Solar & Wind

Kanaka was founded about four years ago our focus since founding is on energy specifically a very special form of renewable energy solar and what makes it special it’s both a distributed energy source as well as a renewable energy source and without question our world has a grave and serious imbalance between supply and demand in all of our energy sources thus we see all the commodity prices moving upward and continuing to do so so kanaka since its founding has been focused on energy as chairman of the company our vision is at the intersection of organic chemistry and energy so I like to think of kanaka as a biotech company focused on energy and our initial product development emphasis is to convert visible light through organic chemistry through organic chemically derived materials into direct current DC current that’s what a photovoltaic is only we’re using organic materials to do that we also have advanced rd in converting not visible but invisible that is infrared radiation into direct current for the first time the quest of a nighttime or thermal photovoltaic and so forth that is to convert different frequencies different wavelengths in the electromagnetic radiation spectrum into not only usable energy and direct current form but someday stored energy in the form of carbon bonds this is what photosynthesis is so if anyone thinks that I’m an entrepreneur who’s out of his mind I will say I have a hundred million years of evolution to move that some day man will figure out through organic chemical pathways how to make energy store energy transported and deploy it mother nature’s already figured it out and of course all of our fossil fuels are nothing but organic material breaking carbon bonds so let’s just figure out how to make carbon bonds because we sure as heck know how to break them and then ultimately converting one form of energy to another through organic chemical pathways in highlight of Konerko we’re now about 45 employees were headquarted beautiful soon to be snowy downtown lowell just minutes out of boston our headquarters in Germany or in Nuremberg which is the energy center for Germany it’s where Siemens has its power and transmission group we also have laboratories in addition to Boston Germany we also have labs in Austria and support labs in Switzerland we began as a spin-out of both the University of Massachusetts and the University of California Santa Barbara campus it’s a pleasure to see and to always hear professor Cohen last night I listen to the other professor your fellow Nobel laureate Alan heeger who’s my co-founder so Alan is our chief scientist he’s on the board of kanaka he and i co-founded kanaka and organized it about five years ago so it’s happy I’m more than pleased and enthused to be on this campus because we spun out of UCSB just as we did you mass so as I said our initial product focus is to develop a low-cost roll-to-roll manufactured photovoltaic material using organic materials that can be a paradigm shift in the cost structure for solar and we have accomplished that we can coat and print photovoltaic modules made from organic materials to your left is a coded module the individual stripes or cells they’re interconnected in a roll-to-roll continuous process this is manufactured off of our pilot in Lowell and to the right is the same only islands that are printed and this was done off of pilot coder in Germany so we’ve already demonstrated it works we’re now just making it work better at lower and lower

costs here’s a photograph of the coding line in Boston it’s much simpler than using semi conductor processes as we now do to make photovoltaics much more energy efficient it’s a continuous scalable roll-to-roll process and what we mean by replicable is it’s terribly important for many nations to have the ability to produce their own energy products and so having processes that can be manufactured in both developed as well as developing nations is obviously a very important part of the government’s policy for their futures for energy and we believe this process can be replicated in a variety of nations around the world the applications are numerous their consumer applications for textiles for all the portable electronics that would carry commercial applications and sensors and meters and like of course off-grid applications for battery recharging for civilian as well as military and federal and and emergency response applications the developing world the developed world residential commercial big Bach big-box retailers you know we did a calculation of Walmart were to put ten percent efficient photovoltaic on all of its stores rooftops it would be the second largest electric utility in America surface area it’s all about surface area that’s what photosynthesis a lot of leaves a lot of surface area I just want to include a slide in sort of setting the tone for this conference is to beyond kanaka which has and will announce next week we raised another 20 million so we’ve raised twenty sixty million dollars in venture capital since our founding and we have investors from both Europe and of course the leading investors in the u.s. both in route 128 and many in the Silicon Valley some that are nano technology focused materials focused like engine partners here in Santa Barbara but some of the largest and most prestigious venture funds and most recently our funding which closed last week led by 3i ventures which is a global fund around the world so there’s a lot happening as i said earlier to some of my fellow entrepreneurs and colleagues in this industry you don’t move battleships you don’t turn battleships you know too quickly but there is definitely a sea change occurring and why is that well of course here there are federal policies but certainly very influential and pre-staging state initiatives in the western states like California Arizona New Mexico but certainly in the eastern states my home state or actually where I work but in Massachusetts and North Carolina and elsewhere so subsidies and sent insensate incentives state initiatives RPS standards this has all been happening and continues to happen likewise as i’m sure you all aware similar things have happened on a national basis and many of the EU nations led by germany of course but now more recently france spain greece italy have all passed very important and very innovative renewable energy federal policies i did have a joke with Senator Sununu who I know well I joked with them that China would pass a renewable energy and a federal energy policy act before America did and it’s wonderful that our Congress finally did pass one but I won the bet I called him up and said China did it before you did so there is of course this grave and balance as was pointed out with the growth in China and the demand from China and India and so this is a continuing pressure it won’t change it will get worse so it’s not just the supply interruptions that occurred because of two devastating hurricanes the demand from Southeast Asia from Asia from the developing world continues to put for decades to come pressure on all fossil fuel all all energy stores as vc’s know in this audience and I know personally as an entrepreneur the telecom and IP the internet meltdown has caused very large venture funds sitting on enormous amounts of money to look for alternative places to invest their money for return to their limited partners and as such a lot of capital that’s been searching for a lot of venture capital has been searching for other industries to invest in and renewable energy and clean technologies environmental technologies have been the recipient of a good portion of that new interest in venture capital so even the generalized venture capitalists have been investing in a big way particularly in the last two years and that will continue Kanaka and other leading nanotechnology and innovative materials companies have certainly

