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John Petersen
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John Petersen is the executive vice president and chief financial officer of ePower Engine Systems, Inc., a Kentucky-based enterprise that has developed, built and demonstrated an engine-dominant diesel-electric hybrid drivetrain for long-haul heavy trucks that promises fuel savings of 25 to 35... More
My company:
Fefer Petersen & Co.
My blog:
ipo-law.com
  • The Chinese Approach to Grid Storage 18 comments
    Jan 9, 2012 11:57 AM
    One of the many organizations that sends me solicitation e-mails is the China Energy Storage Alliance. This morning I got an e-mail from them that shows how the sensible Chinese are approaching the issue of grid-based energy storage.

    As part of a national push to integrate renewables into the power grid, the Chinese Ministry of Science and Technology has launched "The National Wind & Solar Renewable Integration Energy Storage Demonstration Project" that will have:
    • 300-500 MW of wind generation;
    • 100 MW of PV generation; and
    • 110 MW of energy storage.
    During the first stage, the Ministry of Science and Technology will install and integrate:
    • 100 MW of wind;
    • 40 MW of solar; and
    • 20 MW of energy storage.
    The most fascinating aspect of the storage component is that instead of picking a winner for the first 20 MW of storage,  Ministry of Science and Technology will break it down into six different systems from six different suppliers as follows:



    When the first round of testing is done, they'll decide how to build out the other 90 MW of needed storage.

    Imagine that! A government agency that thinks real world testing of competitive products and technologies is important.

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Comments (18)
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  • Gary Jakacky
    , contributor
    Comments (2764) | Send Message
     
    Sensible Chinese? Then why are they connecting empty Potemkin megalopolii [ :) ] with bullet trains that have no passengers? Chinese accounting and accountability are opaque, John. Invest at your own risk.
    9 Jan 2012, 12:31 PM Reply Like
  • John Petersen
    , contributor
    Comments (30650) | Send Message
     
    Author’s reply » This Instablog has nothing to do with investing and everything to do with responsible investigation of competing technologies. I do my best to stay away from Chinese companies because I know enough about Asia to know that I don't understand Asia. Since I don't invest in things I don't understand, I don't invest in Asia or suggest that anybody else should.
    9 Jan 2012, 12:34 PM Reply Like
  • Gary Jakacky
    , contributor
    Comments (2764) | Send Message
     
    Indeed...that IS a good rule. "If ya don't understand it, don't invest in it." I lived throughout Asia and also found them inscrutable. I do read your blogs and posts on EVs etc and, fortunately, am less ignorant on thes subjects than before. Thanks!
    9 Jan 2012, 01:33 PM Reply Like
  • GreenRiver
    , contributor
    Comments (3834) | Send Message
     
    We used to do things that way in the US.

     

    That is, until the first defense contractor figured out that wining and dining procurement managers and bribing politicians (or maybe the other way around) is a far more efficient way of earning a good 'ol capitalistic profit.

     

    Leave it to the "communist" chinese to come up with a truly market based solution. Whoda thunk it.
    9 Jan 2012, 02:30 PM Reply Like
  • Mseekingalpha
    , contributor
    Comments (66) | Send Message
     
    Singling out defense contractors seems a little off target. Some politicians seem willing to be wined and dined by whomever will help keep them in power.
    10 Jan 2012, 10:34 AM Reply Like
  • GreenRiver
    , contributor
    Comments (3834) | Send Message
     
    I didn't mean to single out defense contractors to the exclusion of all other govornment vendors.... Just the historical perpsective that, since even before the WAS a United States of America, the govornment was being cheated by defense contractors. Washington complained mightily to the Continental Congress about the poor quality of the rations and supplies he was receiving at Valley Forge; supplies the Congress wa paying handsomely for.

     

    I only meant that the defense contractors showed the way, every other crooked vendor is following in their footsteps.
    10 Jan 2012, 12:19 PM Reply Like
  • John Petersen
    , contributor
    Comments (30650) | Send Message
     
    Author’s reply » As I recall imitation is the sincerest form of flattery.
    10 Jan 2012, 12:24 PM Reply Like
  • GreenRiver
    , contributor
    Comments (3834) | Send Message
     
    Nah....

     

    Plagiarism is the sincerest form of flattery. ;-)
    10 Jan 2012, 12:26 PM Reply Like
  • Mseekingalpha
    , contributor
    Comments (66) | Send Message
     
    When businesses find it easier to get governments to pay for their services rather than end users, they cross the nearly invisible line that leads to a quickened demise. Better to move to Switzerland.
    10 Jan 2012, 01:40 PM Reply Like
  • John Petersen
    , contributor
    Comments (30650) | Send Message
     
    Author’s reply » Did that in January 1998
    10 Jan 2012, 02:36 PM Reply Like
  • Mike Holt
    , contributor
    Comments (1638) | Send Message
     
    John, this approach seems to characterize many other development activities being pursued by the Chinese. They try something in one region of the country, and if it works, they roll it out in other regions of the country as well.

     

    I know this is going to seem different to you because you are very concerned about the safety of the lithium ion batteries now being used in electrified vehicles, but the strategy being followed by GM in rolling-out the new Chevrolet Volt is actually not so different from the "Chinese approach" described above. GM has initially limited production of the Volt to a relatively small scale and made the Volt available in only a few states. Based upon feedback they receive from consumers, they will then either scale-up production and make them available in the rest of the country -- in fact, the world -- or make whatever changes are deemed necessary before proceeding to a higher level of production.
    13 Jan 2012, 06:55 PM Reply Like
  • John Petersen
    , contributor
    Comments (30650) | Send Message
     
    Author’s reply » I think you missed the point Mike. The Chinese are engaging in modest testing to determine whether battery storage will serve their needs and find out which technology will serve their needs most cost effectively. In America, the bureaucrats have decreed that concepts will work and chosen the technologies that will work best without bothering to hold a horse race. I'll bet the Chinese get better results.
    13 Jan 2012, 11:42 PM Reply Like
  • Tampa Ted
    , contributor
    Comments (2660) | Send Message
     
    John - Its too bad ZBB didn't make it onto the above formal list. However, it appears that it will also soon be engaged in testing at a test site in China.

