is a general term used to describe products, processes or services that reduce waste and require as few nonrenewable resources as possible.
Perhaps the most exciting topic in clean tech right now, he said, is electric carmaker Tesla's plans to build a "gigafactory" that will by 2020 produce more lithium ion batteries annually than were made globally in 2013. While the factory would have major implications for the auto industry, Jaffe said there are signs that the factory would also produce enough batteries for other uses that it could become a "seminal event" that shakes up energy storage.
Tesla is just the company to do it, he said. Elon Musk's company, after all, has already made all-electric cars cool, an idea scoffed at just a few years ago.
"The major car manufacturers' fundamental problem, business mistake, was they said (electric cars are great) for the greenies, a group they don't even know or understand to begin with," Jaffe said. "Instead they should have said this is a high performance car. … Tesla did that."
That unique way of thinking and problem-solving is also permeating other areas of clean tech, roundtable participants said. And it is key to clean tech's future success.
Solar power is making huge strides, they said, in part because of the way people are paying for it now. Not everyone has to front the large purchase cost of installing solar panels and then rake in the benefits over time, said Quayle Hodek, chief executive of Renewable Choice Energy in Boulder.
Power-purchase agreements are allowing businesses and individuals to sign contracts to purchase power from solar providers for 20 or 30 years, lowering their energy bills and at the same time locking in their energy rates without upfront costs. In particular, large companies like Google and Apple are seeing the value in locking in their rates with solar to avoid the volatility of fossil fuel prices.
What it's leading to is the overvaluation of some fossil fuel-based energy companies that have stranded assets like coal plants, Hodek and others said. New energy demand in the United States more and more being answered with renewable energy and less with coal.
"The cost of solar has fallen 50 percent in the last two years," Hodek said. "How do you compete with that? … Why in the world are we going to build more fossil fuel plants?"
Energy utilities have started to catch on by diversifying their portfolios. But even their days could be numbered, said Deane Little, chief executive of Boulder-based New Sky Energy, a firm focused on manufacturing systems that turn waste into valuable chemicals.
Little, who owns a Tesla car and has solar panels on his house, said the day is coming soon when battery technology will be good enough for him – and plenty of others like him – to disconnect from the energy grid entirely.
"I think the centralized utility model is at great risk over the next 50 years," Little said.
One area that continues to make advancing technologies difficult for clean tech is funding, particularly venture capital or a lack thereof.
Carl Lawrence is chief executive of Swift Tram Inc., a Boulder-based company with game-changing ideas of its own in the transportation realm. Swift Tram is trying to develop suspended automated people movers, with hopes of breaking ground on its first system on the University of Colorado's Anschutz medical campus by the end of this year. The only problem, Lawrence said, is that most venture capital firms want to see companies seeking seed funding further along in their development than most clean-tech enterprises are at their early stages.
"They say, 'We'll fund you as soon as you build a prototype,'" Lawrence said. "Well, that's $5 million to build a prototype."
Some of that disconnect, Tuesday's panelists said, comes from a couple of sources. For one thing, there have been some notable failures in the clean-tech space, like Solyndra and Abound Solar, which have led to a negative perception. The other cause is that venture capital funds are typically on 10-year timelines (or fewer) where investors want to see a return on investment.
That kind of return is often faster than what clean-tech companies can offer, said Loren Burnett, chairman and founder of e-Chromic Technologies Inc., which is developing an energy-efficient film for retrofitting old windows.
"That causes them to push their investments toward ones that can exit at that point," Burnett said.
Such pressure for a quick turnaround, Burnett said, can have negative effects for clean-tech companies that do receive venture capital.
"That causes the CEO to make decisions that are in contrast to what he or she really believes is best for the company," Burnett said.
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