Natural Gas Supply Crisis

This article from Chris Nelder actually shocked me. Mostly because I have been active in the industry in some form or the other for years, I bring a whole range of expectations to the table. I am not involved in shale gas production so had no particular need to ever review the economic models associated with it.

US Gas production has shifted from a developed long baseline supply model to an easily developable short baseline supply model. It has been fueled by the sheer initial profitability that kept the drills turning. The stunning result is that we drilled 33,000 wells per year just to stand still on the production side and half of our production is coming from recent wells that are short lived.

I can not imagine a better scenario for whip sawing prices.

Obviously this cannot go on forever. The present question is only now long?

Natural gas has been an incredibly convenient fuel. It will need to be imported by ship in liquid form increasingly.

In the meantime our gas fueled power plants need to be shuttered ASAP and the build out of the power grid to access geothermal, wind and solar needs to go red hot. What this has done is throw a decline accelerator into the domestic energy equation that I certainly did not appreciate and I am sure few others do. The economy is about to kick back to life and here we have a real treat to overcome.

I want to believe that we can transition to a completely new energy system, without massive disruption. Last September was massive disruption brought on by a real credit bubble but popped by the spike in oil prices. That type of collapse will not happen again. However cash flow attacks from the gas sector is very likely as we all scramble to readjust to a too volatile gas market.

I suspect that a lot of industrial users will be discovering the phrase ‘Force Majure’ in their long term supply contracts.

Step on the Gas

By Chris Nelder Friday, July 24th, 2009

http://www.energyandcapital.com/articles/natural-gas-price-forecast/916

The market rarely provides buying opportunities where the risk to value proposition is extremely disconnected, but the natural gas market is having one of those moments now.

The news could hardly be more bearish for prices.

The nation's limited gas storage capacity, estimated at roughly 4 trillion cubic feet, is approaching the full line. Consumption has crashed 36% from 2.7 trillion cubic feet in January, to 2.1 trillion in March, to 1.7 trillion cubic feet in April. Stockpiles remain 18% over the five-year average.

Summer temperatures have been remarkably moderate, making for a lower-than-usual demand on gas-fired power plants for air conditioning. Weather forecasts expect temperatures to remain below seasonal levels.

With little other news to drive the trade, everyone is focused on inventories. The Energy Department's weekly inventory report showed that stockpiles had grown by 66 billion cubic feet to 2.95 trillion cubic feet, and that was enough to drive natural gas prices down 6.4% to $3.55 per million Btu on Thursday, giving the popular United States Natural Gas Fund (NYSE: UNG) a 6.7% loss on the day.

Meanwhile, supply continues to grow. An exciting new field called the Granite Wash play in the Texas panhandle and western Oklahoma is showing prolific production rates. Newfield Exploration (NYSE: NFX) claimed average initial production rates of 22 million cubic feet per day from its seven horizontal wells this week, giving its stock a nice 11% bump on Thursday. Forest Oil Corporation (NYSE: FST), another driller in the Granite Wash and the Haynesville Shale, saw its stock rise 14% the same day.

Another growing horizontal shale play is the Eagle Ford field in south Texas, where St. Mary Land & Exploration Co. (NYSE: SM) has claimed a 5.6 million cubic feet per day flow rate of oil and gas equivalent from one of its wells.

Horizontal shale gas plays are nothing new to readers of this column, of course. Producers of the Marcellus Shale and Haynesville formations are still drilling profitably, even while producers of the Barnett and Fayetteville formations have been forced to scale back drilling due to their higher production costs. Barnett producers claim they need gas back in the $6-8 range before they'll resume drilling.

To the north, the latest and greatest gas shale story is the Horn River Basin, in northern British Columbia. Exxon Mobil (NYSE: XOM) believes its first four wells will produce between 16 to 18 million cubic feet of gas per day—about five times the flow rate of a typical Barnett shale well. The basin's potential is unknown, but some speculate that recoverable reserves in the basin may run from 10 to 60 trillion cubic feet.

Such a supply glut and anemic demand certainly seems to portend low gas prices for the foreseeable future. Bearish analysts eager to make the early call are even suggesting $2 gas by the end of the year.
I don't believe it for a minute.

Was the 2001 North American "Peak" Wrong?

The explosion of North American shale gas and tight sands gas plays has made a bit of a stir in peak oil circles. These unconventional gas sources pushed the continent's production in 2007 over the 2001 peak of 33.8 trillion cubic feet (EIA data), seemingly putting an end to the notion that North American gas had peaked and gone into terminal decline.

Complete official 2008 data is not yet available for all of North America, but I estimate that its gas production for the year came in at around 35.2 trillion cubic feet, roughly 4.3% gain over the previous 2001 peak. Graphically, it looks like this:

http://images.angelpub.com/2009/30/2612/7-24-09-nedler-eac-chart-1.jpg


North American Natural Gas Production. Chart by Chris Nelder using EIA data for 1995-2007. 2008 data from EIA for the U.S., and estimated for Canada and Mexico.

Now, that may be a picture that gets some people excited, but not me. I know that unconventional shale gas wells deplete very rapidly, paying out 60 to 90% of their production in the first year. It takes a great deal of drilling to maintain overall production rates, and in a low-price environment like today's, the prospects for additional drilling are dubious.

For the straight dope on the North American peak question, I turned to David Hughes, the now-retired Canadian geologist who is a bona-fide expert on North American gas.

He pointed out that it has taken 33,000 successful gas wells per year to exceed the 2001 peak, and noted that rig counts are still well down from last year. (According to Baker Hughes, gas rigs operating in the U.S. are now down to 665, the lowest number since May 2002, and off 59% from September of last year.) It's hard to imagine how this will not result in diminishing supply, and Hughes expects we'll feel the effects some time in the next six to nine months.

Canadian gas production fell 11% year over year in April, he said, so these new unconventional plays will have to compensate for a rapid decline. He believes "the jury is still out" on the Haynesville Shale and other shale gas plays outside of the Barnett, as we still lack a detailed understanding of the formations, which ultimately determines the flow rates. The "core" Barnett is twice as productive or more than the non-core, so until we have more detailed information about the newer shale plays, we should take their cost and productivity projections with a large grain of salt.

When considering the North American gas peak, we must also bear in mind that over 50% of natural gas consumed in the U.S. today comes from wells drilled in the last three years, and 25-30% of the gas produced today comes from wells drilled last year, according to data from the IHS Energy Group
This is why Hughes has called unconventional gas a treadmill: because you have to keep drilling like crazy just to stay in one place.

So while we have indeed exceeded the 2001 North American peak, I think it's premature to expect production to keep rising from current levels when gas has spent most of this year at about half the price it needs to be for the lesser plays to be profitable.

There is no doubt that the domestic gas resource is large. According to a new study under the direction of the Colorado School of Mines, the U.S. has about 2,000 trillion cubic feet of natural gas reserves—enough supply to last for decades, even with increased demand.

