Water Water Everywhere July 12, 2010
Posted by cleantechorg in clean water.2 comments
by Richard T. Stuebi
One of the fastest growing “themes” of the cleantech sector is water. While clean energy gets the most attention, clean water is also becoming a high priority. According to Richard Smalley, the late Nobel laureate and nanotech pioneer from Rice University, water trailed only energy on the list of humanity’s top challenges over the coming decades.
Like all things cleantech, a major difficulty has been trying to earn good investment returns from innovations in the water sector. And so it is that the Water Innovations Alliance was formed, to serve as an industry association to promote the emergence of a vibrant entrepreneurial sector in water technologies.
In May, the Alliance held its annual conference in Dayton Ohio. I attended, and heard a number of good presentations providing some interesting tidbits on the water sector.
In his overview, Mark Modzelewski (the Executive Director of the Alliance) gave some eye-opening statistics. Only 3% of the water on earth is freshwater, and little of that small sliver is accessible for human use, with 1.5 billion people globally not having access. By his measures, water is the third largest industry on earth, representing $550 billion of revenues. Modzelewski cited data indicating that 75% of U.S. water infrastructure will need to be replaced, at a cost of “hundreds of billions of dollars.” Soberly, he noted that “the way we move, treat and filter water has changed little since the time of Julius Caesar: we move water through trenches and tubes, we force water through tiny holes to clean it, and we put poisons in water to kill other poisonous things.” Unfortunately, innovation is not happening at the required pace: only $130 million in venture capital was placed in 33 water deals in 2009, with minimal corporate, academic and public sector resources and centers for water R&D.
Paul Gagligardo of American Water (NYSE: AWK) noted in his presentation the huge size of the water technology market: $172 billion of water-related capital expenditures in 2009, with $30-60 billion per year expected in North America over the next several years. Alas, he also noted how balkanized the demand-side of the market is, with 52,000 community water systems and 155,000 non-community water systems in the U.S.
Notwithstanding the difficulties facing companies trying to profit from water technology innovation, a number of presentations from leading firms hinted at the opportunities.
Peter Williams, the CTO of Big Green Innovations at IBM (NYSE: IBM), described IBM’s activities to parallel the smart grid in the water sector. In his presentation, Williams noted that 20-25% of all treated water is lost through leaks, and moving/treating water consumes 3-5% of all energy in the U.S. — implying that smarter water management represents an enormous economic and energy opportunity area.
In his presentation, Ed Hackney of United Water — a subsidiary of Suez Environnement (Paris: SEV, Brussels: SEVB) — took the smart water grid theme further, by noting the need to push intelligence from already-sophisticated treatment centers through the relatively-dumb network.
Probably the biggest splash made at the conference was by Veolia (Paris: VIE, NYSE: VE), a major sponsor with a significant presence, including several speakers. It’s clear that Veolia is trying to show itself as the leader in the water technology field. As profiled in a presentation made by Finn Nielsen, the Chairman of VWS (Veolia Water Systems) North America, Veolia has created the Veolia Innovation Accelerator to work closely with start-up companies on their water treatment technologies to speed up the pace of commercial adoption, by helping such companies validate/improve their technologies and introduce them more rapidly to the marketplace through Veolia’s vast channels in the water industry.
Other presentations from the conference are available, and are worth perusing to gain a better handle on this important but often-overlooked segment of the cleantech universe.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
A Few Conversations on the State of Cleantech July 8, 2010
Posted by cleantechorg in carbon, cleantech, cleantech venture capital, electric vehicles.2 comments
I’ve had a number of conversations in the past couple of weeks about the state of cleantech and the various sectors that make it up.
No real answers, just food for discussion.
The IPO market – a few threads that keep perking up. A need for the IPO market in cleantech to get healthy. A general sesne of relief that Solyndra did not get out. Massive skepticism over Tesla’s prospects. All hopes pinned to Silver Spring.
Carbon / Climate change – determination that the oil spill shall not go in vain, so to speak. Jaded lack of awareness about cap and trade and carbon globally replacing the pre-Copenhagen hype, despite that the underlying policies are getting more an more rational, and more and more real work and debate is occuring. Bifurcated Over $1 Billion in smart money acquisitions in carbon in the last 9 months (JP Morgan, Barclays, Reuters, ICE, Bloomberg), the summer solider and sunshine patriots have bailed for now.
Venture capital – growing unease that the 2 and 20 managed money model is broken, and especially broken in cleantech. Growing disbelief at the “picking winners” strategy and the massive hundreds of millions per company from the DOE in its loan guarantee program – inflation comes to cleantech?
A strengthening sense that like CNG was crowded out of the transport discussion by PHEV and ethanol a few years ago, EV and PHEVs are crowding out a market very jaded with the always over the horizon promise of biofuels to replace corn and sugar cane ethanol.
More discussions on water use and technology than I have had in years. But still no answers.
A sense from those who know, that the US shale gas and the BP Horizon spill have the potential to shift the whole debate.
Or maybe it’s just me projecting my feelings on everyone I talk to, or ignoring those saying stupid things! Since I didn’t do a real poll, the world will never now.
