Entries by Keely Wachs

Today Dell announced that it was going to be carbon neutral five months ahead of schedule.  Certainly, this is a great piece of news for the tech giant.  Yet, critics, including the WSJ's Environmental Capital blog, have questioned whether or not consumers actually care.

While it's definitely worth asking whether or not customers care, this line of questioning misses a key, if not the key, point to Dell's efforts.

Instead of viewing Dell's carbon neutral goal as a customer marketing strategy, instead we should be looking at how going carbon neutral is actually helping the company become more efficient across the board. 

In the era of Six Sigma and process improvement, many companies are looking at business strategies to improve business efficiency.  It begs the question: Why can't we look at energy as the prism by which we improve process throughout the enterprise?

Six Sigma looks to prevent defects and errors in manufacturing and business processes.  In this same vein, what if we looked at energy use as the final output, not widgets?  With rising energy costs there seems to be a strong case for focusing on energy as the center of all business processes.  

For example, by looking at how data centers are consuming energy, many companies, including PG&E, have found that by implementing more energy efficient servers, we can cut the total amount of servers necessary to meet our business needs and reduce our energy costs.  In this example, there are two efficiency gains - the amount of energy used and the amount of servers and space needed to meet the enterprise's IT needs. 

Co-benefits, like reducing servers and space, are at the heart of this approach.  Lime Energy, a company that helps organizations reduce energy use, has found that implementing energy efficient heating and lighting systems increases customer and employee comfort, resulting in significant productivity gains. 

And there are countless other examples out there similar to these.  PG&E has more than 80 distinct energy efficiency programs that have resulted in customer savings of more than $22 billion over the past thirty years.  We've never even looked at how our customers' energy efficiency efforts have driven additional process improvements or economic co-benefits. 

I admit, it's a unique approach to business strategy and one that hasn't been fully developed.  With no end in site for rising energy costs, it certainly warrants some additional thought. 

Do any readers have other examples?  

A roundup of green headlines that caught our eye this week.

• NPR reported that air quality has been improving steadily in Beijing, but that it will get worse right before the Olympics.  Cue deep breath by U.S. triathlon team...
• The California Public Utilities Commission issued its quarterly Renewable Portfolio Standard Report for the state legislature.  The report suggests that the procurement process is strong, but that the state faces project development and delivery challenges. 
• The Climate Group reported today that China is now the world's leader in renewable energy projects.  Cue deep exalt by Chinese Government...
• The U.S. Senate again failed to extend renewable energy tax credits set to expire this year.

Today marks the beginning of Intersolar North America 2008 - the nation's largest trade event serving the complete solar energy supply chain. 

And with it, of course, a ton of major solar announcements to leverage the excitement around the event.  Below is a list of some announcements leading up to and during today's conference.

• Concentrated photovoltaic provider, GreenVolts, today announced that it is going to raise a series B funding round of a little less than $100 million.
• Ausra, a utility-scale solar technology provider and developer, announced that it was looking into selling its solar powered steam for oil recovery. 
• First Solar announced that it will build California's first thin-film photovoltaic solar power plant. 
• As reported by NEXT100's Len Anderson, SunPower announced that it was going to build a 25 megawatt photovoltaic solar plant, the nation's largest, for Florida Power and Light.

Stay tuned.  With three more days of Intersolar, there will no doubt be more to come.

NEXT100 emerges from the July 4th haze with some smoke and mirrors; solar, that is.

Nikkei today reported that the next-generation Prius will be using Kyocera solar panels to power part of the car's two-to-five kilowatt air conditioning system.  The panels would be equipped to the automobile credited with making environmentally friendly transportation mainstream.

Some doubters quoted anonymously in a Reuters story see the panels as more of a symbolic gesture, saying that, "It's very difficult to power much more than that with solar energy."

However, a white paper highlighted by Earth2Tech claims that a solar-powered Prius could drive between five to eight miles on solar power.  The paper states that this would reduce gasoline consumption by 17-29 percent.    

A roundup of green headlines that caught our eye this week.

• Spring 2008 was a hot one!  The Daily Green reports that the National Climatic Data Center found this spring to be the seventh hottest worldwide on record.

• The oceans are getting hot too.  Andy Revkin's DOT EARTH blog highlights a recent report from the journal Nature illustrating the world's oceans' temperatures are rising faster than previously estimated as a result of climate change.

• But it's not all doom and gloom. Treehugger wrote a story on a new tool to help pet cats reduce their carbon paw print.  This is not a joke.  Apparently, CatGenie has created a self-flushing litter box.  And get this; the millions of cat litter dumped in landfills may actually be contributing to climate change. 

• More innovation.  Attendees at the UK's Glastonbury Festival 2008 later this week will be able to charge their mobile phones using wind energy.  The charging stations are produced by an organization aptly named Gotwind. 

• And finally, a tribute to history and the man who brought climate change onto the world stage.  No, not Al Gore.  Monday marked the twentieth anniversary of James Hansen's testimony before Congress when he first brought forth the threat of global warming.  Since his testimony, the science has overwhelmingly provided evidence to Mr. Hansen's theory.  Yet, the anniversary also provides a time for us to reflect on how much more we all can do to help address this challenge, the greatest of our time. 

