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Chinese Bullet Trains Carry "Black Box" Controls

In August we brought you disquieting news that Hollysys Automation, the supplier of a control system implicated in China's deadly bullet-train collision this summer, also provides controls for China's nuclear reactors (which are multiplying just as fast as its high speed rail lines). The Hollysys story now looks darker after informed speculation reported in the Wall Street Journal that the company may not fully comprehend how the control systems work [video below].

The WSJ reports that key components were supplied by Tokyo-based Hitachi without blueprints—a so-called "black box" sale. Don't confuse this black box with the data recorders that airplanes, high speed trains, and even, increasingly, automobiles carry to capture vehicle conditions during an accident. A black box sale is a means of protecting intellectual property. By keeping the buyer in the dark about the internal workings of a product, the seller hopes to prevent reverse-engineering of the equipment.

In Hollysys' and Hitachi's case, the deliberately obscure components lay within the trains' Automatic Train Protection, or ATP—a backup safety system intended to detect and prevent impending collisions. China's rail ministry awarded contracts to Hollysys to supply ATPs and other control systems for high speed trains, refusing to consider bids from foreign suppliers with more experience and sophisticated equipment. To deliver on its bid, however, Hollysys bought in technology that it lacked, from Hitachi.

The obvious drawback to this arrangement is that black box components are harder to understand. Here's the Wall Street Journal's money quote from an unnamed "senior Hitachi executive":

"It's still generally a mystery how a company like Hollysys could integrate our equipment into a broader safety-signaling system without intimate knowledge of our know-how."

That quote suggests that Hitachi could share blame in any failing of said system—a potential liability that the company is clearly aware of. The WSJ story quotes an Hitachi spokesman who asserts that Hollysys received a "technical explanation regarding those components, and we believe Hollysys, as a result, fully understands them."

Hollysys hasn't been heard from since August, when CEO Wang Changli issued a letter to shareholders reaffirming the company's position that its equipment was not responsible for the crash, which killed 40 passengers and injured more than 200.

Beijing-based China Railway Signal & Communication Corp., China's only other domestic supplier of rail control systems, has also been close-lipped. Immediately after the accident CRSC pledged in a statement to "shoulder our responsibility." Then all went quiet, with one exception. As the WSJ puts it:

CRSC hasn't commented about the accident directly, aside from a statement Aug. 23 stating that its top executive, 55-year-old Ma Cheng, collapsed and died during questioning by crash investigators.

Imagine the pressure on executives such as Ma Cheng. Then imagine the pressure on engineers responsible for Hollysys' controls sitting in Chinese nuclear power plants. Are those systems functioning as promised? And, if not, would their suppliers know?

Twirling for Power: New Offshore Turbine Design Can Store Energy

Though there are some alternative wind turbine designs out there, generally speaking, the windmill is a relatively mature technology. In other words, most turbines built will look largely the same. An idea currently being tested in Sweden, though, is about as novel a turbine design as you can get.

The SeaTwirl...well, maybe the Web site can explain what it is and how it works:

SeaTwirl uses a vertical axis wind turbine to absorb the wind energy and a torus ring to store this energy. SeaTwirl uses the physical law for conservation of momentum to enable the storage capacity. When energy should be stored SeaTwirl transports fluids from a less rotationally centered position to a more rotationally centered position to rotate faster, as a skater doing a pirouette. In this way it can store large amounts of energy at low speed and tap it at higher rotational velocity when the demand for energy rises.

It basically functions as a flywheel does. If you want a more thorough explanation, here's a video made by the company:

Some of the info on SeaTwirl's site is a bit sketchy, so I emailed the company's owner/inventor, Daniel Ehrnberg, for some clarifications. He said that the ability to scale up to a massive turbine—listed as a 10-megawatt rating capable of storing 25 000 kWh—is still actually a ways off (four to six years, according to Erhnberg). The biggest prototype made so far was at 1:50 scale, but he told me he is "convinced that the larger SeaTwirl units will have a much better cost-effectiveness than today's technology." He said it is "hard to say" what a full-scale device will actually cost to build.

