Pictures of the Future Spring 2008
Energy for Everyone – Clean Tech in California
Saving Our Planet for Tomorrow
Of all the technology challenges we will face in our lifetimes, none will be bigger than the one represented by climate change. Today, California is a leader in providing answers to this threat. With its unparalleled ecosystem of venture capitalists, top universities, inspired leaders, and risk-ready state of mind, the Golden State is generating clean technology solutions at a rate that might just save our planet.
Berkeley, one of the hottest locations in California for clean tech, is home to hundreds of start-up companies such as Cyclos Semiconductor (left, top & middle) and Progressive Cooling (bottom), both funded by Siemens
Limitless electricity from solar and wind power; plug-in hybrid electric vehicles that "fill their tanks” at your employer’s parking lot during the day and provide distributed storage for excess energy from alternative sources; buildings that are so efficient they generate their own power and return excess energy to the grid; electronic components that draw up to 75 % less power than today’s—all of this and much more may be closer than previously thought.
Driven by mounting evidence of climate change, politicians, corporations, universities, the science and investment communities and the general public are focusing increasing attention and resources on a field known as "clean tech.” The field encompasses everything from energy generation, storage and efficiency in fuels, transportation, buildings, electronics and manufacturing, to advanced materials, and air and water purification. Collectively, developments now in the pipeline in this area hold the promise of transforming carbon-belching economies into climate-friendly renewable energy societies by 2050.
A quantum leap beyond yesterday’s environmental movements, clean tech has become "the fastest growing category in the venture capital area,” according to Ira Ehrenpreis, Chairman of the 2008 Clean-Tech Investor Summit and General Partner in Technology Partners, a Palo Alto venture capital company that manages some $750 million in investments.
Adds Ajit Nazre of Kleiner Perkins Caufield & Byers, a leading Silicon Valley venture capital company that recently added Al Gore to its long list of distinguished partners, "In the U.S. in 2007, approximately $2 billion—roughly one third of all venture capital investments—went into clean tech. The size of clean tech markets dwarfs traditional IT markets by orders of magnitude, trillions versus billions of dollars. Essentially, the entire U.S. fuel and transportation sector is a potential clean tech market, and it represents about 16 % of our $14 trillion GDP—in other words about $2.2 trillion.”
Clean tech is much more than previous gold rushes to computers and communications—it’s a high-stakes cause where the cost of losing is a future no one wants to bequeath to their children. "The development of new, carbon-neutral energy sources is needed to avert disastrous climate change,” says Dr. Steven Chu, director of the Lawrence Berkeley National Laboratory at the University of California (UC) at Berkeley, 1997 Physics Nobel Prize laureate, and co-chair of an international InterAcademy Council study entitled "Lighting the way: Toward a Sustainable Energy Future; Transitioning to Sustainable Energy” (see interview). "If we reach the tipping point at which the carbon dioxide and methane now locked in the tundra of Siberia and Canada is released, that will take us to a very different world,” he says.
Buildings consume 39 % of all the energy generated in the U.S., including 71 % of total electricity and 54 % of natural gas, amounting to $107 billion in 2003. Siemens’ "High Performance Buildings” plans provide energy-saving solutions for most of the categories shown above
Carbon Roadmap. Avoiding that bleak future is a cause California has embraced wholeheartedly through an increasingly focused convergence of interests on the part of government, universities, and the state’s world-class start-up community. For instance, in response to California legislation that sets greenhouse gas emission targets (a 20% reduction compared to 1990 levels by 2020) that are comparable to those proposed by the EU, the state Public Utility Commission (PUC) has proposed establishment of the California Institute for Climate Solutions (CICS). If approved by utility customers who would have to pay a few extra cents per month for it, CICS would create a coalition of all the universities in the state to develop a "carbon roadmap” designed to avert climate change. With a proposed budget of some $600 million per year, the organization would award grants to companies that can provide solutions.
"The roadmap will be similar to the one developed by the semiconductor industry in the Seventies,” explains Dean Shankar Sastry, head of the College of Engineering at UC Berkeley and CICS’s Chief Scientist. "The so-called Silicon Map resulted in Moore’s law because it focused an entire industry’s attention on a single goal. We hope to achieve similar results in the area of carbon reduction.” Sastry expects CICS to fuel the creation of new companies and new technologies. "It’s an example of our Silicon Valley culture—the idea of bringing together venture capital and big industry to invest in promising start-up companies.”
At the top of Sastry’s "to do” list for CICS is the development of technologies that will improve building efficiency. In this connection, he and others are working with Lawrence Berkeley’s Chu and the U.S. National Renewable Energy Laboratory in Golden, Colorado on development of "smart building” technologies. "Building efficiency represents the lowest of the low hanging carbon reduction fruit,” says Chu. "Buildings account for about 40 % of U.S. energy use. New technologies could easily result in a 50 % improvement in this area, particularly in lighting and office machines.”