A new study issued today by UC Berkeley and Duke University provides another grim illustration of climate change's impact on the natural world as we know it.

According to the study, two thirds of the 2,300 plants found only in California could disappear if emissions continue to rise at their current rate and reach 970 million parts per million in the atmosphere by the time period 2080-2099.

Under this scenario, which predicts rising temperatures and changing rainfall patterns, the impact would be especially severe in the foothills of the northern Sierra Nevada and less so on the state's central coast from Big Sur to Mendocino County.

To survive, California's plants would have to shift 100 miles or more from their current range - a nearly impossible task given adaptation rates and the boundaries created by urban development. 

Half of the unique plants found on the continental United States only grow in California, so the loss of the country's biological diversity is at stake.   

On the bright side, if emissions drop to below 1990 levels by 2099, researchers predict that carbon dioxide emissions would reach 550 parts per million.  At this level, the impact on plants would be significantly less. 

Currently, carbon dioxide concentrations are 387 parts per million.

This week has unexpectedly been dominated by the topic of Green Buildings. 

On Monday, I attended a presentation at PG&E by UC Davis Professor Deb Niemeier on energy use in the context of neighborhood design.  She presented research on a comparison of energy use by two distinct communities in Davis, Village Homes and Mace Ranch.  Created by Mike Corbett 25 years ago, Village Homes is a seventy acre subdivision designed to focus on the conservation of energy use and natural resources.  Mace Ranch, on the other hand, is a typical 1990's style subdivision, with little conservation design philosophy.  It makes for an interesting comparison as household income and size do not very much by each community. 

Not surprisingly, Dr. Niemeier's research based on PG&E energy use data, found that Village Homes used considerably less energy annually than the homes in Mace Ranch.  The smallest design considerations - such as which direction a home faces, how it heats its water, the use of trees for shading, and the types of construction products - can have a significant impact.  More surprisingly, Village Homes had considerably older appliances than those in Mace Ranch.  With updated appliances in Village Homes, the energy use variances would have been even greater, according to Dr. Niemeier. 

On Tuesday, I attended a panel on green buildings called "Going Green" and hosted by iReuse, Studley, and Skyline Construction.  The panelists included David Hayes, CEO of Skyline Constructionn; Lynelle Cameron, director of sustainability for Autodesk; Steven Wolmark, vice president of SKS Investments; and Eunice Barnett, a business manager for PG&E.

Two points from this panel really stuck out:

1.  David Hayes said that, if done correctly, there is now only a one-two percent marginal difference on building a LEED Certified building and a traditional building. In the last couple of years he's really seen the price of LEED inputs decrease.  David also made the point that buildings account for 50% of the world's greenhouse gas emissions, so there's a huge opportunity and responsibility for

2.  Lynelle Cameron made a very compelling case for why Autodesk's CAD technology is at the center of the green building industry and alluded to some very cool new technology that will help planners and builders account for sustainability when beginning the design process.

 PG&E's Peter Darbee today joined Google's Dan Reicher, ex-CIA head Jim Woolsey, GM-North America's President Troy Clarke, Better Place's Shai Agassi, the New York Times' Thomas Friedman, Senators Kerry, Alexander, Hatch, and Congressmen Dingell and Inslee during the Brookings Institution's policy event, "Plug-in Electric Vehicles 2008:  What Role for Washington?"

 This venerable group is meeting over the next couple of days to discuss the potential and long-term viability of PHEV's, and to identify federal policies that promote the widespread market adoption of these clean energy automobiles. 

The breadth of this group's interests reflects the breadth of great reasons why PHEV's may play a large role in the future of the transportation industry.  Among factors driving the adoption of these vehicles includes fighting climate change, cleaning the air we breathe, building a new energy economy, and achieving energy independence.   

Remarkable comments so far include Dan Reicher's plea to lawmakers to take action by highlighting a new poll, which shows that 75% of all U.S. voters would support policies that promote plug-in technology.

Another compelling moment was Jim Woolsey's vivid comment that we are paying for both sides of the war on terrorism by purchasing oil.  He asked the audience to look at themselves in the rearview mirror the next time they purchase oil.  He then emphatically concluded his comments by saying, "We can destroy oil's monopoly!"

Darbee added a pragmatic view to the event by highlighting the need for greater investments in the nation's electricity infrastructure to meet the needs of a growing electric vehicle market.  Specifically, he called out other utilities, state regulators, and federal legislators to support smart meter technologies to create a grid that is capable of communicating in real time with vehicles.

Earlier this month we profiled Masdar, Abu Dhabi's initiative to create a renewable energy city. 

Today, the company announced Masdar PV, a $2 billion investment in thin-film solar production capacity.  The investment lays the groundwork for Abu Dhabi to go beyond being a consumer of clean energy, but also an exporter.

The company will begin by opening a thin-film factory in Germany in 2009, followed by a factory in Abu Dhabi a year later. The goal is to reach 210 megawatts of production capacity in a couple of years.

The announcement comes on the heels of Q-Cells' selection of Mexico for its latest manufacturing center.  Interestingly, Q-Cells' original manufacturing facility is based in Germany.

