Archive for the ‘Clean Energy / Clean Tech’ Category

China is world’s new leader in clean energy investment

Thursday, April 1st, 2010
The Pew Environment Group has released a report [1] which shows that China’s investments in clean energy have overcome the U.S. figures.
According to Pew, China now leads the way with $34.6 billion invested last year across all investment types—nearly double the U.S. figure of $18.6 billion.
In case these figures are not grim enough, the study also explains that over the last five years, America’s growth rate of clean energy investment has fallen behind that of Turkey, Brazil, the UK and Italy.
If clean technology is to pull the U.S. out of recession and form the basis of strong new industries to replace many dying ones, then this is a danger sign for America.
The study attributes the low figure to the lack of policy frameworks, financial incentives, priority loans, mandated clean energy targets, and other factors.
Indeed, countries with leading clean energy sectors as a percentage of their economy have all implemented relatively successful energy and climate policies. Leaders include China, Brazil, Spain, UK and Germany.
There is, however, a piece of good news for the U.S. in the study: the country is still the heart of cleantech innovation. The U.S. led other G-20 members in VC and private equity investments fueling cleantech innovation.clean energy 2009 investment by sector (Pew)

The Pew Environment Group has published a recent report (March, 2010) entitled “WHO’S WINNING THE CLEAN ENERGY RACE? Growth, Competition and Opportunity in the World’s Largest Economies.”

The report indicates that $162B was invested globally in clean energy, a growth of 230% since 2005.  For the first time, China took the top spot within the G-20 and globally for overall clean energy investment in 2009.  In fact, China’s investment in clean energy was more than double that of the US in 2009: China invested $34.6B, vs. $18.6B for the U.S.

In addition, 10 of the  G-20 members devoted a greater percentage of gross domestic product to clean energy than the United States did in 2009.

While the US has unquestioned strengths in innovation, its policies and national goals have not kept up with those of other countries — a trend which could make the US become more of a laggard in the near future.

Comments about the report from The CleanTech Group are here, and the complete Pew report is here.


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Financing Clean Energy Projects

Friday, March 26th, 2010

Recently I had the opportunity to attend several panels which looked at issues pertaining to financing clean energy projects.  The panels were:

Although I could never do the three events justice in a summary, here are various bits of information shared at these events.

New England Clean Energy Council / Project Finance

David Richardson gave a generalization of what institutional investors want:

  1. A diversified portfolio
  2. A stable competitive return (A median rate of return of 8% for non-energy projects.  For energy projects, investors investors may look for a median 10% rate of return after administrative costs.)
  3. An offset to risk

Paul Gaynor indicated that the days of developers putting in 10 to 15% equity are gone.  Now funders are requiring developers to put 25% to 35% equity into a project.

Various comments were made about DOE loan guarantees (such as the DOE’s Section 1703 and Section 1705 programs), energy efficiency funds and ESCO’s. Comments were also made about the ARRA Section 1603 Cash Grant Program:

  • Website:
  • All applications must be received before the statutory deadline of October 1, 2011.
  • Comments from panelists indicated disagreement with the design of the program, in which the trigger dates are set for when the project is brought online / placed in service.  Panelists suggested that a better structure would have been for trigger dates set at the closing date of the financial transaction.
  • Mark Riedy indicated that the US Treasury has paid out $2.8B in cash grants from August 1, 2009 through mid-March, 2010.

David Richardson pointed out that, ideally it’s best to avoid complicated financial structures for your project entity, since it can add significant, unnecessary due diligence costs.  (In one example project, the complex financial structure added $1M in due diligence cost.)  However another panelist pointed out that, since projects come in all shapes and sizes, simplicity / standardization is easier said than done.

Marlene Motyka talked about a few of the financial structures currently in use, including the Partnership Flip, Sale Leaseback, and Inverted Lease.  (A few of these structures are mentioned in this Renewable Project Finance blog entry.)

Venture investor and former Oracle president Ray Lane argued on Wednesday that U.S. is losing out to other countries in emerging energy technologies.
Lane, now a partner at famed venture capital firm Kleiner, Perkins, Caufield & Byers

There was a reference to comments made (in other venues) by Ray Lane (and others) that the U.S. is losing out to other countries (especially China) in emerging energy technologies due to inadequate US financial investment; and outdated, cumbersome US regulatory policies.  Panelists commented that firms today sometimes decide to deploy first in China, and then plan to deploy later in the US.  (But, when the “later” comes, they may decide to reinvest again into their China operations if China still appears more attractive than the US for the next set of investments.)