Neal Dikeman is a partner at Jane Capital Partners LLC, and the Chairman of Carbonflow. He is the longtime chief blogger of CleantechBlog.com
Clean Technology Venture Investment Increases 65 Percent in First Half of 2010 July 7, 2010
Posted by cleantechorg in clean tech, cleantech venture capital, Green IPO, renewable energy.add a comment
Matches 2008 Investment Record
The Cleantech Group and Deloitte released preliminary 2Q 2010 results for clean technology venture investments in North America, Europe, China and India, totaling $2.02 billion across 140 companies.
Cleantech venture investment was up 43 percent from the same period a year ago. The number of deals recorded in 2Q10 was down from a record high of 192 in 1Q10, but still represents a strong quarter by historic standards. This completes 1H10, up 65 percent on 1H09.
Corporate activity around cleantech innovation has continued to play an important role in maintaining the levels of investment activity. Corporations are becoming key participants in many of the largest venture and growth capital investment rounds. Strong corporate involvement was evident again in the quarter’s top ten deals: Intel Capital, GE Capital, Shell, Votorantim, Alstom, and Cargill Ventures all contributed, the latter two making their first publicly disclosed venture-stage investments in cleantech.
Corporations have multi-faceted roles in cleantech. Any single utility or multi-national could play any or all of the following roles – investor, partner, customer, acquirer, or competitor. As such, their activity levels are a key indicator of the health and growth of the broader market for clean technology products. The strengthening of corporate commitment to renewable energy and broader cleantech are evident in the strong growth of multi-national corporate and U.S. utility investment for the first half of 2010 :
1H10, total announced capacity additions by U.S. utilities increased 197 percent compared to 2H09, from 1,393MW to 4,134MW, primarily driven by wind and solar. Power purchase agreements (PPAs) rose 148 percent in 1H10, compared to 2H09, from 621MW to 1,539MW, likely due to the pressure of meeting Renewable Portfolio Standards in many U.S. states. Corporate investment announcements from the global corporates tracked reached a new high of $5.1 billion in 1H10, a 325 percent increase from the same period last year.
“The significant strengthening of corporate and utility investment into the cleantech sector, relative to 2009, is very encouraging, given the key role they will play in enabling broader adoption of clean technologies at scale,” said Scott Smith, partner, Deloitte & Touche LLP and Deloitte’s clean tech leader in the United States. “Major U.S. utilities are increasing direct investments in wind and solar due to improving cost scenarios, favorable tax credits and incentives, and evolving pressure to meet Renewable Portfolio Standards. Meanwhile, the largest global companies are seeing the business case for operational cleantech integration, leading to record corporate investment. This uptick was driven by companies looking to improve energy efficiency and reduce carbon emissions in order to reduce operational costs, mitigate energy price volatility risk, drive sustainable growth, and comply with existing and pending regulations around carbon and climate change risk disclosure.”
VENTURE INVESTMENT BY TECHNOLOGY SECTOR
The leading sector in the quarter by amount invested was solar ($811 million), followed by biofuels ($302 million) and smart grid ($256 million). Energy efficiency was the most popular sector measured by number of deals, with 31 funding rounds, ahead of solar (26 deals) and biofuels (13 deals). The largest transactions in these sectors were:
SOLAR – $811 million in 26 deals
Solyndra, a California-based thin film company raised $175 million from existing investors instead of following through with its planned IPO. BrightSource Energy, a California-based developer of utility-scale solar thermal power plants, raised $150 million in Series D funding from new investors Alstom and the California State Teachers Retirement System (CalSTRS) as well as existing investors; the deal followed a conditional commitment from the U.S. Department of Energy for $1.37 billion in loan guarantees that was made in February and Amonix, a California-based developer of concentrated photovoltaic (CPV) solar power systems, raised $129.4 million in a Series B round led by Kleiner, Perkins, Caufield & Byers.
BIOFUELS – $302 million in 13 deals
Amyris Biotechnologies, a California-based developer of technology for the production of renewable fuels and chemicals, closed the final tranche of a $61 million Series C round and also raised a further $47.8 million from Temasek Holdings; Virent Energy Systems, a Wisconsin-based developer of a catalytic bio-refinery platform, raised $46 million from Shell and Cargill Ventures; and Kior, a Texas-based developer of a catalytic cracking technology for turning biomass into bio-crude, raised $40 million.
SMART GRID – $256 million in 11 deals
Landis+Gyr, a Switzerland-based smart metering company, raised an additional $165 million from Credit Suisse to add to the $100 million it raised in mid-2009, while OpenPeak, a Florida-based developer of home energy management products, raised $52 million from Intel Capital and existing investors, and GreenWave Reality a Denmark-based developer of home energy management products, raised $11 million from Craton Equity Partners and other undisclosed investors.
ENERGY EFFICIENCY – $147 million in 31 deals
Nualight, an Ireland-based developer of LED illumination products for refrigerated displays in food retail, raised $11.4 million from Climate Change Capital Private Equity, 4th Level Ventures and ESB Novus Modus. This was the largest deal in the energy efficiency category after OpenPeak ($52million, as above).
VENTURE INVESTMENT BY WORLD REGION
North America accounted for 72 percent of the total, while Europe and Israel accounted for 24 percent, India 3 percent, and China for 2 percent.
