Some mornings these days, we have to postpone our
work plans because of breaking news. Today the
news stories came so frequently we could no longer be comprehensive.

Below is the text of one of our favorite articles
in months. In the US News & World Report's cover
story, Marianne Lavelle, who has previously
written on PHEVs and renewable energy, highlights
some of the promising new technologies we've
talked about in the context of Iceland (Enhanced
Geothermal) and when discussing the new book
Break Through (solar thermal) -- see CalCars-News
Archive. It ends with a stirring endorsement of
PHEVs by Google.org's Larry Brillian and Dan Reicher.

Before that, here's this morning's sampling:

* The San Jose Mercury News runs the transcript
of a dialogue on global warming with California
Attorney General Jerry Brown and Diane Greene,
the CEO of Silicon Valley's latest large IPO
company, VMWare, at the "Public and Private
Sector Accountability and Action" panel at the
Silicon Valley Leadership Group's "Clean and
Green" Projections 2008 event at Santa Clara University on Sept. 26.
Mercury News Editorial Page Editor Stephen E.
Wright says, Now, for some audience questions.
Here's one for both of you. What kind of car do you drive?
Greene: Well, we own two cars. We own a Prius and
a hybrid Camry. And my husband is working on the plug-in for the Prius!
http://www.mercurynews.com/opinion/ci_7310512?

The WALL STREET JOURNAL'S SPECIAL SECTION
"Handicapping the Environmental Gold Rush," runs
an article, The Economics of Hybrids" that
concludes their payback is poor (some of the
assumptions are questionable. But it includes two
sections of great interest to PHEV advocates

* Following a discussion of declining US tax
credits for hybrids, the author, Mike Spector, points out that
"In Europe, by contrast, several countries offer
significant tax breaks. In Belgium, for example,
drivers get 15% of a car's price back -- maxing
out at Euro 3,280 ($4,640) -- if the vehicle
emits less than 105 grams of carbon dioxide per
kilometer, according to the European Automobile
Manufacturers Association. Cars that emit between
105 grams and 115 grams get a 3% break; vehicles
emitting more than 115 grams don't get anything.
Europeans also face high fuel taxes, encouraging
them to buy more-efficient cars."
(PHEVs can be under 105; hybrids around 125;
diesels may approach 200 -- see slides in our
presentation, http://www.calcars.org/calcars-photos.pdf

* Then, after raising as serious issues the
lifetime and replacement cost of hybrid
batteries, then concluding that it's not a problem, the author says
Auto makers are gradually pushing toward electric
plug-in hybrids, which will allow drivers to
recharge a battery with a traditional outlet and
go much further on electric power alone. Such
cars could be a "game changer" that eventually
displaces conventional hybrids, says Mike
Jackson, chief executive of AutoNation Inc., of
Fort Lauderdale, Fla., a nationwide dealership
chain. That article is found
at http://online.wsj.com/article/SB119335110403372123.html

BATTERY LEASING STARTUP
The front pages of the business sections of the
New York Times and the Wall Street Journal and
Business Week break the story of the announcement
today that former software entrepreneur Shai
Agassi has raised $200M for what's provisionally
called "A Bertter Place" to build a rapid charge
and battery swapping infrastructure for 100-mile
range batteries that would be leased to
car-owners for a monthly service fee. The idea
includes "smart grid" features including easy
ways to locate the nearest charging station and
providing distributed storage to electric utilities.
Half of the backing comes from an Israel-based
holding company with interests sin oil refining,
chemicals and shipping. Other investors include
Vantage Point Venture Partners, Edgar Bronfman
Senior and James Wolfensohn formerly of the World
Bank. This strategy of course faces many
challenges in gaining automotive partners and
standardizing components. It does provide
important additional legitimacy to the concept of
removing the battery's high initial cost from the
pricing decision, and removes automakers' final
objection to plug-in hybrids and EVs: battery
lifetime. Agassi hopes to have pilot projects
with thousands of cars in 2009 and a hundred
thousand in 2010, starting on islands.
NYT: Reimagining the Automobile Industry by Selling the Electricity.
http://www.nytimes.com/2007/10/29/technology/29agassi.html
WSJ: Sofware Executive Shifts Gears to Electric Cars
http://online.wsj.com/article/SB119362189984274462.html
Business Week:
http://www.businessweek.com/bwdaily/dnflash/content/oct2007/db20071027_825187.ht\
m
To follow the company, see http://www.projectbetterplace.com/

