Archive INTERVIEWS

• Joe Lichy on The Outlook for Concentrating Photovoltaics


• Daniel Snow on The Bridge Between Old and New Technologies


• Stephen Shea on Solar Manufacturing Innovation


• Karina Funk on The Evolution of Clean Tech Finance


• Wayne Manges on Wireless Sensing Networks


• Robert MacDonald on Water Technologies
  

Concentrating Solar Photovoltaics Shine On

Over the last year concentrating PV technologies have been a popular topic at conferences, in the media and for investors. We interviewed Joe Lichy, President and Founder of NuEdison, to get his perspective on the prospects for funding, technical challenges and continued viability of the sector.

Photon International recently ran an article on the future prospects of CPV. Did you agree or disagree with any parts of their assessment of high and low concentration systems?

I didn’t agree with their perspective on the high-concentration market.  People are always quoting the 40% efficiency of the highest performing cells.  They say just put them into a 500X concentrator and you have a 40% efficient system, but that’s a massive oversimplification.  No concentrator has 100% optical efficiency, and the higher your concentration factor the lower that gets - it can easily be 80%.  In addition all of those high-concentration systems collect only direct light, so again you’re down another 80%. Each time you multiply by .8 you go from 40 down into the 20’s pretty quickly.  You’ve also added the complexity of a tracker and the requirement for spacing these things out.  You can’t have the trackers abut, which means that if you look at area efficiency it’s much lower than silicon flat-panel efficiency, even lower than some thin-films.  So if you had a fixed area on which you’re installing a system, and you wanted to get the most power out of the system you’re going to go with silicon and just cover the whole area. It might be a little more expensive per watt, but you’re going to get a lot more watts.

The only place I see high concentration systems making sense is for remote utility-scale systems in very arid climates where there’s not a lot of diffuse light.  However, the problem is that the value of that electricity is 5 to7 times lower than retail, so they have a much more difficult hurdle to achieve than residential systems.  Plus there’s an immediate technology which to me to be a much more logical route; and that’s solar thermal.  Not only can solar thermal convert at comparable efficiencies to high-concentration CPV, but it can easily be designed to give you 24-hour dispatch, so you get a much higher capacity factor out of your equipment. 

What do you see as the biggest technical challenges that need to be overcome between now and the time when CPV modules are being mass produced and widely installed?

One thing in the Photon article that I mostly agreed with was a comment from Lenny Sharp at Silicon Valley Solar.  He made a comment that “the biggest challenge to commercial manufacturing is the adaptation of flat plate production equipment.”

That’s pretty close to what I feel is true.  The issues people normally think about for CPV are things like: How do you focus the light down? What does the end product look like?  What type of cell do you use?  That’s not much of a challenge.  People have been doing concentrating PV demonstrations for a long time, and the optics are normally very simple. Some people are using more complicated systems, but for the most part simple lenses, prisms and mirrors work quite well.  In fact you can come close to the absolute limit of concentration with a simple optic design, and people have known that for 40 years.

The only reason to do CPV is cost, and manufacturing cost is heavily impacted by scale. Everything we’ve seen to date among CPV companies has been small scale.  NuEdison is talking about 200 kW per year, I see other companies are talking about up to 10 MW next year, and we’re up against the manufacturing of flat panels on the scale of well over 1 GW per year.  So the challenge that CPV faces is proving that at the end of the day you end up with a product that really is a lower cost product than a flat panel.  You can do the math and show that the cost should be lower.  But until you have a well balanced factory with automation and the volumes to negotiate lower costs on raw materials then the costs are much higher than they would be for a larger facility.  My estimate is that the threshold for us to achieve the 35% cost savings that we tout is a 10 MW factory.

However, I didn’t entirely agree with what the SV Solar guy said because CPV doesn’t fit exactly into today’s flat panel production line.  Inevitably with CPV there are different bottlenecks because there are smaller cells, you’re dicing the cells and you have a lot more interconnections.  While in traditional manufacturing they really focused on getting lamination down, that’s not the rate-limiting step in CPV.  There are people out there who aren’t doing any lamination at all.  NuEdison does use a traditional lamination process, but our biggest costs are in dicing and stringing.  So the way today’s factories are balanced is different than the way that a CPV factory would be balanced.  There is some R&D that needs to go into moving from a few hundred cells per hour in a stringer to 1000 cells per hour in a stringer and from $0.10/cut to less than a penny a cut.  These don’t sound like super enthralling R&D projects, and they're the type that generally only get solved by industry.

