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Today we caught up with Dr. Dickson Despommier, a professor of environmental health at Columbia University, who is arguably the world’s leading proponent of “vertical farming” or, if you will, industrial scale hydroponic and aeroponic crop production within high-rise buildings. If you go to his website www.verticalfarm.com, you will find a very in-depth body of work exploring the feasibility of this idea.

A cross-sectional depiction of the vertical farm.

It makes a lot of sense. In a way, it totally inverts the conventional wisdom of many of today’s agriculturalists. Instead of using the biosphere to power the technosphere, we are using the technosphere to power the biosphere.

That is to say – and this is a loose, but useful, interpretation of these terms – if the technosphere corresponds to the global industrial economy, we currently need about 550 quadrillion BTUs per year to power our machines, and biofuel coming from our biosphere will be hard pressed to supply this amount of energy.

Notwithstanding the rising use of biosphere for biofuel, for the most part our biosphere still only has to be used to grow food, and we can feed all of humanity for only about 17 quadrillion BTUs per year. This is based on 2,000 calories per day per human, which equates to 2,326 watt-hours per day per human, times 6.0 billion humans, times 365 days per year, which equates to 582 gigawatt-years to fuel all of humanity. At 33.4 gigawatt years per 1.0 quadrillion BTUs, that is a paltry 17.4 quadrillion BTUS.

So it makes more sense to use the technosphere – factory farming, high-rise agriculture – to provide biological energy to people, then to use the earth’s biosphere to provide biofuel energy to the machines of civilization. Because on this earth, machines use 30 times as much energy as humans, and that ratio is probably set to increase.

On Despommier’s website there is a wealth of rigorous analysis regarding just how much caloric energy you can extract from a high-rise building; more than can be summarized here. Go there. Read it.

But a few very salient points emerge. If only a portion of a high-rise was dedicated to hydroponic and aeroponic agriculture, the building would be able to process its waste water – as well as waste water from elsewhere on the utility grid – using it to water the plants AND to reuse as drinking water. Here’s how: The grey water extracted from sewage would be subjected to biological and mechanical filtration, then it would be used to water the plants. The plants, in turn, would transpirate heavily in the indoor environment, and dehumidifiers would harvest this water – this transpirated water would be pristine drinking water, able to be pumped back upstairs or into the utility grid for reuse. This concept of using transpiration from plants in a commercial high-rise agricultural operation to provide the last mile of grey water purification in the urban environment is revolutionary. Along with the surprisingly low, and dropping, cost of desalination, and advances being made in primary sewage treatment, this innovation could SOLVE the issues of potential water scarcity in the urban environment.

The quantity of food that a high-rise farm might produce is also surprising. Because the plants are grown in optimal conditions – abundant light and water, and no pests – they can yield 3-4 crops per year instead of one, and each crop may require no more than five vertical feet of space. This means each story of high-rise space occupying an area of one acre, for example, can literally produce twelve times as much food per year as an acre of ordinary farmland. This multiple order-of-magnitude increase in potential productivity per unit of land, combined with the proximity to market, combined with the water and energy positive nature of the undertaking, means high-rise farming is merely waiting for economic and political conditions to align in its favor. The technology for high-rise farming is for the most part already here, and it will be available when we need it to feed the burgeoning megacities of this world.

The internet has been around a long time, but finding information about green technology and finance on the internet, that’s something new entirely. Take EcoWorld’s “Green Chips” index, for example. Established in 2000, it is possibly the first, and still one of surprisingly few attempts to map publically traded green companies and green funds for investors.

Camino Energy’s “Energy Navigator” Four new indexes of publically traded sustainable energy companies

Social responsibility funds in general aggregate companies that embrace many phenomena, of which “green” (itself wildly subjective) is only one of a variety of social benefit criteria.

Along with actual funds, of course, are indexes, and in both cases, in the last 18 months we are seeing a lot more attention being paid to green criteria.

If you restrict your “green” criteria to energy, the scope of the job is narrowed, but no easier, when selecting companies to include in a green energy fund, or green energy index. One new online source, www.caminoenergy.com is doing a good job indexing public companies in the green energy space.

