vogelross.com.au

When it comes to bold scientific experiments, I’ve got to hand it to the Europeans. Take for example the Large Hadron Collider completed last year near Geneva. This is the world’s biggest science experiment, occupying a 27-kilometre long underground tunnel. Its purpose is to smash particles one trillionth the size of a mosquito into each other at 99.9 per cent the speed of light. To me, the most impressive part is that the motivation is fundamental research, not a stepping stone to better bombs or to making iPhones cheaper.

On an ever grander scale, a Swiss company Living PlanIT SA has just announced plans to build a complete experimental city from the ground up. Occupying 1700 hectares of beautiful Portuguese countryside, PlanIT Valley will be a massive laboratory where companies can try out the latest ideas in sustainable urban development under real-life conditions.

The PlanIT Valley founder and former Microsoft executive, Steve Lewis, says: “Cities lie at the absolute core of the world’s environmental crisis. They occupy 2 per cent of the Earth’s land mass but consume 75 per cent of its resources. The world must fix the way that cities are built and the way they are operated.”

To have any impact on global warming, the need to develop sustainable cities is urgent. Lewis says construction of PlanIT Valley will start this year. This would be an impossible dream if the project, like the Large Hadron Collider, relied on government funding but PlanIT Valley is a self-funding commercial venture. It will be developed and operated from the ground up in collaboration and partnership with major corporations, research institutions and universities. “The future doesn’t lie in creating another Silicon Valley,” Lewis says. “It lies in moving to the next level a living R&D laboratory in the form of a complete urban environment.” This unique laboratory will include everything a city needs housing, offices, shops, health care, light manufacturing, active and passive recreation and entertainment, schools and a university. By starting literally with green fields, there will be no restrictions on what the participating corporations can test out under actual living conditions. The development will be able to deploy today’s most advanced systems for energy supply, resource management, transportation, communications and other essential infrastructure.

Living PlanIT’s mission is “to find a way to meet the physical, intellectual and spiritual needs of our growing populations within urban centres that are ecologically sound”. PlanIT Valley is designed to produce its own power with a 50 per cent surplus to sell. The project includes creation of sustainable forests, rivers, lakes, a marine biology research and education centre and restoration of indigenous flora and fauna.

While aggressively promoting its social and environmental objectives, Living PlanIT makes no apologies for the profit motive of the venture. PlanIT Valley was recently named the Best Foreign Investment in Europe in High Tech at the World Investment Conference held recently in La Baule, France.

The project announced for Portugal is only the prototype of what can be built anywhere on the planet and the plan is to get other cities under way even before PlanIT Valley is completed. The Living PlanIT president, Malcolm Hutchinson, says: “Our integrated urban infrastructure can be replicated in any region striving to accommodate accelerating urban growth. While the Portuguese project is the most advanced one, we’re in active discussions with other locations we’re finding there’s an enormous global emerging business opportunity.”

This kind of “the sky’s the limit” thinking shows how the twin disasters of global warming and financial collapse could deliver some positive synergies.

This  article was first published in the Sydney Morning Herald.

For further details see the Living PlanIT website.

Peter Vogel

Last week I attended a public consultation on the government’s proposed $1.3 billion Green Car Innovation Fund. The fund is part of the “New car plan for a greener future” which provides $6.2 billion to support Australia’s automotive industry.

In summary, the fund is a grant scheme which offers $1 for every $3 funding provided by the applicant. To qualify for a grant, the project must be aimed at developing ways to significantly reduce the greenhouse gas emission of passenger vehicles. It covers R&D, proof-of-concept, early-stage commercialisation and pre-production activities. Full details of the fund cab be downloaded from the Department of Innovation, Industry, Science and Research website.

This initiative is basically a good thing, as it recognises that with the right policies, going green can be a boost to Australia’s economy, rather than a drain on it. However there are a couple of glaring problems that I suggest the government should look at before the fund kicks off.

Size of the fund

The Fund will provide $1.3 billion over ten years from 2009, or an average of $130m per year.

This is not a lot of money to support the greening of Australia’s biggest export earning manufacturer. To put the size of the Fund in perspective, this represents about 1% of fuel excise collected.

In the light of the present world economic situation the total fund should be significantly increased, perhaps drawing on part of the government’s recently announced economic stimulus package.

Merit critera
The key criterion is reduction of greenhouse gas emissions. But at the public consultation in Sydney, it was stated that only the emission of the vehicle itself are relevant to this criterion,  factors such as embodied energy of the vehicle would not be taken into account in assessing the merit of an application.

This is clearly a fundamental oversight. To be consistent with the stated objective of greening the industry, the total greenhouse gas emissions must be reduced by the proposed technology, including for example the carbon footprint of fuel production and transportation. I fear, however, that because this fund is part of an automotive industry package, and not a climate change initiative, this is unlikley to change. Expecting the car industry to put the environment before profits is akin to asking the tobacco companies to remove the addictive chemicals from cigarettes.

Funding formula
The proposed funding ratio of 1:3 is the fund’s biggest problem. It was explained at the consultation that the rationale for this low ratio is that this will result in a multiplier effect for the government’s investment – $1 of grant resulting in a total of $4 worth of innovation.

This logic is seriously flawed.

Only companies with existing revenues or a strong capital base will be able to find the matching funding, and these companies would carry out the project whether or not they receive a grant. For them, the fund will just represent a nice 25% “icing on the cake”.

Small companies, individuals, university researchers and the like, simply cannot raise the money required. To make matters worse, the fund pays retrospectively, so the grantee actually needs to find 100% of at least the first few months of the project cost themselves. This represents a significant practical cash flow barrier for small innovative and efficient developers.

