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Jump Starting Minnesota's Green Economy

Jump Starting Minnesota's Green Economy

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Published by: Minnesota 2020 on May 11, 2010
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Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Development of the Green Economy Policy Options Outline Selection Criteria Syngas and Green Gasoline From the Farm Heating Minnesota From the Ground Up With Heat Pumps Suburb to Suburb Bus Transport Residential Rooftop Energy Improving the Grid, the New Network for Minnesota’s Green Economy Wind Power for Minnesota; Utilizing Stranded Wind From Economical Plug-in Hybrids to an Electric Car Industry Nuclear Power for Minnesota 5 8 11 13 19 24 31 36 41 44 51

Conclusion: A Call to Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

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Executive Summary
InTroduCTIon
Minnesota is a national leader in green technology Leadership by the state legislature has put Minnesota on the path to produce 25 percent of its electricity by wind and other renewable sources Minnesota is also a leader in producing and using ethanol for transportation Minnesota has the largest network of E85 ethanol-blend fuel pumps in the United States. Our leadership in the green technology sector has greatly benefited us; wind and ethanol revenues put millions of dollars directly into Minnesotans’ pockets. By getting into green technologies early, Minnesota has gotten a head start into the new economy. But the rest of the world is catching up Climate and economic concerns are pushing national and local governments worldwide to attract and develop green businesses. The Chinese leadership in particular is turning their focus toward the green technologies The world’s fastest growing economy is starting to produce and consume green technologies such as solar panels, electric cars and fast trains The Scandinavian countries have already demonstrated that it is possible to simultaneously reduce CO2 emissions and grow the economy In the last three decades with good leadership, Norway and Denmark have consistently reduced their energy consumption and delivered strong economic growth These countries are well positioned for economic revolution

With strong leadership, we are well positioned to take advantage of the changing economic climate.

Minnesota needs to stay in the race Minnesota is a highly educated state with a very strong university system We have all the right resources to form a green technology industrial cluster Minnesota’s track record of forming clusters for cutting edge technologies like supercomputers in the past to medical devices today With strong leadership, we are well positioned to take advantage of the changing economic climate

The objective of this report is to inject business and technical discipline into Minnesota’s green economy policy framework Minnesota already has had success in improving our state’s economy and environment by developing well thought out policy such as the wind mandate This was due to a consensus between government and industry based on sound science and good business practices This report develops a methodology to identify ways to develop the green economy and back it up with specific and detailed ideas where Minnesota can and should act

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Jump Starting Minnesota’s Green Economy

Key fIndIngs
The business communities, including venture capitalists, have already turned their focus toward green technology as the next growth sector Strong leadership in the state can provide a coherent business friendly approach to developing Minnesota’s green economy This report reviews seven specific opportunities for green technology growth in Minnesota. Based on Minnesota’s current economy, knowledge base and geography, the following projects are the best positioned to jump start Minnesota’s green economy and stimulate job growth in the coming years Green Fertilizer from the Wind: Minnesota has enormous wind power capacity, far more than the grid can absorb in the foreseeable future This surplus wind power can be used to produce ammonia for fertilizer Minnesota’s own fertilizer needs can inject $300 million per annum in to our economy and use up to 2000 MW of wind power Solar Powered Roofs: Minnesota has more potential for solar power than New York and Boston due to a large number of sunny days year round If only 25 percent of homes had solar panels installed, they would represent 10 percent of Minnesota’s electricity generation capacity. The benefits from the installation process, if spread over 10 years, could easily produce over $500 million per year Electric Cars in Minnesota: Minnesota is surprisingly well positioned to become a leader in mass market electric cars Minnesota possesses two key skill sets: existing car manufacturing (Ford Plant) and a broad supply of electrical and electronic engineers from the MedTech and automation industry clusters The mass market car industry is undergoing a disruptive change on which Minnesota could capitalize The prize is very big Even one percent of the US car market is $3 to $4 billion per annum in sales Heat Pumps: Heat pumps are the most efficient way of heating homes, and they can do it without burning anything While there is a common misconception that heat pumps don’t work in very cold weather, a Minnesota company has been making cold weather heat pumps for over two decades Installing heat pumps in 25 percent of Minnesota’s homes over a 10-year period would generate $700 million per year

Installing heat pumps in 25 percent of Minnesota’s homes over a 10-year period would generate $700 million per year.

Smart Grid: According to the American Wind Power Association, Minnesota has about 75,000 MW of wind, but we are currently using only 2 5 percent of the total capacity Even after all the wind mandates have been fulfilled, Minnesota will be using less than 10 percent of the state’s wind capacity The remaining 90 percent is waiting for a smarter grid with better control and energy storage.

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Green Gasoline from the Farm: One of Minnesota’s greatest natural resources is agricultural waste from corn farming Most of the corn stover is tilled back into the ground, but it is the single largest, easily available source of biomass Corn stover can be converted to syngas, which in turn can be converted to gasoline Minnesota’s corn stover can produce 400 to 600 million gallons of gasoline a year In the foreseeable future this could add $2 to $3 billion annually to our economy Suburb-to-Suburb Bus Transport: Most commuters travel solo The Twin Cities alone have an estimated 500,000 commuters who commute alone and from suburb to suburb. A specialized bus system would offer these commuters easy transport plus recovery of their commute time If 25 percent of the commuters used such a system, Minnesota would save 25 million gallons of gasoline If the commuter bus time was put to productive use, Minnesotans would recover $30 million in wasted labor-hours worth around $1 billion annually

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Jump Starting Minnesota’s Green Economy

The Development of the Green Economy
In 2004, Vinod Khosla, a leading Silicon Valley venture capitalist, started his own new venture capital firm called Khosla Ventures. Vinod Khosla was a founder of Sun Microsystems, one of the giants of the IT revolution and he was also a general partner in Kleiner Perkins, perhaps the leading IT venture capital firm in Silicon Valley and the world. But when Khosla started his own VC firm he decided to back green technology companies Other VCs have Minnesota needs to actively also followed. It was not only the finance stalwarts from the compete for jobs and new IT revolution Elon Musk used his fortune from the sale of the industries. Public policy leading internet payment company Paypal to found, fund and should be developed to run an electric car company, Tesla Motors At the same time facilitate development of Al Gore released ‘An Inconvenient Truth’ and got his Oscar green technologies and and Nobel Prize for focusing worldwide public opinion on then green business. global warming Market forces driven by latent needs and public opinion have been driving toward the green economy Minnesota with it natural resources and educated workforce can and should lead

defInITIons
There are many environmental needs, from reducing pollution to protecting habitats and endangered species However this report will focus on the opportunities provided by the global warming challenge; reduce CO2 emissions and benefit the economy. For the purposes of this report: Green Technology: Technology and products that reduce overall CO2 emissions This includes the entire range from efficiency measures to energy technology that uses renewable energy. Green Business: Business and industries that utilize green technologies to make a profit in a competitive market place, including both new and old companies Green Economy: Normal market forces propelling green businesses to prosper and grow without long-term subsidies

PolICy objeCTIves
States and governments all over the world are working to ensure that their jurisdictions benefit from the green economy Minnesota needs to actively compete for jobs and new industries Public policy should be developed to facilitate development of green technologies and then green business Finally public policies should be focused on developing businesses that can operate without constant government attention and especially long-term subsidies.

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PolICy aPProaCh
In developing an underlying policy philosophy and approach it is instructional to consider the development of the waste and garbage hauling industry, particularly the question of how free market giants like Waste Management could come into being Many poor countries, especially ones with weak governments, tend to have garbage strewn all over, even when private spaces are immaculately clean Much of the garbage is household garbage that gets dumped outside. Nobody wants the garbage there, nobody benefits from the garbage, but it persists Even in these poor countries the free market adequately serves the cleaning needs inside middle class homes but cannot deliver clean public spaces Economists call it the commons problem when no one wants to take care of the common spaces But in the US the free market takes care of the garbage and waste, and it virtually never finds its way on to the streets. In many municipalities the household garbage pickup is done completely by the free market The state and local governments don’t run, manage or contract out the pickup Why does the free market overcome the commons problem in the US but not in many poor countries? The hint for the answer is found in certain neighborhoods in the poor countries that have much cleaner streets These neighborhoods have strong central organizations with the power to enforce rules But outside these neighborhoods in a poor country, a company like Waste Management could never make money in a free market So how did the US economy reach the point where Waste Management could and does thrive in a free market? There were several steps to get where we are now 1) Enforcement of Rights: People have a right to a garbage-free environment The state decided that this is a very strongly defined right. E.g. in a residential zone an owner is not allowed to dump garbage on their own private property let alone elsewhere Pile garbage on your front yard and the police will show up Enforcing the public’s right to a garbage-free environment is the foundation of the waste hauling and disposal industry. 2) Prototyping the Industry: State and local government jump started the industry Industry can be jump started by mandates, subsidies or direct activity. Population densification and rapid industrialization led municipalities to start garbage collection services Initially run by the government, some municipalities still run waste services, others contract it out, while others allow the free market companies to do everything 3) Market Definition by Regulation: This is the most critical and sensitive piece. Too little regulation, and the market never develops Too much and the market dies If garbage haulers were allowed to charge for just moving the garbage and dumping it wherever they wanted, they will appear to make more money But garbage would not get disposed, cities would not become garbage free, and the industry would eventually collapse because no one would pay for it But if the state required everybody to dispose of the garbage 1000 feet deep in the Mohave Desert the technical and financial requirements would kill the industry. In short, the regulations must be financially and technically feasible and need to evolve over time as technology and market evolves

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Jump Starting Minnesota’s Green Economy

4) Business Needs: The most obvious but often forgotten need. An industry created by enforcement of rights still needs everything else that other industries need e g infrastructure, unfettered access to the market, and freedom to innovate etc. Similar to the waste hauling industry, the nascent green industry is based on the need to reduce and eventually eradicate CO2 emissions State and local governments have started to prototype the industry, e g mandating utilities to use wind power, subsidizing solar power, or directly investing in efficient school buildings. However, the critical step is to ensure that specific regulations and actions are technically and financially feasible. For example, mandating wind power to 25 percent may be reasonable but mandating it to 50 percent may not be technically reasonable without energy storage technology Then the decision to boost wind power to 50 percent will cascade into a decision to mandate energy storage, and that will be based on the costs and technical readiness of the energy storage. The regulatory framework must be based on sound financial and technical basis.

eConomIC benefITs
The economic benefits of the right blend of regulations can be tremendous, especially when indirect economic benefits are taken into account. The waste hauling industry not only created jobs for garbage men, but also in truck companies However, the The economic benefits of the greatest economic benefits were those that came with clean right blend of regulations cities and the improved quality of life. These benefits sound can be tremendous, more ephemeral, but they result in better health, higher especially when indirect property values and increased productivity The absolute economic benefits are taken economical value-added from them would probably dwarf into account. the direct economic benefits of the waste hauling industry. Similar economic benefits can be expected from the green economy. The target industries are much bigger so even the direct economic benefits will be much bigger. But indirect benefits will be truly enormous as economic growth will be based less and less on fossil fuels

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Policy Options Outline
Countries and local government have successfully used public policy tools to develop the green industry Minnesota’s own success story is our wind power industry that was initiated by policies culminating in the renewable energy standards bill Other states have built up a solar power industry and still others are on track to create an electric car industry Good policies work However, poorly thought out policies can have undesirable consequences The electricity deregulation effort in California in 2000 is often blamed for the unprecedented brownouts and blackouts that California suffered in 2000 and 2001. Many observers have blamed deregulation itself for California’s troubles But countries like the UK have successfully deregulated their electric markets A careful analysis of California’s electric supply problems shows that the policies behind the deregulation were poorly designed The brownouts were unintended consequences of a poorly planned set of policies Reducing the risk of unintended consequences requires clearly defined objectives followed by well thought out policies Policy details need to be consistent with the objective Success of the green economic development requires a set of objectives and a coherent set of policy tools

green eConomy PolICy objeCTIves
Creating a green economy requires the simultaneous fulfillment of two objectives— reduction of CO2 emissions and development of self-sustaining businesses Any policy framework should address these two important issues Reduced CO2 Emissions: One of the ongoing challenges with green industries is the problem of green washing, where claims of emission reduction are exaggerated • Businesses must verify or demonstrate a reduction of emissions. The verification requirement can be as broad as possible, but it is necessary to prevent companies from gaming the system • Businesses must verify or demonstrate that technology does not increase emissions elsewhere Driving the emissions up the supply chain is self-defeating Self-sustaining Businesses: Another point of failure is economic policies that do not produce self sustaining businesses Businesses have to become independent of state action and should not be continually dependent on state action • Policy makers should plan for businesses becoming independent of state action, e g policies providing incentives should have sunset clauses Eventually policies need to create self sustaining businesses that can generate profits in the market place. • Policy makers should ensure that technology and industry are ready for the market and meet technology selection criteria An outline of technology selection criteria is provided elsewhere in this report

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Jump Starting Minnesota’s Green Economy

TyPes of PolICy Tools
Within the policy objectives there are different policy tools that can be used. Depending on the technology or business one or more of these tools could be adapted to drive policy Policy tools are summarized below

Direct Action: Mandates and Tax-code Incentives
Government Mandates: Mandate are the simplest way to move the market place They are also easily targeted toward specific industries. But they are also easy to misuse. Before implementing mandates it is important to identify costs and possible unintended consequences Tax Credits: Tax credits are a simple way to incentivize a particular industry Tax credits for consumers work better than those for businesses. Startup businesses are not profitable and tax incentives are not relevant in the short run End-user tax credits provide new businesses with an effectively lower price for the end-user. However tax credits can be costly to the state and businesses can become too dependent on them Grant: Grants are difficult for state government to provide because the state budgets are more constrained than the federal budget However, the state and local governments can set up processes to help businesses and communities get federal monies Financing and Loan Guarantees: While it is difficult for states to provide traditional financing for new businesses, there are ways to create new frameworks in law to leverage market financing. One such way is to authorize local governments to issue PACE bonds PACE bonds are debt-instruments that are linked to property, and the payments are collected through property taxes PACE bonds are a way to leverage market financing by mitigating risk for the lender. There could be other ways.