Q-Cells' new manufacturing center, based in Mexicali, will be hosted in a 10,000 acre science and technology industrial park.  Proximity to the U.S. market appears to be a major driver of the move.  Production in Mexico will no doubt create additional competition for U.S. thin-film producers like First Solar, Nanosolar, and OptiSolar.

Apple may be looking at solar technology to power its latest electronic gadgets, according to Earth2Tech. The report, originating on Engadget and based on a MacRumors posting, cited a recently published patent application.

The patent application claims that the company is investigating the use of solar power in all mobile devices, included handhelds and portable computers.  Specifically, the patent calls for embedding solar panels behind mobile device LCD screens.

Apple hasn't always been seen as a green company.  In fact, the company has been heavily criticized fort not accounting for its environmental footprint. 

Apple's foray into solar powered batteries seems like a step in the right direction, and a win-win in terms of its business priorities and protecting the environment.  Not only could solar technology extend the life of a mobile device, but it will help reduce greenhouse gas emissions generated by pulling from the grid. 

Apple's adoption of these technologies could also help to drive the worldwide market for both solar energy and batteries. 

A report released yesterday by the Energy Information Administration paints an unfortunate image of the state of U.S. greenhouse gas emissions - they are going up faster than the rate of electricity generation. 

According to the report, emissions from the electricity sector rose by three percent as electricity generation rose by 2.5 percent. This means that U.S. electricity generation was actually dirtier in 2007 than in the previous year. 

The EIA states that the relative increase in emissions reflects a decrease in hydroelectric generation due in large part to droughts, forcing utilities to use natural gas, a cleaner form of fossil generation than coal, but still one with a carbon footprint.  Natural gas produces about 40 percent less CO2 than coal. 

A more frightening finding in the report is that the vast majority of this increase did not come from industry, but from households.  According to Environmental Capital, U.S. industry continued to cut emissions, which it has done since 1990.  Households, on the other hand, increased emissions by 4.4%.  The EIA points out that this reflects the fact that more Americans are enjoying a higher standard of living, complete with flat screen TV's and central air conditioning systems.

This result provides another stark example of the need for public policy that aligns the utilities' economic incentives with environmental stewardship.  Below are a few policy steps that would create these proper incentives:

1. Extend the renewable energy tax credits:  The House again passed a bill to extend these credits and now it awaits a Senate vote.  Passing the extensions would send a clear signal to entrepreneurs to start building these renewables projects and to utilities that they could count on this clean future energy supply.

2.  Decoupling:  By decoupling a utilities' revenues from the amount of energy it sells, it creates a disincentive for utilities to sell more energy.  In other words, create a financial incentive for utilities to earn on energy savings, not energy sales.  This way utilities, who interact daily with every American and all businesses, can serve as a conservation ambassador driving good public policy.

It works.  In California we've had decoupling laws for thirty years.  During this time period, the state's per capita energy use has remained flat, while the rest of the country's has increased by 50 percent.  For PG&E's customers, it has meant savings of $22 billion and the avoidance of 135 million tons of CO2. 

Meanwhile, California - the world's sixth-largest economy - has seen economic output per unit of energy improve by 40 percent, versus only 8 percent for the remainder of the country.  In other words, we can have economic growth and help the environment.

3.  Pass federal greenhouse gas emissions reduction legislation:  A harmonized federal policy will create clear direction for utilities, industry, and citizens.  A patchwork of laws will only make it harder for these players to take action in a meaningful way. 

A recent report by the NRDC and Ceres, sponsored by PG&E and PSEG, benchmarked the greenhouse gas emissions stemming from electricity generation and looked at the abatement impact of competing emissions reduction legislation.  The report provides a good starting point to understanding the different types of approaches to legislating greenhouse gas emissions and to the complex nature of regulating utilities with varying levels of CO2 output.

Calling all paparazzi!  There's a new celebrity in town - the high profile cleantech venture capitalist. 

Today, VantagePoint Venture Partners announced that former CIA head James Woolsey has been hired as a partner.  Woolsey will be focusing on energy issues, the environment and national security.  Or as he puts it, he'll be examining technologies that appeal to "tree huggers and hawks."

Woolsey's hiring follows Vice President Al Gore's move from national policymaking to cleantech investing. Last November, Gore joined Kleiner, Perkins, Caufield, and Byers as a partner.

While the hiring of these two high-profile policymakers may not elicit flashing of bulbs or the red carpet, it certainly does validate the staying power of the cleantech sector, which reached $100 billion globally in 2007.  Their hiring also highlights the vital role that the cleantech sector could play in solving some of the world's most challenging policy issues.

Wind power could provide 20% of U.S. electricity needs by 2030, according to a new DOE report released this week.

The report, titled "20% Wind Energy by 2030: Increasing Wind Energy's Contribution to U.S. Electricity Supply," identifies the steps that need to be addressed to reach the 20% goal.  According to the Wall Street Journal's Environmental Capital blog, obstacles include reducing the cost of wind technologies, building new transmission infrastructure, and enhancing domestic manufacturing capability.

Wind currently accounts for about three percent of PG&E's energy mix and we've added more than 250 MW to our future contract mix over the past nine months.  That means that we have 1061 MW of wind energy under contract or delivered.