As Camino Energy’s CEO Mark Henwood explained, the name of the website, “camino,” or “road” (in English) is chosen to indicate the green path we seek toward having a sustainable energy economy. Along this road, sustainable and clean criteria are overlapping yet distinct attributes, and Camino Energy’s green energy public company indexes target energy companies that are developing sustainable energy, which is, as Henwood puts it “energy technologies that push back the date of energy shortages.”

These are interesting distinctions that highlight the difficulty there is in determining “green” criteria – something you would think were monolithic from the passion of many green activists, but in fact is multi-faceted and multi-dimensional. In choosing companies, for example, you have classic green, which are enterprises that embrace practices or provide services embracing and advancing social justice, you have “sustainable” green, which looks at practices and extrapolates to see if in the long-term there are depletions or degradations that in-turn we must seek to avoid, you have “renewable” which some are saying might even apply to nuclear power, and you have “clean” which means no pollution, which in-turn may or may not include CO2.

All of these criteria only scratch the surface of what is green. Henwood’s site is helpful in this tangle of interpretations and agendas, because he has designed a matrix that graphically tracks energy from resource to application, with a set of icons and flow diagramming that is probably the best I’ve ever seen. A small replica of Henwood’s informed and thoughtful schematic is depicted in this post, if you click on it you will see the complete larger version on the Camino Energy website.

With hundreds of public companies from around the world included in his database, with their financial metrics updated automatically, Henwood has created a resource that is hard to find and very useful. With four indexes, Renewable Gencos (geothermal, wind), Solar PV Producers, Fuel Cell Producers, and Ethanol Producers, Henwood is focusing on the green energy sectors with a critical mass of public companies worldwide. He believes, like I do, that even though the photovoltaic sector has done very well in the past few years, and may be a bit overhyped today, it is still the best long term investment.

If you intend to invest in public green energy companies, look to www.caminoenergy.com – their indexes provide invaluable insights, which along with additional vital financial information on green energy companies, makes this website a must-visit.

When we caught up with Gridpoint’s Vice President for Product Strategy, Brian Golden, he wanted to make sure it was clear they offer a lot more than storage. Gridpoint’s “Connect Series” product is a turnkey electricity management system that can be installed in light commercial or multi-unit residential buildings or at a utility substation, in order to monitor and manage electricity usage. And Gridpoint, who already counts among their customers virtually every major power utility in the USA, is one of a handful of companies who offer a suite of products to manage electrical resources more intelligently.

Gridpoint’s 12 kWh “Connect” Series

But Gridpoint’s “Connect Series” unit, about the size of a small refrigerator, is the only product currently available that not only helps electricity consumers and electric utilities manage energy more intelligently, each unit is also capable of storing up to 12 kWh of usable AC electricity. Gridpoint already has hundreds of these units in pilot installations throughout the USA.

With distributed sources of electricity now arriving in new, innovative forms, and capacity increasing exponentially, distributed storage is the final step necessary to completely transform our energy landscape. Wind power is intermittant, solar power peaks between 11 a.m. and 1 p.m. – but with distributed storage available, it doesn’t matter.

As Golden explained, there are several benefits to distributed storage. During power outages, stored electricity can be discharged back into the grid beyond the break in the line, maintaining reliable constant power. In markets where energy pricing is tiered, electricity can be stored during low off peak rates and discharged when rates are higher. Flattening the load by pushing power into the grid during peak hours of demand from distributed sources can relieve congestion on the grid. And, of course, distributed renewable energy sources such as wind and solar can be captured during their limited hours of collection, and utilized 24 hours per day from storage systems. Without distributed storage, new distributed sources of power cannot make nearly the same impact, and Gridpoint is the first company out there offering a product in the market, right now, that solves this challenge.

When I asked Golden what one of these units cost, he said they are about $10,000 to the consumer. Given the current prices of multi-family dwellings or light commercial buildings, that really doesn’t sound like very much. But as a tool to arbitrage between higher peak demand rates and lower off-peak rates, at $10,000 a pop, the unit has a fairly long payback. As a tool to flatten demand for a utility in order to prevent spot prices from spiking, however, the unit is already economical. It is also already economical for new land developments, where the storage capacity offered by Gridpoint’s products, combined with on-site sources of electricity from (for example) photovoltaics, significantly reduces the need for infrastructure to connect to the existing electrical grid – paying for itself immediately.