Mark Riedy agreed that there is a huge renewables focus in a number of international countries, including India, China, Africa and others.  Mark pointed out that some international banks will even take carbon credits as collateral on certain loans.

MIT Energy Conference

Steve Isakowitz commented on three key trends driving clean energy  growth:

  1. Economic demand (Global energy needs continue to increase.  Alternative power sources will be needed to cost-effectively sate the demand.)
  2. Environmental/climate change issues
  3. Security issues (The world continues to be a dangerous place, and there are countries who control oil who do not share our own national interests.)

Steve commented on the billions which DOE spent in investments and loan guarantees.  (They received 3,700 proposals, of which 300 were excellent.  But they could only fund 37.)  He  also remarked on  the important skunkworks  role which will be played by DOE ARPA-e.  A recent ARPA-e Summit highlighted high profile energy firms which were winners (or highly considered) in ARPA-e’s funding initiatives.

Steve also pointed out that a “Valley of Death” funding gap exists for firms who have passed the early venture stage, but now need sufficient funds to grow to reach commercial scale.   (See additional comments at the end of this article about filling this gap.)

Another interesting factoid from Steve: The Department of Defense consumes 14% of America’s energy.

Ignacio Pérez-Arriaga indicated that government energy policies must be:

  • Loud (significant enough to make a difference)
  • Long (sustained for a period of time which is as long in duration as the financial characteristics of the investments)
  • Legal (supported by regulations)

(MIT Sloan classmate) Ray Wood spoke about project bonds, infrastructure funds, rating agencies, innovation, coal states / gas states, U.S. versus China, Demand Side Management; and the need for smart meters to provide consumers with price signals.

Phil Deutch (among many other things) made a few comments about risk:

  1. Understand it
  2. Mitigate it
  3. Get compensated for it

Marianne Wu pointed out that she likes to focus on firms which are not reliant on governmental regulations.  (Although it is fine for otherwise-solid business models to use regulations as a good tailwind.)

CEDA (the Clean Energy Deployment and Administration) was also mentioned as a notable initiative.  (Here is a summary and a commentary re: CEDA.)

HBS Clean Tech Panel

This was a broad panel which (in the interest of brevity) I will not try to summarize.  However, I found it interesting that, when the moderator (Judith Judson) asked the panelists to share thoughts on key funding issues, Marc Poirier indicated that one of the current big issues is “the funding gap which exists when trying to build a commercial scale facility.”

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Bloom Energy Revealed on 60 Minutes

Monday, February 22nd, 2010

Bloom Energy continued its journey out of stealth mode, unveiling its new fuel cell which  produces electricity from a chemical reaction.   It purports to eliminate the need for burning, combustion and power lines.  Beta customers include eBay, Google, Lockheed, Wal-Mart, Staples and the CIA.  Backlog and sales are reported as being in the $2 billion range.

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Smart Grid in the News

Thursday, February 18th, 2010

There have been quite a few interesting articles regarding the smart grid of late.  Here are just a few:

  • Smart Grid 101 – a collection of articles summarizes key concepts/issues
  • Power Guys vs. Netheads – A Smart Grid Culture War?
  • List of 100 SGIG winners – Selected winners in the Smart Grid Investment Grant (SGIG) program, funded by the American Recovery and Reinvestment Act (ARRA).
  • Article regarding high quality of the SGIG “losers”

The February, 2010 issue of Renew Grid indicates that the SGIG winners were selected from a group of almost 400 companies.  More than 200 professionals (from universities, national laboratories, federal agencies and private companies) assessed the proposals.   Electric distribution system enhancements were a key focus of selected companies, with 13 utilities receiving a total of more than $250M in grant money for that purpose.  The utilities that won grants were generally quite far along in their own plans to bolster their electricity networks before the grants were announced.

The grants were supported by $3.4B in ARRA funds.  (The sum of all the original grant requests exceeded $9B.)

Interestingly, a recent article suggest that some designated SGIG recipients may decide not to take the funds, over concerns that the grants may be taxable.

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Smart Grid Culture War? Power Guys vs. Netheads

Clean Energy; Sustainability; The Smart Grid

Wednesday, December 2nd, 2009

Clean energy continues to be hot, and Massachusetts hosted numerous clean energy events in November, a few of which are mentioned here…

UMass Amherst hosted its Clean Energy Connections” conference in Springfield.  One of the more interesting presentations was given by Truman Semans from Green Order (a management consulting firm which focuses on sustainability).  Truman’s presentation described corporate trends in sustainability and  gave case studies from  several Green Order clients.  Other presentations from the Clean Energy Connections conference can be found here.