US NEWS & WORLD REPORT
COVER STORY: Power Revolution
Thanks to Silicon Valley's money and ideas, solar
and other alternative technologies may finally pay off
By Marianne Lavelle Monday, October 29, 2007
<http://www.usnews.com/articles/business/economy/2007/10/26/power-revolution.htm\
l>http://www.usnews.com/articles/business/economy/2007/10/26/power-revolution.ht\
ml

The high-rolling risk takers who brought you
personal computing, the telecommunications
revolution, the commercialization of the
Internet, and, of course, Google now aim to do
nothing less than save planet Earth--and make
billions while doing it. If the venture capital
industry is successful, it might be the ultimate
act of "angel investing," and perhaps no one is
more emblematic of this new wave of high-minded
technology entrepreneurship than Vinod Khosla,
who, after a failed soy milk start-up in his
native India, went on to become one of the
driving forces of Silicon Valley as cofounder of
Sun Microsystems and later as a venture
capitalist. Khosla views climate change as the
gravest threat the world has ever faced, and he
knows others see America's foreign oil dependence
as an urgent crisis. But in his calculus, we've
been pitching pebbles at these Goliath problems.
"Building a biofuels plant here and a solar plant
there is not enough," he says, "unless we can
replace 50 percent and hopefully 100 percent of the fossil energy sources."

This grand goal is not remotely in sight, even
with wind and solar energy and ethanol growing at
a breakneck clip. These renewables now provide
just 3.6 percent of the nation's energy, and the
government predicts their share will grow to a
grand total of 4.2 percent by 2030. By those
calculations, it sure looks like a fossil fuel future for America.

But Khosla, through his own Khosla Ventures and
often working alongside the legendary VC firm
Kleiner Perkins Caufield & Byers, where he
maintains an affiliation, is in the vanguard of
entrepreneurs and financiers who believe their
Silicon Valley success stories can be repeated in
green energy. They are pouring money and ideas
into a new generation of alternatives to fossil
fuel--"technologies that scale," in their words.
That is, options that can ramp up to serve a
large share of the nation's energy needs because
they'll cost less than coal or oil. One estimate
is that venture capital funds nearly tripled
their investment on green energy last year, putting $2.4 billion to work.

Of course, that may not seem like much dough
given that some next-generation technologies are
massive undertakings, like placing 3-mile-square
fields of mirrors in the desert to focus the
sun's rays or shooting high-pressure water into
the hot rock 3 miles underground to create a
man-made geothermal reservoir. And skeptics say
that these approaches may not be cost competitive
for years. The economic equation might change if
Washington puts a limit on carbon dioxide
emissions or institutes carbon taxes that make
coal power and gasoline more expensive, though
that's far from a sure thing. Dan Reicher, a
former Clinton administration energy official who
heads up a major investment effort on climate
change underway at Google, says stronger federal
policy, more availability of Wall Street
financing, and technological innovation are all
equally important in taking green energy to the
next level. "If we're going to get to a
sustainable energy future, we have to be working hard at all three," he says.

But Khosla believes government policy will move
once entrepreneurs take the first step. "Change
has to come from somewhere, and our business is
about change," he says, recalling the early
skepticism that the first microprocessor and
telecommunications revolutionaries faced. "All
the innovation came from little companies that
had breakthrough technologies. The chances of any
one experiment failing may be high, but the
chances of all of the experiments failing is
very, very low. You should have a thousand points
of innovation, and for sure you'll get a breakthrough."

Just the sort of optimism that's helped make
Silicon Valley the world's leading center of
innovation. And just the sort of attitude that
seems to be finally cracking the tough
technological puzzles whose solutions will change
the way we power the global economy and our lives.

Solar concentration
Solar energy may be poised to make the leap from
the rooftop down to the floor of the desert—where
some advocates say it needs to be if it's going
to take its rightful place as a member of Big
Energy. The nation's largest utility in customers
served, investor-owned Pacific Gas & Electric,
this fall announced a bold plan to install nearly
five times the amount of solar power that is now
operating across the United States and do it
cheaper, bigger, and faster than has ever been
tried before. Instead of using semiconducting
material to convert light to energy--those
familiar black photovoltaic panels--PG&E and its
technology partners, like the Israeli firm Solel,
will use nothing more complicated than mirrors,
lots of them, to concentrate some of the
highest-intensity sunlight in the world. The
arrays will heat water to drive turbines just as
in an old-fashioned power plant.

Although solar PV arrays have been crowning more
and more American buildings--the 1.6-megawatt
project opened this year at Google's headquarters
in Mountain View, Calif., is the largest--they're
expensive. Developments are underway to bring
down the price by reducing the silicon from its
usual wafer form to an ultrathin film deposited
on glass. But at this point, PV cost estimates
span from an uncompetitive 23 to 32 cents per
kilowatt-hour, while residential electricity
prices in this country range from 5.8 to 16.7 cents.