Ehrnberg also said SeaTwirl plans to use undersea cables that are already in place to bring the power back to shore, at least for the early prototypes. The big advantage to something like this lies in the storage capability: by sending the stored power to the grid only at times of higher demand or lower wind speeds, the technology averts one of the most common renewable energy pitfalls—or at least diminishes it. As offshore wind continues to ramp up in Europe and we get closer to the first turbines in U.S. waters, this is something to keep an eye on.

(Image and video via SeaTwirl/Daniel Ehrnberg)

Will the Real PV Price Please Stand Up?

The Financial Times reported recently that prices of polysilicon photovoltaic modules, the workhorse of the global solar industry, have dropped to below US $1.50 per watt. Three years ago they were about $3.50/W, and three years before that the total installed cost of PV (not just the module cost) more than $7.00/W--about seven times the cost of wind, which already then could be considered on the verge of economic viability. A solar price approaching $1.00/W would in theory make solar near-economic too and ought in principle bode very well for PV prospects.

But the polysilicon price cited by the FT reflects market forces of supply and demand that are powerfully influenced by government subsidies for both production and installation of PV arrays. The fact is, nobody has the slightest idea what the world price of polysilicon modules would be in the absence of subsidies.

The situation brings to mind something Warren Buffett once said to Ted Koppel, the creator and former anchorman of ABC's "Nightline." Describing the U.S. housing bubble many years before it burst, Buffett said it was as though in a small neighborhood everybody kept selling their houses to everybody else, so that the price of a house just kept going up and up and up. We wouldn't know what the real price of a house was until somebody moved out of the neighborhood and sold to an outsider, Bufftett told Koppel, sipping coffee in the Omaha diner where he liked to work.

Three years ago, First Solar got wide attention with its claim that it had come up with a thin-film production technology that enabled it to produce large PV arrays at a cost of $1.00/W. Though such arrays consume a lot of real estate and therefore cannot be directly compared to polysilicon modules in terms of costs and prices, the reported production cost naturally got very wide attention, because it seemed to be approaching economic equivalence with wind's. Inasmuch as wind had been the big story in power generation for the previous 15 years, solar equivalence—if it was truly equivalence—suggested photovoltaics might be the big story in the next 15.

Adding spice to that tempting concoction: First Solar's eccentric policy of not talking to the press, which made its thin-film technology something of a black box.

As noted here two weeks ago, very low Chinese prices for polysilicon have made life tough not just for standard PV manufacturers elsewhere but also for companies with competing technologies, such as First Solar. Today it was reported that First Solar will be unable to meet a Department of Energy deadline to qualify for a $1.9 billion loan guarantee for a California wind farm it's been developing and hopes to sell. Previously, First Solar had made known it was putting less emphasis on its novel thin-film technology and more on general solar project development.

Because of disconcerting news like that, the slew of recent PC bankruptcies, and general unease about solar prospects, First Solar's share price has dropped sharply in recent weeks, to the lowest level since April 2007.

It also was announced today, Sept. 23, that SolarCity will be unable to complete paperwork in time to obtain a $355 million DOE loan guarantee to support installation of PV generating systems in military housing on various bases. As a result, SolarCity will have to sharply cut back that program. The adverse development is attributed to a tightening of rule enforcement at DOE, because of Solyndra.

United Kingdom Poised to Join Shale Gas Boom?

An energy company in the United Kingdom has revealed estimates for a huge shale gas resource under the northwest of England. Cuadrilla Resources, after drilling some exploratory wells in the Blackpool region, estimates there could be 200 trillion cubic feet of natural gas in the region. Not all of this is recoverable, but the resource is substantial; the United Kingdom consumes about 3.3 trillion cubic feet of natural gas each year.

According to the Guardian, the area may soon play host to as many as 800 new gas wells, mirroring the recent controversial natural gas boom in the United States. The Marcellus Shale, a formation underlying Pennsylvania, New York, West Virginia, and other states, remains at the center of natural gas issues to do with potential harm coming from hydraulic fracturing, or fracking, of shale rock formations. Fracking involves injecting massive amounts of water, sand, and a toxic mix of chemicals deep underground; there is increasing evidence that this process can contaminate nearby water supplies.

