Clean-tech and environmentally conscious investing

Page history last edited by Brian D Butler 1 yr ago

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Table of Contents:

  1. Areas of Focus
  2. Clean-tech and environmentally conscious investing
    1. Challenges for Cleantech Venture Capital:
      1. Comparison to nanotech investment bubbles of the past...
    2. Reasons for this trend:
    3. other issues driving the interest in clean-tech and environment-investing
  3. Innovative Ideas 
  4. Government regulation & stimulation
  5. Clean Tech topics covered by KookyPlan analysis:
  6. News sources around the net:
  7. Lots of investment, but not enough talent = job opportunities
  8. Industries of Focus
      1. Energy
      2. Automobile industry
      3. Agriculture
      4. Construction
      5. Furniture
      6. Food
      7. Travel
      8. Transportation and green tech
  9. Global locations of clean-tech investments
  10. Global locations of clean tech consumers:
  11. Investments
    1. Hype & Hope
    2. Clean tech
    3. Energy efficiency
    4. Clean-tech and environmentally conscious investing
    5. Questions:
  12. Reasons that this trend could end
    1. How would a potential US recession impact the alternative energy market?
  13. Helping Companies appear more green...and making money while doing it
    1. See also
  14. Links from KookyPlan
  15. External Links
    1. More Green Business Models
      1. C cont.
      2. C cont.
    2. Cleantech markets and indices
      1. Cleantech investment funds
        1. Cleantech investor and entrepreneur membership organizations
          1. Cleantech financial reports and publications

         

        Areas of Focus

         

         

         

        Clean-tech and environmentally conscious investing

         In 2007, global investment in renewable-energy businesses rose by 60% from 2006, and reached $148.4 billion (in new investments in just 2007), according to New Energy Finance (NEF), a research firm.  The idea of making money while saving the planet is attracting talent from traditional venture capital-backed areas such as Silicon Valley. 

         

        Challenges for Cleantech Venture Capital:

         

        But the big problem for many cleantech plays, particularly energy production related deals, is that a huge amount of capital is needed to scale these deals up. There are a handful of VCs who have recognized this and have focused on building an expertise in project finance (VantagePoint comes to mind). But many VCs, it appears, have invested in cleantech plays without thinking through the longer term problem of how the technology they're funding will scale up. Many deals will likely face a 'getting to market' problem. Funding a proof of concept is expensive and will probably be funded by initial investors. But will mainstream project finance sources then be able to take the idea and run with it? That transition is difficult and not well understood by many VCs. The key problem is that project finance doesn't do technology risk and one prototype probably won't be enough to address that risk.

         

        In the end, there may be a lot of losses in this space, particularly given the relative lack of potential acquirers (assuming the continued lack of an IPO market).

         

        Comparison to nanotech investment bubbles of the past...

         

        The ultimate problem for VC-backed nanotech companies is that most of them were technologies without products. Kind of like if Google had created its breakthrough search algorithms in 1985. Cleantech companies, on the other hand, almost always have a clear vision of their products and market opportunity. Their problem is getting the technology to work. It's obviously a more fundamental risk, but also should give VCs better guidance when it comes to follow-on financings or cutting bait.

         

        "When you look at the technology companies (not the project companies) in the cleantech space, then you will notice that the vast majority of them are novel materials companies. The vast majority of these novel material technologies are nanotech-based. In other words: Cleantech is the market for which Nanotech has been waiting"

         

        see also our KookyPlan discussion on:  nanotechnology

         

         

        Reasons for this trend:

         

        1. Desire for "energy independence":  The USA set a national mandate to ween themselves off of dependence on mid-east oil. Pres Bush announced that the US was badly "addicted to oil".   In order to reduce US dependence on foreign oil sources (Mideast), they set the bar high, and shot to replace 20% of the gas consumption by 2017 (replace 35 million gallons of gasoline for alternative fuels).
        2. High Oil Prices
        3. Fear of global warming.  The threat of damaging climate change has pushed green-tech into corporate boardrooms, government debates and national headlines.
        4. Dwindling resources (will oil ever just run out?)