Today, flat-panel technologies are pretty much the same across companies, so equipment design is the same as well.  Whereas CPV designs today come in all shapes and sizes.  Do you think that in the future the design of CPV modules and systems will converge on a standardized design, and on standard manufacturing processes, or is the multitude of approaches we see now sustainable?

I don’t think that the multitude of approaches we see now is sustainable at all because first off a lot of them just don’t make any sense! I think that there will inevitably be a couple of different flavors of concentrators, but I think there are basic parts of the design and the manufacturing process that will be common for many of them, such as dicing and stringing of smaller cells.

Within the two classes of CPV, the high concentration stuff is going to be focused on hybrid III-V cells and the low-concentration stuff is going to be focused on silicon and thin-films.  I think that those two worlds will continue to have very different processes, but I think that within each space you will see a lot of convergence, especially in the materials used to form the optics.  Early on there will be slight differences because these designs will be proprietary and different companies will need to keep their own angle.  Today in the flat-panel world there’s no IP because not only is everyone doing it the same way, they’re doing it the same way they were doing it in 1970.  That’s going to take a long time in CPV.  For instance, NuEdison has an optical design that we patented and we’re not going to let anyone else use that exact same optic.  It will be 15 years before it enters the public domain and everyone can use it.  So even if it’s the best optic in the world, other people in the space are going to have to do something else, and the same is true for every CPV design out there today.

The same thing is true in the process, though I think what’s likely to happen is that most of these companies will outsource their manufacturing processes.  Companies like Applied Materials are going to own the manufacturing processes, and whatever they work out will disseminate through the industry.

What types of funding will be most instrumental for supporting the continued development of CPV over the next several years?

The funding for manufacturing improvement is going to be private.  There are three places you can get funding: government, private equity, and strategic investments from companies.  Government is funding generally either for project development incentives or R&D technology development.  And the interest of universities and national labs is always on something that is to their minds sexier than manufacturing.   

Now we’re starting to see a lot of private equity coming in, but there’s still a feeling that most of the private equity firms want a 10X improvement, they want to see prices go to10 cents a watt.  With CPV we’re talking about 35% to 40% cost reduction, and most of the VCs out there don’t find that attractive enough.

The people who find the CPV proposition most attractive are today’s cell manufacturers because they see if from a completely different angle. In order for them to expand it costs a certain amount to build a factory.  What CPV allows them to do is to get twice as many watts out of the same size cell plant.  So they see an immediate impact on their capital expenses, their fixed costs and how quickly they can ramp up.  These are huge benefits for them, even though the end product is only 35 to 40% cheaper.  In a year they can increase their production by twice as much as they could otherwise.  I think that we will see funding coming from cell manufacturers - though what form it’s in, whether it’s strategic investments or outright acquisition, I don’t know.

That’s very interesting; I haven’t heard many people talking about that potential benefit to cell manufacturers.

That’s one big difference about NuEdison’s approach.  We’ve positioned ourselves as a module service provider, working for cell manufacturers because they get the most benefit out of our product.  If you’re doing CPV you ought to find out who’s benefiting from it.  If you’re not totally vertically oriented it’s hard to get a dramatic savings to the end user.  But the cell manufacturer sees a big benefit right off the bat.  If you think about it, today a cell costs about $1.65 per watt and a system installed costs $8 to $9 per watt.  So if you have a 2x concentrator, the best you can do is take $0.80 out of the installed cost of that system if all other costs remain the same.  That’s less than a 10% improvement.  So you can see that with CPV, the benefit to the consumer initially is small.  The benefit to the manufacturer is that suddenly they’re making twice as much money - with twice as many watts from the same number of cells.  Eventually the savings that the manufacturer sees will have to be shared with the consumer when the market becomes more competitive, but it’s not there yet.

The big question that people always ask is: What’s the future for CPV?  If cell costs come down below some point $X will CPV matter at all?

There are a couple of reasons why CPV will continue to matter.  One is that cell costs aren’t going below that point X.  It has nothing to do with the cost of silicon.  We’ve plotted out the cost of a concentrator module versus the cost of a flat-plate module and the cost of silicon feedstock.  Even if you take the silicon cost down to zero, so people are giving away the stuff for free, there’s still a benefit.  It’s small, but there’s still a benefit because the processes are much more complicated for making the cell than the module.  If you have 100MW of module production no one really cares whether you got there using 100MW worth of cells or by making 100MW of modules from 50MW worth of cells.  At the end of the day it’s always going to be cheaper to make 50MW worth of cells than 100 MW worth of cells.  So that’s one reason why even with material costs dropping CPV is going to be useful and attractive, especially for cell manufacturers

BIOGRAPHY

Joe Lichy is the founder and CTO of NuEdison and inventor of their core CPV technology.  He holds a Masters in Electrical Engineering from MIT, and has 15 years of experience in R&D with Intel, QED, and PMC-Sierra.  Mr. Lichy's work in the solar industry includes technical reviews of journal articles (ASES), teaching of seminars (Stanford University and Cabrillo College), and working with the U.S. Congress to develop legislation for promoting the U.S. Solar industry. He is the author of two peer reviewed papers on photovoltaic optics and financing.