In the United States, both fracking and natural gas itself have come under intense scrutiny in the last year. The EPA is conducting an analysis of natural gas extraction processes in the wake of reports of water contamination, and the idea that natural gas is a cleaner, more climate-friendly fossil fuel than other options has also been called into question. Also, the US Geological Survey recently released estimates of the Marcellus Shale's total gas reserves, which knocked the total down from 410 trillion cubic feet to 84 trillion.

There are already concerns in the UK that the newly discovered resource will be extracted before proper environmental assessments can be carried out. Some also expressed the worry that a shale gas boom will draw money away from renewable energy projects.

(Image: Gas drilling rig in the Barnett Shale region, via jermlac/Flickr)

Hot Rocks: Canada Sits Atop Massive Geothermal Resource

A report published by the Geological Survey of Canada last week outlines the huge geothermal energy potential available in the world's second largest country by area. Canada currently has no geothermal electricity generation, but the report says that 100 or so individual geothermal projects could provide a substantial part of the country's baseload power needs.

"Canada's in-place geothermal power exceeds one million times Canada's current electrical consumption," the report notes, though also stating most of that available power could not actually be produced. "Environmental impacts of geothermal development are relatively minor compared to other energy developments, however there are still key issues to be addressed....Geothermal installations have the potential to displace other more costly and environmentally damaging technologies."

There is at least 5000 megawatts of available geothermal power in various parts of British Columbia, Alberta, and the Yukon. What's more, the report's authors write, the cost of delivering geothermal power is expected to rival the costs of coal within 15 years or so. The limitations of developing the huge geothermal resource have a lot to do with location: Some of the most promising areas are far away from load centers, and the costs of developing huge transmission corridors to bring the power to where it is needed would make such projects unfeasible. Still, there is enough located in accessible areas to make a big difference.

Geothermal power in the United States is further along than in Canada, though there remain ample untapped resources in a number of areas. Last year, researchers reported that West Virginia houses an amazing geothermal capacity of more than 18 000 MW. There are close to 200 geothermal projects underway around the country, expected to provide 7000 MW of electricity by the time they're finished.

And then, of course, there's Iceland. The small country takes full advantage of its unique geologic situation, generating almost all of its electricity from a combination of hydropower and geothermal. Canada may not approach such lofty renewable heights, but it's good to know that the resource is available. We'll see if momentum builds on actually developing it.

(Image via Geological Survey of Canada)

Georgia State Climatologist Cashiered

Ten days ago Georgia governor Nathan Deal abruptly dismissed the state climatologist and assistant climatologist, announcing the climate office would be moved from the University of Georgia, Athens, to the state's Environmental Protection Division in Atlanta. Complaints followed that at least for a time the state would be without climate assessments and forecasts of considerable value to its US $65 billion agricultural sector. A small local movement emerged to reinstate David Stooksbury (photo) and Pam Knox. Now the federal government has decertified the Georgia state climate office on grounds the new operation may not be competent to fulfill its mission.

The decision to move the office has been made in terms of administrative efficiency, and Governor Deal has denied political motivation. Deal, however, is known to count himself among climate science skeptics. In 2009, as a member of the United States House of Representatives, Deal signed onto a petition challenging the U.S. Environmental Protection Agency's authority to regulate carbon, despite a Supreme Court ruling that said it could and probably should do so.

Defenders of the Athens climatology office naturally take a dim view of the governor's motivation. One, a close associate of the cashiered climatologists, characterized the sequence of events like this in a personal communication to a fellow scientist:

"(1) Summer 2011 was hot and dry in Georgia. (2) The GA State Ciimatology Office reported that it was hot and dry. (3) Certain drought-sensitive business interests resented that... (4) The governor heard those business interests..."

Last June, Georgia State Climatologist Stooksbury (correctly) predicted the summer would be unusually hot, which will not "give you much comfort," the Atlanta Journal-Constitution warned its readers. Evidently it did not much comfort at least one reader, who happened to be the one who mattered most.