benefited also by investment in new materials research and much of it a good deal of it off of the UC campuses including leadership here in Santa Barbara likewise it’s not just Jeff mo although I have tremendous respect for General Electric and it’s announced leadership as a fortune 50 company but I can assure you without violating ndas and can arcus soon will announce a relationship with a fortune 50 company as we already have relationships with Fortune 100 and 1000 companies that the boardrooms and CEOs of the largest companies in the world are regularly talking about their future energy their energy initiatives for their own businesses not just on the saving side not just on the demand side but what energy businesses what energy technology renewable energy and clean energy businesses they will be in so it’s not just GE it’s the united technologies of the world it’s the honey well as the Siemens the Tycho’s of the world all of their boardrooms and their CEOs and executive staff are plotting what their futures will be investing what makes our solar different is current processes used very noxious materials in solar this thin films are made with selenium gallium cadmium we make it with organics there is certainly an environmental aspect Solar needs to solve you know let’s not go from the frying pan into the fire you know we introduced asbestos and insulation we introduced lead into paint let’s be a little bit wiser about what materials we introduced into building materials for future energy generation on America’s rooftops and for that matter around the world it’s hard for me to fathom that the almighty thought that the way to solve energy was to put carcinogens and toxins into our materials and make energy from them so I personally do not believe that any future for energy or i should say should be conscious of what materials are being used for our future as i mentioned Kanaracus materials are based on nano-engineered environmentally acceptable materials there’s no toxic materials none of our materials none of our components even come close to ld50 we use environmentally friendly solvents and low emission materials and manufacturing we don’t process at high temperatures so therefore it’s much more energy efficient we don’t need clean rooms therefore again it’s more energy and capital efficient so in summary kanakas flavor of solar for the future is a shift from silicon to plastic we are one of the leading nano technology companies of the world that’s our engineering of the materials in theory Alan heeger and others will say thirty percent or greater efficiencies practically we believe we can get over twenty percent people always ask us where are you well we’re closer to ten percent than we are at zero percent and every year our efficiencies keep going up we are ahead of everyone else in the world both academic and commercial efforts in competition to Konerko that’s not good enough for me as CEO Konerko wants and will get over ten percent efficiency from our materials it’s a roll-to-roll process just like photographic plates used to be glass and heavy you know they used to be made from glass and silver halide deposited and metal frames if you think about what a photographic plate looked like 110 years ago it looks like a solar cell today but yet you can walk into any drugstore and buy a 3-cent strip of Kodak film in a package that cost more than the film so how in a hundred years do we get from photographic plates to a 3-cent emulsion coated strip polyester film it’s about roll-to-roll large volume manufacturing that’s how we’re going to drive down the cost of solar again environmentally acceptable organic materials we don’t make the products we just make the products make energy we have the basf model and I think it’s a proven business model I solar is one of the fastest-growing electronics segments in the world if not the fastest growing electronic product in the world but energy is the largest industry in the world seven trillion dollars a lot of headroom for kanaka to grow we’ve already announced leading partnerships with leading companies in the US and Europe we’ll be announcing our partners throughout the year in Asia we’re partnered with DuPont with Siemens with Merck with Kurtz when the largest printing companies in the world will announce who our Asian partnerships are

as I say in the coming year funded and I’m proud of it the leading venture funds in US and Europe a very experienced management team with over 200 years of industrial experience and I don’t know what world-class is but if Nobel laureate off this campus ain’t world-class then I challenge you to tell me what world-class is we have the leading scientists in this field of science in US and Europe who are part of a prestigious team of 30 PhDs and growing working on kanakas organic PV thank you very much and I appreciate this opportunity delighted to be able to give you some background on wind power and I’d like to discuss on the implication of wind power and solving world problems some some world problems and also talk about the the factors of technical socio-economic and political impacts both positive and ones that impede the the technology is one that’s been evolving since the 1980s and it went through a period of very difficult times as we got into the 1990s and essentially the the industry shifted offshore and it’s a sad comment because it was really Uncle Sam’s funds that that cause of birth of the industry and the the reason for that is that there was a lot of discontinuity in policy in the u.s. supporting and then stopping in the supporting again the but what we have today is a technology that is really able to make a very serious contribution to to the supply of electricity and the we believe we have a turban that is state-of-the-art it’s it’s one that is in production now in Cedar Rapids Iowa it’s the result of an effort that we started in 2001 I started the business in 1980 and so I’ve been kind of through the the evolution of three generations of turbines and this is the fourth one if you look at the industry as a whole it’s been growing very rapidly now for about the last 15 years up in the range of twenty to thirty percent it it’s very interesting globally because there’s such an abundance of wind resource around the world so it has a potential really making a very large contribution to the power supply the industry today is running around 11 billion dollars the potential for penetration into electric grids in the advanced countries is on the order of 20 to 40 percent I frankly think it will be of the higher end of that range in the u.s. there’s enough wind power now that supplies over 2 million homes yes wind is intermittent there are times when you don’t have wind but as we see wind becoming more widespread the the need for backup power becomes much smaller and a study was done in Minnesota that showed that with 1,500 megawatts of wind the backup required for that area would be on the order of eight megawatts so it’s really kind of an interesting thing that you you end up getting a much more consistency in wind production as you gather Geographic and dispersion and when is very is very predictable on a on a shorter time span it’s intermittent as you get into longer time spans month a month year to year you have very high predictability the most of the deployment has been land-based however in Europe because of the high population densities wind is now shifting to offshore and that’s where over the next ten years it’s expected that something on the order of two-thirds of the development will be offshore the other

