Navigant Research Blog

What LinkedIn Tells Us About the State of the Cleantech Industry

— March 29, 2012

The success of the cleantech industry will ultimately be measured by two yardsticks.  One, of course, is its ability to reduce greenhouse gas emissions and deliver environmentally friendly and sustainable forms of energy.  The other is its economic impact and its ability to generate new businesses and new jobs.

This second facet has become an increasingly important measure as the global economy struggles to recover from the economic downturn.  My colleague Richard Martin has written about how this debate is evolving in terms of the industry as a whole and the likely impact on U.S. jobs.

A recent blog piece by Scott Nicholson, a data scientist at social media site LinkedIn, provides a different type of evidence for continued growth in cleantech jobs.  LinkedIn was engaged by the White House Council of Economic Advisors (CEA) to help broaden the Council’s understanding of what’s happening in the U.S. jobs market as part of its annual Economic Report of the President.

LinkedIn currently has around 150 million members, but the study focused on U.S.  members who have been part of the network since 2007 in order to avoid bias related to the rapid growth in membership in recent years.  The study analyzed job movements of tens of millions of members between 2007 and 2011.

The analysis showed that the fastest-growing industry sector, based on members’ profile information, was Renewables and Environment at +49.2%, ahead of Internet (+24.6%) and Online Publishing (+24.3%).  In comparison the fastest-shrinking industries included Newspapers (-28.4%), Retail (-15.5%), Building Materials (-14.2%), and Automotive (-12.8%).  The study also looked at the volumes of job gains/losses by industry.  Again Renewables showed one of the largest growth rates, alongside Internet, Hospitals & Healthcare, Health, Wellness & Fitness, Oil & Energy, and IT.  Retail, Construction, Telecommunications, Banking and Automotive had the largest volume of job losses between 2007 and 2011.

The LinkedIn study is interesting in its own right – even if it can only give a very partial glimpse into what is happening in the jobs market.  It’s also fascinating because it provides further evidence of how our connectedness in a global world is itself becoming an important means of understanding how the economy and our society are changing.  That’s another reason why utilities, government and other organizations involved in the cleantech industry need to see social media as not only a communications platform but also a valuable source of insight in a complex world.


Gauging the Real Integration Costs of Renewables

— March 29, 2012

The success record of smart grid renewables integration is a mixed bag, with European countries boldly plowing forward while many utilities in the United States exhibit what a former California state regulator called “electrotrophobia” – the fear of change linked to greater reliance upon intermittent renewable energy resources.

Massive amounts of new transmission lines will be necessary in the U.S. to access the best wind resources, yet the biggest buzz is about advances at the distribution level.  The truth of the matter is that the integration of renewables is not a reliability issue, as these resources are integrated around the world at penetration rates 10 to 20 times higher than in the United States, without major catastrophes.  It is really all a matter of costs to ratepayers and of reducing the environmental impacts of the current reliance upon natural gas fired generation — along with a massive build-out of new transmission infrastructure — to solve the integration problems.  As renewable deployments increase, integration costs are expected to go way up (see Figure 1.1 below) – at least from the perspective of U.S.  utilities.

In isolated cases, such as Denmark, real and rapid progress on smart grid renewables integration is already reality.  While Europe (especially Germany and Spain) appears to be in the lead, the U.S.  and Asia Pacific are also making big strides forward.  Instead of integration costs going up with higher solar PV penetrations, smart grid experts in Germany suggest the opposite could occur with the right low-voltage distribution network technology, highlighting the lack of consensus on how increased renewables will impact utilities.

The synergy between smart grid and renewable energy seems intuitive, but where the rubber meets the road, much more validation needs to be done.  Technologies have come a long way over the past five years.  Today microgrids, demand response, and wind and solar forecasting technologies are all reaching commercial status.  As a result, the tools on the grid side to better manage the variability of renewables are now increasingly available.  These technologies will begin displacing the current reliance upon gas-fired generation at the transmission level over the next six years.  This, in turn, will minimize the environmental impacts of grid integration of solar and wind, reinforcing the value of the smart grid.

On the renewables side, equal if not greater progress has been made with new and improved technology and innovative business models.  The fact that state-of-the-art wind turbines and solar PV systems with sophisticated micro-inverters can self-provide many of the ancillary services that utilities and grid operators worry about speaks to how far this industry has come in responding to integration issues.  Determining the business case for the integration of these renewables through the smart grid is, by necessity, a matter of speculation.  Safe to say Pike Research believes the world will be a very different place six years from now.


