As part of my job at GreenMountain, I work with a lot of renewable energy startups. As a result, my friends are constantly telling me about new startups that they’re excited about. This often leads to a discussion of how I evaluate renewable energy companies. The companies that my friends think are on the way to the top are rarely the ones that I think will win, so I think I should try to explain myself.

First off, my goal is to predict whether the company at hand will be able to produce huge amounts of energy from renewable sources at prices that rival fossil fuels. In most of the world, this is not currently possible– fossil fuels are still cheap. There are regional exceptions, like residential solar power in ridiculously sunny places like the American southwest, but generally, no renewable energy company has yet succeeded.

Thus, the interesting question is: what do you need to do to win?

You must scale to huge.

A few years ago, I worked at an environmental foundation in Maine. For the last 8 years, the foundation has produced their own biodiesel from excess frialator oil from two nearby seafood restaurants that boomed in the summer. While I worked there, I was able to buy biodiesel for my Passat at whatever price the local gas station was charging for regular diesel.

It was brilliant, but the only reason it worked was that we got the frialator oil for free. I personally burned around 10% (50 gallons) of the annual biodiesel yield from the two seafood restaurants. I was driving fewer miles than the national average, and in a 42 mpg car. It’s still a great idea, but biodiesel from frialator oil will never scale to huge.

Breakthroughs in the lab are not enough.

Every few weeks, I hear news of a breakthrough in solar cell technology in a laboratory setting. Usually, it’s the Grätzel cell again. If not, it’s often a new manufacturing technique that is purported to be cheap in high volume, but which is currently being produced in very low volume. Even the largest cell producers don’t have a good idea of how cheap their cells will be when they scale beyond GW levels. (Maybe they’re pretty good at 10 GW, but that’s pushing it.) Claiming to be able to make those predictions accurately when you’re below 1 kW is not credible.

You will not challenge Vestas soon.

In the more established renewable industries, like big wind, there are just a few players. Vestas, for example, sells about 25% of the large wind turbines in the world. They have around 20,000 employees and have been producing turbines for 30 years. They do over €1 BN in sales per quarter. Designing a MW-scale turbine takes years, never mind testing.

Most startups could not fit one large turbine blade in their offices. If you’re a big wind startup with a plan to compete on that scale in the next few years, you are not credible. You might be able to do it, but you need a ten year plan.

Higher efficiency at higher cost is not an automatic win.

In small wind, a common approach is the shrouded wind turbine. The general idea is to add a shroud around the wind turbine that channels wind into the blades. So far, nobody has been successful with this approach– the economics dictate that the marginal cost of blade extension beats that of shrouding. This is not to say that shrouded turbines will always lose, just that so far, nobody has been able to get an increase in efficiency that outweighs the increase in cost.

Concentrating photovoltaic systems face the same problem– can you add a concentrating mirror cheaply enough that it’s worth the cost? The jury is still out on that one.

Lower cost with lower efficiency is not an automatic win.

For years, solar cell companies have been trying to make “thin film” solar cells, i.e. cells that are manufactured by depositing a coating a few microns thick on a substrate, usually metal. Because thin film cells are so thin, they use very little material, so they’re much cheaper per unit of area than conventional cells. Unfortunately, they’re also less efficient. In the long run, thin film cells may still win, but so far it seems that, despite massive investments in R&D, the efficiency penalty outweighs the cost savings.

Every engineering challenge comes with a counterpart in marketing.

To win in renewable energy, you can’t be just a brilliant engineer. You also need a team that can sell your products. It’s like preventing car theft– it doesn’t do any good to lock one door of your car, even if you lock it really carefully, and the lock is really strong. You have to lock all the doors, every time you leave the car. In the same vein, your heat recovery system may be brilliant, but if you marketing efforts look amateurish, you’re sunk.

The ocean, sun, wind, and rain are harsh.