Back to Top

Making the Most of Innovation
Companies must bridge the gap between old and new technologies to succeed

Recently we interviewed Professor Daniel Snow of Harvard Business School to discuss his research in absorptive capacity, the measure of how well companies can collect and make use of new knowledge.    In his recent research, Professor Snow has found that companies that invest in Research and Development on “future technology” are more successful in integrating components of those future technologies, or radical innovations, into their current products.  In this interview, we discussed the impacts of this idea on R&D decisions as well as the challenges startups face to bridge the gap between old and new technologies.

What kind of advantages does being able to absorb outside technologies and expertise give companies?

There are a few ways that I think about this.  The first is that these activities can result in profitability, the short-term bottom-line type of stuff.  In addition, the need for absorption of future technologies happens most often at inflection points, or crossroads for industries, which are times at which companies can be vulnerable.  Companies that aren’t good at adapting to new technologies may go out of business. 

Finally if you’re not cynical about things that organizations are trying to accomplish, if you agree with the premise that companies can be doing good for society, then if those companies go out of business society misses out on the innovations that they might have introduced.  Ultimately that’s an advantage to society as much as to companies.  When companies have something really cool to offer but are not able to get that thing marketed and sold to customers, then society as well as the company misses out.

I’m sure you have seen this in your experience, too: I wish I had a dollar for every company I have seen that had a really cool technology that could make a big difference to the market or to the world but that didn’t make it for some reason.  There are lots of great technologies that come out of universities and lots of  technologies that come from inventors.  But a lot of the time they just get it wrong, or they don’t have the ability to make the best use of that technology, so society misses out on the benefits. 

That’s an interesting perspective…

Well, people sometimes are surprised at the level of consideration given issues of corporate social responsibility and social welfare at business schools these days. But there is increasing recognition of their importance.

The test cases for much your research have been in the automobile industry. What do you think the implications are for startups in industries that are, by reputation anyway, more fast-paced?

I do think that it applies to other industries, but I’d also take issue with the premise of your question.  I think that the auto industry is inclined to be fast-paced. These companies are hiring smart engineers, and when you talk to people inside of the companies, they wish that cars like the GM Volt would take hold or that the fuel cell would take off.  I don’t think that they’re slow paced for lack of inclination, but they’re slow paced because of the size of the investments required and because of what their customers demand.  Anyway, I realize that’s quibbling.

I’ve seen these kinds of ideas work in fast paced industries like semiconductors and medical technologies.  At the core you need to have some people who have experience or grounding in the current technology and market but who also have some understanding of the new technologies are coming along, and focusing on R&D.  You need people who are at the intersection of these two eras of technology in order to be able to synthesize them.

This is a general concept that doesn’t just apply to “boring” old industries. The principal is really general: you need people that can bridge the gap between the two generations.

How could these principles apply to some cutting edge technologies like photovoltaics, batteries or biofuels?

I actually just sat in a presentation recently by a semiconductor equipment company.  One of the things they’re making is machines that are used to manufacture photovoltaics, and it was really interesting to see what they were thinking about and how the manufacturing technology is progressing. I think that the advances that are being made in photovoltaics are interesting because some of the stuff that’s happening there is really cutting edge, but some of it is seems relatively low-tech.  In some applications they’re combining processes for things like semiconductors and flat panel displays with processes for manufacturing construction-grade structural glass.  The people who have a good understanding of how to make these products successful are people that understand not only the cutting edge stuff, but also understand the construction industry, the glass industry and other fields that have been around for years. That’s an example of a gap that has to be bridged.

Batteries are another example of where you’ve got a lot of cool advances taking place, but the applications are still kind of boring, and that’s where the rubber meets the road.  It’s one thing to have a chemistry set that allows you to make a really cool battery, but until you understand how that actually goes into a home system where you can store electricity for later or until you understand how a car works, you’re not going to be able to market the technology.  For instance, there’s a battery company here in Boston that came out of MIT.  For a while they’re going to be doing boring stuff like putting their batteries in power tools until they learn about how the market works, how to manufacture in China and how to run a supply chain. That’s the stuff that you need to make your technology successful.

