Old Wizard

Battery Investing for Beginners, Part 2

John, The subsequent comments stenghten my assertion, I think, that China and Asia will lead in the lithium battrery race. The subsequent comments raise the environmental and raw material issues to a more formidable level than what I asserted and indirectly bring in the cost of labor as well. This is part of the reason I believe that our Government is ignoring the reality of their push to phev's, and that their investment strategy is muddled at best. It would be just another Government blunder if the deficit spending was not so great, but at worst it can be disasterous for the future well-being of our country.

Battery Investing for Beginners, Part 2

John, Thanks for the comprehensive article. I have profited from your articles in that I have a much greater appreciation of the whole energy storage evolution. I will disagree with your conclusion that the Chinese battery companies will not play a big part in our world. It is a fact that both GM and Ford are either negotiating with or have chosen asian battery makers over those in the US. Isn't it a familiar story that we invent, often start production domestically and when the product takes hold, the production goes off-shore, usually to asia or other low cost labor places where environmental and other regulations are not so stringent. As a case in point, First Solar's large production expansion has been in Malasia and off-shore. It's latest large contract is in China and the statement from the company spokesman was that such a project would not be possible in the USA because of the difficulty in tranmission and linkage to the grid.

Are Energy Storage Investors Chasing Their Own Tails?

Another good article, John. I caution you not to be too exuberent about GE's announcement. Immelt's stuardship at GE has not been exactly a rollicking success. The stock price, net profit, dividend, and product market share on engines, appliances, lamps and even generators to a lesser extent has decreased during his tenure while the risk in GE capital has increased leading to a downgrading of GE's corporate bonds. Deals like the one made with Warren Buffet weren't particularly advantageous for existing stock holders. The announcement, while making some sense from their new thrust into the green energy era, seems to be playing more to the politics of the country. GE management is on the Obama team and has gotten guarantees that it can go to the Fed loan guarantee window as a back up to shore up the cash requirements in GE Capital. Given the bet Immelt has made on windmill farms, electric grid management and medical record computerization, he must support the administration programs and 100m is good pr. The only problem is that demand at this point is pretty much Gov. fostered and may or may not be real, take longer to develop so that break even can be realized and not represent what the 200k or less user wants, needs or can afford. For example, what real evidence is on the table that leads us to believe that the railroads of the world want to buy and can afford hybrid electric train engines that makes the investment viable and at what point would their new batery venture coincide with a real windmill market. The Gov.'s goal is to provide 20% of todays generating capacity from wind and solar by 2030. Is the payoff from this investment going to break even in the next ten years? If I were running the ship I would be more inclined to build train engines that ran on natural gas, but my measure of performance would be nearer term and not driven by as many unpredictable dependencies such as politics, speed of windmill facility installation, development of high temperature reliable and safe batteries, and the time horizon of when effective electric grid management from wind generated electricity of any magnitude is brought on-line.

White House Report: GM Volt Is Not Ready for Prime Time

John and engstudent, It's nice to find folks who genuinely attempt to do real analysis instead of picking a solution that they like and not analyzing it for its true problem solving merits. The urgency of solving the energy dependency problem is not only security, based on geopolitical considerations, but one of economic viability for our country. The country has run an increasingly negative cash flow with the rest of the world since 1991 and this negative operating cash flow is approaching a trillion dollars/yr. This does not count borrowing to satisfy our yearly domestic budget deficits. Replacing imported oil with a commodity that we have in the USA should be a no-brainer, especially if it can be done quickly. Electric cars and the discussion of the viability of lithium batteries to power them seems to be great but no one really believes that elctric cars or hybrids could make a dent in solving the negative cash flow problem in 5 or even 10 years. This is why I favor the use of natural gas vehicles as a near term solution. It addresses the cash flow problem the earliest, stimulates jobs the quickest, reduces green house gases and air pollutants and really needs no new technological or economic miracle to be cost effective. I hope the Steven Chu who responded to your comments isn't the secretary of the treasury. If it is , we are really in trouble. As engstudent has pointed out, important components for the electric car would not come from the USA. I would also point out to Mr. Chu that if the chinese are ahead of us in lithium battery manufacture it would be difficult to compete with them because of their worker pay scales and safety rules and short of massive govenment subsidies or trade tariffs or embargos, we would always be trying to catch up. Miscellaneous, GM'S eastimated cost for Volt is 40k. A 7500 dollar tax credit at a marginal tax bracket of 25% would result in less than $1900 savings, hardly enough to offset the difference in costs of its competitors. For the corvette man you can buy the new german hybrid that will fit your bill at a price of$87500. For you global warming,greenhouse gas folks, the reason the port of long beach california has required all trucks entering the port to pick up from or deliver goods to ships to be natural gas powered is to reduce air pollution. Nuff said.