Most energy systems have to survive outside for their ~20 year lifetime. If they can’t, you have lost. Ocean power systems, for example, have to survive scouring from ice and abuse from drifting trees. Wind turbines have to survive hurricanes; solar panels must endure hail. If you’re a slippery businessman, you might be able to sell a product good enough to give you 5 years to change your identity and escape to a country missing the requisite extradition treaty, but that won’t solve our energy problem.

Please note in the comments respectable axes of evaluation that I have omitted.

Comment sent to Massachusetts about their bone-headed inclusion of ECMA 376 (OOXML) in their latest draft of the Enterprise Technical Reference Model:

Hello,

I’m a long-term resident of Massachusetts; I run an engineering firm in Waltham. I have no affiliation with any company that produces any document format.

I have two objections to the inclusion of Microsoft’s ECMA 376 in ETRM 4.0:

1. As a citizen, I don’t want to buy a certain vendor’s software to read government documents.

2. As a technical professional in a competitive market, I don’t want to pay the overhead of upgrading the de facto standard Microsoft Office every 3 years for no good reason.

ITD had the right idea with its choice of ISO 26300 (ODF) as a single, open standard for government documents.

In the engineering work that I do, we need to maintain two sets of tools– one in metric units and one in English units. The choice of two standards for the same function provides nothing but inefficiency. ITD should not introduce similar inefficiency into government document formats.

It is predictable that no other vendors will implement ECMA 376 well enough to guarantee document fidelity across platforms. To see why, consider this excerpt from page 1379 of ECMA 376:

“If this compatibility setting is turned on:
<w:compat>
<w:autoSpaceLikeWord95 />
</w:compat>
Then applications should mimic the behavior of Microsoft Word 95 when determining the space between those characters, as needed.”

No explanation of “the behavior of Microsoft Word 95″ is given. How might a competing vendor determine all the rules that Word 95 uses for character spacing? Type all possible sequences of characters in all fonts on a computer borrowed from the Computer History Museum, and then analyze the results?

This sort of incomplete specification, found throughout ECMA 376, will mean that nobody other than Microsoft will be able to implement ECMA 376 completely. While ECMA 376 is nominally open, in my judgment, it is so incomplete as to be effectively proprietary. In the language of ITD, ECMA 376 is publicly available, but not fully documented. The predictable result of ECMA 376 adoption will be a series of buggy import functions in competing software, while Microsoft Office remains the government-supported standard.

The same cannot be said for ODF. Many competing products that implement ODF already exist; I’ve been using them for all my personal documents for several years. I understand the objection that the switch to ODF from Microsoft’s closed formats will be painful, but it’s a better choice than upgrading to the next Microsoft format every three years for eternity.

I request that Massachusetts return to its innovative idea of choosing a single, open standard for government documents; I believe that ODF is the best choice for that standard.

Thanks for your consideration,
Brandon Stafford
Cambridge, MA

I voted for Deval Patrick for governor of the fine commonwealth, er, state that I live in; I was disappointed to see that he appointed the Microsoft Regional Director for Public Affairs, Brian Burke, to his technology working group. It’s disappointing because Mr. Burke will likely attempt to overturn a great technology decision made by requiring that the state adopt OpenDocument format (recently published as an ISO standard) as its preferred format by January 1, 2007. This would mean that my government would no longer be paying so much for Microsoft Office when cheaper alternatives, such as OpenOffice, exist. It’s true that OpenOffice has its flaws, but as a daily user of Microsoft’s lovely office suite, I can verify that Microsoft Office does as well. (Why, for example, when I search Outlook’s inbox, does it return results from my oldest email first?)
The working group has a public meeting at 7 pm on Monday, December 11, 2006.

Stephen Kurkjian, a writer for the Boston Globe, reported today on the resignation of Massachusetts CIO Peter Quinn. Kurkjian failed to mention that his poor reporting one of the causes of Quinn’s resignation.