In a way I’m speaking about this in reverse from my recent paper, which demonstrated that the old technology people need to be doing R&D in order to understand the next step.  But it is useful to talk about it in the reverse, the new technology people need to understand the old stuff so they can synthesize the two and make it work.

My intuition for biofuels is that petroleum companies with big distribution networks, companies like BP, could end up winning the ethanol race, as compared with a small startup.  This is because the established firms that are rooted in the industry know how fuel distribution and refining work, but they can also be doing R&D and making acquisitions to put them in a position to absorb the new technologies into their way of doing business. 

So if you’re that startup in Kansas that’s trying to collect corn and make ethanol the lesson is not that you should stay out of the industry.  The lesson is that when you’re thinking about hiring people, staffing your board or hiring executives, you need to have people in there who really understand how the industry works.  The concept of absorptive capacity works both ways.  What it’s really about is being able to absorb, synthesize and make use of technologies that are somewhat removed from the core of what you’re doing.  If you’re in a lab or you’re a small company you need to be able to absorb technologies that are outside of your space of experience.  Even if it’s stuff you think of as boring, older technologies or distribution channels, you have to understand it to succeed.

BIOGRAPHY:

Daniel Snow is the Lumry Family Assistant Professor of Business Administration at the Harvard Business School.  Professor Snow joined the HBS faculty in 2004 and currently teaches in the first year Required Course, Technology and Operations Management. His research focuses on the impact of new technologies on firms and industries. In particular, he examines the choices companies face when deciding which technologies to develop. His research on the “Last Gasps” of technologies in the face of competition from new technologies has been influential in shaping thinking about innovation and technology transitions. He has worked for Ford Motor Company as a Financial Analyst, and has consulted for firms facing decisions about Research and Development, technology transitions, and the issues associated with new technology adoption. His Ph.D. is from the University of California, Berkeley’s Haas School of Business.

Back to Top

Stephen Shea on Solar Manufacturing Innovation

You’ve been in the PV industry a long time – what are the biggest surprises you’ve seen in the development of the industry?

Overall I'm surprised that the industry has taken so long to get where it is today.  Recently I've been most surprised and excited by the ability of new PV companies to develop into major players seemingly overnight.  The traditional PV technical community has been a rather small family, so I’m delighted to now see an influx of people who bring with them skills from other technical fields, skills from business and access to financing to help drive the industry's growth.  With more political will, I think that could have happened in the U.S. a decade ago.

There seem to be a lot of companies selling PV manufacturing equipment, but there are also new technologies coming out every month… How do you see the manufacturing equipment industry responding to this?
Despite the fact that new technologies come out constantly, the bulk of the industry is still based on screen-printed crystalline silicon.  And despite the recent shortage of silicon, that technology still accounts for the majority of growth in the industry. Because of that, established larger equipment manufacturers have the opportunity to develop reasonably standardized equipment lines with the prospect of high-volume sales.

At the same time, process variations from one manufacturer to another and manufacturer-specific technology advances create an opportunity for new players who can supply customized equipment or who can create custom variations in off-the-shelf systems.

Do you think the solar industry will ever become as standardized as the semiconductor industry?  What will happen in the meantime?

 I think the industry will continue to be divided between companies who make essentially similar products and an increasing number of companies, some of which may be quite large, whose solar cell and solar system designs are unique. So I don't see the solar industry, at least in the short term, becoming as standardized as the semiconductor industry. In the long term, I suspect there will be some paradigm shift that leads to one or two clearly superior thin film materials and processes based on those materials, but I believe that point is several decades away.

What do you think the PV industry will look like 30 years from now?

 As we approach the mid-21st century, the PV industry will have outgrown the need for substantial governmental subsidies and will achieve a cost-effective place among the world's energy technologies.  Photovoltaics will play a significant part in electrical generation worldwide. 

Are there any opportunities for technical breakthroughs that you think aren’t getting enough attention right now?

BIOGRAPHY:

Dr. Stephen Shea has over 30 years of experience in the photovoltaics industry. As a consultant, Steve has worked with industry leaders such as Norway’s REC and startups such as Practical Instruments. Previously he directed process technology development at BP Solar (formerly Solarex), where technology improvements over two decades resulted in a doubling of device efficiency along with more than an order of magnitude reduction in manufacturing cost. His experience spans the PV supply chain including photovoltaic device design and development, manufacturing process analysis, equipment specification, system design and performance and quality control.  Steve earned a Ph.D. in Applied Science/Electrical Engineering from the University of Delaware and is the author of 25 publications on crystalline and thin-film photovoltaics.

