Zany concept vehicles and fuel efficient hybrids vied for attention at the Tokyo Motor Show. Both Toyota and Honda tried to soften the image of sports cars as gas guzzlers with concept hybrids running on a mix of petrol and electricity. Fuel cells, which run on hydrogen and emit only water, also make an appearance as Honda shows off the “PUYO” concept car with a “gel body” to improve safety and “the feel of an adorable pet”. Despite the success of the hybrid, car makers are still hedging their bets on green technology, with electricity, biofuels, clean diesel and fuel cells also seen as potential alternative power sources.Toyota is among automakers trying to lighten the load so as to reduce fuel consumption, unveiling the 1/X (pronounced one-Xth) plug-in hybrid; the car is said to be two-thirds lighter than Toyota’s hot-selling Prius and twice as fuel efficient thanks to the use of carbon fibre materials. Toyota president Katsuaki Watanabe, trundled onto the stage on the i-REAL, which resembles a high-tech armchair on wheels. Among the more wacky designs on show was Suzuki’s Sharing Coach which looks more like a small spacecraft than a car, with two smaller one-person PIXY pods on wheels that fit snugly inside. Nissan showed off the Pivo 2 egg-shaped electric concept car that has a rotating cabin, can drive sideways and comes with a talking “robot agent” to cheer you up or help with navigation. Its “Round Box” curvy compact convertible is said to be “like being on a roller-coaster yet without any risk.”
Over the past year politicians have been leaning more towards nuclear as it seems to be a convenient solution to climate change. While safety and economic concerns have been depreciated, the public has not been convinced by the political spiel, at least in the UK. That is good and offers hope that appropriate energy alternatives will be capitalised before the spread of nuclear fuel and waste accelerates.
China’s solar technology industry has experienced explosive growth in just a few short years as it becomes the principal supply of solar product. But in early October the challenge of getting enough raw material to satisfy demand has caused valuation concerns over listed Chinese solar businesses. At issue plaguing the global industry is an acute shortage of high quality polysilicon, the key feedstock material for manufacturing solar panels. Exacerbating investor anxiety is the industry’s practice of not fully disclosing amounts of polysilicon supplies to which companies have guaranteed access or the prices that companies are forced to pay for tight supplies.
The solar technology industry in China has thrived thanks to a favourable regulatory environment spurred by a government eager to expand the use of alternative energy and clean up air pollution. The Chinese solar push has coincided with booming demand in Europe, particularly in Germany and Spain, for PV arrays buoyed by generous subsidies and national efforts to expand the mix of solar to their power grids.
The emergence of Chinese solar companies’ presence on Wall Street began in December 2005 with the listing of Suntech Power Holdings Co. Ltd., a solar-module maker based in Wuxi, Jiangsu. Suntech is the world’s largest module manufacturer, with a global workforce of more than 4,000. Other listed Chinese firms include Canadian Solar Inc. Trina Solar Limited, Solarfun Power Holdings Co Ltd, JA Solar Holdings Co. Ltd, China Sunergy Co. Ltd, LDK Solar Co. Ltd and Yingli Green Energy Holding Co Ltd.
The ongoing polysilicon shortage, along with recent controversies over two Chinese companies accused of inaccurately reporting supplies to investors, will contribute a waning of investor confidence.
This phenomenon, while alerting investors to the general risks of investing in China, also illustrates how green tech is not immune to the economic imbalances felt in other sectors. While green is the way industry is going, it remains a challenge to find businesses that manage themselves in a more holonic way. Investors should expect a less transparent investment environment in the “Wild East”.
As the 50th anniversary of the Windscale nuclear disaster occurs (the worst in the world at that time) new research published in the journal Atmospheric Environment shows the incident generated twice as much radioactive material and could have caused more cancers than was previously thought. Although the scale of that disaster was modest by modern standards, the research underlies the need for a much more precautionary approach to nuclear than is current.
This statement from hedge fund manager Hamid Hakimzadeh bears serious reflection.
The global financial system is critically predicated on future energy supplies meeting projected demand. The credit pyramid presumes that future expansion is adequate collateral for today’s debt. The emerging reality on energy undermines this assumption, which in turn erodes the valuation of wide variety of financial assets. Since low quality covenants cave in first when confronted with cash flow stresses, it is no surprise that sub-prime assets are the first to register the drain cause by sustained higher energy costs. The sub-prime crisis may be no more than the opening salvo of an energy crisis.
While the logic is not novel, what is important is that the concurrent analysis that resource limits are being reached (as reflected in rising energy prices) makes the reality of this situation more present. The consequence being that global economic dynamics are going to change in fundamental ways that change the philosophy of capitalism. Our holonic perspective suggests that there will be a leveling of the playing field. But in the meantime, energy and credit businesses will become increasingly important as they adapt to changing dynamics.
The US love of energy has been supported by subsidies and protection of the oil industry. Last month the administration took a step to reducing those subsidies in a new energy bill. And now a report confirms the collusion and apathy among regulators and the industry. A report has unsurprisingly declared that the Interior Department’s program to collect billions of dollars annually from oil and gas companies that drill on federal lands is troubled by mismanagement, ethical lapses and fears of retaliation against whistle-blowers. And this was an internal report! The yearlong investigation and concluding report grew out of complaints by four auditors at the agency, who said that senior administration officials had blocked them from recovering money from oil companies that underpaid the government.