Cool Computing. Just a few minutes’ drive from Chu’s hilltop office, Dr. Alexander Ishii and Prof. Marios Papaefthymiou are working on exactly the kind of energy-saving technology Sastry and Chu have in mind for reducing computer and office machine energy demand. With financing from Siemens’ Berkeley-based Technology-to-Business Center (TTB), the two entrepreneurs have founded Cyclos Semiconductor, a start-up that will exploit a novel chip design technology from Papaefthymiou’s research lab at the University of Michigan. The new technology—applicable to everything from cell phones to servers—promises to reduce power demand and associated heat in processors by 30 % to 75 % by recovering power from a processor’s clock and logic circuitry. "The core concept behind our work is that power can be recycled. Our design technology can be applied to any chip design, allowing chips to function like hybrid automobiles that return power to the battery every time you step on the brakes,” says Ishii. "There’s nothing else like this on the market. Our patented technology is basically ready for market, and we are working with Siemens on first deployments.”
Meanwhile, just a few cubicles away, Dr. Ahmed Shuja, head of TTB start-up Progressive Cooling, explains that his company may have an answer to the ravenous electricity demand of server farms. Thanks to rapidly increasing Internet usage, the market for data centers, each of which, on average, uses about 500 servers, is growing at 10% per year. Collectively, these centers account for 2.5% of total U.S. electricity demand "and that figure is expected to double in the next three to four years,” says Shuja.
His solution? A looped "wick” that uses capillary force to pump heat away from hot spots on processors and graphic cards. Unlike the heat pipes that often cool today’s processors, which are circular and made of copper or nickel oxide, Shuja’s device is flat and is made of silicon, allowing it to cover—or perhaps eventually become—a processor’s shell. What’s more, his patented chemical etching technique can produce millions of uniform, densely-packed pores per square centimeter. The result is that heat is channeled away so effectively that fans can potentially be downsized, thus cutting power demand and noise. "All in all,” says Shuja, "this new technology could enhance data center energy efficiency and opens the door to higher computing power with the same volume.”
California: Innovation Powerhouse
Although the growing focus on clean tech is a worldwide phenomenon, no other location outside the U.S. even comes close to Silicon Valley in terms of the magnitude of its venture capital investments in this area. Take solar energy, for example, the largest single clean tech category worldwide. According to a recent survey by Ernst & Young, in 2007, U.S. investors poured $859 million in venture capital into 25 major start-ups in this area. Of that, $517 million was invested in 15 companies in San Francisco’s Bay Area, and another $94 million in four companies in southern California. By comparison, Germany—the world’s second largest location for venture capital in solar energy—invested €70 million in seven start-ups in 2007. Other leading locations, such as the UK and France, invested €12 million and €9.6 million respectively. California’s patent registration figures also paint a remarkable picture of innovation, with 44 % of all U.S. patents in solar, and 37 % in wind technologies in 2006 coming from the Golden State, according to the California Green Innovation Index.
Sensors and Savings. Siemens’ clean tech start-ups plug into the bigger picture of developing energy-saving technologies for appliances and buildings and the efforts of government, academia, utilities and the entire private sector in California to provide solutions that will cut carbon dioxide emissions. "Our vehicle emission standards, our renewable portfolio standard, and our appliance and building standards are more aggressive than those in other (U.S.) states,” says Jackalyne Pfannenstiel, head of the California Energy Commission (CEC). "California’s Clean Car Law; the Global Warming Solutions Act; the Governor’s climate change, low carbon fuel standard, green building, and bioenergy Executive Orders; and adopted limits on the carbon content of new long-term electricity contracts are all groundbreaking actions,” she adds (see interview).
This climate-friendly environment has helped to stimulate the establishment of organizations such as the Center for Information Technology Research in the Interest of Society (CITRIS www.citris-uc.org), a public-private partnership headquartered on the UCB campus that has already produced over 500 spin-off companies. The Center focuses the efforts of thousands of students with more than 300 faculty from four UC campuses and industrial researchers from over 60 corporations, including Siemens, which is an Associate Corporate Member.
Building on its research in micro sensors, intelligent materials and advanced controls, CITRIS has embarked on an ambitious partnership with the PUC and the CEC aimed at eliminating spikes in electricity demand. "We plan to replace the electricity meters and thermostats in 11 million California homes with wireless models that receive localized, real-time energy-price information that is staggered from community to community and blended with weather information,” say Prof. Paul K. Wright of UC Berkeley’s Mechanical Engineering Department and CITRIS acting director.