Energy Storage: Chrysler - A123 Alliance Likely to Spark Interest in Sector

Speculawyer, Labeling someone a fan of T Boone obfuscates the issue. I earned my living in systems analysis and engineering. I learned early in my worklife that one cannot solve a problem unless, they first properly define it. I have followed the financial morass we as a country are in very closely and have come to the conclusion that the country can not continue to be prosperous when its operating cash flow is increasingly negative over 19 years. The problem results from the importation of energy, trade imbalances primarily with China and other Asiatic countries and a shortfall in the net profits of investments abroad and foreign investments here. To solve this problem we need to import less energy and make more things here that foreign countries will buy. The problem needs solutions that make an impact quickly and with a sense of collective urgency. This has led me to the natural gas solution. 51% of our electricity generation is from coal -fired generation facilities and less than 1% from wind and solar. Electric plug in cars will require more electrical generation and take the better part of a generation to replace even 60% of our gas-powered vehicles. On the other hand, Over 40% of our daily oil usage goes to gas-powered vehicles. Further, we have the domestic natural gas resources and can use them to more quickly power autos,hybrids, buses and trucks. That is why I am a proponent of the natural gas solution. I also believe that we should be more heavily invested in wind, solar,tidal and geothermal as a country and am disappointed at the small part of the stimulus devoted to these areas. Again, in any solution set, the measure of performance should be the reduction of the current account negative balance with a goal of driving it to zero in 10 years or less. If we as a country don't do so, our future becomes increasingly hampered and our economic well being severely hindered.

Energy Storage: Chrysler - A123 Alliance Likely to Spark Interest in Sector

John, The euphoria over battery-powered cars is more an outgrowth of The new president,s oratory and his popularity than one which has facts and rational logic behind it. The fact is that the structural problem with the US's economy has to do with the ever increasing negative current account which is now approaching a negatve one trillion/yr. Electric cars cannot solve this problem soon enough, for the country to have a prosperous future. The deal with Chrysler is between an unhealthy company and a wanna be whose product may or may not be viable. Tre move certainly panders into the president's rhetoric and a constituecy which probably won't buy electric cars in sufficient quantities for the forseable future, and may be more an indicator of those companies' present status than anything else. That is why, I subscribe to focusing on natural gas-powered vehicles as the most important energy intiative there should be. My analysis is that nothing can make a sufficient impact on our current accout more quickly, create jobs that last, reduce green house emissions and make us strategically stronger. While I believe that alternate energy intiatives should continue, including electric cars, we can't lose sight of the more pressing problem that needs a quick solution lest we run out of tme and our economic and strategic weakness make the longer range alternatives impossible.

Why Pure Play Energy Storage Companies Could Double for Investors

Firfly, It's not just the solar cell farm, the intermediate storage, the storage mechanisms, it's also the right away for the transmission lines, the type of transmission lines, the insertion into the existing grids and the ability of the grid to control itself efficiently when subjected to impulses in demand that constitutes the system problem that must be addressed. Unless the gov jump starts the whole system with large enough[ I refer to them as pilot projects] progress will bog down in interminable legal, technological and cost-effective semi conjectural arguments. The Cape wind project is a case in point;it's been in the works for over 5 yrs and has gotten only 3 of the required 11 permits to proceed. Our technology for alternative energy is far more advanced to accomplish significant alternate energy in less than 10 years than was our technology to go to the moon and we did it in 8.5 years.

Why Pure Play Energy Storage Companies Could Double for Investors

John, I think it will take 20 years with the approach being taken for solar and wind to change much in the way we create relaible energy. The new president states that he wants to double today's capacity to generate electrical energy by renewables, particularly, wind and solar in 3 years. Today the alternative sources account for something less than 1% of our electrical capacity. I believe that our new energy secretary is a smart man, but my fear is that he is an R&d academician and is not geared to the implementation of complex systems. The need to replace 6.5 million barrels of oil/ day we import from unstable and in several cases unfrendly regimes requires a greater sense of urgency. If we are going to allocate over 100b dollars of investment, it should be focused on large scale pilot projects for alternate energy that would provide the forcing function and direction for componet development and deployment. Establishing a bigger goal to be achieved in 5 years would lead to your witnessing some of the unimaginable progress sooner and be a wiser investment strategy for the future well being of the country.

