Power to the People: EY's Renewable Energy Index Ranks Country Attractiveness

For the past ten years, Ernst & Young has published a quarterly index analyzing the attractiveness of countries around the world for developing renewable energy.

Called the Renewable Energy Country Attractiveness Index (or RECAI, for short), the index has provided a barometer of the renewable energy sector.

Established in 2003, the quarterly publication ranks 40 countries for their "attractiveness" of renewable energy investment and deployment.

The latest edition of the RECAI cites energy demand, natural resource, technology costs, access to finance, and global competitiveness as key influences for investors.

Global annual clean energy investment totaled US$269b in 2012, representing a five-fold increase on 2004, according to the report. And the sector is now becoming competitive with more traditional fossil fuel energy sources.

New and improved technologies, such as cheaper, more efficient solar panels, biomass boilers, and even small wind turbines, are those technologies cited by the Index that allow energy users to generate their own power where and when they need it.

This "democratization" of energy sources provides greater flexibility when it comes to energy generation and management.

The latest RECAI includes a revised, updated methodology reflecting shifts in investment drivers and the sector's maturing since the report’s creation 10 years ago.

An increased focus on the role renewable energy plays in each country’s energy mix, energy supply and demand, and the cost competitiveness of renewable energy, are some of the changes reflected in the new methodology, according to its editors.

As with other country attractiveness indices, EY has also adopted an increased emphasis on the economic and political stability of each particular market.

"Market fundamentals, such as energy demand growth, security of energy supply and the affordability of renewable energy, feature as some of the most prominent drivers of renewable energy growth today," says RECAI's chief editor Ben Warren.

"Our revised methodology allows us to analyze each market's investment attractiveness much more effectively by considering these factors and weighting them accordingly," claims Warren, who serves as Ernst & Young UK Energy and Environmental Finance Leader and Global Cleantech Transactions Leader.

The revised index sees the US regain the top spot in terms of attractiveness, as high barriers to entry for external investors realign China into second place.

Despite that change, the RECAI finds prospects for growth for the sector in China remain strong with continued GDP growth, increasing energy demand, and the ongoing strategic importance of the sector to the local economy providing solid foundations for the future.

You can download the latest RECAI at www.ey.com/recai

(Disclosure: The author is marketing director for EY's Global Cleantech Center, which is one of the sponsors of the RECAI.)

My Year in EY's Global Cleantech Center

What a difference a year makes.

A year ago today I joined Ernst & Young's Global Cleantech Center as its global marketing director. Now, reflecting on the year just passed, I can say with confidence, it was a very good year.

The author testing out the Fisker Karma at EY's
Cleantech CEO Retreat, September 2012

We accomplished a lot -- not the least of which was my adjusting to life in such a large organization.

Prior to joining EY with its 152,000 employees, the largest organizations I'd worked for were The Nature Conservancy, with 4500 employees when I left, and the publisher Penguin USA, which was part of a larger multinational, but still felt at the time like a small house.

Moving from an entrepreneurial shop where I called the shots (and celebrated or suffered the consequences) to being more of an intrapreneur in a large firm brought challenges.

For the most part, these challenges were about having to negotiate or await approvals for public communications, contracts, and sponsorships.

Through it all, I've come to a deeper understanding of the importance of the firm's need to maintain independence, especially as it relates to EY's audit clients, which is the necessity for some of the restrictions.

USS MakinIsland (LHD 8)

Homeport:  NavalBase San Diego

Necessity is the mother of invention, as Plato said, and despite some of the challenges there have been some terrific successes as well. Some invented, some evolved.

Among them, our annual Cleantech CEO Retreat in Napa, California, to which we attracted some great entrepreneurs along with industry leaders and others to help cleantech CEOs wrestle with the pressing issues they face in the current climate.

For the event I scored Thomas Hicks, Deputy Assistant Secretary of the Navy for Energy, as keynote speaker.

Tom was energizing and inspiring as he shared the Navy plans to build the "Great Green Fleet" and make the transition to advanced biofuels and renewable energy on sea and shore. (And what slides! To see the biofueled aircraft carrier USS Makin Island up on the screen is awe inspiring to say the least.)

A report on our findings and insights from the retreat will be published shortly. Our other thought leadership pieces, white papers, and round table discussions on specific verticals can be found here.

Perhaps the greatest benefit of working at EY is the people, and I couldn't have thrived in (let alone survived) my first year without great colleagues and new friends like Sandra Feldner Vandergriff, Lily Donge, and Chris Walker, along with my team in the Global Cleantech Center.

Where the author spends most days.

People are EY's greatest asset, and the fact that the organization has remained on the Fortune 100 Best Companies to Work For list for 15 consecutive years attests to how much the firm values its employees.

In a time of major transition for me over the past year, this has been a great place to work with its trust-based environment allowing for workplace flexibility and providing the technology to keep me connected when out of the office. (Well, some of the technology could use an upgrade...)

My boss, EY's Global Cleantech Leader Gil Forer, has been a very supportive. He helped remove roadblocks where necessary, told me to ignore detours that would throw us off our goal, and always understood when I had to leave New York for Philadelphia to be with my kids.

I could not have been successful this year without the patience, faith, and love of my partner, Samantha Beinhacker, who went through her own powerful transition this year, and still found the energy to be supportive of me in ways both spiritual and material. Our journey together has been remarkable thus far and has only just begun.

As much as I reflect on the year behind me, I look forward to the year ahead, which will bring new opportunities and challenges as I continue to inform, evaluate, and convene on behalf of the cleantech sector.