However, as much as we believe in adding clean renewable sources to our mix, wind poses a bit of a challenge for all of California's utilities.

Wind blows at night in California, which means that we're getting a renewable source during a time when we don't need a significant amount of energy.  In the past, we've been able to store wind energy via the Helms Hydroelectric facility to be used during the day time peak demand hours (roughly 11 am to 7 pm).  We use the clean wind power to pump water uphill to a reservoir, where it is stored.  Then during the day, we generate electricity by running the water through the hydroelectric facility.  It's truly an amazing engineering feat, yet requires a significant capital investment. 

We're also looking at electric vehicles as a way to store off-peak generated wind energy.  At some point we could see plug-in electric hybrid vehicles (PHEVs) serving as mobile storage facilities. Our customers would plug their PHEV in to a 120 volt outlet at home during the night following their daily commute.  Then each car would sell back the energy to the grid when needed during the day.  The car would communicate with the utility, so that it knows exactly how much to take depending on the driver's needs. 

We're a few years off from this scenario, but we've been doing some interesting partner work with Google and Tesla, and discussing the need for more electric vehicles (EVs) with the major U.S. automakers. 

With advancements in battery technology we could also have onsite storage capacity, whereby wind energy is stored at the generation facility and brought on the grid during the day when demand is highest. We're also working with venture capitalists and entrepreneurs to develop this market. 

Whether it's onsite or through PHEVs, it's clear that we'll need improved storage capacity to truly take advantage of California's abundant, yet off-peak wind supply.  It should be interesting to see how this plays out. 

As first reported in today's New York Times, Nissan Motor Company announced plans to spend nearly $1 billion to develop and sell an electric car in the U.S. and Japan by 2010.

The Japanese car company would be the first major auto manufacturer to bring a zero-emission vehicle to the U.S. market.

According to the Times story, Nissan's chief executive, Carlos Ghosn, decided to accelerate development of electric vehicles because of high gas prices and environmental concerns.

Ghosn's remarks shift a major shift in policy.  During the 2005 National Automobile Dealers Association, he called electric hybrids niche products useful only in markets with strict fuel economy and emissions standards, like California.

His change in tone reflects a growing trend among U.S. automakers.  GM and Toyota have both publicly stated that are working on electric vehicles and will have them on the market in 2009 and 2010 respectively.

What makes the Nissan announcement different is that the company's French alliance partner, Renault, has already signed a deal with California-based Project Better Place (PBP)to produce electric cars for sale in Israel and Denmark.  PBP is lead by Shai Agassi, who I saw speak at the Fortune Green Brainstorm Conference last month.

This partnership means that Renault-Nissan is serious about building cars for actual markets.

Katie Fehrenbacher of Earth2Tech wrote a very helpful piece today looking at the pros and cons of distributed solar vs. utility scale solar.

Her story was driven by a keynote speech given by PG&E's Roy Kuga during the Berkeley-Stanford Cleantech Conference Series.

It's fairly common to look at these two approaches as competing and I am glad that she's been able to look at this objectively. Both approaches are extremely complimentary and we'll need both to meet our future energy needs and address climate change. There probably will not be a silver bullet when it comes to solar technologies.

One interesting point to add on to her piece is the idea that there is also a middle play, which combines photovoltaic technology (PV) at a utility scale.  Last year we signed deals with GreenVolts for two MW and Cleantech America for 5 MW.  These companies use PV technology and site relatively small utility scale projects closer to urban populations, thereby cutting down on distribution costs and land use needs.  There are others out there, like OptiSolar, who are looking to do similar projects, but with thin film technology.

With so many new technologies and such a pressing need, it will be a very interesting space to watch over the next few years, when the utility scale projects are projected to come online.

A new report released today by the United Nations Environment Program highlights that global renewable energy investments reached $100 billion in 2006.

The report, Global Trends in Sustainable Energy Investment 2007, analyzes the growing field of global renewable energy and energy efficiency investments. 

The report optimistically states that 2007 data appears to be continuing upward with investments occurring in sectors and regions previously considered too risky and too illiquid to merit the attention of the institutional investment community.

The report also notes that OECD countries still dominate as investment recipients, but that developing countries are rapidly emerging as investment centers.  Specifically, China is now the second largest recipient of venture funding, behind the U.S.

The report concludes that the $100 billion milestone seems to be reflective of a "full-scale industrial development, not just a tweaking of the energy system." 

As reported in USA Today, China is now the world's largest CO2 polluter.

The Journal of Environmental Economics and Management today will issue a report that highlights China's passing of the U.S. as the world's number one CO2 emitter.

What's most alarming is the rate at which China's emissions are growing fueled in large part by the country's economic growth.  The country is cutting the ribbon on a new coal-fired power plant every week. 

The environmental implications of this exponential growth in greenhouse gas emissions will be tremendous. 

Moreover, it may result in a standoff between the U.S. and China over international regulations.  One of the U.S. Government's arguments as to why it does not support international mandates on CO2 emissions is because of the growth at which China and India are emitting.  The logic is that all countries must cut emissions or the effort of participating countries will have little or no impact on worldwide emission reductions.