The program also calls for wireless micro sensors developed at CITRIS to be adhesively applied to major appliances in utility customers’ homes. Powered by ambient vibrations and equipped with LEDs, the sensors will provide on-the-spot feedback as to when power is at a premium. Other sensors now being tested will detect human presence through changes in air motion and humidity, wirelessly adjust lighting and climate control systems accordingly, and will optimize these based on learning algorithms. "By making consumers aware of the cost of electricity from hour to hour, and optimizing energy use in every home, we expect this technology to eliminate the need for five to ten new power plants over the next decade in California alone,” says Wright.
Ideal for commuting, plug-in hybrid electric vehicles (PHEVs) can travel 60 km on an 8-hour charge of sunlight. Some employers, including Google (below) are already investing in this vision of the future
A Tank of Sunlight. Just as the CICS has come up with a kind of global vision for cutting residential electricity use, Prof. Andrew Frank, director of the Hybrid Electric Vehicle Research Center at the University of California at Davis has developed a global answer for transportation: it’s called the plug-in hybrid electric vehicle (PHEV). Very simply, a PHEV is a hybrid with an extension cord. PHEVs use lithium-ion batteries that typically store 10 kWh. Unlike today’s gasoline-electric hybrids that merely extend the range of a tank of gas, PHEVs that are now on the drawing boards of major auto manufacturers will be able to travel 40 miles on a "tank” of electricity. Forty miles is important—at least in the U.S.—because it’s the average distance traveled per day. Any additional miles would require old-fashioned gasoline or cellulosic ethanol produced from nonfood sources, including a variety of organic, industrial, and domestic waste products.
What’s amazing about Frank’s proposal—he has testified before the U.S. Congress and is internationally recognized as the "father of the plug-in hybrid”—is its extraordinary simplicity. "Here in California, a kWh of electricity goes for 10 cents. That’s enough to carry an average American car equipped with a PHEV drivetrain 4 miles,” he explains. "So you’d pay $1 for ten kWh, which would be enough to go 40 miles. To travel the same distance with gasoline, you’d need two gallons, which would cost you $7.” What’s more, Frank predicts that the difference in cost between gasoline, diesel and electricity will become wider as time goes on, increasing to "over ten to one within the next few years.”
PHEVs would solve a range of problems. "With only 20% market penetration, they would level the load for power plants, making the entire power generation infrastructure more efficient, and thus lowering the cost of electricity,” explains Frank. And according to a January 2007 Pacific National Laboratory study, if every car in the U.S. were a PHEV, the current grid could support more than three-quarters of them charging at night without building a single power plant.
PHEVs also open the door to personal energy independence. "With less than ten square meters of today’s solar panels you could produce a tank of power in eight hours,” says Frank. That’s a proposition that makes sense for many environmentally-minded companies interested in reducing fleet costs and, eventually, in encouraging employee use of PHEVs. Plug-in hybrids also offer the potential of collectively storing the huge but unpredictable amounts of energy produced by renewable sources, such as solar and wind farms. Finally, in a fully networked infrastructure, PHEVs could be equipped with dual-direction electricity meters, allowing them to buy and store energy from alternative sources, and then discharge it to a local grid for credit during periods of peak demand.
Trained as a mechanical and aeronautical engineer, Frank holds 27 patents and has many more pending. He is also co-founder and CTO of Efficient Drivetrains, Inc. a Silicon Valley start-up that sees vast opportunities for its unique technology in the Third World, where two- and three-wheeled PHEVs would not only reduce air and noise pollution, but ensure mobility.
Venture capitalist Nazre of Kleiner Perkins agrees: "I think that the plug-in hybrid is the vision that developing countries should go after. And if we combine PHEV technology with advanced solar distributed power, at some point we will see an exponential curve where it will really take off. Sure, we’re here to make money,” he adds, "but the most important thing we can do is to have a positive impact on the place we live—our planet.”
Arthur F. Pease
Incubating Businesses in Berkeley
Anyone who’s ever seen the incubators in which premies are kept warm and fed would know in a flash how perfectly the "incubator” metaphor fits Siemens’ Technology-to-Business (TTB) Center near San Francisco. Just a stone’s throw from the campus of the University of California at Berkeley, and in the heart of the most vibrant venture capital market on earth, the TTB offers a warm and nourishing climate for budding businesses. "We now have 25 technology-based products and businesses, including 10 that are related to clean tech. Fourteen of the 25 were launched in the last three years,” says TTB President and CEO Dr. Stefan Heuser. TTB’s team of venture technologists continuously scouts universities, research labs, start-ups, conference proceedings, and other sources for innovative technologies. "What we’re looking for are technologies that are a good potential match with Siemens’ businesses,” says Heuser. An offshoot of Siemens’ worldwide corporate R&D organization, TTB hires inventors, invests in early stage start-up companies, licenses IP, and helps to validate technologies and business cases. This either leads to prototypes ready for product development or venture-backed start-up companies on their way to becoming Siemens partners. For more, visit www.ttb.siemens.com/