With current technology, "concentrating solar
power" would cost about 40 percent less than
PV--tantalizingly close to competitive in areas
like California with high energy prices. Exactly
how the mirrors will be configured could bring
the cost down more. Rows of curved reflectors
work well; since the 1980s, a dazzling "parabolic
trough" display has provided reliable power to
California, the only operating concentrating
solar power project in the country. But Spanish
firm Abengoa this summer aimed for greater
efficiency by focusing circles of mirrors onto a
central "power tower" near Seville for the first
commercial European Union CSP plant. The company
would like to do the same in the U.S. Southwest.
One firm that has been working with PG&E is
Ausra, which recently relocated from Sydney to
Silicon Valley and received $40 million in
backing from investors led by Khosla Ventures to
promote its big idea. Ausra thinks it can drive
CSP costs down with simpler, flat mirrors and
turbines that run at a cooler temperature, like
those in nuclear power plants. Ausra also aims to
engineer into the system the ability to store
thermal energy so it can provide power when the sun stops shining.

Engineering firm Black & Veatch of Overland Park,
Kan., estimates that outside of environmentally
sensitive areas, there's enough available flat
"high solar resource" land--also known as
desert--in California to provide six times the
power that the Golden State uses today.

Deep geothermal
Geothermal is lower profile than a range of other
alternative energy technologies, even though many
homes--including President Bush's Crawford
ranch--have heat pumps that tap into the Earth's
steady, reliable warmth. But few realize that the
United States is the world's biggest mass
producer of geothermal power, with long-running
plants in western hot springs and geyser areas
that generate more electricity than all U.S. wind
and solar energy combined. It was long thought
that big-scale geothermal had reached its natural
limit. Few locales are graced with steamy water
reservoirs close enough to the surface (less than
2 miles under) to be easily tapped to run
electric turbines on the ground above. And many
hot spots happen to be beneath scenic treasures
like Yellowstone National Park or on American Indian reservations.

But recent study shows deep-drilling and
seismic-exploration techniques developed in the
oil industry could be exploited to draw out the
geothermal energy found 3 or more miles
underground, locked in dry rock that's more than
300 degrees Fahrenheit. A developer could drill a
well and use high-pressure water to open
fractures in the rock. Then, injection wells
would be drilled to circulate the water in the
man-made reservoir and extract steam to the
surface to run electric turbines. This year, a
government-sponsored study led by Massachusetts
Institute of Technology concluded that these
"heat mining" methods could offer access to a
staggering amount of energy. Just 2 percent of
the U.S. geothermal resource base could yield
nearly 2,000 times the power that the nation now consumes each year.

The limiting factor is the cost. The
old-fashioned geothermal sites now operating in
geyser areas aren't any more pricey than old coal
plants, at about 3.5 cents per kilowatt-hour. MIT
looked at a half-dozen potential enhanced
geothermal sites across the country and came up
with estimates ranging from a potentially
competitive 10.3 cents per kilowatt-hour to a
sky-high $1.05 per kilowatt-hour. However, if a
few well-defined technical problems were tackled
to boost what's known as the "fluid production
rate," MIT said costs would plummet to 3.6 to 9.2 cents per kilowatt-hour.

"It brings an absolutely gigantic amount of power
into the realm of economic feasibility," says
Susan Petty, one of the study scientists, who now
is running AltaRock Energy in Seattle, which
plans to develop the first "enhanced geothermal"
demonstration project in the United States in the
next two years. With backing from venture capital
firms Khosla Ventures and Kleiner Perkins,
AltaRock's goal is to provide 10,000 megawatts
within a decade. That's enough to power 10
million homes, and more than four times the power
of all the old-style U.S. geothermal plants now operating.

Numerous companies, spurred in part by government
subsidies, are also active in Australia and
Europe, with one plant to begin commercial
operation soon in Unterhaching, near Munich,
Germany. Not everything has gone as planned.
Earlier this year, a geothermal company's
rock-fracturing operations 3 miles underground in
northwest Switzerland touched off earth tremors
with a 3.3 magnitude felt nearly 10 miles away.
But the MIT study said that better techniques can
control this and other problems. And since
geothermal energy, unlike solar or wind, is
constant, MIT said it could provide 10 percent of
U.S. base-load energy needs if the nation would
spend $1 billion on its development over the next
15 years—less than the cost of one coal plant.
High-pressure ethanol

In alternative transportation fuels, the holy
grail quest is the search for the next ethanol.
Sure, the business of fuel alcohol distilled from
corn is booming, with production having tripled
since 2002 and up 33 percent this year to 6.5
billion gallons. Historically, ethanol has been
more expensive than gasoline, but crude oil
prices are now so high that ethanol would be
cheaper even without its 51-cent-per-gallon
subsidy. Indeed, one reason pump prices have not
skyrocketed along with the price of crude oil is
that so much fuel is blended with 10 percent
ethanol. Politicians would like to mandate that
refiners use still more. But even if you don't
agree that diverting corn to energy has strained
the food industry or environment--and the ethanol
industry most assuredly does not---there is a
practical limit to squeezing fuel from the cob.