It's a classic collective action problem. On the one hand, it's difficult to ask China, India, and other developing countries to not use an abundant and cheap source of energy.  At the same time, global warming is a...well...global problem, and emissions will need to be cut worldwide if we are to address the very real challenges associated with climate change.

We have a unique perspective on this.  We are members of the China-U.S. Energy Efficiency Alliance - a group designed to share energy efficiency best practices between the two countries.  As a group member we've sent delegations to China to understand their challenges and hosted Chinese delegations to share our experience with energy efficiency and renewable energy in California - arguably the most successful U.S. example.

Energy efficiency would seem to be the perfect solution for developing countries, who cannot afford to invest in more costly renewable energy.  Energy efficiency provides these countries with an opportunity to reduce energy demand and save consumers money. 

However, as UC Berkeley Fellow Robert Collier points out in a recent story in the UC Berkeley Alumni Magazine, energy efficiency will need to be a mandate by the Chinese government.  When choosing between investing in expanding their business and being energy efficient, most Chinese industrial organizations will most certainly choose the former.

Today the Philadelphia Phillies dipped their toes into the world of clean energy by purchasing 20 million kilowatt hours of Green-e Energy Certified Renewable Certificates (REC's).  The purchase will offset the energy use at Citizens Bank Park for the year.

As part of the EPA's Green Power Partnership, the Phillies' purchase is the largest purchase of renewable energy in professional sports. 

REC's are an interesting way of greening the Phillies' operations and part of a larger trend in Baseball teams becoming more environmentally friendly.  Len wrote an interesting post last month about how the Nationals introduced their new green ballpark.  And last year, PG&E partnered with the Giants on making AT&T Park the first major league stadium with solar energy.

It will be interesting to watch how environmental groups react to the Phillies' decision to use REC's. Some groups have argued that this approach is akin to a license to pollute.  Instead of focusing on producing clean energy or focusing on energy efficiency like the Nationals, opponents might argue that REC's aren't really helping to create cleaner energy.

We launched ClimateSmart - a voluntary customer carbon offset program - and ran into this argument.  We launched knowing that this would be a potential criticism; however, we designed the program using the most stringent protocols created by the California Climate Action Registry (CCAR). 

To do carbon offsetting well, one must account for additionality, which means that the project would not be done in the course of business if it weren't for the additional investment generated by the credit.  CCAR's protocols do account for additionality.  I am sure that the REC's created by the EPA do as well, but the Phillies should be aware of this issue when communicating to their fans. It's very complicated and could be a criticism, even if well-intended.

Only two days into the week and we have a ton of movement in the solar industry.

As reported by Earth2Tech.com, solar thermal start-up SkyFuel announced that it is receiving $17 million in a series B round of funding from Leaf Clean Energy.  

According to Earth2Tech, SkyFuel's announcement follows nine digit funding announcements last week from Stirling and eSolar. Stirling raised $100 million and eSolar $130 million.

The Albuquerque-based SkyFuel uses a different type of technology from other solar thermal companies, like BrightSource, Ausra, and Solel.  SkyFuel claims to have created an inexpensive and light material called "ReflecTech."

In addition to the technological story, what I find interesting is that all of these companies are raising capital in a tough economy and in the face of uncertainty around federal tax credits that will greatly impact the returns on these investments. 

Another interesting movement in the solar industry this week was the announcement by Sunrgi.  As reported today in USA Today, the company claims that it can use lenses to concentrate sunlight by more than 1,600 times to produce electricity on photovoltaic panels in the five to seven cents per kWh range.  To put this in perspective, conventional generation is in the nine cents per kWh range.

According to Greentech Media, similar companies can concentrate in the 500-832 times range.   Is the Hollywood-based Sunrgi pulling a blockbuster hype blitz or is this the real deal?

Last Friday Ohio announced that its state senate passed legislation mandating a renewable portfolio standard (RPS). The bill, awaiting Governor Strickland's signature, mandates that 12.5% of the Ohio's electricity must come from renewable sources by 2025.

Ohio is now the 26th state in the U.S. to enact a RPS.

In contrast to California's 20% by 2010 RPS goal, this may seem like a fairly weak mandate, but it requires context. Ohio gets 87% of its power from coal. Moreover, the state is a major producer of coal, meaning that a move to renewables could have a broader economic impact.

Ohio's political leaders deserve credit for moving this bill forward in the face of some very tough odds. They also should get recognition for focusing on energy efficiency by setting a goal to reduce energy usage by 22% by 2025.

Energy efficiency benefits the environment and puts dollars immediately in the pockets of energy consumers. It's the quickest and most cost effective way to reduce greenhouse gas emissions.

Environmental groups hailed the bill as a way to reap the environmental and economic benefits of diversifying Ohio's electricity mix with homegrown wind and solar resources. 

Apparently, the state has substantial wind resources along the glacial ridges of central Ohio, across the farmlands of northwest Ohio, as well as on and off the shores of Lake Erie. Within the next decade, say some environmental groups, Ohio could generate at least 10% of its electricity from wind power alone.

Pasadena - Following a stellar first day and a very fun evening with Chuck Leavell at the piano bar, the Fortune Green Brainstorm's second day brought more thought provoking discussion.