NORTH AMERICA: North American companies raised USD $1.46 billion, down 11 percent from 1Q10 but up 47 percent from 2Q09. The total of 76 disclosed rounds was high by historic standards, but down by 41 percent from the record 128 in 1Q10. As the most significant region for VC investment, the sector trends broadly match those described globally. The largest deals were for Solyndra ($175 million), a California-based thin film solar company, BrightSource Energy ($150 million), a California-based developer of utility-scale solar thermal power plants, and Amonix ($129.4 million), a California-based developer of concentrated photovoltaic (CPV) solar power systems. California led the way, with $980 million (67 percent total share) in investment, followed by Massachusetts ($124 million, 8 percent).
EUROPE/ISRAEL: European and Israeli companies raised USD $476 million in 54 disclosed rounds, up 48 percent (by amount) from 1Q10 and up 100 percent from 2Q09. The largest deals were for Swiss smart grid company Landis+Gyr ($165 million) and French solar plant developer Fonroche ($66.1 million). The large growth capital deal for Landis+Gyr places Switzerland ($165 million, 1 deal) at the top of the country league table, followed by France ($82 million, 11 deals), and Norway ($59 million, 4 deals). The UK had the most deals (17) with investment totaling $59 million.
CHINA: Chinese companies raised USD $30 million in 5 disclosed rounds. The largest deal was for Prudent Energy, a developer of flow batteries, which raised $10 million from JAFCO Investment Asia, Mitsui Ventures and CEL Partners.
INDIA: Indian companies raised USD $59 million in 4 disclosed rounds. The largest deal was for Krishidhan Seeds, a producer and distributor of hybrid seeds for the farming industry, which raised $30 million from Summit Partners.
GLOBAL M&As AND IPOs
There were 19 clean technology IPOs during the quarter, totaling $2.31 billion, up slightly from 18 IPOs in 4Q09, also totaling $2.31 billion. China accounted for the majority of transactions, with 12 offerings, which raised a combined $1.73 billion (75 percent of the overall total). There were three North American cleantech IPOs in 1Q 2010, which raised a total of $304 million, the lion share netted by the high-profile $226m IPO of Tesla Motors on June 29, 2010.
However, the largest global cleantech IPO recorded during the quarter was Origin Water, a China-based developer of membrane filtration systems for municipal and industrial sewage treatment and recycling, which raised $370 million from an offering on the Shenzhen Stock Exchange. The company’s share price more than doubled during the first day of trading, valuing the company at about $3.3 billion.
Clean technology M&A totaled an estimated 160 transactions in 2Q10, of which totals were disclosed for 45 transactions totaling $6 billion. Two of the most significant deals were in smart grid: Swiss engineering company ABB acquired U.S.-based software maker Ventyx for more than $1 billion to provide it with broader access to the utility enterprise management market; and Maxim Integrated Products acquired U.S.-based smart meter semiconductor company Teridian Semiconductor for about $315 million in cash.
TOP GLOBAL VC INVESTORS
2Q10 Most Active Cleantech Venture Investors (# investments)
Carbon Trust Investment Partners 6 = Helveta, Green Biologics, Intamac Systems, ACAL Energy, Arieso, Concurrent Thinking,
Kleiner Perkins Caufield & Byers 4 = Amonix, Amyris Biotechnologies, Fisker Automotive, EdeniQ
Angeleno Group 3 = Amonix, Coda Automotive, EdeniQ
Draper Fisher Jurvetson 3 = BrightSource Energy, EdeniQ, Scientific Conservation
Khosla Ventures 3 = Coskata, Amyris Biotechnologies, Sakti3
The Cleantech GroupT, providers of leading global market research, events and advisory services for the cleantech industry, along with Deloitte, which provides audit, tax, consulting and financial advisory services to cleantech companies, released these preliminary 2Q 2010 results for clean technology venture investments in North America, Europe, China and India, totaling $2.02 billion across 140 companies.
The Petroleum Industry: Past the Tipping Point? July 5, 2010
Posted by cleantechorg in energy policy, energy prices, gulf oil spill, oil.2 comments
by Richard T. Stuebi
As Jon Stewart so beautifully satired a couple of weeks ago, American political leaders have long said “enough is enough” about the lack of a coherent national strategy regarding oil.
In the wake of the BP oil spill in the Gulf, is this time different? Will the U.S. finally be able to change its stance on petroleum? Will the petroleum industry itself be irrevocably altered?
Though I don’t always agree with its perspectives, one of the better (i.e., more well-informed and reasoned) weekly energy newsletters I receive is “Musings from the Oil Patch”, written by Allen Brooks, Managing Director of the boutique investment banking firm of Parks Paton Hoepfl & Brown.
In the June 8 issue, Brooks provides an excellent analysis of the future of the petroleum sector, entitled “BP Oil Spill Pushes Industry Beyond Tipping Point”. The main conclusion of the essay is that the oil industry will never be the same – and all of the ways in which it will change should drive up the price of oil. His summary:
“Onshore oil and gas resources will become more valuable than offshore ones. Shallow-water petroleum resources may be worth more than deepwater ones. International markets will be more active and attractive for energy and oilfield service companies than the U.S. market. The domestic oil and gas industry will be less profitable in the future. New U.S. offshore drilling and operating procedures will become more onerous and expensive and likely require different, more capable equipment.”