Back to Top

Karina Funk on The Evolution of Clean Tech Finance

I know you recently left the Massachusetts Renewable Energy Trust. What are you up to now?

When I first joined the Trust about three years ago, investing in clean energy start-ups was just a small, niche field.  To address the gap in private sector financing the Trust launched a privately-managed VC fund, and I ran a seed-stage investment program internally.  Since then, interest in clean energy ventures among investors and entrepreneurs has grown tremendously.  I decided to leave the Trust’s direct investment programs in good hands and build upon what we started by working on investment opportunities in wider geographies and markets.  At the moment I’m engaged in a large project with Charles River Ventures. 

Thus far I see most of the financial innovation in the U.S. happening in the private sector – this is typical of the historical evolution of project financing for many other large infrastructure projects.  But government policies can help to share risk and encourage wider use of best practices in project finance. 
We’ve seen innovations that spread risk and return over a wider net:  some engineering companies are starting to get comfortable giving independent performance guarantees; voluntary markets, aided by state policies, are unlocking the value of renewable or energy efficiency attributes and are creating new revenue streams; and investors can manage risk across a portfolio of assets rather than one special purpose entity.  New financial instruments such as insurance and derivatives will continue to evolve to help manage risk, and investors will move up the learning curve to more sophisticated hedging strategies.  I think there are great opportunities for ramping up quality energy generation projects, if the right expertise and incentives are harnessed in order to allow for risk-adjusted returns. 

Solar and biofuels are the hottest venture investment sectors right now.  The public markets have been rewarding solar module manufacturers handsomely with multiples of 5-10 times revenues.  There is a large and growing manufacturing base for silicon-based photovoltaics, large enough to feel the pinch of currently-constrained silicon supplies.  In the wake of this there are venture prospects yet:  the combination of a large incumbency and a growing market creates opportunities for incremental innovation to improve the economics of solar energy. 
It’s also easy to follow both public and private money to biofuels.  There are many different chemical and thermal processes that are under experimentation, and the markets are enticing:  ethanol alone is a $10+ billion market world-wide, and in the past year both developed and developing countries have stepped up their mandates and incentives for biofuels use.
In addition to those two, we also see new materials being funded in the energy space.  I think venture funding is becoming available for these technologies in part because of their option value:  many new nano-materials may have applications across several markets, from solar to electronics and even to life sciences.

Where do you see the greatest potential for US state and federal funding to have the greatest impact on the renewable energy sector?

There are two major gaps in research funding that effective state and federal funding programs can address: the gap between pre-seed and venture financing, and the gap between research and commercial-scale projects. 
To attract private sector funding, it’s important that market realities help drive the development process at the outset.  Government funding for programs that help support collaboration between stakeholders and refine designs for real-world applications can help reduce the risk of investing in early-stage technology development.
Private/public sector collaboration can also provide creative ways to encourage early adoption.  Government funding and appropriate policy changes can provide incentives for incumbent energy providers to adopt new technologies.

Different technical fields vary in the strength of the link between research institutions and commercial reality. In IT, for example, startups tend to be years beyond universities and labs, but in biotech universities and startups are much more on a par in regard to technical innovation and commercial relevance. What do you see in energy?

As in biotech, universities can play a critical role in validating what’s being developed by energy start-ups.  These new technologies require high capital expenditures and have many issues to resolve, from basic science to process innovation and manufacturing scale-up.  That being the case, in these days of $70 oil, I have seen several very early-stage university teams being funded rather aggressively by seed- and even venture-stage investors that are willing to take the risk that the scale-up issues will be solved. 

Where do you think the biggest opportunities are for new energy technologies to succeed in the short-term?

Growing populations around the world have a voracious appetite for transportation fuels, electricity for housing and industry, and for powering consumer electronics.  I’m always looking for technologies focused on solving key issues in some of these well-defined markets, rather than generating green electrons and then looking for a problem to solve, or expecting a drastic change in customer behavior.  The tricky bit is identifying the best market opportunities.  Startups should think hard about willingly subjecting themselves to navigating a highly regulated and slow-moving industry (this includes utilities as well as the automotive industry).

How does the technical and economic potential of today’s innovative energy technologies compare to the commercial reality?  Do you think that there are adequate economic opportunities to spark interest and investment from the private sector?