thing that we’re doing that’s somewhat in the same category harnessing a slow movie fluid wind air is his ocean currents and that’s a technology we’ve been working on for for a couple of years now and we believe we have some some opportunities for the u.s. particularly in the in the southeastern area of the US where you have the Gulf Stream to be able to supply fairly meaningful quantities of renewable energy with by harnessing the Gulf Stream and we’re at a fairly early stage on that but I think it has great promise the the turbine that we’re just now bringing to market is a two-and-a-half megawatt machine and just to give you a sense of scale you can see out compares to the to the Statue of Liberty the swept area of the rotor is around an acre and a half and this column of error that the drive through the rotor drives the rotor in the course of the year has a wind run that’s equivalent to about four times around the planet so that is what what drives the Machine and out of that you get the equivalent of about twelve thousand barrels of oil per year in terms of what it would take to to make electricity so it’s a fairly meaningful amount of power that you get from one of these machines the two and a half megawatts is it’s hard to relate to megawatts so at peak power which is around 25 miles an hour wind speed it’s it’s around 3333 hundred horsepower so as I mentioned earlier twelve thousand barrels per oil per year that means three of these machines up in North Dakota or someplace in some of these windy areas over their 30-year lifetime will essentially contribute the equivalent of 12 of a million barrels of oil the the thing that’s really helpful with wind power is it is something that can be deployed fairly rapidly because of its modularity you can you can bring on power as it’s needed and it can come on it a fairly good clip in the early 1980s in the course of five years something like twenty thousand machines were deployed those were much smaller machines but it just gives you an idea that it’s something that that unlike many of the large central power plants that require many years of planning and then construction to be able to generate power seven to eight or ten years out with the wind you can bring it on at a fairly strong clip the the amount of wind power that’s being developed around the world now is really starting to strain some of the heavy industry capability we’re finding now that we’ve we’re having to go out to five of the major foundries around the world just to get the large castings so in a way it’s helping to revive some of the smokestack industries and this machine has about 500 tons of steel so it’s a fairly large amount of conduct really in put the job creation aspect of it is is on the order of two-and-a-half to three jobs job years per megawatt the in terms of how how winkin can make a contribution you look at the bigger energy picture picture and with the developed nations about a third of the the energy use is for electricity another third for transportation we believe the wind can of course contribute in both of those areas short term the it’s are essentially clean power and that is uh that’s pretty pretty significant now because bringing on particularly coal-fired plants means that you’re you’re you’re essentially committing to 40 or 50 years of combustion of coal that of course is the

most harmful to do to the environment in terms of the emissions and Amanda and carbon dioxide emissions the the amount of wind power that we have in the u.s today every year offsets a coal equivalent if you can imagine a train from Seattle to Miami of coal cars and our wind penetration is very small still so you can see that the the potential to be able to make really meaningful reductions in emissions is is is significant with wind when has become quite economic and it’s been something that’s we’ve been working on for a long time to continue to drive down the cost of making electricity with wind to the point worse now among the most competitive of the waste to make electricity so you look at those terms the short term considerations now let’s look at some of the long term what is what is energy security just the the ability to reduce the amount of energy fuel sources that we need to bring from abroad there were some comments made earlier with our 60-some percent dependency now on imported oil now the United States you don’t burn much oil anymore to make a tricity but around the world are still a vast amount of diesel-powered electricity electric generation that could be displaced by by wind power wind is is playing a very important role in some of the some of the emerging economies particularly India and China China has a very aggressive program for wind with somewhere on the order of 10,000 megawatts actually in planning at this point another contribution for wind as we go along will be as we move from the very excellent fuel efficiency of hybrids the hybrid electrics and in that case what you would have would be the ability to take to charge the electric the electric batteries of these hybrids during the night time periods when wind power is producing energy consumption as low electricity consumption is low and use that to be charging to be charging batteries and the the effect that’s been studied by by some indicates that would be on the order of 50 cents a gallon kind of benefit now that sounds pretty dramatic and I think it will see how it plays out but the idea of using off peak power wind generation for for powering hybrids is a pretty pretty interesting idea and of course the the ultimate really is to get to is to use wind to produce hydrogen and hydrogen for for transportation another thing that we’re saying now with wind is using it with reverse osmosis to produce water and some of these some of these projects are just starting now off of southern Spain the in terms of in terms of wind contributing to to political stability perhaps it’s a bit of a stretch but it is there it is fairly consistent that areas where you have high resource exploitation as with oil you end up having governments that are pretty focused on conserving the the benefits of that production for the benefit of few causing this instability with a greater population requiring then military to defend the position and so this is something that we need to try to find ways to break that cycle and to the extent that we can make countries more self sustainable in their energy

supplies when pair can do that it can provide jobs it can keep it can keep the the economics of that power generation at home and it could keep it at a much more democratic level of economic distribution and then I think probably the the final point on the long-term implications of a wider wind usage is just the whole thing of trying to conserve some of this extra these fossil fuel sources particularly petroleum and gas for the generations ahead and right now we’re burning it with fuel efficiencies of 25 30 maybe 40 percent and we’re using it in such vast quantities that we really are starting to reach a peak of where new oil that comes on that has been to new discoveries are not keeping up with the with the with a rising demand for for the product and so banking making this these resources will be available for future generations for plastics particularly aviation I mean we can cut down on transportation fuse of fuel land-based but for aviation of course is something that you’re going to continue to knead knead fossil fuels and particularly petroleum I let’s see I think I’ve covered most of these points let me just go forward one of the most fundamental ways to look at the the benefit of a regenerating technology is to look at it from the standpoint of how much energy do you put into it and how much energy do you get back out and a coal-fired plant is on the order of two and a half times input versus output hydroelectric is there’s something on the order of 10 times with a with wind power on a 20-year life of a machine you’re around 35 times the the Clipper turbines designed to 30-year life so it’s it’s on up around 45 or 50 times so that is that’s one approach to to to evaluating evaluating energy with wind another way of course is to look at the the cost of the resource and we’ve seen a fairly significant decline in the cost of wind to a great extent that’s happened by just scaling up the turbines where the increase in the rotor size and the ability to capture energy goes up exponentially but the costs go up linearly so the effect of that is to drive down the cost of the electricity what we have on this graph are two curves one is is a curve showing very high wind sites and you can see there that were in a band of price competitiveness with with conventional energy and the challenge is bent to go to areas of lower wind speeds and that’s the that’s see that’s a higher line on the graph the significance of that is that most of the wind developments taking place around the world has been in areas of very high winds and the technology has has advanced we’ve been able to do with our turbine to be able to go from these areas they’re called class ixclass seven winds down to class for class five wins to moderate wind speeds your geographic area increases 20-fold of you’re able to do that so the way the wind really becomes a mainstream to the energy supplies to be able to to tap into those areas there is a number of scenarios on on energy supplies of from from from carbon fuels and in the US and we we’ve seen the peaking of oil back in in 1970 this is a graph that

