Entrepreneurship and The Clean Energy Economy

I was interviewed by Robert Linton on the Green Numbers Radio Show. Here are some excerpts and links to the interview.

Radio interview, Part 2

Robert Linton –There’s a worldwide water crisis right now. Tony, could you tell us the real relationship between solar and water?

Tony Seba – Sure. Water, as you may know, is very tightly linked to energy. You need energy to produce, transport, and clean water and you need water to produce energy. For instance, in California 19% of our electricity is used to transport water from one place to another.

Desalination, meaning production of clean water from seawater, has gone up 10,000 percent over the last forty years. In part, this is because there’s been growth in areas which already have a water crisis. Desalinating, cleaning water, is very energy intensive.

Saudia Arabia and other Gulf countries, for instance, burn about 1.5 million barrels of oil per day to desalinate water. This is about $120 million dollars per day to desalinate water.

Clearly, burning fossil fuels to power these desalination plants is not financially or environmentally viable. And so solar desalination is the only way to desalinate and clean water for the future.

RL: Wow, that’s amazing. You’ve spoken about the clean energy economy and it will transform other industries. Specifically, say, for example a data center, with their service, and trying to keep them cool, or maybe with a company with a sun chip as a food manufacturer. How can clean energy help transform those industries?

Tony Seba: One of the interesting opportunities that I explored and I found was that of solar air conditioning, solar chilling, which, when you think about it, people do a double take…“What do you mean solar, which is heat and chilling which is cold?” But in fact, to run a chiller, you need hot water, not just electricity but also hot water, and most of the energy that’s used in data centers… two thirds of it… two thirds of a data center’s budget goes into air conditioning, into chilling. So if you put these two things together, you use solar energy to heat the water, and then you use a chiller with that solar hot water to chill data centers. And that is one way in which solar energy will transform not just electricity generation but also will transform data centers and so on.

You mentioned food production. Frito Lay has a plant right here in California that produces SunChips and SunChips used to be made with gas and of course saying “Gas Chips” would not sell a lot of chips, but now they’re being heated with solar power. There’s this technology called parabolic troughs which concentrates the sunshine and it generates steam, which heats the oil, which fries the chips, and that technology is in use today.

RL: You know with solar energy, I know there’s going to be a huge impact as far as how it will affect life in the developing world. Say for example in the Marshall Islands in July of 2008, they had a blackout. How would solar help prevent that from happening in the future, could you talk about this incident?

Tony Seba: Yes, one of the big opportunities that I found, I call “island-scale solar” and the example of the Marshall Islands is one of them. The Marshall Islands went bankrupt in July of 2007 because the whole island is powered by diesel fuel which comes from oil. And in July 2008, oil hit a peak of $147 per gallon. These islands could not afford to buy the oil, so they went dark. And that’s not the saddest thing. The saddest thing is that these are sunny, perfectly sunny islands in the South Pacific and they were paying for diesel power two to three times what they could be paying for solar energy. And there are thousands of islands around the world that are in the same predicament… sunny islands that are paying two to three times for dirty power, what they could be paying for solar power.

And not only that, I can tell you there are millions of villages around the world that are pretty much like islands in the sense that they’re not grid-connected. Just to talk about India, there’s half a billion people who live in half a million villages that are not grid connected. And this is a problem, but solar power does not need a grid, so you can power all these half a million villages in India for less than what they are paying today for diesel or kerosene.

RL: You know, Tony, a lot of my listeners are investors… could you tell us about the one or the two trillion dollar opportunities that our listeners may not have heard of, or maybe some market opportunity that you see that really scaled to market?

Tony Seba: Absolutely. The book has many, but let me give you two, and we started the conversation about two multi-trillion dollar opportunities. One of them is solar air conditioning. The peak rates that we pay for electricity in the United States are when the sun is heating the most. So we’re paying for air conditioning, for instance, 40 cents, 50 cents, and the new rate in California is $1 per kilowatt hour, when you could perfectly have a solar air conditioner which is basically solar receivers on top of your house with a chiller that can generate pretty much electricity for free. And this is a multitrillion dollar opportunity. You can use solar chillers, like I said, for data centers, for houses, for buildings, for warehouses… There’s going to be a massive transformation that’s going to generate solar chilling.

Another one is what I mentioned, village-scale solar which involves villages around the world that are not grid-connected which can generate their own power with solar. Just to give you an example, just to tell you how exciting this is for me, I taught this course, the “Clean energy Market and Investment opportunities” course last Fall at Stanford and at least (to my knowledge) half a dozen folks who took that course went on, basically left their jobs, to start solar-related clean-energy companies, and one at least, has got offers from investors to invest in them. This is only after a few months. It’s so exciting that it’s already happening so quickly.

RL.: How do you compare this emergence with Silicon Valley in the past, and also, Tony, is America leading the way for the clean energy revolution?

Tony Seba: That is a good question. We are building great technologies, we in Silicon valley we are used to building technologies and putting them in the market, in companies and so on. In the past, we really did not need anyone else to do this, so we built Cisco, Apple and Intel, Google and so on. But clean energy, energy itself, is very different, because in energy, the biggest driver, the main driver, is government policy. Energy companies have been subsidized and are being subsidized by one account, 200 billion dollars go into subsidies for fossil fuel energy, coal, oil, and nukes every single year…

RL: It doesn’t make sense anymore.

Tony Seba: It doesn’t. But not only that, the laws and the rules, the land use regulation are stacked in favor of incumbents of fossil fuel energies. So we need the right policies from Washington, from Sacramento, from the government, to make clean energy happen. And I’m not talking about subsidies to solar, I’m talking about the need to stop subsidizing the fossil fuel industry, which, by the way, is the largest industry and the most profitable industry in the world. In that sense, Silicon Valley is not really leading the clean energy economy. Countries like Germany that have had the right policies over the last 10 to 15 years have created a couple hundred thousand clean energy jobs, and they lead, for instance, in solar photovoltaics.

RL: Tony, I’d like to thank you for coming on my show today. I would like to welcome you back when you come back, I know you have a trip overseas to look at some prospects for investments. When you get back I’d like to have you come back on the air. I really appreciate you coming on today, and all my listeners, definitely pick up his book, Solar trillions, you can go to tonyseba.com to look at his website. Tony, thank you very much.

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