The potential for ROIs within the 3-7 years demanded by the private sector is a major factor favoring investment.  The nearer-term opportunities lie among the clean energy technologies that are already at the stage of solving engineering scale-up problems. However, now that interest has been sparked among the private sector, clean energy entrepreneurs shouldn’t over-promise.  Much more research is needed to determine the technical economics of producing those green electrons.  Even with strong financial incentives in place in the near-term, entrepreneurs and investors need to explore the ugly truth of whether they’re still competitive if oil drops back down to $40 a barrel. 
Will we see widespread adoption of these technologies soon or will it be a long time coming?  What’s needed to encourage adoption?
Although many clean energy technologies are currently viable, they are still in search of discretionary spending by customers and corporations.  The markets are huge but uptake will only happen once a viable technology is proven to be economical and robust on a large scale.  This requires attention to both power generation and infrastructure.  In the case of biofuels, for example, the ability to harvest the feedstock, transport it to a processing plant, and finally distribute a blend won’t happen without focused coordination among industry players and, hopefully, accommodating state and federal policies and incentives. 

BIOGRAPHY:

Back to Top

Wayne Manges on Wireless Sensing Networks

For introduction, can you describe a bit about your background and your specialty at Oak Ridge National Lab?

I direct programs in uranium enrichment and wireless technology for energy efficiency in industry under the DoE’s Industrial Technologies Program.  I’ve been at ORNL for almost 30 years and have been mainly involved in measurement and control development for large, one-of-a-kind systems for the government and some special private sector organizations.  My interest in wireless came from my hobby as a ham radio operator. 

How is the world of wireless sensing technology different today than it was five or ten years ago?

Since retail firms like Wal-Mart have demonstrated the value of “supply chain visibility” it’s less of a stretch now for people to see “process visibility” as a value to their organizations.  In 2002 Dr. Jay Lee said in Fortune magazine that CBM – condition-based maintenance – would be the next “killer app” for wireless, much as RFID was the first.  This has proven correct with TXU Energy installing a $14M wireless network to monitor the condition of equipment at the Comanche Peak nuclear power plant. 

The big change in the market today is acceptance.  The technology is finally maturing to a point where facilities other than nuclear power plants can afford to deploy large-scale networks of wireless systems.  Standards like ZigBee, Bluetooth, IEEE 1451.5 and SP100 are beginning to make believers out of users who have been waiting for “unplug and play” wireless.  Organizations like The Wireless Industrial Networking Alliance are working to address the remaining issues and ensure that expectations and performance are at least within sight of each other.

What are some interesting applications of wireless sensing in clean technology?

I learned of an interesting application during a class that I taught on wireless and cyber-security for the water treatment organization in Boston.  During heavy rain they would have to dump untreated sewage into the harbor since their facilities did not have the capacity to handle the volumes entering through the flood drains on the streets.  Alternatives like separating the lines or increasing capacity were not very attractive.  Someone there had the brilliant idea of remotely – wirelessly – controlling the valves on the street lines to open those where the rains weren’t as heavy and allowing the effluent to “back up” into these under-filled lines.  Boston gets heavy rains that may be extremely localized, so this turned out to be a real solution that solved much of their problem with only the cost of a few wireless links to valve controls. 

The “holy grail,” of course, is low-cost ubiquitous sensors.  With improvements in process visibility users get better energy efficiency, materials use, quality control, inventory tracking and reduced waste. 

This promise is being realized by trucking companies who now monitor their processes very precisely and reap huge benefits by optimizing their operations over larger and larger areas.  However, truly widespread use will require major technological and economic innovations since the current integrated costs of $200 - $1000 per node are too expensive for most industries.  The target cost ranges from $5 to $50 per node for most industries that consume energy in the US.  Wireless sensors could result in as much as 10% energy savings and 15% emission reduction if they were deployed in the major energy consuming industries in the US.
 
How does the technical potential of these technologies compare to the commercial reality?  Do you think that there are adequate economic opportunities to spark interest and investment from the private sector?

The technical and commercial opportunities of these technologies are unparalleled in history.  The only thing that comes close for industry is perhaps the introduction of the microprocessor.  Wireless is a platform technology that allows new ways to think about processes.  For example, people who think cell phones just changed our culture underestimate the impact.  Wireless sensing will be as much a tidal wave of change and will ripple throughout industry. 

The challenge for us all is to make sure the deployed systems actually work.  This is necessary for both technical and commercial success.  ORNL’s Extreme Measurement Communications Center was founded to test industrial wireless products and qualify them for use in harsh environments. Sometimes the funding sources don’t have the qualified personnel to choose technologies with the most commercial potential.  There is so much money to be made that people are jumping in without adequate preparation and understanding of how the technologies, applications, and markets actually map together.  Several good wireless sensor companies have failed because they failed to meet the expectations of the marketplace, financial community or both.  These failures hurt everyone.  With costs increasing every year for wiring and decreasing for wireless, it’s inevitable that the right technology will emerge.  The only questions are where and when. 