State Participation: Market Development
The state can also directly participate in the market place, either with purchases or with marketing assistance Direct Participation: Market participation is great for new businesses because it gives them revenue and validates the product for the market • Create a public infrastructure for the new technology E g a simple recharging infrastructure could stimulate electric car production in Minnesota • Seed the market with purchases for government use E g local governments that purchased hybrid cars for their fleet of cars as hybrids were just becoming more popular.

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Validation and Market Development: New technology is always challenged to find customer and capital Marketing the idea is perhaps the cheapest way for the state or government to help a new industry • Validation: State or local government validates a new technology or business model Creating code, specifications and requirements for new technologies such as heat pumps will validate them with consumers who have not heard of them before • Leadership: The bully pulpit of the governor and other elected officials can have a huge impact. Public leaders can effectively replace millions of dollars worth of advertising for a new industry as well as coordinate deals that can land jobs for the state or community

State Support: Education & Service
The state and local governments can also use state educational institutions and government departments to promote a policy Education and Training: Availability of a trained workforce is key to developing any industry • Community colleges developing rapid training for new technologies • DEED training, programs and centers directing job seekers • Collaboration with NGOs that train and assist the unemployed “Good Customer Service” to Businesses: Regulatory uncertainty and friction often turns off businesses more than cost alone • Clear and fair regulations • Assisting businesses to navigate laws, especially federal law • Ensuring interdepartmental cooperation • Single points of contact for regulatory purposes, especially at the local level Technology Development: State institutions like the University of Minnesota are already leaders in basic research but have the ability to do more • Higher Education institutes producing public domain technology that can seed startup businesses Public domain information in the information technology sector has been a tremendous help for new businesses

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Jump Starting Minnesota’s Green Economy

Selection Criteria
During heady days of the internet bubble a lot of private capital was invested in very questionable business models. Hundreds of millions of dollars were lost in attempts to sell heavy bags of pet food over the web or home-delivery for weekly groceries For a variety of reasons that included a ‘gold rush’ mentality, many of these business plans were poorly thought out When a new business initiative omits the key step of validating the technology and marketplace, the business will fail No amount of investment money or management talent can overcome this fundamental flaw. The green technologies revolution is also susceptible to an economic bubble and the gold rush mentality Even though the state will not directly invest large amounts of capital, it still has a huge impact on the green economy development When the state promotes a particular green technology or business, it creates a critical mind share within that industry, and private capital follows Promotion of the ‘hydrogen’ economy by President Bush and other state actors drove a lot of private capital into fuel cells and ancillary technologies In the green economy area, the state and government need to be very careful about directing private capital While investors and boards will manage individual business plans, the state has to be careful about selecting the technologies and industries to back Good selection criteria are a combination of societal benefits and business and technical readiness. A disciplined approach to selecting industries and technologies to back is critical to jumpstarting Minnesota’s Green Economy A summary of selection criteria follows

soCIeTal benefITs
• Environmental Benefits ◦ Clear and proven long-term CO2 emission reduction. Merely shifting CO2 will cause the industry to collapse in a few years This will be especially true as either cap and trade or direct carbon taxes get implemented ◦ No other negative environmental impact, even legal ones Disrupting the environment will reduce political support in the short run and drive up long- term costs • Importance for Minnesota ◦ Clear economic benefits to Minnesota. The state institutions should not be spending time on benefits that do not help Minnesotans. ◦ State and local control of policies possible Technologies and business where federal law or policies are paramount should be left to the federal government.

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TeChnICal faCTors
• Technology Readiness ◦ Core technology is manufacturing ready Technologies in a pure research state are too risky to be identified as a basis for economic development. ◦ Ancillary technologies already in market Any other technology that is critical to bring the product to market should also be in market Bringing multiple new technologies to market simultaneously in one new product is often too risky. • Manufacturing Readiness & Scalability ◦ Supply chain ready and can scale up easily If the manufacturing or delivery supply chain cannot scale up, the product will remain a niche product not worth the effort. ◦ Key skills widely available or can be developed rapidly Critical for both growing the industry and reaping the economic benefits. ◦ Raw materials widely available otherwise it would become a bottleneck for growth. This is point relevant even if raw material is otherwise considered ‘waste’ ◦ Scaling up should not impact other critical industries or the environment Competing interests increase the risk, add cost and increase the potential of loss of public support

eConomIC and busIness faCTors
• Market Readiness & Competitive Viability ◦ Should not require an expensive new infrastructure for use Industries and technologies with infrastructure needs should be considered on a separate track and should not be considered for rapid deployment ◦ There should be no competitive green industry with substantially better value. However, if two green industries are roughly comparable then the market should decide ◦ Industry should be roughly price competitive with non-green competition Early adopters are often willing to pay a premium for green products. However, the cost differential cannot be too high and it should eventually disappear. The cost differential can also disappear as environmental impact costs are built into the non-green product • Economic & Stakeholder Impact ◦ There should be no expectation of substantial changes in consumer behavior Any product or service that requires substantial change in consumer behavior could take up to a generation to adopt ◦ Business should thrive and grow in Minnesota Key parts of the business value chain should remain in Minnesota for the foreseeable future

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Jump Starting Minnesota’s Green Economy

Syngas and Green Gasoline from the Farm
Minnesota produces about one billion gallons of ethanol annually adding approximately $2 to $3 billion dollars to our economy State and federal mandates requiring ethanol to be blended into gasoline for cars have benefited Minnesota. However, in addition to improving the greater Minnesota economy, there are also global warming benefits and a reduction in our dependence on imported oil. But ethanol blending in gasoline started for a different reason. The use of ethanol blending started with the need to make gasoline cleaner burning Adding ethanol to gasoline is often called oxygenation and results in lower noxious emissions from the tailpipe However, as the twin specters of global warming and America’s dependence on foreign oil came into public consciousness, it also became clear that ethanol blending addresses both concerns Ethanol is a biomass-derived renewable fuel and thus can help reduce green house gases It replaces some gasoline used in cars and is domestically produced so it also reduces America’s dependence on foreign oil Ethanol has become very popular with Congress who has increased the federal mandate to blend ethanol The Congress has encouraged the use of ethanol both by a mandate and by a direct subsidy to ethanol producers Nevertheless, ethanol has fallen out of favor in environmental circles because of the challenges that arise from using a specific ethanol production technique: corn-based ethanol. Corn-based ethanol is the first large scale use of biomass for energy. While using it does not release any net CO2, the production process is energy intensive and releases CO2 Many technical studies have shown that using corn-based ethanol does not reduce overall carbon dioxide emissions Secondly, there are growing concerns that using corn for fuel adversely affects the food supply. Finally corn-based ethanol may be too expensive to be viable on a larger scale Minnesota has gone In 2008 even with record high oil prices and a substantial farther than the subsidy, the price of corn had risen so much that corn-based federal government in ethanol companies were not making money Given all the problems with corn based ethanol in 2008 the EPA even considered rescinding the federal ethanol mandate Minnesota has gone farther than the federal government in encouraging corn-based ethanol, and our state became the leader in ethanol use Minnesota now has the largest E85, 85 percent ethanol blend, distribution network for flex fuel cars. In the long run we do stand to benefit from the ethanol distribution infrastructure as new ethanol technologies e.g. more efficient corn ethanol or cellulosic ethanol come into play It is unlikely that the need for ethanol from the farm will go away because of the need for clean burning gasoline But using corn, a food crop, to make transportation fuel is not the only way to get energy from Minnesota farms

encouraging corn-based ethanol, and our state became the leader in ethanol use.

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During the early 1920s, German scientists developed a way to make gasoline and diesel fuel using the gas called syngas Syngas was then generated from coal During WWII the Germans made large quantities of gasoline and diesel from coal derived syngas But syngas can also be created from biomass Replacing coal with biomass, a renewable resource, to produce syngas would then produce renewable gasoline or diesel

TeChnology and IndusTry
Syngas is a mixture of hydrogen and carbon monoxide At the start of the 19th century, many cities were being lighted by syngas, the famous gaslight of the Victorian era It was generated by blasting steam over hot coal or coke. Both carbon monoxide and hydrogen are flammable, and syngas was a very easy way to distribute heat and lighting fuel before electricity It was also used for cooking and heating in the home However, carbon monoxide is very poisonous, and by the early 20th century, natural gas was replacing syngas everywhere World War I was the first major war that required the use of gasoline. After the war it became clear that access to transportation fuels was of critical national strategic interest Germany was rich in coal but had limited access to oil and became very concerned about its strategic weakness During the early 1920s two German scientists Franz Fischer and Hans Tropsch developed a way of converting syngas to gasoline Syngas is heated with a catalyst and is converted to gasoline or heavier fuels like diesel The technology is called the Fischer-Tropsch process and was easily scaled up to industrial levels During World War II the Nazi government, using Fischer-Tropsch process, was producing upwards of 125,000 barrels of oil per day for their war effort. The process of producing gasoline from coal-derived syngas is called coal gasification. After the war was over, coal gasification lost favor as cheap Middle Eastern oil flooded the world market. There have been recurring attempts to revive coal gasification for other reasons. National security concerns is one reason; using coal gasification and using American coal to fuel our cars reduces dependence on foreign oil. Early environmentalists also advocated goal gasification as a simple way of creating a clean burning coal process because the gasification process removes many types of pollutants. But coal gasification does not reduce CO2 emissions, and the environmental movement lost interest in it But syngas to gasoline is a proven industrial scale technology and has been improved over the years Creating gasoline from biomass-based syngas would be ready for primetime as soon as biomass syngas becomes commercially viable The fundamental science behind creating syngas from biomass is quite straightforward Biomass is heated in an atmosphere of steam and limited air, and voila, the syngas comes out The process also produces a solid residue that contains all the potential old fashioned pollutants such as sulfur The solid residue can be used for other industrial purposes The syngas itself is a very clean burning fuel and any gasoline from it will also burn cleanly A well-designed biomass reactor will be able to accommodate a range of biomass, from corn stover to woodchips to turkey litter. The major technical challenge is making the process commercially feasible and being able to control the quality of the syngas The syngas output needs to have a controlled composition of carbon monoxide and hydrogen Additionally, the reactor needs to handle a variety of biomass with varying levels of moisture, particle size and composition

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Jump Starting Minnesota’s Green Economy

A critical intermediary step in developing the industry is to use syngas for combined heating and power applications Burning biomass directly produces the old fashioned pollutants, like soot, sulfur dioxide and nitrous oxides But syngas burns much more cleanly than biomass Converting biomass to syngas is an excellent way to cleanly produce industrial heating or setup combined heat and power plants Combined heat and power plants could be Converting biomass to another way to get green heating for greater Minnesota buildings syngas is an excellent and get renewable electricity into the grid Work on biomass to syngas reactors is already underway The University of Minnesota at Morris has built a biomass reactor to create syngas for heating the campus Syngas combustion is used to create steam in a boiler In the future, syngas combustion will also be used for cooling However, Dr Joel Tallaksen, the project manager of the biomass reactor project, said the reactor project is more than just providing heating and cooling with a lower carbon footprint. A key objective was for the university and its partners to learn about building better biomass to syngas reactors This reactor project is an industrial scale pilot for a biomass to syngas study There are also other fuels from biomass syngas. Dr. Douglas Cameron, Chief Scientist at Piper Jaffrey, says it is very easy to convert syngas into chemical called dimethyl ether that can be used in diesel engines Dimethyl ether is a gas but has the remarkable ability to work in today’s diesel engines with minimal modifications, and it burns cleanly. Even older diesel engines when using dimethyl ether do not produce any particulate pollution or sooty smoke Dimethyl ether is the most clean burning fuel for existing diesel technology Biomass to syngas technology is advancing fairly rapidly. There is already a radically different type of reactor called plasma reactor that super heats biomass to a very high temperature to produce syngas A company in California is planning to use the plasma reactor to produce syngas followed by a Fischer-Tropsch system to create renewable jet fuel They are planning to set up a plant in Sacramento

way to cleanly produce industrial heating or setup combined heat and power plants.