But as my readers well know (all together now): It's not the size of the tank which matters, but the size of the tap.

Should drilling over the next three years fail to keep pace with the rapid underlying decline rates, that new 2008 peak will fade into just another bump on the long plateau of North American gas production. We should not be too quick to turn our backs on the supply issue.

Is Demand Really Dead?

Many investing analysts have focused on high inventory numbers and the mild weather as key forces pushing down gas prices. This has contributed to the gas market disconnect, since these are actually fairly marginal drivers.

The lack of demand is the most important factor weighing on prices, with U.S. demand for all uses down 36% from January to April this year.

However, most of the loss in gas demand owes to the industrial sector. As I explained in my April natural gas analysis ("Natural Gas Under $4 Is a Steal"), gas consumption in the US is split roughly in thirds between commercial and residential demand (which is fairly constant), electricity demand (which grows at about 5% each year) and industrial demand. Vehicular demand, while up 6.2% over last year, is still a miniscule component.

http://images.angelpub.com/2009/30/2613/7-24-09-nelder-eac-chart-2.jpg


Natural Gas Consumption by End Use. Chart by Chris Nelder using EIA data.

Demand outside the industrial sector is actually quite resilient. Gas consumption is off only slightly year-over-year as of April, with residential demand gaining 0.7%, commercial losing 4.1%, and electric power losing 1.8%. (April is a good month to consider for our purposes here, because the mild weather of the equinox months make them the low points of the seasonal demand cycles.)

Industrial sector demand, by contrast, is down a whopping 11.5%. Cutbacks in the production of petrochemicals, plastics, wood products, metals, motor vehicles and fertilizers, as well as lower gas demand for industrial boilers, are primarily responsible for the decline.

In short, we may expect demand to creep up again in concert with an overall recovery in the economy, particularly the manufacturing sector. Depending on whose estimates you believe, that recovery may be less than a year off.

Gas prices could easily double from today's levels when that happens, whereas it's hard to imagine much more downside risk with an unrelentingly bullish overall market sentiment in place since March.

More Bullish Factors

Climate change concerns will lend further support to gas demand. As carbon emissions start coming with a price attached, cleaner-burning gas will be increasingly favored over coal for fueling power plants. Many newer plants use dual-fuel designs, enabling them to switch readily to whichever fuel is cheapest. As the hidden subsidy of externalized emissions costs is taken away from coal, gas will be cheaper, and it will stay cheaper.

The vehicle angle is another hugely bullish factor for gas, but so far the markets don't seem to have discounted it at all.

As I have often suggested, the combined virtues of lower emissions, an inexpensive and large domestic supply, and its suitability as a bridge fuel to wean us away from oil will prove irresistible to policymakers, particularly as we begin to feel the effects of peak oil. Accordingly, a raft of new gas legislation is now working its way through Congress.

A huge win for the Pickens Plan and other natural gas vehicle boosters came early this week when the House overwhelmingly approved H.R. 1835, its portion of the so-called NAT GAS Act. The bill would authorize $30 million a year for the next five years for research and development, increase and extend tax credits for buying natural gas vehicles, and offer a suite of tax credits and other incentives to expand natural gas refueling capacity and push government vehicle fleets toward alternatives.

Assuming the new incentives become law, which seems a safe assumption, a significant chunk of new gas demand for vehicles could materialize right around the same time as the economy begins to recover. It wouldn't take much increased demand to blow right through the perceived gas "glut" we have today, and cause prices to spike. But it will take many months for drillers to catch up with rising prices.

The longer prices remain too low to sustain increased drilling, the more tension there will be in the price slingshot.

A year from now, I think we'll be looking back on those analysts who predicted $2 natural gas by the end of this year with the same sad regard that we now have for the ones who saw oil trading in the $40s in December and thought it was going to $25.

You may recall that's when I got bullish—because I knew that the price of oil was wrong. I feel exactly the same way about gas now.

Another reason to start getting bullish is the extremely bearish gas sentiment itself. We haven't seen gas prices stay this low in years, and gas continues to trade at an historically low price relative to oil on an energy basis. As Warren Buffett likes to say, "Be fearful when others are greedy, and be greedy when others are fearful."

Natural gas under $4 was a steal in April, and it's even more of a steal now. Ignore the nattering nabobs of natty who worry on about inventory numbers; that's all noise. Lift your eyes from your shoes to the horizon, and you'll see that there's only one direction that gas prices can go over the coming year, and that's up.

Until next time,

Chris

Wind Power Integration Easy

This research has tossed up a surprising result. Wind power can be easily integrated into a power grid by a combination of more finely managed power plant operations on a timely basis (remember just in time?) and building more flexibility into the power plants that also are on the grid. On top of that, if this is done, there is no need for any storage.

That last was a totally unexpected result. In practice, storage will still be welcome as will the integration of a power plant into municipal heat production.

We are describing a far more seamless operation than any imagined with the perceived problems that wind power presents.

Electricity Systems Can Cope With Large-Scale Wind Power

http://www.energy-daily.com/reports/Electricity_Systems_Can_Cope_With_Large_Scale_Wind_Power_999.html


by Staff Writers
Delft, Netherlands (SPX) Feb 25, 2009
Research by TU Delft proves that Dutch power stations are able to cope at any time in the future with variations in demand for electricity and supply of wind power, as long as use is made of up-to-date wind forecasts.
PhD candidate Bart Ummels also demonstrates that there is no need for energy storage facilities. Ummels will receive his PhD on this topic on Thursday 26 February.
Wind is variable and can only partially be predicted. The large-scale use of wind power in the electricity system is therefore tricky. PhD candidate Bart Ummels MSc. investigated the consequences of using a substantial amount of wind power within the Dutch electricity system.
He used simulation models, such as those developed by Dutch transmission system operator TenneT, to pinpoint potential problems (and solutions).
His results indicate that wind power requires greater flexibility from existing power stations. Sometimes larger reserves are needed, but more frequently power stations will have to decrease production in order to make room for wind-generated power.
It is therefore essential to continually recalculate the commitment of power stations using the latest wind forecasts. This reduces potential forecast errors and enables wind power to be integrated more efficiently.
Ummels looked at wind power up to 12 GW, 8 GW of which at sea, which is enough to meet about one third of the Netherlands' demand for electricity. Dutch power stations are able to cope at any time in the future with variations in demand for electricity and supply of wind power, as long as use is made of up-to-date, improved wind forecasts.
It is TenneT's task to integrate large-scale wind power into the electricity grid. Lex Hartman, TenneT's Director of Corporate Development: "in a joint effort, TU Delft and TenneT further developed the simulation model that can be used to study the integration of large-scale wind power. The results show that in the Netherlands we can integrate between 4 GW and 10 GW into the grid without needing any additional measures.
Surpluses
Ummels: 'Instead of the common question 'What do we do when the wind isn't blowing?', the more relevant question is 'Where do we put all the electricity if it is very windy at night?'. This is because, for instance, a coal-fired power station cannot simply be turned off. One solution is provided by the international trade in electricity, because other countries often can use the surplus.
Moreover, a broadening of the 'opening hours' of the international electricity market benefits wind power. At the moment, utilities determine one day ahead how much electricity they intend to purchase or sell abroad. Wind power can be better used if the time difference between the trade and the wind forecast is smaller.'
No energy storage
Ummels' research also demonstrates that energy storage is not required. The results indicate that the international electricity market is a promising and cheaper solution for the use of wind power.
Making power stations more flexible is also better than storage. The use of heating boilers, for instance, means that combined heat and power plants operate more flexibly, which can consequently free up capacity for wind power at night.
The use of wind power in the Dutch electricity system could lead to a reduction in production costs of EUR1.5 billion annually and a reduction in CO2 emissions of 19 million tons a year.

