Supercharged on Supercapacitors

It's my pleasure to share some exlcusive tidbits from the stellar team at Lux Research on a breakthrough area of technology supercapacitors.

DEMAND FOR SUPERCAPACITORS EXPECTED TO SURGE

Lux’s report is divided as well. Its first section explains the basic technologies enabling supercapacitors, and what properties make these devices attractive. The second half explores opportunities in each of the market’s sectors, including their potential size and growth, and how individual companies are poised to capitalize.

Incumbent supercapacitor players will find the report offers comparative analysis of future growth opportunities for each sub-segment, while companies arriving late to the game will learn what technologies offer appealing entry points to the market. Prospective investors will also find insights into which individual companies are best positioned to compete in their respective sectors.

The report derives its intelligence, in part, from interviews with 19 supercapacitor manufacturers and four application developers in different application areas. Among its key conclusions:

*Cell phones and digital cameras will drive adoption in electronics. Multimedia cell phones and autofocus cameras both impose high pulse power demands that batteries and conventional capacitors are poorly equipped to provide. This will spark supercapacitor growth in consumer electronics from $122 million in 2008 to over $550 million in 2014.

Transportation will drive large supercapacitor applications. It takes a lot of power to get a large bus or truck moving, which will fuel demand for most large supercapacitor applications. Wind turbines are another key opportunity, although relatively high supercapacitor prices will limit adoption rate. Overall, large storage applications are expected to expand from $86 million last year, to over $320 million in 2014.

*Commoditization of carbon-based supercapacitors will give large players an edge. Carbon-based supercapacitors – which will define the market for the foreseeable future – are a relatively undifferentiated technology composed of base materials in very price sensitive markets. That creates a textbook case for commoditization, wherein high volumes will help to lower costs, and allow large players to gain more market share.

"As volumes increase, we expect large players including Panasonic, NEC‐Tokin, and Maxwell Technologies to benefit most from economies of scale,” said Grose. “As that trend unfolds, the market may see more diversification as large companies bolster their portfolios through acquisitions of smaller firms.”

“Bridging the Gap with Supercapacitors: a Tale of Two Markets,” is part of Lux Research’s Alternative Power and Energy Storage Intelligence service. Clients subscribing to this service receive continuous research on the industry, as well as market trends and forecasts, ongoing technology scouting reports, and proprietary data points in the weekly Lux Research Alternative Power and Energy Storage Journal, and on-demand inquiry with Lux Research analysts.

Craftsmen, Karlgaard & Wriston's Law

Regardless of the raging rhetoric over healthcare reform, let's not lose respect and awe for the march of modern medicine and the soldiers of science specifically the corp of “corpus craftsmen"who practice to perfection their handiwork on our hands, knees, legs, backs, elbows, shoulders--the surgeons and doctors who cut us and stitch us up. While the government, lobbyists, insurance companies, drug companies and assorted mudslingers fight it out, I cheer on with awe and appreciation these body repairmen. As luck has it, I'm on the mend recovering from reconstructive knee surgery after tearing up nearly ligament in my left knee. Equally awesome is the body's own remarkably resiliency at healing. Talk about a complex adaptive system. So today I present friend, colleague and Publisher of Forbes, Rich Karlgaard's recent writings on Walter Wriston and what’s needed for the magnetism of capital and talent:

*Wriston's Law Still Holds*

“Wriston's Law is named after the late Walter Wriston, a giant of banking and finance. In his 1992 book, The Twilight of Sovereignty, he predicted the rise of electronic networks and their chief economic effects.

Wriston said capital (meaning both money and ideas), when freed to travel at the speed of light, "will go where it is wanted, stay where it is well-treated."

By applying Wriston's Law of capital and talent flow, you can predict the fortunes of companies (and countries). All predictions about future performance must start with this most basic question: Do companies (and countries) attract money and talent, or repel it?

America's success for most of its history owes to Wriston's Law. Ambitious people and investment capital have always wanted to come here. America was a place where merit and investment could be rewarded--not just economically, but socially too. The rise of the American meritocracy after World War II coincided with the decline of Northeastern WASPs in America's social hierarchies. In the early 1980s, writer Tom Wolfe predicted that Silicon Valley would usually beat Boston's Route 128 in technology showdowns because Silicon Valley culture elevated the engineer and entrepreneur to higher social status. Thus Silicon Valley was a better magnet of talent.