fInanCes and busIness develoPmenT
The key business advantage of creating renewable gasoline is that the market and distribution network are already in place Unlike ethanol or other non standard fuels, no changes are required in existing cars or infrastructure As such, there is a very large, ready market The key challenge it to produce green gasoline at market viable prices In the next decade, cap and trade and rising demand from India and China will drive up the price of oil A green gasoline industry will probably come to existence in a favorable economic climate of $6 or more per gallon for gasoline As such, it represents a tremendous opportunity While new sources of oil are being discovered, most of the new discoveries are very expensive to extract Newer oil shale or deep water oil fields require oil prices to be above $100 per barrel to be truly profitable. It is very unlikely that a green gasoline industry will be competing with cheap middleeastern oil

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A critical first step in developing a green gasoline industry is to speed up the development of biomass-derived syngas While the requirements for syngas quality are very stringent for gasoline production, they are much less so for syngas for heating Using biomass-based syngas to for heating may be the first commercial breakthrough for biomass reactors. Corn- based ethanol for fuel producers are looking to replace their natural gas heating in their plants with renewable energy A biomass syngas reactor to provide heating is a possible solution Renewable energy for heating is very important because corn ethanol production requires a lot of energy The Chippawa Valley ethanol plant in Minnesota is already planning to roll out a syngas plant in the near future That plant will use corn cob, and this will greatly reduce their overall carbon footprint for producing corn ethanol, making it much ‘greener’ Ethanol plants are not the only place to use syngas for heating Any large scale heating need in greater Minnesota can be fulfilled by syngas heating. Additionally , Syngas can also be used in combined heat and power plants since syngas can be used to create electricity in highly efficient turbines The hot exhaust from the turbines can be then be used to heat buildings, water or anything else The electricity can be used or be pushed back into the grid, adding to the green electricity content of the grid As the biomass to syngas reactor technology improves, it can then easily become the basis for a green gasoline industry

benefITs
While any biomass can be used to create syngas, in Minnesota one resource stands out, corn stover A few years ago the Xcel Renewable Fund, with the approval of the Public Utilities Commission, funded a very comprehensive study about the availability of biomass in Minnesota The study was performed by the Minneapolis-based nonprofit Center for Energy and Environment The report released last year covers the entire gamut of biomass in Minnesota from turkey manure to softwood timber Based on the numbers from this study, corn stalk is the one biomass resource that stands out above others There are two reasons, a lot of corn is already being grown in Minnesota, and there is no critical alternate use for corn stalk Corn stalk is a strategic biomass resource for Minnesota Other excellent biomass resources that are currently being used for electricity, like turkey litter or forestry residue, are simply too small to make a statewide impact. Other resources like softwood timber are available but cannot be harvested in large enough quantities without a careful study of the environmental impact Large-scale planting of specialized crops for energy like switch grass or fast growing trees may displace food crops or disrupt the environment. Corn stalk is available now without any significant downside. We just have to figure out how to use it.

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Jump Starting Minnesota’s Green Economy

Corn stover is the residue of the plant that is left over when the grain is harvested. Typically, most of the corn stalk is tilled back into the land to maintain soil quality Studies done by Oak Ridge National Laboratory have shown that about 40% to 60% of the corn stalk can be removed from the land without long term soil degradation. The single most important benefit from using corn stalk is that it will not affect the food supply. And since corn is already being grown it will also not displace any other crop or disrupt natural habitats The harvestable stover could be used for making synthetic green fuels Studies done by Dutch researchers have shown the biomass can be converted to fuel while maintaining up to 51% of its energy content Using Minnesota’s supply of harvestable biomass for transport fuel could generate 400 to 600 million gallons of green gasoline per year replacing 15 to 20 percent of our gasoline In the foreseeable future, when the global economy starts up, $4 to $6 per gallon gasoline is likely In this scenario, Minnesota’s green gasoline could easily account for $2 to $3 billion in revenue If other biomass resources, such as corn cob or even energy-rich corn itself, are added to mix then these numbers go up Finally, biomass feedstock is heavy and transporting will not be cost effective. Moving gasoline, the final product, is much more cost effective. Therefore, when the biomass-based gasoline industry develops, high tech production facilities with the high paying jobs will develop close to the biomass resources

PolICy reCommendaTIons
The demand for corn-based ethanol is still strong, and it is unlikely that it will diminish in the near future Some of the rhetoric against corn-based ethanol was not accurate Many economists concur that last year’s sharp rise in food prices were attributable to high gas prices rather than corn demand for corn-based ethanol At the same time, improvements in the production process will make corn-based ethanol more ‘green’ Nevertheless, the economic events of 2008; the sharp rise in gasoline prices, the sharp rise in corn prices and the ethanol industry losing money point to the need for Minnesota farmers to diversify out of corn ethanol Government policies should be directed toward diversification rather than just focusing on whether corn-based ethanol is good or bad From a policy perspective, incentives for biofuels should only be based on three criteria: 1) Is the fuel green? Does the carbon in the fuel come from renewable sources? 2) Does it help the economy? Is there any economic value and will the economic value be captured locally? 3) Is it commercially viable? Can the fuel production become independent of federal subsidy?

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The key to jump starting the green fuel industry is to ensure incentives and some directions for the intermediate steps Some challenges are straightforward like the need to modify farm equipment for harvesting corn and corn stover without multiple steps State educational agencies in partnerships with large farm equipment manufacturers could easily develop prototypes There are no fundamental engineering problems to developing this equipment Biomass to syngas reactors represents a bigger R&D effort. The University of Minnesota Morris’ biomass reactor project is an excellent start It can be followed up with encouragements for combined heating and power projects That will include incentives to electric companies to accept power from the combined heat and power plants Farm-based biomass provides both renewable carbon and an income stream for the agricultural economy. And if waste biomass is used, there is very little impact on food prices and the food industry In the long run, syngas can also be made from special energy crops like fast growing prairie grass. Biomass is bulky and difficult to transport. So it is likely that the biomass-to-fuel plants will be situated in Greater Minnesota The biomass-to-fuels revolution is already underway Biomass is one of Minnesota’s great resources, and we cannot afford to be left behind.

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Jump Starting Minnesota’s Green Economy

Heating Minnesota From the Ground Up With Heat Pumps
In high school science we learn that heat or thermal energy is everywhere When heat energy is concentrated the temperature goes up and we feel hot Wouldn’t it be nice if we could heat our houses in the winter just by pumping in heat from outside, concentrating it in the home? Sounds like science fiction but it’s not. Most homes in the US have two devices that do just that—pump heat We call these devices air conditioners and refrigerators The fridge pumps heat from inside the cabinet to outside The food inside the cabinet cools down, and the back of the fridge, where the heat is being dumped, heats up The air-conditioner works the same way, pumping heat from inside the house to the outside The air conditioner and refrigerator technology are over a century old But they are complex machines and, with cheap fossil fuels furnaces, were the simplest and most economical way to heat homes. Rising energy costs and global warming concerns are starting to change this attitude, but there are still ways to go In March of 2009, a new exhibit called the Smart Home opened up in the Chicago Museum of Science and Industry. It is a model green and energy efficient house built on the Museums grounds. It has all the latest energy efficiency gadgets and technology except for heat pumps. Some of the attendants at the exhibit did even know that heat pump technology is viable in the Chicago cold, let alone Minnesota The most common type of heat pumps available today is called air-source heat pumps They are modified air-conditioners and most air-conditioner manufacturers supply them. The airsource heat pumps can heat homes in the south, but not in Minnesota The weather in Minnesota requires a special type of heat pump called ground-source heat pumps They are also called geo exchange systems and sometimes (inaccurately) called geothermal heating Large manufacturers are not offering ground source heat pumps, but a small company has been manufacturing them in Appleton, Minnesota for the last two decades And yes, a ground source heat pump can heat a house in Tower, Minnesota in January

TeChnology and IndusTry
Heat pumps work off two physical properties of liquids; evaporating liquids absorb heat and condensing liquids deposit heat. Gasoline on skin feels cold as it evaporates off. Similarly, steam burns are much worse than water burns because the steam condensing on skin releases a lot of heat into the skin Heat pumps leverage these physical properties to cool and heat Heat pumps circulate a liquid, often called a refrigerant, in a closed circuit. In the cool area, there is an evaporation chamber For the hot area, there is a condensation chamber An electric pump called a compressor moves the liquid In the evaporation chamber, the compressor reduces pressure and forces the liquid to evaporate, and in the condensation chamber, the liquid condenses The evaporation chamber sucks up heat, and the condensation chamber pushes it out, and voila, a heat-pump

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The heat pump consumes electricity to move the heat around, that’s why fridges and air-conditioners use electricity But when it comes to heating the house the efficiency equation always benefits the heat pump. To understand why the system is more efficient, a very efficient electric heater has a coefficient of performance COP of 1 0 This means that one unit of electrical energy will cause the heater to produce one unit of heat But one unit of electrical energy can cause a heat pump to move more than one unit of heat from a cooler place to a warmer place Ground source heat pumps have a COP that is typically in the range of 3 5 to 4 0 The same argument applies when comparing to gas furnaces So even though gas energy is cheaper than electricity, the heat pump is still cost effective because of its high COP The biggest challenge in designing useful heat pumps is achieving high COP, i.e. high efficiency. There are two types of heat pumps. The more common type, called air-source heat pumps are essentially air-conditioners that have been modified to run in reverse In the summer, they run to pull heat from inside the house to outside the house In the winter, the refrigerant flow is reversed and heat is pulled inside the house. When the outside air temperature drops lower than about 25oF, they cannot handle the heat load needed But there is a source of constant temperature that is very close for each and every house About eight feet below the ground, the temperature is a constant 50oF, summer or winter Ground-source heat pumps work by exploiting the earth’s constant temperature Ground-source heat pumps circulate the refrigerant through piping buried eight feet or lower into the ground These underground piping loops serve as a heat source in the winter and a heat sink in the summer A well-designed heat pump can concentrate the ground heat even in the middle of a Minnesota winter And yes, in the summer the very same heat pump will cool the house, at efficiencies much higher than a regular air-conditioner According to the Environmental Protection Agency (EPA), geo-exchange heat pump systems are the most energy efficient, environmentally clean and cost-effective space conditioning systems available. Even in the coldest climates, heat pumps are still cost effective compared to alternate systems While the initial purchase price of a residential system is higher than that of a comparable gas-fired furnace and central air-conditioning system, it is more efficient, thereby saving money every month. For further benefits, in the summer cooling period, the heat that is taken from the house can be used to heat the water, also for free

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Jump Starting Minnesota’s Green Economy

Geo-exchange systems in both new and existing homes can greatly reduce energy consumption 50 to 75 percent compared to older or conventional replacement systems and thus has a corresponding decrease in emissions Annual operating costs are lowest with geothermal heat pumps Heat pumps are a viable option for current and to-be homeowners

busIness and fInanCIals
While heat pumps are cost effective, people are scared off because the upfront price for a heat pump appears to be steep. There are two cost pieces to getting a heat pump installed; the costs of the heat pump and secondly, burying a length pipe into the ground that will act as a heat source or sink This buried length of pipe is analogous to piping that you find on the back of refrigerators and freezers For existing homes where there is not much open land this pipe has to be buried very deep and usually requires a well-digging rig. The cost of laying and burying the pipe is often larger than installing the equipment For an existing 20-year old 2500 sq foot home in Minnesota, the following table represents a typical cost benefit analysis for installing a heat pump versus furnace and AC combination. This information is from a web-based calculator from the Center for the Energy and the Environment, a Minnesota based nonprofit.

furnace/aC Equipment Piping Heat Pump Rebate Utility Rebate Other Fed Rebates Total outlay Annual (Gas $1.10 therm) Annual (Gas $2.00 therm) ($1,500) $7,500 $1,350 $2,300 $9,000 $0

heat Pump $10,000 $16,000 ($7,800) ($2,500) ($1,500) $14,200 $750 $750

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When the time comes to replace the 20-year- old furnace, the homeowner will spend about $7000 more to get a ground source heat pump However, he will save about $600 per year in utility costs, giving an 11-year payback If natural gas prices rise to $2 per therm, what they were in July 2008, the home owner saves $1500 per year, with a payback time of less than five years! But there is more The most expensive piece of the heat pump, the piping, is very durable, lasting more than 50 years Studies show that houses with renewable sources of energy or savings can sell for up to 20 times the annual energy savings Installing a heat pump could increase the value of the house by $15,000 to $20,000. The increase in value of the home by itself can pay for the heat pump! Of course, if heat pumps are installed in new construction, the buried piping costs are much lower and pay back times correspondingly shorter Heat pumps and heat pump installation are still niche markets As the market grows, the costs will come down

benefITs
Heat pumps have traditionally been marketed for large scale projects such as the Roseville Mall Community centers, schools, malls, even universities like Ball State in Indiana, use heat pumps for their heating and cooling needs The breadth of implementation speaks to its flexibility in application and is a testament to its soundness In the past 10 years geo-exchange heat pumps have finally started to move into private residences But they are still quite rare in homes This is despite that fact that an Appleton, Minnesota-based company has been making cold climate heat pumps for the home for over 20 years

Promoting a heat pump industry would be an excellent way to push the green economy, create jobs and develop a new industry. Retrofitting only 10 percent of the houses in Minnesota with heat pumps can generate $3 billion in direct economic activity.