Some news outlets are portraying the calamity in the Gulf as Obama’s Katrina, or perhaps more astutely as his Iranian hostage crisis – either of which would imply a dragging down of his Presidency. Brooks instead sees the Obama Administration somewhat more sympathetically: as “family members outside a hospital operating room following a severe auto accident. While the surgeons work their magic on the victim with techniques beyond the understanding of ordinary people to fully comprehend the knowledge and skills being applied, the family members remain powerless to influence the outcome. Rather, they stand around praying or crying as emotions overwhelm them. Soon they become angry and demand immediate justice or retribution against those responsible for the accident.”
And, of course, that’s what happened when President Obama determined “whose ass to kick” and exacted his pound of flesh from BP in securing their agreement for contributing $20 billion into a clean-up fund. This, in turn, raised vocal objections from Obama’s opponents — including those formerly arguing that Obama hadn’t done enough about the oil spill — about undue executive privilege. The infamous “apology” by Rep. Joe Barton (R-TX) to BP, and Barton’s subsequent apology about the apology, was the zenith/nadir of the political grandstanding about this spill from all sides.
The ineffective posturing and inane bickering in Washington has contributed nothing towards stemming the flow of oil from the sea bottom, nor to clean up the waters and the beaches in the Gulf of Mexico. But does the venom being spewed over the airwaves from all parts of the spectrum indicate that the petroleum industry is now approaching a tipping point?
In terms of energy policy, I think not. Call me a cynic, but when it comes to national energy policy, I will always take the under on what our Federal leaders will accomplish to improve our long-term prospects.
Why am I so negative? Just like our economy is fueled by energy, our political system is fueled by money. And, there is hardly anything in the economy as wealthy as the energy sector. The industry as a whole and its leading companies are both extremely cash-rich (certainly much more so than the principal advocates of change) and willing to spend money in Washington to support/defend their entrenched interests.
For the big oil companies, it’s not surprising that their primary objective is to protect the status quo, as opposed to making any transition. This point is well articulated by Deborah Gordon and Daniel Sperling in “Big Oil Can’t Get Beyond Petroleum” (a clever play on BP’s slogan “Beyond Petroleum”), as run June 13 in the Washington Post.
Kevin Leahy, Managing Director of Climate Policy at Duke Energy, recently gave a presentation in Columbus in which he opined that “Moderates are the new endangered species in Washington”, adding that sane national energy policy requires tradeoffs and compromises that can only be achieved by crossing party lines — which is traitorous anethema in the current political environment.
No, I don’t think the politicians will have the courage anytime soon to lead us out of our energy challenges. As an economist, I think price signals may be the only way to move us in a different direction.
Absent any rules to change the dynamics of the market, energy prices will move (largely) as a function of supply and demand. (I say “largely” because the petroleum market is a classic oligopoly, controlled by a swing monopolist — Saudi Arabia — with the greatest supply at the lowest costs, so pricing doesn’t follow pure supply/demand forces as they would in a totally free market. But, close enough.)
That’s where the peak oil theory comes in. There are innumerable postings on the Internet about peak oil (see, for instance, the Association for the Study of Peak Oil), so I won’t go into detail here. But, suffice it to say: in a world of increasing demand for petroleum (especially from places like China, where oil demand is growing at “astonishing” rates) and a finite planet with ancient organic matter (e.g., dinosaurs) converting to hydrocarbons not anywhere near as rapidly as hydrocarbons are being extracted, the long-term price trend can pretty much only be upward.
In the June 21 issue of ASPO’s weekly newsletter “Peak Oil Review”, editor Tom Whipple interviewed Jeff Rubin — formerly the chief economist of CIBC World Markets and author of Why Your World Is About To Get A Whole Lot Smaller: Oil And The End of Globalization. Below is a somewhat lengthy but nonetheless fascinating passage from that interview:
“Depletion does not have to be apocalyptic. It will only be apocalyptic if we continue to consume oil as we have in the past when it was cheap and abundant. Because I’m an economist and believe in the power of prices, I believe that we’re going to change. I believe that a global economy, when we move resources all around the world to be assembled by the cheapest labor force and then be shipped to the other end of the world — that’s not a rational way of doing business in a world of $150-a-barrel oil. What we’re going to see is a whole reengineering of our economy, and while we’re going to make a lot of sacrifices in terms of our past energy consumption, we’re going to find that our new smaller world has a lot of silver linings. And in a lot of ways it is going to be more livable and sustainable than the old oily world we’re leaving behind. Peak oil will be an agent of change, and much of that change will be positive, not negative. If we continue to commute 60 miles each way in SUVs, we’re going to get screwed. All of a sudden, peak oil will equal peak GDP; that’s not just an economic recession for a couple of quarters, that’s a world of no economic growth. The point of my book is that, while we can’t do anything about triple-digit oil prices, they don’t have to be so devastating as in the past. We have to reduce, in effect, oil per unit of GDP, and the way we do that is to go from a global economy back to a local economy because a global economy is an extremely oily way of doing business. And that switch isn’t something that the Federal Reserve Board or US Treasury or the Bank of Canada or the European Central Bank is going to put in place; that is going to be the aggregate result of all the micro decisions that consumers make about what we eat, where we live and how we get around. I think triple-digit oil prices will lead us to make the right decisions on those fronts, and the result will be a very different economy than the economy we know.”