America beat Germany to the atomic bomb in the 1940s because America welcomed talented immigrants--many of them Central European Jews--and Germany repelled them. It is appalling to think what might have happened if Germany had developed the bomb in 1943. The thousand-year Reich lasted only 12 years because Hitler rejected atomic science as a figment of Jewish minds.

America beat the Soviet Union to the moon in 1969 and then 20 years later to the Cold War's victor's podium because America had the immigrant X-factor. The Soviets did not.

The 25-year economic boom of 1982 to 2007 was built at the intersection of capital and talent. Lower tax rates on capital gains and income caused a miraculous reverse alchemy. Capital emerged from the dead hand of tax shelters and precious metals and began flowing to talented entrepreneurs in high technology. The capital flow from past to future acted as a magnet for the most talented entrepreneurs in the world, who came to the U.S. for the opportunity to build companies and get rich.

The reason for bringing up Walter Wriston and the late, great 25-year boom of technology, entrepreneurship and investment that was built on Wriston's Law is--very sad to say--that America has reversed course.

On immigration, America has made it harder for educated and skilled foreigners to enter the country and become citizens. As immigration policy goes, it should be a no-brainer to hand out green cards to foreigners who get college degrees in the U.S.

As for capital, well, America's tax burden is rapidly catching up to Europe's. I like Europe as well as anyone--as a place to drink coffee and loaf. I really enjoy watching this year's Tour de France on the Versus HD network on my 60-inch flat panel TV. France is really lovely, isn't it? But France is not where global free agents go to build tomorrow's dynamic companies. France rejects Wriston's Law, and so it repels capital and talent.

Not so very long ago, America was the destination for capital and talent. Now America is just one country among many competing for these precious resources. Our relative advantage in the world is declining. Nothing I see coming out of Washington is helping matters. Quite the opposite. Capital and merit are under attack.

American policy is working against Wriston's Law. As long as this continues, the American recovery will remain weak…”

Nod to Hod for Robotics

The future really is here, its just unevenly distributed. Today’s courier is robotics researcher Hod Lipson of my alma mater Cornell University. Our recently published Forbes interview is below. Hod is learning a lot about consciousness and creativity by teaching robots to work. And if you thought the Roomba was a consumer electronics novelty, give a nod to Hod and what he’s working on.

Hod Lipson is director of Cornell University's Computational Synthesis Lab (CCSL) at the Sibley School of Mechanical and Aerospace Engineering, Ithaca, N.Y. He focuses on novel ways for automatic design, fabrication and adaptation of virtual and physical machines. He has led work in areas such as evolutionary robotics, multi-material functional rapid prototyping, machine self-replication and programmable self-assembly. Lipson received his Ph.D. from the Technion-Israel Institute of Technology in 1999, and continued to a postdoc at Brandeis University and MIT. His research focuses primarily on biologically-inspired approaches, as they bring new ideas to engineering and new engineering insights to biology.

Why don't we start with a quick overview of your research?
I am interested in robotics, specifically the questions of how we can make machines more adaptive to the environment, to other machines and to changes in themselves such as failures. Robotic systems today are superhuman in their accuracy, in their speed, in their ability to work 24/7 in hazardous environments and so forth. But, their inability to adapt to new situations is really their weak point. In contrast, biology is very good at adaptation.

So you think Darwin's mantra, survival of the most adaptable, applies to robots?
As environments and tasks become increasingly complex, it eventually boils down to adaptation, which is a key to sustained operation and to long-term viability. Traditionally in engineering, people focused on optimizing system performance and so-forth, but increasingly we need to shift the focus to the resilience of systems in the face of changing environments.

You recently published an exciting paper in Science summarizing some of your latest research. Could you give a quick overview of your results?
What we have done recently is created what we call a "robotic scientist." It's essentially an algorithm hooked up to an experimental system that performs experiments, collects data, and tries to distill the physics principles or physical laws that underlie the observed behavior. It doesn't just collect data, calculate correlations or make predictions--it actually tries to see if there is some simple underlying law that explains the apparently complex behavior. It doesn't quite replace scientists, but it's certainly a tool that I think will be necessary in order to make progress working on increasingly complex questions with large amounts of data, where laborious hand modeling falls short.