But the heat pumps have a lot going for them Residential heat pumps are a green industry where the core skills and technology are already in the market place The technology has been around for many years and can be retrofitted in most existing homes. Diverse skills such as HVAC technicians and well diggers can be leveraged for this industry The federal government is already providing financial incentives. Promoting a heat pump industry would be an excellent way to push the green economy, create jobs and develop a new industry. Retrofitting only 10 percent of the houses in Minnesota with heat pumps can generate $3 billion in direct economic activity This does not include the new housing As housing starts improve, popularizing heat pumps in new homes can jump start the industry

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Jump Starting Minnesota’s Green Economy

PolICy reCommendaTIons
So what’s stopping Minnesota from enjoying the benefits of a tried and tested technology in their homes? Our own personal experience shows that the primary issue is lack of awareness Most consumers are not aware of the value of heat pumps But perhaps even more important, the heating and cooling contractors are not aware, not trained, or interested in installing heat pumps Part the problems is a very legitimate fear of installing something new and then finding out that it does not work Also, heat pump installation bring groups of contractors together who never worked together, HVAC contractors and well diggers Like any nascent industry, inertia and lack of knowledge can stall growth The key to developing a residential heat pump industry is disseminating knowledge The state and local government organizations can do just that very cost effectively. 3) Community Colleges: Installing heat pumps does not require fundamentally new training Custom-designed short courses could rapidly bring HVAC technicians, general contractors and well diggers up to speed 4) State Government: The state through DEED Workforce Centers and county resources is already helping people find work by leveraging their existing skills. In difficult economic times the state can follow the federal government’s lead and try to direct people in the housing and related industries towards the growing renewable industries like heat pumps 5) Public Officials: Legislators and state’s constitutional officials have a powerful bully pulpit that can effectively legitimize this new industry. 6) Local Government: Installing new green technologies can often get caught up in a code ambiguity zone and slow the process down. Sometime all that is needed is clarification of the code Minnesota should also strongly encourage all new homes built in Minnesota to use heat pumps Minnesota can lead in heating homes from the ground up using heat pumps!

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Suburb-to-Suburb Bus Transport
A family moves to Minneapolis from Houston. They find a nice house in Plymouth where they like the school district and they’re near one spouse’s job in NW Minneapolis But the other’s job is in Eagan The commuting spouse has steeled herself for the 40-minute stressful commute and after living in Houston she is ready for it. But this is Minnesota and there is a TCRCD or Twin Cities Rapid Commute District The commuter just has to sign up on the TCRCD website and is then directed to park at a nearby church to start her commute There, a bus with assigned seating and Wi-Fi internet picks her up and drops her at her office complex. The commuter spends the 40-minute commute getting work done. After moving to Minnesota, the commuter suddenly recovers an extra hour per day of time. That’s Minnesota nice! Unfortunately, this scenario is still hypothetical The Twin Cities Metro area, like most metro areas in the United States, has become poly-centric with jobs being distributed all over the suburban regions Many commutes originate from one suburb to another suburb And for the typical twoincome families, there is no option of moving close to both their jobs Ring routes like I-494/I-694 have become critical commuter thoroughfares These long commute times have become the bane of modern times. That’s why, whenever viable public transport is offered, commuters flock to it. One of the best ways to get commuters out of their cars is to develop transportation options from suburb to suburb Custom point-to-point bus routes can be economically set up In addition to being better for the environment, the bus system can be made One of the best ways very desirable for commuters However, the buses would need to get commuters out of to pick up people from parking lots near their homes and drop their cars is to develop them off very close to their work. The buses would need to transportation options be equipped with internet and enough seating to ensure that from suburb to suburb. commuters could use their commute time efficiently. Dedicated bus commute systems can be done for as little as $40 million upfront costs and $10 million a year operating costs for a 5000 commuter system. Since the system will start after individual commuters have signed up, initial ridership figures will be very high. There is also a high likelihood that the private sector and/or individuals will contribute to costs With the right financing model, the fiscal impact on the public purse could be non-existent to very low. The suburb-to-suburb bus transport is not an alternate for traditional public transport, bus or light rail systems The traditional public transport systems deliver complete transportation functionality in high density population areas or highly traveled corridors worldwide The suburb-to-suburb bus idea is a narrowly focused approach to replace single occupancy cars going from suburb to suburb twice a day during the weekdays It is a new approach that is geared toward a typically American commute in a typically American city

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Jump Starting Minnesota’s Green Economy

Effective public transport usually results in a virtuous cycle improving the economy, house prices etc Public transport also reduces gasoline consumption and America’s dependency on foreign oil Releasing millions of wasted man hours on labor cost will be another benefit. This system has the benefit of being both green and cost effective.

ProduCT and servICe
Public transportation systems in most cities are the hub and spoke routes that are geared to bringing commuters from the suburbs to dense downtowns. Routes are based on aggregated traffic flow patterns and change only very slowly. The routes are decided and then commuters follow the routes This approach does not work for commutes between lower density suburbs It is not financially prudent to put in the minimum density of routes between suburbs that would make daily commutes feasible However it should be possible to design suburb-to-suburb bus commutes based on the following ideas • Identify and target specific employment areas e.g. office park complexes. • Design bus routes based on individual commuter needs • Focus on longer commutes • Limit the number of pickup / drop-off points. • Design routes that are point to point and without transfers What we get will be the 21st century version of the company bus, an open service provided for the decentralized employment that is today’s America This idea for a suburb-to-suburb bus commute is based on the Google Bus service, an employment perk that Google initiated to keep its workforce happy Google has a well-deserved reputation for being one of the best companies to work for Many of its employees put a high premium on a comfortable commute Google developed bus routes that would pick up daily commuters in comfortable and green buses This is the old company bus idea brought up to date Google developed customized bus routes for its widely distributed work force that opted into the program With 32 buses, Google was able to serve 1200 employees The buses have comfortable seating equipped with Internet connections The bus allows many of the employees to get up to 1 ½ hours per day back into their lives and has received rave reviews from its employees The Google bus idea can be modified for a public system. The key is in developing a system that identifies specific commutes and then designs the routes for them. For the idea to be successful, the routes have to be like express bus lines with a limited number of stops That means both pick up and drop off points have to be clustered close together. Most workplaces are part of large office parks. The morning drop off points can easily be clustered together in office parks and complexes. For example, there could be several drop-off points in Eden Prairie office complexes near the Vikings offices.

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The challenge is morning pick up points Suburban housing does not have enough density to have a few pick up points that are within walking distance from each commuter’s residence Therefore, street corner pickup points will not work, it will require too many of them Some of the commuters could get dropped off, but many will need to park their cars. However, there is another under-used physical resource found in most suburbs that can be leveraged for this system; a very large number of empty parking spots found in churches and in strip malls These spots normally sit empty for most of the week and are only used on the weekends These spots can be used during the week and can help in avoiding large park and ride building structures By repurposing existing infrastructure, commuters can enjoy convenient public transportation with minimal capital costs Already existing Park and Ride ramps, like the one in Eden Prairie, use local church parking for overflow parking. To be cost effective the routes will have to be highly targeted. Most suburban commuters are getting onto the freeway and then getting off the freeway in a different suburb. No public transport system duplicates this behavior but it is possible to automatically design such routes from commuter data These routes will have to be designed like the express bus routes, picking up commuters from a group of close pick up points and dropping them off at another close set of points. See attached diagram. The drop-off points are the various office complexes that the commuters are headed toward

potential bus routes

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Jump Starting Minnesota’s Green Economy

The key technology enabler for suburb-to-suburb bus comes from advances in the software industry The main technical hurdle is developing bus routes from individual commuter data This would have been a major technical hurdle even a decade ago but is quite feasible now It will require two systems: 1) A system for collecting and collating commute data from thousands of commuters spread all over the city Today’s web based systems can easily handle this type of activity A system can easily be constructed from off-the-shelf software. 2) A system for designing custom routes from very large data sets Advances in logistics algorithms for delivery companies and routing software found in GPS systems can be modified for this purpose. This approach produces a new approach to public transport. Routes are designed after ridership has been confirmed by identifying specific named individual commuters. The system is highly focused and only geared toward commuters. Because of its personalized nature, there are better opportunities to get private partnerships for financing the system. The buses themselves would have to be comfortable and green To entice professional commuters out of their cars, the buses should allow them to work, that means Wi-Fi access and proper seating Most professional commuters have experience working in airplanes GPS locating of buses with web-based and cell-phone notifications of bus arrivals will deliver the customer service aspect of the system expected by professional commuters The buses acquired for the system can be the greenest feasible The system can use plug-in hybrids with the latest efficiency features such as bio-diesel capability or even the higher efficiency gas turbine and electric motor hybrids Since the system is using the existing infrastructure of roads, freeways and parking spaces, startup capital needs are drastically reduced, and bus costs are the only upfront capital costs The objective of the system is to move single occupant commuters out of their cars by providing them with a better alternative.

busIness and fInanCIal Case
Over 70 million people drive alone to work each day in the US Based on national trends, the Twin Cities metro area has an estimated half a million commuters who drive alone each day The key reason for driving alone is convenience and flexibility. There is plenty of evidence that many commuters would leave their cars if they can get a fast, reliable and comfortable public transport The ridership of the Hiawatha filled up very fast. In the Twin Cities even a 20 percent market penetration for single occupancy cars would get 100,000 cars off the freeways every day during commute hours

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Consider a simple costing model using the following assumptions • Bus cost: $250,000 • Maintenance cost: $0 55 per mile Typical industry standard • Diesel costs: $3 per gallon • Bus mileage: 4 mpg: Will be better for greener buses. • Bus driver pay: $25 per hour • Commuters per bus: About 60 to 80 for 3 to 5 trips one-way • Software development: $15 million. • Parking spot rental: $300 per annum Assuming reasonable administrative and other overhead gives: • Initial outlays: $6,000 - $8,000 per commuter • Operating costs: $2,000 - $3,000 per commuter per year A pilot system for 5000 commuters can be initiated for as little as $40 million dollars and $10 million a year Compare this to $700 million to start the Hiawatha line This simple cost model does not include any revenue; it is only intended to legitimize the need for a full-scale feasibility study It is important to recall that this idea is inspired by a private system, the Google bus There are short term direct reductions of costs to the commuter Each commuter will probably save easily $1200 per year in fuel costs And the one hour to one and a half hour time recovery easily translates into $6000 to $10,000 of labor savings in the target commuter market In designing the finances for the system, the cost savings for the commuters should be leveraged. The system should be a public-private partnership Individual commuters will contribute because they find the system very convenient and low cost. That includes reducing the wear and tear on their cars and gas savings Many employers will consider contributing because, like Google, they will be providing a fairly desirable perk

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Jump Starting Minnesota’s Green Economy

benefITs from The busIness and IndusTry
Well-designed public transport systems usually have a positive economic impact, benefit the environment, and improve the quality of life for the community There is tremendous pent up demand for public transport systems as is evidenced by the fact that new commuter light rail lines such as the Hiawatha tend to fill up very fast. This has been true nationwide. A bus system has several unique benefits: • For Society: ◦ Saving gas (National Security and Global Warming benefits) ◦ Reducing impact on infrastructure • For the State: A Low Cost System ◦ Can start on a small scale • For Businesses: Employee productivity improvement • For Commuters: Easy stress-free commute Gas Savings: Like all public transport systems, the suburb-to-suburb bus system will reduce gas consumption For each commuter signing up, gas consumption will be reduced by about 250 gallons per year And if the buses are running on fully renewable sources, then each commuter being signed up will result in a savings of 500 gallons of gas a year Gas consumption reduction will reduce global warming as well as reducing America’s dependence on foreign oil Infrastructure Expenditures: Reducing the number of cars on the road will reduce wear and tear on the road and mitigate the need to expand roads The savings in road maintenance and expansion by itself could be substantial Cost Effective: This system has a very narrow purpose and can be built very cost effectively. And just as important for getting the project launched, this system can be piloted on a very small scale. The system co-exists very easily with the cars The system also does not require major upfront costs Time Savings: The single biggest benefit is recovery of time for individual commuters. Commuters can save 250 to 400 hours per year It is important that this value be captured and one way to do that is to ensure that it is possible to work on the bus, like airplanes However, some commuters may choose the commute time as their stress free down-time in which case it is a high value fringe benefit for them. Once people start using public transport, the support for other more expensive but better systems like light rail line also increases The network of buses does not compete with light rail lines or traditional rail but once a system is setup, commuter corridors would emerge. After the commuter corridors are identified, it is more likely that that there will be support for expensive but dedicated better public transport options like light rail.

