16 July 2014

My Top 5 Reasons Cleantech Is Alive and Well

Here's My Top 5 reasons cleantech is alive and well:

 
1.) China. China finally seems poised to address its outrageous pollution problem. The Beijing Municipal Bureau of Environmental Protection estimates it will cost China upwards of $800 billion to clean its air. $800 billion. Cleaning up Beijing alone could cost as much as $163 billion. And its water doesn't fair much better: seventy percent of the groundwater in the north China plain is unfit for human contact. Not just consumption, contact. And only half the water sources for Chinese cities are safe to drink. The Chinese government says it will commit 1.7 trillion yuan ($277 billion) to combat air pollution over the next five years, which is a start, but until then we'll keep seeing scenes like the "LED sunrise" on Tiananmen Square that went viral.

LED sunrise on Tiananmen Square. Credit: ChinaFotoPress via Getty Images

2.) Google bought Nest for $3.2 billion. This is a cleantech success story. I don't care whether Nest Labs ever considered itself a cleantech company since its founding in 2011. If cleantech is the set of new technologies and business model innovations that help use natural resources more efficiently, effectively, and responsibly, then Nest, which took a ubiquitous, yet poorly designed technology (the thermostat), made it smart and fun to save energy in homes because its cool and easy to use. That is cleantech.

Nest thermostat. Photo: Nest Labs

3.) Solar, distributed solar. I know, solar was a dirty word for some investors, including the American tax payer, who got burned by solar 1.0. But there's a new game in town now that solar panels are cheap and financing distributed solar has become easier thanks to innovators like SolarCity, Sungevity, and the like. Installations are on the rise and investment is pouring back in.

4.) Tesla Model S. Motor Trend Car of the Year. 2014 Detroit News Readers' Choice Award as North American International Auto Show Most Innovative Vehicle. Yes, D-E-T-R-O-I-T News. Tesla  announced earlier this year it had sold 6,900 of its Model S in the fourth quarter -- twenty-five percent higher than the previous quarter and roughly twenty percent more than expected. And they recently announced the Model 3 (formerly, Model E, but it turns out Ford owned that), which will sell for about $40,000, Tesla is in line for growth and more growth. That's for a company with $27.25b market cap.

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Tesla Model S. Photo: SEA


5.) Many more innovations are needed. Energy efficiency, recycling, water use, as well as purity and scarcity, and food are all ripe for cleantech disruptions, innovations, and solutions. There are still plenty of opportunities out there for entrepreneurs, investors, and others to tackle resource scarcity, use, and management. We've only just begun to address the issues our planet faces. And the need for innovative financing to enable these solutions is also going to grow. Call it what you will, "cleantech" is going to be a growth engine for many years to come.


Cleantech isn't dead. It hasn't crashed, it hasn't lost its value, and it has only grown more important and necessary. Cleantech is alive and well.


(NOTE: This is a slight, updated edit of an earlier post I wrote on The Green Skeptic.)

17 April 2014

Ideas on Energy: Mid-Atlantic Energy Technology Forum Looks to the Industry’s Future


(Note: This is reposted from my friends at Pepper Hamiliton LLP, co-hosts of the Mid-Atlantic Energy Technology Forum with the Cleantech Alliance Mid-Atlantic, of which I am co-founder.)

Mid-Atlantic Energy Technology Forum panel photo

The future of the energy industry; the technologies with the potential to impact energy exploration, delivery and efficiency; and the energy industry investment climate were on the agenda at the 6th Annual Mid-Atlantic Energy Technology Forum.

Pepper’s Energy and Emerging Company Groups hosted the April 3, 2014 event in Philadelphia, along with the Academy of Natural Sciences of Drexel University (which served as the event venue) and the Cleantech Alliance Mid-Atlantic. Nearly 300 energy industry professionals were in attendance.