In any case, as Golden pointed out, we are only a few years away from batteries becoming far more economical. The lead acid batteries used in the Gridpoint units last five years, they are telecommunications grade – meaning they are sealed, extremely durable and safe – and they cost about $185 per usable kilowatt-hour of AC current. But thanks to the advances in hybrid and all-electric car design, advances in battery technology are happening fast. By the time the existing battery systems reach the end of their useful life, they will be replaced – within the same units – by batteries with price performance triple what they are today.

And as utilites move beyond the pilot scale installations of Gridpoint’s products, and begin to place orders in the thousands, the storage capacity that aggregates across the USA will match the exponential increase in capacity from intermittant renewable sources, allowing them to provide round-the-clock electricity. Perfect for charging our plug-ins while we sleep, when the sun is down and the wind has died.

There are no official announcements of when the GM Volt will actually hit the showrooms in production quantities, but the year 2010 continues to hold up as the unofficial date. Last week in the Detroit Free Press, in a report by Katie Merx entitled “A New Era Dawns for GM,” Vice Chairman Bob Lutz stated he “wants to make up to 100,000 fuel-efficient Chevrolet Volts in the first year of production.” This got our attention.

The GM Volt – The World’s First Production Series Hybrid? (GM Volt Image Gallery)

Yesterday I asked GM spokesman Rob Peterson about the quantity of cars planned and the launch year 2010. Peterson could not make an official comment on the year but confirmed that everything is still moving forward on schedule, and that “GM’s internal target is 2010.” That means cars in showrooms in just over two years.

In a significant step forward, last week LG Chem delivered the first lithium ion battery to GM for testing. As Peterson noted “this is being tested not at the cell level but is a full pack that meets all of our power and energy needs.” As we reported in August in our post “GM’s Volt to use A123 Battery,” GM selected two manufacturers out of 31 respondants to their RFP for an automotive lithium ion battery, A123 and LG Chem. It looks like LG Chem has won this round, but Peterson noted “A123 should have their battery here before the end of this year.”

We’re going to say it again: The GM Volt, and its European counterpart, the GM “Flextreme” which has an onboard diesel, is a series hybrid, very distinct from current hybrid designs, and it is a long overdue breakthrough. It is misleading for mainstream journalists to refer to the Volt as a “plug-in hybrid” and leave it at that – it grossly misrepresents the significance of this innovation. As the diagram below indicates, a series hybrid’s gasoline (or diesel) engine is not connected to the drivetrain, only to an onboard generator. Electricity from the generator, along with stored (and recovered) electricity from a battery pack, are what powers an all electric drivetrain.

The Series Hybrid: Onboard ICE powers generator powers electric motor.

The series hybrid design is simpler, requires less maintenance, and delivers outstanding performance. The only thing it was waiting for was the energy density of a usable lithium ion battery. The mystery is why all major automakers haven’t announced series hybrids – for a variety of political or business reasons they still have not, and GM is going to acquire a huge lead in this technology.

Here’s the specs on the Volt: The range on battery-only (using plug-in electricity) is 40 miles – which will fulfill nearly 80% of the normal daily driving cycles in the USA. The range on gasoline-only, if the battery is completely drained, is 600 miles, at 50 miles per gallon. Because the 12 kWh (usable AC) lithium ion battery pack only weighs 400 pounds, it is not a significant drag on the vehicle. We love this car, and up to 100,000 of them are still on track to hit the road in just over two years.

Ever since The Global Warming Swindle was aired in the U.K. several months ago, I’ve been wanting to see it. Well here it is:

Tonight I watched it in its entirety, and am more convinced than ever how dangerous and how wrong it is to accept anything in the name of fighting global warming.

This film, the second of three linked to by Fin in his post “Global Warming Doomsday Called Off,” (all three of the films he links to are worth watching) was more thorough and measured than I’d expected, and confirmed many points of skepticism I already had. In the over 90 minute presentation, some of the most eminent scientists and thinkers in the world came forward over and over with reasons why the global warming crowd has got it wrong, and the consequences we face if rational debate and cost/benefit analysis isn’t restored.

