Clean Energy


With 35 million people and 28 million cars, Californians expect it to be there when we want it – even if we aren't sure where it came from.

Mike Keesee, SMUD:  "It's sort of amorphous.  You know, you turn on the lights and the power is there."

But the energy system in California is undergoing a transformation – and where our energy comes from will look very different in the future.
Jackalyne Pfannenstiel, California Energy Commission: "It is going to be a cleaner system.  It's going to be dispersed.  People are going to get their energy needs met completely, but through different ways then we currently see."

What used to be called "alternative" energy is becoming mainstream – from solar innovation to fuel cells…and what's being called the "Holy Grail" of clean energy: biofuels for transportation.

Gary Simon, CleanStart: "If it's zero emissions, it's renewable, and has as low a carbon impact on the environment as possible – that's clean energy."

Many are pinning their hopes on this big new trend creating big opportunities for the region.

Carol Whiteside, Great Valley Center: "We think that it's an employment opportunity, it's a research opportunity, and it is certainly a way to save energy and cost and clean up the environment."

In the next half hour, we will look at some of the emerging new technologies in clean energy being developed right here in the Sacramento and San Joaquin Valley. And we'll meet some of the innovators hoping to establish this region as a leader in the business of clean energy.

New Valley is brought to you by the following sponsors:

Williams + Paddon: architects, planners, people.  Providing architecture, planning, and interior design for corporate, institutional, and educational clients.  Design services for a sustainable future.

VSP is a proud leader of Partnership for Prosperity, working together to create a shared regional business agenda that enriches our quality of life. 

Committed to the community, Five Star Bank recognizes the importance of this collaboration toward local empowerment and continued prosperity for the Capitol region. Five Star Bank is a proud sponsor of New Valley.

Treasure Homes is proud to support New Valley in an effort to build better communities and encourage smarter business practices.  Fallen Leaf at River Bend in Natomas is an example of Treasure Homes' commitment to building energy efficient homes that promote clean energy and enhance the quality of life throughout the Sacramento region.

There's a power shift taking place in California – a change in how we think about energy.  How it's produced…and the opportunities it provides.

Andrew Hargadon, UC Davis Energy Efficiency Center: "As a state, we are very sensitive to the issues of energy and as the cost and the volatility of energy increases, you won't find a place more receptive to the notions and needs of fixing the energy problem."                               

Fixing the energy problem means that what has long made environmental sense is beginning to make economic sense as well.

Investment in clean energy technologies – including wind, solar, biofuels, and fuel cells – are expected to quadruple in the coming decade.

Gary Simon: "People are asking, isn't there something else out there that is better? And can it also be cleaner at the same time? Those are big changes."

What has caused this shift?  Concerns over global warming and a dangerous dependence on foreign oil top the list – as well as all-time high gas prices.  Add to that advances in clean energy technologies, and expanded government mandates to encourage their development and use, and you begin to see the future of energy transform.

California leads the way with aggressive state standards on renewable energy.

Jackalyne Pfannenstiel:  "By 2010, 20% of retail electric sales will come from renewable sources – that's enormous.  That's a lot of economic activity that will go into meeting that renewable portfolio target."

Cities across the state – and the country – are vying to put themselves on the map as clean energy providers.  Sacramento and San Joaquin Valleys are among them.  Clean energy is at the core of an economic development roadmap for the Fresno area.
Carol Whiteside: "We're always looking for an economic activity that is compatible with our base, with agriculture.  By using energy, we can use the fundamentals that are already here &ndash the agricultural waste, manufacturing processes, the abundant solar and wind power that we have and build on our strengths.  And so we feel it's a natural fit for the region."

When it comes to producing renewable energy, the Central Valley has a lot of the right ingredients.  But making use of them requires more than planning.  It requires innovators and entrepreneurs in energy technologies.

48 kW of power, thermal power.

Gary Simon believes those entrepreneurs are right here in our own backyard – and he helped create a business incubator called CleanStart to find them.