The Forum kicked off with an investor panel moderated by Pepper partner Thomas P. Dwyer that discussed the current strategic and financial climate and what to expect in the energy sector in 2014. The featured panelists were George Coyle, manager, investments technology ventures, ConocoPhillips Company; Bill Kingsley, managing director of EnerTech Capital; Michael Smith, vice president, head of Constellation Technology Ventures at Exelon; and Annie Theriault, vice president of the Northwater Intellectual Property Fund.
Thomas P. Dwyer at podium photo
Dwyer asked the panelists how the long-term viability of energy technology is perceived in the marketplace, to which Coyle responded, “Energy technology has always been there and will continue to be. While we saw a drop in cleantech investment, we’re still invested in a number of cleantech companies, including the first commercial carbon capture plant in Texas.”

“Oil and gas are booming, and those industries continue to drive the need for technologies that help them to be more efficient and sustainable. It’s difficult to supply energy and it takes energy to do that, so there’s no shortage of need for technology that streamlines those processes,” Coyle said.

Smith said that as an electric power provider, his company is seeing a paradigm shift in how businesses and individuals make and use power, which will likely change the way energy and related services are provided going forward. “Disruption in our industry is coming from the outside. People are making devices to make buildings smarter, and those innovations are coming from technology people, not energy people,” Smith said.
Dwyer then posed a thought-provoking question to the panelists: Will there be a Google or Apple of the energy space, or is the industry too regulated for that to happen?

Kingsley said, “It won’t happen in the next two or three years. The utility system in the United States is brilliant in the way it was set up in the 1920s and 30s. But, that investment model is now creaky. Everyone is looking at doing something with natural gas – there wasn’t much going on in that space 15 years ago. Utilities can’t plan effectively in that environment.”

“That’s right from my perspective,” Smith said. “Customers increasingly determine their fate, and we’re seeing an erosion of the energy paradigm that’s been around for 100 years.”

Coyle added, “We’re seeing a reversal of roles. Instead of creating more devices to take power off the grid, we’re seeing new ways of putting power back on the grid.”

Dwyer asked the panelists about trends in exits in the energy space, and Theriault said that exits involving IP in the software space are doing well. “On the M&A side and public company exits, energy is still a tricky market and will continue to be challenging,” she said.

Kingsley said, “We had people who walked away from the cleantech sector who are now coming back, so it’s a cyclical market. I like it – there are fewer investors, so the deal prices are better.”

The discussion closed with the panelists’ thoughts on opportunities and challenges for energy technology in the Mid-Atlantic region. Coyle said that while there are many very good energy technology professionals in the region, the challenge is getting the best and brightest minds to care about energy and see it as a career path, as it is seen in Houston and other parts of the country where the energy sector is more dominant. He also said that perspective may change now that Pennsylvania is one of the largest energy production states, thanks to the Marcellus Shale.

“There is no dearth of activity in this region, and I am not at all concerned about the viability of energy technology in the Mid-Atlantic,” Smith said.

Reception in the Academy’s Dinosaur Hall photo

A company showcase followed the panel discussion, and featured five innovative companies, which each presented a snapshot of their company’s energy-focused technologies. Kevin Brown of Hobbes & Towne introduced the presenting companies:
  • Applied Communication Sciences has developed an innovative grid technology product that is getting traction in the marketplace. For example, the company’s utility pole sensors are deployed in the Sacramento Utility District to better monitor its network.
  • Essess is a mobile thermal imaging technology company that can map a building’s energy loss – identifying leaks in a building envelope undetectable by the human eye – and provide remediation services.
  • Infinite Invention LLC provides the ConnectDER, an electric power meter that mounts between a standard utility meter and the meter case to provide a quick, safe, inexpensive way to connect solar homes to the grid.
  • Preferred Technology, LLC provides environmentally friendly resin-coated sand products to the fracking industry; coated sand prevents wells from clogging during the fracking process.
  • Solar Grid Storage LLC “makes solar better with batteries,” providing a containerized storage solution that changes solar power into grid power by adding batteries to solar photovoltaic installations.
Bob Inglis at podium photoScott Anderson of Ernst & Young’s Global Cleantech Center then introduced keynote speaker Bob Inglis, a former congressman from South Carolina and executive director of the Energy and Enterprise Initiative (E&EI) at George Mason University, to close out the program.