Rather than try to summarize these points again, which has already been done here, and elsewhere, I strongly recommend anyone who hasn’t yet seen this film to watch it now, before the link goes dark. The fact that this film isn’t shown to every public school student in the USA, right alongside “Inconvenient Truth,” is a crime.

Below are listed the names of the people interviewed during the course of “Global Warming Swindle. Over the lengthy program they deliver not sound-bites, but reasoned refutation of virtually every key point relating to the theory of CO2 induced global warming. Read this list, and if you respect even one of these people, think twice, and take the time to watch this film:

• Dr. John Christy
  Lead Author, IPCC
• Professor Paul Reiter
  IPCC & Pasteur Institute, Paris
• Professor Richard Lindzen
  IPCC & Dept. of Meteorology, MIT
• Professor Tim Ball
  Dept. of Climatology, University of Winnipeg
• Patrick Moore
  Co-founder, Greenpeace
• Dr. Roy Spencer
  Weather Satellite Team Leader, NASA
• Professor Patrick Michaels
  Dept. of Environmental Sciences, University of Virginia
• Nigel Calder
  Former Editor, New Scientist
  Co-Author, “The Chilling Stars”
• James Shikwati
  Economist & Author
• Lord Lawson of Blaby
  Former Chancellor of the Exchequer, U.K.
• Professor Philip Stott
  Dept. of Biogeography, University of London
• Professor Ian Clark
  Dept. of Earth Sciences, University of Ottawa
• Professor Patrick Michaels
  Dept. of Environmental Sciences, University of Virginia
• Dr. Syun-Ichi Akasofu
  Director, International Arctic Research Centre
• Dr. Frederick Singer
  Former Director, US National Weather Service
• Dr. Ian Clark
  Paleoclimatologist
• Professor Carl Wunsch
  Dept. of Oceanography, MIT
• Professor Philip Stott
  Dept. of Biogeography, University of London
• Dr. Piers Corbyn
  Climate Forecaster, Weather Action
• Dr. Eigil Friis-Christensen
  Director, Danish National Space Center
• Paul Driessen
  Author “Green Power, Black Death”

Ethanol fuel from sugar cane has surely been an economic benefit to the Brazilians.

Renewable fuel has always been of interest, but has historically not been commercially viable at low fuel prices.

At high fuel prices and due to climate change there has however been an upsurge in the interest in renewable fuel.

The renewable fuel interest can be grouped into the following segments:

1) Governments

a. For fuel security

b. For the environment

2) Social interest groups for the environment

3) Producers of renewable fuel feedstocks

a. Existing farmers of feedstocks that can be used for fuel.

b. New entrants to the market who produce food stocks that can be used for fuel.

c. New entrants to the market who supply feedstocks that can only be used for fue.

4) Producers of Renewable fuel

If we look at the impact of each of these segments and list the main costs and benefits that the actions of each group provides we can summarise as follows:

1) Governments

Switchgrass, which is a fuel-only crop, requires cellulosic extraction of its ethanol in order to produce high yields.

a. Fuel Security

We need to distinguish here between the intention of the government and realistic ability to secure fuel security. First, if we say a government seeks fuel security that clearly implies that the fuel from crop to market would be under control of the government. It therefore would justify the motive to try and produce all the fuel under the government’s control, which would imply the fuel, would have to be produced in country. However, the question then falls back to whether that country has the ability to produce such renewable fuel in country given the local agricultural system dynamics.