Under the circumstances perhaps we should take comfort from small things. Texas governor Rick Perry, out on the presidential campaign trail, has been casting aspersions on climate science while Texas burns. But he has not actually denied that the world is getting warmer, and Texas along with it. He only casts doubt on the case for human causation.

Dark Horse Diesel

Though about half the automobiles in Europe are diesels, the technology has never had much traction in the United States, partly because much stricter U.S. clean air regulations made it virtually untenable. But several years ago Daimler and Volkswagen introduced cars powered by clean diesel technology capable of meeting U.S. requirements. (Such cars include a diesel version of VW's Jetta, [seen above], its Golf, and the Mercedes ML 350, GL350 and R 350; a useful online primer on Daimler-Benz's BlueTEC diesel technology is available on the auto company's site. ) Initially the new cars didn't seem to be making much headway. Sales numbers in recent months, however, are beginning to turn heads.

During the first eight months of this year, clean diesel sales in the United States increased by almost four times as much as overall car sales--37 percent versus 10.4 percent. In each of the five months from April through August, the growth in clean diesel  sales far exceeded growth in sales of hybrid electric cars.

A number of factors, to be sure, have distorted the hybrids market: the Japanese tsunami and earthquake, which disrupted production; a unusually strong Japanese exchange rate, which has made it advantageous to sell hybrids in the domestic market rather than export them; and so on. As a result of such conditions, just 9500 Toyota Prius vehicles were sold in the United States in August, compared to 18,600 in March.

Still, the numbers and the trends are arresting. 8,808 clean diesel units were sold in the United States in August, compared to 21,177 hybrids and 1,664 plug-ins (both plug-in hybrids and EVs). Compared to August 2010, hybrid sales were down 12 percent and clean diesel sales were up 20 percent. According to the Clean Diesel Forum,  analysts Baum and Associates predict that clean diesel cars will account for 6-6.5 percent of the U.S. market in 2015, compared to about 3 percent now. JD Power  & Associates expects diesels to be 7.4 percent of the market in 2017.

This may be a rare case where industry analysts turn out to have been too conservative and pessimistic. Couldn't clean diesels, having come around the outside track,  be dominating the U.S. market by 2025? Might not half of Americans be driving diesels, just like in Europe? Could the hybrid turn out to have been just a fascinating passing phase and the EV a slightly silly idea? We're not saying all that's going to happen, but we're not saying it's out of the question either. (Let's not forget that barely more than ten years ago fuel-cell-powered vehicles were all the rage.)

In turns of image, admittedly, clean diesel still has a way to go. Mercedes-Benz has Hollywood actress Emmy Rossum--that's Emmy who?--plugging BlueTEC. Tesla Motors has George Clooney. But hey, unfortunately it turns out you have to be just about as rich as Clooney to drive a Tesla. You--I'm sorry, who did you say you were?--might actually be in a position to drive a Mercedes ML350.

A Tale of Two Pipelines

Concurrently in the last weeks, world attention has focused on two immensely controversial pipeline projects: the North Stream natural gas pipeline, connecting western European consumers with suppliers in Russia and central Asia; and Keystone XL, which would take petroleum from Canadian oil sands in Alberta and transport it to refineries in Louisiana and Texas. The two projects both raise basic geopolitical issues—but issues representing quite different types of geopolitics.

North Stream is controversial because it carries gas from Russia under the Baltic directly to Germany, bypassing Poland and Ukraine. This means Russia could curtail gas shipments to Ukraine, which it has done several times to exact financial and political concessions, or to former Soviet satellite countries, without affecting supplies to West Europe. Arguably, North Stream positions Russia to bully Poland, the country that suffered the most at the hands of the Nazis in World War II.

Contemporary Germany's political culture is in many ways exemplary. But it does not speak well of the culture that former chancellor Gerhard Schroeder has served as chairman of North Stream, fronting for the project and acting in effect as an employee of Russian President Vladimir Putin. In some countries such an intrinsically conflicted arrangement would not be tolerated. 