Inglis founded the E&EI in 2012 on the conservative principles of free enterprise and economic growth, limited government, liberty, accountability and reasonable risk avoidance to solve the country’s energy and climate challenges.

“At E&EI, we believe that free enterprise can fix climate change,” Inglis said. “Our proposal involves cutting income taxes and replacing it with a carbon tax – in effect, reducing taxes on income, which you want more of, and taxing something you want less of.”

The event program is available online at http://www.pepperlaw.com/pdfs/Energy_Tech_Forum_Program_Book_2014.pdf.

03 March 2014

Coming Up: 6th Annual Mid-Atlantic Energy Tech Investment Forum

Six years. We've been running these cleantech and energy tech investment forums for six years. And by "we" I mean my co-founder of the Cleantech Alliance Mid-Atlantic, Kevin Brown of Hobbs & Towne, and me, along with our pal Tom Dwyer, who was part of the original team putting this show together.

Now Tom is at Pepper Hamilton, which joins us as co-sponsor this year, but we'll be at the same venue, as the past few years, the Academy of Natural Sciences in Philadelphia. Or as my kids used to call it, the "dinosaur museum."

This year, we've got another stellar line up, with keynote speaker Bob Inglisformer U.S. Representative for South Carolina's 4th Congressional District, who lost his seat to a tea-party challenger because of his outspoken free-market acknowledgment of climate change and support for green energy solutions. 

Bob went on the found the Energy and Enterprise Initiative at George Mason University, an independent think-tank devoted to promoting free enterprise solutions to climate and energy issues. In other words, he's one of the good guys and you won't want to miss what he has to say.

We'll also have an investor panel, featuring

    • George Coyle, Manager, Investments Technology Ventures, ConocoPhillips Company
    • Michael Smith, Vice President, Head of Constellation Technology Ventures at Exelon
    • Annie Theriault, Vice President, Northwater Capital
    • Tucker Twitmyer, Managing Director, EnerTech Capital

And, of course, our ever-popular company showcase and cocktails with the dinosaurs.

When: April 3rd, 2014, from 4:00 - 7:30 
Where: Academy of Natural Science, Philadelphia, PA 

Be there or be square. Here's how to register for the event: REGISTER


21 February 2014

My Key Take-Aways from the Cleantech Innovation Summit 2014



"There's more optimism than ever for cleantech,"according to Raj Atluru of SilverLake Kraftwerk. 

Atluru was speaking at the Cleantech Innovation Summit in Newport Beach, California last week.

His was not the only optimism to be heard on the dais, in the breakout rooms, and in the halls. In fact, it seemed optimism was at an all-time high after several years of a perpetual negativity death-spiral.

The optimism comes, in part, from the announcement of NEST's acquisition last month by Google for $3.2 billion. That certainly changed the mood. 

Yet also because there are other successes to point to, including Tesla -- whose stock surged in after hours trading on Wednesday after the company announced increased production of the Model S -- and Solar City and others that seem to be riding the current wave of good sentiment for the sector.

In addition, there is the growing understanding that we'd been talking about "cleantech" all wrong before. 

As Brook Porter of Kleiner Perkins said on his panel, "Cleantech is not a sector, cleantech is an attribute."

And that's exactly how others seem to be looking at it today. The buzzphrase at the Cleantech Innovation Summit was "Cleantech Done Right," rather than Cleantech 2.0.

"What Nest proved is that 'sexy' and 'cleantech' can belong in the same sentence," said Andrew Chung of Khosla Ventures. Tesla does too, with its emphasis on design, and making the best car possible, not just the best electric car.

Companies like Nest and OPower make energy data more personal, and as with Tesla, design and ease of use for consumers helps drive their success. But as much as it is about design, it is also about data.

And that points to a not-so-subtle shift in the way investors are talking about cleantech, if they're even mentioning the term. 

It's now all about big data, collaborative consumption, sustainability, waste-to-value, and food production. These are new cleantech investment areas and, as RockPort Capital's Abe Yokell said, "The data rich world of our future is ripe with investment opportunities."

