From old to new, and a smarter planet

via www.youtube.com

Found this interesting video on the IBM developerworks site. The title, "From old to new, and a smarter planet" describes not only the scene we see, but what we don't see.

developerWorks' Scott Laningham is our host for the less than 2 minute video which plays out on the roads of West Texas. He just couldn't pass up the symbolism of the setting — old oil wells rimmed by miles of wind turbines.

This past weekend, I was driving from St. Louis to Chicago and also saw miles and miles of wind turbines off in the distance. To some these are an eyesore, but to me they represent our future.

At the end of the video, Scott makes a plug for the Smarter Planet demo series on developerWorks. www.ibm.com/developerworks/

House Passes Wind Energy Research and Development Act of 2009

Wind energy currently makes up 2% of the total energy generation in the United States, but there is the potential for it to provide up to 20% with the right improvements in turbine technology, forecasting, energy storage, and expansion of transmission systems.

So it is great to see that the U.S. lawmakers are starting to focus on this area.  Yesterday, the U.S. House of Representatives passed the Wind Energy Research and Development Act of 2009.  The bill, if eventually signed into law, would authorize a comprehensive program to improve the efficiency, reliability and cost effectiveness of domestic wind energy systems.

The bill would authorize the Secretary of Energy to carry out a program of research and development to improve the energy efficiency, reliability, and capacity of wind turbines; optimize the design and adaptability of wind energy systems; and reduce the cost of construction, generation, and maintenance of wind energy systems.

Specifically, this program would include:

  • Examination of new materials and designs to make larger, lighter, less expensive, and more reliable motor blades
  • Technologies to improve gearbox performance and reliability
  • Technologies to improve transmission from remotely located renewable resource rich areas
  • Low-cost transportable towers greater than 100 meters in height
  • Advanced computational modeling tools, control systems, blade sensors and advanced generators
  • Wind technology for offshore applications
  • Automation, materials, and assembly of large-scale components
  • Methods to assess and mitigate the effects of wind energy systems on radar and electromagnetic fields
  • Wind turbines with a maximum electric power production capacity of 100 kilowatts or less

The bill authorizes $200 million dollars per year from 2010 through 2014 for these programs.

Let’s hope this bill, or something like it, makes it way into law.

For more information

8 Emerging CleanTech Investment Areas

A new report is claiming that, with an aggressive infrastructure investment, eight emerging technologies could meet 60 % of new energy demand by 2020.  It is also claiming that we could abate more CO2 than is necessary for climate stabilization in just 10 years.  

The report, titled  "The Gigaton Throwdown", was developed with the support of many, many people who are tied to the cleantech industry.  The effort was led, in part, by Sunil Paul, who is a founder of Silicon Valley’s Spring Ventures.

The report estimates that if annual global private investment in cleantech tripled between now and 2020, clean energy investments would be in line with fossil-fuel investments.   It is a lofty goal, but the authors say that if we are able to shift investment into ready cleantech solutions, the results would be world changing:  climate mitigation, energy security and 5 million new jobs planetwide.

The report highlights the eight emerging clean technology solution areas that are ready for investment and could yield the stated goals.

  1. Biofuels
  2. Building Efficiency
  3. Concentrating Solar Power
  4. Construction Materials
  5. Geothermal
  6. Nuclear
  7. Solar Photovoltaics
  8. Wind

According to the report each of the eight solutions listed above could feasibly deliver one giagaton of global energy, and each could avoid one gigaton of emissions from being discharged into the atmosphere by 2020, thus the idea for the name of the report.

Apparently the authors considered plug-in electric vehicles , but the projected adoption of this technology is predicted to be too slow to have an impact by 2020.

For more information:

2009 Venture Capital Investment Survey by Deloitte and NVCA

Deloitte and the NVCA  released their annual Venture Capital global survey findings last month.  The report found that (not surprising) VC firms have been cutting back in their funding of startups.   While it has been a difficult recession, the industry is making some adjustments.

Some summary findings

  • Portfolio Pruning.  51%  are decreasing the number of companies in which they plan to invest and just 13 percent are increasing this activity.
  • Cleantech:  The clean tech sector is poised to become the leading investment category.  Overall 60% of respondents say that cleantech investments are on the rise.  Among U.S., UK and Israeli investors, about half expect to increase their investments in cleantech, while about seven out of 10 AP respondents and European respondents expect their cleantech investments to increase.
  • Globalization:  Globalization of the venture capital industry will intensify in coming years, posing significant competitive questions for the United States, and opportunities for emerging markets such as China.
  • Regional Investments:  Investment levels are more likely to increase in countries outside the United States.  Governments of all countries have a crucial role to play in fostering competitiveness and innovation.  Specific findings include that 52% of the survey respondents are currently investing outside their home countries.  19% of respondents expressed that investment levels will rise in Israel,  50% believe that investment will increase in Asia (excluding India); 43% in India; 36% in South America; 25% in Europe and the UK; and 17% in North America.
  • Government:   66% of venture capitalists would like a tax break from their respective governments. 40% believe that government support for entrepreneurial activity is important; 31% would like governments to encourage more active public markets; and 29 percent believe improved access to private capital sources will help better support innovation.
  • Investment Timing:   According to 51% of the VCs, now is a good time to invest. Only 6 percent believe that it is not a good time to make investments.