Keystone XL is controversial for a very different set of reasons. Together with two earlier pipelines that were approved in 2008 and 2009, it would bring close to 3 million barrels per day of heavy crude oil to the United States from Canada. As Canada is a completely reliable supplier, unlike some OPEC countries or Russia, the new pipeline would contribute materially to U.S. energy security. 

The objections to Keystone XL are not politico-military, as with North Stream, but environmental. The pipeline would lead to more oil sands extraction, an energy-intense and carbon-intense process that also devastates the local environment; and delivery of the heavy oil to U.S. refiners will enable continued reliance on fossil fuels, a reliance that environmentalists say is incompatible with the U.S. pledge to cut its greenhouse gas emissions 80 percent by 2050.

For those reasons, environmentalists' opposition to Keystone XL has been fierce, unanimous, and pointed. At this writing, hundreds of demonstrators have been arrested at the White House. Twenty scientists, among them several of the most eminent U.S. climate scientists, have written to President Obama saying the Keystone project is incompatible with climate goals. All the top U.S. environmental organizations have joined in a letter asking the president to kill Keystone—and warning him of political consequences if he does not.

The groups described the pipeline as “perhaps the biggest climate test you face between now and the election,” and said that  "If you block it, you will trigger a surge of enthusiasm from the green base that supported you so strongly in the last election," clearly implying that if he does not block it, that enthusiasm will be absent.

It's a major quandary for the president. The U.S. State Department, which was responsible in this case for preparing an environmental impact statement (because a cross-boundary project is involved), has issued an EIS saying that Keystone XL is in the national interest. But environmental leaders have drawn a line in the (oil) sand: As they see it (and I'm frankly in agreement with them here), the national interest in reducing greenhouse gas emissions and cutting the risk of catastrophic climate change must take precedence over near-term energy security. If the president takes the opposite view, they are warning, he should not expect to see environmentalists among those ringing doorbells, stuffing envelopes, and manning phone banks next year.

Emissions Scorecard

Having recently observed that energy policy is in an impasse, and having focused mainly on issues of energy independence and dependencies, let's take a closer look at energy's climate corollary.

The first thing to take stock of is the Kyoto Protocol, the 1997 addendum to the 1992 United Nations Convention on Climate Change (UNFCCC), with which the world dedicated itself to the task of preventing "dangerous" global warming (without being too specific about what that meant). Generally, Kyoto obligated the industrial and then-industrializing societies--basically the advanced OECD economies and the transitional economies of the former Soviet Union and eastern Europe--to cut their emissions by varying amounts by 2012 (around 7-8 percent in the case of Europe and the United States).

The Kyoto Protocol took force on February 16, 2005 and now has 192 countries as parties, all but one of which has ratified the agreement. That one holdout is the United States. So from a strictly legal perspective, Kyoto joins other international agreements--such as those banning land mines, protecting children and migrant workers, and establishing the international criminal court, among others--that the USA has chosen not to affirm. (But that's another story.)

Absence of the United States from the UNFCCC implementing protocol is important but not all-important, as noted here and in Spectrum magazine many times. There is no one-to-one relationship between protocol status and actual reduction of greenhouse gas emissions. But that's not to say there's no relationship whatsoever. Nations that have been the most seriously concerned about climate change and that have expressed the strongest support for the Kyoto regime also have been most successful in meeting or even exceeding the Kyoto terms.

First and foremost come the United Kingdom and Germany, which lead the major advanced industrial countries in cutting emissions. Counting changes in land use patterns (which have impacts on both the uptake and release of carbon dioxide and methane), Britain's GHG emissions were 27.7 percent lower in 2009 than in 1990, and Germany's were 23.1 percent lower. Each country has cut its emissions roughly three times more than Kyoto required.

U.S. GHG emissions in 2009, on the other hand, were 10.6 percent higher than in 1990. Japan's were 5 percent lower but Canada--which often sounds as high-minded as Sweden in global discourse--saw its GHG emissions reach a level almost 30 percent higher than in 1990!