Wind Power Bull

In a way this is important. Putting up a wind turbine has become as common place as buying a car and the permitting process has also become noncontroversial. It helps to recall that this has taken twenty years of build out around the world after twenty years of perfecting the technology.

Rather importantly, these wind turbines are obviously working financially for their owners and for the power companies also. That means in a world with a paucity of safe investments, these investments are gold.

We can expect the build out of these turbines to continue booming until the installed base is maximized at an order of magnitude higher. I cannot think of a better industrial stimulus program to replace the failed housing stimulus plan that foundered in the morass of sub prime lending.

Other technologies are rising but are still in the maturation stage. This is important to understand. We cannot buy time to make a technology bullet proof. Wind technology is presently bullet proof and it has cost forty years to achieve this.

It therefore make great sense to load our grid with as much wind power as can be properly handled, say 20% to 30% of grid load. It has certainly succeeded in Europe and is obviously working everywhere else.

It is not the final answer, but it is a great stimulating solution for the next five years while we get over the subprime hangover.

What is wonderful, is that individual investors can easily participate in this build out, by simply identifying location and working through the permitting and acquisition process.


US Officially Leads World in Wind

http://www.ecogeek.org/content/view/2543/86/

Written by Jack Moins

Friday, 06 February 2009

The Global Wind Energy Council (GWEC), a consortium of wind power supporters, based out of Brussels has announced some news that will have a lot of us pretty geeked. Last year, they revealed, showed tremendous gains in the wind market, growing 28.8 percent, to reach 120 GW of installed capacity.
Steve Sawyer, Secretary General of GWEC adds, "The 120 GW of global wind capacity in place at the end of 2008 will produce 260 TWh and save 158 million tons of CO2 every year."
In the race fight climate change, and move away from geopolitically volatile, deletable fossil fuels, wind offers the promise of oodles of largely untapped power. As Bob Dylan would say, "The answer my friends, is blowing in the wind."
Last year the U.S. started to exploit this resource in earnest, with 50 percent growth, to reach 25 GW of capacity. The big news is that for the first time the U.S. seized the world lead in wind power production, wresting it from former champion Germany.
This year, Germany came in a close second at 24 MW, while alternative-energy-friendly-Spain filled in at third. China, though, perhaps earns the biggest pat on the back for taking fourth place after managing to double its growth for the fourth year in a row. If it continues on this pace, it may soon seize the wind power lead, and help get the coal power monkey off its back.

Cost wise, wind is relatively affordable, almost as cheap as coal and nuclear, and significantly cheaper than solar. However, the unprecedented wind power growth also brings challenges. The young industry has yet to figure out a good scheme to store power to offset its variable nature, much like solar. However, with money and projects flowing in like, well... the wind, the industry seems ready to tackle such a challenge.

Superflare Superthreat

The only good thing about a super flare is that it is brief. This article is a reminder that they really exist. And it will still take a lot of time to recover services, particularly if all the transformers are fried.

Which truly begs the question regarding how well the system is protected? This is not difficult, but certainly costs money. It is surely not impossible to protect transformers in particular and those are the things that take time. Breakers protect cables surely even though most everything else is likely to be fried.

I doubt is any of our computers are protected. So while protecting the grid is a case of avoiding design negligence, the rest of the system needs regulatory standards.

This report is a loud warning that we have not done what common sense tells us to do. We need to pay attention. Why are our transformers and motors not wrapped simply in foil? Or is that just too cheap and brain dead easy? Of course most computers are in metal casings which do most of the job.

However, the mere fact that 130 main transformers are even vulnerable tells me that this issue is not on any design engineer’s radar.

It is simple to put the rules in place to lower exposure and simple obsolescence will resolve it all over twenty years. The only thing that requires immediate attention is the transformer inventory. There we are talking about Hurricane Katrina style negligence

Severe Space Weather

01.21.2009 January 21, 2009: Did you know a solar flare can make your toilet stop working?

That's the surprising conclusion of a NASA-funded study by the National Academy of Sciences entitled Severe Space Weather Events—Understanding Societal and Economic Impacts. In the 132-page report, experts detailed what might happen to our modern, high-tech society in the event of a "super solar flare" followed by an extreme geomagnetic storm. They found that almost nothing is immune from space weather—not even the water in your bathroom.

The problem begins with the electric power grid. "Electric power is modern society's cornerstone technology on which virtually all other infrastructures and services depend," the report notes. Yet it is particularly vulnerable to bad space weather. Ground currents induced during geomagnetic storms can actually melt the copper windings of transformers at the heart of many power distribution systems.

Sprawling power lines act like antennas, picking up the currents and spreading the problem over a wide area. The most famous geomagnetic power outage happened during a space storm in March 1989 when six million people in Quebec lost power for 9 hours: image.

According to the report, power grids may be more vulnerable than ever. The problem is interconnectedness. In recent years, utilities have joined grids together to allow long-distance transmission of low-cost power to areas of sudden demand. On a hot summer day in California, for instance, people in Los Angeles might be running their air conditioners on power routed from Oregon. It makes economic sense—but not necessarily geomagnetic sense. Interconnectedness makes the system susceptible to wide-ranging "cascade failures."

To estimate the scale of such a failure, report co-author John Kappenmann of the Metatech Corporation looked at the great geomagnetic storm of May 1921, which produced ground currents as much as ten times stronger than the 1989 Quebec storm, and modeled its effect on the modern power grid. He found more than 350 transformers at risk of permanent damage and 130 million people without power. The loss of electricity would ripple across the social infrastructure with "water distribution affected within several hours; perishable foods and medications lost in 12-24 hours; loss of heating/air conditioning, sewage disposal, phone service, fuel re-supply and so on."