Whew.
I’ve said to many people that I’m one of a very small (and widely-disliked) minority — and clearly Mr. Rubin is in this camp — who believes that high energy prices are and will be a good thing, from an environmental perspective, an energy security perspective, and a technology innovation perspective. And, if Mr. Rubin’s thesis bears out, high energy prices can also represent a force for reattracting much of the economic activity that has left the U.S. in recent decades to other parts of the world.
Globalization can continue for virtual things like ideas and communication, but for physical and material goods, an increasing oil price can only mean a reversion towards greater localization of economic activity.
A consistent re-migration of manufacturing back to the U.S. would really be a signal that a tipping point has been achieved. However, the big worry is summed up nicely in a quip by Mr. Leahy during his talk at the workshop “Opportunities for Ohio Businesses in a Clean Energy Economy”: “In his 2006 State of the Union speech, President Bush said that ‘America is addicted to oil.’ To which I say, ‘Unfortunately, every time America kicks the habit, the dealer drops the price.’”
While true in previous decades, price-cutting in the oil markets may not be so inevitble in the future. With the insatiable appetite for oil and the increasing challenges of supplying it from more difficult and remote resources, I don’t think even manipulative actions by OPEC to “keep America hooked” via lowered oil prices can or will work for very long — in a future world of ever-tightening supply/demand balances for black gold.
What American politicians can’t do via the laws of man, the laws of petroleum engineering and the laws of economics can and will eventually do.
I doubt that there will ever be a discrete tipping point for the petroleum industry, but rather a gradual ebbing. Perhaps the ebbing has begun. If there is a tipping point, as noted petroleum analyst and banker Matthew Simmons likes to say, it will only be obvious in the rear-view mirror.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
What do Big Oil and EV Batteries Have in Common? June 30, 2010
Posted by cleantechorg in cleantech, conocophillips.add a comment
For those of you interested in the sector under the sector in electric vehicles, the guts of Li Ion battery technology, the week just got more interesting than an overpriced, over hyped Tesla IPO.
Check out a very quiet unnanouncement in A123′s SEC filings noting a multi-year supply deal with ConocoPhillips’ Cpreme, the emerging leader in anode materials for Li On batteries. The technology is a processing technology to make high performance graphite based powders out of plain old petroleum coke materials, that has the potential to be very low cost at scale. A123 has announced supply deals in the past with Navistar, Fisker, Eaton, Think, the Chevrolet Volt and a number of others.
For those interested in the guts of the Cpreme technology, a good summary is here. And a quick search of the patents includes: 7,618,678, 7,597,999, 7,323,120.
It wasn’t too long ago when the only other contender for Tier 1 battery supplier in the US, Johnson Controls-Saft, was announcing their Cleantech Innovation Award win and DOE award with a Cpreme logo quietly slipped into the presentation, though likewise no announcements were ever made. Johnson-Controls-Saft had announced lithium ion supply wins with Ford, Mercedes, and BMW. Maybe the liberal view is right, cleantech can bring manufacturing and green jobs back to the US – courtesy of our oil companies?
Or perhaps we should note that Tesla has announced it’s buying its batteries from Panasonic in Japan - with our DOE money (about half of its total capital!) and California tax breaks. So maybe we’ll just ship the new cleantech manufacturing jobs to Japan instead.
Neal Dikeman is a partner at Jane Capital Partners LLC, the Chairman of Carbonflow and Cleantech.org, and a long time cleantech advocate and blogger on Cleantechblog.com.
Headhunting in the CleanTech World June 28, 2010
Posted by cleantechorg in cleantech.add a comment
by Richard T. Stuebi
It wasn’t long ago that most executive recruitment firms didn’t know how to spell “cleantech”, much less develop specialized practices in the field.
In 2000, when I and my fellow co-founder of a start-up company in the distributed generation space knew that we needed help in hiring a CEO, we contacted a few generalist search firms, but found that they had neither the interest nor the rolodexes to take the assignment. In the end, we retained the energy-focused firm Clarey/Napier International of Houston, and were very satisfied with their work, but it wasn’t though they had a lot of competition for our business.
In early 2005, I wrote a white paper called “Leadership in Renewable Energy” (which I was astonished to find still on the web!), in which I vowed “to personally be involved in ‘recruiting’ one new excellent businessperson into the renewable energy sector each year,” and urged others to do likewise — just to accelerate the pace of talent entry into cleantech.
My how times have changed!
Today, a couple of top-notch boutique search firms — Hobbs and Towne and ON Search Partners — are mainly if not solely focused on cleantech placement opportunities. And, after years of ignoring the sector, many of the big retained recruiting firms now have solid cleantech practices.
A few weeks ago, I got an email from Ron Brown, the partner who heads the Alternative & Renewable Energy practice at Heidrick & Struggles, outlining some of their recent cleantech placements at venture-backed firms such as Grid Net, Comverge, Solyndra, Northern Power Systems, and Bloom Energy.
Hardly a month goes by where I don’t receive an unsolicited call or email from a recruiter looking to place an executive into some cleantech post. So, my vow from 2005 to help in attracting one person a year into the renewable sector seems like a quaint notion today.