Collectively, the so-called Annex 1 countries (OECD and former East Bloc) cut their emissions about 10 percent from 1990 to 2008, while U.S. emissions went up about 15 percent in that period. But some of the fine detail is of further interest. In the period from 2000 to 2005--when the Bush administration was making a point of not taking the climate problem seriously--the United States did a better job of cutting emissions than Germany and Britain did. What is more, in the period from 2000 to 2009, in which U.S. policy has consistently fallen short of what Kyoto parties have sought, the United States cut its emissions by about 14 percent, whereas Europe cut its just 11 percent . (That's true whether we're talking about the 15 European Union countries that initially signed the protocol or the 27 EU countries of today.)

With the United Kingdom experiencing severe social and economic problems, Germany dead-set on phasing out nuclear energy, and Japan likely to follow suit, all three nations will be only too happy to see global legal requirements relaxed. Germany's and Japan's emissions are sure to rise in the near term, as fossil energy replaces atomic; and if Britain has to back off from expensive energy commitments, its emissions may rise as well. Meanwhile, perhaps, the United States will pick up some of the slack, and some of the real deadbeats like Canada will get on board.

Solar Eclipse

Anybody reading headlines in the business press will have noticed that in photovoltaics, there's a whole lot of shaking out going on. Three significant U.S. manufacturers have gone under in the last month: Solyndra, Evergreen Solar, and SpectraWatt. Solyndra, a major beneficiary of U.S. government support, suffered the added indignity of having its offices raided by the FBI shortly after it announced bankruptcy. 

The difficulties facing solar companies are not hard to identify. Heavily subsidized, low-cost Chinese producers have penetrated global markets in a big way, driving prices for basic polysilicon modules sharply down. That translates into problems not only for North American and European makers of basic polysilicon cells, but also competing technologies.

Solyndra, which was developing a novel tube technology, just couldn't get it to market at low enough prices to compete. The U.S. and German developers of what's to be a really major concentrating solar power project in Blythe, California, have announced that the first half gigawatt of installed solar will be generic polysilicon rather than high-end concentrating PV cells. First Solar, which has boasted a breakthrough thin-film technology, has seen its share prices drop more than 60 percent in the last three years and now is getting into project development and engineering, procurement and construction.

Vertically integrated companies like California's SPI Solar and China's Yingli Solar are doing well--but often under conditions that send eyebrows jumping.

SPI, working with KDC Solar and LDK Solar, announced in August that it would build a 9.7 MW photovoltaic generator for the New Jersey subsidiary of a major pharmaceutical company; Yingli said it would supply 10 MW of PV generation for a New Jersey installation that will be "the largest non-utility owned solar intallation east of the MIssissippi River."

Solar projects in New Jersey, as it happens, boast the highest rates of return of any such projects in the world. Analysts at Lux Research found that because of New Jersey's hugely generous Renewable Energy Credit prices, solar rates of return are 40 percent and above in the so-called Garden State. Next comes Portugal, followed by Australia, Italy, and India. In Germany, with China and the United States a major solar producer, rates of return will be in the vicinity of 22 percent out to 2016, Lux predicts.

In light of the unsustainable subsidies benefiting solar energy, instabilities in the industry, and the steep learning curve it has to climb, projections of profitability are to be taken with big grains of salt. (I beg the reader's pardon: In a situation so riddled with what economists call "market distortions," resort to business journalism cliches is unavoidable.) Only in the last couple of years, as solar construction has boomed, have people begun to notice things you might have thought would be obvious.

Two years ago, Google issued a report on solar module performance, based on operation from 2007 of a California PV installation that at that time was the largest single one in the world. Among the findings: large solar arrays tend to get dirty and sometimes need to be cleaned; specifically, tilted arrays get washed pretty well by rains, but horizontal arrays do not; in the arrays that need washing, cleaning can double their electrical output.

With the industry still digesting rudimentary lessons like that, obviously there is a great deal more to be worked through. Meanwhile, in countries like Germany, Spain and the United States, the domestic solar industries that were meant to benefit from government subsidies will continue to see Chinese competitors eat their lunch--at least until their remarkably slow-witted political leaders do something about it. 


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