In a very primitive way, are you making robots self-aware and aware of their environments?
Well, the term "self-aware" is very touchy and controversial, but that's the direction we are heading. I think the ability of a machine to create a simulator of itself and its environment, and then use that simulator to plan and make predictions, is the beginning of what may be deemed self reflection, and I think it will be important in any kind of adaptive system. From a psychological point of view, you can argue that consciousness has to do with the ability to self-reflect and self-model. Of course, there is a huge gap between what we can do with machines and what primates and humans can do, but I think it's on the same path.

In taking inspiration from nature and Darwinian evolution and applying those lessons to robotics, what has really surprised you?
I'm always fascinated by the kind of solutions that you get when you allow something as open-ended as evolution to tackle a problem. What we have been doing extensively in robotics and other areas of engineering is using algorithms inspired from biological evolution to try to solve a challenging design synthesis problem. In other words, we have set of building block and we put them in a "primordial soup," so-to-speak. We then allow evolutionary processes of recombination and mutation to connect these pieces together, subject to some selection criteria, and let this evolutionary process brew for hundreds and thousands of generations until we get solutions that match our criteria of selection. We have been applying this to anything from designing robot bodies and brains to designing analog circuits and mechanical devices, and what's been really interesting to see are the kinds of results that come out of this process.

Can you give an example of a creative robotic invention?
In one case, we let it try to design a photonic structure, a structure that manipulates light at the submicron scale. The system came up with a new kind of design that we hadn't thought of before and that resulted in a publication in its own right. In another example, we let it design mechanisms to solve a particularly notorious challenge in mechanical design (making a machine that can create a perfect straight line--an engineering puzzle that took humans over a century to solve). Within about a day of computation, it came up with a number of different designs, some of them infringing on patents in this area.

We let it design some analog circuits, which usually take quite a bit of knowledge to design, and this algorithm, without any prior knowledge whatsoever about analog design, was able to create some really interesting designs, some again infringing on patents. What's most interesting is that when we added the requirement that not only must the design work, but it needs to be robust so that if you eliminate any of the elements it still works, and it was able to do that as well.

Most recently, in this robotic scientist challenge, we let this evolutionary process try to create models that explained the behavior of a double pendulum, which is a very complex and chaotic dynamical system. And just by looking at the behavior of this pendulum through a camera, it was able to generate Hamiltonians and Lagrangians (mathematical equations) that exactly explicate its behavior, something that would probably take someone with a major in physics to write down.

What have you learned about people and our own evolution in the process of working in robotics?
When you study robotics, it forces you to rethink, in a very quantitative way, the attributes we hold close and consider unique in our definition of what it means to be human. For example, what is creativity? If machines can create new things and ideas that infringe on patents, which humans have traditionally defined as being creative, what does that mean about creativity? When we have computers that can generate experiments and ask questions, what does that mean about curiosity? Traditionally, we use terms like creativity and self-reflection in a very loose way to cloak something we don't understand very well, but when you actually work with robots trying to emulate these very characteristics, it forces you to think about them in a very precise and quantitative way. Ultimately, I think it leads to deeper questions and better understanding of these concepts.

What innovations in robotics will change our lives 100 years from now?
We are heading toward increased automation, not just in terms of machines and robots performing automated tasks and chores, but automation in the design of those machines. That is, can we make machines that can make other machines? I definitely see an acceleration of these kinds of technologies showing up. It's a bit of a subtle point, but design automation gives you huge leverage to design other things faster. In parallel with that, I also foresee more automated manufacturing and personal fabrication taking over. I think personal fabrication is today, where personal computation was in the 1970s, and pretty soon we will see machines such as 3-D printers being used to fabricate things of increasing complexity at home and on-demand, replacing many traditional manufacturing technologies. And so this combination of robotic design and robotic manufacture is going to be one of the profound changes that we will see in the next couple of decades.