"The concept of interdependency," the report notes, "is evident in the unavailability of water due to long-term outage of electric power--and the inability to restart an electric generator without water on site."

http://science.nasa.gov/headlines/y2009/images/severespaceweather/collapse.jpg


Above: What if the May 1921 superstorm occurred today? A US map of vulnerable transformers with areas of probable system collapse encircled. A state-by-state map of transformer vulnerability is also available: click here. Credit: National Academy of Sciences.

The strongest geomagnetic storm on record is the Carrington Event of August-September 1859, named after British astronomer Richard Carrington who witnessed the instigating solar flare with his unaided eye while he was projecting an image of the sun on a white screen. Geomagnetic activity triggered by the explosion electrified telegraph lines, shocking technicians and setting their telegraph papers on fire; Northern Lights spread as far south as Cuba and Hawaii; auroras over the Rocky Mountains were so bright, the glow woke campers who began preparing breakfast because they thought it was morning. Best estimates rank the Carrington Event as 50% or more stronger than the superstorm of May 1921.

"A contemporary repetition of the Carrington Event would cause … extensive social and economic disruptions," the report warns. Power outages would be accompanied by radio blackouts and satellite malfunctions; telecommunications, GPS navigation, banking and finance, and transportation would all be affected. Some problems would correct themselves with the fading of the storm: radio and GPS transmissions could come back online fairly quickly. Other problems would be lasting: a burnt-out multi-ton transformer, for instance, can take weeks or months to repair. The total economic impact in the first year alone could reach $2 trillion, some 20 times greater than the costs of a Hurricane Katrina or, to use a timelier example, a few TARPs.

What's the solution? The report ends with a call for infrastructure designed to better withstand geomagnetic disturbances, improved GPS codes and frequencies, and improvements in space weather forecasting. Reliable forecasting is key. If utility and satellite operators know a storm is coming, they can take measures to reduce damage—e.g., disconnecting wires, shielding vulnerable electronics, powering down critical hardware. A few hours without power is better than a few weeks.

NASA has deployed a fleet of spacecraft to study the sun and its eruptions. The Solar and Heliospheric Observatory (SOHO), the twin STEREO probes, ACE, Wind and others are on duty 24/7. NASA physicists use data from these missions to understand the underlying physics of flares and geomagnetic storms; personnel at NOAA's Space Weather Prediction Center use the findings, in turn, to hone their forecasts.
At the moment, no one knows when the next super solar storm will erupt. It could be 100 years away or just 100 days. It's something to think about the next time you flush.

Martin Roscheisen updates Nanosolar

This is just out from Nanosolar. For the record, I have never seen such a level of financial support from such significant players this early in a corporation’s development. The investor’s ability to both complete due diligence and to do back up research is a given and is surely at play here. This company is moving forward on a mountain of cash even perhaps more vigorously than Google did (the owners of Google are major investors here). I have no doubt that the IPO will be a gimme.

As a reminder, they produce a tool for $2,000,000 that produces sufficient solar cells in a year to replace one nuclear power plant at an initial selling price of $1.00 per watt. This means that they can surely produce it down to a price of $0.25 per watt. I have no doubt that the installed cost of this energy will fall below all other sources of energy.

Even more important, as you can see from the rest of the company blog, they are building small in order to intercept the transmission system itself just before it reaches the customers. This will eliminate the need for high voltage transmission which is responsible for huge unavoidable energy losses. I was not joking when I have written in the past that a dollar bill is sitting at the top of the dam while as little as $.15 actually reaches the application point. Now perhaps a dollar of collected solar energy will deliver fifty cents to the application point.

These numbers that I am throwing around are not refined but you get the idea and we are not too far off.

The advent of cheap solar energy now pushes the low cost hydrogen production that we have recently posted on and will push the development of an efficient hydrogen storage technology. It is obvious that surplus solar energy needs to be stored and doing it with hydrogen is as obvious provided the turn around is fairly cheap. I do not have precise details as yet but the enthusiasm at MIT suggests that that is now nicely solved.

We still have to store it all but there are plenty of methods if we need them for lack of a great solution. Even a large balloon full of gas works. I suspect that we will see some of the metal hydrides dusted off again.

For those who follow this blog, we have generally commented on any and all alternatives that pop up. They all have their champions and are all worthy if the cost of energy is high or inconvenient. Breezing into the middle of the boreal forest with a balloon wind power generator makes eminent sense compared to any and all alternatives.

However there occasionally comes along a technology that can put any and all others out of business forever.

Printed solar cells are about to do just that. This means that any and all alternatives need to be financed in such a way that closure upon payout is a practical option. I cannot make this any more clearly. Grid power is now obsolete.

The world that we are shortly entering will ultimately use ethanol for long haul transportation because of the convenience of onboard fuel storage and the ease of production as an engineered alga product or several viable alternatives. Everything else will use solar energy directly with hydrogen acting as a storage system.

This means also that we have the option of ending all oil production and natural gas production with what likely will be a much cheaper alternative even at ten dollars a barrel.

Nanosolar Ups Funding to $1/2 Billion; Partners Strategically for Solar Utility Power

As part of a strategic $300 million equity financing, Nanosolar has added new capital and brought its total amount of funding to date to just below half a billion U.S. dollars.

Last December, we introduced the Nanosolar Utility Panel(TM) to enable solar utility power — i.e. giving utility-scale power producers the solar panel technology to build and operate cost efficient solar power plants.

The tremendous demand for our unique product was matched by the desire to support us in scaling its availability even more rapidly and ambitiously.

Today we are pleased to announce that we have received strategic backing by partners ideally suited to accelerate the implementation of this business — in the form of product supply agreements, strategic collaboration, and equity investments.

As part of the transaction, the boards of directors of AES Corporation (one of the world's largest power companies), the Carlyle Group, EDF (the world's largest electric utility), and Energy Capital Partners signed off on investments into Nanosolar through Riverstone Holdings, EDF Renewables, and simultaneously formed AES Solar. A fraction of the oversubscribed Nanosolar equity round also included financial investors such as Lone Pine Capital, the Skoll Foundation, and Pierre Omidyar's fund as well as returning investors including GLG Partners, Beck Energy, and Conergy founding investor Grazia Equity. The transaction closed in March 2008.

The alliance for solar utility power is the outcome of a year long effort on behalf of our strategic partners examining the solar industry, investigating virtually every solar company on the planet, and conducting one of the most thorough due diligence efforts on our manufacturing operation, our scale-up capabilities, and our readiness for the level of cost efficiency demanded by solar utility power. We are honored to have been selected as the company of choice to partner with by such a distinguished and sophisticated group.

The new capital will allow us to accelerate production expansion for our 430MW San Jose factory and our 620MW Berlin factory. (Earlier, Nanosolar secured a 50% capex subsidy on its Germany based factory.)