Gary Simon: "We're there to try to take local innovators who have a good idea technologically, to help them convert that into a business idea and an actual business because we believe the fastest and best way to get this out to the public is to make it into a product that  a biz can sell and people will pay for." 

CleanStart organized this business plan competition.

Gray Simon: "So in one sentence: what have you got here?"

Local innovators in clean energy developed their business plans and honed their pitches to compete for prize money – and investment money.

Joe Lichey, NuEdison:  "If you look at this, you'll see it looks like it's entirely covered in silicon –"

Gary Simon: "But it's actually a mirror –"

Joe Lichey: "It's actually a mirror."

Gary Simon: "Well, this is very clever."
Joe Lichey has been developing his reflective solar technology for five years.  He's optimistic about his timing – and about getting capital to take his project to the next level.                                                  

Joe Lichey:  "As the investment community begins to realize there is an opportunity for them to have legitimate money making investments in this space, they put the money into people who have good ideas and allow them to turn out a good product. There is a huge leap from a good idea to a good product."

To make that leap requires capital and connections.  Joe, like many others here, is trying to avoid what investors refer to as "The Valley of Death" – the place where a lot of good ideas die.

Andrew Hargadon, UC Davis Energy Efficiency Center:  "It's the point at which you are no longer researching a new technology and no longer qualifying for research funds, but are far short still of proving to customers that this is a viable and reliable technology."

Andrew Hargadon, author of the book How Breakthroughs Happen, has seen this scenario time and again.

Andrew Hargadon: "So venture capitalists, angel investors won't invest in the company yet, but have lived past their research stage."

Hargadon is now director of the New Energy Efficiency Center at UC Davis.  His job is to help University researchers transfer their energy technologies into the marketplace and avoid the missteps that could plunge them into the Valley of Death.

Michael Siminovitch, California Lighting Technology Center: "It's a mercury-free florescent technology essentially."

He works closely with people like Michael Siminovitch at the California Lighting Technology Center, which has a successful track record in moving its innovations from the lab to the marketplace.

Michael Siminovitch: "What we do is we  take new technologies  and work in partnership with utilities, manufacturers and end users to take that technology forward." 

The death of a new innovation is often caused as much by lack of social capital as it is by financial capital.  Nowhere is that social capital more important than in the field of energy.

Andrew Hargadon: "You can't separate clean energy from energy... and the energy sector has been around for 150 years."   

That means plugging new technologies into a very old system, and requires lots of players – researchers, political leaders, utilities, and entrepreneurs – all coming together.

It creates some big challenges in moving new energy technologies forward, but it may also be a big advantage for the Valley as it tries to establish itself as a clean energy hub.

Andrew Hargadon: "So when you look at our neighborhood, what you begin to see is people at the table needed to make bold moves in both energy efficiency and clean energy technology, you have them all right there.  I think, personally, if it can't be done here, it can't be done anywhere."            


Neil Koehler, Pacific Ethanol, CEO: "This is the largest economic development opportunity in California since the high tech boom of last generation."
Neil Koehler's optimism in clean energy is reflected in this new 35 million gallon ethanol plant his company is building in Madera, California.

Neil Koehler: "We have 140 acres here."

Pacific Ethanol's Madera plant will be the West Coast's largest producer of the corn-based fuel.  And with the help of big investors, four more plants will soon follow.  The plants will attempt to keep up with a booming demand for ethanol, which currently is being used as a gasoline additive to reduce greenhouse emissions from cars.

Neil Koehler: "Today, every oil company in California is blending a minimum 6% ethanol into gasoline to meet clean air requirements.  So it's a little known fact that many consumers are not aware of that ethanol is in ALL the gasoline in California &ndash a billion gallon market here in the state of California." 
It's one reason that ethanol – and other biofuels being developed – are considered the "Holy Grail" of clean energy.

Jackalyne Phannenstiel: "I would say biofuels have the potential to help us in two enormous ways.  One is greenhouse gases.  The other is the supply problem in California: having enough supply to keep gasoline prices under control, to meet needs of the driving public in California."

The state has made the development of biofuels a priority, and set out new targets for California to produce 20% of its own biofuels by the year 2010.