Flights of Icarus, Slow Dawns & Africa Edison

I’ve long held a biased view that solar power will be a flight of Icarus (flying too close to the sun and crashing and burning) and that the only moneymakers will be clever entrenpreneurs who launch what I’ve dubbed “Africa Edison”, taking distressed solar assets from VC funded valley companies and porting them to distrubted utility model in democratic African countries like Ghana. Just like Global Crossing: it’s true beneficiaries were the third-world consumers that got connected, not the investors that funded the fiber-optic cabling. As with most technologies, users benefit from the largesse of funders. Or as Jim Surowiecki noted—in greed and avarice lies the hope of progress.

Anyway: the source of fuel (the sun) is free, for at least half the day, only the hardware is expensive. And the hardware gets cheap through mass bankruptcies of VC funded solar companies. Asset firesales at distressed companies come discarded and cheap. Distributed power for distributed population. This makes way more sense than competing for baseload power. All this remains to be seen. There isn’t yet an obviously viable business model (ie one that wouldnt rely on NGOs) and nor have the bankruptcies, required for my logic to make sense, taken place. But were I a betting man, the odds from where I stand look fair.

But meanwhile the empirical evidence suggests my gut instinct just ain’t right—yet. And being early is the same as being wrong. So objectively, here below, I share an excerpt from the experts at Lux Research, especially their star-studded solar team and their latest findings that are the buzz of the industry.

IMMINENT GRID PARITY TO CREATE SOLAR BOOM IN CALIFORNIA
Solar is nearly competitive with traditional energy in select locations today, says Lux Research, though widespread grid parity will take a decade

Boston, MA – July 7, 2009 – Solar energy has had an image as an impractical high-cost luxury. However, falling costs and time-of-use electricity pricing have now begun to make solar competitive. Proximity to “grid parity” varies by location, and is closest for commercial rooftop installations in California. Grid parity isn’t a single-point in time, and parity for utility-scale generation remains a decade or more away. However, near-term viability in select applications will drive the thin edge of the wedge that leads to cost reduction and future universal grid parity, says a new report from Lux Research, entitled the “The Slow Dawn of Grid Parity.”

“The solar industry is coming of age, and the metrics for judging solar technologies are shifting,” said Ted Sullivan, Senior Analyst at Lux Research, and lead author of the report. “Instead of upfront capital cost for adding generation capacity – or cost per watt peak ($/Wp) – the new standard is the levelized cost of electricity (LCOE).” Presented as cost per kilowatt-hour ($/kWh), LCOE measures the total lifetime cost of a solar installation. This shift enables a more direct comparison to conventional generation types, and enables more rigorous analysis of solar technology on the basis of life-cycle costs, payback period, and return on investment.

The report also provides executives and investors with data on the internal rate of return (IRR) of new solar installations by geography, application, and technology. “IRR is determined by comparing the LCOE in different countries, applications and technologies against the specific subsidies and available retail rates of electricity,” explained Sullivan. “The higher the IRR, the higher the demand in that country, and the more attractive the investment. In subsidized markets, the internal rate of return can reach well in excess of 10%, actively fueling demand.”

Lux Research’s report derives its intelligence from conversations with twenty utilities, project developers, financiers, and tax experts. Among its conclusions:

*Select applications nearly enable grid parity today.
Solar will converge with grid electricity rates in some situations, such as commercial roof decks in California at costs approaching $0.45/kWh. But grid parity comparable with utility generation costs around $0.08/kWh remains a decade away for solar in most markets.

*Subsidies are still the primary demand driver for new installations.
Even where solar is far from grid parity, ongoing subsidies allow investors, businesses, and homeowners to earn positive IRRs from solar installations. These IRRs will boost demand, fueling further increases in scale and enabling the industry to continue cutting costs and innovating. This should drop future solar LCOEs and further accelerate grid parity.

*Premature views of grid parity could be counterproductive. Mounting fiscal pressure on debt-ridden governments could turn the political tide against solar subsidies, particularly if politicians take the simplistic stance that grid parity is a current reality.

“The Slow Dawn of Grid Parity” is part of the Lux Solar Intelligence service. Clients subscribing to this service receive continuous research on solar industry market and technology trends, ongoing technology scouting reports and proprietary data points in the weekly Lux Research Solar Journal, and on-demand inquiry with Lux Research analysts.

About Lux Research
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