         

         

        other issues driving the interest in clean-tech and environment-investing

         

         

         

         

         

        Innovative Ideas 

         

        • idea bank list of many ideas for KookyPlan
        • green portfolio investing - publicly traded stocks of companies involved in green industries, projects, efforts 
        • carbon trading , and other methods of combating global warming - is a market where countries can go to trade the rights to pollute.  Very interesting stuff.   
        • Wind power, still made here: Windunie (Dutch for wind union) is a collective of 230 wind turbine owners, most of whom are farmers who operate turbines as an extra source of income. All sell the energy they produce directly to consumers. Windunie's customers can pick a specific farm they want to buy electricity from. More »
        • Eco-friendly pack and move solution: Moving supplies such as boxes, bubble wrap and other packaging materials remain piled up in landfills long after people have settled into their new abodes. EarthFriendlyMoving has set out to change that by offering eco-friendly moving supplies available at consumer-friendly prices. EarthFriendlyMoving's RecoPack—short for Recycled Ecological Packing Solution—containers are ... More »
        • Biodegradable milk jugs: Designed and manufactured in Britain, Greenbottle is a biodegradable milk bottle that uses a smart two-part system to aid recycling. The bottles are composed of a cardboard outer manufactured from pulped, recycled cardboard, which is lined with an inner sleeve of biodegradable plastic made from corn starch. The plastic ... More »
        • Incentive-based recycling: Going green has gotten a lot more enticing to consumers in communities served by Philadelphia-based RecycleBank. Households can earn RecycleBank Dollars, redeemable for discount coupons at select retailers, just for putting their recyclables out to be collected. But the incentives don't stop there. It's also great promotion and community ... More »
        • Product life story labels: Product life story labels — Dole Organic lets consumers “travel to the origin of each organic product”. By typing in a fruit sticker's three-digit Farm Code on Dole Organic's website, customers can find the story behind their banana. Each farm's section on the website includes background info, shows photos of the crops and workers ... More »
        • Eco assessment for homes & businesses: Sydney-based Todae offers businesses practical advice for cutting down energy and water usage and reducing their environmental impact. For AUD 399, a Todae consultant will come to an office or store and check everything from recycling to heating and cooling systems. The business is then provided with a detailed ... More »
        • Full-service home composting: A new start-up in Bangalore, India, hopes to arm consumers with products and services to empower them toward a simple solution for reducing landfill waste: composting. The Daily Dump offers an array of decorative composting containers that can be used in the home to manage organic household waste and ... More »
        • Water 'skin' reduces waste: Pitched as a water skin, a new bottle created by French packaging manufacturer Sidel provides a lighter alternative to traditional PET bottles. A regular plastic half-litre water bottle weighs 13 – 16 grams. Sidel's NoBottle weighs just 9.9 grams. According to Sidel, "Water is the largest beverage market by ... More »
        • Solar-powered trash masher: The BigBelly is a solar-powered waste container that aims to eliminate those all-too-familiar overflowing trash cans, keeping public spaces cleaner and greener. The flagship product of US-based Seahorse Power Company, BigBelly units compact trash on the spot, optimizing refuse capacity — a BigBelly holds up to five times as ... More »
        • Eco starter kits: Most of us realize there are changes we should make in our lives to become more environmentally friendly, but overcoming inertia and actually doing it can be another matter. Now a few different companies offer starter kits to help make those changes happen. Greensender, which just launched in October ... More » 
        • more Ideas:  what about:  a financial product that allows foreign investors to invest in (a) carbon credits, or (b), social responsible bonds, or (c) eco-conscious investing.....ie, save the amazon by buying these financial services....An investment fund in which consumers can purchase parts of the amazon in order to offset their carbon-emitting, gas-guzzling consumer behaviors....what do you think?  add more of your thoughts here...(go ahead, its a wiki)

         

         

        Government regulation & stimulation

         

        germany as a role model?  see:  http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=8780295&story_id=10961890

         

         

         

        Clean Tech topics covered by KookyPlan analysis:

             (links to KookyPlan pages)

         

         

        News sources around the net:

         

        1. Greentech Media raised $2.75 million in May of '08 to increase writing staff, and coverage of Green tech industry (see coverage here).  Original content plus sindicated content from Venture Beat, others....