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PolICy reCommendaTIons
Suburb-to-suburb transport is a case where the greatest barrier for a private or public entity to setup a pilot project is lack of information. Traditional traffic patterns studies will not help in designing the types of routes that are described in this report. The first step is to commission a pilot study. The study should partner with companies to promote people to signup The target would be to get enough people to sign up so that profitable routes could be constructed for a pilot program of 1000 or 5000 commuters After the study, the state can facilitate the project: 1) Minimize conflict with existing transportation infrastructure. 2) Ensure that there are no problems with churches or shopping malls participating in the parking program 3) Identify ways for employers to subsidize the program Finally, it should be remembered that the system was inspired by a business trying to provide fringe benefit to its employees in a competitive employment. It should be possible to create publicprivate partnerships where there is good potential for demand for the service

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Jump Starting Minnesota’s Green Economy

Residential Rooftop Energy
What is one of the easiest ways for an average US consumer to get carbon-free green electricity? Purchase rooftop solar panels of course, even in a cold northern place like Minnesota Many Minnesotans are not aware of our state’s high potential for solar energy using rooftop solar power Calculations done by the National Renewable Energy Laboratory show that Minneapolis has more available rooftop solar energy potential than New York, Seattle, Portland and even Houston Despite our cold winters, we have many sunny days, and our summer days are very long
annual Power (kWh) City
Typical 4kW PV Array

Phoenix Miami San Francisco Minneapolis Boston Duluth Houston New York Chicago Portland Seattle

6462 5951 5778 5375 5138 4970 4884 4874 4869 4701 4067

TeChnology and IndusTry
Residential scale solar electric power is generated by photovoltaic (PV) cells, commonly known as solar cells Solar cells are electronic devices that convert the sunlight into electricity The light particles from sun, called photons, move the electrons in the material The moving stream of electrons is what we call an electric current In short, a solar cell is a device that produces an electric current when light falls on it While solar cells have been around for over a 150 years the modern solar cell was developed at Bell Labs in 1954 By 1958, solar cells were being used to power satellites in space The most widely available solar cells are made from silicon semiconductor They are manufactured using the same basic semiconductor technology that is used in the manufacturing of electronics and computer chips Advances in the computer industry have also advanced the solar cell industry Silicon-based solar cells are commercially available for residential rooftop implementations and are the most common type However, there are several other types of solar cells with different materials that are also being introduced into the mass market. They often are called thin-film cells, but this is an umbrella term for many different materials. Thin film solar cells include amorphous silicon (a-Si), Cadmium Telluride (CdTe), and even a material called Copper Indium Gallium Selenide (CIGS) They are just starting to hit the mass market

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The other major innovation in the industry is called concentrators The idea behind concentrators is that since solar cells are expensive, it may be cheaper to concentrate the sunlight and use less of the expensive solar cell material For example, using a magnifying glass to concentrate the sunlight by 10 times requires one tenth the solar cell material Solar concentrators have proved to be problematic in the residential market The current solar concentrator technology is only good for utility sized arrays However, there are companies that are planning to bring it to the home market shortly From the customer perspective, there is only one property of solar cell that really matters—the price The electricity is the same from any type of solar cell and all types of solar power are inherently green. Therefore, all the different companies and competing technologies are all focusing on bringing the costs down The advantage of multiple solar cell technologies is that there is internal competition that will drive down cost to reach grid cost parity The energy industry has recognized the potential market for home-based solar power Manufacturers are making specialized solar cell panels that are designed for residential rooftops. These come with all the electrical paraphernalia that connect the system to the state’s power grid These grid-connected systems allow the homeowner to use whatever electricity they need, and the surplus is distributed into the electric grid system Residential systems are also sturdy enough to withstand high winds short of a tornado and up to one inch hail As the underlying technology costs come down, aesthetics and looks will become important Most home owners will pay a premium to have their homes look good Companies are already making solar cells that mimic roof tiles and blend into the roof. Other companies are incorporating thin film solar cells into windows. These will be very thin films that look like one-way films found on many automobile windows but generate electricity in addition to keeping the glare of the sun out Many companies all over the US and Minnesota provide turnkey services to install and setup a residential rooftop solar electric power system. In short, residential solar power is rapidly becoming mature technology that is backed by a full-service industry

fInanCIals and busIness Case
Residential electric power in Minnesota costs about 8 cents per kWh hour The national average is about 10 cents per kWh, with the highest being in Hawaii at 18 cents per kWh The cost of sunlight is free Inherently, it is the upfront cost of solar cells that makes solar electricity expensive For a well designed system, there are virtually no running costs Unfortunately, solar cells are very expensive, and solar energy has historically been one of the more expensive ways to generate electricity But the good news is that the costs have come down and are expected to continue going down The industry is just about to hit the tipping point

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Jump Starting Minnesota’s Green Economy

Like other renewable energy sources, there are rebates and credits available for solar rooftop systems The basic regulatory framework is already in place in Minnesota The State runs a rebate program for residential solar power Some of the utilities provide additional rebates There are also federal and state tax credits, reinforced by the Stimulus Package Another critical piece is the energy buy-back provision The State requires that all utilities operating in Minnesota must buy-back any surplus residential power at retail rates In practice, the electric meter runs backwards when the house is generating more power than it is consuming This means that all the power generated by the system counts toward the homeowner’s bottom line, not just the amount they use The final key piece of the financial component is the increase in the home’s value. An empirical study done in California in 2004 found that home values increase by 20 times the annual energy savings So for every $100 per annum reduction in electric bills, the home value will increase by $2000 A typical four-bedroom house would probably install a 4kW (4000 W) panel In Minnesota, a 4kW panel would produce about 5200 kWh of electricity At 8 cents per kWh, this would save the homeowner $416 annually or about 30 to 50 percent of their electricity bill There is virtually no running cost for the solar array The biggest expense of solar panels is the upfront cost This includes the solar panels and installation. Installation includes attaching the panels to the roof and connecting it to the household electric circuits and the grid In the later half of 2009, the price of installed residential solar panels was running at $8 per W While the base cost is very high, state and federal incentives make it financially viable.

Cost per W installed (2009) Array Size (W) Cost of Array MN Rebate ($2 per Watt) Fed Tax Credit (30%) Cost to homeowner

$8 4000 $32,000 ($8,000) ($7,200) $16,800

Less Home value Increase (est.) 20 times annual energy savings effective Price

($8,320) $8,480

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At today’s prices, installed solar panels will pay for them selves in about 40 years on a cash basis or in about 20 years if house appreciation is taken into account. While these financial benefits seem small, they are perfectly in line for early adopters of the green revolution For comparison, sales of hybrid cars have taken off despite there being no purely financial benefits or payback unless gas prices went over $6-$7 a gallon Over the next two to three years the financials are expected to continue to improve. Silicon Valley startups are now creating prototypes of solar cells with substantially lower costs An existing silicon shortage is also starting to ease up The market expects solar cell costs to go down by around 30 to 40 percent within three years If installed solar panel prices reach $6 per W and electricity prices reach US average of 10 cents per kWh, the payback period becomes only two years if house appreciation is taken into account. And when solar panels reach $4 per watt, with California like electric rates of 12 cents, the payback period becomes six years without any state of federal incentive Nevertheless, the high upfront cost of solar panels is sparking a new approach to financing the panels. There are companies in California and a startup in Minnesota that will install a rooftop solar panel and charge a fixed monthly lease amount for it. As these companies install more and more panels and the prices come down, they will be able to pass off the cost reduction to the early adopters This approach allows homeowners a hedge against the expected falling price of solar panels

benefITs
Widespread adoption of solar power will greatly benefit the people of Minnesota in achieving their targets for renewable electricity. If 25 percent of Minnesota’s single family houses get rooftop solar power, it would represent 10 percent of Minnesota’s installed electric power generation capacity In particular, this power will be available when people need it If 25 percent of Minnesota’s the most, running air conditioning during the day during single family houses get the summer There are other advantages of residential solar power as opposed to large centralized power stations Distributed power generated close to consumption saves transmission costs and reduces the load on the transmission infrastructure. The economic benefits are also distributed widely as contractors, small businesses and homeowners directly see the benefit of the economic activity. Twenty-five percent of Minnesota homes getting rooftop solar panes represents over $5 billion of economic activity. Finally, tapping the financial resources of individuals to deploy a new technology has many advantages. Individual early adopters will not to be as fiscally conservative as utility executives. Like all technology product purchasers, these early adopters help seed and refine the market. These retail-sized power stations also allow the market to grow organically rather than justifying the need for millions of dollars of investment at a time. The homeowner is also working off the retail electric price and not the wholesale price and will see value even with a higher cost structure

rooftop solar power, it would represent 10 percent of Minnesota’s installed electric power generation capacity.

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PolICy reCommendaTIons There are many people who place a very high value in going green The rising sales of hybrids are proof that people put a premium on going green State and local government should support this enormous reservoir of political will in the public for going green. Residential rooftop solar energy represents another way to channel this political will toward the greening of the economy Minnesota already has the basic regulatory framework and incentive packages in place As the solar energy industry grows, Minnesota has the potential to become a leader in rooftop solar power generation. The residential rooftop solar panel industry is a particularly good option since it is unlikely to need any incentives in a few years Financial Incentives: As the industry grows, the state needs to ensure that the current rebate program is capable of handling the growth while remaining fiscally responsible. The state also should ensure the rebate and tax credits are consistent throughout Minnesota and easily accessible to all One key point is to ensure that incentives remain in place if the homeowner chooses to use alternative financing or rental type agreements to pay for the systems. There are companies in California that provide co-ownership or rental arrangements to provide homeowners with solar panels without any up-front cash Regulatory Framework: Minnesota should be ready for newer solar cell technologies and different types of solar panels as they come into the market place The rebate structure and energy buy-back provisions need to be flexible and technology agnostic. The requisite monitoring of the system should be simplified and automated. Finally, state and local government should clarify the sun access rights in residential neighborhoods Once a $20,000 solar array is in place, a new tree by a neighbor can be much more than a nuisance Solar power has many advantages and it should be part of the repertoire that society uses to combat global warming Many states and local governments are taking the lead The Governor of California, Arnold Schwarzenegger, announced California’s Million Solar Roofs initiative in 2006 Recently, the City of San Francisco developed its own rebate program for rooftop solar panels. In its most recent budget, the State of Pennsylvania also introduced rebates for rooftop solar panels. The State of Minnesota should continue to be a leader as the rooftop solar revolution truly gets under way

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Improving the Grid, the New Network for Minnesota’s Green Economy
In 2000 and 2001, California suffered brownouts and blackouts. The wholesale electricity price fluctuated wildly, utilities went bankrupt, and businesses and residents were very angry with the state The spectacle of Silicon Valley, the global leader in technology, being beset by third-world-like rolling brownouts became a national embarrassment The electric crisis was probably the single most important issue that brought down California Governor Gray Davis who became the 2nd governor in the history of the US to be recalled by a public vote. After the debacle there was plenty of blame going around. Some blamed the deregulation effort, others blamed the regulators for botching the effort, and yet others pointed the fingers at the energy traders for manipulating the market. But everybody from Governor Gray Davis to President George Bush wanted California grid improved as a part of the fix-it effort. It should not be surprising that failing electric supply can bring down a governor The US economy went from a 20 percent reliance on electricity in the 1940s to 60 percent in the 1980s placing the electric grid at the center of economic activity But America’s electric grid has been falling behind the 21st century needs and is in no shape to support the new green economy The Obama Administration has been promoting a new Smart Grid. Our current grid, often called “the most complex machine in the world,” was developed over the past century without any coherent planning. It now stands fragmented with distributed ownership that often necessitates management by nonprofit intermediaries. Despite the problems, the grid runs 24/7 because it has to run 24/7. When it stops running, a huge number of people and businesses are affected. The grid was originally designed for simple load patterns with large power plants constructed close to cities The large coal, gas and nuclear power plants were a stable and predictable supply of power Large cities with businesses and homes with traditional appliances had a predictable demand for power However, today’s rapidly growing demand and the explosion of electronic gadgets creates new demands and stresses on the grid The new renewable sources of power, the wind and sun, are neither stable nor predicable and are usually far from major demand centers The creation of a ‘smarter’ grid means at least three things: 1) Manage the complex demand to control peak demand 2) Transmit large amounts of power over long distances efficiently. 3) Manage supply distributed and variable sources such as solar panels and wind turbines To become smart the grid will have to meet all these needs while remaining in balance 24/7 And the key to doing that is requiring that automation can deal with a lot of the issues That’s the term Smart Grid, i e a grid that will use modern electronics to balance complex supply and demand

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TeChnology and busIness
Today’s electric grid is powered by large centralized power plants, designed to maximize economies of scale. When electricity is transmitted over long distances, it needs to be transmitted at very high voltages, at hundreds of thousands of volts As the electricity gest closer to the customer, the grid branches out, and the voltage is reduced The change over happens at electric substations by devices called transformers. The electricity is shunted off to different secondary substations where transformers push it down to household voltages of 110V or maybe 220V The electric grid consists of the wires, poles, substations, transformers and shunts In essence, it is the network that moves electricity from the producers (power stations) to the consumers As such it is similar to a network of pipes that move water from reservoirs to your home or like the internet that moves information from servers to your computer However, in some ways the electric grid is more fragile than the other two In the water system a large supply of water is available ready for use, allowing operators to turn up supply when demand goes up On the internet, information only gets pulled from the server when the consumer needs it The water supply and the internet become unbalanced in very extreme circumstances The electric grid on the power must be consumed the moment it is produced Excess supply or excess demand can cause the grid to fail The need for instantaneous balance in the electric grid is the key to its fragility. It is truly remarkable that the US electric grid—run by many operators and managed by different state regulators—runs 24/7 virtually all the time. The grid is kept in balance by a process where all new power is allowed into the grid only after a careful engineering study In Minnesota, this process is controlled by an independent organization operated jointly by the power producers in the industry This organization, the Midwest ISO, carefully controls the influx of new power into the grid. It ensures that the new power or new consumption will not destabilize the grid Therefore, it sometimes takes up to six months for new wind power sources to be approved