As we now live in a global village, the impact of any significant shift in agricultural output use would affect other parties and countries in the world. Without going into details this is exactly what happens if you try and subsidise local production of biofuel from corn which drives up local demand for corn and consequently the effect spills over into the rest of the world which leads to the fact that corn prices skyrocket. Similar effects are visible throughout renewable feedstocks that can be used either for food or fuel once you create a synthetic demand by way of subsidies or legislation you impact market demand and prices. The net result here is that this is in no way whatsoever a food versus fuel debate but simply a debate on what the effects of legislation, subsidies and government intervention has on markets; this is why we have noble prize winners in economics who try and explain why governments should not directly intervene in markets.

b. Environment

As is the case of fuel security, the intention of environmental security or environment improvement is pure in nature, however, to institute policies that directly affect markets simply lead to market demand increasing, resulting in market price pressure and thus market insecurity which is synthetically created by such interventionist policies. Again, this makes a strong case for disinterventionist policies by government when it comes to fuel production targets for green fuel which consequently affects feedstock prices (such as the rise and rise of palm oil prices). Again this is not a matter of food versus fuel but synthetic impact on market prices by government interventionist policies.

2) Social Interest Groups

Firstly it is greatly due to the tireless pursuit of these groups that climate change and the correlation of interest in renewable was formed. This has certainly resulted in renewable fuels surging to the forefront of interest. What is however very hard to ascertain if these groups have resulted in the current policies of Governments in which case, the net result is more instability than benefit to the food markets, again their support is well intended, but if correlated with government reactions as described above then more specific lobbying is required to stay aware from the above policies and rather try and refocus on the producers of renewable resources and support to these parties.

3) Producers of renewable fuel feedstocks.

There are actually three subsets of producers and their impact and reactions to the increased interest in renewable fuels differs.

a. Existing farmers of feedstocks that can be used for fuel.

These include existing coconut growers, palm oil plantations, corn growers and so forth. These groups are simply reacting to existing demand and supply forces and therefore when scenarios like government reaction affect demand for their products upward, they simply benefit from increased income. The parties can be seen as neutral parties as they consistently supply their products and simply sell to the highest bidder. In this context these parties certainly do not participate in the food versus fuel debate.

Nigerian Cassava A flex crop, good for food or ethanol.

b. New entrants to the market who produce food stocks that can also be used for fuel.

These farmers focus on similar products as the above parties. Their expansion I simply centred around the logic that farming has become profitable in feedstock that can be used either for food or fuel. Again these parties will not act as market makers, but rather market takers. In this regard they will simply sell to the highest bidder, regardless if that is a fuel or food consumer. The focus then turns directly back on to the buyer and their motives for buying, which in turn directly back on to whether subsidies or economics provide incentive for the buyer to consume the crop as a fuel or as a food. Again, the food versus fuel debate can quite easily be removed from the discussion by simply asking as to whether the market is being created by government intervention, as is the current case, or by plain market forces, which does not appear to be the case.

c. New entrants to the market who supply feedstocks that can only be used for biofuel.

These are specialist producers who use crops such as Pongamia or Jatropha often with the interest of either developing own plantation or combining this with an outgrower program or doing a combination of the two. The first question one would need to ask of these parties is how do they affect the local food security. Is the areas of their operation currently food neutral or positive (thus producing more or equal food than being consumed), or is the area food negative (thus consuming more food than being produced. If negative the one should determine if the consumption of the area can be maintained from another area in the world, and if it would not be more important to increase food security to neutral or positive before commencing fuel crop production.

The questions raised by the prospect of biofuel-only crops replacing food crops in food-neutral regions are exceptionally important, because today many very poor parts of the world do not have food insecurity in poor rural areas. Such areas would include certain parts of Africa where the environment is exceptionally fertile for most of the year and the local populace are therefore certainly not starving by way of food from crops this I can affirm from personal experience as I have travelled across a number of areas by road and very rarely see signs of malnutrition in such areas.

Jatropha is a fuel-only crop, doing well in harsh arid conditions. Jatropha’s best yields, however, are where food crops would also thrive.

In cases therefore where food security is neutral or positive and land is not currently under development it would therefore raise the question as regards what to do with the land should we plant food or fuel renewables. Allow me to say that the greatest crime what not be to develop the land at all (this is of course in a sensitive way that takes care of biodiversity and the environment which is a totally separate issue from a strictly food versus fuel debate). Development will bring economic development and prosperity to an undeveloped area and would be to the benefit of all people. So if the question then is what should be developed on the land logic would then dictate that the most economically viable crop should be produced, irrespective of whether it is used for food or fuel for the simple reason that the investment pool for agriculture projects is somewhat smaller than for industries such as mining.