Currently most ethanol is produced in the Midwest with corn grown in the Midwest.  But as demand for higher blends of ethanol in our gasoline grows – from the current 6% to the much-touted 85% &ndash ethanol producers may need to go beyond corn.

Neil Koehler: "The California Energy Commission has estimated that in this state alone, we could produce 3 billion gallons of ethanol from waste biomass alone." 

Biomass – such as agricultural waste, forestry debris, and even municipal waste – could be used to produce what's called cellulosic ethanol. Breaking down these materials so they can be used to produce ethanol is not an easy process, but a lot of money and research is currently going into developing the technology.

Jackalyne Phannenstiel: "We do need to move to cellulosic ethanol.  It's there, technologically, we know we can do it, but we need to refine the technology, we need to reduce the cost, we need to overcome those hurdles.  It will happen but it's not there right now." 
Until it is, Pacific Ethanol will bring trainloads of corn from the Midwest to produce its ethanol.

Soybeans are the crop of choice for producing biodiesel – the most promising alternative fuel for diesel vehicles.  But, like corn, those soybeans are grown in the Midwest.  Biodiesel can be made from other types of oil-producing plants, including sunflowers and canola.  It begs the question: if agricultural land is one of the key assets of the Central Valley, why aren't we growing our own energy-producing crops?

 The answer to that is complex, and probably best illustrated by what is happening on the ranch of John Diener.  John is using his canola and mustard seed crops to produce biodiesel.

John Diener, Red Rock Ranch: "We burn a large quantity of diesel every year, we burn over a couple hundred thousand gallons of diesel.  There is a need on our farm to have a cost effective source of oil for creating the biodiesel."

But the fact is, John wouldn't be growing canola at all if he had a choice.  In the fertile Central Valley, home to some of the world's highest value crops, it doesn't make economic sense.  Here, farmers make about $2,500 per acre growing tomatoes.  Almonds get a return of about $6,000 an acre.

John Diener: "We receive probably about $300 an acre growing canola, so the economics are not driving us."

What is driving John are high levels of Selenium, a naturally occurring element, on part of his farmland.  When that land is cultivated and irrigated, the Selenium collects in the groundwater and becomes toxic to waterfowl and other wildlife in the area.

For 12 years, John has been working with Gary Banuelos, a plant and soil scientist with the USDA, to find a crop that will grow here…and also remediate the problematic Selenium.

Gary Banuelos, Plant and Soil Scientist, USDA-ARS: "There are so many facets involved when you use plants to clean the environment that it really requires some thinking.  not only which plant to use, but crop rotation, how to sustain that, with each type of crop, what kind of product can be produced from that."

Years of investigation led Gary to a family of plants that include canola and mustard seed that remove the Selenium from the soil without being affected themselves.

John Diener: "We started out with what would take care of the selenium.  we found these crops to take care of that, then the next question is , what do you do with those crops."

Part of the answer is in the oil produced in the small seeds of these plants.  With new pressing equipment, John can now extract that oil to produce biodiesel that he uses on his farm.

John Diener: "You have to separate the oil from the meal."

But it is actually a secondary product that is most valuable to John: this protein-rich meal left over after the oil is pressed out.

John Diener: "This is probably the most valuable part of the whole process."

John plans to sell it as Selenium-enriched feed for livestock.  What is happening on John Diener's ranch helps us understand the intricate environmental and economic considerations involved in trying to grow energy-producing crops in the Central Valley.

Gary Banuelos: "When you look at this on a long term basis, you really have to look at it from a sustainability perspective… and Sustainability includes economics. I think many times people do not look at the complete picture, what is needed to create a sustainable system."

If there is one renewable but underutilized resource in this state, it is organic waste.

Governor Arrnold Schwarzenegger:  "California is a biomass goldmine, with tremendous resources found in our agricultural, forestry, and our urban waste.  It has the potential to power 3 million homes or 2 million cars."

Biomass is already being used to create power: agriculture and wood waste are incinerated to generate electricity.  And manure from California's 2 million cows provides Methane gas that is being captured and converted to energy.