shows really peaking coming fairly soon I mean if we’re not in and now and with with the the curve being one of fairly slow ramping up and then being very steep on the downside and we’ve seen this just concern over over maxing out on on our ability to find new fossil fuel resources starting to reflect in in the price of fuels this is the price of for natural gas for most of the last 25 years gases ranged in the dollar and a half to about two and a half dollars per thousand cubic feet and just last year it was up in the eight to nine dollar range it’s currently up around twelve or thirteen dollars the Department of Energy has suggested that above four dollars six hundred thousand megawatts of wind would become economically viable that would be about twenty percent of our electricity supply so I think the numbers frankly a little bit higher than that but in any event and gas prices probably won’t hold up that high for very long but certainly there’s a lot of people now including a lot of utilities that are I think taking the view that it’s not going to be back down on the in the four or five dollar range anytime soon so then then you look at what some some companies have have projected and this is a this is a graph that was put together by ExxonMobil and it shows the the amount of discoveries that have been made historically and of course during the 30s most of those big oil fields were discovered and and then you had a lot of global discoveries going on through the 50s 60s and 70s but then you see the overall decline in new discoveries and yet production continues to rise so this I think just adds to the concern that were right at the point of and you know the point I mean the point could be anytime between now and five or 10 years from now of rolling over between having new discoveries topping out dropping off yet our demand continues to rise at a very stiff rate in terms of deployment of wind power the the things that are enabling to this is that the technology really is a mature now it’s very reliable the the modularity allows it to be deployed rapidly it’s very compatible with the grid up with the operation of the electricity grids and the ability to build these machines is something that is starting to rely on global sourcing for the Liberty turban we’re bringing blades from Brazil we’re making a main shaft and the Czech Republic we’re making a generators in Mexico and so on and this is pretty much the way the whole industry is going to global sourcing the the infrastructure for wind is is okay is supported by by a fairly good transmission system in the US although we are starting to see limitations on on wind capability by a transmission limitations the the other thing that we’re saying is that many of the very big wind areas of the country are fairly distant to a load center so new transmission will be required for for the extensive developments that that could be a head the the principal things that are that are obstruction to win development really is in certain

cases there’s there’s an attitude that they we don’t want to see wind turbines and the not in my backyard type of mentality and I think that is something that it probably is is a carryover from the times that we’ve had of being able to feel like we’ve had a very good easy life we can dispose of things we we can be careless with the use of fuels and so on my sense is that is that the times ahead we’ll see much more concern over being much more practical practical on how we on how we use our resources so I would expect the NIMBY the NIMBY attitude at some point will fade away as as the concern over over energy becomes stronger the the other the other main obstruction really is just the the fact that the carbon fuel industries are so well entrenched and politically very strong and of course resistant to change I’d like to mention one other thing in terms of the memory response and that is it what happens to Birds and the the avian factor is really a non-issue you you in doing a wind project you just don’t you do your environmental study you don’t look locate it would plant where there’s a a V and fly way or a roosting area that sort of thing so it’s it’s really a non-issue this is the map of the us wind resource the vast the vast area for development really is in the Midwest and that’s where most of that activity is taking place now so in terms of the political aspects of things that are enabling wind power development is a fact of the public is becoming much more informed there has been very strong leadership in Europe because of higher energy prices in a much keener sense of environmental damage of fossil fuels in the u.s. there has been at the state level a fairly high degree of in patients with what’s going on in Washington so states have taken their own initiatives there’s now 22 states that have programs for implementing renewable energy generation in the States the other thing particularly in the last year is the is kind of a waking up of the electric utility sector where I think to certain extent it’s it’s been driven by their consumers were in many in many areas consumers have been willing to pay more for some amount of green energy in the power supply but the other thing that I think is a very strong driver is just the fact that energy costs particularly natural gas have gone so high then now utilities are starting to understand the wind can be a really an important part of their generation portfolio to control to help control long-term costs the the in the United States a thing to spend the the most damaging to the industry has been the on-again off-again policies out of Washington Washington in terms of support for wind energy it’s been based on a two-year tax credit that expires the industry dies out then it’s brought back it’s now been instituted through 2000 oven then it’ll expire again and that discontinuity really is cause the industry basically to to move mostly into Europe and then of course the other thing is the fact that that carbon fuels really have a essentially an invisible subsidy which is that they’re able to emit pollution and carbon dioxide without a penalty that is a form of subsidy that society gets to pay and as a final comment if you look at how how quickly could win be brought to bear to really make a difference in the energy supply you look at Denmark it’s now it now has about twenty three percent of its energy from from wind power Germany