A high yielding project would greatly assist to bring development to an area and this would lead to a socially and economically responsible investment not focusing on what the crop is used for, but what benefits the projects (and hopefully if a socially acceptable project then what benefits the people of the area most. In this regard it is the writers opinion that a blend of pure fuel and ‘flex’ crops (used for fuel or food) would be the most justifiable long-term investment. This would mean that a balanced output can be provided and the output can be switched between the two uses to provide a more stable income.

There is another reason why it is safer to spread the project between pure fuel and ‘flex’ crops, and this reason is agricultural subsidies. Put very simply, it very often does not pay to produce pure food crops in the third world as very often you have to compete against highly subsidised markets, that is ultimately the reason why the World Trade Organisation is consistently struggling to bridge this exact problem in the various trade rounds held to address the problem. This problem cannot be expected to disappear for a very long time still, and in this regard it therefore provides a far sounder project profile with reduced risk by at least planting partially flex crops and partially pure fuel crops which are not affected by agricultural subsidies. That way if food prices synthetically skyrocket then the project benefits, and if they drop you can still sell your crop for fuel, thus providing a balanced investment.

4. Producers & Refiners of Renewable Fuel

This group simply provides a conversion function dependent on one hand on feedstock supply and on the other hand for a viable market. Often however the risk is that the feedstock price is driven by support for the off-take segment to which the fuel producers deliver, and if this is affected as described in the government impact section, then they directly need to drive up the feedstock prices which means they needs further government support to remain at viable levels of off-take prices. The greatest danger here is that these producers along with government support can fall into a negatively reinforcing loop by consistently requiring more and more government support as the feedstock prices consistently get driven up, which can potentially bring food from fuel production to a total market collapse if subsidies are withdrawn for these producers. The contra argument would be that if the fuel producers seek lowest cost advantage and structure their investments on that basis (which would mean that they would need to be as close from crop to market as possible) and therefore possibly relocate given that they then produce an international commodity fuel and not biofuel anymore they might find a more stable, reliable and cost effective market.

Burgeoning plantations of oil palms are an example of how subsidized biodiesel is generating massive rainforest destruction.

Whether for food security or for environmentalism, intervening or creating synthetic prices in the market for food securities is creating food instability.

Certainly seeking optimal areas where the optimal crop yields can be sought and seeking a blended strategy of pure fuel and flex feedstocks provides as safe strategy against such risks, as the investors will be able to capitalise on their dual position.

Synthetic prices also create a dangerous position for pure fuel refiners if they do not focus on low cost production strategy and stick to as short as possible a cycle from crop to market as it means your political risk to the project is immense as if the government withdraws support for market prices your project viability is significantly eroded.

Further, if fertile areas can be accessed and developed this provides benefit for the local area and therefore social upliftment flexible crop strategies can greatly impact the viability of these investments. And if return on investment both for the community and investor is the prime objective, why then could it be possibly justifiable to launch the main centre of a commercial investment into marginal land. Yes of course, if there is some economic return it could be considered to develop such marginal land, but surely any investor would primarily be interested in good economic return.

It is unlikely that marginal land would cater for such rate of return requirements, more likely these projects would be social, and if they are social, then there is a real case for government intervention to address social development and not to affect markets. Food versus fuel is not the issue then, the issue is renewable policy for fuel and flex feedstocks from governments both in the first and the third world.

About the Author: Louis Strydom is an expert in new venture creation and project finance with wide experience on projects in the developing world. One of Strydom’s main projects for the last year has been conducting a pre-feasibility study and promotion of a 230,000 acre site for a Jatropha plantation and biodiesel refinery in Kenya. Previously he was Senior Vice President of Project Finance at Decillion – a company listed on the Johannesburg Stock Exchange. Other positions included Senior Economist managing the Credit Policy and Risk Management division of the Export Credit Insurance Corporation of South Africa. Prior to that he was a Director with Triumvirate responsible for Marketing and Consulting on Crisis Management. Strydom also has extensive experience in short term insurance with American International Group on fire/casualty risks, niche products and political risks in Africa, Europe, the Middle East, UK and USA.