Going All-Electric August 7, 2008 By Martin enRoscheis, CEO

The following is one of my favorite charts: How far a car can drive based on either of the following forms of energy, each produced from 100m x 100m (2.5 acres) of land: (cut for this post)

How come that biofuel does not really cut it? Electric cars are about four times more energy efficient than fuel based cars. This is because fuel engines mostly creates heat and thus wastes the majority of the energy units available. Combine this with biofuel plants not being very efficient solar energy harvesters relative to semiconductor based solar electricity, and the result is this huge difference.

In other words, it is clear that if the goal is to maximize energy efficiency, the end point to go after is all-electric cars everywhere. Moving all of transportation to all-electric would essentially cut in half our overall energy consumption without compromising on distance to go.

I for one have vowed that the Prius I bought six years ago will have been the last fuel powered car I'd buy in my life. (Given that I may very well own the highest-mileage Prius on the planet, this presumably reflects my confidence in the quality of this vehicle and the near-term readiness of electric car technology…) Presently, it is baking in the sun all day while I'm at work. My future all-electric car would charge up while idling under a solar carport.

Nanosolar Receives U.S. Senate Environment Award // Getting a Federal RPS Right

U.S. Senator Barbara Boxer and her staff today visited Nanosolar to tour our factory and present us with the U.S. Senate Conservation Champion award. We are honored to be awarded this recognition — thank you very much!

During our meeting with the U.S. Senator, we discussed the importance of getting a Federal RPS right in 2009.

Getting a Federal RPS Right

The state level Renewable Portfolio Standards (RPS) we have today are limited in a key way: They are primarily geared towards large-scale, centralized generation, i.e. power plants of larger than 50MW in size. That's the old mindset — preferring one 300MW plant over thirty 10MW plants.

But a lot of today's action and opportunity in renewables is in decentralized 1-10MW generation, including municipal solar power plants and other forms of power generation at the local level. No well-designed RPS should have a built-in bias against small & medium sized power generation.

For instance, in California, we have one policy framework (the California Solar Incentives, CSI) for sub-1MW solar installations, connected locally; and we have an RPS that works for >20MW power generation, connected to transmission lines. In between we have a policy gap for renewable generation of one to twenty MW in size, which is often directly connected into the municipal grid, i.e. without having to use transmission lines:

No federal energy policy should favor big power plants over medium sized ones; and the state level policies should be reworked in this regard too.

Specifically, by avoiding the substantial expense and energy loss associated with transmission infrastructure, small and medium sized power plants have an economic benefit to the public, and this ought to be reflected as a corresponding commercial benefit.

Another key element to get right in the next generation of RPS is better transparency and project pipeline predictability. Only a predictable environment will be an investible one. One way of achieving good predictability are standard contracts which the utilities have to accept.

Magenn Wind Power Generation

I was introduced this morning to this ongoing project at

http://www.magenn.com

Although anyone can sketch out the likely difficulties, the promise is certainly there for a major new source of constant energy supply. I have copied their FAQ and have interspersed a couple of comments there.

This is clearly a serious effort by folks with real knowledge and skills and it is good to see this happening.

My general comment is that this will quickly come down in cost per kw. The present initial pricing is at $3.00 to $5.00 for a small unit.

More critically, it opens the door to major off grid industrial energy production. A large factory normally has to be sited on grid and grid losses are built in. Here we have our power source within a thousand yards of its application which means a huge increase in overall efficiency. Any small town can both contemplate producing their own local power sharply dropping the cost, but also can attract manufacturing to their locale. The manufacturer gains a secure local work force, and a secure local power source.

The promoters see the usual very remote opportunities. I see every small town as a viable customer. Yes they are on the grid, but having a convenient primary source of power at home and even the capacity to wheel any surplus onto the grid is very attractive, particularly if we want to adopt municipal electric cars as a major energy conservation strategy.

I also question the ability to handle weather related problems, but this has been the primary problem of balloons and blimps from day one and they have generally been sorted out. Hauling the device down is actually the final recourse and all weather systems provide ample warning. Icing may be another matter.

This innovation makes economic distributed municipal scaled energy generation a viable option. And for every kw that you have released back to up stream users, you have also likely released another kw used to overcome line losses. I look forward to seeing a 1000 kw unit built which should be quite suitable for a small town of a 1000 or so. That size should be producible at a much lower cost also.

FAQ

1. When is Magenn's "Floating Wind Generator" or Air Rotor shipping?

Magenn Power is currently in the prototype phase of our Magenn Air Rotor System (MARS). Magenn Power plans to ship our first official product, a 10 to 25kW version in the later part of 2009/10. Magenn will not be shipping a 4 kW sized unit as previously planned.

2. What is the Magenn breakthrough?

Magenn's breakthrough is based upon three decades of experience designing very large inflatable structures. The Magenn Air Rotor System is a closed inflatable structural design with inherent integrity, stability, and low cost. Furthermore, MARS is a buoyant system that only requires a low cost tensioning cable to secure it and transfer energy to the ground. When considering aerodynamics (Magnus effect) and other properties, the result is a device that is elegant and is projected to be more cost efficient when compared to competing wind energy systems.

3. What is the projected life span of a Magenn Air Rotor?

In some cases, current aerostats (blimps and balloons) made of the same materials have lasted over 20 years. Magenn assumes a depreciable life span of at least 15 years before major refits are required.

4. How does MARS stay aloft?

MARS is filled with helium gas, which is inert and non-flammable. The lifting gas creates a lift force that is in excess of the total weight of the system. The helium provides at least twice the positive lift versus the overall weight of the MARS unit. Additional lift is also created when the rotor is spinning in a wind. The aerodynamic effect that produces additional lift is called the Magnus Effect.

5. What is the Magnus Effect?

This is the same effect, discovered in the mid 1800's, that creates lift when a spherical or cylindrical object is spun while moving in a fluid. A dimpled golf ball, hit properly, has a back spin that causes it to lift in flight. A baseball curve ball pitch uses the Magnus effect. Basically, a back spin causes a low pressure region to form above the object and high pressure to form below, resulting in lift. A large object like the Magenn Air Rotor creates substantial lift, so much so that the device should actually work in a wind, without using a lifting gas.

6. Why are two types of lift useful?

The combined lifting effect from buoyant (helium) lift and aerodynamic (Magnus) lift help stabilize the Air Rotor against "leaning" in the wind. In tests, an Air Rotor went straight up and held a near vertical position in various wind speeds, since the Magnus effect increases as the wind speed increases. Our research indicates that maximum lean will never be more than 45 degrees from the vertical. One can buy inexpensive wind rotor kites that demonstrate the Magnus effect. They are called Hawaiian kites and are interesting in that they go straight up in a wind; much straighter than a foil design or other kite designs.

7. Is the total lift sufficient to lift generators and other equipment?

The bigger the MARS unit, the easier it is to build heavier stronger structures, envelopes, and generators. As an example, the largest MARS units planned (100' x 300') will have tens of tons of buoyant (helium) lift. This is well in excess of the overall Air Rotor system weight.