         

         

         

        Lots of investment, but not enough talent = job opportunities

         

        see careers: clean tech

         

         

        Industries of Focus

         

        Energy

         

        energy industry 

         solar energy

         

        Automobile industry

        Innovations in the Automobile Industry are key to reducing global warming.  Some innovative companies such as Honda, Toyota, or the new "Tesla Motors"  are doing some very interesting things in this sector... the European Car industry is leading the way in emmisions regulations.  Electric cars are coming.  See the latest innovations from Tesla Motors and more...New diesel engines

         

         

        Agriculture

        agriculture might not sound like an interesting topic for entrepreneurship, but think about renewable energy from corn, soy

         

        Construction

         

        Cement Industry

        green bricks ?  A new process to manufacture bricks from the waste from coal-burning energy plants.

         

         

        Furniture

        furniture industry and the environment

         

         

        Food

        organic food market

        rising inflation worries 2008

        in response to the US  ethanol policy, we see food (corn getting more expensive)

         

         

        Travel

        travel industry impact on the environment

         

         

         

         

        Transportation and green tech

         

        electric propulsion for ships, cruise ships, and airplanes?

         

         

         

        Green Datacenter. The “greening” of the datacenter will continue to be a top priority for corporations as the cost of simply powering the center begins to exceed the cost of the servers and devices in it. Key drivers to help reduce the overall carbon footprint and run more efficient centers will include intelligent sensors and advanced analytics to monitor and improve equipment utilization to reduce downtime and provide comprehensive operational visibility. Green datacenters are also increasingly becoming part of corporate social responsibility campaigns, so expect increased focus here.

         

         

         

        Global locations of clean-tech investments

         

        clean-tech clusters 

         

        Brazil alternative energy market

         

         

         

         

         

        Global locations of clean tech consumers:

         

         

         

         

        Investments

         

        Hype & Hope

        “Greentech could be the largest economic opportunity of the 21st century,” said one prominent venture capitalist.

         

         

        Clean tech

         

        This year, VCs have already invested more than $3.64 billion into green technology startups according to a survey by the Cleantech Network, a 13 percent rise over the same period last year. Investments were made in a range of sectors including renewable and distributed energy, advanced materials, transportation and water purification/management.

         

        Which green technologies will prove to be truly world-changing, which will be good investments, and which will turn out to be over-hyped? What government actions will have the greatest impact? Will funding continue to grow at the impressive rate experienced in the past 24 months or is another bubble set to burst? Where are the opportunities in the lower-tech side of clean tech including recycling, fuel cell membranes, green building, and conservation? Is there a downside to being green? 

         

         

        Energy efficiency

         

         

        According to a recent study by McKinsey, a consultancy, the world could save over half of the greenhouse gases, and get an investment return of 17% if it were to invest heavily in energy efficiency (an easy step to take, as compared to investments in alternative energy sources, for example).  They estimate "that investment in energy efficiency of about $170bn a year worldwide would yield a profit of about 17 per cent, or $29bn", according to FT.com.   see our discussion on the economics of energy efficiency. 

         

         

         

        Clean-tech and environmentally conscious investing

         

        Investments in clean technologies are alternatives to coal and the oil industry.  Within the energy industry, there are many business models being explored as there are a confluence of factors that are combining to make this a very interesting sector.  To begin with, the high price of oil, and the US fear of dependence on foreign sources of energy are resulting in much renewed emphasis on exploring new methods of powering our cars, homes, airplanes, and so on.  Also, as the fear of global warming reaches a critical mass, we are seeing an increased consumer demand for clean tech products.

         

        Clean tech first emerged in widespread use to describe a group of emerging technologies, industries, and financial asset classes based on principles of biology, resource efficiency, and second-generation production concepts in basic industries. Examples include energy efficiency, selective catalytic reduction, non-toxic materials, water purification, solar energy, and new paradigms in energy conservation.

         

        Since the 1990s, interest in these technologies has increased with two trends: a decline in the relative cost of these technologies and a growing understanding of the link between industrial design used in the 19th century and early 20th century, such as fossil fuel power plants, the internal combustion engine, and chemical manufacturing, and an emerging understanding of human-caused impact on earth systems resulting from their use (see wikipedia articles on: ozone hole, acid rain, desertification, and global warming).