This state of affairs would have been unfathomable to me a few years ago, and is possibly the most compelling evidence supporting long-term optimistic prospects for the cleantech world. As long as a good share of the best talent flows into cleantech, this is a sector with a healthy future.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
Cleantech Blog "Power 10" Ranking Vol III 2010 June 23, 2010
Posted by cleantechorg in cleantech.14 comments
This year picking the Top 10 Cleantech companies felt a little more challenging than 2009 and 2008. The sector is growing (and growing up), and struggling under its first cycles. Biofuels is a bit smashed up (as we’ve been predicting), water tech still has not emerged, solar is learning how to play with the big boys, smart grid is growing up fast but still a bit young, carbon is still under a policy uncertainty cloud. And EVs, well “where’s the beef?” is still the phrase that comes to mind.
I spend most of my day meeting and talking to companies in the cleantech sector. And those of you who know me know I have opinions on who is doing it right, and who is doing it wrong.
As before this is the Cleantech Blog Power 10 Ranking of cleantech companies doing it right.
Eligibility for inclusion in the ranking requires meeting a 6 point test. Suggestions for inclusions in future volumes are welcome. The 6 point test:
1. The company is energy or environmental technology related
2. I like their products
3. The market needs them
4. The company is smart about building their business
5. I’d like to own the company if I could (for the right price, of course!)
6. It is not already one of mine
So here we go:
1. First Solar – Still growing, still maligned, still taking market share, still the cost leader by 5,233 miles. The whole solar category owes them big time. And it bought Nextlight Renewable Power, which might have made the list in its own right.
2. A123 – A123 has huge challenges in front of it, and we debated whether they should come anywhere near the list at all. But to be honest, without their IPO, the last year would have looked really bleak (and the A123 c. 50% downround before that really was bleak). Thanks guys, we’re rooting for you. Don’t make me regret this one.
3. Nissan - Is it Leafs or Leaves? No matter, kudos for rolling dice to make a serious play in EVs. Fingers crossed that the actual launch keeps you on the list. Of note, before you ask about Tesla, see below.
4. Sharp – Still a solar king, so I still won’t dethrone them. But we got close this year to just listing only one PV manufacturer.
5. JP Morgan – Kudos for snatching up the best asset in the carbon markets at a bargain price. The first mover in over $1 Billion in M&A in the carbon markets that has announced since the fall (JPM/Ecosecurities, Barclays/Tricorona, ICE/Climate Exchange PLC, Reuters/Point Carbon). Smart money is buying, and you moved first.
6. Enphase Energy – I’m very, very curious to see if microinverters finally have real legs. Kudos for essentially making the category real.
7. Landis+Gyr – Still my favorite in smart grid. Until one of the US venture backed players delivers enough to challenge them for market share, they stay the smart grid representative. Though perhaps Silver Spring can push them this next year?
8. Walmart – We pushed GE off for Walmart this year. I expect to get hammered for this one. But be honest with yourself, their push for greening up their supply chain was serious, was massive, and is and can be the single biggest impact on the cleantech sector ever. Walmart haters, go home. The market leader is leading.
9. Iberdrola Renewables – Keep on trucking. Wind energy is still our cleantech crown jewel, and you are still the king.
10. Philips Lumileds – We probably should have had them on last year’s list, as LEDs continue to thrive and may be one of the biggest unsung stars in cleantech, and Lumileds is long the key LED powerhouse.
Applied Material’s well publicized issues have knocked them off this year’s list, but we have hope they’ll be back. And I really really wanted to add both Schott and Solel, the solar thermal receiver kings, but ran out of room.
This Year We Add a Dishonorable Mention to:
1. Any company raising money with Advanced Equities, which would include Bloom Energy, SolFocus, Fisker, Serious Materials et al. If that statement doesn’t make sense to you, just google the words advanced equities scam. Has the potential to sink major venture firms and the whole cleantech venture sector if we’re not careful. Or read below.
Garbage In, Forbes Magazine
Advanced Equities Takes Its Investors on a Bad Trip, Venture Beat
2. Solyndra – Tsk, tsk, $3.50/Wp for CIGS is not very exciting after $1 bil in capital, and $500 mm of taxpayer money? Aren’t we supposed to be selling CIGS for $1/Wp these days without subsidies 
? No wonder the IPO got pulled. How happy do you think Barack Obama is with his investment now?
3. Tesla – Selling 10 cars a week? With $400 mm of my taxpayer money? Come on people. Sell to your rich friends without my money. All Tesla fans should read the Michael Kanellos article with the “selling 10 cars a week” bit. I think there are 10 dealerships within 10 miles of the NUMMI plant alone that outsell that. Is this an EV company or an SNL skit? Go Nissan!
Neal Dikeman is a partner with cleantech merchant bank Jane Capital Partners LLC, and the Chairman of Carbonflow, as well as the editor and creator behind Cleantech Blog and Cleantech.org.
Gates Gets It June 21, 2010
Posted by cleantechorg in federal policy.1 comment so far
by Richard T. Stuebi
A few weeks ago, the American Energy Innovation Council released a report calling for a bipartisan commitment to increased governmental involvement in encouraging more research to spawn the new energy industry of the future.
