tingilinde

tesla pays off govt loans nine years early

the press release:

 

Tesla Repays Department of Energy Loan Nine Years Early
Only American Car Company to Have Paid Back Government

Wednesday, May 22, 2013

PALO ALTO, Calif.-- Tesla Motors announced that it has paid off the entire loan awarded to the company by the Department of Energy in 2010. In addition to payments made in 2012 and Q1 2013, today's wire of almost half a billion dollars ($451.8M) repays the full loan facility with interest. Following this payment, Tesla will be the only American car company to have fully repaid the government.

For the first seven years since its founding in 2003, Tesla was funded entirely with private funds, led by Elon Musk. Tesla brought its Roadster sports car to market with a 30% gross margin, designed electric powertrains for Daimler (Mercedes) and had done preliminary design of the Model S all before receiving a government loan.

In 2010, Tesla was awarded a milestone-based loan, requiring matching private capital obtained via public offering, by the DOE as part of the Advanced Technology Vehicle Manufacturing program. This program was signed into law by President Bush in 2008 and then awarded under the Obama administration in the years that followed. This program is often confused with the financial bailouts provided to the then bankrupt GM and Chrysler, who were ineligible for the ATVM program, because a requirement of that program was good financial health.

The loan payment was made today using a portion of the approximately $1 billion in funds raised in last week's concurrent offerings of common stock and convertible senior notes. Elon Musk, Tesla's Chief Executive Officer and cofounder, purchased $100 million of common equity, the least secure portion of the offering. "I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate," said Elon Musk. "I hope we did you proud."

About Tesla

Tesla Motors' (NASDAQ: TSLA) goal is to accelerate the world's transition to electric mobility with a full range of increasingly affordable electric cars. California-based Tesla designs and manufactures EVs, as well as EV powertrain components for partners such as Toyota and Daimler. Tesla has delivered almost 10,000 electric vehicles to customers in 31 countries.


Moniz: Tesla Repayment Shows the Strength of Energy Department's Overall Loan Portfolio

Washington, D.C. -- Today, Tesla Automotive repaid the entire remaining balance on a $465 million loan from the Department of Energy nine years earlier than originally required. U.S. Energy Secretary Ernest Moniz made the following statement:

"When you're talking about cutting-edge clean energy technologies, not every investment will succeed -- but today's repayment is the latest indication that the Energy Department's portfolio of more than 30 loans is delivering big results for the American economy while costing far less than anticipated.

"More than 90 percent of loan loss reserve Congress established remains intact, while losses to date represent about 2 percent of the overall $34 billion portfolio. The other 98 percent of the portfolio includes 19 new clean energy power plants that are adding enough solar, wind and geothermal capacity to power a million homes and displace 7 million metric tons of carbon dioxide every year – roughly equal to taking a million cars off the road.

"The Department first offered loans to Tesla and other auto manufacturers in June 2009, when car companies couldn't get other financing and many people questioned whether the industry would survive. Today, Tesla employs more than 3,000 American workers and is living proof of the power of American innovation. This is another important contribution to what the Obama Administration has done to preserve and promote America's auto industry.

"Finally, this announcement is also good news for the future of America's growing electric vehicle industry. While the market has taken longer than predicted to get going, sales of electric vehicles in the U.S. tripled last year and are continuing to increase rapidly in 2013. Tesla and other U.S. manufacturers are in a strong position to compete for this growing global market."

The Department released today the fact sheet below providing additional statistics and highlights of the Department's loan portfolio.

Key Statistics and Highlights of the Department's Loan Portfolio:

Losses to date in the Department's loan programs represent about 2 percent of the $34 billion portfolio and less than 10 percent of the $10 billion loan loss reserve that Congress set aside to cover expected losses in the programs.