which started just in late 1990s has 61 thousand people employed and when that’s more than what they have had in 44 coal-fired power generation both in the extraction and in the plant operation so when is created great employment anis now making about a sixteen percent contribution to the electricity supply in germany spain is pretty much the same story in the u.s. we started in nineteen nineteen eighty and we’re at about that well we’re under one percent energy contribution with wind but i would expect that will be changing thank you very much and create the opportunity I’ve been told to keep it fairly quick so i won’t at the canadian i won’t tell you any of my comments about us politics this photograph I took in Germany a little over a year ago the pile each of those piles is a thousand tons of straw in the pile of the right you see half the pile thousand tons of straw ah a 2,000 tons of straw day is what you need to feed 150 million gallon cellulose ethanol plant as we heard earlier if the United States is going to have twenty-five percent renewable fuels from cellulose ethanol they will require 1000 of these 50,000 50 million gallon plants so what you’re looking at there is the amount of biomass required every minute and a half when this industry grows so biomass remember the masses will be huge here I’d gin the company that I work for we are a biotech company and according to do EE we are the world’s leader in this in this technology idea we had four people up with us for two days late last year and they have decided that we are ready to go and indeed we have been producing ethanol from the cellulose and straw for just about two years now photograph on our right is our plant in Ottawa its million gallon capacity tiny in that in the ethanol world but still way about pilot whoops was right here we’ve been working at this since the 1970s 30 years took us a while to get there we started out with two civilian pilot operations we moved along now we have this 30 million dollar demonstration platter showed you a picture of we’ve had great support petro canada canadian oil companies put in 20 million we started out with a nice bit from the Canadian government 15 million I gave us a critical mass to attract a lot of good industry Volkswagen earlier this year announced a partnership with us and our big partnership is we shall they put in 50 million thus far and this is a partnership that is really good besides the money they’ve given us a lot of their quality people and people time they take this industry I can assure you very seriously it took us 30 years to develop this technology I’ll try and explain it in 30 seconds on the upper right we bring in the the biomass material we chop it fine give it a mild acid bath and steam treatment turned into porridge we add the enzymes and this live in your mazda to peel ensign little turn on a soup cracker the starch and added sugar in short order our enzymes do the same thing for cellulose so we add the enzymes and the sugar is produced what’s left over is the lignin it goes into power production provides all of our own energy for the plant and perhaps exports some power to the grid and once you have a sugar fermentation we have yeast settle that will ferment all the sugars distillation is ancient technology and you have cellulose ethanol pagina the demonstration plant as I mentioned before we’ve been producing ethanol for two years I liken our state of the industry to the aviation industry our first bench tests were like the Wright brothers and their aircraft through a little bit then our pilot to pilot operations were like the first time you could I never prank at flying a secret figure-eight without killing the pilot and then we have our demonstration plant I consider compare

that to the spirit of st. Louis Lindbergh made it across the ocean everybody took paid attention hey this aircraft really worked now we are buying straw in Canada and Southeast Idaho for a first commercial plant we hope to have a shovel in the ground and for about a 50 million gallon plant in about a year year and a half from now that’s comparable to the dc-3 it was a good commercial airline it made people money still operating a bit today but the future out there it’s an awful lot of wonderful technology ahead of us such as the aircraft industry after the dc-3 first started to fly we are supplying fuel to canadian government fleet right now we have our own vehicles it’s still quite tiny but there there’s a lot of vehicles going around with our ethanol there now that’s our plant right at the airport in Ottawa the foreground is the enzyme facility and behind there is our ethanol plant which is a five-story building this is the business end bringing in the straw we just begin have a straw broker and we’d bring in whatever the farmers are producing we don’t want a baby are our enzymes that’s actually doesn’t there ensign plant that’s in our SML plant this is where we separate the lignin at the just kind of a novelty at the g8 summit last year in Scotland all official vehicles used our fuel this is interesting this is what the this is agriculture residue throughout the world there’s lots of it w3 wheat G is for grain SC for sugarcane ours for rice this is the US general map of where you find agriculture residue and California is quite well-endowed certainly that the corn growing areas and what have you but it’ll be a when the industry takes off it’ll be you find it all through the US usdoe and USDA did a survey about a year ago are the completed a year ago they maintain it is over a billion tons of biomass available annually in the United States of which sums agriculture residue and some will be dedicated dedicated crops this basically means that there is the resource out there capturing it is not going to be a slam dunk this materials could be hard together but it does exist every ton of biomass will produce about 75 to 80 gallons of ethanol with our current technology this is what President Bush said about cellulose ethanol a few days ago and if he said it what I’m saying must be true benefits agriculture this is going to be quite profound that if 60 billion gallons of ethanol are produced this means that there be a 24 billion added boost to the farm revenue currently soybeans and corn are tied at number one of crops at about 20 billion dollars so this could be the largest agricultural activity in the country I talked about agriculture residue switchgrass today basically the wild plant you get five tons an acre the S&L yield is 80 gallons a ton the basis on straw price for the people at fifteen dollars a ton the windrow that will give the farmer 75 dollars an acre which isn’t much last couple days ago I was out at the company called series which are the Thousand Oaks and they’re kind of the Johnny Appleseed of this industry they’re developing switch grass and other plants for this industry which are going to be quite quite profound when I showed him this slide they laughed at me said we’re already there and we’re going to get a lot better but taking switchgrass it starting to move in the direction that they’ve done for corn and wheat of taking wild plants and making them productive they can increase the yield comfortably doublet they can reduce the lignin and up the ethanol yield per ton 200 gallons I won’t get too far into the economics of it but very comfortably the the plants will pay an extra ten fifteen dollars a ton for this material which means the farmers in the windrow get twenty-five dollars a ton suddenly his yield per acre is two hundred fifty dollars which is very very good in this day and age for the agriculture community so the the benefits agriculture really are are very substantial and once you start to get to dedicated crops a lot of the problems of a assured source of supply of the biomass are taken care of we’re talking about jobs here so you’ve got a thousand plants eventually for a mature industry