Solar Storms and the Electricity Grid

— March 29, 2012

March passed for most with little terrestrial evidence of the storm raging above the atmosphere. So this time we got away with nothing more than some spectacular pictures of the coronal mass ejections – i.e., solar flares.  Increasingly, though, electricity transmission firms are working with professional astronomers to be warned of the next big solar storm.

The solar cycle lasts between 9 and 14 years, and during the so-called Solar Maximum, solar flares and sunspots increase in frequency and energy.  These massive bursts of solar plasma and charged particles create geomagnetic storms when they hit the earth’s atmosphere.  Although it’s thought unlikely that we would face another solar super-storm anytime soon, the frequency and intensity of solar storms is on the rise and is forecast to peak sometime in 2013.

These geomagnetic storms have the potential to knock out satellites, disrupt airplane navigation systems, and overload the electricity grid.  That’s exactly what happened in 1989, when a solar flare saturated power transformers in Quebec, Canada, taking out 9.5 gigawatts from the system instantaneously.  That was in 1989, before the ubiquitous Internet, before smart phones and tablets, before laptops in every home.

Today, we rely on the continuous free flow of high-quality electricity to provide heat and power to our homes and offices and to power all of the gadgets we use on a daily basis.  Power outages are all too common already, as shown in the chart below.

So what can we do? Apart from becoming an off-net survivalist, for a more rational response is to create more distributed power generation.  Often when we talk about DG it is more in terms of efficiency, stability and making the best use of local resources.  But what it could also be used for is to create something of a self-healing network.

In a DG network of multiple islands, with each island slightly overlapped the next, if one was knocked out, by weather, inquisitive animal, or solar activity, each of the neighbouring islands could temporarily pick up the missing load until the system was fully repaired.  Sounds simple, and it’s definitely not a new idea.  But like many things this is an idea whose time has yet to come.  Why now?  Renewables, efficient conversion technologies, such as fuel cells and advanced batteries, a range of energy storage options, and an increasing number of people and policies are aligning to create a window of opportunity.

We would need to systematically and deliberately create an island-based DG network, based on the increasing knowledge of what the smart grid could provide and of the potential for linking renewables, micro- generation, energy storage and the smart grid to create a much more resilient network.

So maybe this month’s solar storm was a heaven-sent catalyst for change.  If we are to continue to depend on the flow of electrons for our basic needs, we must ensure that the electricity grid can cope with everything we face, including solar eruptions.


Fisker Looking for ‘Bieber Effect’

— March 29, 2012

Fisker Automotive has hit a rough patch (a rock quarry may be a better way to characterize it, actually).  The company has seen excitement about the product crumble recently thanks to the recent, incredibly public, failure of the $102,000 Fisker Karma while being prepped for testing by Consumer Reports.  This was immediately followed-up with the all-but-expected whistleblower claiming he or she knew it all along.  At the same time, many see the freeze on loans from the U.S. Department of Energy as putting the kibosh on the company, or predict that SEC investigations of original investors will scare any future funding sources, or are of the opinion that the CEO change signals trouble for the company.  Any of these developments could mean that implosion is imminent.

Despite all this, two things can sure be said for Fisker:  the company designs sexy cars, and teenagers love sexy cars.  For his 18th birthday, the heartthrob of 15 year olds everywhere, Justin Bieber, was given a Karma by his manager (no word yet if he lived close enough to the studio to make it home before the battery light came on).  Bieber joins several other celebrities with the opportunity to own this piece of vehicle history, because let’s face it, whether Fisker survives or not, the cars will likely be collectors’ items.

The strategy of putting celebrities’ sexy backsides into the seats of cars is not new.  Vehicle marketers have been using that strategy for decades (why do you think Chevy gives away a Corvette at the Superbowl?).  Fisker is wise to foster this strategy because over the years it has proven to work.  One of the most recent example comes from Cadillac’s resurgence, which many attribute to the Escalade’s appeal to hip hop stars and wannabe stars, bringing in younger buyers and growing sales to a peak in 2005 as the third largest luxury brand in the U.S. (beating Mercedes, just behind Lexus and BMW).  For a brand previously known for the Fleetwood and Seville, that was a dramatic turnaround.

Fisker faces a different situation because the brand is new.  But a “Bieber Brand Bump”, particularly among young people, is very important to help make Fisker seem less fly-by-night and make it an aspirational vehicle for youngsters.  Unfortunately, the quality issues have the potential to undermine any Bieber Bump, unless perhaps Fisker can convince Bieber to pick up a wrench and help improve the mechanics.


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