"Energy efficiency is the cleaner energy option
that pays for itself," suggested Mark Fulton to the large crowd gathered
for the Mid-Atlantic Cleantech Investment Forum last Thursday evening. "It
applies already existing technologies at scale with no government funding and a
payback of 2-4 years."
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| Mark Fulton |
Fulton is Managing
Director and Global Head of Climate Change Investment Research and Strategy
with Deutsche Bank Climate Change Advisors, so he has the data and charts to
back up his statements.
His team is currently exploring financing models for
energy efficiency, which they believe will generate over $1 trillion in savings
over 10-20 years.
"The Empire
State Building energy efficiency upgrade demonstrated 30 percent IRRs,"
offered Fulton. "So why isn't anyone investing in it?"
Perhaps it's the wise investor's contrarian outlook.
The Forum, now in
its 4th year, co-hosted by the Cleantech Alliance Mid-Atlantic and Blank Rome's
Cleantech Group, offered some contrarian suggestions from an investor panel.
The panel included Tucker Twitmyer of EnerTech Capital for whom "efficiency plays
have been our bread and butter," and Lux Capital founder Josh Wolfe, who's
refrain, "it's a great technology," belied the fact that not all great technologies make great investments.
It's such a
contrarian outlook, too, that has led to successful investments for Lux,
EnerTech, and NRG Energy's venture arm, and that has cleantech newcomer Edison
Ventures looking to capital efficient "cleanweb" models as a way to
play in the sandbox.
The nascent
cleanweb movement, initially launched by Sunil Paul at Spring Ventures, brings
together web coders to tackle big energy problems. (You can read more about the
cleanweb hackathons here.)
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| Tucker Twitmyer |
Twitmyer, who has
been investing in clean energy companies and projects for over 10 years, sees parallels
with earlier cycles in the space, "LP [limited partners] who haven't seen
the kinds of returns they want have started heading for the exits."
But that's not
necessarily time to panic, suggested Wolfe. On the contrary, when the bulk are
investors are chasing the next big thing, Wolfe and other successful investors
see opportunities in what's left untouched.
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| Josh Wolfe |
This thesis has paid off handsomely with one such investment,
Kurion, which has a solution for addressing toxic nuclear waste, realizing $40
million in profit on $100 million in revenue last year.
The company was
one of the few working to clean up the Fukushima nuclear reactors in the wake
of the tsunami a year ago.
Another panel at
the Forum on shale gas development revealed that there's a growing need for
clearly defined regulations in the natural gas sector, especially
around well-casing construction and fluids disclosure. But the panel of
experts concluded that sustainable natural gas development is achievable.
Presenting company
pitches by new entries in the space rounded out the evening's program,
including Green Power Technologies (the "BERT" people), Matcor,
OmniWind, Primus Green Energy and XL Hybrids.
"We need to
start talking about cleaner energy, not just clean energy," offered Fulton
in his keynote. "Sixty to seventy percent of American voters support the
idea of cleaner energy," which includes advances to make existing forms of
energy better, cleaner and more efficient.
Recognizing there
are no silver bullets or magic remedies, fora like this one are designed to
call attention to the variety of solutions available. No matter how contrarian
they may seem.
(Disclosure: The author is a co-founder of the Cleantech Alliance Mid-Atlantic, which co-hosted the Forum.)