The morning started with Todd Woody's electric car panel. Participants included Elizabeth Lowery of General Motors, PG&E's Peter Darbee and Jan-Oluf Williams of Think Global AS. 

The conversation highlighted the benefits of the electrification of the auto industry - inexpensive and clean fuel sources, and energy independence.  The panel also highlighted challenges, like the need to bring more electric vehicles on to the market.  GM is planning on mass producing its Volt model in the 2009 time frame.  Think Global is also working on selling 30,000-45,000 vehicles globally in the next few years.  Other challenges include battery advancements and the need for greater infrastructure to support these vehicles.

One notable statement by Peter as noted in Todd's latest Green Wombat post is that he would like to replace the oil industry.  In the context of the conversation, Peter was saying that we would like to give our customers more choice in how they use energy in the home and in the way that they use transportation. 

Darbee added that if you look at the carbon emissions from an electric vehicle powered by a clean utility like Exel, Entergy, FPL or PG&E vs. oil, the environmental benefits are tremendous.

Following the panel several attendees asked Peter if we were interested in the electrification of the auto industry because it means that we will sell more energy.  We spent some time explaining California's decoupling laws and how we do not make more money by selling more energy.

Later in the day, famed venture capitalist Vinod Khosla, countered the electric vehicle movement by saying that cellulosic ethanol is a much more cost effective and environmentally source of fuel. 

Another interesting panel was Adam Lashinsky's interview of Bjorn Lomborg of the Copenhagen Consensus Center.  The author of the "Skeptical Environmentalist" and "Cool It" offered a very reasoned perspective on why climate change and other environmental problems should be dealt with in a responsible way.  

The day also featured two CEO interviews with Hugh Grant of Monsanto and Michael Dell of the eponymous computer company.  The range of issues and sectors reflected in these conversations illustrates the breadth of the green movement in global business.  It's everywhere and on everyone's mind.

The question then is: what next?  We all recognize the need to act and the real economic and environmental benefits with these actions.  But I couldn't help but feel that there is still some confusion about where companies should be focusing their efforts.

I think that this is where effective public policy can play a huge role.  I touched on this subject in yesterday's post.  Clear market signals from our policy makers in D.C. will really help to answer the "what next?" question, especially as it relates to the climate change challenge.     

Pasadena - On the road today at the Fortune Green Brainstorm event.

I feel very fortunate to be attending this event as a wallflower - it's an unprecedented gathering of leaders in the green business space. 

One interesting speaker was Shai Agassi of Project Better Place.  Shai and his team are working hard to change the entire relationship between the transportation and utility sectors by providing the infrastructure to support the electrification of the auto industry.  It's this type of ingenuity that will help to solve our addiction to oil and improve the environment. 

The first day of the conference featured a full course of interesting panels, ranging from nuclear energy to innovative green start-ups to public policy.  One interesting panel featured California Attorney General Jerry Brown.  AG Brown highlighted a number of lawsuits that this office is pursuing to help California push environmental policy in the face of federal opposition. 

PG&E's Peter Darbee participated in numerous panels.  Of particular note was his discussion on a solar energy panel, "Is Solar the Answer?"  Moderated by Fortune's Todd Woody, the panel featured Ausra CEO Bob Fishman, Applied Materials CEO Michael Splinter, and Bill Gross of eSolar - who by the way just scored $130 million in funding from Google among others.

The final outcome:  solar might not be THE answer, but it will play a huge role in meeting our future energy needs and addressing climate change.  All participants agreed that with rising natural gas costs, technological improvements, and a clear price for carbon, solar is becoming increasingly more competitive. 

What's needed now is a clear market signal from federal lawmakers by way of federal tax credit extensions and greater R&D resources for renewable energy.

With so much going on, I could go on about the event. But I'd miss all of the evening's main attractions.  Stay tuned for more Green Brainstorm tomorrow...

Today we announced the arrival of SmartAC to the East Bay with the installation of a SmartAC Switch on the home of Walnut Creek Mayor Gwen Regalia. 

The program, initially launched in Stockton in February 2007, is now available to all East Bay residential and small business customers.

By enrolling in the SmartAC program, the utility's East Bay Area electric customers with central air conditioning can now participate in a voluntary program that helps PG&E and the State of California avoid summer heat power interruptions.

We designed the program to be voluntary and flexible with the choice to opt-out.  We were extremely sensitive to the idea that we would be seen as "big brother" controlling our customers' thermostats remotely.  It seems our sensitivities were not without reason.  A few months back the CEC proposed an idea under Title 24 energy efficiency standards to require all new thermostats to have this remote controlled technology.   This proposed mandate created quite a storm among bloggers, eventually leading to a New York Times story and the rescinding of the proposal.

The success of PG&E's SmartAC program demonstrates that if done correctly - that it is voluntary with the opt-out choice, customers will gladly participate. We've actually been amazed by how well the program has been received by our customers.

PG&E is one of California's largest private land-owners.  This fact blew me away when I first learned of it.  But it actually makes sense if you think about all of the company's hydro facilities and other transmission and distribution infrastructure throughout the state. 

Today the company took a huge step in preserving a significant percentage of this land by announcing that it has submitted to the California Public Utilities Commission (CPUC) a plan to protect 140,000 acres of its Sierra Nevada and Cascade mountain watershed lands and Carrizo Plains for the benefit of current and future generations of Californians.