this translates to 600,000 permanent jobs in rural America where they’re not a heck of a lot of jobs today and they’re good jobs there they’re stable there’s a few fairly high tech jobs and when you get into a rural area they say hey my son had just completed University can come back and be your your your manager for you know the biotech part of a of the of the project have benefits to the environment on the left is how much co2 kilograms per gallon boy we sure makes the measurements there but anyhow on the left is how much co2 is emitted from a gallon of gasoline the middle two are from a corn fired conventional corn plants quite an improvement and the far right is how much co2 comes out of cellulose ethanol consider that the biomass is large it has very little carbon debt associated with it there’s carbon debt in assembling and bring it to the plant but as you will recall we export some electricity to the grid compensates for some of the carbon that used to get the material layer and a host group of studies on this do we and others have come out to arrange around practically zero incremental emissions of co2 one of the things you could do if this industry took off the United States would leave the Kyoto signature countries in the dust the energy bill on paper is very very good but it’s kind of slow getting started but it was very well it was very good to our industry if only it could be implemented I get to Washington more often I get to downtown Ottawa these days but we’ve noticed in the last say well certain of the president’s our presentation would even leading up to it there is a quickened interest an improved interest there and getting this industry off the ground that’s my last slide I should just give you a vision of the kind of the company we’re looking to be a leader in this thousand plant development as I mentioned we’ve already got but for 2,000 tons of straw contracted in Southeast Idaho a similar amount in Western Canada we’re looking at Germany one place is going to be a first plant and whichever jurisdiction comes up with say the the amount of government backing to share the risk we’ll probably get the first first plant all three governments say we know there’s gonna have to be a risk-sharing em approach to to this but it’s we’re ready to go that technology is there shall have indicated that they want to be a serious equity provider in the first plant us energy bill provides for a 250 million dollar loan guarantee for the first plant provided the equity people put in twenty percent so the the you know the things are coming together to launch this industry fairly quickly thank you for your attention the first question with that vanasse to answer is what opportunities exist for new versus established companies to introduce new technology and more efficient sources of energy the second is to emerging energy technologies play a unique role in creating environmentally friendly sustainable solutions versus simply providing new sources of energy and the third is how do environmental concerns affect the adoption of these technologies I’ll kick it off and then turn to the rest of the panel I wanted to make a couple comments on clipper win as an example a colleague of mine came back from a wind energy finance conference yesterday in San Diego where he was one of the speakers there were four hundred and fifty people talking about how to finance wind projects it just shows the level of interest in that technology look back over the last six years and the amount of renewable energy has been added to the grid in the US but eighty-five percent of the came from wind however as we heard last night the biggest wind manufacturers are other than ger all offshore and GE investors who are the two biggest ones selling in the US are sold out for the next two years and they can pretty much name their price so as someone who buys from the wind industry and wind developers we will look forward to having companies like clipper come in and bring in new technologies and new hardware so I think there’s a real role there for small companies like that to to contribute I turn to the panel for any other Chuck sure on the first question are there opportunities for new technologies versus established technologies I’m a partner in a venture capital fund based in Boston Massachusetts who invest in these technologies so we have a passionate belief that the answer is yet it is yes to this a couple quick reasons

why and then a few examples of what those opportunities might be first of all we believe we’re living in an era of technological revolution that directly can impact energy markets advances in material science of which UCSB is of course one of the global centers of excellence are creating a host of noon abling materials we live in an era where we’re going beyond silicon for instance into the realm of wide bandgap semiconductors that enable things like solid-state lighting and a host of other things that reduce the amount of energy we use for certain everyday functions there’s a in the technology realm as well there’s a cross-pollination between different scientific disciplines and we are also experienced this migration to the miniature we no longer just can observe the behavior of materials at the atomic level we can manipulate and build around them so that’s that’s stimulating the whole nanotechnology revolution which has relevance here this the technology breakthroughs play out against a backdrop of some big macro forces which have been referred to we’ve got glowing population growth we’ve got strains on uncertain finite natural resources like hydrocarbons and clean water and we’re pushing the restorative power of ecosystems to absorb the waste materials and emission that industrial societies is stressing them with that is producing both an environment that emphasizes technical innovation but also some policy formulation that is helping to drive these markets as well not as much in some cases as some of us would like to see in a perfectly enlightened world but nonetheless regulators legislators and populations are insisting on ever higher quality standards for their air and water we see people embracing renewables has been discussed and at least in the United States this emphasis on energy security which is somewhat of a new concept these days is driving us to look at new sources and ways to create greater efficiencies from the things we already use so if that’s why just a couple quick areas where we believe these opportunities exist in the area of generation again we’re seeing a very rapid growth of most of the major forms of renewable energy we’re starting from a low baseline but thirty percent per your compound annual growth rates or something that excite venture capitalists most certainly we’re getting the generators that we use to be both smaller and more efficient an extreme example of which is not just small distributed inefficient generating technologies but microgeneration as my teenage children believe they have a god-given right to watch full-length color motion picture movies on their cell phones we’re reaching the outer limit of battery technology to provide that power so we’re converting to energy generation technologies that fit in that very small form factor as opposed to energy storage technologies in the realm of transmission and distribution of both electrons and hydrocarbons we have an opportunity to embed a lot of new technology in the electric power grid it’s a 300 billion dollar legacy resource it suffers severe under investment it’s reliant on technology and critical pieces of equipment that are 50 years old and there’s a lot of technology already developed for other networks fiber-optic networks and others that can be embedded in the electric grid and increase its efficiency and self-healing and interactivity similarly there’s a lot of opportunity for smart meters we don’t meet our electricity use with much granularity and there’s a lot of benefits that can come from that there’s a lot that’s happening in energy storage Craig from panadeine will talk to you about their flywheel company there are nanotechnologies the storage of hydrogen and carbon nanotubes that people are working on as well as advanced battery technologies and then there’s the whole realm of process and prevention technologies applied to our energy generating resources there’s a lot of work being done on multi pollutant control technologies that can more efficiently scrub flue gas for all the various contaminants that we now want to control for Frank Alex from power span will be talking about that a little bit later today aliquot Q spoke last night about the role of catalysis and the opportunities there so that’s an area we watch very very closely and there’s a related discipline there too and that is deposition because catalysis is in many ways about surface area and if you can get a more highly structured surface with greater surface area in a more precise deposition of your catalytic material you can get greater efficiencies and there’s our area of carbon capture and carbon conversion and