What I find particularly attractive about this concept is that it will have declining cost curve against increasing scale and improving aerodynamics. Just as large ships are also better, so should this device.

I have always been a fan of airships, but their proper development needed modern materials and increasing scale to justify the economics. I always liked the idea of hauling fresh fruit and vegetables from California to New York at eighty miles an hour without any vibration and a modest fuel expenditure. Oh well.

8. What's the difference between a Magenn Cylindrical Rotor and propeller wind mills?
Other things being equal, Magenn Air Rotors are 50% as efficient as the best propeller rotors, in terms of their wind "intercepted area". For a standard propeller system, this is the circular "swept area" of the propeller, and for a Magenn cylinder, its "wind facing area". Thus Magenn must have an intercepted area twice as large to produce equivalent output. However, there are other factors that will boost Magenn efficiency such as being able to deploy above ground mechanical turbulence. Magenn cylinders are basically strong, closed structures and therefore can be built in large sizes at low cost -- substantially reduced capital cost in comparison to the propeller units.

9. How is the swept area of the Magenn Air Rotor compared with that of the traditional turbine?

Wind Turbine swept area efficiency is crucially important to a flat plate wind turbine, but in our case it is not, since we can increase the size of our rotor at little cost and get equivalent or better "economic efficiency" per unit of swept area. Magenn uses 40% to 50% of our total rotor frontal area to calculate swept area efficiency. What is important is the overall cost and the rated output.

10. Why use Helium?

Helium is a light inert gas and the second most abundant element in the universe. Helium was discovered in 1868 by J. Norman Lockyear. Helium provides extra lift and will keep MARS at altitude in very low winds or calm air. It is also plentiful, inexpensive and environmentally safe. Helium's inert quality over other lifting gases makes it very acceptable in North America. In other parts of the world other lifting gases will probably suffice due to availability and low cost.

11. What about using Hydrogen?

This flammable gas is lighter than air and the most abundant element in the universe. Henry Cavendish discovered that hydrogen was an element in 1766. In Third World applications, hydrogen is an attractive and inexpensive candidate for the lifting gas. The use of hydrogen will be the subject of future MARS testing.

In fairness, hydrogen has always been problematic. It does enter into chemical reactions and it just loves to leak away. Since lift is needed only to get to altitude, were aerodynamic lift can take over, it makes more sense to avoid hydrogen.

12. What type of inflatable material (envelopes) will be used?

MARS will be constructed with composite fabrics used in airships today. The fabric will be either woven Dacron or Vectran with an inner laminated coating of Mylar to reduce porosity and an exterior coating of Tedlar which will provide ultra-violet protection, scuff resistance and color. Dacron is used for boat sails, Mylar in silver toy helium balloons, and Tedlar is the plastic coating found in all-weather house siding.

13. What about weather, lightning and service?

The US military uses inflated, helium-filled aerostats that are 400-ft in length and are tethered at up to 15,000-ft in altitude. These aerostats are illuminated, including the tethers, and indicated on all general aviation charts and Notams (Notification to Air Men). The aerostats carry many tons of radar equipment and are powered through the tether which is connected to ground winches which raise and lower the aerostat for servicing. Lightning is not a problem since the aerostats have lightning arrestor equipment. Also, helium is non-flammable. MARS units will be deployed at much lower altitudes, thus simplifying all of this.

14. At what altitudes will Magenn Air Rotors be deployed?

MARS will be deployed up to 1,000-ft altitude at this time. The benefits of higher altitudes are being investigated. Future MARS units may be deployed at altitudes far beyond 1,000-ft.

15. What about positioning and wind direction?

Due to the inherent elegance of the design, the Magenn Air Rotors will always weather-vane properly. Regardless of wind direction, the deflection disk will ensure MARS units will automatically rotate toward the wind, with the Magnus aerodynamic effect creating additional lift.

16. How does Magenn altitude compare with the big fixed tower Wind Generators?

Magenn Air Rotors will be deployed at altitudes up to 1000-ft. The maximum height of the GE rotors are approximately 400-ft, which is still subject to ground turbulence in most locations. The big fixed tower windmills still need to be located in specific high wind locations often near the coast.

17. Can Magenn Air Rotors be deployed anywhere?

Yes almost anywhere, deployment flexibility is inherent in the system. Its deployment flexibility, its rapid deployment capability, and its limited maintenance requirements create markets that are not available to other wind or solar energy product manufactures. MARS units will be deployed for disaster relief, to third world communities with limited or no infrastructure, for various military applications, to remote locations, and in harsh climates.

18. What field testing have you done on the MARS to establish its reliability?

We have tested all individual components. Three important, and well documented, test areas from our airship research and development have included validation of the envelope structure, aerodynamics (Magnus effect) and more recently the best blade to drum configuration. MARS units will undergo extensive field testing before they are put into full production.

19. What is the maximum wind speed that the MARS can tolerate and still remain airborne?

MARS can operate at speeds greater than 28 meters per second. The MARS uses torque (load) as opposed to velocity (speed) to transfer energy from the wind hence it has very good low speed characteristics and broad speed latitude. The maximum wind speed is dictated by structural integrity, and not tip rotation speed, therefore, the larger the MARS the higher the wind speed capability.

20. Are there any features or controls that keep the MARS from over-speeding?

Yes, over speed controls are built into the design of MARS. On the larger MARS units, excessive speed is controlled by moderating tether height.

21. Is the deflate system used in case of excessive wind speed?

A deflate system (common on all blimps) is an emergency system that would only be used if for some reason the rotor broke free or other extreme emergency.

22. Is there any transmission of data from the MARS to the ground that monitor the performance or signal that there are malfunctions that need attention?

Yes. Pressure is constantly monitored and controlled. Rotation speed, wind speed, and generator functions are also monitored.

23. What type of generators will be used?

Depending on size, either DC or AC generators will be used, with rectification as necessary.

24. Do the generators use a drive that increases their rotational speed relative to that of the rotor?

Yes, the generators support the axle ends, but are off axis and slightly below the axle. They act as tether anchor points. In all cases the rotation speed is stepped up by a simple gear arrangement.

25. Is there any equipment on the ground, other than a transformer, needed to regulate or in some way transform the electricity transmitted to the ground? If so what sort of equipment is required?

Magenn anticipates that MARS units smaller than or equal to 10 to 25kW nameplate capacity will be used mostly in off-grid applications, such as for backup power for farms, emergency response or Third-World villages. The off-grid configuration (at an additional charge) will include a charge controller, storage batteries, and a DC-AC inverter to supply AC output at mains voltages. This equipment will be on the ground. Mains voltage is 120 Vac 60 Hz in North America, and 240 VAC 50 Hz in Western Europe and many other parts of the world.