The dual benefit of using organic waste is that you not only create energy and get rid of the waste; you also eliminate the greenhouse gasses that these materials naturally put off as they decompose.  Still, only a fraction of the biomass available is being used.

Dave Konwinski, On Site Power Systems: "There is so much organic waste still being buried in California landfills.  The composting facilities are at their limit, they can't take anymore. We're still burying enough green waste to produce about 1-point-3 million gallons a day of fuel." 
Dave Konwinski and his business partner, UC Davis scientist Dr. Ruihong Zhang, have a technology they say can change that.

For eight years, they have been working together to develop and market Dr. Zhang's patented technology in what is called an anaerobic digester.  These tanks essentially act as giant composters that can break down all types of organic waste – from food scraps to green waste – and turn it into energy.

Dr. Ruihong Zhang, UC Davis: "What this technology &ndash my research &ndash is about is to create a value out of these materials, these waste materials, so that we can utilize them instead of disposing of them as waste.

The decomposition process creates clean biogases that are caotured in these pipes and can be used to create electricity, replace natural gas, even be blended into vehicle fuels.  What's more, this entire system is portable, intended to be used on-site for potential commercial users such as food processing plants or landfills and waste transfer stations."

Dave Konwinki: "So it's built right at their operation, and then the energy that is produced is cleaned up and the biogas is used to offset their natural gas use, and so now they are not buying natural gas off the pipeline."

It's a technology that might never have made it out of the lab if the California Energy Commission hadn't put Zhang, the scientist, in touch with Konwinski, the businessman.

Dave Konwinski: "Working with the university, working with the professors, and being on the campus has really helped us validate it in the private sector industry.  If I had done this with my partners and built it in our backyard in Camarillo, we'd be nowhere near where we are today."

Where they are today is this full-scale demonstration plant, funded in part by the California Energy Commission.  They'll use it to market on-site power systems – and ultimately determine if it can become a viable clean energy business in the Sacramento Valley.

California's most powerful energy source renewes itself each day with the rising sun.  Of all the clean energy technologies, solar is indisputably the darling of the industry, with the most investment and the largest growth.

Joe Lichy, NuEdison:  "Right now and for last 5-10 years, we've been seeing explosive growth. Currently, it's a $5.4 billion industry."

That growth is good news for innovators like Joe Lichey, who has a new solar technology to market.  In fact, it is creating unprecedented opportunities for everyone involkved in the solar industry – from the innovators and manufacturers to the installers – even home builders looking for niche markets.  The growth in solar is global, but California is a key player.
Jackalyne Pfannenstiel, California Energy Commission: "The major thing that is happening in solar is big global interest in it. Germany, Japan, and California are the three big markets for solar, so the solar manufacturers are stepping up to meet that great demand."

In California, the solar industry is being helped by big incentives from the state: $3 billion available over the next ten years to help homeowners install solar roofs.

Jackalyne Pfannenstiel: "We'd love to be able to have a solar industry so that you don't need the incentives.  We want people to put solar on their homes because it makes sense."

With 200,000 new homes being built in California each year, the majority of them in the hot Central Valley, the greatest opportunity for creating more solar-powered homes is here.

Mike Keesee: "We actually record the output of the solar system through this meter."

It's why the Sacramento Municipal Utility District – SMUD – is targeting home builders like Jim Bayless.  Jim is partnering with SMUD to create what are called zero-energy homes.

Jim Bayless, Home Builder: "We think it's an advantage for us because it differentiates us from all our competition."
The key feature that differentiates these homes is this roof-integrated solar system.  When combined with other built-in energy features, these homes will actually produce as much electricity as they use.

Jim Bayless: "SMUD's concept is real simple, if they can get people to put solar panels on their roofs, then they don't have to build power plants."
Because the rooftop system is producing peak energy at the same time the hot Sacramento region is using the most energy, it not only helps the homeowner with low energy bills; it helps SMUD keep up with demand.

Mike Keesee: "We refer to it as distributed generation.  It certainly makes a lot of sense: that you can site the power or power production where the power is needed.  This is what's happening here with these homes; why not put it on a rooftop?"