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For most people the Smart Grid means demand management Instead of having to build new plants to manage the few days of peak demand in the summer, utilities can save money and pass the benefits on to the consumer for only a slight inconvenience . The idea is to spread the demand out so that peak power needs are controlled For example, instead of running your dryer during the day when demand and cost are highest, the system would encourage you to do your drying in the evening when demand is low, giving the consumer a price break Many utilities are already doing demand management to shut down air conditioners on peak demand days, which allows customers to get a break on their bills This is a very rudimentary piece of the smart grid The idea is to allow the utility to manage and monitor many electrical devices in the home to better control and predict demand Xcel Energy has a large scale Smart Grid pilot currently running in Boulder, Colorado The project went live in September 2009 and steadily incorporating more features such as adding smart meters and incorporating plug-in-hybrids into grid management The Obama Administration is also pushing another key piece of the new grid—long distance power transmission Utilities have to locate power production wherever the wind blows and the sun shines Wind power is available in the Midwest, especially the upper Midwest Solar power is primarily available in the southwest However most of the demand is on the coasts In other words, a large quantity of power will have to be transmitted over very long distances. This is something the grid was not designed to do The grid is more like a network of single lane highways with short and local multi-lane freeways What are needed are long distance multi-lane freeways A second component to the smart grid is a new type of electric transmission, called DC High Voltage transmission that can transmit power efficiently over very long distances. DC High Voltage has been around since the time of Edison, but in the last two decades, it has become technically feasible on a commercial scale

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The third challenge, and perhaps the most important piece of the Smart Grid, is managing green power. Wind and solar electricity place new demands on the grid because they are intermittent power sources Current green contributions to the grid are about 2 percent and do not have an impact, but if the 20 to 30 percent goals are reached, utility companies may have difficulty regulating power since the grid needs to be balanced all the time But perhaps the most exciting piece is energy storage If part of solar power could be stored during the day and released during the night, solar power becomes a stable base- load power like coal or nuclear The same argument is applicable for wind power. Utilities are starting to work on large batteries and other energy storage ideas In poor countries where electric supply is unreliable, most middle class households have some kind of UPS system for electricity storage They are not very expensive Local distributed storage can buffer demand or supply fluctuations. These three issues are tied to keeping the grid balanced all the current grid is the the time One of the most critical developments taking place industry’s key strategy is putting sophisticated automation at the various choke for cost effectively points of the grid The grid has the ability to shunt power modernizing the grid. from one section of the grid to others. But putting more automation in this process has the option of making existing infrastructure far more robust and flexible. Putting automation into the current grid is the industry’s key strategy for cost effectively modernizing the grid benefITs President Obama’s economic strategy is riding on a market wave that has already started; green business One of the key tenets of this administration’s strategy is to invest in alternative sources of energy and to upgrade the grid to a ‘smart’ status Even before the election of 2008, conservative oil businessman T Boone Pickens invested $5 billion in green technology last year He may not be an environmentalist, but there are sound economics behind greening the economy And one of the key talking points in both the McCain and Obama campaigns was about building a better grid. Upgrading the grid is central to all the renewable energy plans For example, Google recently chose to develop a large server farm in rural Washington State to be close to a hydroelectric plant and avoid reliance on the grid. Google is a world class company and is not satisfied by the current state of the electrical grid The US economy prides itself on its capacity for innovation, but it must have a progressive infrastructure upon which its businesses can innovate The funding and political momentum is there, and Minnesota needs to be at the forefront Minnesota growth opportunities lie in harnessing wind and solar power Both green electricity sources are distributed as intermittent. If Minnesota can improve the grid, the free market will find it much easier to develop wind and solar power, as it will provide access to the customer

Putting automation into

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WhaT Can mInnesoTa do?
There are ample opportunities for Minnesota to develop all three parts of the Smart Grid Western Minnesota is home to many wind farms The people in western Minnesota would be very interested in participating in programs that could grow the local economy Developing a safe load management component of the Smart Grid requires pilot programs that encompass entire communities Xcel Energy has a pilot program in Boulder, Colorado Western Minnesota is home to many small communities that could be used to develop a rural and multi-community pilot program for Xcel Minnesota is between the wind resource-rich Dakotas and the load centers of Chicago and the east coast Any transmission lines to utilize wind power from the upper Midwest will have to go through Minnesota There is also opportunity for greater utilization of Minnesota’s own wind resources if efficient and modern transmission lines are built. While this is in part a national issue, Minnesota is uniquely positioned to be a leading state for development and subsequent benefits. Finally, Minnesota should also lead in developing technology and techniques to manage production fluctuation. This piece probably has the best short-term opportunity for Minnesota. With great wind and roof top solar power potential, Minnesota stands to benefit greatly from energy storage solutions In the past Minnesota has led in renewable energy, from wind power to ethanol In the short run there are two key developments that can help Minnesota 1) Open Model of Grid: While MISO is doing an excellent job of managing the grid, it is sometimes difficult to identify opportunities for putting power into the grid. A study commissioned by the state, Minnesota Grid Study for CBED legislation, found some interesting opportunities If the grid is modeled in a computer system and is made widely available, entrepreneurs could explore and validate their new ideas easily 2) Distributed Power Storage: Large power storage systems are still being developed However, small scale energy storage systems are already available Deploying distributed storage close to consumption (i.e. close to homes) may be the most economical way to get intermittent power into the system

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Wind Power for Minnesota: Utilizing Stranded Wind
Wind power is a very old technology Mankind has been using windmills to pump water and mill grain for centuries In the 21st century, the windmill, now called a wind turbine, powers electric generators to make electricity for the grid Wind-based electricity is clean and green, but the supply is intermittent and is only available where the wind blows, not where the power is needed Wind-powered electricity is already an established industry worldwide, and Minnesota is one of the leaders in wind power Minnesota currently has about 1800 MW of installed wind power capacity The state has passed a law where by 2021 Minnesota utilities must generate between 20 and 25 percent of power using the wind But Minnesota’s wind potential is much more than that Estimates by the American Wind Power Association show that Minnesota has about 75,000 MW of potential wind power capacity That means that Minnesota is currently using only 2½ percent of its capacity Under the current mandates, even by 2021, Minnesota will be using at most 10 percent of its potential wind capacity Tapping into more of Minnesota’s wind power to generate more electricity runs into two problems • The grid cannot reach many sites where wind farms can be built New power lines need to be built to access the wind power • The grid will not be able to handle additional wind power due to its intermittent nature. Some type of energy storage technology or other means will have to be used to create controlled power output from wind-based generation Both these challenges are expected to be ultimately met, but will require millions and maybe billions of dollars of investment and perhaps a few decades of time In the meantime, the wind continues to blow The wind power industry has a term for it: stranded wind Approximately 90 percent of Minnesota’s wind resources are stranded wind, i e there are no plans to use it either because there are no grid connections or it is not possible to accept any more wind power into the grid While waiting for grid and energy storage to mature, perhaps it is time to go back to the roots of wind power and use it where it is generated

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loCalIzed use of WInd PoWer
The localized use of wind power is well suited for creating a product that meets three criteria: 1) Energy intensive process 2) Easily transported or locally available raw material 3) High value and easily transported final product. The approach is to mimic the windmill-based grain milling process where wind mills were located in the farmlands During historical times, grain milling was a relatively energy intensive process and used local raw material to produce flour. While flour manufacturing would not meet these criteria today, there are other products that do

WInd To ferTIlIzer
Commercial farm fertilizer is typically made from a gas called ammonia This is a very large and very energy intensive business By some estimates up to 1 percent of the worldwide energy consumption is used for manufacturing ammonia Most of the commercially used ammonia is manufactured from natural gas and thus releases CO2 emissions Using a green source of energy will cut the emissions from ammonia Minnesota uses about $300 manufacturing Minnesota uses about $300 million million worth of ammonia for worth of ammonia for farming each year The state farming each year. The state has more than enough wind resources to make all this has more than enough wind ammonia and then some Today most of the ammonia is made using natural ammonia and then some. gas Natural gas is heated with steam to produce hydrogen The hydrogen is then mixed with nitrogen from the air and using a century old technique called the Haber-Bosch process, ammonia is manufactured When German chemist Fritz Haber was developing the process, he used hydrogen that he made by splitting water molecules with electricity Later on when the process was industrialized, hydrogen from natural gas replaced hydrogen from water But now it is possible for industry to come back full circle by creating hydrogen from water using green electricity from the wind Since water and air are widely available, this process would essentially be converting wind to fertilizer The University of Minnesota’s West Central Research and Outreach center has already initiated a pilot project for wind to fertilizer. They have attached a small ammonia plant to a wind turbine and produced green ammonia Researchers at the U believe that a green fertilizer industry can easily use up to 2000 MW of wind No grid investment or energy storage technology is needed for this work Minnesota and other farm states already have infrastructure to manage ammonia distribution

resources to make all this

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WInd To green fuel
Minnesota has the unusual good fortune of having two green resources, wind and agricultural waste biomass, close by This provides an opportunity for simultaneous use of corn-based agricultural waste and wind power Any biomass can be converted to syngas, gas that is the basis for green fuels (See Syngas section) Converting biomass usually requires heat, typically done by burning some of the biomass or syngas But the best type of heating is by using electricity and using a process called electric plasma heating Plasma heating makes the biomass very hot, and this ensures a good quality of clean syngas Since plasma heating requires electricity, it can be expensive At this time plasma heating is currently only being used to incinerate household waste But a company in California is using plasma heating to convert biomass to jet fuel But if the same technology is used to create electricity from windmills and biomass from agricultural waste, the resulting fuel would be green and efficient.

PolICy reCommendaTIons
Minnesota has been focused on using wind to power our grid And it should continue to do that Using wind to power the general purpose grid is probably the best use of the grid However, Minnesota’s wind resources are much greater than can be absorbed into the grid in the foreseeable future Therefore policymakers should also look at other options There are probably many ideas for using stranded wind; only two were presented in this section The key policy objective of using stranded wind should be to create incentives that are functionally equivalent to those for existing wind to grid incentives Awareness that such incentives could materialize will spur entrepreneurs to bring their ideas to the table and encourage investment

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From Economical Plug-in Hybrids to an Electric Car Industry
Imagine a car, a silent smooth car, a powerful fast car and one that refuels right in your garage This is the promise of an electric car The quest for the electric car was originally driven by the need for zero emissions vehicles But electric cars also have another advantage that will endear them to American drivers; efficiency that does not come at the expense of engine power. It will be possible to get muscle cars, light trucks and mini vans that have Prius-like efficiency and whisper-quiet smoothness of a Roll Royce with no emissions However, all of this promise is being held back by the limitations of the current battery technology. Nevertheless, due to the tremendous advantages of electric cars, key players are jumping into the electric car race. There are many different approaches to developing the electric car industry. Launch with pure electric cars into niche markets, use plug-in hybrids as a stepping stone, or develop rapid recharging infrastructure everywhere When the California startup Tesla Motors announced its high performance all-electric sports car, GM followed suit with their mass market plug-in sedan the GM Volt. Yet another California startup Better Place is partnering with national governments and car companies to create a rapid recharging infrastructure The nascent electric car industry is focusing on upper end and niche markets Tesla spent hundreds of millions of dollars to produce $110,000 all-electric sports car GM is spending about a $1 billion to get a $40,000 plug-in hybrid compact sedan launched The average price for a new car in the US is $27,000 And building a new rapid recharging infrastructure will probably cost billions of dollars The traditional view is the electric car industry will have to spend billions of dollars and produce very expensive cars before they get to the mass market Both the Tesla Roadster and the Volt are excellent cars, but they are quite expensive for their class It will be a many years before either company produces a truly mass market car But it does not have to be that way That is the lesson from the curious tale of White Zombie, an all-electric street legal dragster In the early nineties, John Wayland of Oregon was tired of all the problems with imported oil and decided to go oil free He acquired a white 1972 Datsun 1200, gutted its innards and put in an all-electric drive-train. Thus was born the White Zombie. The car was created in his garage with a big helping of American ingenuity but without a multi-million dollar budget John Wayland liked speed so he built the White Zombie to go fast, very fast He started taking his car to the drag races and easily defeated cars like Corvettes, Masaratis and BMW sports cars. YouTube videos of an ancient white Datsun zooming past a shiny new Corvette are quite amusing

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Jump Starting Minnesota’s Green Economy