     

    http://bit.ly/wYCaWa

     

    "The joint venture has been named Anhui Meineng Store Energy Co. Ltd., or Meineng Energy.

     

    ZBB said Meineng won contracts to supply its EnerStore advanced energy storage and EnerSection power and energy control management products at a technology test center as well as a government demonstration site.

     

    Assembly will take place at a new factory in WuHu City that is expected to open by the end of March. Financial terms of the contracts weren't disclosed."
    24 Jan 2012, 10:16 AM Reply Like
  • Mike Holt
    , contributor
    Comments (1638) | Send Message
     
    John, I think it depends upon the level of activity under analysis.

     

    Elsewhere, you have indicated that GM performed insufficient testing of alternative battery technologies before rolling out the Chevrolet Volt, and that this left you with the impression that GM was using consumers as guinea pigs. In response to the point you were trying to make at that level of activity, I would say that your preference for the Chinese approach involving the introduction of different technologies into the marketplace to see which works best, versus GM's approach of analyzing, evaluating, and testing various technologies before they introduce them into the marketplace is in contradiction to what you have espoused elsewhere.

     

    I would further argue, as I did in my comment above, that the two approaches are similar in that both involve the roll-out of products on a limited scale within only selected markets before being manufactured and sold on a larger scale to a wider market.

     

    At the government activity level, I believe the approaches are similar here as well -- for better or worse. In both cases, the government has identified a targeted objective and has provided funding to a number of different companies who will then battle it out to come up with the most marketable solution aimed toward achieving the government's objective. In your article, you've focused on the Chinese government's push to integrate renewable energy into the power grid. The American government has targeted a similar objective, and provided various forms of funding to a number of different companies in a number of different industries, and is likewise waiting for them to duke it out to come up with the most marketable solution. Some of the companies -- indeed, some of the industries -- have proven themselves to be complete duds, but that's the price for insisting that the government doesn't play too much of a role in picking winners.

     

    The difference in approaches at this level is that the American approach is intended to be only temporary (we both hope) while the Chinese approach is essentially permanent -- the central role of the state has been imbedded in Chinese society for so many thousands of years, it defines China as much as the principles of liberty and justice define the USA. Furthermore, the degree of American government involvement has not reached the levels of government involvement that characterize many rapidly developing countries, such as China (although that's a slippery slope and a cause for concern to both of us as well).

     

    Absent temporary American government involvement, I'm concerned that global trends will foster a more rapid development of systems based upon an even greater role for government, in the economy and in other aspects of our lives. But, I do share your concern for the higher levels of "temporary" American government involvement. As Friedrich Hayek warned us in his book, "The Road to Serfdom," once that camel gets its nose under the tent....
    14 Jan 2012, 11:07 AM Reply Like
  • John Petersen
    , contributor
    Comments (30650) | Send Message
     
    Author’s reply » You're twisting my words Mike.

     

    If you can't see the difference between government testing everything in real life before making an implementation decision and government picking a winner without testing and foisting it on unsuspecting consumers, I think we're done.

     

    I wish you the best of luck in your investing.
    14 Jan 2012, 11:20 AM Reply Like
  • Mike Holt
    , contributor
    Comments (1638) | Send Message
     
    Sorry, John, I didn't mean to offend you personally. My intent was to compare and contrast the manner in which new technologies are introduced in China and in the US, including the nature and extent of government involvement in this process, and to draw out the importance of trends in this regard to investors.
    15 Jan 2012, 10:05 AM Reply Like
  • John Petersen
    , contributor
    Comments (30650) | Send Message
     
    Author’s reply » You succeeded. I'll not be responding to you in the future unless your posts are truly preposterous.
    15 Jan 2012, 10:39 AM Reply Like
  • nakedjaybird
    , contributor
    Comments (2855) | Send Message
     
    John - here's a tidbit about China's "successful" push toward needing more stored energy for renewables: the future for Axion Power Cube!!!! Big time.

     

    "And yet, Gansu, the home of about one million Chinese, has seen annual investments totally about $6 billion in wind, solar and other areas related to renewable energy. The result has been noteworthy. An area once known as a center for oil has largely replaced the now depleted wells with solar farms, wind farms and a smart grid. By 2020 the area should be more or less free of oil and largely running on renewable energies.

     

    If you multiply the million people in Gansu by 1,500 (i.e., to arrive at the approximate total population of China of nearly 1.5 billion), you'll see the scale at which China is hoping to build out its renewable energies: Gigawatts of wind and solar are likely to be eventually measured in four digits. If you do the math and make a few assumptions, you can see how China could easily spend $20 trillion on these efforts."

     

    And to assume a country on its way to spending this kind of money is headed for some sort of Armageddon is just silly. Remember too that renewable energies are labor- as well as resource-intensive."

     

    source: Silver, Copper, Gold... And China
    June 20, 2012 | 5 commentsby: Dr. Stephen Leeb | includes: GDXJ, GLD, JJC, NG, SLV
    20 Jun 2012, 11:27 AM Reply Like
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