Meanwhile, water issues continue to bubble-up as potential areas of risk and need, especially around shale gas development. Water recycling, reuse, and clean-up is all essential for companies focused on fracking for bountiful natural gas.

"We need to do more with less: less water, less trucks, less impact," said Steven Hall of Schlumberger.

Jeff Guild of BlueTech Research confirmed the need for investment in water, citing energy from wastewater, nutrient recovery, and reuse as key investment areas.

As for utilities, Thomas Brill of San Diego Gas & Electric suggested utilities need to look at how Canon addressed the challenge of digital photography versus how Kodak reacted or how Verizon pivoted from hard assets to wireless services. "There are lessons there for utilities," said Brill.

The challenges to big utilities from renewables appear to be very real and can no longer be ignored.

"Solar is freaking us out," said Colleen Calhoun of GE Ventures, "It is growing so fast, it is getting so big." 

Calhoun added that when she talks to GE's CEO Jeff Immelt, they talk about "solar, energy storage, and oil and gas -- drilling deeper, farther offshore."

A mystery remains about how energy storage will contribute to the mix, but Cheryl Martin of ARPA-E had some encouraging things to say about the agency's progress on that front.

"We're finally going to make grid-level storage a reality," Martin told the audience in her keynote.

And energy efficiency technologies -- beyond consumer solutions like Nest and OPower -- are increasingly gaining traction. 

"Building automation was a $35 billion business in 2012," according to Will Coleman of OnRamp Capital. "And it's only going to grow."

The question from a commercial building perspective seems to be how to replicate what Nest accomplished with design, user interface, and distribution. How does one translate that success to commercial buildings?

Having problems like that to solve are what leads to innovation, and perhaps that's another reason for investor optimism at the Cleantech Innovation Summit this year. 


22 January 2014

If I Could Speak at Davos: My Top 5 Reasons Cleantech Is Alive and Well

My colleague who posts as @EY_Cleantech had an interesting tweet this morning. She posited the question, If you could speak at the World Economic Forum on cleantech, what would you say?


Here is my answer.

Cleantech isn't dead. It hasn't crashed, hasn't lost its value, and has only grown more important and necessary.

Here's My Top 5 Reasons Cleantech Is Alive and Well:

1.) China. China is finally acknowledging and stepping up to the plate to address its outrageous pollution problem. China's air and water quality is breaking its ability to make progress. The Beijing Municipal Bureau of Environmental Protection estimates it will cost China upwards of $800 billion to clean its air. $800 billion. Beijing alone could cost as much as $163b. And its water doesn't fair much better: seventy percent of the groundwater in the north China plain is unfit for human contact -- not consumption, contact. And only half the water sources for Chinese cities are safe to drink. The Chinese government says it will commit 1.7 trillion yuan ($277 billion) to combat air pollution over the next five years, which is a start, but until then we'll keep seeing scenes like the LED sunrise on Tiananmen Square in Beijing.

LED sunrise on Tiananmen Square. Credit: ChinaFotoPress via Getty Images

2.) Google bought Nest for $3.2 billion. This is a cleantech success story. I don't care whether Nest Labs ever considered itself a cleantech company since its founding in 2011. If cleantech is the set of new technologies and business model innovations that help use natural resources more efficiently, effectively, and responsibly, then Nest, which took a ubiquitous, yet poorly designed technology (the thermostat), made it smart and fun to save energy in homes because its cool and easy to use. That is cleantech.

Nest thermostat. Photo: Nest Labs

3.) Solar, distributed solar. I know, solar was a dirty word for some investors, including the American tax payer, who got burned by solar 1.0. But there's a new game in town now that solar panels are cheap and financing distributed solar has become easier thanks to innovators like SolarCity, Sungevity, and the like. Installations are on the rise and investment is pouring back in.