PG&E is also working in close cooperation with the Stewardship Council to fund its Youth Investment Program. The grant-making program is designed to better connect California's youth with the environment and to help build the next generation of environmental leaders and stewards.

One of the most rewarding parts of working in the cleantech space is witnessing the amount of innovation rapidly occurring at the intersection of science and business.

Last night I was able to see the excitement generated by this innovation during the UC Berkeley's Center for Entrepreneurship and Technology's Cleantech Innovation Prize.

The 2008 Venture Lab Clean Technology Innovation Prize event, hosted on Berkeley's campus, brought together and recognized teams of  UC Berkeley engineers, scientists, and Haas School of Business students who are working on applied research and technology with commercial potential in the field of clean technology.

This year, sixteen teams focusing on some of today's most pressing clean technology challenges, were recognized as semifinalists. The teams then presented their technologies to a panel of judges consisting of venture capitalists, renewable energy entrepreneurs, and Hal La Flash, PG&E's director of emerging clean technology policy.

All of the semifinalists had great concepts and you could see that some of the technologies had real potential for commercial application. It was clear from some of the judges' questions - especially those for the VC community - that there was real interest in funding some of the projects.

The judges selected four winners out of the sixteen semifinalists. A third place tie went to a team focused on improving battery capacity and another working with optics to improve solar efficiencies.  Second place went to a team using mobile technology to develop sensors that monitor riparian systems and traffic flow.  The first place team developed a low cost fuel cell, which could be utilized by citizens in third world countries to power lights and small electronic devices, like phones.  

Winners received $20,000 in cash and prizes. Additionally, the Kauffman Foundation provided $5,000 in travel scholarships to the competitions leading (and interested) teams to attend Copenmind - a global university-industry conference in the space of clean tech-- in Copenhagen, Denmark, to be held Sept. 1-3, this year.

A quick update on the renewable energy tax posting from earlier this week. 

United States Senators John Ensign (R-NV), and Maria Cantwell (D-WA), led a bipartisan group of senators on Friday to announce a bill designed to encourage the development of renewable energy and expand energy efficiency in buildings, homes and appliances.

"Satisfying our energy needs and reducing our reliance on foreign sources is a challenge that we must meet, but that can only happen with the right incentives in place," commented Ensign, announcing the introduction of the bill into the Senate. He continued: "Our bipartisan bill will help put us on a path toward energy independence with American ingenuity leading the way."

The Clean Energy Tax Stimulus Act of 2008 extends incentives to encourage renewable energy.

The legislation extends the placed-in-service deadline through 2009 for the Production Tax Credit to encourage electricity production using renewable energy resources such as geothermal, wind, biomass, and hydropower facilities. The bills authors argue that with this change, these renewable energy plants will have valuable tax stability for 10 years.

In addition, the bill proposes to extend the solar and fuel cell Investment Tax Credit for eight years to encourage development of these technologies.

We're hopeful that this will finally be the bill to extend the renewable energy tax credits.  It appears to have bipartisan support.  The measure is also co-sponsored by 28 other senators including Senator Pete Domenici (R-NM), Ranking Member of the Senate Energy & Natural Resources Committee. The bill is also supported by Democrats like Boxer, Feinstein, Biden, and Stabenow; and Republicans like Hutchinson, Dole, Hatch, Stevens, Coleman and Sununu.

One of the most frequent questions I get from reporters is whether or not the extension of the energy tax credits by the US federal government will negatively impact several of the renewable energy power purchasing agreements we've announced over the past six months? 

This question is sure to heat up soon with speculation that two U.S. senators, Maria Cantwell, D-Wash., and John Ensign, R-Nev., are preparing to introduce a new renewable energy tax credit proposal within a week. 

The Cantwell Ensign proposal would represent the fourth attempt at securing tax credits in the past few months. Two bills failed Senate approval in December and most recently, the Renewable Energy and Energy Conservation Act of 2008, which included a section securing renewable energy tax credits, was narrowly defeated in February. 

Much is at stake.  According to a report by the Prometheus Institute and Greentech Media, $30 billion worth of solar thermal plants have been announced in the past six months.  These include more than 1600 MW from agreements signed by PG&E. 

Back to the question on the impact of these credits on all of these projects.  The basic answer is yes, there will be a significant impact.  But it's unclear as to how much.  Given the climate change, national security, and economic benefits derived from greater adoption of renewable energy (see Editorial below), it's likely that these projects will still be built. But it may take longer, delaying economies of scale and keeping costs high relative to conventional dirtier sources of energy.  We believe that the time to act is now. 

Peter Darbee, PG&E Corp's Chairman, President, and CEO makes a very compelling case for the need to extend the energy tax credits in today's Energy Daily.  I've included below the text in its entirety.  I recognize that this makes today's blog entry extremely long, but given the importance of this subject and the need for urgent action, I am hoping that his words will motivate.  

Senate Must Renew Renewable Energy Tax Credits

As the head of one of America's largest electric and gas utilities, I like other utility executives have to consider the energy future that lies ahead for our company, our customers and the country. The more I talk with experts about the global warming crisis, the more I am convinced the problem is real and needs to be addressed immediately.