Why Pure Play Energy Storage Companies Could Double for Investors

John, As I have said before, your articles are informative and try to analyze the options in an objective and logical way. My problem with the stimulus is similar to another commenter's. The buckshot bottoms up approach does not put storage mechanisms in any systems or end product goal. For example, if a near term goal of putting x electric cars on the road that have a range of y miles in z years was established, then RD&D evaluation criteria could be used to drive the grant process. Since I believe that battery development is at least as advanced in China, what will drive the process in america that results in energy independence?

Energy Storage Incentives Approved by Congress

JP, I agree that some progress is better than none. My problem is that the stimulus bill does not focus the effort and thereby will propgate a tower of babel discourse on the roadmap to energy indepedence. While providing money for component development such as battery storage and grid management is a good thing, I believe more progress would be made by setting specific alternate energy production goals that are significant in a five year incremental time frame and enabling large enough pilot projects to jump start the activity. Provision of altrernate energy, e.g. example solar, is a systems problem that only converges when the total problem is addressed under specific time constraints. A large enough pilot project would serve as a learning mechanism and also as a focusing framework for component development. Alternate energy can be provided in many ways and the most readily available one in the short term, natural gas,[as fitz has pointed out and i agree] is not part of the bill. New jobs could immediately be created. Simultaneously the other forms, like wind,solar, electric cars,etc which have a longer pay-off should be kicked off as well through the process I discussed above. When the country invests over 7% of its annual gross domestic product, it should be done with much more specific goals, if the country wants to ensure a prosperous future.

Energy Storage Incentives Approved by Congress

John,you might be the only person in america that has actually read the bill. While its provisions do pump money into battery stocks, the bill is completely devoid of a recognizeable comprehensive energy policy.As an investment, it strikes me as a buckshot approach to component development and is missing concrete goals that make us less dependent on oil in the president's potential time in office.

Smart Grid's Enabler - Alternative Energy Storage

John And Fitz, I think John's articles are a refreshing attempt to actually do some analysis of alternatives. An observation about the smart grid, If there is so much debate about the method for storing intermittant supply that comes from wind and solar if those two sources are to be significant, what does building out the grid mean? Just a carryover from filter theory, Impulses must be carefully addressed if the system is to be stable.Does building out the grill mean that the control functions will only deal with current sources and attempt to optomize it or is it something more? Since the grid has to deal with peaks and valleys, the more interconnection the more complex the contol function becomes and must deal with many local peaks in what is a non linear problem.

Lead-Acid, Lead-Carbon Batteries: The Only Option for Average Consumer

JP, I have appreciated your articles because they try to analyze what has been a subject with many assertions and wishes other than facts.Our focus in all of the desire to use Hybrids and electric cars seems to be range of driving and reduction of green house gases. As I have commented on Fitz's articles, we appear not to be focused on the more important and urgent problems. We are running a negative operating cash flow as a country and addressing this problem within a five year time frame with substantial steps should be our priority. Your analyses appear to verify that purely electric vehicles will not address the problem. Natural gas, electric hybrids appear to be both the most practical and economic way to address the problem correctly.

Will the Audacious Bailouts for Alternative Energy Happen?

JP, Another very informative article. I have this very real fear that the new administration will not really tackle the energy independence energy in either a significant enough way that advances home grown energy alternatives or to new products and services that the US can sell to the world that drives our horrendous negative current account balance to zero. Any effort in this direction should start with a clear statement of stretch goals against which progress is measured. That is why a goal of five m barrels of imported oil less per day in five years and ten m. less in ten years is my starting point. Let's call it the 5 and 10 goal. To achieve such goals, any clear thinker would have to quickly pick several[ at most 3] of the most promising approaches and possibly 2 longer term approaches and then jump start them. since the gov is planning to spend a trillion dollars of our money in the next two years, I hope that half of this money is spent on significant pilot projects. I am not a seeking alpha author, but have commented with more detail as to what these pilots might look like. That would take us too far from your article, however.

Cleantech: The Sixth Industrial Revolution

JP, Another very good article. Did you notice that American super conductor just announced a deal they closed to provide grid regulation for three wind farms in China?