2008 Clean Break Lookahead

Call them predictions, call it my own personal wishlist, but 2008 is poised to be a pivotal year for clean technologies. We’ve got a U.S. presidential election in November that could dramatically change the course of post-Kyoto climate talks and finally get America in the game. We’ve got a Summer Olympics in Beijing that will throw a spotlight on China and give the world’s largest consumer of coal a chance to highlight its green projects, ambitions and the technologies behind them. We also have Earth Hour happening on March 29, when dozens of cities around the world will turn their lights off for an hour to demonstrate their commitment to fighting climate change. I expect this year’s event to be a turning point in our history — a shift from our passive acknowledgement that we need to act to battle climate change to a more proactive, almost activist call for immediate action. Expect public protests against government inaction to hit the streets in a big way in 2008. Oh, and while I personally believe we hit peak oil in mid-2006, I expect 2008 will be the year when more people will begin to believe that conventional oil production is on a permanent downward slide — i.e. the trend will become more obvious.

Now, mixed into all of this, here in my view are eight “To Watch” items for 2008:

1) Offshore wind and ocean power: We’ve been hearing much about the potential for offshore wind power and ocean power systems. In 2008, we’ll begin to see some major offshore project announcements, each backed with substantial financing and key government commitments. On the ocean energy side, smaller scale pilot projects will be revealed as authorities make good on their promises to fast-track approvals. Rising interest in offshore wind and ocean power systems will spark much-need discussion of high-voltage DC transmission and suboceanic transmission using superconducting technologies, given the need to connect these remote energy sources to the grid.

2) Reaching beyond PV: The solar market will show no signs of slowing down, but all eyes will be on solar thermal power ventures, such as Ausra, which claim they can compete directly against coal-fired power generation using heat from the sun. This again highlights the need to start discussing next-generation transmission technologies and faster development of the smart grid. Solar thermal, both for distributed heat generation and central power generation, will continue to gain respect in the larger solar arena. We’ll also start to hear serious talk of combined heat, power and lighting solar systems, providing a 3-in-1 package and a compelling proposition for big-box retailers such as Wal-Mart and Home Depot that are eager to walk their marketing talk.

3) Selling energy, not equipment: Expect the SunEdison services model to expand, not just as a renewable utility option from new entrants but as an offering that includes solar, geothermal and even conservation. Up until now the focus has been on the Solar PV utility, but newcomers such as Mondial Energy are gaining traction on the solar thermal front while other newbies are experimenting with no-risk, no-capital approaches that sell energy, not systems, to end customers that are looking for price stability while also greening up their images. Another boost to this approach? The banking community is beginning to realize it’s a good place to invest.

4) No more faking it: Greenwashing got attention in 2007, but expect major backlashes in 2008 against companies that want to appear green but don’t back up appearances with substance. When Shell sold its solar unit and BP invested in the oil sands, it had more people asking themselves: Are we being had? This coming year will separate the real deals from the raw deals. Companies will tone down their advertising, claiming to be “greener” but not necessarily “green” as more consumers and media call them on it.

5) Made In China: We’ve talked perhaps too much about the opportunity for selling clean technologies in China, but haven’t spent nearly enough time worrying about the new generation of Chinese clean technology companies that want to sell to us. Whether it’s solar, wind, power electronics, or energy storage, expect an eye-opening year as Chinese companies begin coming to market with clean technologies that beat North American companies on price. It’s great news for consumers and businesses that will start to see a meaningful reduction on their green purchases, but for investors in some cleantech stocks it could prove a rude awakening. Some may find comfort by investing in development and service companies with a local focus — i.e. wind and solar developers who have a geographical edge over the Chinese. Pure tech plays need to beware the Chinese threat.

6) Peak labor: We can talk all we want about peak oil, peak uranium, peak lithium or peak energy, but a common denominator for all is a labor bottleneck. We’ve got talk of a renaissance in nuclear. Hype around clean coal and carbon capture and sequestration. A boom in Canada’s tar sands. The list goes on and on, more or less amounting to a massive demand on skilled labor at a time when the power sector will see mass retirements over the next five to 10 years. We have to ask whether we truly have enough engineers, scientists and tradespeople to fulfill the promises and expectations we have in next-generation energy solutions that are big and centralized. Each of these industries is competing with the other for a shrinking batch of highly skilled workers, and it’s doubtful the bottleneck will open up anytime soon, particularly as regulators impose more stringent rules around safety and the environment. So yes, a carbon tax may spur development of clean coal and next-gen nuclear, and yes, there are big reserves of unconventional oil that become more economical to retrieve as energy prices rise, but it gets you very little when you’re struggling to find the people to do the work. The issue of peak labor will become more apparent in 2008 and will make solar, wind and other distributed energy technologies look even more appealing. You don’t need to be a nuclear engineer to install a solar panel on your roof or in a solar park for that matter. Distributed generation allows us to bypass much of the skills bottleneck and quickly get the clean power we need.

7) Turning a positive into a negative: As concentrations of greenhouse gases in the atmosphere reach critical levels, we’ll need to start talking more seriously about extracting CO2 from the air rather than simply adding less or none. This means considering technologies that are carbon-negative, and this is where gasification and pyrolysis of biomass becomes interesting. Using biomass as fuel is itself carbon-neutral, but if we could capture and sequester the CO2 through a gasification process or in the form of a solid char or “biochar” through pyrolysis, then there’s opportunity to generate electricity and heat and remove CO2 from the atmosphere. It’s not going to solve all our problems, but certainly 2008 is a year where we see growing interest in biomass gasification and biochar production, even if only on a small, distributed scale.

8) Charge it, please: Some think biofuels are the future of transportation, but if you’re like me you believe most consumer vehicles in the future will be plug-in hybrid or pure electric. I’m not saying biofuels won’t play a major role, particularly in developing countries, but when Vinod Khosla disses plug-ins as a sideshow I scratch my head. Electrification of transportation, and extending the smart grid to our personal and fleet vehicles, is going to happen in North America and Europe. Companies such as CrossChasm and V2Green are jumping at the opportunity, as is Shai Agassi’s well-funded Project Better Place. Biofuels will play a role, but a vehicle that relies strictly on combustible fuel is equivalent to a standalone PC in a networked world. Yes, batteries remain a key hurdle, but not an insurmountable one. Expect some major breakthrough in 2008, and important announcements related to affordable, low-cost electric vehicles that can be driven on highways.

Of course, this isn ‘t an exhaustive list — just a few thoughts bouncing around my head these days. Each day surprises, and this leaves me optimistic that the world is heading in the right direction. We just need to speed it up a bit. Perhaps we’ll see that in 2008.

Happy New Year.