The government says it has fixed the funding at 1:3 because it wants to get the best bang for its buck. However the exact opposite will result. The biggest returns will come from the small research projects, not the big ones. With the minimum grant being $100,000, it also dictates that the minimum project size is therefore $400,000. We are aware that some of the most innovative work being carried out in Australia at the moment in the field of electric vehicles is by small companies who would have neither the management bandwidth nor the cash flow to execute a project of that size.

Giving a hundred inspired individuals $100,000 each with no strings attached is much more likely to produce some new groundbreaking technology than giving a car manufacturer a $10m cashback on a $40m project.

A better solution would be to calculate the funding ratio on a sliding scale, so that small projects receive 100% funding (removing the impossible matching funding barrier) and large ones be funded at 1:4.

Funding should also be paid in advance, tranched against a projected cashflow.

Otherwise, the scheme will, by its very design, eliminate the target organisations it seeks to support.

This post was also published by the Sydney Morning Herald.

Yesterday’s announcement that AGL and Macquarie Bank are planning to spend $1 billion to build an electric-vehicle charging network in Melbourne, Sydney and Brisbane is yet another indicator that the carbon crunch could be the saviour of Australia’s automotive industry (see my previous post on this subject).

The car companies are slowly tooling up for all-electric vehicles, although progress is being hampered by the temporary insanity of hybrids. Meanwhile, many early adopters are taking matters into their own hands and building their own electric cars.

Last weekend I had a look at some examples at the Field Day organised by the Sydney branch of the Australian Electric Vehicle Association.

Most of the vehicles on display were conversions done by dedicated owners. The process is quite straight forward. Take a car of your choice, take out the petrol engine and everything associated with it (cooling system, fuel tank, starter, alternator etc) and install an electric motor, batteries and controller.

A typical conversion

 Engine compartment gutted and a small electric motor installed.

The performance of the converted car can be whatever you want, it only depends on budget. Acceleration and top speed is determined mainly by motor size and range by battery type and capacity. The battery is the Achilles heel and the most expensive part. Traditionally, various styles of lead-acid battery have been used, but these are very heavy and lose efficiency after only a couple of hundred charges. The newer Lithium iron phosphate (LiFEPO4) batteries are dramatically lighter for equivalent powerm, and should last ten times longer. They are, of course, many times the price, although this will no doubt change once production volumes rise.

Cost of the materials to convert a typical car is roughly $2000 for the motor, $2000 for the controller and $5,000-10,000 for LiFEPO4 batteries. There is a useful collection of links to Australian EV component suppliers on the Zero Emission Vehicles Australia website.

A classic VW beetle conversion

Typical scene under the hood of a homebrew EV

The owner of the bike below built the whole thing for under $2000, including the bike. The motor is small and nearly silent. You’d be able to drive this bike into an apartment building for parking. Top speed is 70km/h which is quite adequate for getting around town.

As I explained in my article published recently on Crikey, The Great Hybrid Swindle, fully electric cars are much more environmentally friendly than hybrids, and also very much cheaper to drive. Even if they are recharged using coal-fired electricity, they have a better carbon footprint. I calculate that for average city driving, the daily energy required can be captured from a modest solar array on the roof of your house, resulting in absolutely cost-free and emission-free driving for most people. If you drive somewhere that does not a powerpoint for recharging, the solar panels pump electricity into the grid during the day, and you charge the car overnight.

The Rudd Government has made a strong commitment that Australia will play a leading role in development and application of green car technology. They have issued the Green Car Challenge, pledging to purchase environmentally-friendly vehicles for the Commonwealth fleet if they are produced in Australia.

The 2008 Review of Australia’s Automotive Industry recommended bringing forward the Green Car Innovation Fund to 2009 and doubling the grants to $1bn. It also proposed the inclusion of transportation in the new emissions trading scheme. This carrot-and-stick approach will be a huge boost to local green car initiatives.

The future of driving does not involve petrol. AGL and Macquarie have obviously caught on to that idea.

Perhaps the Australian car industry, being quite tiny by world standards, will be able to change course more quickly than their global counterparts.

I recently enjoyed a business lunch where the guest speaker was Climate Change Minister Penny Wong. I was very impressed by her obvious intelligence and enthusiasm for her job (“My mum was thrilled when I told her my new job is to save the world”).

However Wong is a lawyer, not a scientist, and when asked what she is personally doing for the environment, she said “I drive a hybrid”.

Oh dear, she’s fallen for the hybrid hype. This prompted me to write an article which was published this month by Crikey.

The gist of this article is that hybrid cars:

• Have everything that can go wrong with a petrol car plus everything that can go wrong with electric cars
• Don’t burn much less fuel that a modern turbo-diesel or even small petrol car
• Have a huge carbon footprint in the manufacture of all those extra components
• Are uneconomical to own and operate

Most importantly, fully electric cars are practical today and don’t suffer these drawbacks. Electric car technology presents a massive opportunity for Australian technology, manufacturing and the economy.

I also explain how solar powered cars are a practical reality for many urban commuters.

For those who do not subscribe to Crikey, the article can be downloaded here.

The frightening part of climate change is the speed with which we need to act to bring about any meaningful reduction in greenhouse gasses.

Governments are notoriously slow to act, and measures introduced take a long time to bite. To complicate matters even more, technological developments are coming faster and faster.

Governments must therefore design policy around outcomes, not particular technologies.

For example, lighting technology has already outpaced climate change policy. As my latest business briefing paper Energy efficient LED lighting ready for the big time explains, well-intentioned schemes like the NSW Greenhouse Gas Reduction Scheme encourage use of dangerous, second-rate fluorescent lighting when much better alternatives now exist.

Peter Vogel