While the report stopped short of accusing top agency officials of wrongdoing this may have been pragmatism owing to insufficient specific evidence. It offered a sharp description of failures at the Minerals Management Service, the agency within the Interior Department responsible for collecting about $10 billion a year in royalties on oil and gas. Investigators also softened their internal critique by saying that the whistle-blowers were sometimes unaware of other efforts under way to recover the missing money and that they sometimes simply disagreed with top management. Nevertheless it notes that the agency is too cozy with oil companies and that internal critics had good reason to fear punishment. This article from the NYT offers some juicy illustrations.
None of this is surprising to those who have seen the cynical approach of oil companies to pollution, environmental degradation and energy security (including alternative energy). Given the history of collusion we are not hopeful of immediate change, but the report is another sign that oil is not the panacea it has been sold as and the carelessness of the industry is being brought to light.
Coincidentally, BusinessWeek reported on the intransigence of big oil to introducing ethanol mix in its forecourts. Despite receiving billions in subsidies to provide ethanol it is using overt and covert tactics to keep E85 (85% ethanol 16% petrol, which directly substitutes for petrol) out of drivers’ tanks. It is another page in the tales of deception by big oil.
There have been several reports recently of the increasing popularity of nuclear as a solution to rapidly emerging concerns with fossil fuel energy. But this may be more a result of propaganda than pragmatism and principle.
A collaborative approach, which had been adopted in the UK, is breaking down. Recently the UK government initiated a public review of nuclear power which included environmentally aware stakeholders. Unfortunately, these stakeholders have withdrawn from the process protesting the biased review. The accusations are damaging because the government is bound by its own guidelines to keep an open mind on new nuclear power stations until after the “fullest public consultation” and if the government is forced into a third consultation it could delay major energy decisions being made for at least a year.
The coalition review process was forced upon the government by the high court, which ruled in February that a previous consultation was “seriously flawed” and “manifestly inadequate and unfair”. At least six groups, including Greenpeace, Friends of the Earth, WWF and Green Alliance, claim the government is distorting the evidence by not presenting the alternative scenarios provided and say they are considering whether to take the case to court again. What is clear is that the dangers of nuclear power still appear to be at the forefront of public concern, with 89% of people worried about safety and 92% alarmed at the prospect of creating more nuclear waste.
Unfortunately, our reading of the situation is that government is leaning toward nuclear because it provides a “solution” that is sellable to the public and supported by rich lobbies, while its costs are postponed to be the problem of later incumbents. Nuclear is the GM of energy. It looks great if your listening to the people selling it, but the users and the locals where it happens have their environment and livelihoods destroyed.
Then there are the greens who support it because it can be a solution to climate change. This is an act of desperation because they are rightfully fearful that people will not change their behaviour in time to make a difference. They would rather have a planet with radioactive acne than one in which nature dies. Its not the easy choice that it is made out to be. However, if people are informed about lifestyle choices and consequences we usually do the right thing and change behaviour. That is what the review needs to promote and where it has failed.
Further reading: Nuclear’s power’s new age from The Economist concludes: “One of the reasons why the public turned against nuclear power last time round is that it found itself bailing the industry out. It would be wrong, not just for taxpayers but also for the industry, to set up another lot of cosy deals with governments. The nuclear industry needs to persuade people that it is clean, cheap and safe enough to rely on without a government crutch. If it can’t, it doesn’t deserve a second chance.”
Their briefing Atomic Renaissance focuses on the expected expansion of US nuclear and its influence on policy elsewhere.
That’s the objective of Gordon Murray, ex-Formula 1 car designer who recently launched a new company to design a green family car, the T25. Production will be outsourced for this concept car which Murray would like to have online in 18 months. He’s aiming for safety, efficiency and cost competitiveness. Let’s hope this initiative helps transform the personal transport industry.
Oil prices are reaching new highs as September draws to a close. They are peaking above $82 a barrel. If winter in north America and Europe comes in hard these prices will add to economic difficulties, though the majors will benefit as usual.
Energy Use in the New Millennium by the International Energy Agency published on 10 September draws a gloomy picture of efforts made by the 26 IEA member countries to control their energy consumption since 1990, the reference year of the Kyoto Protocol on climate change.
“Final energy-use increased by 14% between 1990 and 2004. This increased energy-use fed directly into the level of CO2 emissions, which also rose by 14%.”
“These findings confirm the conclusions of previous IEA analyses – that the changes caused by the oil-price shocks in the 1970s and the resulting energy policies did considerably more to control growth in energy demand and reduce CO2 emissions than the energy efficiency and climate policies implemented since the 1990s.”
What this tells us is that either we, as individuals, must take globally responsible initiatives to reduce our energy consumption, or we will all be faced with increasing shocks, in pain and frequency, to societies increasingly withdrawn from nature by modern conveniences.