I would still be grateful for more information on this story, and even some
blunt and detailed one-on-one feedback, but I do begin to see the picture, I think.
Great thanks to those who have sent me some information.
COST is the biggest issue in deciding whether we can really make the switch to renewable, carbon-free sources of electricity, which will never run out of fuel.
The difference between 10 cents per kwh and 20 cents may not sound like much, but if we met the whole world's electricity generation needs (20,000 terawatt hours in 2008,
according to IEA/OECD data) that would be the difference between the world paying $2 trillion dollars per year versus $4 trillion per year. Going carbon free will be a whole lot easier if we don't have to ask for an extra $2 trillion/year, and can even compete in a large part of a free energy market (if we ever get one).
So I was shocked when the only group building solar farms that could hit 13 cents per kwh were killed this year, while other companies selling for 20 cents and up were doing just fine, in US and Europe. This is as serious as it gets, folks, if you really care about he future of humanity.
I think I have a better idea today what really happened, but am still looking into it...
Here is a posting to some expert energy lists on what happened and what we can learn from it:
-- though it is not definitive yet, by far, I have begun to get some feedback
from folks in Silicon Valley who have looked a bit more into the SES story.
One of the toughest problems in real world science and technology is how to filter
out various kinds of herd instinct and groupthink.
As an example, a few years back, I was a little proud when I funded a small project
which made progress in telling us how to built useful carbon-tolerant alkaline fuel cells
(AFC ). (The report by Urquidi-MacDonald, Sen and Pat Grimes was posted at
arxiv.org, easy to find, though I recently noticed a book and articles by Patrick Grimes
on fuel cells, via Google Scholar, that Pat never told me about).
I was pretty happy when that report was filed, and mmediately contacted the guy who runs
the main fuel cell program at NSF.
Roughly, I said, 'Hey, here is something which works. You might want to follow up."
(None of those PEM fuel cells, the main thrust of the big Al Gore PNGV program,
ever really did. More precisely, unsolved problems with catalysts resulted in continued
hydrogen peroxide formation, which made them unable to achieve "whole systems' efficiency
more than internal combustion systems, and which seriously cut lifetime and raised cost.)
His response: "Yeah, maybe it works, but that's not where the money is." (And that's not where the main thrust
of Al Gore's PNGV program was either.) NOTE THAT I DID NOT NAME NAMES: that would be unfair in this case,
for a number of reasons. That guy did some good and important things, and also missed a few things, which averages
out a lot better than most people.
I was a little shocked at the time. It's our job at NSF to focus on things which DOE is NOT already doing,
to pay special attention to things which are new and unique, which offer breakthroughs.
To compensate for the mindless herd conformity, and short term needs, which exist elsewhere.
It's supposed to be a little like contrarian investing, where we looks especially hard for new opportunities which result
from holds in the market. It is a highly competitive system (so competitive it may overstress human nature
in many ways).
In fact, the market economy, like NSF, is also supposed to be a competitive system. Sometimes,
in making funding decisions or orienting panelists, I use the analogy of a supermarket.
There are certain products (like some spices and some hygiene products and some medicines)
which most people would vote against including, if it were a majority vote; indeed, some products
are a matter of life or death for some customers, but a majority of people who come to the store
would pretend even not to see them. Stores can be more efficient than a simple majority vote on
what to put on the shelves, because they account for diversity, the many needs or market segments.
They don't work perfectly, but they do work a lot better than a simple majority vote by all shoppers on
every product as to whether to put it on the shelves or not.
But again and again in science and technology, I have seen cases where considered
vague and shallow conventional wisdom, by folks who have not looked deeply into an issue,
ending up freezing entire directions for a long time or even forever. Lately,
that often seems to be the rule rather than the exception in the US.
I have seen generation after generation of recent NSF leadership exhorting us all to be a bit less
conservative, and really pay special attention to breakthroughs and
transformative new opportunities -- and also seen lots and lots of backlash, some open and some
ala Good Soldier Schweick (a famous World War II movie about a Czech who subverted the Nazis simply
by actually following their orders VERY diligently in his own unique way).
I just posted one set of examples, involving intelligent systems, on the Kurweil list,
which might amuse a few of you:
It seems that a major problem for SES was simply a conventional wisdom, not unlike the
former belief in PEM fuels with cars carrying hydrogen as such in a fuel tank as the
one and only possible future for transportation.
I knew it was there, but not how far it had gotten into down to the level which could
bankrupt a company like SES.
There is a quasi-religious belief, particularly strong in silicon valley, that "of course PV solar farms
must be cheaper than any kind of solar thermal, if not now in the near future -- so we should
not waste any money or opportunity on the latter. This is true, because PVs are chips,
and chips are governed by Moore's Law. Chips are inherently cheaper than weird things
with pistons and temperature and pressure in them. Much simpler and more elegant.
We don't need numbers to know that solar thermal must be more expensive.
Besides, even though Arun Majumdar admits PV solar farms cost 20 cents per kwh, he has a clear target
of 5 cents per kwh, which would be less than and solar thermal solar farm on earth today."
Of course, it helps that lots and lots of PV people are getting money today, just as PEM people were ten years
ago, and are always testifying to everyone about how their is The True Path, and getting cited as
The Experts (qualified of course because they got money from a PEM program).
But in fact .. 5 cents is a TARGET for ARPAE. In fact, lower PV costs have been a target at DOE for a long long time.
There was a brief time not so long ago when OMB required that agencies actually POST quantitative official targets,
and be "held accountable" for actually reaching them. At that point, the cost target for solar thermal
was much lower than the target posted by DOE for PV solar farms, and the targets DOE was willing to
be held accountable for were much higher than what NREL, for example, was posting and projecting at that time.