Will we see widespread adoption of these technologies soon or will obstacles prevent it?

Many of the obstacles around security and reliability are perceived rather than real.  The cost issues, though, are real.  The emergence of the standards I mentioned will go a long way toward allowing users and suppliers to better match performance with expectations.  What’s needed is for people to understand that wireless technology is not just about replacing wires.  It’s about changing the way we think about monitoring and controlling processes.  This will come with more successful applications and the open standards that allow choices without long term commitments.  The original cell phone concept was initially rejected by a major US company because the technology experts there could not imagine that the public would accept the level of unreliability inherent in the connectivity envisioned.  Again, thinking of the cell phone as just replacing wired phones was missing the point.  Steven Chen, at a wireless technology supplier called 3eTi, predicts that the US government will soon begin to accept wireless technology for their unclassified use within three new standards: FIPS 140-2, IEEE 802.11i, and WPA-2.  He predicts the market for government wireless in 2006 to approach $7B.  This will get the attention of all three communities: investors, suppliers and end users.

What innovations do you expect to see in the next few years?

A major breakthrough is likely in radio hardware.  New technologies including hybrid spread spectrum and ultra-wide-band are likely to improve reliability, security and latency in many hard applications.  The cost of these should be no higher than current technologies since the materials are similar.  The challenge for the suppliers and financial communities is to continue to make money during the emergence of these technologies while the challenge for end users is to maintain enough flexibility in standards to move forward as the technology matures.  The worst case scenario would be if the users decide to wait “until it all shakes out.”  With that scenario, the choices will be extremely limited and the costs will be high.  This would be analogous to those who refused to embrace the PC or Ethernet for industrial applications until they were “ready.”  The companies who benefited the most from these disruptive technologies were the ones who got into the game early, acquiring expertise and experience, and then moving with the tidal wave as it swept through.

A short-term breakthrough will come with the emergence of wireless standards that are vertically integrated from radio to application.  Once users and suppliers begin to see the benefits of not having to re-invent everything every time, the market acceptance will accelerate.  New uses will be found and the culture will begin to change for industrial wireless.  This is likely over the next year or two.  Real money is going to be made and real impacts realized during these early adoptions of standards-based systems. 

BIOGRAPHY

Wayne Manges is a program director at Oak Ridge National Lab responsible for a $4.5M per year program in uranium enrichment and the US Department of Energy’s Industrial Wireless Program.   With 29 years at Oak Ridge National Lab, Wayne is working to bring wireless technology to the steel, paper, and other industries.  He is a contributing editor for Sensors Magazine and is the current co-chair for the ISA SP100 standard for wireless industrial automation.  Wayne holds Master’s degrees in Chemistry and Physics from Rensselaer Polytechnic Institute and Electrical Engineering from the University of Tennessee.

Back to Top

Robert MacDonald on Water Technologies

In January 2006, GreenMountain’s Jon Guice interviewed Bob MacDonald, a Silicon Valley entrepreneur, to talk about his interest in water technologies.

Most of your career has been in photonics. How did you come to be interested in water?

Believe it or not, topics like activated charcoal water treatment and aquifer remediation were frequent topics of dinner table conversation growing up, thanks to my stepfather, a professor of environmental engineering.  Two summers working in his research lab at the University of Illinois in the mid-‘80s gave me first hand experience in the issues and technologies involved in water quality management. Many of the water treatment technologies developed over the ensuing decades have come of age, and the market need for these technologies has never been greater. This is similar to the photonics market ten years ago, so I’m looking to apply the lessons I learned building businesses in photonics to the water market.

Where do you think the biggest opportunities are for new technologies in this sector?

Membranes for various filtration steps are gaining steadily due to decreasing costs, increasing reliability, and the need to achieve more stringent treatment standards.  Emerging applications for membranes include desalination, ultrafiltration for drinking water, and biofiltration for wastewater treatment.

More generally, biological treatment technologies are rapidly developing. Microorganisms rely on catalysis that does not need extreme conditions or harmful chemical inputs. The tools to understand microbial communities and harness their benefits are also expanding rapidly.

Are there any technologies that seem to be “on the way out”?

Environmental technologies die slowly because investments in the water industry tend to be based on large projects with decades of planned use. Chlorine treatment of drinking water is slowly on the way out. Conventional sedimentation and filtration will also fade as membranes come on. 

Where do you see the need for a lot of innovation in order to meet current and future water challenges?