When in production, large on-grid MARS units used for commercial power generation will be configured differently. The plan is to use variable-frequency (doubly fed) AC generators, so that the generator can remain synchronous with the grid and get the most out of the energy in the wind without motoring off the grid or causing excess reactive loading. The generator controller, protection and grid interconnect equipment (including voltage-matching transformer), and a winch to regulate the elevation of the MARS above the terrain will all reside on the ground.

In summary, Magenn's aim is to send airborne as little equipment as possible (i.e. we aim to keep things on the ground if possible). In all instances, Magenn will provide all necessary equipment to interface our unique generation system to conventional loads.

26. What voltage is generated on the MARS?

Customer specified DC or AC - 110 to 240 volt, 50 to 60 Hz.

27. What qualities does the "Kevlar like" material used for the rotor have that would prevent damage from flying objects such as birds or airborne debris?

Our experience in large airship structures leads us to use a woven high-tenacity substrate similar to Kevlar. This woven material is coated or laminated with a Tedlar outer surface which reduces abrasion and protects against UV radiation. Tedlar is typically used as a coating on aluminum siding. On the inside of the woven material is a coating designed to act as a gas barrier (Mylar is used as example). It should be noted that the woven substrate material is the same as that used in bullet-proof vests.

28. What happens if a MARS unit breaks loose from the tether?

Magenn has incorporated an instant deflate device if the MARS unit breaks loose from the tether or base (a requirement of FAA). A rip cord type device cuts a hole In the envelope and the MARS unit safely floats back to the ground.

29. Is there a point where the device has to be reeled in to avoid too strong a wind or bad weather?

Yes, in extremely high winds the device should be reeled in and winched down to the ground.

30. What warranty or guarantee will you have on the MARS?

Magenn will pass on the standard warranty for the generators installed. The warranty for the MARS unit will be a minimum of one year. It is expected that a service/support contract will also be sold with each MARS unit (7 to 15% of initial cost per annum). The support contract will cover most mechanical and electrical problems.

31. How soon will backpack-sized units be available?

Backpack size or small units may be available in five to ten years. Magenn Power is looking to license this technology and may not manufacture it ourselves.

32. Can I get a Demo unit for a very large customer?

Demo units are NOT available yet. Magenn Power will have demo units available in 2009/10.

33. Can I be a test site for your MARS unit?

Although test sites are welcome, we have already selected all the test sites we need at this time. Please advice us if you would like Magenn to consider you as a candidate for future test sites.

34. What is the pricing of the MARS 10 kW unit and what does it include?

Final pricing is yet to be determined on the 10kW MARS unit. We are aiming to have Magenn's target list price between $3 dollars to $5 dollars per watt. (Please Note: this price is subject to change).

The MARS 10 kW units includes:

30' x 60' foot envelope (exact size yet to be determined)

Two x 5kW generators, gear systems, etc.

Tether System, 400 feet included, (optional tether lengths will be available up to 1,000 feet at an additional charge)

Necessary lighting on the Tether to meet FAA & Transport Canada regulations
Safety mechanisms in case envelopes detaches from tether to meet FAA & Transport Canada regulations

Onboard Electronics

5 Year warranty on parts and labor, does not include helium

Yearly Maintenance contracts will be available from Certified Dealers and Distributors for an additional fee of (7 to 15%) per year. Magenn Power will supply the parts, and the Dealers will supply the labor.

Not included with the MARS 10kW unit:

Electric Winch (Magenn will provide at an additional charge, but will be offered as a separate line item)

Inverter if required (Magenn will provide at an additional charge, and will be offered as a separate line item)

Necessary Permits will vary from location to location (Certified Dealers and Distributors will be responsible for obtaining permits for most customers)

Installation and setup of the MARS unit (Available from Certified Dealers and Distributors and an extra charge)

Helium (Magenn is negotiating a world price, see question on Helium below for costs)

Electrical cable from MARS unit to power grid or battery system (Available from Certified Dealers and Distributors at an extra charge, Magenn will provide specifications)

Electronics to connect to power grid (Available from Certified Dealers and Distributors for an extra charge, Magenn will provide specifications)

Batteries (Available from Certified Dealers and Distributors for an extra charge, Magenn will provide specifications)

35. What is the size of MARS and its shipping weight?

The MARS 10 kW unit will be approximately 25" x 65" when inflated, it will come standard with a 400 foot tether; this configuration will have a shipping weight under 1,200 lbs.

36. Can I purchase a 10kW unit with a longer tether than 400 feet?

Yes, different tether lengths will be available as an option.

37. Does my customer need a concrete pad for MARS?

Some customers may require a concrete pad for a permanent installation. Magenn Power will provide specifications.

38. How much Helium does the 10kW MARS require?

The exact amount is yet to be determined. MARS 10kW unit will require slightly over 32,000 cubic feet of helium. Please note; Helium is NOT included in the price of MARS units.

39. What is the price of Helium?

The price of Helium varies from country to country. It is roughly $0.30 cents per cubic foot (depending on location in the world). It should be noted that Magenn is negotiating with the worlds largest helium suppliers to get the best available pricing for its distributors and dealers around the world.

40. I hear that Helium leaks?

Yes, Helium will leak over time. Helium leaks at a rate of 0.5% per month or 6% per year, therefore the MARS units will have to be topped up with Helium every 4 to 6 months. The Certified Dealer will provide this service to the consumer.

41. My customer needs to know exact power curves on the 10kW MARS?

Exact power curves and efficiency data are not available at this time. Magenn will provide our findings as soon as they are available. Estimates of power curves and efficiency data estimates are available on the MARS 10 kW specification sheet which is available for download on this site.

42. How do I know if the wind conditions in my area are good for the MARS unit?

MARS units will operate between 2 meters/sec and in excess of 28 meters/sec. As a reseller or Certified Distributor, you will be responsible for knowing your local wind conditions. A Google search should be able to provide you with this data.

43. What permits will I need for my customer?

Each MARS units will need special permits from the FAA to be installed in North America, countries outside of North America may have different rules and may not require permits, please check with your local authorities.

44. What are the exact FAA rules?

See: http://www.chem.hawaii.edu/uham/part101.html

MARS units cannot be installed within 5 miles of an airport; MARS units cannot be installed within a flight path in North America; MARS units must and will have lighting every 50 feet, and the lights must flash once per second. All MARS units must and will have a mechanism to quickly deflate in case a unit gets detached from its tether.

45. What about installing a unit at my house in town?

MARS units will not be able to be installed within most city or town boundaries within North America.

46. I am a very large distributor and I want exclusivity for my country?
At this time, Magenn Power has no plans of offering exclusivity in any one country or geographical area.
Exclusivity may be given to companies that invest in Magenn, do joint ventures with Magenn, license Magenn's technology, or commit to large volumes of MARS product.