4.) Tesla Model S. Motor Trend Car of the Year. 2014 Detroit News Readers' Choice Award as North American International Auto Show Most Innovative Vehicle. Yes, D-E-T-R-O-I-T News. Tesla recently announced it had sold 6,900 of its Model S in the fourth quarter -- twenty-five percent higher than the previous quarter and roughly twenty percent more than expected. And with work begun on the Model S sedan, which will sell for about half the $69,000 price tag of its big brother, Tesla is in line for growth and more growth. That's for a company with $21b market cap.

Tesla Model S. Photo: SEA

5.) Many more innovations are needed. Energy efficiency, recycling, water use, as well as purity and scarcity, and food are all ripe for cleantech disruptions, innovations, and solutions. There are still plenty of opportunities out there for entrepreneurs, investors, and others to tackle resource scarcity, use, and management. We've only just begun to address the issues our planet faces. And the need for innovative financing to enable these solutions is also going to grow. Call it what you will, "cleantech" is going to be a growth engine for many years to come.

That's what I would say if I could speak about cleantech at Davos.


21 January 2014

Can Crowdfunding Help Cleantech Ride the Big Data Wave?

"Big data is a coming wave of 'green gold,'" says Nick Eisenberger of Pure Energy Partners."Information technology will be the most powerful tool to address resource challenges in our lifetime."

Eisenberger was speaking at the Markle Foundation offices in New York, where Agrion, which bills itself as the global network for energy, cleantech and corporate sustainability, convened an impressive roundtable to talk about advances in funding new ideas and uncovering innovation for energy and sustainability.

Moderated by Peter Gardnet of Breaking Energy, the panel featured, in addition to Eisenberger, Benjamin Healey of Connecticut's Clean Energy Finance and Investment Authority (CEFIA), Richard Robertson, Solar Energy Business Development Manager with GE Ventures, and Dr. Jon Roberts of the Clean.Data.Project.

"Energy is where the most data is," said Clean.Data.Project's Jon Roberts. And the panelists agreed its where the most opportunities are in energy, improving its generation, use, and efficiency. Yet not all the necessary datasets are open.

"The biggest obstacle is generational," Eisenberger claimed. "The older generation, my generation, is not comfortable with the 'open' in open innovation."

Richard Robertson explained how GE Ventures has invested in Quirky, a crowdsourcing platform for inventors, and has turned to the crowd for help with design and product naming.

The innovation is out there, Robertson suggested. 

"Sungevity has an incubator in their Oakland facility, and Solar Mosaic [the crowfunding platform] is in that incubator,” said Robertson. “Mosaic is looking at not just solar projects, but wind, energy storage. They're putting projects in the ground." 

At least one audience-participant in the Agrion session, a project finance expert, called into question some of the deals Mosaic and others are funding and the stated returns listed on the Mosaic site. "We wouldn't fund those projects," he offered. "It's like charity."

But that's precisely the point made by Mosaic and others, such as alternative financing renewable energy companies SolarCity, SunRun, and United Wind, among others. They are there to fund the deals no one else will, deals that aren't big enough for the big banks, which is a pretty good sized niche.

That is, in fact, why these new models exist.

For those not familiar with the Mosaic model: projects are listed on its online marketplace, which allows investors pick projects to fund and then provide the capital for rooftop solar installations. The investors are repaid once the project is up and running and generating electricity. Their first projects were mostly on affordable housing in California.

The company provides capital to developers at about 5.5 percent and collects a 1 percent fee, according to some sources, returning roughly 4.5 percent.

“To rapidly deploy clean energy, the industry needs access to low cost capital and lots of it,” Mosaic co-founder, Billy Parrish, told Bloomberg News last year. “We are able to source capital from the crowd and lend that capital to clean-energy developers at lower interest rates than they would get from banks.”

Platforms like Mosaic, which seek a large, “democratic” community of engaged funders, as opposed to the elite accredited few, got a boost last year when the SEC released its proposed guidelines about crowdfunding as it relates to the Jumpstart Our Business Startups or JOBS Act.

If the admittedly hand-picked crowd at the Agrion session is any indication, crowdfunding is here to stay.

However, as several roundtable participants suggested, it may be best deployed as part of a mix of financing options.