And, as the sector comes out of the trough of disillusionment onto the slope of enlightenment, I hope we can continue to make a difference for the entrepreneurs, investors, and strategic partners with whom we work.

My Next Step on the Path: Ernst & Young's Global Cleantech Center

The author ponders his path on Block Island.

A few years ago I announced the launch of my consultancy VerdeStrategy here on The Green Skeptic.

I've enjoyed working with some great clients in a consulting and advisory capacity for marketing, capital raising, and strategic positioning. I've helped some great companies and entrepreneurs navigate often stormy waters of the past few years. 

But I missed being a part of a team, part of an entity larger than myself and a few colleagues who came together on specific projects. I missed the camaraderie that comes from an enterprise of shared vision and objectives. 

So now I'm embarking on a different path. 

This week I joined Ernst & Young's Global Cleantech Center to direct their marketing strategy. I'm becoming a part of a great team of experts and thought leaders in the cleantech space, including Gil Forer, Scott Sarazen, and John De Yonge. You can read some of their writing on the cleantech opportunity in their Global Cleantech Insights and Trends Report for 2011.

With Ernst & Young, I'm joining an even larger global team of assurance, tax, transaction, and advisory professionals that share my values -- values that have been consistent throughout my career with The Nature Conservancy, Ashoka, and VerdeStrategy.

I'm excited about this new opportunity in my life and work. And I hope to be able to continue to share my sector insights through The Green Skeptic and my commentary on FOX Business and other media.

Meanwhile, a hearty thank you to my clients and friends for your support over the past few years. And apologies to my readers for the lack of posts over the past few weeks as I sorted out this transition.

Keep in touch and stay skeptical!

Clean Energy Is the New Black -- Eye, That Is...

The Tonight Show, Starring John Doerr

There's so much noise about "clean energy" and "green jobs" and "Obamacare"...oh, well, maybe not Obamacare, but it's tainted by the same brush these days, I'm afraid.

I was talking with my cleantech colleague Scott Moon of Ernst & Young the other day at the ribbon cutting for Renmatix's new technical facility in King of Prussia, PA.

Renmatix has developed a technology that converts wood waste into cellulosic sugar for use in biofuels and biochemicals.  It's not just an energy play.

The world in which we live -- tech, manufacturing and service companies that are trying to disrupt energy, building materials, chemicals, and even finance -- is getting a black eye from a peanut gallery full of enemies. 

As if that wasn't enough, then came Solyndra, which was like getting hit by friendly fire as we were taking the hill.

"We can't get a break," I said to Scott.  "Good companies that have solid solutions and good products and even customers lined up out the door are being lumped into the rubbish bin of broken dreams."

Even my pals at Fox Business are trash-talking the entire sector while attacking the President's policies and insider shenanigans.

"We need to come up with a new name for 'cleantech,'" Scott said. "I can't get anybody to pay attention to it."

Inside the spartan facility, Renmatix's presentation was beginning.  John Doerr, venture partner at Kleiner Perkins Caufield & Byers, and a long-time advocate of and investor in cleantech, came on the stage to a rock music intro.  It was a talk show entrance.  He even did a Johnny Carson move to silence the music.

"There were basically three revolutions over the past 30 years," Doerr related. "computer technologies: IT; biotech: BT; and now we have the third, energy tech or ET."

"Energy Tech."  With all due respect to Mr. Doerr or my brethren at Enertech Capital, who were prescient in being inclusive when naming their firm, I'm not sure that does it either.

Sure you can lump stuff like "clean coal," natural gas, nuclear, and maybe even tar sands under the "ET" label, but wasn't that what "clean energy" was accomplishing over "renewable energy."

At the end of the day, we really need to find not a new brand, but to make a better case for the energy technologies we need to power the future. 

The debate over whether we can make money in this stuff has started, but that's still too early.  The real test is still a way off.

Until we do make some green from green, however, we'll never see cleantech, clean energy or even energy tech become the new normal.  And I just hope we don't get caught with the lights off one day.

US Venture Capital in Cleantech Grows to Nearly $4B in 2010

US venture capital (VC) investment in cleantech companies increased by 8 percent to $3.98 billion in 2010 from $3.7 billion in 2009 and deal total increased by 7 percent to 278, according to an Ernst & Young LLP (E&Y) analysis based on data from Dow Jones VentureSource.

According to the analysis released today, VC investment in cleantech in Q4 2010 reached $979 million with 72 financing rounds, flat in terms of deals and down 14 percent in terms of capital invested compared to Q4 2009.

Solar, consumer products and building materials, and electric vehicles and charging stations led the way in 2010.

Two trends that E&Y spotted are worthy of note because they contradict some of what we've heard on the street concerning energy efficiency and seed investing.

• VC investment in the energy efficiency segment dropped 9 percent from 2009 to 2010, to $688.99 million through 68 deals.  In Q4 2010, 17 deals were completed in the segment, attracting $196.63 million, a 41 percent decrease from Q4 2009. 
• Seed rounds accounted for a large number of deals, 18, for 2010, a 125 percent increase in comparison to eight seed round deals in 2009. The share of investment dollars going to second rounds increased from 18 percent in 2009 to 26 percent in 2010. Later stage deals received $2.37 billion or 62 percent of the money invested in this period.

Ernst & Young considers "cleantech" to encompass "a diverse range of innovative products and services that optimize the use of natural resources or reduce the negative environmental impact of their use while creating value by lowering costs, improving efficiency, or providing superior performance."

SOURCE: Ernst & Young