47. How do I invest in Magenn Power Inc., how much is Magenn raising and what is the minimum that I can invest?

See Magenn Investment Page. Send an email to invest@magenn.com

Quantum Dots light and energy

I came across this two year old article from Vanderbilt University and I have copied it for you..
Essentially they have produced a nanodot that luminesses as white light. They even formed a paint that lit up properly.

I have already discussed the advent of inexpensive nanodot based solar collectors.

All this stuff is still in the lab, but they are actually working. The lab work now is to establish the best protocols for making this stuff.

We are soon entering a world were personal static energy and personal lighting will be inexpensively available to us. The only trick left is the difficulty still remaining in storing surplus energy for later use.

Of course mobile storage of electrical power would then liberate us from oil.

In the meantime, we are preparing the technologies that will release a huge amount of grid power. Lighting will cease to be a principal power drain and cheap solar energy used at home will almost if not totally make the the household independent of the grid.

We obviously need a real breakthrough in energy storage. And I suspect that there is room here for even the back yard thinker.

Quantum dots that produce white light
could be the light bulb’s successor

By David F. Salisbury
Published: October 20, 2005

ake an LED that produces intense, blue light. Coat it with a thin layer of special microscopic beads called quantum dots. And you have what could become the successor to the venerable light bulb.

The resulting hybrid LED gives off a warm white light with a slightly yellow cast, similar to that of the incandescent lamp.

Until now quantum dots have been known primarily for their ability to produce a dozen different distinct colors of light simply by varying the size of the individual nanocrystals: a capability particularly suited to fluorescent labeling in biomedical applications. But chemists at Vanderbilt University discovered a way to make quantum dots spontaneously produce broad-spectrum white light. The report of their discovery, which happened by accident, appears in the communication “White-light Emission from Magic-Sized Cadmium Selenide Nanocrystals” published online October 18 by the Journal of the American Chemical Society.

In the last few years, LEDs (short for light emitting diodes) have begun replacing incandescent and fluorescent lights in a number of niche applications. Although these solid-state lights have been used for decades in consumer electronics, recent technological advances have allowed them to spread into areas like architectural lighting, traffic lights, flashlights and reading lights. They are considerably more expensive than incandescent bulbs, but they are capable of producing about twice as much light per watt; they last up to 50,000 hours or 50 times as long as a 60-watt bulb; and they are very tough and hard to break. Because they are made in a fashion similar to computer chips, the cost of LEDs has been dropping steadily. The Department of Energy has estimated that LED lighting could reduce U.S. energy consumption for lighting by 29 percent by 2025, saving the nation’s households about $125 billion in the process.

Until 1993 LEDs could only produce red, green and yellow light. But then Nichia Chemical of Japan figured out how to produce blue LEDs. By combining blue LEDs with red and green LEDs – or adding a yellow phosphor to blue LEDs – manufacturers were able create white light, which opened up a number of new applications. However, these LEDs tend to produce white light with a cool, bluish tinge.


The white-light quantum dots, by contrast, produce a smoother distribution of wavelengths in the visible spectrum with a slightly warmer, slightly more yellow tint, reports Michael Bowers, the graduate student who made the quantum dots and discovered their unusual property. As a result, the light produced by the quantum dots looks more nearly like the “full spectrum” reading lights now on the market, which produce a light spectrum closer to that of sunlight than normal fluorescent tubes or light bulbs. Of course, quantum dots, like white LEDs, have the advantage of not giving off large amounts of invisible infrared radiation, unlike the light bulb. This invisible radiation produces large amounts of heat and largely accounts for the light bulb’s low energy efficiency.

Bowers works in the laboratory of Associate Professor of Chemistry Sandra Rosenthal. The accidental discovery was the result of the request of one of his co-workers, postdoctoral student and electron microscopist James McBride, who is interested in the way in which quantum dots grow. He thought that the structure of small-sized dots might provide him with new insights into the growth process, so he asked Bowers to make him a batch of small-sized quantum dots that he could study.

“I made him a batch and he came back to me and asked if I could make them any smaller,” says Bowers. So he made a second batch of even smaller nanocrystals. But once again, McBride asked him for something smaller. So Bowers made a batch of the smallest quantum dots he knew how to make. It turns out that these were crystals of cadmium and selenium that contain either 33 or 34 pairs of atoms, which happens to be a “magic size” that the crystals form preferentially. As a result, the magic-sized quantum dots were relatively easy to make even though they are less than half the size of normal quantum dots.

After Bowers cleaned up the batch, he pumped a solution containing the nanocrystals into a small glass cell and illuminated it with a laser. “I was surprised when a white glow covered the table,” Bowers says. “The quantum dots were supposed to emit blue light, but instead they were giving off a beautiful white glow.”

“The exciting thing about this is that it is a nano-nanoscience phenomenon,” Rosenthal comments. In the larger nanocrystals, which produce light in narrow spectral bands, the light originates in the center of the crystal. But, as the size of the crystal shrinks down to the magic size, the light emission region appears to move to the surface of the crystal and broadens out into a full spectrum.

Another student in the lab got the idea of using polyurethane wood finish for thin film research while working on his parents' summer cabin. He had even brought some Minwax into the lab. That gave Bowers the idea of mixing the magic-sized quantum dots with the polyurethane and coating an LED. The result was a bit lumpy, but it proved that the magic-sized quantum dots could be used to make a white light source.

The Vanderbilt researchers are the first to report making quantum dots that spontaneously emit white light, but they aren’t the first to report using quantum dots to produce hybrid, white-light LEDs. The other reports – one by a group at the University of St. Andrews in Scotland and one by a group at Sandia National Laboratories – describe achieving this effect by adding additional compounds that interact with the tiny crystals to produce a white-light spectrum. The magic-sized quantum dots, by contrast, produce white light without any extra chemical treatment: The full spectrum emission is an intrinsic effect.

One difference between the Vanderbilt approach and the others is the process they used to make the quantum dots, Bowers observes. They use synthesis methods that take between a week and a month to complete, whereas the Vanderbilt method takes less than an hour.

A second significant difference, according to Rosenthal, is that it should be considerably easier to use the magic-sized quantum dots to make an “electroluminescent device” – a light source powered directly by electricity – because they can be used with a wider selection of binding compounds without affecting their emissions characteristics. Other research groups have reported stimulating quantum dots to produce light by applying an electrical current. Of course, those produced colored light. So, one of the projects at the top of Rosenthal’s list is to duplicate that feat with magic-sized nanocrystals to see if they will produce white light when electrically stimulated.

The light bulb is made out of metal and glass using primarily mechanical processes. Current LEDs are made using semiconductor manufacturing techniques developed in the last 50 years. But, if the quantum dot approach pans out, it could transform lighting production into a primarily chemical process. Such a fundamental change could open up a wide range of new possibilities, such as making almost any object into a light source by coating it with luminescent paint capable of producing light in a rainbow of different shades, including white.