The White Zombie will not win against specially constructed and expensive professional drag racers But that’s actually its strength What John Wayland accomplished is the key to driving the electric car revolution, accomplishing good enough performance economically Clayton Christianson of Harvard Business School has studied business innovation and written a very influential book called the white zombie the “Innovators Dilemma ” He shows that disruptive innovation, the kind of innovation that overturns industries, usually comes with good enough products that are economical and start by taking over the low end of the market And the companies that generate the disruptive innovation are usually outsiders As the technology stands today, the high tech battery is the only bottleneck to an electric car industry. New battery technology is needed to give electric cars a long gasoline-free range, but it also makes the cars expensive. Using today’s battery technology will still give about five to 10 miles of battery range. A study by Carnegie Melon scientists has show that the most cost effective strategy is plug-in hybrids with a range of just seven miles A system with economical cars and a lightweight network of simple charging stations at workplaces can be built on today’s technology The simple network of recharging stations could be just outlets at commuter and company parking lots Such a network would not suffice high tech batteries but would double the gas free range for low tech battery cars up to 10 to 20 miles for daily commutes. This is the fastest way to get a large number of electric cars out in the market place From an environmental perspective, it is better to get a million cars that have 20 percent reduction in CO2 emission than to have 10,000 cars that are truly zero emission. And widespread economic benefits only come from mass market products From both economic and environmental perspectives, wide scale deployment of incrementally green cars would be much better than waiting for the best battery technology. But from a marketing perspective incremental improvements are difficult to sell. Both environmental and business interests tend toward wanting dramatic improvements in technology The paradox of commercializing an emerging technology is that getting to market fast is the critical factor in minimizing costs. A good enough product that gets to the market faster is better than getting a better product later. The key is identifying the minimum threshold that can get the product out into a mass market. Electric cars with simple battery technology are at that point. The key is to legitimize this approach

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ProduCT and TeChnology
Electric cars have been around for a long time Jay Leno’s garage full of antique cars includes a 100-year-old production electric car Electric cars lost out to gasoline cars very early on because of limited battery capacity Nevertheless, the electric motor is inherently superior to the gasoline engine for automobiles • Efficiency: The electric motor is very efficient and its efficiency does not depend on speed or motor size This means that the electric motor gets the same high efficiency at city driving and freeway driving, in large cars or small cars

100 year old electric car

• Power or Torque: The electric motor produces very high torque, and the torque is available at all speeds That means that the car can accelerate fast from a standing start and does not need to shift to higher gears. No transmission needed. • Zero emissions: The electric motor does not produce any pollution If the electricity is from renewable sources like wind, then the car is truly zero emissions to run The hybrid cars like the Prius are the first attempt to take advantage if the electric motors inherent superiority In today’s hybrids both the gasoline engine and electric motor can drive the cars The gasoline motor can also recharge the battery. Complex mechanics and software ensure that both are used to maximize efficiency. In the electric car an electric motor exclusively drives the car’s wheels, referred to as an all-electric drive train Electric cars come in two types: • Pure Electric: These cars only have an electric motor and battery. They need recharging stations and usually require several hours to recharge The only fast way to ‘refueling’ them would be a network of battery-swap stations. • Plug-in Hybrid: Also called series hybrid or extended range electric vehicle These cars have an on-board gasoline or diesel generator to recharge the battery when it runs out.

hybrid car drive train

electric car drive train

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The electric car is inherently simpler The electric motor has fewer parts, e g does not require oil changes and other maintenance Most electric cars will probably not need a transmission since there will be no need to shift gears. The White Zombie is such a direct drive, and it reverses by reversing the electric motor The overall simplicity will lead to lower manufacturing costs once the economies of scale start to apply The battery remains the Achilles heel for the electric car. Despite vast improvements in battery technology, there is still no available battery technology that can power a typical car for 300 miles and recharge in 10 minutes. And even if such a battery technology were available, recharging the cars would severely overstress the electric grid Companies are approaching the problem in three ways • Niche Market Cars: Tesla has opted to start with a high-cost battery-only car. Even though this is a battery only car, it is a niche market sports car and will not stress the grid too much. They are hoping that the utilities or the government will have improved the grid by the time they bring out mass market cars • Electric Cars and a Recharging Network: Nissan and Better Place are teaming up with Denmark and Israel to create a rapid recharging network for battery-only cars. Nissan sells cars, Better Place builds infrastructure with the help of national governments. • Plug-in Hybrids with Built in Gasoline Generator: GM is basing its Volt strategy on this approach The Volt can recharge on a garage overnight and go 40 miles without recharging Once the batteries deplete, the on-board generator recharges them. Many industry insiders think that plug-in hybrids are the safest choice since they won’t need any new infrastructure The car depends on the existing grid and existing gasoline supply chain Nevertheless, GM still managed to spend over a billion dollars and came out with a $40,000 car The reason for that is that GM went for longest possible electric-only range GM developed and commercialized bleeding edge battery technology and wrung out the most efficiency by designing a new chassis and body GM could have greatly reduced the cost by reducing electric-only range Researchers in Carnegie Melon found that plug-in hybrids are more efficient than plain hybrids. But trying to increase the battery-only range dramatically increases the price and weight of the car since the battery is both expensive and heavy. The economical sweet spot for battery-range in a plug-in hybrid is seven miles. The 40-mile range of the Volt is overkill. Low battery range cars could be built on existing chassis and bodies with economical battery packs. They could easily be charged at home. They could also be easily charged in garages and with simple network electrical outlets in parking lots, not unlike the engine block heater outlets found in Northern Minnesota No billion dollar development cost or billion dollar infrastructure upgrade needed

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busIness and fInanCIals
Market demand for cars is assured for the foreseeable future, but it is a saturated market with well-defined price points. Any new entrant will require competitive advantage and must fall within existing pricing structure Electric cars will start having one key advantage, more green than the primary competition The electric engine can also give cars a performance edge for a cost However, the flip of the argument is to provide good enough performance for lower cost. The average price of a new car in the US is $27,000 This price includes the upper end cars To be a truly disruptive technology for the mass market, the electric will have to penetrate the entry level market, e g a four door sedan/hatchback priced at $20,000, preferably $10,000 To keep the car economical, the business model needs to focus on cost as a key competitive advantage However, the automobile market is a mature market, and there is a certain threshold of performance and reliability that must be met. Otherwise, the economical electric car will suffer the fate of the Yugo, where poor reliability killed the brand completely Lowering costs should be achieved by minimizing development and launch costs and minimizing the bill of materials The experience of the White Zombie is that existing commercially available technology can go very far when it is stitched together intelligently Costs need to be controlled by keeping both development costs and the bill of materials costs low Development Costs: The cars should be built on existing platforms—body and chassis—as much as possible to minimize developmental costs Unit Costs: Key to limiting unit cost is minimizing battery costs and keeping performance to good enough for its class Like the computer industry, the supply chain for electric cars will have independent sectors, the battery and electric generator being separate. In the computer industry, separate hard disk, graphic cards sector’s internal competition drove the technology. Hard disks kept on getting better. Similarly, battery technology will improve, and the battery range will go up until finally, the gasoline generator will no longer be needed Already researchers in Stanford University have developed a material that can create long range batteries that also can recharge very fast. The electric car promises to be a major disruptive technology in the automobile business Finally, it should be noted that this type of hybrid design, where a gasoline generator is driving an electrical drive train is neither fundamentally new nor risky Most people don’t realize that ‘diesel’ locomotives are diesel powered electrics and have all-electric drive trains The diesel engine just runs the generator to make electricity and the electric motor drives the wheels The rail industry has been successfully running them for decades

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benefITs from The IndusTry
An electric car industry can be a source of global warming control and economic development at the same time The fastest way to get a large number of electric cars out in the market place is to target the mass market. From an environmental perspective, it is better to get a million cars that have 20 percent reduction in CO2 emission than have 10,000 cars that are truly zero emission And widespread economic benefits only come from mass market products. From both economic and environmental perspectives, wide scale deployment of incrementally green cars would be much better than using the best battery technology for expensive cars. Cars that have five to 10 mile of battery range can log 3000 to 5000 miles per year of electric-only travel That could save up to 120 to 200 gallons of gas per car And when these cars run out of battery range, they will have the fuel efficiency of a hybrid, e.g. 50 to 60 mpg for a small sedan. In short, these cars could reduce gas consumption by 60 to 70 percent as compared to a regular gasoline car The US car market is about 17 millions cars per annum Even a 1/10th of one percent is more than 10,000 cars Even the 10,000 cars seed market represents approximately $100 million of revenue The automobile market is so large that even a small piece is a huge incentive But real incentive is a real chance that Minnesota could become the center of excellence for new electric car industry These are times of turmoil, and older companies are contracting Minnesota has two key sets of skills that can be leveraged, a small nucleus of automobile industry experts from the Ford plant and an electrical engineering base from medical technologies and the sensors, automation and control industry Minnesotans have the skills needed to launch the electric car industry

PolICy reCommendaTIons
In 2008 Ford was persuaded to keep their light truck plant open in St Paul While it is very important to keep today’s automobile manufacturing in Minnesota, we should also be looking towards future Where will automobile manufacturing be in the next 10 years? Gov Schwarzenegger convinced Tesla to setup their new manufacturing plant in California instead of New Mexico What can Minnesota do to compete in the Great Electric Car race? The worsening economy is slowing down the nascent electric car industry Tesla has already announced a delay in starting their new factory Cash strapped GM may not be able to sell the Volts at as low a price as it wants In this climate, any state or region that can legitimize and facilitate a lower cost approach can attract the industry. Minnesota can take five concrete steps. 1) Legitimize the low tech battery approach. The state can use its bully pulpit and partner with advocacy groups to popularize this approach The very act of the state pushing the solution can create a seed market of early adopters

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2) Ensure that incentives are properly targeted The state should ensure that the incentives do not discriminate against electric cars with lower tech batteries. 3) Help with the regulatory framework The nascent electric car industry will need help dealing with state and federal regulations. Sometimes the regulations may need to be simplified. And sometimes the only requirement is help to navigate complex regulations 4) Develop a network of simple charging stations The simple charging stations will typically be standard outlet not unlike the engine block heater outlets common in northern Minnesota The state can partner with electric utilities and employers to create a network 5) Create a seed market by purchasing some electric cars for state projects and state fleets. Minnesota has all it needs for a disruptive electric car industry to form here—automotive experience and electrical engineering talent The Twin Cities Ford Motor plant that is slated for closure makes Ford Rangers The Ranger body style, a basic light truck, is an excellent candidate for electrification. Whether or not the plant has any value depends on what it will cost to reconfigure it? Nevertheless, a key resource is the skilled workers. Leveraging the skills of the workers—people who have years of experience in the business— is important. In 2009, Fisker Automotive, an electric car startup, acquired a GM manufacturing plant in Delaware Fisker is also planning to utilize the services of GM workers that were made redundant with plant closings And these are unionized workers. Fisker management understands that trained staff is central to the success of any company. Minnesota has a highly educated workforce and a state government with a history of supporting environmental businesses like wind power By providing the right incentives, we have a great chance of becoming an electric car industry cluster and a leader in the Great Electric Car Race

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Nuclear Power for Minnesota
A few years ago Dr Patrick Moore, a one-time founding member of Greenpeace, came out in favor of civilian nuclear power Since then it has become clear that due to global warming concerns, support for nuclear power does not follow the traditional left-right divide. There are many younger progressives who feel that nuclear energy should be part of the mix used combat global warming while keeping the electric supply secure At the same time, many people feel strongly that nuclear power too dangerous to be viable for large scale and long-term civilian use, especially when other alternatives are available Nuclear energy has come a long way from the very first reactor built underneath a basketball court at the University of Chicago during World War II Today no one would advocate building an experimental reactor in the middle of a large city But even during the 1950s there was widespread optimism that nuclear power would change the way society works The Chairman of the Atomic Energy Commission foresaw a time when electricity from nuclear power would be too cheap to meter But Hiroshima brought home the dangers of radioactivity and nuclear pollution Nuclear bomb testing and the close call at the Three Mile Island reactor turned public opinion away from nuclear power Only a handful of reactors came online in the US for almost 30 years However, the US is still the largest generator of nuclear-based electricity with 104 active reactor generators producing 101 GW of electricity We have almost twice the number of reactors as France, the next largest nuclear power producer With 20 percent of US and 25 percent of Minnesota’s electric power coming from nuclear plants, nuclear power is here to stay for the foreseeable future But should we increase the number of reactors? The difficulty with deciding on nuclear power is because when it is good, it is very very good and when it is bad, it is very very bad When a nuclear plant is working as designed, there is no pollution, no CO2 emissions, and the volume of waste is so small that decades worth of waste can be stored on-site. But when something goes wrong, it’s Chernobyl! Even a few pounds of misplaced nuclear waste can become a major national security concern

TeChnology
Splitting the atom, called atomic fission, creates lots of energy. One pound of uranium undergoing fission produces as much energy as burning 32 million pounds of coal. However, nuclear reactions are very choosy and only work with particular types of atoms. Atoms come in different types called isotopes. The re is only one naturally available material that can undergo fission, the isotope of Uranium called U-235 Natural uranium consists of very low concentrations of U-235, only 07% of that is mixed in with another isotope of uranium called U-238 For nuclear power the U-235 needs to be concentrated before it can be used and this process is called ‘Enrichment’