IEEE Boston convened a forum at MIT on the topic of Moving Toward a Smarter Electric Grid.” Topics covered by the panelists included: the necessity of standards/interoperability, evaluation of the impacts which PHEV battery charging periods may have in system operation, and comparisons of smart grid deployments around the globe.

Several soundbites from the panelists:

  • NIST has currently identified 22 categories of stakeholders who must work together for Smart Grid interoperability.
  • The idle capacity of today’s grid could power 70% of the energy needs of today’s cars and trucks.
  • Some cleverly call the Smart Grid the “Enernet” (Energy Internet)
  • A true Smart Grid creates “ProSumers” (People become both producers and consumers.)
  • Utilities ranked “advanced control” (data management systems that provide automated decision-making) rather than Demand Response (DR) as the top smart grid application in a recent Pacific Crest Mosaic Smart Grid survey.


MIT hosted an FCC “Field Hearing on Energy ,the Environment and Smart Grid Communications.” Among the takeaways from the panel:

  • The government should find ways to incent broadband networks and utilities to work together in new ways.
  • Ubiquitous deployment of broadband  is a prerequisite to making the national smart grid a reality. (There are still areas in the US where broadband is accessible to less than 35% of the population!)
  • The Smart Grid will save energy ($20B  to $40B over the next decade) due  to remote monitoring, energy management and telecommuting.

Other quotables and factoids from the FCC hearing:

  • “Smart Grid and broadband are first cousins.”
    – (Julius Genachowski, FCC chairman, son of an MIT alumnus)
  • “Smart Grid is the Electricity Internet;” “We need to move from iPhones to iFridges;”  “Governor Deval Patrick is rebranding Massachusetts, from ‘The Bay State’ to ‘The Brain State’… and we need to re-brand ourselves as ‘The Brain Country.'”
    – Rep. Ed Markey, D, MA; former chair of the House Telecommunications Subcommittee and current chair of a special committee on energy and global warming
  • It is important to enable consumer price signals.
  • 15% of grid capacity is required for dealing with the 88 annual hours of 1% peak usage. This is where Demand Response (DR) has added value.
  • CleanTech is the biggest wedge in the VC “pie,” but Smart Grid does not yet account for as much of that CleanTech wedge as it should .
  • Open standards and “plug and play” interoperability are key.
  • Consumers need real-time visibility into their own energy consumption (which will incent energy conservation).
  • Tendril‘s fastest growing market provides smart-grid-like services by leveraging “chirps” from existing meters married to broadband (without AMI / smart meters).
  • Consumer pull will be the ultimate driver of change.
  • Innovation (and  risk!) must be allowed (which means large incumbents must be allowed to fail).
  • Zigbee protocols (or similar) should be natively integrated into broadband modems (to allow cheaper/easier grid interfaces).
  • Smart Grid related  companies at the Technology Showcase tables included Verisae, iControl, EnergyHub and others.

Additional coverage of the “FCC Field Hearing on Energy, the Environment and Smart Grid Communications” and related info is below:

Additional contact info:, Twitter: @tonyparham

Clean Energy Trends

Monday, September 14th, 2009

Bad News: Last week, The Boston Globe / Associated Press reported new symptoms of global warming, as two German merchant ships traveled through the fabled “Northeast Passage.”  This route is normally avoided by ships because of its heavy ice flows.  However, global warming and melting ice have opened a route from South Korea along Russia’s Arctic coast to Siberia.  This prompted one official to comment,”The Arctic is becoming a blue ocean.

Good News: Last week, TKG colleague and NECEC Clean Energy Fellow, Imran Qidwai, gave an excellent overview presentation regarding current Clean Energy Trends.


Clean Tech includes a broad array of knowledge-based products/services that lower costs and decrease negative ecological impact.  These technologies span broad areas, including: energy, transportation, water, air & environment, advanced materials, manufacturing, agriculture, recycling and waste.  Clean Energy focuses its efforts on the energy sector.

99.2 quadrillion BTU’s of energy were consumed in the US in 2008, flowing from five major supply sources (petroleum, natural gas, coal, renewable energy, nuclear electric power) to four major demand sectors (transportation, industrial, residential/commercial, electric power). Unfortunately, over 50% of the supplied energy was lost or wasted, consumed in extraction, distribution, conversion and behavior losses.

