Wharton Energy Conference Tries to Bridge the Future

Judging by the commentary at last Friday's Wharton Energy Conference, the bridge to the future is a double-truss of traditional and alternatives.
 
The conference, held at the stodgy, old-fashioned Union League of Philadelphia, featured a stellar group of experts in three tracks, including representatives from traditional energy sources (fossil fuels, nuclear), alternatives, and the regulatory and financial players to help navigate.

And it was no more evident than in the sentiments expressed by the speakers over lunch.

"Traditional sources of energy are going to be with us a long time," said Mark Mills, founding partner of Digital Power Capital. "The world doesn't really react to $80 barrel oil. $80 a barrel is the new floor. $150 a barrel is not question of 'if' but 'when'."

Mills was participating in a mock scenario over lunch demonstrating how an energy storage company needs navigates between those who hold the purse strings and those who have the regulatory clout to help or hinder its business.

"As an investor, I want rules and guidelines, especially around interconnection and safety, to anticipate where it is going," said Mills. "It's not important to have the "right" rules, but just have the rules not change."

After lunch, investors shared their insights about the state of financing in cleantech and energy businesses.

"Renewables have taken a beating lately," offered Michael DeRosa, a managing partner with Element Partners, a leading investor in high growth companies in the energy and clean technology markets. "But let's remember that renewables is a broad category."

"Solar seems to be the most expensive, but it has the best potential for distributed generation and actually has the lowest subsidies," suggested DeRosa. "Geothermal is a very economic source of base load generation. We should be looking at more geothermal in the US."

DeRosa shared his concerns about picking one technology over another to receive subsidies.

"Does it make sense to subsidize electric vehicles or a particular type of solar product that may have risks," asked DeRosa. "Risk in light of a lithium shortage, for example or other rare earth material, versus a subsidy for natural gas vehicles and an industry where we know we can access all the reserves?"

The subject of reserves was also taken up by those on the traditional energy side of the equation.

Representatives from Shell, ExxonMobil, and Brazil's quasi-state oil exploration company Petrobras analyzed their quest for tapping into reserves and the need for all sources of energy for the future.

"We're still going to be using a lot of fossil fuels for the foreseeable future," said Robert Lance Cook of Shell. "We see natural gas as not just a bridge fuel, but as a destination. It has a 2-to-1 advantage over coal in terms of CO2."

The future of energy is paved by old technology, new technology -- and creative folks trying to develop the right policies and financing vehicles to make innovation possible.

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Wisdom from Wharton: Cleantech Talk

"Twenty years from now, we will look back on how we get energy the same way we look back at how we got information twenty years ago," Steve Cohen said in launching the first of two cleantech panels at last Friday's Wharton Entrepreneurship Conference 2010.

"Current Trends and Opportunities in Cleantech," moderated by Cohen, an energy lawyer with Morgan Lewis, also featured Dr. Stephen Tang, CEO of the Science Center, the oldest and largest urban incubator and science park in the world, along with Sean Casey from FiniteCarbon, a forest carbon development company, and Sam Gabbita of cleantech investor Element Partners.

Dr. Tang, a Chemical Engineer by training, knows something about the "energy of the future" having earned his entrepreneurial stripes developing hydrogen fuel cells with Millennium Cell, which recently went bankrupt.

"I took Millennium Cell to its IPO in 2000, and left in 2004. Ten years ago hydrogen fuel cells were a major focus of US automakers; at least, that's what they wanted you to believe," said Tang. "What they were really focused on were CAFE standards and keeping them from being lowered. You have to understand the headwinds."

Often those headwinds are political, such as with carbon regulation. "Carbon markets are directly responsive to government action," said Casey, of FiniteCarbon. "And in the US, we want to do it our own way."

Indeed, the energy industry itself may be its own worst enemy. As Gabbita of Element Partners put it, "The biggest challenge in Cleantech is that you're dealing with a commodity market made up of slow-movers."

This is why some believe that we won't be able to move as fast as China in terms of alternative energy adoption.

"The risk isn't that China won't adopt cleantech," Gabbita suggested. "The risk is that China is doing it now and will define the rules of the game for the future."

While China may be slow to start, they have the power of the centralized government to innovate more quickly once the decision is made to move toward adoption of alternative energy sources.

And, while some, such as keynote speaker Pennsylvania State Treasurer Rob McCord, recognize that the "energy sector has massive externalities that require government support," it may be best for entrepreneurs to proceed cautiously in pursuing government funding for their ideas.

"It's great to get government money until you realize they are in your shorts for-ever," said Harrison Wellford of Wellford Energy Advisors in a panel on "Financing Your Cleantech Ventures."

Technologies are available today to help with the transition here. However, as Ravi Barot of OxiCool suggested in that same panel, "Investors and entrepreneurs need to realize that clean technology takes time, more than other investments."

And, as Steve Tang from the Science Center related earlier in the day, "The killer app of today is more important than the platform technology of the future for energy transition to happen."

Upcoming: Wharton Entrepreneurship Conference 2010

Has there been a better time to be an entrepreneur than right now?

Technology breaks down barriers and makes it easier and less expensive than ever to turn an idea into a business -- and traditional job venues don't seem to be getting into hiring mode any time soon.

So get yourself over to the 13th Annual Wharton Entrepreneurship Conference at the Marriott in Philadelphia this Friday (February 19, 2010) to learn about "Opportunities for the Entrepreneurial Community in a Rising Economy."

The conference is a leading entrepreneurship forum for entrepreneurs, investors, industry professionals, academics, and students to foster entrepreneurial innovation and leadership.

This year's conference focuses on identifying and capturing entrepreneurial opportunities as the economy regains momentum or, at least, as the economy reboots.

Of particular interest to readers of The Green Skeptic is the panel on "Current Trends and Opportunities in Clean Tech," which features Sam Gabbita of Element Partners, Sean Carney of FiniteCarbon, and Stephen Tang, President of the Science Center, and a session on "Financing Your Clean Tech Ventures" with Ravikant Barot of OxiCool, Mark deGrandpre of Ben Franklin Technology Partners, Emily Landsburg of BlackGold Biofuels, and Harrison Wellford of Wellford Energy Advisors.

There are also sessions devoted to Health Care Services, Consumer Products, Tech and Web-based Services.

Keynote speakers include:

• Rob McCord, Treasurer of Pennsylvania and founder of life-science and technology venture funds
• Scott Friend, Co-Founder of ProfitLogic (which sold to Oracle in 2005) and Managing Director at Bain Capital Ventures
• Dr. Kathy Crothall, founder of three medical device companies (including Animas, which sold to Johnson & Johnson in 2006) and a Principal at Liberty Ventures Partners.

The conference is trying something new this year: a Student Expo. Building off the success of last year's Start-up Expo, this year's Expo will feature both local start-ups and selected start-ups run by Penn students. Entrepreneurs will showcase their businesses and introduce their teams to the 500+ conference attendees.

The conference is this Friday, February 19th at the Philadelphia Marriott Downtown. More information is available at WhartonEconference.com.

Register for the event using TicketLeap.

Hope to see you there!