Many of the nation's largest and most innovative energy and transportation projects are supported by the Department of Energy's loan programs, including:

Several of the world's largest solar generation facilities and thermal energy storage systems (Ivanpah, Agua Caliente, Desert Sunlight, Abengoa Solana, and Solar Reserve Tonopah)

One of the world's largest wind farms (Shepherds Flat)

The first two all-electric vehicle manufacturing facilities in the U.S. (Tesla and Nissan)

The first nuclear power plant to be built in the U.S. in the last 30 years (Vogtle)

In the auto industry specifically, these investments have made an enormous impact. In June 2009, for example, the Department offered more than $8 billion in conditional loan commitments to three companies -- Ford, Nissan and Tesla – to help retool, refurbish, and reopen American auto plants to produce the cars of the future. The results have been impressive:

The Department provided a $5.9 billion loan to Ford Motor Company to upgrade and modernize thirteen factories across six states and to introduce new technologies to raise the fuel efficiency of more than a dozen popular vehicles, including C-Max Hybrid, Focus, Escape, Fusion, Taurus, and F-150 trucks, representing approximately two million new vehicles annually. This investment is supporting approximately 33,000 manufacturing and engineering jobs across the United States.

In Smyrna, Tennessee, the first advanced battery packs produced in the United States are coming off the production line of Nissan North America's production plant. These advanced batteries are powering U.S.-made all electric Nissan LEAF cars. The construction of the 1.3-million-square-foot, state of the art battery facility was made possible through a $1.4 billion loan from the Department of Energy.

Tesla's $465 million loan enabled it to reopen a shuttered auto manufacturing plant in Fremont, California and to produce battery packs, electric motors, and other powertrain components. Tesla vehicles have won wide acclaim, including the 2013 Car of the Year from both Motor Trend and Automotive Magazine, and Consumer Reports recently rated Tesla's Model S as tied for the best car ever rated. Tesla has created more than 3,000 full-time jobs in California – far more than the company initially estimated – and is building out a supply chain that supports numerous additional jobs and technologies, and is bringing advanced manufacturing technology back to America.

It's important to remember that these three loans were conditionally offered in June 2009, which was a time when many people believed that the industry itself might not survive. That was the same month GM filed for bankruptcy, and auto sales were 28 percent lower than the year before. One major newspaper headline that month summed up the industry as "on the verge of extinction." June 2009 was also the lowest point for U.S. auto industry employment in decade. At the beginning of 2008, America's auto industry had employed almost a million people; just 18 months later, one-third of those jobs were gone. The ongoing financial crisis was making it nearly impossible for the major auto companies – let alone startups like Tesla – to obtain financing. The lack of financing for the automotive industry was critical and potentially lethal for the industry. Providing these loans was a calculated risk – but it was the right decision for the country.

stalking methane leaks

Natural gas is being hailed as a clean fuel and a bridge to a world where much less carbon is emitted to the atmosphere.  It does burn cleaner than oil or coal (roughly 30% less carbon dioxide than oil and 50% than coal) and other pollutants are lower.  But a problem is half as much as coal is still far too high - it may be fine for short term replacement for coal, but creating new infrastructure that uses it is a problem as power plants tend to last for five or more decades.

I said may be fine.  It turns out there is a fly in the ointment.  While burning natural gas is cleaner, not all of it is burned.  Some escapes to the atmosphere.  Natural gas is mostly methane which happens to be a much more powerful greenhouse gas than carbon dioxide.   It varies with the type of coal burned, but if natural gas leakage is greater than about four percent the end result is greater green house gas emissions than coal.

Leakage exists, but it is poorly monitored.  Estimates are in the two to three percent range for the US - meaning natural gas may be worse for global warming than burning oil.  Some measurements have been very high - figures in the high single digits have been recorded at some fracking sites, but it should be stressed very little has been done in the form of actual measurements.

NPR recently profiled atmospheric scientist Ira Leifer who made a trek taking some measurements.  Great stuff, but we need an instrumented infrastructure measuring this.  My guess is there are industry and political pressures that would make the expense difficult.  The next best thing would be solid amateur measurements - inexpensive instruments that could be easily calibrated would be a nice development.   Then again a few percent waste is money that just blows away...

 

 

us taxpayer bill for extreme weather was high last year

According to the NRDC it was nearly $100 billion - about $1100 per taxpayer.  While last year may have been a spike it is likely the average will just keep increasing.  Most of the damage was covered by taxpayers rather than insurance.

After Sandy the term resilient seems to be coming into general use  - mostly replacing sustainable.  In this part of the country (NJ) a huge number of small electric generators have been installed.  Being without electricity for a week or two in freezing weather was not particularly fun and many came to see them as extremely desirable necessities.  Permanent natural gas generators are frequently in the $5,000 to $10,000 range and are a very expensive and inefficient power source. Perhaps this should be viewed as an additional cost burden on families who can no longer trust the power infrastructure.