It makes good sense to AIM for very ambitious targets, and to try to set things up so that one can
make a good profit even in a relatively worse case scenario. (That's part of why I propose 15 cents per kwh
as a price/market guarantee for solar farms of all kinds. Much better can almost certainly be achieved,
in my view, with really effective solar thermal solar farms using dish solar, but an open market would
allow PV folks equal access.) See a follow-on posting below on why the conventional wisdom here is
In my view, SES did make a business mistake circa 2000 when it signed a purchase contract with SCE and PGE
committing to a price well under the 11.5 cents per kwh those utilities then paid for peaking power from natural gas.
(That's from the Business Week story where SCE or PGE announced the contract.)
When they found they couldn't replicate STM technology as easily as they had expected (as happened to
a few bigger companies who tried to reinvent STM's Stirling engine), Sandia tells me that they were
basically stuck with costs of 13 cents per kwh for the initial solar farm, not enough to make a net profit
or build up any capital reserve under the initial contracts. That by itself would be enough to
kill them, unless they could find new sources of funding to tide them over to their projected 10 cents cost,
or unless they could restructure the contract to a little more than 13 cents. At that point, the local conventional wisdom and
the PUC (with the new cost gas option) certainly kick in, with or without NIMBY and right of way issues to make it worse.
Thus it really looks like two causes at work -- this math, operating on a small company without that solid
15 cents market guarantee, AND the NIMBY or right-or-of-way regulatory stuff which prevented them from just
going ahead and quickly completing the solar farm they were into before the funding fell apart.
The investors mainly blame the problem on the latter, because the regulatory stall is certainly
what happened first. (I DID track the primary sources back at that stage). If the regulatory stall had not happened,
the working numbers from a working if money-losing solar farm might well have changed the final,
financial outcome for the firm.
If the regulatory obstacles which stopped the construction could be basically eliminated for this kind of badly needed new thing, or substantially streamlined, our chances would be a whole lot better... in California or wherever else such problems get fixed.
Again, more detailed data form STM, Infinia and from the Guang Dong investors is also consistent with
this picture, and clearly unknown to the general herd here.
In my view, solar Stirling is the LEAST risky
and most definite source of affordable renewable electricity on a scale large enough to meet all
the world's needs... but I personally have some special responsibility to do what I can to explore
higher risk things which the herd would not really bellow at, because they would not even see them.
Best of luck,
More on the conventional wisdom about PV versus solar thermal:
In that posting on what happened to SES, I forgot to add some comments
on the conventional wisdom I was deploring. I am not about to give full cost breakdowns here,
but when people get confused by false analogies, it is important to try to balance them with some
other fact of life, which focus who are REALLY aware of the technology realities should already know.
PV cost is not governed by Moore's Law, which has mainly been about ever shrinking feature size
to process bits of information with greater density and speed. The primary cost problem is
not the cost of PV panels as such, but the cost of "balance of system."
For example, people talk a lot about cost goals like $1 per watt. (As you know, I have paid a lot
more attention to cost per kwh, so I can't be as precise about per watt. Both alsovary a lot as a function
of local sun conditions.) But last I checked with one of the nation's real front line experts on power electronics
for solar and wind, he said it already costs about 75 cents per watt just to convert DC to AC. That's important,
because PVs produce DC, while Stirling generators produce AC directly. The power electronics with PV
farms are actually much more complicated than what I have just discussed, but there is certainly no
law of nature that systems which require extra power electronics much be cheaper than those which do not.
Some folks talk about how our new R&D thrust can result in PVs as cheap as paper, coming out on rolls.
"What could be cheaper than that?" But in fact, the class of PVs which can now be rolled out like paper
are lower efficiency and weaker systems, which require more area than more solid PVs, and thus MORE
of the balance of system cost, which is the main problem here. (R&D to improve their efficiency,
and to improve power electronics is worthwhile, but not exactly a bird in hand. Better power electronics is
more likely to produce big breakthroughs in plug-in hybrids, for technical reasons, but the underlying R&D has value
in any case.)
What's more, if you ask about cost per meter, I would ask whether a square meter of PV AND required structural support
will ever be able to compete with the cost per meter of simple dumb reflectors ( mirrors) made in conventional auto body parts factories.
Infinia and folks linked to STM and GM have shown how the dishes in Stirling-dish system can be made that way.
This has HUGE implications for scaling up. If Stirling engines are produced in existing underutilized automotive engine
factories,. and reflectors in underutilized auto body panel factories, it becomes possible to really scale up and achieve mass production
economies of scale a whole lot faster than any other path, without the time, delay and cost of building new
"green field' factories. No weird and exotic materials needed.
With lower cost per square meter, higher efficiency in converting collected light to electricity,
and less cost in power electronics...
It is certainly not an option to be ruled out apriori!!!
But again, I have no personal economic stake in that, on my own or via NSF.
It's all just a matter of trying to pay serious honest attention to larger needs which will
affect every one of us.
I do have a personal stake in an alternative technology, from the world of Moore's Law,
which I will try to do my feeble best to push ahead today, in parallel with this other stuff.
I most likely will screw up the next stage, since I am neither a lawyer nor a corporation,
and have neither I can rely on for this purpose right now, but there are times when one
has a duty to try.
Also -- I really do not mean to question the value of major investment in PV technology. Breakthroughs may be possible. In fact, I have recommended funding for
a number of breakthrough-oriented PV projects myself, which have been funded.
But all the data I see says that the best solar thermal is cheaper now, and a lot more solar thermal has been deployed around the world in actual use in electric utilities.
We do need a diversified portfolio -- but it's a real shocker that we have neglected
most definite least risky low-cost option we have.