         

        Clean tech ncludes the wind power, solar power, biomass, hydropower, biofuels, information technology, electric motors, lighting, and many other appliances that are now more energy efficient. It is a means to create electricity and fuels with a smaller environmental footprint. And it is the need to make green buildings both more energy efficient and environmentally benign. Environmental finance is a method by which new clean technology projects that have proven that they are "additional" or "beyond business as usual" can obtain financing through the generation of carbon credits. A project that is developed with concern for climate change mitigation (such as a Kyoto Clean Development Mechanism project) is also known as a carbon project.

         

        Clean Edge, a clean-tech research firm, defines clean tech as "a diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes." It notes that "Clean technologies are competitive with, if not superior to, their conventional counterparts. Many also offer significant additional benefits, notably their ability to improve the lives of those in both developed and developing countries"

         

         

         

         

         

         

         

         

        Alternative Energy/Cleantech. In 2008, global interest in cleantech will continue to grow as competitive players emerge in unexpected geographies outside the United States. Beyond investment in alternative energy, there will be a great demand for technologies that allow energy consumers (businesses and homeowners) and producers (utilities) to monitor, manage, distribute and use energy more efficiently. Look for more investment in companies in the areas of energy efficiency, advanced water management, intelligent utility networks, energy caching and storage, and demand-side conservation and smart metering tools.

         

         

         

        Questions:

         

        Can a renewable energy (wind farm, solar farm, biodiesel power station, etc) produce both renewable energy certificates (REC's) as well as carbon offsets?

         

        Can the owner of a wind farm or biodiesel power station, for example,

        (a) collect both REC's to sell to consumers or the power company and

        (b) carbon offsets to trade on the carbon market from the same renewable energy produced?

         

         

         

        Reasons that this trend could end

         

        1. over-investment (so accelerated in the past two years - came to 85 billion dollars in 2007, growth of 20% over the previous year)
        2. tightening in the credit markets worldwide
        3.  People just loose interest in "green" as a trend (other things such as the rise of food prices might become more important)
        4. Is there even enough renewable energy potential?

         

         

        German companies prove renewable energy can stand alone — Researchers at the University of Kassel teamed with several German power companies to study the potential of renewable energy sources — hydro, solar, wind and others — to power an entire country. A grid of 36 plants was connected to show, in miniature, that such sources can effectively work together. Now the problem for Germany (and other companies) is scaling the output to meet demand. Much more detail on the study is available at Biopact.

         

         

         

        How would a potential US recession impact the alternative energy market?

         

        “In a recession, there is less money around and demand for any source of energy will fall, but alternative energy will fall further as it is less established than conventional sources of energy.”  Edmund Shing, European equities strategist at BNP Paribas, added: “Alternative fuels are very likely to be absolutely crucified in the coming months. People are not going to buy stocks where future earnings are in big doubt. If we enter a fully blown bear market, which looks likely, it is difficult seeing these stocks recovering.”   In early 2008... “We have seen a big sell-off in alternative fuel stocks. Worries over recession have been the main factor driving them lower,” said Terry Coles, head of the F&C Global Opportunities Fund.  Wil the sell off continue?  Or will there be a big rebound?  Time will tell....

         

         

         

         

        Helping Companies appear more green...and making money while doing it

         

        A company "energy and power solutions", raised $20M for energy efficiency, joining the growing market for helping other companies to be more energy efficient.  It puts in green energy generating systms, or helps other companies to figure out how to do so themselves.  It has a system called Rebate XChange in which it handles carbon rebats.  Customers include Miller Brewing, Tyco and UPS.  Funding came frmo NGEN partners and Robeco Groep, in the Netherlands

         

         

         

         

         

         

        See also

         

         

         

         

         

         

        Links from KookyPlan

         

         

         

        External Links

         

        Dow Jones Clean Tech Investor report (daily): http://www.fis.dowjones.com/products/cleanTech.html

        the new daily e-newsletter and Web site for those putting money to work in the exciting new frontiers of alternative energy and clean technology.

         

         

        Excellent source of info:  http://green.bizjournals.com/?ana=house_grnbiz

        General admission: http://www.churchillclub.org/

         

         

         

        More Green Business Models

         

        C cont.

        C cont.

         

         

         

        Cleantech markets and indices

         

         

         

        Cleantech investment funds

        A number of venture capital, hedge funds and mutual funds have been created to invest into the cleantech market space, including:

         

         

         

        Cleantech investor and entrepreneur membership organizations

         

         

         

        Cleantech financial reports and publications

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

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