The background to Quinn’s resignation involves his controversial initiative that will require that all Massachusetts government computer systems store documents in OpenDocument format by January 1st, 2007. Microsoft, the major software supplier to the government, would naturally prefer that Massachusetts mandate the use of their new non-standard XML formats. The alternative, OpenDocument, is a standard already used by software shipping today; additionally, it is approved by an international standards body, OASIS, and has been submitted to the ISO.

In the past few months, Microsoft has been trying to argue against the new policy. In the middle of all this, Stephen Kurkjian, a veteran reporter at the Boston Globe, wrote an article entitled: “Romney administration reviewing trips made by technology chief.” The article alleges that Peter Quinn made sponsored trips to technology conferences without filling out the correct forms. The “review” was instigated by the Globe, as described in this quote from Kurkjian’s article: “The state launched its inquiry after the Globe began asking questions about the trips earlier this week; it is being conducted by Thomas H. Trimarco, the head of Administration and Finance.”

That was on November 26, 2005. About two weeks later (December 10, 2005), the Globe admitted that, in fact, Peter Quinn had done nothing wrong. Specifically, Kurkjian writes that, “[Quinn’s boss at the time, Eric Kriss] confirmed that he had verbally approved all of Quinn’s requests to travel to conferences in 2005. Kriss said he relieved Quinn of the responsibility of filling out the forms for the trips this year because he felt that the reason that the regulation had been put in place originally — the fiscal crisis of the mid-1990s had cut out all state-funded travel — had expired.”

Two more weeks pass, and on December 24, 2005, Quinn sends an email to his staff announcing his resignation. According to a report from Robert McMillan of Macworld, his email included the following: “‘Over the last several months, we have been through some very difficult and tumultuous times . . . Many of these events have been very disruptive and harmful to my personal well being, my family and many of my closest friends.’”

In his article today (December 28, 2005), Kurkjian quotes the same phrase, “some very difficult and tumultuous times.” Kurkjian’s next line is: “Quinn had been the subject of a review by his current boss, Administration and Finance Secretary Thomas H. Trimarco, following a report in November that Quinn had failed to fill out the required state forms to allow his appearances at numerous out-of-state conventions in 2005, where his visits were, for the most part, paid for by convention organizers. Trimarco’s review found that Quinn had authorization to make the trips and had not violated any conflict of interest provisions.”

It’s shocking that Stephen Kurkjian, while explaining that Quinn was quitting because of the stress of recent events, fails to mention that he was personally the cause of one the most significant events. Kurkjian mentions “a report in November that Quinn had failed to fill out the required state forms.” This fails to acknowledge that the report was a newspaper article, not a formal report of any sort; that the report was wrong; and that the report was written by Stephen Kurkjian, the same guy now reporting on Quinn’s resignation.

It’s certainly possible that most of the stress that pushed Quinn to quit came from other sources– for example, the testimony of Microsoft’s Alan Yates, or the strange misunderstandings of Representative Pacheco. However, given that Kurkjian wrote the erroneous report, he should take responsibility for his error.

The Boston Globe, a subsidiary of the New York Times, published a shameful article by Stephen Kurkjian about Massachusetts CIO Peter Quinn failing to provide detailed estimates about trips he took to conferences in 2004. The smoking gun of the article was: “He provided the name of the conferences he was attending, but only the total amount of money that the trip cost on three of them . . .” Before publication, the Globe failed to contact Quinn’s supervisor at the time, former Secretary of Administration and Finance Eric Kriss.

Now, 14 days later, Kurkjian has published an article that starts, “[Peter Quinn] did not violate conflict-of-interest standards or other rules when he took 12 out-of-state trips to attend conferences during the past year without obtaining the written approval of his boss . . .”

This time, Kurkjian managed to get in touch with Eric Kriss: ‘’’I knew of every trip that Peter was taking, and I approved them all,’ Kriss said.”