 

 

 

how a uncommon environmentalist sees the world

Mike notes the two part transcript (part 1,  part 2) of a Jeremy Grantham  interview that appeared in The Guardian a few weeks ago.  I'm not as enthusiastic as he is on China...

 

 

a huge carbon bubble?

In the past few months increasing attention has been given to the notion of a carbon bubble.  The idea is that to keep gobal temperatures from rising past a specified number you are limited to burnng a certain amount of carbon based fuels - a cap exists.  But if you look at the development of carbon resources by compannies and countries, the amount is much greater than any reasonable cap - large amounts of money are being spent for nothing.  At some point you have a huge inventory of stranded assets.  But how can a market possibly be wrong?  After all, it is impossible for a home mortgage bubble or a banking crises  to exist isn't it?

There may be some very serious investment risks and ruined economies down the pike.  Perhaps another externality of a carbon based economy as it tries to avert disaster.  Of course there is always the possibility that we will figure diaster is ok.

One of many papers on the subject - this one has the following forward by Lord Stern:

This report shows very clearly the gross inconsistency
between current valuations of fossil fuel assets and
the path governments have committed to take in
order to manage the huge risks of climate change.

If we burn all current reserves of fossil fuels, we will
emit enough CO2 to create a prehistoric climate,
with Earth’s temperature elevated to levels not
experienced for millions of years. Such a world would
be radically different from today, with changes in the
intensity and frequency of extreme events, such as
floods and droughts, higher sea levels re-drawing the
coastlines of the world, and desertification re-defining
where people can live. These impacts could lead to
mass migrations, with the potential for widespread
conflict, threatening economic growth and stability.

Governments have started to recognise the scale
of the risks posed by unmanaged climate change
and have already agreed to reduce annual global
emissions to avoid global warming of more than 2°C.
In late 2015, governments are expected to gather

in Paris at the annual United Nations climate change
summit to sign a treaty that will commit everyone
to action that will achieve this aim.

Carbon capture and storage technology could, in
theory, allow fossil fuels to be burned in a way that
is consistent with the aim of reducing emissions.
However, this report shows that even a scenario for
its deployment that is currently considered optimistic
would only make a marginal difference to the amount
of fossil fuels that can be consumed by 2050.



Smart investors can already see that most fossil fuel
reserves are essentially unburnable because of the
need to reduce emissions in line with the global
agreement. They can see that investing in companies
that rely solely or heavily on constantly replenishing
reserves of fossil fuels is becoming a very risky
decision.

But I hope this report will mean
that regulators also take note,
because much of the embedded
risk from these potentially toxic
carbon assets is not openly
recognised through current
reporting requirements.

The financial crisis has shown what happens when
risks accumulate unnoticed. So it is important that
companies and regulators work together to openly
declare and quantify these valuation risks associated
with carbon, allowing investors and shareholders to 
consider how best to manage them.

If these valuation risks are made more transparent,
companies that currently specialise in fossil fuels
will be able to develop new business models that
take into account the fact that demand for their
products will decline steeply over the next decades,
and to consider their options for diversifying in order
to maintain their value. Investors will also be able to
consider whether it is better to stay with high-carbon
assets, or instead seek new opportunities in those
businesses that are best positioned gain in a low
carbon economy.

This report provides investors and regulators with
the evidence they need that serious risks are growing
for high-carbon assets. It should help them to better
manage these risks in a timely and effective way.

Professor Lord Stern of Brentford, Chair, Grantham
Research Institute on Climate Change and the
Environment, London School of Economics and
Political Science 

 

 

Of course this presuposes that humanity has enough sanity to eventually agree to limits,

storing energy from offshore wind turbines

Take a big hollow sphere and sink it to help anchor an offshore wind turbine.  Pump water out when you have extra wind and open a valve and let water back in, spinning a turbine connected to a generator, when it is calm.  Massive engineering, but it may be a viable way to store energy.

snip

...

Whenever the wind turbines produce more power than is needed, that power would be diverted to drive a pump attached to the underwater structure, pumping seawater from a 30-meter-diameter hollow sphere. (For comparison, the tank’s diameter is about that of MIT’s Great Dome, or of the dome atop the U.S. Capitol.) Later, when power is needed, water would be allowed to flow back into the sphere through a turbine attached to a generator, and the resulting electricity sent back to shore.