Hence, the pursuit of "cellulosic ethanol," the
same fuel made by breaking down the tough
starches found in hardier plant matter--from
cornstalks to fast-growing switch grass to
paper-mill waste. Ideally, the feedstock would be
abundant and wouldn't require a lot of water,
fertilizer, or tending. Cellulosic works in the
laboratory but at great cost. So dozens of
companies are trying to hit on the formula to
make it economic, mainly through bioengineering
of enzymes that would convert grass, husks, or
wood to sugar that could be fermented into fuel.
The government predicts the first cellulosic
plant will cost five times more than a corn
refinery and will come on line no sooner than 2010.

But Range Fuels, a Broomfield, Colo., firm
founded by Khosla, aims to beat that projection
by two years. One of six companies that received
Department of Energy grants to accelerate the new
technology, Range will be the first to break
ground on a commercial plant on November 6 near
Georgia forestland, where it plans to refine
abundant timber-industry waste wood. Instead of
relying on expensive enzymes, Range will use heat
and pressure to turn wood chips to gas, then
extract ethanol with a catalyst. It's a
greened-up version of the proven Fischer-Tropsch
process developed in 1920s Weimar Germany to make
diesel fuel from coal. The company's not
revealing the plant's cost, only that it will be
less than the Energy Department projects and will
be pumping fuel into the market by the end of
2008. With the help of extra subsidies for
cellulosic ethanol that Congress enacted in its
big 2005 energy bill, Range is confident it can
be commercially successful selling to nearby refiners.

Range Chief Executive Mitch Mandich used to be a
senior vice president for sales at Apple Computer
and was chief executive at a Silicon Valley
speech technology start-up that was bought out
before he switched to alternative energy. "Rather
than stay in tech, I thought I'd like to help
make a difference in the world," he says. The
inspiration came in December 2005 at Stanford
University when former Vice President Al Gore
gave the slide show that was later immortalized
in the movie An Inconvenient Truth. Mandich and
his friend Khosla, also in the audience,
afterward talked about Gore's presentation and
plea for the tech industry to get behind the push
for a solution, and the idea for Range Fuels was born.

New efficiency
Congress is dithering over a proposal to force
American cars to average 35 miles per gallon by
2020, a seemingly modest goal with smaller cars
and more-efficient diesel engines helping the
European Union near 44.2 MPG and Japan attain
more than 45 MPG. But a race is on for the
technology that could blow all those numbers
away. "You see the difficulty Congress has in
setting a new...standard, and we know the best
way to help is to have some cars that get 100
miles per gallon and to make them gorgeous and
affordable," says Larry Brilliant, executive
director of Google's philanthropic arm,
Google.org. That would mean more than 70 percent
oil savings, since the current fuel-efficiency
standard is just 27.5 MPG goal set in 1975 and reached by the late 1980s.

Google is putting its considerable muscle behind
the drive for the "plug-in hybrid," technology to
take the hybrid gas-electric engine system
already found in the Toyota Prius to a new level.
Add a larger battery that can store electricity
longer and can be charged with an ordinary
household outlet, and the car could run on home
electricity instead of gasoline most of the time.
The plug-in advocacy group CalCars estimates that
with today's electricity prices, drivers would be
paying the equivalent of 75 cents per gallon. As
a first step, Google is putting together a small
fleet of retrofitted hybrids to gather data that
demonstrate the technology's capabilities.
(Anyone can log in to rechargeit.org to see that
it is averaging 68.4 MPG.) But Google wants to
see the big automaker mass-produce plug-ins. Last
week, Google closed bidding on its request for
plug-in or hybrid technology proposals it plans
to fund to the tune of $10 million. The goal is
to make renewable energy more attractive to
utilities through the use of green vehicles. One
problem those companies have with wind and solar
is that they are intermittent. Some days, the
skies are cloudy and the air still. "But if you
had a large number of plug-ins with significant
battery capacity plugged into the grid, we'd have
a very compelling storage opportunity," says
Google.org's Reicher. "If we can crack the code
on plug-in vehicles, I think it will be
transformative." Now that's thinking big.

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Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://www.calcars.org/news-archive.html
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