things like that too that present opportunity so I’ll just stop with question one Thanks huh had to build on what chuck was saying and to address some comments that relate most specifically to the Konerko presentation from Howard J thought was really exciting you know I think with respect to the question regarding whether you know these are truly transformative technologies whether they can change the way we think about energy I think the answer is yes and I think the area of flexible solar photovoltaics is partly because of the roll-to-roll processing which does have the capacity to lower costs but also because it has the possibility to open our imaginations why’d I get very excited when I dream about being able to wear a solar cell I get excited when I talk about our work and people come to me and they say I’d like to make a sell a sale for a sailboat out of out of your flexible materials I get excited when I hear that we only need to cover Oh point one percent of the u.s. is area to harness as much power as we need and I mean that sounds like a lot of area but then then when people say we’ve actually already paved that fraction of the US with roadways so when you have a technology where you can kind of just roll out the solar carpet I think it’s very exciting now the challenge at the moment of course is with respect to efficiency can we find a way to unite these potentially transformative technologies with good enough performance to make them useful and I thought building on Howard’s presentation I just leave you with a few a few comments from the research side of the world where I and other people are working hard to try to advance the efficiency of these technologies and to put it in a nutshell the good news is that we haven’t run out of good ideas and we haven’t run out of good things to try and in fact the field of solution process physically flexible solar cells is incredibly lively and dynamic one it just to give you a few examples of what we haven’t done yet but we think we we could do we haven’t run out of spectrum to harvest we’re doing a reasonable job of harvesting the visible part of the spectrum and nearly all solar cells have not yet touched the infrared in fact it was just a year ago that the first report of a solution process infrared solar cell came out and that was the first and it wasn’t efficient and so there’s huge room to improve our efficiency in harvesting the infrared portion of the sun’s and that is half the sun’s power reaching the earth so that is already a factor of two opportunity Howard to the fact that we can use organics and that that presents some very attractive features from the environmental standpoint potentially and I’d like to add that we can also work with in organics and we can merge the two things together and that some of the most exciting work is at the interface between the organic and the inorganic world’s in organics does not have to mean toxic silicon and germanium are both examples of inorganic materials that are outstanding semiconductors that can now be synthesized colloidal e and can be spread on like goop on to another material and can potentially be solar capturing materials and so we should not restrict ourselves in my view to a particular category of materials but we should be broad in our thinking and we are being brought in our thinking about uniting those two worlds um we don’t have to use electrochemical methods alone though I think that’s a very promising area but there are pure solid-state device architectures in which we can work successfully and in fact there are pure organic and there are stable solar cell architectures that have been realized by the olive asados group and then subsequently in the infrared by my group in the past couple of months that prove that we do not if we are concerned about the longevity of certain organic strategies we are not forced to rely on those and perhaps to leave you with two other I think exciting future points that build on Chuck’s comments about the possibilities of nanotechnology we do not have to restrict ourselves by any means to a planar architecture to something that is flat and therefore we can break the compromise between thickness absorbance and transport and I’ve had incredibly stimulating discussions with the stookie group over the past couple of days while UCSB on using some of the the leading ideas in the area of mesoporous nanomaterials architectures to capture as much light from the Sun as we possibly can and then to transport the energy out as efficiently as possible we have definitely not yet reached the limits of what we can do on that front and finally with respect to some some other really exciting science that’s going on that has tremendous practical utility over the past few years NREL and Los Alamos researchers have initially predicted that we can get more than one excited electron for every photon that comes from the Sun and therefore we have further possibilities to improve the efficiency of our solar cells by significant amounts they have then subsequently shown that that process works experimentally but nobody yet in the published literature has shown that we can actually use those multiple exit ons generated by single photons in order to drive more power from solar cells but the good news on that is that we and many other groups around the world see that as one of the most exciting

challenges of both curiosity and application driven research and there is a race on to be the first to show that multi-asset on generation can be useful and I think we’ll succeed I’d like to draw our attention back to biomass we heard more aesthetics talk create creating transportation fuels from biomass he referred to the fact that they’ve been authoritative report assessing what could be the the supply of biomass in the United States the billion turn report produced what could be produced annually other reports have said does there enough land exist that would not compromise food and the answer is yes and so other groups have believed that with the application of biomass and regenerating ethanol from it in one form or another maybe thirty maybe fifty percent of the u.s. transportation fuels that could be realized now underpinning all of that of course there does have to be a lot of innovation Morrissey’s company has relied hitherto on cellulose waste coming from crops as he said we’d straw some barley straw there is a lot of that waste in the United States and undoubtedly it will be used but the end of the day the economics are not particularly favorable for a number of reasons and one of them is that the density of it on the ground is not high enough and indeed that’s only going to cover part of the land and part of the amount that’s required so he mentioned the necessity to generate dedicated energy crops now there are such crops but really the whole field is in its infancy what is envisaged here is that switchgrass as mentioned by the president a native prairie grass that’s capable of growing on very poor land with minimal inputs it’s a perennial very deep roots could be harvested year in year out as a forest crop to supply the feedstocks for plants such as a Morris referred to that plant would not be grown on land used by food it would be in addition and the energetics of production and the economics are very favorable now that is a plant that has not been received the attention of plant breeders it’s in its native genetic state and wherever a man has got to deploying the principles of plant breeding he’s been able to make many improvements so in terms of what entrepreneurial input needs to be made to bring this about it’s certainly the entrepreneurism associated with plant breeding to bring to increase the yields up to levels that would make the economics very favorable now in today’s world that entrepreneurism and plant breeding involves a lot of biotechnology a lot of knowledge of genetics of genes of genetic engineering and that’s what I happen to do and there’s no shortage of genes known that can affect photosynthesis affect leaf size effect numbers of leaves affect the ability to withstand drought the ability to grow on salts and and so on and so forth and those are the innovative improvements that is going to drive the opportunity of delivering these specialists dedicated energy feedstocks into the marketplace to allow these thousand energy plants by oath analogy plants to churn out the ethanol under the heading of entrepreneurs I would also remind us all that farmers are indeed entrepreneurs they are looking to get every dollar that they can out of their land and there’s a large fraction of them in the United States today and of course all over the world who are not making much money they would welcome the opportunity to use their land for purposes such as transportation fuel production and because they’re entrepreneurs they will bring a lot of entrepreneurs into how to get the best out of the land in a sustainable way