All of this occurred as Quinn was (and still is) involved in a struggle to move Massachusetts toward the use of OpenDocument, a file format for electronic documents. When a journalist goes off looking for dirt on a politician and prints a pile of unsubstantiated allegations, that’s called a witchhunt. Stephen Kurkjian, what were you thinking?

That brings us to the difference between citizen journalists, like me or the writers for Wikinews, and professionals like Stephen Kurkjian. When I talk about blogging with people who read paper newspapers on a regular basis, the objection I hear most often is: “How do I know that I can trust them? They could be anyone!” With me and the amateurs at Wikinews, you can’t trust us beyond record that we’ve established on the web. However, bloggers (like me, or my friend Mike at The Unauthorized Participant) have no incentive to lie to you. If I don’t feel like writing about anything, then I don’t. I go downstairs and read a book, and that’s it. Mike has a little incentive, as he has ads on his blog, but I suspect he makes about $0.03 per year from them.

The same is true of Wikinews. Last spring, I was unemployed for about 2 months. I wrote a lot of stories for Wikinews, and it was satisfying. Now, I have a new job and less free time. The OpenDocument story has caught my attention. I live in Massachusetts, and I want people to know that the state is on the verge of adopting an open standard for office documents. That’s the entirety of my agenda. I don’t work for Sun or IBM or anyone else who stands to gain from the adoption of OpenDocument. I work doing IT support for an environmental foundation, and I would like to end the scheme of forced upgrades in which Microsoft makes us upgrade to new versions of Office when all we need are the features that were available in Word 97. I want the truth to be told because I think it will make the world a better place.

Stephen Kurkjian, a professional journalist, has a different structure of rewards. The New York Times Company pays him to research and report on local news. Lots of the stuff he’s written has been great (notably, his work in Boston’s Catholic church abuse scandal in 2002). Other stuff, like the recent article trying to taint Peter Quinn without sufficient evidence, is embarrassing. The crux is that Kurkjian can’t go downstairs and read a book. If he wants to continue in his job, he has to write engaging content for the people of Boston to read, even if there is no story to be told. That’s why I am at least as skeptical of professional journalists as the amateurs.

Alright, this is getting dull. I’m going to go read a book (Thomas P. M. Barnett’s Blueprint for Action, if you were wondering). (Look out! He’s a blogger!)

David Berlind has posted another great summary of recent events involving Microsoft’s Office 12 formats, OpenDocument, ECMA, and the ISO. The quick summary is that Microsoft has submitted a plan to get ECMA approval of their formats for Office 12. ECMA would then submit the standard to the ISO for approval. Microsoft has said that they will not sue anyone for infringing their patents in the course of implementing the Office 12 file formats. There is some concern about the possibility of Microsoft suing people who offer only partial implementations of the formats.

In response to one of the comments on his blog, Berlind writes: “You could say “history will repeat itself.” But then again, Microsoft’s covenant not to sue was a pretty big change for the company. So, if it can make that change, can’t it also break from its past in other ways?”

I think Microsoft might be genuinely changing. On the other hand, maybe they’re not. What is the incentive for the residents of Massachusetts, such as me, to give Microsoft the benefit of the doubt? OpenDocument is already approved by OASIS, and it’s likely that it will pass through the ISO before Microsoft’s formats. OpenDocument is available for use in multiple products, right now.

So why should I want my government to wait? Will Microsoft’s formats provide some technical advantage? We’re talking about document formats for an office suite. Will Microsoft’s format allow me to write a memo automatically laced with top-notch witticisms? Enhanced support for embedding physical objects in documents? Will it be the Web 2.0 of file formats? Can I tag their documents and batch upload them to Flickr with the click of a button?

If Microsoft’s intentions are actually good– if they aren’t just trying to hold on to their lock on formats for as long as they can– why won’t they support OpenDocument? The argument for Microsoft centers on their formats being just as good as OpenDocument. If they’re just as good, then let’s pick OpenDocument and avoid the risk that Microsoft may not have our best interests at heart.