These homes are connected directly to the power grid, meaning any extra electricity they produce feeds back into the meter.

Mike Keesee: "Electricity is like that, it just goes where it wants to go and if you don't need the electricity, it will flow out to our system. That's one of the things the solar industry had to do is perfect that technology to make it seamless."

Developing that seamless system has been a huge breakthrough in allowing wider use of solar technology, and spawned new local businesses like Team Solar, which got its start working with SMUD, and is now one of the largest solar installers in California.
Joe Lichey: "What we do is use an optic."

It has also created a booming market for new solar technologies that might help innovators like Joe Lichey make that leap from a good idea to a good product, and create the type of clean energy businesses local planners are hoping for.

Carol Whiteside: "We could end up being the most solar, most renewable region in the world if we plan carefully and are really strategic."

Fuel cell technology: for most of us it means cars.  Cars that use hydrogen to produce their own electricity without combustion – and create clean water as their only byproduct.

For seven years, most of the major car manufacturers have been working on this technology here at the California Fuel Cell Partnership in West Sacramento.  But the technology has proved challenging, and fuel cell cars for the mass market are still at least five to ten years off.                                              
What many people don't know is that fuel cells are being used – and even successfully marketed and sold – by one local company.

Larry Bawden, Jadoo Power Systems: "It's just that simple."

Larry Bawden is the founder of Jadoo Power Systems, the world's largest supplier of portable fuel cells.  The company manufactures and ships about 1,000 of these units each year from its Folsom lab.

Larry Bawden: "So this allows you to have your own mini power generation device if you will."

Larry started Jadoo five years ago by targeting a very small niche market for these portable fuel cells: battery replacement for professional video cameras.

Larry Bawden: "Everything starts as a niche with some success and then starts graduating up, which has been our company's strategy from day one." 

And the company has graduated – to larger systems, which it is marketing to first responders, law enforcement, and the military as an emergency back-up power supply.  His business strategy has been so successful that it is being held up by local clean energy proponents as one to emulate.

Andrew Hargadon, UC Davis Energy Efficiency Center Director: "Jadoo Power Systems is one of the few companies in the hydrogen fuel cell area that is actually making money already.  They've done that because they have expressly chosen to pursue a particular market where power is most valuable."

As the energy system transforms and becomes more distributed – meaning energy is being generated closer to where it is being used – the future of fuel cell technology is expansive.  Bawden envisions entire homes being powered by these fuel cell units.  Jadoo Power SDystems fits prominently into visions of a clean energy future for the Sacramento region.

Larry Bawden: I think the whole clean tech investment area is massive.  There are probably going to be several centers in the United States that will become expert in that area.  What it will take for the Sacramento Valley area to become one of the many is a few key successes. 

The future vision of our state's clean energy system depends on the success of these clean energy businesses.  It will take all of these technologies to transform the way we produce and use energy.  Ultimately, the goal is to reduce pollution and our dependence on fossil fuels.  But clean energy also has the potential to transform the economic development picture of the Central Valley, providing a business niche the Valley can call its own.

Carol Whiteside: There is no place yet that owns renewable and clean energy.  We think it is an opportunity for the San Joaquin Valley, in fact the entire Great Valley, as becoming the center for applications and use of these technologies.


New Valley is brought to you by the following sponsors:

Williams + Paddon: architects, planners, people.  Providing architecture, planning, and interior design for corporate, institutional, and educational clients.  Design services for a sustainable future.

VSP is a proud leader of Partnership for Prosperity, working together to create a shared regional business agenda that enriches our quality of life. 

Committed to the community, Five Star Bank recognizes the importance of this collaboration toward local empowerment and continued prosperity for the Capitol region. Five Star Bank is a proud sponsor of New Valley.

Treasure Homes is proud to support New Valley in an effort to build better communities and encourage smarter business practices.  Fallen Leaf at River Bend in Natomas is an example of Treasure Homes' commitment to building energy efficient homes that promote clean energy and enhance the quality of life throughout the Sacramento region.