with these plants and harnessing all those entrepreneurs I think is part of this dream part of this vision they’re necessary they’re essential the result would help the rural economy so I think those of us who are interested in photosynthesis and harnessing it through what nature does with plants have got our I very much on bringing biotechnology genetic improvements to create plants which are as well designed for releasing energy as the modern corn plant is for producing grain Thank You professor Lee okay I just thought to make a quick comments in the suggest suggestions are those 3s back salsa thought to speakers already give our very nice presentations for first of all TV I think a key issue is still material technologies but the moment I think plastic organic TV is a very good direction but I think more conventional silica best previous to a very interesting direction people still need to develop that one and also the people still try to develop the even high visions like fifty percent of the solar utilization efficiency try to concentrate the satellite to a small piece of a TV and they will reduce the price dramatically for the wind power i think as i know from a china one of the thing you need to develop the energy storage technology for some remote place do the date night time you don’t use that much electricity you need to storage that and it ends there that’d be very interesting year for biomass conversion certain ism to be very promising opportunity but i’m just worried about that technology you mentioned you know enzyme is not Universal catalyst for all the different kind of biomass that is very selective and also the difficult thing for for most of the biomass difficult to to decompose the leaking and the cellulose and the after the reaction you have a lot to Westar what and you have a lot of thing difficult in to decompose behind so my suggestion is the value if you can come by the photocatalytic a technology as I mentioned yesterday and to treat the West wat and compared with you Sam technology and just as a that we are actively survival and otherwise you have a lot even that technology is the environmental process about to actually will produce a lot of rest what ok I’ve been doing science for a little over 60 years and so perhaps the most useful contribution i can make here is to is to try and give a a long-term perspective on this issue of emergent technologies and innovation so let me start with something that i saw in the Scientific American just very recently and then I’ll go way back so very recently I saw an ad in the Scientific American covets two whole pages namely the page behind the front cover and the next page now the page behind the front cover this was an ad by chevron it said for every two barrels of oil that are produced one bear barrel of new oil is found that gives you something to think about on the second page this was elaborated but was the first page that really caught my eye because I remembered it’s not more than three or four years ago that

Chevron had full page ads that said here’s what we’re doing we exploring this and we’re exploring that and you have nothing to worry about until 2025 once interesting 2025 they didn’t comment beyond that the latest thing that I saw latest projections from the very very conservative US Department of Energy is that well oh hell may break loose in 2026 I mean I mentioned earlier this morning this drop right for production decreases by a factor of two every every 10 years so my first remark is I think we are really at a tipping point the fact that if your accuracy a government bureaucracy hadn’t quite caught up yet actually stopped us for making the statement that when we have made our film from making the statement that we are addicted to oil and a few months later that’s the lead statement by the president so it’s a it’s a it’s a time of great opportunity but I would perhaps rather say of great necessity it’s not only that there are all kinds of possibilities but if you better do something about it so people have often thought back and I think it’s in some ways a good comparison to a Manhattan Project the Manhattan Project many of you will know the basic history so nuclear nuclear fission was discovered just about the time that the second world war broke out the possibility of huge energies being released was became scientifically known there was a strong concern and has it turned out justified concerned that the Axis powers particularly Germany was developing nuclear weapons and you know a crash program was started the Manhattan Project and it used the best brain power the best scientific power the best engineering capability and in a matter of a few years this threat of nuclear weapons being used by the Axis powers was countered successfully the threat was counted successfully what was done to my mind unsuccessfully was that in fact after the threat was counted successfully we dropped two nuclear weapons on Japan that’s a that’s another that’s not a story now let me let me do a a fast forward innovation what was the what was the the greatest technological innovation in the most important in the last century I think one can argue about that but I think a very good case can be made for saying it was the transistor I happen to be a young man with a junior faculty job at the time in Pittsburgh and I come back to call later and I got a summer job at bell telephone laboratories have worked for Bill shockshare was the leader of the group that that developed the transistor and what lesson can be learned from that true revolutionary moment when the first transistor was demonstrated I think we can we can learn something very important Bell Labs I subsequently worked there I think altogether 12 summer so it became a servant in a house

fixture the remarkable thing which was I think essential to the kind of invention which the transistor represented and to many of the other things that were produced at that lab was there was an incredible continuity and effective continuity with excellent intercommunication from the most pure science to the telephone it was it was a remarkable sequence of steps people from a pure science department after a while they became more interest certain of them became more interested in applications they moved into the department so to speak applied science applied science into the next level and finally Western Electric that actually made telephones I don’t think that has ever been quite replicated the successful continuity from pure science to manufacture I think when we are speaking about opportunities today we should keep this in mind as in is another excellent mazal and excellent lesson from history some of us myself I consider myself a pure scientist but I have I guess from the first time during the Second World War that I’ve worked in an in a plant that manufactured aircraft electrical instruments I’ve always just happened to enjoy enormously using pure science for the most practical applications I think we should encourage this in our educational programs the that interplay between pure science and practical applications now you will in a few hours i’ll present a film to you and so many of my ideas are in fact incorporated in that film so i will not take any longer time now I think you will see their people again pure scientists bell labs will figure again because it was also the place where the modern photovoltaics were first produced and and then it will take you right up to the present and even into the future so I’ll let the film say the rest on my behalf thank Oh you