I’d love to hear a rebuttal to my argument on technical grounds. The only comparison of the two formats I know of is on Groklaw, but I didn’t think the article was so good. It didn’t give me a good understanding the relative benefits of what the authors call “mixed” and “non-mixed” models for XML. It did make the good point that OpenDocument reuses other existing standards like SVG, while Microsoft does not.

(I’ve been waiting for widespread SVG support for years; I can’t believe that we still use the gd library for the creation of graphics programmatically when we could use SVG.)

Writely announced today that has added support for ODF. Writely is an AJAX word processor, i.e. a program like Microsoft Word that you use through your web browser.

That means that there are now several different programs supporting ODF:

• OpenOffice / StarOffice
• KOffice
• Writely

Abiword and Textmaker can open ODF, and they’re both working on saving in the format.

David Berlind at ZDNet has been exchanging email with Curtis Chong, the president of the National Federation of the Blind in Computer Science, on the topic of the OpenDocument policy in Massachusetts. Chong’s concern is that Massachusetts discontinuing the use of Microsoft Office will result in screen readers failing to work for people with disabilities. Berlind thinks that moving to an open standard will mean that once screen readers are fixed to work with the standard, they will work forever.

The tough part of the question is deciding when to adopt a new, open standard over a dominant, proprietary standard. As far as I know, nobody makes the argument that proprietary standards are better for the person using the standard. I suspect that even a Microsoft zealot would love to erase their history of changing file formats with new releases of Word, if they could maintain the same features and market share they have today.

Software users want open standards, not because they’re interested in open standards, but because they’re *not* interested in standards at all. Standards are boring. As someone who has actually read IEC 60950 (Information Technology Equipment– Safety), I can verify that standards are not interesting. Converting documents from Word 97 format to .rtf to get rid of macro viruses is also no fun. I did a lot of it a few weeks ago– it is boring.

On the other hand, sometimes your just trying to get your job done so you can go home and play with your kids, or whatever it is that people who don’t like computers do. Sometimes, the shackles of a proprietary standard are comfortable, particularly in the short term. On a day to day basis, the incentive to disrupt your work on behalf of “standards compliance” is very low.

In the long term, it’s quite high. As Curtis Chong writes in his first letter to David Berlind: “[W]henever Microsoft decides to come out with a new version of Office or Windows, screen access technology developers and the blind community must race to keep up.” If the screen readers don’t keep up with Microsoft’s ever-changing standards, they are screwed.

The role of government, (for example, the state government of Massachusetts, where I live), should be to make sure that we take the long view. They should do this to minimize the total amount of pain that we go through. This is the same issue we face with the environment. We want the efficiency of the free market to maximize profits, but we have no reason to think that the free market will maximize, say, air quality. As a result, we allow the government to restrict the market to protect important shared resources through, for example, automobile emissions controls.

What does the long view tell us about file formats? By now, it is predictable that Microsoft will continue to change formats and force upgrades on their customers. It has been happening for approximately 20 years– I first used Microsoft Word 1985; I suffered; and I stopped using it regularly in 2001. If nobody forces us to switch to an open standard, it is very likely that the pain will continue. I suspect that Microsoft actually *needs* to change standards to stay competitive. Given that most people would be reasonably satisfied with the functionality of Word 97, if Microsoft loses the battle against OpenDocument, and there are free alternatives that reach the level of Word 97, they’re hosed.

Is it time to switch to OpenDocument? I use OpenDocument on a daily basis for spreadsheets and text documents. It works. The Massachusetts policy allows that accessibility will trump format, i.e. nobody will be forced to use OpenDocument if it means they can’t read it. Given that escape clause, OpenDocument’s maturity, and the strong incentive for all of Microsoft’s competitors to make OpenDocument work for everyone, mandating the use of OpenDocument is exactly what the Massachusetts government should be doing.