One such 25-meter sphere in 400-meter-deep water could store up to 6 megawatt-hours of power, the MIT researchers have calculated; that means that 1,000 such spheres could supply as much power as a nuclear plant for several hours — enough to make them a reliable source of power. The 1,000 wind turbines that the spheres could anchor could, on average, replace a conventional on-shore coal or nuclear plant. What’s more, unlike nuclear or coal-fired plants, which take hours to ramp up, this energy source could be made available within minutes, and then taken offline just as quickly. 

The system would be grid-connected, so the spheres could also be used to store energy from other sources, including solar arrays on shore, or from base-load power plants, which operate most efficiently at steady levels. This could potentially reduce reliance on peak-power plants, which typically operate less efficiently.

...

 There are any number of ways to store energy - the trick is finding one that is cost effective and efficient.  Perhaps this one makes sense.

 

 

democracy as been hacked

Al Gore gives an impassioned speech at the Stephen Schneider memorial at Stanford last week.

Al Gore @ Stanford | April 23, 2013 from Cyperus Media.com on Vimeo.

a carbon bubble

Of course this assumes that action will be taken at some point - I'm not terribly confidient that good choices will be made at this point - particularly in the three to five countries that can make the largest difference.

 

 

more on pollution in china

When will this mess break?  via the NY Times

snip

...

The boy’s mother, Zhang Zixuan, said she almost never lets him go outside, and when she does she usually makes him wear a face mask. The difference between Britain, where she once studied, and China is “heaven and hell,” she said.

Levels of deadly pollutants up to 40 times the recommended exposure limit in Beijing and other cities have struck fear into parents and led them to take steps that are radically altering the nature of urban life for their children. Parents are confining sons and daughters to their homes, even if that means keeping them away from friends. Schools are canceling outdoor activities and field trips. Parents with means are choosing schools based on air-filtration systems, and some international schools have built gigantic, futuristic-looking domes over sports fields to ensure healthy breathing.

“I hope in the future we’ll move to a foreign country,” Ms. Zhang, a lawyer, said as her ailing son, Wu Xiaotian, played on a mat in their apartment, near a new air purifier. “Otherwise we’ll choke to death.”

She is not alone in looking to leave. Some middle- and upper-class Chinese parents and expatriates have already begun leaving China, a trend that executives say could result in a huge loss of talent and experience. There are also reports of foreign parents turning down prestigious jobs or negotiating for hardship pay from their employers, citing the pollution.

There are no statistics for the flight, and many people are still eager to come work in Beijing, but talk of leaving is gaining urgency around the capital and on Chinese microblogs and parenting forums. Chinese are also discussing holidays to what they call the “clean-air destinations” of Tibet, Hainan and Fujian.

...

 

 

 

 

harvesting human energy

Every now and again you see an article like this on recovering kinetic energy expended by people.  Unless you are trying to harvest very small amounts of energy where it may be difficult to find it otherwise, these are on the foolish side.

We don't make that much energy available.  The human body is only about 20 to 25% efficient at converting the energy stored in food into kinetic energy.   A dedicated recreational rower might spend an hour doing about 200 watt-hours of work to the flywheel of a good rowing machine.  You might be able to recover 90 or even 95% of that with a very good (expensive) generator, but let's say you can get all of it.  A few hundred watt hours isn't much considering the average home uses about 25 kilowatt-hours of energy a day - not to mention a human powered generator is an extremely expensive way to make power.

There are great uses for human generated power - moving a person (and not much else) for distances up to a few miles is one of them - a bicycle is one of the most efficient ways to move people.  But dreams recovering significant amounts of energy from street tiles are just dreams.

One of the biggest levers we have for moving towards less impact on the environment is to conserve, but it is very important to note that to have any real impact we have to take big steps ... if everyone does a little it will only add up to a little.  

Think of it this way.  Everyone uses energy.  If you do something that saves a percent that's fine, but you are still using a lot.  If everyone else makes the same 1% change, the total energy drop is only a percent.  While that is not bad, it doesn't really change anything.  There is a real danger that people confuse these tiny changes with major ones.  

So if you can save a bit here and there go ahead and do it, but don't confuse yourself that you are doing well.  I've seen people very excited about installing new LED bulbs.  They often save money (but not always), but then the same people don't worry about much more significant change.