Two classes of compounds are driving new technology innovation.  The first group is hormonally active compounds, or endocrine disruptors, such as pharmaceuticals, plasticizers and hormones themselves. While they are present in low concentrations, there can be many of them. The impact of these chemical cocktails on living organisms is yet to be fully understood. In wildlife, endocrine disruptors have been clearly shown to impair reproductive systems in some species.  These organic compounds are not effectively treated by conventional wastewater treatment systems.

The other broad class is the oxidized inorganic anions, like perchlorate, selenate and arsenate. These contaminants can be removed by conventional ion exchange, but it is expensive and generates hazardous brine. 

What are some interesting and innovative technologies that are out there now?

There are a lot of new technologies being developed and deployed for water purification and wastewater treatment.  I brought some notes with me on a sampling of companies:

• In membrane ultrafiltration: Companies such as Zenon (Canada) and Inge AG (Germany) are aggressively deploying systems for water filtration using micro porous membranes.  Membrane technology improves performance and lowers operating costs for water treatment in a variety of applications.
• In membrane biofilm reactor (MBfR): This emerging technology being commercialized by Applied Process Technology (Pleasant Hill, CA) effectively treats oxidized inorganic anions through the use of biological organisms that grow on the membrane surface, which provides the organisms a controlled supply of hydrogen.
• In ozone disinfection: Novazone (Livermore, CA) develops systems that use ozone to disinfect and sanitize drinking water and other food products without the use of harmful chemicals.
• In ultraviolet disinfection: Ultraviolet disinfection technology is being applied to remote/portable water treatment systems.  An example of how this technology is applied to disinfect water containing viruses and bacteria that cause cholera, typhoid, dysentery, and other deadly diseases in remote and rural villages is the UV Waterworks product offered by WaterHealth International (Lake Forest, CA).
• In efficiency: Remote sensing, wireless communications and automated controls are being applied to agricultural, commercial and residential irrigation systems. HydroPoint’s (Petaluma, CA) WeatherTrak products adjust watering schedules based on local weather forecasts and history as well as plant and soil types. 

Water purification has not been historically a fast-paced or “cool” technology. Do you think there’s potential for the kind of excitement that has surrounded web or solar startups to grow around water companies?

Not soon in the US market, where just 15% of drinking water is delivered by for-profit companies. There are many parallels and connections between domestic water and energy markets, which suggests greater changes and excitement may be in store for the US water market in the future. In the near term, innovation and growth in the water industry will continue to be driven by international markets. Countries and regions with more acute scarcity of water or with longer planning horizons are deploying state of the art water treatment systems more aggressively than the US. Countries in the Middle East, for example, are investing heavily in desalination plants and other infrastructure to meet their growing water demand. Water will undoubtedly become an increasingly valuable commodity worldwide, and many believe that “water will be the next oil.”

What do you see happening in water purification in the near future?

Don’t look for rapid changes in the domestic residential and commercial drinking water markets. However, there will be significant, rapid growth opportunities in other domestic markets, such as industrial water and water re-use.

Do you see any trends in the venture sector regarding water technologies?

Regarding venture investment activity in water, my sense is that it lags solar by 3-5 years.  The level of general interest from the venture community is rising, but it has not yet translated into rapid growth of venture investments targeting the water market. 

Some companies are focusing on water purification for developing countries. What are they going to have to do to attract investors?

This is an important question, as the largest population centers currently suffering from lack of safe drinking water are in developing countries. The potential for improving health and saving lives in these countries is profound. One sixth of the world’s population lacks access to safe drinking water. Some 6,000 children die every day from diseases associated with lack of access to safe drinking water, inadequate sanitation and poor hygiene. So the need is clear.

Companies focused on delivering solutions to this critical need have historically depended on philanthropic and charitable sources of money such as the World Bank. There’s no legacy of highly profitable companies focused on these markets. Investors will be only attracted once they perceive opportunities for attractive financial returns.

BIOGRAPHY

Robert MacDonald, Ph.D. is an entrepreneur focused on building businesses around novel technologies.  He founded Onetta, a market leading optical amplifier company, which was acquired by Bookham Technologies in 2004.  MacDonald served as Vice President of Sales and Marketing and Vice President of Product Management for Onetta.  Prior to co-founding Onetta, MacDonald was at New Focus for five years, where he led teams in engineering, marketing, and sales. As the first member of New Focus' telecommunications division, he played a key role in establishing the company as a major supplier of WDM components for network applications and oversaw the development of products such as the advanced tunable laser. MacDonald earned Master of Science and Ph.D. degrees in Physics and a Bachelor of Science in Electrical Engineering from Brown University. His education also includes a Master of Science in Electrical Engineering from Stanford University.

Back to Top