The five key recommendations of the report are:
- Create an independent body to propose a national energy strategy
- Triple federal spending on energy research to $16 billion per year
- Create centers of excellence in energy research
- Fund ARPA-E at $1 billion per year
- Establish a New Energy Challenge Program to drive pilot project deployment
Members of the Council represent a “who’s-who” of American business leadership, and they recently met with President Obama upon the report’s release. Quotes from press coverage after the meeting were revealingly strong.
Jeff Immelt, the CEO of General Electric (NYSE: GE): “We have a policy today. Our policy is uncertainty…I’d say status quo for this country is a losing hand.”
Ursula Burns, CEO and Chairwoman of Xerox (NYSE: XRX): “The incident in the Gulf just kind of intensified this discussion – that we have a fragile, brittle system.”
But it is the presence and statements of Bill Gates, the legendary founder and Chairman of Microsoft (NASDAQ: MSFT), that are telling. Until now, Gates has been largely silent on energy and environmental matters. However, as you can see in a posted video, Gates is now beginning to speak up on these issues.
Gates said in a news conference after the meeting with Obama that he and his fellow business leaders hoped “that any energy bill, particularly that’s raising revenue, should be heavily influenced by the Council’s report” to put more revenue into energy research.
To the humanitarian Gates, the world’s poor are “going to be the ones, when there are climate change effects, who suffer by far the most. And they need cheap energy. That’s actually something that unites the rich and poor.”
Note that Gates didn’t waffle by saying “if” about climate change. It’s a matter of when and where climate change will start biting.
Of course, the technoscenti don’t view Gates with the same esteem as, for instance, a Steve Jobs of Apple (NASDAQ: AAPL). While not as exalted as Jobs, as the second wealthiest person in the world (who pals around with the world’s third wealthiest person, Warren Buffett), Gates ought to have a lot more impact with those who control the really big dollars (not just public but private and philanthropic).
So, when someone like Gates starts making noises that our current approach to energy and environmental issues is untenable, perhaps it’s a sign of bigger changes afoot in the cleantech realm.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
BP and the Obama Administration – I Blame You for Ruining My Gulf June 18, 2010
Posted by cleantechorg in Uncategorized.7 comments
To start off with, I have to say like many people I’m deeply concerned with the oil spill at Horizon in the Gulf of Mexico. It is a generational environmental hit that cannot be overstated. Perhaps BP deserves more credit than it’s getting for responding fast with a massive amount of resource, no finger pointing, and for putting its whole company on the line, but this is a BP caused problem, so we ought to expect that. However, we should not ignore the role our government had in this debacle.
I’m not a happy camper. We’ve been doing drilling offshore with a very, very good environmental track record for decades. The laws, systems and technologies in place to prevent exactly these problems are known, tried and tested. When this is over we are likely to find that it wasn’t the laws and prevention technology that failed, it was not giving them the proper respect. Or put another way – “operator error” at BP and our government.
BP has been dinged for a number of years now for the dark underbelly of the John Browne era. When John Browne took over, he really turned the entire industry upside down, opening an era of super M&A, and out wheeling and dealing the other oil companies including the acquisitions of Amoco and Arco, pushing the Beyond Petroleum concept leading the way in solar, renewable, and carbon. His and BP’s contributions should not be understated. But industry people will generally tell you that the BP of that generation also built a culture of short term thinking, make your numbers and milestones, cutting maintenance and safety corners if need be, and leave the problems for the next guy. This is the same picture that has been emerging in the media, administration and congressional inquiries into what happened at Horizon just before the explosion, systemically ignoring best practice to save economics on a challenging well. It makes me cringe. I hope it’s not true.
Once it happened, we exposed a bigger systemic problem. BP is throwing everything known at this thing, and making up new technologies every hour racing for a solution. It’s a company defining event and they know it. The systemic problem is that a catastrophe like this in deepwater is new and challenging. The fixit tools just don’t exist. Handling the same situation if the rig had stayed up, or if we were onshore, would likely have seen many of the remediation techniques already work. But no one has EVER dealt with problems like this at depths like these before. The oil drilling and spill containment technology arsenal we’ve built up over the years has never been tried (and maybe really not even planned) to operate subsea in deep water. These are part technology issues and part planning issues. Neither of which are things you want to be trying out for the first time the day the crisis hits. Both industry and government should have seen this one coming.
The US government has culpability here, too. The US government is the landowner here, collects big checks from BP and others from drilling, and was just as culpable in disregarding the risks and just as unprepared for the results. The deepwater risk plans were filed by the oil companies as asked, and apparently never challenged by the regulator. When Congressmen berate ExxonMobil for cookie cutter risk plans almost word for word the same as BP’s that talk about walruses in the Gulf of Mexico, I want to know why the regulator never caught this when it could have mattered. The same regulator who negotiates the deals and collects the checks? Mr. Congressman, Mr. President, oversight of that is YOUR fault, not BPs. The are the oversightee, you are the oversightor.
If my pit bull bites a child because I can’t control it, the dog gets put down, but I pay the piper. There’s a saying that there are no bad dogs, just bad owners. If my tenant is breaking laws and someone gets hurt, and I hadn’t spoken up or enforced my own lease, don’t I have some responsibility to the victim? Does the term negligence come to mind?