A variety of solutions can be engaged to improve the efficiency of our energy usage, including:

  • Demand Response Management
  • Energy storage (including Pumped Hydro, Compressed Air, Composite Flywheels, new battery technologies)
  • Smart grid / Smart Home solutions
  • Renewable energy resources (solar, wind, biomass, geothermal)
  • Other innovations

Each of the above areas is in various stages of development, and can be leveraged to make a dent in the overall problem.  However, each presents its own challenges.  (For example, recent activities to leverage geothermal energies may have set off an earthquake in Germany last week.)

Clean Tech initiatives can help us reverse some of the negative trends affecting our planet, while providing many entrepreneurial and economic opportunities.  This is clearly an opportunity to do well by doing good.

[Full presentation here.]

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US Energy Secretary Chu speaks re: Clean Energy at Harvard’s JFK School of Government

Monday, August 10th, 2009

Last week, I had the opportunity to attend a forum at Harvard’s JFK School of Government in Cambridge to hear The Honorable Dr. Steven Chu, United States Secretary of Energy, speak on the topic of “Laying the Foundation for the Next Generation of Clean Energy Jobs.”

The event was moderated by Harvard’s Dean David Ellwood.   A special introduction was provided by Congressman Edward J. Markey (D-MA), co-author of the American Clean Energy & Security act  (sometimes referred to as ACES, or the “Waxman-Markey bill”).  This bill passed in the House on June 26, 2009. The bill now goes on to be voted on in the Senate.

Markey also was the (co-)author in the past (1982, 1993, 1996) of several key telecom bills.    Markey indicated that the recent set of energy bills — the 2007 Energy Act, the American Recovery and Reinvestment Act of 2009 (aka  ARRA aka The Stimulus Bill) and now Waxman-Markey — will be just as pivotal in the energy sector (in regards to unleashing innovation to solve societal challenges) as the telecom bills were in unleashing innovation to create unheralded advances and investment ($850 billion) in the telecom space.  However, Markey pointed out that the telecom sector is four times the size of the telecom space.  As a result, he expects that $1 trillion to $2 trillion of investment will be unleashed.

Chu (who is also a Nobel Prize recipient in physics) gave a very engaging presentation.  He chronicled the changes which our environment has shown in recent decades/centuries.  He also described the perils of reaching a (non-linear) tipping point in regards to greenhouse gasses:    Although much of the excess greenhouse gasses have been man-generated, we need to be aware that there is a tremendous quantity of frozen organic material in our ice caps and tundras.  Just a few degrees increase around the tipping point could cause that organic material to thaw out.  Once it does, the amount of carbon dioxide and methane generated by that (previously inert) organic material would be so substantial that even a massive reduction of the human-generated greenhouse gasses would not be sufficient to halt the overall escalation of greenhouse gasses.

Chu also made reference to the McKinsey report which stated that the ACES goals are easily achievable, even if we only focus on investments which have a positive financial ROI.   He also referenced “easy” adjustments, such as using white-colored roofing and road materials (rather than dark-colored materials) to decrease absorbed solar-thermal energy.  In addition, various computer tools are available today which help architects understand construction and maintenance design considerations in regards to making their designs more “green.”

Chu championed the creation of Energy Innovation Labs (aka Energy Frontier Research Centers) to help us become the leaders in a new economic revolution.  This will lead us to an era of economic prosperity in addition to helping to save the planet.

He closed with a quote from Martin Luther King regarding the “fierce urgency of now,”  encouraging us to act now (even with imperfect solutions) so that we do not fall into the trap of waiting (too long) to arrive at perfect solutions.

[View video of event.]

[Additional coverage of the event was provided in articles from WBUR and Reuters.]

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Clean Energy Resources

Friday, July 31st, 2009

This week, a colleague asked me for resources gleaned from some of the clean energy events/information which I have reviewed recently.   Accordingly, I thought it might be useful to post a few of them here:

Events / Presentations

  • Babson Entrepreneurial Energy Expo 2009:
  • BU Photonics Center 2009 event: “Disrupting the Status Quo in Electric Energy Management: A Systems Approach to a Sustainable Energy Future”:
  • IDC Energy Events Roundup Blog

Reports / Articles / Research



  • Green marketing best practices: (via New England Women in Energy & the Environment)

Associations / Networks

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