Across the country, we are seeing hotter average temperatures, more extreme weather and frequent droughts. In my home state of California, the predicted loss of snow pack will mean less hydropower as we face soaring demand for electricity during the hot summer months.

But if controlling greenhouse gas emissions is essential, the question on everyone's mind is how we can accomplish that without hurting our economy.

Congress has an immediate opportunity to take a step in that direction by supporting efforts to develop competitive new sources of renewable power that will not only reduce our carbon footprint, but also create new green jobs to boost our economy.

By providing tax incentives for renewable power as it did for new nuclear power development, Congress can help make the case for stripping carbon out of our energy supplies as strongly in our economic self-interest as it is a global environmental imperative.

In February, the House of Representatives passed a timely measure to prevent the expiration of production and investment tax credits for renewable power at the end of this year. In addition to extending the credits for several years, the House approach supports important energy efficiency programs, encourages investment in new technology such as "smart meters," the cornerstone of an advanced electric grid, and provides incentives for plug-in electric vehicles that could dramatically reduce our dependence on foreign oil.

Over the next couple of weeks, the U.S. Senate will have the opportunity to vote on similar legislation to extend or kill vital tax credits that nurture the growing wind, geothermal and solar power industries.

But partisan disputes in the Senate over how to fund these credits, if unresolved, could deal a devastating blow to the renewables industry.

A recent study by Navigant Consulting found that failing to renew the credits could cost more than 116,000 U.S. jobs and nearly $19 billion in annual U.S. investment.

These losses would be felt across the country, in states such as California, Colorado, Illinois, Iowa, Minnesota, North Dakota, Oklahoma, Oregon, Pennsylvania, Texas and Washington.

Those who wonder why Texas should care about supporting alternatives to oil and gas don't realize that it now harbors a quarter of all wind power capacity in the United States, and has tremendous potential for further growth.

Although the Navigant study was commissioned by the wind and solar industries, our company's experience as a major buyer of renewable energy attests to its general conclusions. Already we see a marked slowdown in new renewables projects slated for 2009 and beyond, as developers wait to see whether Congress will act.

Navigant's conclusions are also supported by the nation's experience with on-again, off-again federal support for renewables.

The expiration of production tax credits in 2004, for example, caused a 77 percent drop in installed wind capacity that year relative to 2003.

Last year, with credits in place, the wind industry enjoyed its best year ever, growing 45 percent. Developers installed more than 5,000 megawatts of new generating capacity, more than twice the previous record and enough to power 1.5 million homes.

The incentives have also helped drive tremendous growth of the solar industry, albeit from a much smaller base. Our utility alone contracted for more than 700 megawatts (MW) of power from solar developers last year. As scale grows and technology advances, the cost of solar photovoltaics is plummeting and the cost of solar thermal power is approaching parity with gas-fired generation.

This tremendous spurt of innovation and development could be squelched just when the national economy, buffeted by the housing collapse and record oil prices, needs all the support it can get.

Promoting renewable electric power, combined with incentives for gas-sipping plug-in hybrid electric vehicles, could drastically reduce both the carbon footprint of American transportation and our need for oil imports.

Senate support of tax incentives for new renewable development is an affordable first step toward reducing our nation's carbon emissions. And with the fate of several promising industries and tens of thousands of jobs at stake, it is a measure we can't afford not to take.

This past weekend, PG&E joined the City of San Francisco and the World Wildlife Fund during Earth Hour - an event where cities and towns from around the world turned off their lights for an hour as a call to action against climate change. 

The brilliance behind the event was its simple statement - billions of people around the world have the tools at their disposal to make a difference in the fight against climate change.

We continue to receive calls from customers and media about the event's success.  Specifically, they want to know how much power San Francisco saved by turning off the lights for one hour?  Based on our records, we actually could not see a noticeable difference on the power grid. 

Does this mean that no energy was saved?  Absolutely not.  Certainly, many homes and businesses turned their lights off.  But when you look at the aggregated impact on the grid for that one hour, it's difficult to accurately say how much power we all saved.

Does this mean that the event was not successful?  No way.  The true measure of success is how much awareness the event brought to the impact that energy use has on climate change.  The event also highlighted a simple solution - energy efficiency.

We've been working on making energy efficiency "sexy" for our customers for almost 30 years.  I always ask myself:  how can saving money and saving the environment not be considered sexy?

We've been wildly successful providing our customers with energy efficiency programs over the past thirty years.  We've helped our customers save $22 billion and helped prevent more than 135 million tons CO2 from entering the atmosphere.  Yet, we feel like we're just scratching the surface when it comes to the things we can all be doing to reduce energy use.

Which is why we're always looking for interesting ways to make energy efficiency visible.  Last October, we participated in a similar event called Lights Out San Francisco. We also partnered with the Sierra Club to give away one million compact fluorescent light bulbs (CFL's) during the 2007 October Energy Awareness Month.  To date, we've pushed more than 30 million light bulbs since 2000.

Another interesting side note is that San Francisco Board of Supervisors President Aaron Peskin recently proposed a measure to reduce energy use in the city's buildings during the night time.