The US government had zero capability of its own in place to deal with a spill of this magnitude, meaning all of the technical heavy lifting was squarely on BP’s shoulders, and to believe the media reports coming out now, the Federal government moved fast but was highly unorganized on its own side failing to coordinate Federal, state and local response (remember the old sarcastic, “Hi, I’m from the government, I’m here to help” line). That’s about like leasing out my building, telling the tenant they’re liability is capped, and then hoping they happen to decide to get insurance for me anyway.
And the government’s reaction seems very political, when I want to see more work. Just shut up and do it. The moratorium on offshore drilling smacks of egregious kneejerk politics, did nothing for the crisis at hand, and hurt the very communities under economic strain. A recent WSJ article even quoted a number of the technical experts the administration had cited as the justification for the moratorium who publicly slammed the administration for misrepresenting their analysis once they saw the “final, final” report, not the “final” one they signed off on.
Perhaps worse, the Obama administration’s shakedown of BP, like it’s previous shakedown’s of Chrysler to force a firesale and riskless windfall for Fiat, is very, very disturbing. We have the best court system in the world for just this sort of thing, and it makes me shudder to see what we are doing to the rule of law, crisis or no crisis. What, you think a Southern trial lawyer can’t hold his own with BP? Get real. Mississippi by itself mints trial lawyers faster than BP pumps oil. Item number 1, BP should not be able to use Congress and the administration as a shield to try and cap its liabilities (we apparently did that ourselves at a paltry $75 mm), and second, the administration should not be blatantly strong arming a private company to agree to payments above and beyond our own legislated cap, without going through the courts we set up. Hugo Chavez does that. America does not.
We don’t need “down with BP polemics” and finger pointing. We don’t need to wreck the rule of law to CYA the government’s errors. We may not even need new laws. We do need our regulators to actually do their job. We do need BP to pull out all the stops to plug the leak, and to pay the price for its recklessness, and we do need the industry to start working on planning and technology ahead of time when it can do the most good.
Credit where credit is due: I applaud the administration for moving fast, and I applaud BP for not finger pointing and putting their money where their mouth is, now. I apologize to everyone for the long rant, I’m almost done. But I grew up in Houston, and the Gulf of Mexico is home to the beaches, and the wildlife, and the sea food, and the industry, that defined my home town. It’s sickening that part of me is a tiny bit relieved the oil slick is moving East not West. Frankly, I’m not sure whether the Obama Administration or BP deserves to survive this debacle. The Gulf of Mexico and 40 years of track record in the offshore drilling industry deserve better.
Neal Dikeman is a partner at Jane Capital Partners, a cleantech merchant bank. He is the Chairman of Carbonflow, and Cleantech.org, and is Texas Aggie.
A Good Green Story June 14, 2010
Posted by cleantechorg in solar, sustainability.1 comment so far
by Richard T. Stuebi
One of the more promising stories to emerge from Cleveland in recent years is the formation of the Evergreen Cooperatives, a holding company to fund start-up companies that:
- Employ disadvantaged citizens from some of the most poverty-stricken neighborhoods in Cleveland
- Are founded on the principle of being worker-owned cooperatives, to enable employees to participate in the wealth-creation of the business
- Serve the needs of the local community, anchored by the market requirements of major enduring institutions such as the Cleveland Clinic, University Hospitals, and Case Western Reserve University
- Provide a product/service that is truly sustainable and consistent with the green economy of the future
Since Evergreen was formed and seed-funded in late 2009, the first three businesses launched are the Evergreen Cooperative Laundry, Ohio Cooperative Solar, and GreenCity Growers Cooperative. With just a few months of operation, these green economy enterprises are now employing dozens of Clevelanders who otherwise would be challenged in finding meaningful employment opportunities, affording true career-tracks and wealth-creation (as opposed to merely a meager wage).
Admittedly still in its early days, the long-term impact of Evergreen will only be known and felt years from now. But, the prospects are promising. In the late 1950’s, the Mondragon region of Spain suffered from many of the same economic travails now besetting Cleveland, but the formation of the Mondragon Corporation (a similar network of cooperative businesses) has now led to an economic powerhouse of more than 100 firms employing 120,000 people and annual revenues of more than $20 billion.
The world is taking notice of this social experiment: so far in 2010, Evergreen has been reported on in The Economist and Business Week, but perhaps the most thorough story on the Evergreen Cooperative is found in “The Cleveland Model”, an article appearing in a recent issue of The Nation. I urge you to read this article to learn more about a truly positive glimmer of hope in the revitalization of the industrial Midwest of the United States — and in the mainstreaming of cleantech throughout the American economy all the way into its inner cities.
There are too many heroes underlying the birth of Evergreen to list in one place, and I’m sure I don’t know them all, but I cannot complete this posting without special tips of the hat to: Lillian Kuri and India Pierce Lee of the The Cleveland Foundation, Ted Howard of the Democracy Collaborative, Stephen Kiel of Ohio Cooperative Solar, Mary Ann Stropki of ShoreBank Enterprise, and the late and deeply-missed John Logue of the Ohio Employee Ownership Center at Kent State University.
Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.