The 2009 Global Venture Capital Survey was conducted in the first quarter of 2009 and measured the opinions of more than 700 venture capitalists worldwide.  To view the full survey results visit: 2009 Global Trends in Venture Capital

Shifts in Cleantech Financing

This blog brings significant updates to my previous two blogs on Cleantech showing (1) that after a strong 2008, 1Q09 Cleantech investments have dropped and (2) the important role of Cleantech in the stimulus plans.


  1. The Cleantech Group released 1Q09 VC investments in Cleantech which show a 45% drop compared to the previous quarter and a 48% drop compared to 1Q08.  The average round size dropped from  $20M in 3Q08 to $12.3M in 1Q09.  The report underlines that “Cleantech financing is moving into a new phase characterized by diversified funding sources as global recession and liquidity issues impact venture investors.  Venture funds continue to invest significant sums, albeit at a slower pace and scale”.  Utilities and corporations are increasingly playing a leadership role in developing the sector. 
  2. Meanwhile governments globally are allocating historic amounts of capital to clean technology through stimulus packages.  I should have added to my blog last week that the report “Towards a Green recovery” estimates that $400M  of  $2.6T spent in economic stimulus by G20 are earmarked for clean tech such as renewable energy, improved grids and cleaner cars. In the US, the American Recovery and Reinvestment Bill places Cleantech as a key driver of economic stabilization and job growth.  The measures (Over 10% of the total spending) target doubling renewable energy generating capacity (wind, solar, and geothermal).  Provisions also target efficiency, expanded electricity grids including advances metering, energy management SW and usage monitoring sensors.

The credit squeeze has challenged sectors such as wind and solar, stalling new and expansion projects.   The industry is still looking for clarity on how a new Treasury grant program will work.  Financing of projects slated to go forward is still taking extra time to get done.  The stimulus has generated more activity if not yet money for the renewable s sector.

 

Green Recovery?

 

A couple weeks ago, I discussed some trends in VC investments regarding Cleantech.  For the G20 summit early April, the Postdam Institute for Climate Impact Research and the Grantham Institute on Climate Change and the Environment published a very interesting document about the potential for a green recovery from the current recession.  (Towards a global Green Recovery) 


The report shows that “Public spending aimed at stimulating private investments that help reducing greenhouse gas emissions can perform very well against criteria for an effective stimulus while providing the additional benefits of lower energy costs and increased energy security.  By focusing on correcting well known market failures in energy use and R&D, it can avoid crowding out private sector activity.  In fact, green recovery programs have the potential to stimulate private investment in low carbon technologies, thereby developing new opportunities for employment, innovation, and wealth creation.”  The report also highlighted key measures that the G20 could take, including physical infrastructure upgrades, energy efficiency increases, and potential flagship project investments. 


So what happened?  The G20 communique included $1.1B in plan pledges – $750B for the IMF, $250B for trade and financing – as well as motions for stricter regulations on hedge funds and banks.  While many groups are arguing that a larger GDP share should go towards green initiatives, others are satisfied that those notions have become mainstream.  Personally, I think that the economic situation is such that priorities will focus on the fastest way to accelerate the recovery, possibly at the expense, at least initially, of green.

VC Investments in Cleantech remain Strong

Well, this is my first time on this blog.  I have worked with Bill for 10 years in IBM where  he writes one of the most successful internal blogs and I was really excited when he authorized me to participate in this blog.  Among emerging trends and opportunities, I am thinking of focusing on Cleantech for a couple reasons.  Beyond my personal interest, this is an opportunity that I can discuss in any job interviews I hope to get over the next few months…  Whether it is hype or reality, people and companies always show interest and understand at least some aspects of it.  VC investments are a good benchmark to measure the potential of emerging technologies.


According to  PWCC / Reuters / National Venture Capital Association data, VC investment cuts were notable in 2008 (-8% in volume, -4% in deal volume) - this was the first year since 2003 that total investments slowed.  The brightest spot was investment in clean energy technologies which increased 52% to $4.1B.  Seven of the 10 largest deals for the year were in this area.  By contrast investments in  Software companies fell 10% and life sciences startups 15%, even though biotech and medical device startups were the top investment sector for 2008. 


Cleantech investment focus is on solar energy and photovoltaic companies which received $1.8B in 2008.  Startups that make energy from other sources, including ethanol and nuclear energy were next, getting $561M or 14% of the total.  Other major investments benefitted companies that recycle chemicals and battery startups. 


A little European pride to finish — Deloitte 2008 Global VC Survey shows that Europe is emerging as a new leader behind the US for Life Sciences and Cleantech — led by Germany and the UK.  Will have to find out where France stands…