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All the civilian nuclear reactors in the US use enriched uranium as their fuel The uranium is fabricated into fuel rods The rods are then inserted into a nuclear reactor Inside there is material called moderator At its basics, the nuclear reactor is quite simple If enough fuel rods are put in close together, the nuclear reactions start naturally The moderator allows the operators to control the rate of the reaction As nuclear reaction proceeds, an enormous amount of heat is used to run a steam turbine that runs an electric generator A typical reactor provides 1 GW of electricity, dayin and day-out The waste from a nuclear reaction is highly radioactive material The amount is quite small, but the material is exceedingly dangerous Normally the waste would have lost most of its radioactivity in a few decades except for one curious twist of nature The enriched uranium still has U-238 By itself U-238 cannot undergo fission, i.e. not useful for nuclear power. But inside a reactor something strange happens to U-238, it becomes another element called Plutonium—in particular the isotope Pt-239. And Pt-239 is can undergo fission. In fact Pt-239 is the major component of nuclear bombs. While Pt-239 can be used in civilian reactors, due to nuclear weapons proliferation risk, the US decided that it will not be used on civilian reactors Pt-239 remains radioactive for thousands of year, is very dangerous, and is present in nuclear waste Separating Pt-239 from the spent fuel rods is called nuclear ‘reprocessing’ Reprocessing tends to quite expensive since it requires handling very dangerous materials. There are two benefits to reprocessing • Reprocessing simplifies the nuclear waste problem. The waste in the US contains Pt-239 increasing waste volumes and requiring safe storage for thousands of years • Reprocessing greatly increases the nuclear fuel supply The Pt-239 that was waste now becomes fuel The US civilian reactors do not reprocess the fuel French civilian reactors do At the current rate of use, the global supply of U-235 will last about 200 years If use of nuclear power expands without reprocessing, U-235 could easily run out in 50 to 70 years However the supply of U-238 is 150 times that of U-235. There is another material called Thorium that can be made fissile like U-238. Supply of Thorium is 600 times that of U-235 Therefore, it is unlikely that there will be a major global or US expansion of nuclear power without some kind of reprocessing

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But the need for reprocessing does not reduce its dangers With the current nuclear technology, reprocessing requires that the material be taken out of the reactor, transported to another site and reprocessed The fuel needs to then be fabricated and put back into the reactor All these steps involve risk There are experimental reactor designs that accomplish reprocessing within the reactor itself But these are still on the drawing board While in the long run, nuclear reactors designs will evolve and perhaps improve enough that critics will be satisfied. But R&D (research and development) and design certification cycles for nuclear power plants are decades long For the next 10 to 15 years, it is extremely unlikely that there will be any commercial reactor that is significantly different from the ones that are currently coming online. In the US these reactors do not reprocess and only use enriched uranium as fuel

advanTages vs. dIsadvanTages
The debate over civilian nuclear power for the next decade has to be focused on reactor designs that are already in the market place The Nuclear Regulatory Commission will not and should not approve new designs in a hurry The debate then comes down to the cost of adequate safety Nuclear reactors can work safely and fuel can be stored in casks for decades, if not longer And nuclear power does not produce global warming gases nor increase dependence on foreign oil But what are the risks and the true costs? Nuclear reactors need to be designed with very high safety margins since the risk tolerance for a nuclear accident is effectively zero. The cost of safety, from huge reactor containment vessels to redundant systems, drives the construction costs of reactors up to $5 to $6 billion And then there are other operating costs, waste disposal cost, insurance and decommissioning costs In the US, Japan and Western Europe, nuclear power plants have an adequate safety record There have been no serious accidents but there have been a couple of near misses. In the final analysis the question for nuclear power is simply, is it cost effective?

PolICy reCommendaTIons
In 2009 the Minnesota Legislature debated whether or not to remove the moratorium on new nuclear power plants. Ultimately, the debate over whether the moratorium gets lifted or not is a distraction What is important is that the legislature gets consistent cost numbers from the nuclear proponents A comprehensive MIT study from 2002 assumed that upfront costs for 1000 MW reactor would be about $2 billion But market price for 1000 MW reactors that includes construction and deployment is closer to $5 billion In addition to construction costs, there are other costs that also need to be accounted for

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Secondly, policy makers should determine if the money can be better spent elsewhere. Minnesota has a competitive advantage in wind and biomass. While intermittency of wind power is a problem, investing a few billion dollars in a smarter grid with better storage technology may produce much better economic benefits for Minnesota. Both wind turbine and energy storage technologies have much shorter R&D cycles Finally, nuclear plants are such big ticket items that it is better to spread the risk. For short term it may be better for large states like Illinois or California that have huge energy needs but limited renewable resources to try out the first few new reactors. In the longer term, the Federal Government and the National Labs need to get back into nuclear reactor research At this time, the only fundamentally revolutionary reactors that are being built are being built in China and India, albeit on an experimental scale Both these reactors are based on ideas developed in the US The US should not fall behind on nuclear power technology

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Conclusion: A Call to Action
The recommendations in this report are ready for implementation The time to act is now There is much work to be done in developing policy details for each of the technologies or industries There are also great opportunities to identify new technologies and businesses This report provides a roadmap for both, but success will depend on getting the details right. The details of any public policy initiatives have to be grounded in sound science and market realities Otherwise, policies with the best of intentions will fail as history has shown in the past California’s attempt to start an electric car industry is a cautionary tale of what happen when scientific and business principles are ignored. In early 1990, California’s Air Resources Board (ARB) passed mandates that required manufacturers to start producing zero emission vehicles (ZEV) The objective was to reduce the overall automobile emissions in California and develop a new industry, both very laudable goals GM took up the challenge and produced their first mass market electric car the EV1. The car was leased to selected customers from 1996 till 2003. The project was effectively a pilot program to field test production electric cars About 1,200 cars were built and were put into the hands of customers for their daily use But the program did not grow and was cancelled in 2003 The EV1 program is generally regarded as a failure GM spent one billion dollars on the project with very little to show for it. And California had to back down from its green mandates. The program’s termination generated strong feelings on all sides of the issue There were probably many reasons why the program failed But one of the reasons was a critical point of failure Given the state of battery technology at in the 1990s it was impossible to make a battery-only car for the US mass market. However, had the mandate been written differently, California could have gotten its reduced emissions and the US could have had a thriving electric car industry The EV1 program was a debacle that should not have been There are two concrete steps that Minnesota can take to catalyze the green technology economy and implement the recommendations of this report 1) Encourage good leadership 2) Develop widely available public domain information

The ImPorTanCe of leadershIP
The failure of the EV1 electric car initiative was clearly a failure of leadership The facts about the electric car were well known to many experts in the early 1990s But lack of leadership allowed the policy makers to flounder, and California ended up with a self-defeating policy framework. Strong leadership in the early 1990s could have gotten the US an electric car industry.

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Good leaders do not have all the answers but should be able to articulate a vision and get others to follow The good leader will get all the stakeholders together to develop a coherent and viable approach A good leader will bring the public and private sector together A good leader will ensure that competing interests all work towards a common goal In Minnesota, a good leader will ensure that DEED has the tools and resources necessary to provide support and assistance to organizations and individuals interested in pursuing green technology and businesses As this report has shown, Minnesota is ripe for the green economy, but entrepreneurs need a public entity to help them navigate the necessary state rules, regulations and programs along the way With the right resources and infrastructure, DEED can provide these tools and support

As this report has shown, Minnesota is ripe for the green economy, but entrepreneurs need a public entity to help them navigate the necessary state rules, regulations and programs along the way.

There is a tendency to ignore the importance of leadership in the public sector development The private sector has always understood importance of leadership in developing new businesses and new industries Successful senior managers in technology companies are expected to provide good leadership for all stakeholders. Minnesotans should expect no less from their elected officials. Minnesotans need to ensure that as we ramp up our green economy there is strong leadership in place to deliver success

hoW PublIC domaIn InformaTIon Can helP
During the development of EV1, many experts had the knowledge that could have prevented failure of the project Nevertheless, the decision makers both in the public and business sector failed to understand the implications The paradox was that information was available, but it was not in a form that was useful for political leaders or the business community The underlying information was spread between different experts, and it was not organized around a product or market. In a normal product development cycle, key decision makers are working off existing product design and market place information This existing body of work greatly reduces the risk in new product development When technology companies produce entirely new products, the risk of failure is very high For every new innovative winner, there are hundreds of losers But innovation does not have to be so risky The software industry has evolved an approach to reducing risk in innovation. It is known as Open Source Software. The term refers to public domain software products, technology and information. Many companies use open source software in their products and services. Using open source software reduces the product development costs, time and risk. Even technology giants, such as IBM, Apple and Google either have open-source software in their products or use it to provide service. Open-source software has clearly benefitted development of the software industry.

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Jump Starting Minnesota’s Green Economy

A program of open source green technology products and services can similarly benefit green economy development. Setting up such a program and effectively disseminating the information could catalyze a green technology industrial cluster in Minnesota. This report represents a first step in creating a pool of public domain information on green technologies

Call To aCTIon
Minnesota is well positioned to take advantage of all the technologies and industries described in this report Minnesota has a highly educated workforce, a history of high technology clusters, and political leadership with a long-term view

Minnesota has a highly educated workforce, a history of high technology clusters, and political leadership with a long-term view.

This report provides a framework to identify the right approach Strong leadership can get both the public and private sector moving toward the future And a green technology open-source initiative can catalyze the movement Let’s get moving Minnesota Our state has a history of innovation, and the green economy provides new opportunities to jump start our state’s economy

The author would like to thank the following people for their assistance: Dr. Doug Cameron of Piper Jaffrey Emmett Costel, student at Macalester College, Minnestota 2020 Undergraduate Research Fellow

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Selected Sources for the Green Economy Report 
 
The markets sizing calculations were done by the author. The opinions represented in the report are based on the author’s  judgment. A selection of the key sources is listed below.     Exec Summary, Dev of Green Econ and Selection Criteria  Vinod Khosla is a green VC.    http://www.khoslaventures.com/about.html    Garbage problems in poor countries: Authors personal observation.     California electricity deregulation  Book: Power to the People. Vijay V. Vaitheeswaran    Syngas   Biomass Resource Sizing Basics  MNCEE Report: http://www.mncee.org/public_policy/renewable_energy/biomass/index.php  EIA Report: http://www.eia.doe.gov/oiaf/analysispaper/biomass/  Availability of Corn Stover: http://www.agmrc.org/media/cms/29691_FF4DDBE878D2B.pdf    Ethanol Production Est. http://www.neo.ne.gov/statshtml/121.htm    Efficiency Issues: http://www.oilcrisis.com/netEnergy/WoodFischerTropsch.pdf    Heat Pumps  Heat Pump Company: http://www.econar.com/ in Minnesota    Heating and cooling calculator from Center for the Energy and Environment  http://www.mncee.org/siteapps/hvaccalc/index.php    Heat Pump pricing from the authors based on bids for the authors house from two contractors.    http://www.sbgeothermal.com/   www.architectmechanical.com  Suburb to Suburb Bus Transport  Idea based on the Google Bus: http://www.nytimes.com/2007/03/10/technology/10google.html    Driving Solo: http://www.csmonitor.com/2007/0625/p02s01‐ussc.html    Bus Pricing Information from   http://www.apta.com/  Payscale pricing info  http://www.payscale.com/research/US/Job=Bus_Driver,_School/Hourly_Rate    Home Solar  Solar energy potential calculator from NREL 

http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/    Array pricing estimated using info from http://www.ips‐solar.com/ a local solar power company    Minnesota Electricity   http://web.mit.edu/mit_energy/resources/factsheets/MnElectricityFactSheet.pdf    Info about Minnesota’s solar program   http://www.state.mn.us/mn/externalDocs/Commerce/Minnesota_Solar_Primer_092104053212_Solar%20Primer.pdf    Ammonia from Wind  Information about wind to Ammonia  http://renewables.morris.umn.edu/wind/ammonia/  http://windnh3.blogspot.com/2009/08/ammonia‐from‐wind‐likely‐to‐happen‐in.html    Electric Cars  General information about Chevy Volt  www.gm‐volt.com    White Zombie information  http://www.plasmaboyracing.com/    100 year old electric car  http://www.popularmechanics.com/cars/jay‐leno/vintage/4215940    Carnegie Mellon study for optimal battery capacity  http://www.cmu.edu/me/ddl/publications/2009‐EP‐Shiau‐Samaras‐Hauffe‐Michalek‐PHEV‐Weight‐Charging.pdf    Nuclear Power  Costs of Nuclear Power  Market costs of Nuclear Power as reported in the Media  http://www.tampabay.com/news/business/energy/article997461.ece  http://www.newsobserver.com/business/story/993686.html  http://www.cleanairalliance.org/node/686    MIT Nuclear Power Report   http://web.mit.edu/nuclearpower/ 

   

Minnesota 2020 is a progressive, non-partisan think tank, focused on what really matters.

2324 University Avenue West, Suite 204, Saint Paul, MN 55114 www mn2020 org

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